- Euro: Greece Fails To Obtain Extension, ECB To Wait For German Ruling
- British Pound: 2Q GDP Contracts 0.5%, RSI Falls Back Ahead Of Overbought
Euro: Greece Fails To Obtain Extension, ECB To Wait For German Ruling
The Euro slipped to 1.2497 as German Chancellor Angela Merkel said she will need to see the Troika report on Greece as the region seeks a two-year extension to meet its budget target, while the European Central Bank reiterated that it will wait for Germany's high court to rule on the European Stability Mechanism before finalizing its bond purchase program. As Greece struggles to get its house in order, the threat of a euro-area exit may generate further declines in the exchange rate, and the EURUSD may track lower over the near-term as the ECB talks down speculation of seeing a major announcement at the next rate scheduled for September 6.
As the EURUSD maintains the downward trend carried over from 2011, the lack of momentum to push above the 100-Day SMA (1.2610) may produce a lower top going into September, and the pullback from 1.2588 is likely to turn into a larger correction as the economic docket on tap for the following week is expected to show a weakening outlook for Europe. However, as the Jackson Hole Economic Symposium comes into focus, we may see the EURUSD consolidate ahead of the key event, and the developments coming out of the conference is likely to have major impact on the euro-dollar as market participants weigh the outlook for monetary policy.
British Pound: 2Q GDP Contracts 0.5%, RSI Falls Back Ahead Of Overbought
The British Pound continued to pare the advance from earlier this week as market participants scaled back their appetite for risk, but we may see the sterling continue to outperform against its major counterparts as the Bank of England looks poised to sit on the sidelines throughout the second-half of the year. Indeed, the preliminary 2Q GDP report for the U.K. showed a less-than-expected contraction during the three-months through June, and the positive developments coming out of the region may encourage the BoE to become more upbeat towards the economy as the recovery gradually picks up. Nevertheless, the GBPUSD looks poised for a short-term correction as the relative strength index falls back from a high of 66, but we continue to look for a series of higher highs paired with higher lows in the exchange rate as the upward trend takes shape.
|USD||12:30||8:30||Durable Goods Orders (JUL)||2.5%||1.6%|
|USD||12:30||8:30||Durables ex Transportation (JUL)||0.5%||-1.1%|
|USD||12:30||8:30||Non-Defense Capital Goods Orders ex Aircrafts (JUL)||-0.5%||-1.4%|
|USD||12:30||8:30||Non-Defense Capital Goods Shipments ex Aircrafts (JUL)||1.2%|
--- Written by David Song, Currency Analyst
To contact David, e-mail email@example.com. Follow me on Twitter at @DavidJSong