Will Japan and the Eurozone see Decreased Growth Over Next Six Months?

Fundamental Headlines

• EURUSD – A highly appreciated euro deterred foreign consumers in May, as German and French exports fell the most in four years. German shipments fell 3.2 percent in April, the most since June 2004, while French exports declined 1.7 percent. Over the past year, the euro has gained nearly 18 percent on the dollar and 15 percent on the sterling, diminishing competitiveness among traders. The German data was unexpected, suggesting that the U.S.-led global cool down is beginning to affect Europe’s two largest economies. Discuss the topic and your trade ideas in the EUR/USD Forum.
• USDJPY – Japan’s equipment orders report, an important indicator to assess the market and predict capital gain over the next three to six months, rose 10.4 percent in May. The rise is considerate, given orders rose 5.5 percent in April, and only a 1.1 percent increase was expected. Heavy investment in steel headlined the increase, which will have a hard time supporting Japan’s capital investment. More than likely, as inflation increases, capital will decelerate, and there will be a negative reading for the May-June data. Discuss the topic and your trade ideas in the USD/JPY Forum.
• AUDUSD – Westpac Banking Corporations’ confidence index dropped by 6.7 percent to a 16-year low, to 79 points, the sixth straight such reading below 100. Consumers, deterred by upward inflationary pressures and the highest borrowing costs in 12 years, have been less inclined to spend money on property or at retailers. As sentiment decreases and home-loan approvals decline as well, it’s becoming increasingly clear that the RBA is leaning away from another rate hike this year.