The Single currency has peaked out today with the optimistic Germane IFO release of August this morning which was expected to be 88.6 and it has surprised the market by 90.5. The IFO expectations have gone up to 95 in August from just 90.4 in July and it was expected to be just 91.6 while the current conditions figure has increased to 86.1 and it was expected to be 86.1 which reflect the current market optimism of the coming future but the current conditions have not seen a major variety yet. The single currency has met a selling pressure on touching 1.435 after these data amid greenback buying as the dovish US equities performance today but it has just found an intraday support at 1.421.

The single currency has been supported recently by series of better than expected data which have started 2 week ago with the release of EU GDP of the second quarter which came at just -.1% q/q and -4.6%y/y and it was expected to be -.6% q/q and -5.1% and it has continued with the uprising release of the germane ZEW of August which was expected to go up to 45 from 39.5 in July it has surprised the market this morning by rising to 56.1 this month and also August ZEW survey of the EU which shows the economic sentiment has gone up to 54.1 from 39.5 in July and it was expected to be just 43 and by the end of last week we have had better than expected flash figures of EU PMI Manufacturing of this month coming up to 47.9 from 46.3 in July and it was expected to improve to just 47.5 and also the PMI Services figure came up to 50.2 from 47 and it was expected to be 48.1 and also in the beginning of this week, we have seen an increasing of the EU industrial new orders in June by 3.1% m/m and they were expected to be up by 1.7%.

The US equities market could keep its last week gains underpinned by yesterday by the release of August US consumer confidence release which was expected to be 48 and it has come at 54 from 46.6 in July as the market focusing on the slow pace of consuming in US in June and July which was affecting negatively on the US stocks as the slowing down of the consuming pace can hurt the investors to believing in the current demand which is required to spur this recovery and store confidence again in the US economy and these needed data have come after last week Ben Bernanke's optimistic speech which indicated that the worst of the credit crisis is looking behind of us currently and the focusing is now on the current obstacles in front of a reliable economic growth after the credit crisis. His comments have spurred a new wave of cheeriness driving the stocks markets up with the end of last week amid better than expected data from the housing market after the release of July US existing homes sales which were forecasted to be up by just 2.7% but they have surprised the market by grown up by 7.2% improving the investors' risk appetite to buy stocks selling the low yielding currencies such as the greenback and the Japanese yen but now Dow is struggling to stand above 9500 on what looks a profit taken wave after a strong rally of the US stocks in spite of the surprising rising of the US new home sales of July too by 9.6% m/m and they were forecasted to be up by just 1.6% and the better than expected increasing of US durable goods orders of July by 4.9% m/m which refer to an materialized improving of the US economic conditions in the recent weeks.

By God's will, it is important tomorrow to wait from Germany for August CPI preliminary reading to be unchanged at July m/m and down yearly by .2% and from UK we wait for the nationwide housing prices to be up monthly by .6% and down yearly by 3.9% and from US for the Q2 preliminary reading which is expected to be down by 1.4% y/y and US real personal consumption expenditures of the second quarter to be down by 1.2% q/q. 

Best wishes
 
FX Consultant
Walid Salah El Din

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