The Euro has already slid lower against the U.S. Dollar this morning, but the single currency remained supported by expectations that the European Central Bank will soon implement fresh measures to contain the Eurozone debt crisis.
Support for the Euro remains ahead of the ECB’s policy meeting this Thursday, amid growing expectations that the bank will announce measures to lower Spanish and Italian borrowing costs.
This morning, the Spanish 2nd Quarter GDP figure shrank by 0.4% showing how much the country is struggling to cope; they are the fourth biggest economy so this is deemed very negative for the Euro.
Last Thursday, ECB President Mario Draghi pledged to do whatever is necessary to preserve the single currency. German Chancellor Angela Merkel and French President François Hollande vowed to defend the Euro in a joint statement on Friday and said that they are "deeply committed to the integrity of the Eurozone." How many times can the problems be pushed to one side?
In regards to the U.S. the markets are looking ahead to the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the bank will hint at further monetary easing measures. Also, Treasury Secretary Timothy Geithner is scheduled to meet with German Finance Minister Wolfgang Schaeuble and Mario Draghi to discuss the global economy.
Looking ahead for today in regards to fundamentals, for GBP the main risk event will be Mortgage Approvals for June and for the Euro investor’s eyes will be looking at the Italian 10year Bond auction.
09.30 – GBP Mortgage Approvals (Jun) – The figure is expected to decrease from the previous at 49.0 from 51.098, possibly having a short-term negative effect for the Pound.
10.00 – EUR Consumer Confidence (Jul) – This is expected at -21.6 from the previous figure of -19.8, which could have a negative effect on the Euro.
10.00 – EUR Business Climate (Jul)
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