Currency in Euro Zone EUR/USD hit
Published on June 28, 2010 by admin · No CommentsCurrency News in EUR/USD
The euro slid against the U.S. dollar this morning, after the leaders of the world’s largest economies agreed on a timetable for halving their budget deficits within three years.
EUR/USD hit 1.2355 during late Asian trade, shedding 0.12%, after pulling back from a 1-week high of 1.2397.
The world leaders reached the agreement at the G20 summit in Toronto on Sunday, in a signal of their determination to now stress debt reduction after enacting spending programs to counter the global financial crisis.
The G20 weekend brought nothing fresh to markets, with the group agreeing that countries would follow their own paths in terms of economic growth. There were pledges to attempt to halve budget deficits by 2013, without hitting growth too hard, as well as promises to clamp down on risky behaviour by banks.
There is no UK data of note today, However the housing market will be in focus this week with data from Nationwide due to be released on Wednesday. Final Q1 GDP data is also due to be released on Wednesday, with no changes to growth anticipated.
Data released by the U.K overnight showed growth in house prices slowing marginally in June, although this still took the year-on-year rate to its highest level since January 2008. According to property data company Hometrack – prices rose an average 0.1% last month down from 0.2% in May but up 2.1% in annual terms. This report is likely to lend further support to the pound versus the euro, with sterling still underpinned by the positive reaction to last week’s U.K emergency budget.
The U.S labour market is expected to be the main focus for this week, with Non-Farm Payrolls report for the month of June due to be released on Friday. The payroll rose by 431,000 in May (the largest monthly gain since early 2000) However, only 41,000 jobs were added over the month which was well below market expectations. A drop of 70,000 is anticipated this month.
ADP employment data, due to be released on Wednesday is expected to provide some advance indication of the overall outcome of the Non-Farm Payrolls report.
Additional data to watch this week for the U.S includes consumer confidence reports for June along with Manufacturing ISM data, construction spending and personal income/consumption figures.
In the Euro-Zone, the final Markit manufacturing PMI report for June is due to be released, and is anticipated to confirm the dip shown in the previous flash estimate. Business Activity and sentiment surveys are also expected to ease back – which would further underline concerns about the pace of recovery in the Euro-zone.
M3 data is anticipated to re-iterate the ongoing problems with credit conditions within the Euro-Zone, and Flash HICP data for the month of June is expected to show inflation well below the 2% target. These reports will be important in terms of setting the tone for markets/currency movements.
