EU Morning Report 

Dollar is under pressure after the Jackson Hole speech 

  • The US dollar is under pressure today against its major counterparts as investors speculate the Federal Reserve may announce further monetary easing in their meeting next month. During the Jackson Hole speech on Friday, Fed Chairman Ben Bernanke did not signal a third round of Quantitative Easing but he kept all options open by saying that the September's policy meeting would be extended to two days. He said that we will witness a solid economic growth by the end of the year but he also added that the Fed will consider many tools for stimulating the economy if needed. Economic data on Friday also revealed the US Gross Domestic Product in the second quarter grew by 1% up from a previous 0.4% growth. Against the Japanese yen, the dollar edged lower today falling to 76.49 today from 77.69. Focus turns to today's Pending Home Sales data.
  • The euro edged higher against the dollar today gaining 1.5% hitting 1.4548 from 1.4328. Versus the Swiss franc, the single currency gained 3.3% rallying to 1.1770 from 1.1395.
  • The Australian dollar edged higher as Bernanke's speech eased concerns that the US economy may enter recession and boosted risk appetite. Against the dollar, the Aussie jumped as high as 1.0633 from 1.0462. The British Pound rose against the greenback hitting 1.6401 from 1.6208. UK Gross Domestic Product showed that the UK economy grew by 0.2% in the second quarter. 
  • Oil prices jumped to 85.85 dollars a barrel from 82.96. Gold rose to 1838.42 dollars an ounce from 1757.09. Silver also edged higher rising to 41.78 dollars an ounce from 40.08.

Currencies to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4450 with a preference to enter Long positions at 1.4460
  • § The USDJPY pivot point is at 77.00 with a preference to enter Short positions at 76.95
  • § The OIL pivot point is at 82.90 with a preference to enter Long positions at 82.90
  • § The Gold pivot point is at 1855 with a preference to enter Short positions at 1855                         

Today's calendar and market movers:

  • § US Personal Income in July is forecast to gain 0.3%
  • § US Pending Home Sales in July is forecast to fall 1.3%

Equity Markets:                                               

US equities were positive on Friday with the S&P500 trading up 1.51% and the DJIA up 1.21%. The European bourses were negative with the FTSE trading down -0.02%, the DAX down -0.84% and the CAC down -1.01%. The NIKKEI and the HSI at the time of writing are trading up 0.65% and 1.51% respectively.

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