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- Canadian Economy in Contraction in Q2
- British HPI Adds Further Confirmation to Global Housing Recovery
- Japanese Data Underlines Stable Growth
- US Dollar Higher Before GDP Data
| Canadian Economy in Contraction in Q2 Posted: 29 Jul 2011 06:25 AM PDT
The gross domestic product (GDP) reports out of Canada this afternoon gave cause for concern among international investors today. Expectations were for a mild rise in growth for the second quarter of approximately 0.1%. The actual figure, instead, showed a 0.2% contraction for Q2. The Canadian economy has been struggling with the regional woes brought about by debt solvency issues in the United States. Lingering growth concerns and a choppy commodities market have also held the Canadian dollar (CAD) in limbo when other economic reports revealed that it should have seen solid growth. This GDP data is disconcerting as we head into an emotional weekend pitched with tension as the US Congress concludes its debt negotiations ahead of the August 2 deadline. Read more forex trading news on our forex blog. |
| British HPI Adds Further Confirmation to Global Housing Recovery Posted: 29 Jul 2011 06:20 AM PDT
Housing reports the world over have been underlining a rising trend of stability and growth in the housing market. US data over the past two weeks highlighted a solid uptick in housing investment and construction activity. Canada's housing market also reported heavy increases and rising prices throughout July. Britain added another piece to the story this morning. The Nationwide HPI report out of Britain early this morning revealed a surprise growth reading of 0.2%. Expectations were for a decline in the house price index of 0.1%. These reports seem to portray a picture of solid recovery in the housing and mortgage markets globally. Japan's housing starts report also revealed growth this morning, underscoring the trend as global as opposed to European or American. Read more forex trading news on our forex blog. |
| Japanese Data Underlines Stable Growth Posted: 29 Jul 2011 06:09 AM PDT
This morning's flurry of economic reports out of Japan depicted a country on a stable, yet shaky path to recovery. Inflationary targets in the country's PMI and CPI were largely met with the exception of the National Core CPI which fell 0.1% short of target forecasts. Housing data also revealed increases in housing starts, but a decline in household spending. The mixed reports were largely positive for the Japanese economy. Traders are still seeking safe-havens as global concerns over debt have yet to subside. The Japanese yen (JPY) remains a mainstay among investors with sizeable safe-haven hedges within their portfolio. The solid economic reports, though not shining too bright, will likely help the yen continue to make gains early next week. Read more forex trading news on our forex blog. |
| US Dollar Higher Before GDP Data Posted: 29 Jul 2011 04:56 AM PDT
The dollar is trading higher before the release of Q2 GDP numbers from both the US and Canada. The US debt crisis is the most pressing issue but euro zone events have been driving the majors this morning. A vote in the House to raise the US debt limit was scrapped yesterday as Republicans realized they would not receive enough votes to get the legislation through and have since went back to the drawing board. Regular readers of this forex trading blog will know we expect some sort of last minute agreement to be reached between Democrats and Republicans though time is running out with only 4-days remaining before the US Treasury will potentially default. Should a compromise be reached it may not be enough to save the AAA credit rating the US currently holds. Comments from S&P note the ratings agency is looking for budget deficit cuts in the range of $4 trillion. Neither of the two political parties has presented a plan that comes close to this number. A failure to raise the debt ceiling could send the dollar reeling in the near term while a ratings downgrade might bring about long-term weakness in the US dollar. Traders were reminded today that the European debt crisis hasn't gone anywhere. Spain was placed on review for a rating downgrade by Moody's citing increased budget deficits and the 2nd Greek bailout which could increase the risk of bondholder footing the bill for any additional rescue package. The EUR/USD was briefly sent below yesterday's low of 1.4250 after reports hit the wires speculating the EFSF may not be ready to provide Greece with the next tranche of funding by mid-September. The EUR/USD has a 50% retracement from the June 12th low to the July high at 1.4185 and 61% at 1.4100. Further support is located at 1.4070. Resistance is near 1.4320-50. GDP for both the US and Canada will be released later today and expectations are not high for either of the North American countries. Consensus forecasts for the US are at 1.7%. The growth numbers nothing to brag home about but comparing to the UK which only managed to post a 0.2% increase, the US numbers don't look half bad. Only 0.1% growth is forecasted from Canada. The USD/CAD, a pair that typically falls with the "risk-on" trade and rises with "risk-off" sentiment is attempting to establish a beachhead above the 0.9530 level. Resistance for the pair comes is at 0.9620 off of the trend line that falls from the June high. Support is found at this month's low at 0.9400. Read more forex trading news on our forex blog. |
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