Euro loses ground over Dollar

The Dollar had a great day yesterday as it strengthened against all the majors. The dollar hit a 7 month high against the Yen as there was unrest across the globe over recessions against all the other largest economies.

The government officials did not help as they said that the Japanese economy may have already entered a recession, which was backed by Japans index of business cycle leading indicators that were on near 6 year lows. 

The Euro lost ground over the USD as reports came in for German growth data which is expected to have contracted by 1% in the second quarter, this gave a little light on the ECB as now they are expected to deter from its hawkish stance on interest rates. However the Euro surprisingly has held its ground despite the poor data releases, this may be due to the ECB stance on controlling inflation. This may change if future weak growth data is released, then this may force the Euro to push lower. 

Sterling fell below the 1.95 mark yesterday but managed to make gains against the Yen due to what was said above by the government officials in Japan. The main focus is on the USD as backed by John Normand from JPMorgan's comments that the US was the only economy that is not sliding into recession. 

Due out today is the BoE rate announcement at 12pm and ECB rate announcement at 12.45pm, with Trichet speaking at 13.30pm. Other data due to release is from the US , Pending Home Sales and Consumer Credit.