We wait this week for the inflation data from EU, UK and US while the gold which is the mirror of inflation is starting this week trading almost at the top of 17 months amid increased geopolitical concerns in the gulf area after the American Israeli military threats and the Iranian reaction by an exercising of its medium and long rage rockets like Shehab-3 which produced high oil prices have come over 145$ per barrel by the end of last week before easing lower by the end of last week. Also the worries about the financial market have increased again by the end of last week by the quarterly earning reports of releases of the financial sector in US of the second quarter. There can be further write down loses showing the needs for cutting more jobs and for looking for more capitals to over come the credit crisis negative impact on the financial markets but now the waiting and see is the current stance and the mistrust in growth and investment is still containing the current market sentiment increasing the demand for gold as a reserve of value especially as the central bank are capped of tightening as the recession forces at this point even after the ECB has hiked the interest rate by .25% to be 4.25% in the face of the inflation upside risks, Jean Cluade Trichet has given a dovish message by referring to the downside risks currently and the sluggish growth of the second quarter after good data in the first quarter which can tackle further tightening actions in appreciation of the growth down side risk.
Best wishes
FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com
