Daily Market update by UWC

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15.07.10

The Chinese Data published this morning have been provoked the new wave of risk appetite on market. According to this fact European currencies strengthen against USD.
Today in the morning EUR/USD is in a consolidation position forming its today’s direction.
Gold keeps its uptrend and today may reach the new highest level.
The Bank of Japan expects the increase of prices next year according to the Consumer Price Index growth.

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USD/YEN is keeping its descending movement and today the pair is near to reach the lowest level of this year.

EUR/USD during the Asian session fixed a new maximum at the level of $1.2958.

Today the microeconomic data will be very important for all market participants. Economists expect that consumer price index in June will increase 0.1 % against last month.

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During the European session the Euro is up and has started to test the new stress area of the 1.3000 level.
GBP today is under the influence of the financial figures therefore the currency pending the data.
As for Asian trade the USD and JPY fall against the main currencies.

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Before Ben Bernanke comments USD fell against JPY during the Asian session.

USD will go down to the level of 86.00 if the expectations regarding recovery of the US economy are weak.

According to the economists data the growth of US Gross Domestic Product expects to be 3 % till 2012.

EURO, GBP and USD trade in the same way against each other but they dropped considerably against JPY.

EURO will be under pressure this week till the results of banks’ “stress tests” will be published on Friday.

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The most of Asian stocks today trade in downside according to the pessimistic comments of Ben Bernanke regarding economic perspectives of US economy.

Ben Bernanke’s views do not inspire investors, the markets fall today was a consequence of the economic growth uncertainty.

Bank of China announced that Chinese Yuan should take into account the world economic situation, now the Yuan rate is fluctuating in both directions and it means that Yuan is stable.

Yesterday was the worse period for the Yen because investors withdrew long-term funds to provoke mass buying of the risk assets.

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Stress tests results will be published today. It will be an analysis of 91 banks in the European territory and these results should calm down investors regarding the state of the European financial sector. The time of event is 17 pm GMT.

Due to waiting for these results EURO drops against USD during the European session.

Bernanke urged the legislators to reduce the Federal budgeted deficit in medium-term period. He said that it’s necessary to have US financial situation under control.

By the end of Thursday GBP bounded around 100 pips against Japanese YEN.

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YEN and USD grew up due to the consolidation of Asian stock market indexes.

If other stock markets go up, EURO may continue the uptrend.

The positive results of “stress tests” caused concern that these tests were too simple and didn’t reflect the real financial situation.

Investors start buying EURO because they rely on the tests results which show that European bank system wasn’t destroyed by the crisis.

UK retail sales increased considerably and demonstrated the highest level since 2007.

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Yesterday in the evening EUR/USD fixed new maximum and this fact stopped all attempts of EURO to continue its growth. So the uptrend of EUR/USD is failing little by little.

GBP/YEN trades next to the six-week peaks and it draw investors’ attention to this pair.

Until USD/YEN is below 88.20 the descending dynamics of the pair continues.

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It’s the second day when YEN becomes stronger against EUR and USD.

The data regarding US economic growth will be published on Friday and this event is considered as a one more proof of economic deceleration.

For the pair EUR/USD the level of 1.3000 is a psychological area.

GBP/USD tries to continue increasing, in the morning this pair reached the new high.

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With regards to the data of Centre for Economic Policy Research and the Central Bank of Italy, the indicator EuroCoin in July fell from 0.46 to 0.40. The indicator is decreasing 4 months running. And it testifies deceleration of the economic growth rate.

Parliament of Italy approved assigning a sum of $ 440 billion and 575 billion euros on creation of the Support Fund for the countries with high national debt.

The prices of OIL and oil products grew against USD. The USD weakness is pushing up the Oil prices.

EUR/USD dropped today because of markets feverishness.

USD/YEN decreases due to unfavorable situation on Asian markets.