he European PMI reading showed that the manufacturing and service sectors contracted at their slowest pace in eight months. The composite reading rose to 43.9 from 41.1 but remained below the 50 boom/bust level.
Fundamental Headlines
• Fed Weighs More Securities Purchases – Wall Street Journal
• GM Finance Arm to Get a Fresh Bailout– Wall Street Journal
• S&P downgrades UK outlook– Financial Times
• Fed Officials Are Unconvinced `Stabilization' of U.S. Economy Will Persist– Bloomberg
• Libor Declines by Most in More Than Two Months as Recession Concern Eases– Bloomberg
EURUSD – The European PMI reading showed that the manufacturing and service sectors contracted at their slowest pace in eight months. The composite reading rose to 43.9 from 41.1 but remained below the 50 boom/bust level. Manufacturing saw the biggest increase advancing from 36.8 to 40.5 and surpassing estimates of 38.3. A pick up in German activity helped pull the overall numbers higher which is a positive sign for the region as its largest economy shows signs of stabilizing. The positive fundamental data may keep the ECB from adding to their initial quantitative easing measures which includes purchasing 60 billion Euros of debt. Discuss the topic and your trade ideas in the EUR/USD Forum.
GBPUSD – The S&P lowering its outlook for the U.K. economy from stable to negative is a sign that there are more underlying problems for the economy. The ratings agency cited the shortfall of tax receipts against an ever increasing government budget as the reason why the county’s AAA rating was at risk. Meanwhile, retail sales printed better than expected with a gain of 0.9% versus 0.5%. Sales rose on the month in all categories, with the biggest
gain at non-specialized stores such as department stores, which recorded a 3.5 percent increase. Nevertheless, the downgrade will bring into question the pace of a recovery, despite the improving fundamental data. For more news and resources, visit the Pound Currency Room.
