Fears this week regarding stimulus for the UK will be announced by the Bank of England (BoE) later today. What figure will be pumped into the UK economy will be eagerly awaited by the markets as Asset Purchase program tops the bill. The GBP fell versus the USD and Euro on speculation that £50-£75Bn worth of asset purchases may be required to help boost growth.
European Central Bank (ECB) President Mario Draghi will be meeting today in Frankfurt with the focus being on cutting the interest rate from 1% down to a record low of 0.75% according to many reports. Historically, a rate decline weakens the currency as the return on investment reduces.
Italian Prime minister Mario Monti expressed in the news recently that he believes Italy does not require a Euro bailout, which may see a new found confidence for investors in the struggling economy as Spain is expecting a massive bailout. French president Hollande has finally embraced reality and announced €7.2bn worth of tax rises on wealthy households and big corporations to help reduce the country’s deficit.
In the United States, Service Industries probably grew at a slower pace in June, showing signs that the USD is still struggling to maintain momentum. Nevertheless the pressure remains on the US economy with ADP employment expected to decrease slightly ahead of non-farm payroll tomorrow.
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