The single currency is still getting use of the ECB keeping of its easing policy unchanged while the Fed, BOE and BOJ are still looking for further easing steps to keep their recovery after flattering trading currently well above 1.36 versus the greenback. The growth signs are still improving in the Euro zone and especially in the germane leading economy getting use of the slump of the single currency after the credit crisis and the debt crisis which attracted the market focusing this year pushing the single currency below 1.2 while the deflation concerns are emerging in US putting pressure on the Fed to take a second round of its quantitive easing policy buying more Mortgage backed securities and rolling over it’s holdings of treasury securities as they mature before this deterioration can have further negative impacts on the consuming and capital spending and to inform the markets that the Fed will not stand seeing the economy falling back in a second dip recession with no action even with the interest rate near 0% which is keeping the greenback under pressure across the broad until now.

The cable also has been skeptical by the growth downside risks amid slowing of the US growth in the second half of this year and depressed by the release of UK public sector net borrowing of August which was expected to be 12.2b Stg from 3.173b Stg and came at 15.3b Stg and the dovish MPC release minutes have shown tending for further stimulation easing steps following the Fed..

These expected easing measures could push the gold up breaking 1300$ trading currently at 1312$ with market growth worries after new dovish US Conference Board's Consumer Confidence release slumped to 48.5 while the market was waiting for 52.9 in September after rising to 53.5 in August from 50.4 in July.

By god's will, it is still important this week to wait for September US Chicago PMI to be 56 from 56.7 in August and September US ISM manufacturing index to get down to 54.5 after coming back up to 56.3 against the market expectations of easing further to 53.5 in August from 55.5 in July.

Best wishes

FX Consultant

Walid Salah El Din
E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
http://www.fx-recommends.com