Euro Declines as Global Demands Fade

[B][U]Fundamental Headlines[/U][/B]

[B][U][/U][/B]• [I]Freddie Hunts for Cash[/I] – Wall Street Journal
• [I]Stock Futures Set to Open Higher Ahead of Bernanke Speech[/I] – Wall Street Journal
• [I]Bank Trio in Auction Rate Deals[/I] – Financial Times
• [I]Paulson Might Weigh Whom to Hurt in Any Fannie, Freddie Rescue[/I] – Bloomberg
• [I]Central Bankers at Retreat May See Few Options to Fix Economy[/I] – Bloomberg

· [B]EURUSD –[/B] Industrial new orders for the Euro-Zone slid to a 7 year low as the index fell to -7.4% from -4.4% from the previous year as global demands begin to fade. The current account deficit also widened to -8.2B from -7.3B as a result, heightening downside growth risks for the 15 European nations. As growth prospects worsen for the Euro-Zone, the ECB may be forced to hold the benchmark interest rate steady for the rest of 2008 as inflation remains well above target.Discuss the topic and your trade ideas in the EUR/USD Forum.

· [B]GBPUSD – [/B]Second quarter GDP figures were unexpectedly revised lower to 0.0% from 0.2%, lowering growth expectations for Europe’s second largest economy. The downside risks to growth will be a major area of concern for the BoE as the housing crisis continue to take a toll on the economy. Market participants have already raised bets that the MPC will be force to cut the benchmark interest rate as economic activity continues to deteriorate, and may not be able to stand on the sidelines for much longer. For more news and resources, visit our GBP/USD Forum.

· [B]USDJPY– [/B]The Bank of Japan Minutes reiterated the central bank’s focus on downside growth risks, noting ‘sluggish’ for the world second largest economy. Central banks expect upside inflation risks to cool as economic activity stalls, and went onto say that ‘the pace of wage increases is weak.’ On a lighter note, Japanese supermarket sales rose for the first time in four months to 0.9% from -0.9% in June. Discuss this and your trade ideas in the USD/JPY Forum.