The euro demise
The euro demise yesterday came as ECB president gave his monthly press conference and signalled that although the ECB are always ready to act to contain inflation in an aggressive way the current situation shows that price pressures are contained for the moment and that the risk to the European economy remain to the downside. As one major European Bank commented this morning we need an Army of Analysts to be ready for his press conference ‘ and I personally couldn’t agree more.
Yesterday’s robust services PMI release kept the resilient pound very much on the front foot with market economists looking at earlier BOE hikes than the market originally forecasts for August.
After a yet another outperformance from the UK housing market report this morning the pound looks well placed to outperform its European neighbour and if we see a disappointing U.S jobs report today then extensions to 1.6500 can’t be ruled out into next week.
The RBA released a revised growth forecasts for 2010 and 2011 after the recent floods.
The central bank cut the 2010 GDP forecast to 2.75% from 3.5% and raised the 2011 estimate from 3.75% to 4.25% with the CPI estimate for 2011 raised to 3% from 2.75% .
The general tone of the report was well received with the RBA predicting employment to grow at an above average trend with the jobless rate falling to 4.5% by the Australian winter of 2013.
The AUD is trading 50 points higher this morning on the bullish release.
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