FX Highlights

  • USD is trading higher as equity markets fall in Asia with the Shanghai Index down 3% and banking concerns re-emerge, GBP falls to a four month low versus EUR in reaction to news that Lloyds Banking Group failed to raise enough capital to meet the FSA stress tests - UK banks will need to do more to improve their balance sheets, Japan's new Finance Minister Fujii reverses his support for strong JPY, UK public borrowing widens by less than expected in August, EU current account surplus widened in July and German producer process rise, the commodity currencies pressured by a setback in the price of gold, weaker crude and a spike in risk aversion as equity markets slide
  • Focus turns to today's release Canada's wholesale sales, and quadruple witching for US equity markets
  • Japan's Deputy Governor Yamaguchi says the global recovery is likely to continue for some time, still uncertain outlook for Japanese economy, he is concerned about the BOJ maintaining nonconventional monetary policy for too long, Yamaguchi' comments signal that the BOJ may be nearing an exit from credit market support
  • Japan's new Finance Minister Fujii says he does not want to be labeled as backing a strong JPY and said that JPY should reflect the Japanese economy, JPY lower
  • IMF to revise up its EU forecast by 0.5% for 2009 and 2010, IMF says there remain uncertainties about the global recovery and now is not the time for the ECB to exit nonconventional monetary policy
  • EU July current account surplus widened to 8.8 bln from 0.8 bln last month, producer prices in Germany rise 0.5% in August, Germany's Merkel expects 5 to 6% growth in Q3 2009, EUR lower
  • UK August public sector borrowing rises to 10.27bln from 5.09bln last year, a rise of 12 bln was expected, Lloyds Banking Group fails to meet capital requirements of the FSA will need to do more to clean up its balance sheet, GBP lower
  • US household wealth increase by 2 trln in Q2, the gain in household wealth may boost consumer spending
  • US equity markets set to open lower, European equities 0.5 % higher, Nikkei closed 73 points lower

Upcoming Events

  • US - Friday, no major us economic data is due for release today
  • CAN - Friday, July wholesales sales will be released expected at 0.8% compared to 0.6% in June