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US Dollar under broad based selling pressure

The pound weakened against the euro before the release of data that’s forecast to show the UK economy slowed in the second quarter. Britain’s currency climbed against the dollar as US lawmakers failed to agree on a deficit reduction plan. The UK economy grew 0.2 percent in the second quarter after expanding 0.5 percent in the prior 3 months, according to the Bloomberg survey before the release from the Office for National Statistics at 9:30 am in London. The pound has fallen 7.8 percent in the last 12 months, making it the second worst per¬former among 10 developed market currencies after the US dollar.   
Data 09.30: Prelim GDP q/q.


The euro’s overnight rally could be short lived as a third Greek bailout looks like only a matter of time. Get ready for more bitter rows over how the pain should be distributed between holders of Greek bonds and the taxpayers of other eurozone countries. That is no way to encourage companies to invest or consumers to spend—but it is the way to try the patience of German taxpayers. The second problem is the design of the European Financial Stability Facility—the rescue fund is to be the first line of defence against speculative attacks. But how would Italy and Spain be defended in practice? The European Financial Stability Facility has been handed powers to intervene but no new cash. A fighting fund would have to be raised by passing the hat round member states, a challenge that looks a tall order today.
No major data.


The dollar came under broad based selling pressure after a pair of back to back speeches from US President Barack Obama and House of Representatives Speaker John Boehner failed to offer much more than a rehash of familiar arguments surrounding the lingering impasse over raising the US legal debt limit ahead of a deadline on August 2nd and introducing deficit-reduction measures to pacify global ratings agencies that have put the world’s top economy on negative watch for a possible downgrade. The greenback slid as much as 1 percent against the euro.
Data 15.00: CB Consumer Confidence; New Home Sales.


General: • Canada’s Dollar traded at almost the strongest level since November 2007 as investors sought shelter after US lawmakers failed to find consensus on raising the nations$14.3 trillion debt ceilin


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GBP/USD                        1.6340

GBP/EUR                        1.1260

EUR/USD                        1.4500

GBP/JPY                         127.50

GBP/AUD                        1.4950

GBP/NZD                         1.8740

GBP/ZAR                         10.95

GBP/CHF                         1.3110

GBP/CAD                        1.5400

GBP/SGD                        1.9640

GBP/THB                         48.50

GBP/HKD                        12.7250

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These rates are for indication purposes only.


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John Paul Georgiou

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