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Currency report podcast for week to Aug 28.

By • Aug 30th, 2012 • Category: Currency

The Coracle Online Currency podcast for August 28, 2012 in association with Crossbar fx

Wed 29th Aug EMU – CPI for August
US – GDP revised

Thurs 30th Aug EMU – German Unemployment
UK – Consumer Credit
US – Personal consumption expenditure

Fri 31st Aug UK – Consumer confidence
EMU – German Retail sales
US – Factory Orders, Bernanke’s speech at Jackson Hole

Thank you for downloading the foreign exchange market report podcast for August 28th from Coracle Online and Crossbar fx.

After getting ahead of themselves in putting their trust in central bankers, the markets last week actually got some of the encouraging hints they had wanted. Unfortunately they then fell prey to new doubts. The ECB is clearly waiting for the politicians to make the first move. In contrast, it is just possible that the F.O.M.C is preparing to launch QE 3 ‘fairly soon’, which could reasonably mean announcements during the 12/13th September meeting, or the following one on 23/24th October. There was a caveat in the minutes of 31st July/1st August meeting that if ‘incoming information pointed to a substantial and sustainable strengthening in the pace of recovery’ then a new programme might not be necessary. As it happens, the various US data releases in August, headed by the Non-Farm Payrolls have been quite encouraging and some people began to think that these were now good enough to steady the FOMC’s hand. Mr Bernanke will no doubt have to make a clearer signal during his address at Jackson Hole on Friday.

In Europe, the politicians, except the increasingly frantic Mr Samaras, do not seem in much of a hurry. Mrs Merkel and Monsieur Hollande, possibly disingenuously, are sending out quite encouraging messages to Greece while trying to sound stern at the same time. Spain continues to want the ECB to blink first before they ask for a bail out.

The UK had a less comfortable week. GDP in Q2 was revised to minus 0.5%, which after allowing for the extra Jubilee Holiday, means output was flat. Too much attention is often paid to each month’s Public Sector Borrowing figures as they are subject to seemingly endless subsequent revisions. The July numbers were slightly disappointing on the revenue front with a £1 billion shortfall in North Sea Oil tax receipts. Government expenditure was higher than expected and they seem to be trying to make people aware, all of a sudden, that it was the projected rate of increase and not the absolute level that the Coalition is trying to reduce. Any which way, it’s still borrow and spend, just more slowly, and kicking the debt further down the road.