Euro finds some further strength
The Euro started this week in a much better position than it finished last week. Sentiment was lifted overnight by better than expected data from China along with the new global banking rules, Basel III ,which did not harbour any nasty surprises. Banks now have to hold 7 percent of their risk-bearing assets which is much higher than the current 2 percent but some were expecting a massive hike in the captal needed by banks which would spark a new round of money raising which would not be good for the financials.
Sterling was hurt on Friday by some pretty poor Producer Price Index data which came in worse than expected and put the proud pound on the back foot going into the weekend.
The Aussie Dollar has managed to hit a five month high following the decent data from China overnight. China’s consumer price index rose 3.5% on year in August the fastest pace since October 2008.
Not a great deal of data today to give the markets much direction and we could see a reasonably quiet day with many currencies trading in a range. Looking forward to the rest of the week and tomorrow has the UK inflation data along with the German ZEW index of economic sentiment followed by Euro inflation on Wednesday. Quite a bit of other data out for the rest of the week so we should get a clearer idea on the global recovery or lack thereof.