Forex Market Review by Finexo.com
On Friday, the U.S Dollar tumbled against the majority of its currency counterparts as a government report showed that U.S. economic growth slowed in the second quarter. According the Department of Commerce, the U.S. economy grew 2.4% in the second quarter after a revised 3.7% increase in the first three months of the year. Unfortunately for the U.S, this disappointing report was just one of many in a long string of weaker-than-expected figures for July. The news 
pushed the U.S. dollar to drop to an 8-month low against the Yen and a 6-month low against the Swiss Franc.
Up ahead this week, trading is expected to be dominated by interest rate announcements from the central banks of Europe, Britain and Australia. Moreover, all eyes will be on Friday’s Non-Farm Payroll. Investors continue sell the Dollar, as the string of the souring US economic reports have made market participants distrustful of the greenback’s “safe haven” status.
EUR/USD
The Euro rallied against the dollar, in its first monthly advance since November, as concerns began to ease that the single currency region’s debt crisis will worsen and spread to the global economy. The Euro rose 6.7% to $1.3052 on Friday, from $1.2238 on June 30. Moreover, the 16-nation currency has rallied over 10% from its four-year low of $1.1877 on June 7. According to analysts, the Euro’s recent turnaround is due to the surprisingly strong European data and the recent weak U.S figures.
Up ahead, this week there are several key European announcements, including that the minimum bid rate, published on Thursday. While, the ECB is expected to continue to hold the key rate at 1.0%, forex traders are advised to listen to ECB president Trichet’s speech. At last month’s meeting, Trichet’s credibility received a boost when he laid out the positive news occurring in the EU economy and how the central bank is working to prevent further financial problems. However, this time around expectations are higher and if the ECB and Trichet sound too conservative, the Euro’s recent rally could come to a screeching halt.
USD/CAD
The Canadian Dollar appreciated against its U.S. counterpart in July, its first monthly gain since April, as rises in equities and commodities boosted the appeal of currencies tied to growth. The Canadian currency was up against the U.S Dollar, after a report showed that despite slowing economic growth in both nations, the Bank of Canada will continue to raise the its key overnight lending rate. On Friday, Stats Canada reported that the nation’s growth edged up in May by 0.1%, in line with market expectations, after unexpectedly stalling in April.
Forex Market Review & Analysis by Finexo.com
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