German Chancellor Angela Merkel and French President Nicolas Sarkozy rejected an expansion of the 440 billion-euro ($633 billion) rescue fund and rebuffed calls for joint euro borrowing to end the debt crisis, saying greater economic integration was needed first. BOE policy makers Dale and Weale ended their push for an increase in interest rates this month as the EU crisis and signs of a global economic cooling increased downside risks to inflation. The MPC voted unanimously to hold the key rate at a record-low 0.5%, according to the minutes of the Aug. 3-4 meeting and Posen kept up his vote to increase the bond-purchase program by 50 billion pounds. The MPC said further asset purchases, which would increase the program from the current 200 billion pounds, might “become warranted were some of the downside risks to materialize.” The central bank also said “news over the month had generally reinforced the weak tone of indicators of global activity growth over the past few months.”
The Swiss franc strengthened as investors bet that intensified measures announced by the SNB won’t be sufficiently strong to curb gains in the currency. The franc surged against all currencies, snapping five days of declines versus the dollar, after the SNB said it decided to expand liquidity to the money market, raising banks’ sight deposits to 200 billion francs from 120 billion francs. The central bank will also continue to repurchase outstanding SNB bills and use foreign-exchange swap transactions.
EURUSD moved lower to 1.4325 and EURJPY moved lower to 109.80 after the leaders of Germany and France rejected calls for a joint-bond plan to stem the region’s debt crisis and amid signs growth is slowing, USDCHF moved lower to 0.7824 after moving up to 0.8017 as the Franc strengthened on SNB measures, GBPUSD dropped to lows of 1.6350 after release of minutes. Gold traded at highs of $1794 and Silver moved up to $40.12 following news of SNB intensifying measures and yesterday’s German GDP almost stalled.
EU inflation levels, US producer prices and Oil inventories form today’s calendar.
By
The Swiss franc strengthened as investors bet that intensified measures announced by the SNB won’t be sufficiently strong to curb gains in the currency. The franc surged against all currencies, snapping five days of declines versus the dollar, after the SNB said it decided to expand liquidity to the money market, raising banks’ sight deposits to 200 billion francs from 120 billion francs. The central bank will also continue to repurchase outstanding SNB bills and use foreign-exchange swap transactions.
EURUSD moved lower to 1.4325 and EURJPY moved lower to 109.80 after the leaders of Germany and France rejected calls for a joint-bond plan to stem the region’s debt crisis and amid signs growth is slowing, USDCHF moved lower to 0.7824 after moving up to 0.8017 as the Franc strengthened on SNB measures, GBPUSD dropped to lows of 1.6350 after release of minutes. Gold traded at highs of $1794 and Silver moved up to $40.12 following news of SNB intensifying measures and yesterday’s German GDP almost stalled.
EU inflation levels, US producer prices and Oil inventories form today’s calendar.
By
M.Zohaib Gadit
Forex Trading Consultant, Shivani Financial
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