Forex News (Podcast and Text): US Dollar Gains As BOE Cuts, ECB Leaves Rates On Hold - Will Trichet Lead Euro To Bounce Back?

Published February 7th, 2008 - 18:58 GMT

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Fundamental Headlines

•    USDCHF – Labor market conditions in Switzerland remained resilient in January as the unemployment rate held steady at a seasonally adjusted 2.6 percent. Indeed, the January SVME Purchasing Managers Index unexpectedly improved to a reading of 61.6 from 60.8, with nearly every component (including output, purchases, and prices) rising. Ironically, the one component to slip was employment, but nevertheless, it appears that export and domestic demand should be able to keep Swiss expansion humming at a relatively solid pace in early 2008. For more news and resources, visit the new Swiss Franc Currency Room.
•    GBPUSD – The BoE cut rates in line with expectations by 25bp to 5.25 percent, as the central bank cited deteriorating prospects for global output growth and tightening credit conditions for consumers and businesses alike. Essentially, the MPC is more concerned that slowing growth will bring inflation below target than they are concerned that inflation will accelerate out of control, suggesting that more rate cuts may loom on the horizon as long as economic data points to deteriorating conditions. Discuss the topic and your trade ideas in the GBP/USD Forum.
•    EURUSD – The ECB left rates unchanged at 4.00 percent, as expected, though as we noted in DailyFX Cross Market Reactions, the big event risk looms at the 8:30 EST press conference by ECB President Trichet. Discuss the topic and your trade ideas in the EUR/USD Forum.

•    US Retail Sales Projected To Rise 1% in January (link) – Wall Street Journal
•    US Pending Home Sales Probably Fell in December, Survey Shows (link) – Bloomberg
•    Senate Stimulus Bill Fails to Advance (link) – Wall Street Journal
•    Heightened Resistance? Euro-zone ‘Decoupling’ From US Economy Will Be Put To The Test (link) – Financial Times
•    Japanese Consumer Spending Is Solid, BOJ's Iwata Says (link) – Bloomberg
•    Deutsche Bank Net Falls; Subprime Writedowns Avoided (link) – Bloomberg