Looking Back (June.30-July 6)

GBP/USD: The Pound Sterling went pretty much where I expected it to go. During the July 2 London trading hours the stock market rallied 9.8% creating an immediate demand for the Pound; however the new demand petered out just shy of 1.530, falling hard after the not-so-great England Central Bank's Monetary Report as expected.

EUR/USD: Extremely mediocre producer activity and around the same Unemployment Rate as last month sets up for a pessimistic ECB Report and follow-up press conference. ECB President Mario Dragzi shared similar sentiment with BOE President Mark Carney.

"Both the European Central Bank and the Bank of England stood aligned against the Fed’s decision to cut stimulus spending, committing to record low interest rates. The ECB will keep its rate at 0.5 percent, and the BoE has hinted at lower rates.

In an unprecedented move, European central bankers broke new ground to protect their economies from a US-led surge in bond yields, indicating they will keep benchmark interest rates low for an "extended period.”

ECB President Mario Draghi said the decision was aimed at supporting the euro economy of the anticipated decline in US money printing, but insisted the consensus was reached without US influence.

European markets rallied on the news, which posted their biggest one-day jump in 11 months, but the pound and euro fell against the US dollar, with the euro hitting a five-week low.

"We are not reacting to other central bank’s monetary policy decisions," Draghi said."

source: Autonomous Nonprofit Organization “TV-Novosti”, 2005–2013. http://rt.com/business/euro-bank-interest-rate-693/)

AUD/USD: Sluggish manufacturing performances have slowly gotten better, but still below where the RBA wants it to be. The Australian Trade Balance remains at $-2637M signaling that the Australian dollar is still too high to encourage foreign buying of Australian goods and services. Retail sales grew 0.1%; pretty slow for a growing economy. Consumer confidence began to rebound from a bottom set in May of -7.0%. Concerning however is the continuing shrink of full-time employment. Employment Changes month-to-month beat expectations of a grisly outlook but most of the work is part-time which will impact earnings. A decline in the GDP growth rate raises concerns of the economic expansion ending.