Losses for the U.S. dollar against most major currencies

The U.S. dollar lost some grounds against most major currencies yesterday,
as data showing a third consecutive monthly decline in U.S. retail sales
bolstered expectations for another round of easing by the Federal Reserve. The
Commerce Department said U.S. retail sales fell by a seasonally adjusted 0.5%
in June, confounding expectations for a 0.2% increase, after a 0.2% drop in
May.

The U.S. dollar lost some grounds against most major currencies yesterday,
as data showing a third consecutive monthly decline in U.S. retail sales
bolstered expectations for another round of easing by the Federal Reserve. The
Commerce Department said U.S. retail sales fell by a seasonally adjusted 0.5%
in June, confounding expectations for a 0.2% increase, after a 0.2% drop in
May.

Closer to home, the Euro suffered more onslaught against the Pound yesterday
and there were concerns about the debt crisis across Europe knocking the Euro,
which pushed the trading rate for GBP-EURO up to levels not seen since October
2008! The Pound rose to 1.2768 at Interbank yesterday, another high for 2012 so
far. It will be interesting to see how far this momentum can continue, with the
currency currently trading at a fantastic rate. The main reason for the Euro to
suffer was the ongoing downgrades by Moody’s of 8 Italian banks. The downgrades
followed Friday’s downgrade of Italy’s sovereign.

Germany’s constitutional court announced that it will deliver a ruling on
whether the Eurozone’s permanent bailout fund contravenes the German
constitution on September 12, disappointing hopes for an earlier decision.

Looking ahead at the markets today, it is an extremely busy day for all the
major currency pairs with fundamentals expected that could potentially move
markets. In the UK the main focus is on Consumer Price Index. In the EU figures
from the German ZEW Survey could have an effect and across the pond in the US,
Consumer Price Index and Fed’s Bernanke Delivers the Monetary Policy Report to
Senate. 

Today’s
Fundamentals

08.30 GBP Consumer
Price Index – This is expected to stay the same at 2.6%.

09.00  EUR
German ZEW Survey (Economic Sentiment) (JUL) – Expected to
decrease to -20 from -16.9.

12.30 USD Consumer
Price Index Ex Food & Energy (YoY) (JUN) – This is
expected to come out weaker than the previous figure. 2.2% compared to 2.3%.

12.30 USD Consumer
Price Index (YoY) (JUN) – This is expected at 1.6% instead
of the previous figure of 1.7%.

14.00 USD Fed’s
Bernanke Delivers Monetary Policy Report to Senate 

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