The pound consolidated against the dollar during the overnight trade as falling stock markets sapped demand for riskier assets. However, sterling remained strong against the euro and the Australian dollar after Rightmove House Prices report showed London home sellers raised asking prices to a record in June. Average prices increased 1.8% from May to 438,622 pounds, while home values increased by 0.6% on national level. There are no data releases or policy speeches scheduled for today. Looking ahead to this week, the minutes from the June MPC meeting are released on Wednesday. June release will give us the first indication of how new MPC member Ben Broadbent will be positioned on policy. Also scheduled for this week are public finance data and CBI industrial Trends on Tuesday, while on Thursday the BBI lending data and CBI Distributive Trades highlight the economic calendar. Expect for the pound to remain in current ranges ahead of the Wednesday’s BoE Minutes release.
The euro fell across the board during the early morning trade as European governments failed to agree on bailout program for Greece in order to prevent the country to default on its debt. EU finance ministers pushed Greece to pass laws to cut the deficit and sell state assets, and left it open whether the country will get full 12 billion euros promised. However, any major loses in the single region currency were limited after Luxembourg’s Juncker said that any role for private investors in new rescue package for Greece “has to be really voluntary”. Looking ahead to this week purchasing managers index (PMI) data headlines the economic calendar and it give us an early indication if the Eurozone economy is going to continue with its “soft recovery” into June.
The dollar gained across the board as declines in commodities and stock markets around the world boosted demand for safer assets. The MSCI Asia Pacific Index of shares fell 0.6% for a fourth day of declines, while the Stoxx Europe and FTSE 100 Index slumped by 1%. Looking ahead to this week, Federal Reserve meeting headlines the economic calendar as investors remain worried by recent run of poor US data. Market participants will pay close attention to Ben Bernankes’s press conference on Wednesday while they wait for Fed’s next move as QE2(quantitative easing) program ends this month. Also scheduled for this week is the home sales report, with the expectations for the figures to drop to the lowest level this year.
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