[B]Fundamental Headlines[/B]
[I]• Fed’s Balance Sheet Grows – Wall Street Journal
• IMF Warns U.K. on Banks’ Status – Wall Street Journal
• Global equities set for best week since May – Financial Times
• China Rebound Props Up World Economy as U.S. Struggles to Return to Growth – Bloomberg
• Porsche CEO Wiedeking Says Sale Is Imminent as VW Power Struggle Nears End – Bloomberg[/I]
[B]EURUSD [/B]– The Euro-Zone Trade balance report showed a surplus for a second month as falling imports outpaced exports. The net gain of 1.9 billion was lower than the month prior’s 2.7 billion, but beat estimates of 0.0. Exports fell for a third straight month which may be a sign that the impact from global stimulus efforts are starting to dissipate and could Limit the scope of a recovery. The ECB has just begun its covered bond purchase program and may remain on hold until they can assess its impact. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]USDCAD[/B] – Canadian CPI fell to -0.3% in June which was the most since 1955 and a sign that deflation risks still exist for the country. Looking at the breakdown we see that clothing prices fell 2.8% during the month which could be a sign that domestic demand is weak. However, the core reading only saw a slight decrease to 1.9% from 2.0%, while the monthly headline print rose by 0.3%. The sharp fall in energy costs are still filtering through the economy, but as long as the core reading remains firm, the BoC can refrain from quantitative easing measures. However, there is concern that the central bank will over react and start tightening too soon, if prices start to rise again. For more news and resources, visit the new Canadian Dollar Currency Room.