With summer almost in the rear view mirror and investors returning from the Labor Day holiday, the USD gained against the EUR and GBP swiftly. There was no major data from the U.S. on Tuesday, but risk sentiment took a hit as market participants returning to their desks were struck with various news accounts internationally that Greece and Ireland are once again being confronted with debt issues. The Germany Factory Orders numbers were published yesterday and turned in a poor result of minus -2.2% compared to the estimated gain of 0.6%.
The U.K. will lead the data parade today with Manufacturing Production and the Halifax HPI. Germany will also release it Industrial Production figures today. The U.K. numbers are estimated to decline regarding the HPI and be stable for the Manufacturing statistics. The German numbers are forecasted to show an improvement. However, the crux of trading today that will spark the currencies is likely to remain the shadow that has reemerged within the European banking situation and government debt. The Wall Street Journal sparked concern yesterday with an article questioning the ‘stress tests’ from the E.U. and this was followed up by a story in Bloomberg which wrote about Greek debt obligations lacking transparency.
The U.S. will release the Beige Book figures from the Federal Reserve today, but it will be Wall Street that investors are focused on – after yesterday’s declines which essentially took the gains made last Friday off of the table. The States have been light on data all week, but tomorrow the weekly Unemployment Claims will be brought forth and traders who watch the jobless numbers will get further information to gauge. The economic situation in the U.S. remains under a microscope and investors find themselves with many questions still regarding the prospects for growth as jobless, housing, and thus consumer confidence remains fragile.
The JPY traded stronger against the USD on Tuesday and finds itself being put to a real test. Japanese exporters will not be pleased at all with the JPY being so strong, but like their government – they face obstacles trying to counter the strong currency until risk adverse trading somehow subsides. The AUD maintained its range yesterday, even after the Labor coalition was anointed the leader of the government once again. With only a one vote majority in Parliament, investors have shown very little inclination thus far to wager for or against what appears to be possible gridlock politically.
Written by bforex.com
