Forex

Stock indices have had a slight breather after their recent fall. With the German Dax bouncing off critical support, FTSE 100 struggles to drive prices higher.

After three consecutive months of declines, U.S. consumer confidence rebounded in August as falling gas prices took some of the bite out of sky-inflation in the economy.

U.S. stocks appear to have to turned the corner towards another bear market leg lower, and on that bounces are expected to be short-lived.

German Inflation Rises to 7.9%, ECB Hawks Talking up a 75bps Hike

The EUR/USD is churning sideways around parity, but anticipated to continue the trend lower in the both the near and long-term.

Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Germany 40-bullish contrarian trading bias.

Monetary policy divergence between the Bank of Japan and the Fed worsened after the Fed’s commitment to rate hikes while the BoJ remains supportive. Yen vulnerable

The DAX and FTSE both show signs of continuing recovery following Friday's selloff, with China's stimulus pledge allaying growth fears.

As interest rate differentials widen between Japan and other major economies, the Japanese Yen continues to weaken.

EUR/USD found some support after a mixed consumer confidence report, while ECB officials stay on their hawkish path.