U.K. and Euro-Zone Seeing Increasing Price Pressures, How Long Will Central Banks Sta

[B]Fundamental Headlines[/B]

[I]• China’s Industrial Output Rises – Wall Street Journal
• Recession Takes Toll on U.S. – Wall Street Journal
• US starts to unwind state bank support – Financial Times
• Economic Growth in U.S. Forecast to Slow After End of `Cash for Clunkers’ – Bloomberg
• Consumer Sentiment in U.S. Probably Improved on Signs Recession Is Ending-Bloomberg[/I]

[B]
GBPUSD[/B]– U.K. August factory gate prices rose for a sixth straight month by 0.2% in August pulling the annualized reading up to -0.4% from -1.3%. A 1.2% rise during the month in petroleum products lead to the increase as stabilizing oil prices are beginning to filter through. Indeed, we saw the annual rate of change for petroleum products rise from -20.1% from -15.3%. Nevertheless, inflation is expected to remain below the BoE’s 2.0% target for the remainder of the year which will allow them to maintain interest rates at a record low of 0.50%. Discuss the topic and your trade ideas in the GBP/USD Forum.

[B]
EURUSD[/B] – German whole sale prices in August rose 0.7% following a 0.5% decline the month prior. It was the fourth gain in the past five months which could be a sign that the stabilizing economy is sapping consumers purchasing power. If companies can pass more of their costs on to buyers then they will be able to raise profits which is the first step before they begin to hire workers. The growth outlook for Europe’s largest economy continues to brighten despite concerns that the end of government stimulus will thwart a recovery. Indeed, German public spending is expected to account for 4% of GDP from 2008-2010. Discuss the topic and your trade ideas in the EUR/USD Forum.