German Exports Rise For Third Month, But Drop In Production Raises Growth Questions

[B]Fundamental Headlines[/B]
[I]
• Mixed News Reinforces BoE View – Wall Street Journal
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• Gold rises above $1,000 an ounce – Financial Times
• Putin Blinking on Increased Exports Signals Oil Weakness as OPEC Convenes – Bloomberg
• Stocks Cheapest Since '89 Show Why Analysts Say Economists Wrong on Growth -Bloomberg[/I]

[B]GBPUSD[/B]– U.K. industrial production rose for the third time in four months as manufacturing activity increased by 0.9%. Declines in mining and oil production limited the broader reading to a 0.5% improvement which surpassed estimates of 0.2%. A 3.3% increase in output of chemicals and man made fabrics helped lead the improvement in manufacturing, but a flat reading in textiles could be a sign that consumer demand is expected to remain weak. The BoE has expresses concerns that lending to consumers remains restricted which could limit the scope of a recovery. Therefore, at Thursday’s policy meeting there is potential for the central bank to add to their quantitative easing efforts. Discuss the topic and your trade ideas in the GBP/USD Forum.

[B]EURUSD[/B] – The German trade balance surplus increased to 13.9 from 12.1 billion as exports rose for a third month outpacing flat imports. Demand from abroad rose 2.3% in July following a 6.1% increase the month prior which helped lift Europe’s largest economy out of recession. However, concerns that growth is unsustainable was further boosted by a 0.9% drop in German industrial production in July which significantly missed economist predictions of a 1.6% gain. Manufacturing, mining, capital goods, energy and construction all saw reductions. The ECB has recently tried to talk down interest rate expectations as growth prospects remain “highly uncertain”. Therefore, expectations are that they will keep their benchmark rate on hold for the remainder of the year. Discuss the topic and your trade ideas in the EUR/USD Forum.