FOREX News and Overnight Technical Levels- August 2nd

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

  • [B]USDJPY -[/B] Monetary base contracted for the 17th consecutive month at a rate of -2.3 percent versus -3.0 percent expected, as the Bank of Japan steadily drains surplus funds from the short-term money market.
  • [B]EURUSD -[/B] The European Central Bank left rates steady at 4.00 percent, as expected. However, the central bank surprised the markets by announcing that they will hold a press conference this morning, as ECB President Trichet will likely signal a 25 basis point hike in September with the phrase “strong vigilance.”
  • [B]GBPUSD -[/B] The Bank of England ledt their benchmark rate steady as well at 5.75 percent, and while one more hike is expected this year, markets will have have to wait until next week for the BOE Quarterly Inflation Report in order to gain a clearer signal on future policy.
  • [B]US Treasury Secretary Henry Paulson[/B] said he was assured that China is committed to currency flexibility and more financial reforms,as he told reporters, “I heard from everyone, right up to the top, they are committed to currency flexibility, to currency reform.”