British Pound Falls to a Record Low (page 2 of 2)

Breakout Expected in the Euro

The Euro is consolidating within 100 pips of its high against the US dollar. For traders that like technicals, there is a clear ascending triangle forming in the EUR/USD which indicates that the currency pair is prime for a breakout. Wholesale prices in Germany were stronger than expected, confirming the ECB's fears about inflationary pressures. In the week ahead, US data dominates the calendar with only the German IFO report, Eurozone consumer prices and producer prices due for release.

Australian, New Zealand and Canadian Dollars Drop in Rising Risk Aversion

Rising risk aversion and the 250 point drop in the Dow has driven the Australian, New Zealand and Canadian dollars lower against the greenback. New Zealand reported their REINZ house prices, which hit a 7 year low, as record high interest rates start to take a toll on the overall economy. Next week's retail sales figures are also anticipated to drop, as personal savings grow. In contrast, New Zealand's consumer prices and food prices should report cheery figures, as dairy prices remain high. With economic slowdown creeping into the picture, RBNZ officials show no remorse, as wage pressures continue to boost inflationary pressures. On the other hand, Australia did not have any releases, but yesterday's unemployment report indicated that the once resilient economy is starting to weaken. Next week's depressed home loan and investment lending releases will prove to investors that the housing sector is already in a slump. On the Canadian front, new housing prices grew at a slower pace than anticipated, as the housing market starts to mimic the US housing market. Next week's CPI releases indicate that inflation is slowly approaching the 2% safety zone, but it should not be a concern for officials.

Yen Crosses Rally Ahead of G7

After a week of relatively consistent losses, the Japanese Yen had an unexpected gain today on the unwinding of carry trades. If this trend should continue over the few trading sessions, there is potential for the Yen to end up near its support level of 95. With no economic news released\, investors look forward to next week, with the G7 meeting and BoJ minutes due for release this weekend. This should set the tone for Monday's trading session, along with providing investors vital information about the issues that are of main concern for officials.