The Euro is trading lower at the mid-session. Now thatcredit concerns in the Euro Zone have been taken care for the short-run,investors are becoming worried about the possibility of a slow down in theeconomy.
The Euro is trading lower at the mid-session. Now thatcredit concerns in the Euro Zone have been taken care for the short-run,investors are becoming worried about the possibility of a slow down in theeconomy. The size of the new bailout package is expected to have an impact onthe Euro Zone economy which may result in a double-dip recession.
A dovish Bank of England outlook for U.K. growth andinflation is pressuring the British Pound at the mid-session. The BoE’s weakoutlook negated most of the rally which took place on Tuesday following theestablishment of a new government.
In the report released prior to the New York opening, BoE Governor Mervyn King warned that risks to growthhad increased and that the Euro Zone debt crisis had made it necessary for thenew U.K.government to speed up the process of developing a balanced budget. Furthermorehe added that interest rates would stay at a record low 0.50 percent for longerthan the markets had expected. He then added that inflation was forecast to bebelow its 2 percent target in two years.
King was supportive of the new government and looked forwardto working with it in an effort to turn the economy around while cutting thebudget and reducing the sovereign debt.
The USD CAD is under pressure at the mid-session. Higherequity prices are helping to boost the Canadian Dollar. Strong demand for thecurrency is also being driven by the bullish outlook for the economy and thestability of the Canadian banking system.