[B]Fundamental Headlines[/B]
[I]• Cost Cuts Lift Profits But Hinder Economy – Wall Street Journal
• Summers Outlines Risks to Recovery – Wall Street Journal
• Slow US recovery blamed on low demand – Financial Times
• Treasuries Rally on Fed Speculation as Gold Jumps, European Stocks Decline – Bloomberg
• Obama Dollar Retreats Most Against Commodity Producers in Wealth Transfer -Bloomberg[/I]
[B]EURUSD –[/B] German investor confidence unexpectedly declined for the first time in three months in October as concerns grew that the region’s recovery wasn’t assured. Dovish talk form several ECB members helped temper optimism despite the trend of improving data. The Zew survey economic outlook fell to 56.0 from 57.7 with the assessment of current conditions improving to -72.2 from -74.0 but missing expectations of -69. The central bank is expected to remain on hold until mid-2010 but markets participants started to anticipate tightening to begin sooner which provoked the cautious comments from committee members. The central bank has deemed the current record low 1.00% benchmark rate as appropriate with economic risks currently balanced. To discuss this and other ideas visit the EUR/USD Forum.
[B]GBPUSD- [/B]U.K. consumer prices were flat in September which slowed price growth from a year ago to 1.1% from 1.6% the month prior. Economists were forecasting inflation of 0.3% for the month with the annualized reading falling to 1.3%. A 0.7% drop in food prices offset gains in clothing and household goods to generate the first flat reading in September since records began. The continuing disinflation will leave the door open for more quantitative easing efforts from the BoE. The central bank left interest rates unchanged this month and refrained from adding to their asset purchase program as they decided to wait until November when the initial program ended and the results from the quarterly inflation report will be released. To discuss this and other ideas visit the GBP/USD Forum.