Euro Hits Record Highs as Investor Confidence Falls (page 2 of 2)

Eurozone growth should weaken further in the coming weeks, especially with the Euro climbing to a new record high.

The ECB has been mute about intervention but if oil prices continue to fall, they will probably start entertaining the notion.

However for the time being, it is the US dollar that is driving the currency pair. Eurozone consumer prices are due for release tomorrow and Switzerland will be releasing their retail sales report.

The market expects consumer spending to rise, which could lift the Swiss Franc for no other reason than the fact that the country could be doing comparably better than many other G10 nations.

Pound Sterling hits three month high on record CPI

The Sterling strengthened against the US dollar and Euro as consumer prices hit a record high.

Producers are passing on their highest costs to consumers because the rise in prices is not just limited to food and energy.

This was much stronger than the market expected and well above the Bank of England's 2% target. The annualized pace of CPI growth has now hit 3.8%.

The BoE has already warned that inflation could rise above 4%. Meeting this prediction will not be enough to force the BoE to raise rates.

House price growth remains near a 30 year low while retail sales took another dive in the month of June. UK labour market data is due for release tomorrow which could determine whether the British pound will hold onto its impressive gains.

Australian Dollar hits new 25 year highs, Bank of Canada leaves rates unchanged

The Australian, New Zealand and Canadian dollars continue to gain strength on bullish economic reports and US dollar weakness.

The Bank of Canada left interest rates unchanged at 3%, which was right in line the market's expectations but the BoC grew slightly more concerned about inflationary pressures.

However like the BoJ, the BoC will not be altering interest rates anytime soon because US economic weakness and the ongoing turbulence in the global financial markets are keeping their hands tied.

The New Zealand dollar was one of the market's best performing currencies thanks to a sharp rise in consumer prices. CPI grew by the fastest pace in 18 years.

Japanese Yen Crosses: All under water

The volatility in US stocks has weighed on all of the Japanese Yen crosses.

The Bank of Japan left interest rates unchanged at 0.50%, which was right in line with the market's expectations, but they cut their economic forecast and raised their inflation projections.

This had no impact on the Yen crosses however, which traded primarily on the wild swings in US equities