[I][B]Fundamental Headlines[/B][/I]
• [I]Lehman StrugglesTo Shore Up Confidence[/I]– Wall Street Journal
• [I]Street Firms Accused of Tax Scheme[/I]– Wall Street Journal
• [I]Bourses sell-off for third session[/I]– Financial Times
• [I]ECB Says Inflation Risks Prevail Even as Growth Slows, Oil Prices Decline[/I]– Bloomberg
• [I]Junk Bond Distress Levels Surge to 5-Year High, Signaling Europe Defaults[/I] – Bloomberg
• [B]GBPUSD [/B]– The BoE’s August Inflation Attitudes Survey showed that the inflation expectations surged to a new record high of 4.4% from 4.3% in May. Furthermore, BoE Governor Mervyn King said that the recent depreciation of the British Pound may fuel upside inflation risks going forward, which suggests that the MPC will not lower the benchmark interest rate until next year. However, David Blachflower continued to hold a dovish outlook as he expects unemployment conditions to worsen over the coming months, and anticipates economic activity to remain subdued for the rest of the year. For more news and resources, visit our GBP/USD Forum.
• [B]EURUSD [/B]- The European Commission lowered their growth forecast to 1.3% from 1.7% for the Euro-Zone, and expects Germany and Spain to slip into a technical recession later this year. Despite the dour outlook held by the commission, ECB Governing Council member Axel Weber dissented on the views, stating that ‘there is no need to see the medium-term outlook in an overly gloomy light or even raise the specter of a deep recession.’ Furthermore, the ECB bulletin stated that inflation remains at a ‘worrying level,’ noting that upside prices pressures will likely keep inflation above the central bank’s 2% target until 2010. Meanwhile, wholesale prices fell more than expected to 7.4% from the record high reading of 9.9% in July on the back of falling oil prices. For more news and resources, visit our EUR/USD Forum.
• [B]AUDUSD [/B]– Inflation expectations for the $1T economy slipped to 4.4% from 4.9% in August as economic activity cools amid falling oil prices. The downward revision for inflation suggests that the RBA may hold a dovish outlook for inflation, which could lead to potential rate cuts in the near future. Meanwhile, the Australian economy added 14.6K jobs in August, which beat expectations of a 5.9K increase. The bigger than expected rise in employment helped the to lower the jobless rate to 4.1% from 4.3% in July. For more news and resources, visit our Australian Dollar Currency Room
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