The yen is stronger against the euro and the dollar ahead of a government report forecast to show UK industrial production grew in July at a slower pace.

  • Speculation that the Bank of England will expand its asset-purchase program this week weakened the sterling against the yen for a second day.  The pound fell almost 200 pips from yesterday's high to 151.32.  If industrial production comes in weak and the Bank of England increases their monetary easing, it would boost risk aversion.
  • The Bank of England has cut interest rates from 5.75% to a record low of 0.5% and has taken additional steps for example buying bonds in the past one and half years to sustain economic growth.
  • The Aussie was close to its highest level in a year against the greenback on speculation Federal Reserve officials will this week signal they plan to hold down borrowing costs.  The Australian dollar rallied to 0.8577 against the dollar yesterday, this morning the AUDUSD eased down to 0.8528 as the Australian dollar slipped 0.4% against the yen.
  • According to the Saudi Arabian Oil Minister Ali al-Naimi, the global crude oil markets is in good shape with prices between $68 and $73 a barrel and should be satisfactory for both consumers and producers.  The Oil Minister also stated that the market is well supplied, as he arrived in Vienna for tomorrow's OPEC meeting, where the group is expected to leave output quotas unchanged.
  • Today, at the end of the Asian session gold broke above the 1000 mark for the first time since late February, spurred by inflation fears.  The all time high is just above $1030/oz.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4285 with a preference to enter into long positions at 1.4295
  • The GBPUSD pivot point is at 1.6300 with a preference to enter into long positions at 1.6310

Today's calendar and market movers:

  • UK Manufacturing Production month on month expected to drop to 0.3%
  • German Industrial Production month on month expected to rise to 1.5%
  • Canada Building Permits month on month expected to drop to 0.5%

Stocks:

  • The US markets were closed yesterday in observance of Labor Day.  As of 06:05 GMT the Nikkei is trading at 0.7% and the Hang Seng at 0.62%.