British Pound Slips as U.K. Manufacturing Contracts
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• Atticus Hit Hard by Credit Crunch – Financial Times
• Oil Falls on Report Gustav Won’t Speed Up Before Striking Land – Bloomberg
• ECB May Keep Rates at 7-Year High as Recession Looms – Bloomberg
· GBPUSD – Manufacturing activity in the U.K. contracted for the fourth consecutive month, heightening recessionary fears for Europe’s second largest economy. The index however, improved slightly to 45.9 from 44.1 in July, but may continue to face downside risks as global demands fade. In a separate report, U.K. mortgage approvals fell to a nine year low of 33K as home prices continued to tumble lower. Amid rampant inflation, instability in the housing and financial sector paired with stalled growth could forced the BoE to support economic activity as the U.K. economy is on the brink of a recession. For more news and resources, visit our GBP/USD Forum.
· EURUSD – Retail sales in Germany fell for the second consecutive month as oil prices peaked to a record high of $147.27 in July. The monthly reading slipped to -1.5% from -1.4% in June, while the yearly figure was unchanged from the previous year. Manufacturing activity in Germany fell to a record low of 49.7 from 50.9, while the Euro-Zone manufacturing PMI contracted for the third consecutive month. The economic outlook for the 15 European nation continues to grow dim, and may lead the ECB to soften their hawkish outlook. For more news and resources, visit our EUR/USD Forum.
· AUDUSD – Stalled growth in the Australian economy has helped to bring down inflation for the first time in a year as the inflation index fell to 4.2% from 4.6% in July. The unexpected fall should help to ease inflationary concerns for the $1 trillion economy, and would allow the RBA to lower the benchmark interest rate from the 12 year high. With the RBA scheduled to set rates tomorrow, market participants have already increased bets for a 25bp rate cut, which may spark increased volatility for the Australian dollar. Discuss the topic and your trade ideas in the USD/JPY Forum.