Euro headed lower? (page 2 of 2)

The British Chambers of Commerce reported that business optimism plummeted in the second quarter. The UK trade balance is due for release tomorrow and like the German numbers, we expect them to be pound bearish.

Last month, manufacturing PMI fell to the lowest level since 2001. The export orders component of the report also deteriorated, which is why we believe that the UK trade deficit will continue to grow.

As the Bank of England's monetary policy meeting approaches, more people are talking about the possibility of a rate cut this year. Recent data indicates that the UK economy is in serious trouble and a recession could be right around the corner.

Falling commodity prices drag Australian, New Zealand and Canadian Dollars lower

The Australian, New Zealand and Canadian dollars have been hit by lower commodity prices and a stronger dollar.

Oil prices have dropped $9 over the past two trading sessions and hopefully this is a top. The only thing that can prevent the global economy from slowing even further would be a reversal in oil prices.

If crude fell back to $100 or even $120 a barrel, central banks around the world could forget about raising interest rates and focus on boosting growth.

This would help to bring some relief to companies and consumers who have been forced to cut expenses.

Australian business confidence dropped to a seven year low last month, which is the weakest since September 11th.

New Zealand business confidence on the other hand held at a 33 year low.

We get to learn how consumers in Australia feel tonight with the release of the Westpac consumer confidence report.

Meanwhile Canada will be releasing housing starts. We expect falling oil prices to weigh on the Canadian dollar.

Japanese consumer confidence hits six year lows

Japanese Yen crosses continued down a volatile path, as the Dow experienced a strong rally.

The Yen managed to rally against some but not all of the majors. Economic data was soft, with the Eco Watchers Survey plunging to a six year low as high food and oil prices took a heavy toll on sentiment.

These numbers could be foreshadowing a similar deterioration in consumer spending as the Bankruptcy rate rose for the first time in three months.

Looking ahead, Machine Order and Machine Tool Orders should help investors attain a better understanding of how poorly the business sector may be doing. With no interest rate change in the near future, more trouble in the Japanese economy may only have a limited impact on the Japanese Yen.