Euro trades at a lower level against the USD yesterday

The Euro traded lower against the USD yesterday, despite weaker than expected U.S. economic numbers and uncertainty over a German vote to approve the bailout package.

In the UK yesterday, Retail Sales figures were expected at 2.7% however, they came out a little lower than expected at 2.2%.  This had no negative effect on Sterling as it continued to strengthen against the Euro, breaking new highs for the year. A few months ago Barclays Capital were bold in a statement and stated they could see GBP/EURO at 1.33 by the end of the year... who is doubting them?

The Spanish auction of it’s 10 year Bonds pushed its yields up above 7% for the first time in a week. Spain sold a little over its target of €2.98 billion of debt. The rise in yields on the 10 year bonds pushed  Greece, Portugal and Ireland to seek international aid.

The Pound still managed to rise to a two-week high against the U.S. dollar (even after the weaker than expected retail figures). This followed the release of disappointing U.S. employment data. US unemployment rose by 34,000 to 386,000, the figure was expected to be 365,000.

Leading into the weekend the main focus will be on German producer prices index. The figure is expected to decrease adding to more negativity for the Euro currency. It will be interesting to see if the Pound can continue its strong surge this week, however it may be the case that investors sell positions before the weekend.

This could be a great time to purchase Euro, while the GBP/USD is also trading at a 2 week high.

Today's Fundamentals

06.00  EUR German Producer Prices - This was previously at 2.1%   and is expected to be 1.8%.

08.30 GBP Public Finances (PSNCR) (Pounds) (JUN)  - This was previously -4.4B   and is expected at 8.5B  -4.4B.

08.30 GBP Public Sector Net Borrowing (Pounds) (JUN) - This was previously 15.6B   and is expected  at 11.2B.

12:30  CAD Bank Canada Consumer Price Index Core (YoY) (JUN) - This was previously 2.3  and is expected8.5B  1.8.

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