Daily FX Report

British housing prices fell in June

Tue, Jul 15 2008, 09:57 GMT
by Varengold Bank Research Team

Varengold Wertpapierhandelsbank AG


Good morning from Hamburg. Today it’s the Canadian’s turn for an interest rate decision, after the Japanese today in the morning. It will be very exiting in the next weeks, because all central Banks are in a difficult situation. On the one hand the inflation is getting out of control, but on the other hand, they don’t want to hurt their economies.

Market review

British housing prices fell in June, but the pace of decline as been slowing, even as market conditions remain bleak and sentiment is at record lows. RICS says its 3 month house price index rose to -88 in June from -92.2 in May, but remained only slightly above a 30 year low. Separate data from the British Retail Consortium showed that retail sales fell 0.4% on a like-for-like basis in June, as customers cut back on most items except groceries. The GBPUSD was not significantly affected, and rose just 0.1%, and closed at 1,9942.

The New Zealand Q2 CPI rose 1.6% qtr/qtr, outpacing the 1.4% forecast. Yr/yr the CPI is up 4%, also above the expectations of 3.8%. Even with the surge in inflation, analysts see the RBNZ cutting interest rates as soon as next week .The NZD is up 0.3% and closed at 0.7646. The CAD was a little changed against the USD on Monday, as traders await the Bank of Canada’s interest rate decision today and its updated report on monetary policy.

The BoJ left interest rates unchanged, as expected, at 0.5% which induced no changes in the USD/JPY. The central bank said in an update of its half yearly report that the Japanese economy is slowing further on high energy costs, slow capital expenditures and consumption. The BoJ says it will conduct monetary policy flexibly.

AUD/USD

For the first time in over 20 years, the AUD/USD broke through the 0.9650 mark. The currency tested the level first time in mid of May. After a decrease in June, the Aussie increased back to the mark at the beginning of July. Now the next hard level will be the 1-even mark, whereby the Aussie will be more valuable than the USD.

Chart 2

EUR/CHF

EUR/CHF has been developing a side range between 1.6020 and 1.6250, since the beginning of June. Both levels were tested twice, most recently on the upper side of the range. Now it might decrease back down to the 1.6020 level.

Chart 4



Published on  Tue, Jul 15 2008, 10:05 GMT

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