ECB Likely To Cut Interest Rate By 0.25 To An All-Time Low Of 0.75%

 
It is widely expected, ECB will be more likely to cut interest rate by 0.25 percent to an all time low 0.75 percent. The rate reduction is following June 28/29 EU Summit which leaders made a sign of progress where they came up with an accord with regards to a banking union under ECB supervisions. Yields on Spanish and Italian bonds have eased since euro area leaders announced the move last week, when they also agreed to withdraw the ESM's preferred creditor status.

The euro gained almost 2.6% percent after the announcement of an accord. This upcoming rate decision perhaps a punishment to EU leaders or a reward for their hard work which left Draghi pleased after the summit. However, analysts from around the world have come to a consensus that ECB President Mario Draghi is reluctant to engage further action before euro area leaders will implement the policies they agreed upon. He reiterated that ECB analysts are still assessing the impact of the first two LTROs, which pumped over €1 trillion into the banking system starting late last year.
EUR/USD" title="EUR/USD" width="625" height="377">
GBP/USD
The Bank of England is expected to increase its Quantitative Easing program or the Asset Purchase Program as the BOE calls it from £325bn to £375bn today as gloomy outlook on the economy. Purchasing Managers Indices, (PMI), for Manufacturing and Construction are stuck below the key 50 level and even more important Services PMI has started showing some weakness with 51.3 against expectations for 52.9. The British service sector expanded at the slowest pace in eight months in June and the slowdown exceeded economists' expectations, as additional holidays and fragile demand weighed on activity. As an aftermath, British currency fell for a third day against the dollar to $1.5573. Reports by Markit this week showed U.K. manufacturing and construction contracted in June, while euro-area services and manufacturing output shrank for a fifth month.
GBP/USD" title="GBP/USD" width="624" height="468">
USD/JPY
Japan's average monthly wage earnings in May logged it first decline in four months, data from the Ministry of Health, Labor and Welfare showed. Cash earnings were down 0.8 percent annually, following a 0.2 percent rise in April. The decline was largely driven by a 39.9 percent fall in special payments, predominantly summer bonuses. Meanwhile, regular pay gained 0.4 percent after falling 0.2 percent a month ago. Overtime pay grew at a pace of 6.4 percent, faster than the 5.7 percent increase seen in April.
USD/JPY" title="USD/JPY" width="624" height="468">
AUD/USD
Australia’s dollar touched a two-month high as a government report showed retail sales rose in May, adding to signs of resilience in the nation’s economy. The so-called aussie climbed for a fourth day after Reserve Bank of Australia Governor Glenn Stevens said growth is close to trend and data showed home-building approvals soared by a record in May. The currency climbed to $1.0320, the strongest since 3rd of May before trading at $1.0290 from $1.0283. By individual category, restaurant sales were up 1.0 percent, followed by food retailing and other retailing (both up 0.4 percent), and clothing and department store sales (both up 0.3 percent). Sales of household goods declined 0.1 percent. By region, sales were up 0.7 percent in Western Australia, followed by Queensland (0.6 percent), the Australian Capital Territory (0.5 percent), New South Wales (0.5 percent), the Northern Territory (0.4 percent), South Australia (0.2 percent) and Victoria (0.1 percent).
AUD/USD" title="AUD/USD" width="624" height="468">