Bernanke has said that the placement of financial rules are required in order to get the US back on a more sustainable fiscal path. It is evident that a number of Western country’s could benefit from these kinds of measures. Significant budget deficit’s are becoming common place in many countries globally as huge amounts of debt seems to be becoming ever more socially accepted.

“Well-designed rules can help promote improved fiscal performance,” Bernanke commented yesterday, a rule “could provide an important signal to the public that the Congress is serious about achieving long-term fiscal sustainability, which itself would be good for confidence,” he said.

Risk appetite in the markets see stocks up in both Europe and the US. The Euro has benefited from better than expected PMI data helping to lift sentiment further. UK PMI helped bolster a Sterling rally against the US Dollar which is now looking precariously fragile. A test of resistance and perhaps the 1.60 psychological level could be imminent with Non Farms this Friday.

Tomorrow has a relatively quiet economic calender with revised GDP data from the Eurozone and ADP Employment from the US. The FX markets will most likely be influenced by stock market activity. If we continue to see a rise in global stocks we will probably see the Euro make more gains and the USD weaken further.

Support and Resistance

GBP/USD – Support 1.5670 / Resistance 1.5928
GBP/EUR – Support 1.1296 / Resistance 1.2015

Economic Releases

EU 16 – Revised GDP (Q2)
US – ADP Employment

Best Regards
Luke Zorab

Torfx Currency Dealer