There was no key important data to move the currency market. The market is stagnant waiting for a major change to move. We have this week the flash release of this month EU PMI of the services and manufacturing sectors and also the release of the germane IFO. From US, we have the release of US building permits of June which was 1.091m in May and by the end of the week we have US new home sales which were 512k units in May and are expected to be 510k units in June. We have also US Michigan consuming sentiment survey which is expected to be 56 in July.

 

The greenback could have gained support recently from the Oil prices easing lower than 140$ per barrel since last Wednesday trading lower than 130$ a barrel right with the beginning of this week supporting the equity market and putting pressure on the Japanese yen across the broad reaching 107 versus the greenback on a risk apatite getting back wave could be underpinned by the market believe in the US joint plan of the US treasury and the Fed for bailing out Freddie Mac and Fannie Mea which has given a boost to the financial market amid better than expected release of JP Morgan quarterly earning report even after Merrill Lynch the second quarter loss of 4.89 Billion and citigroup loss of 2.5 billion, the believe that the  credit crisis can ease in the future could contain the market sentiment.

Last week, The US CPI which has come at 5% and the market was expecting 4.5% and the core figure which excludes the food and energy has come at 2.4%has come higher than the market expectations of 2.3% showing strong inflation upside risks in US in this same time of struggling growth Which could add to the greenback as it has shown an increased inflation pressure on the Fed to consider rate hiking in the face of this building inflation in US.

The oil prices and their volatile actions have contained the markets sentiments recently as their high effects on both of inflation and growth at these serious levels of inflation and sluggish growth.

 

Best wishes

 

FX Consultant

Walid Salah El Din

E-Mail: mail@fx-recommends.com

http://www.fx-recommends.com