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Australia’s Consumer Inflation Expectations rose to a 7-month high of 3.2% for July, according to the Melbourne Institute’s survey. Indeed, rising oil costs in recent months may have contributed to worries that the price of goods will rise in the coming month. Three of the last four months saw consumer expectations of such upward pressure rise

•??? British Pound Plunges as UK Industrial Output Unexpectedly Contracts •??? Swiss Franc Remains Range-Bound vs. Euro, SNB Intervention Risk Looms •??? Australian Dollar Down with Carry Trades, RBA Signals Potential for Further Rate Cuts •??? Canadian Dollar Drops Despite Jump in Canadian Ivey PMI, Building Permits US Dollar, Japanese Yen Surge as DJIA, S&P 500 Tumble to Key Levels - G8 Summit Adds to Event Risk The US dollar and Japanese yen both saw extremely choppy price action, and ultimately ended the day up against the majors as risk aversion drove FX carry trades and equities lower. However, where the S&P 500 and DJIA closed leave very mixed signals, as daily charts of both indices show head and shoulders patterns, but the former ended the day just above its neckline of 880, while the latter made a bearish break below its neckline at 8260.

The Reserve Bank of Australia kept interest rates on hold at 3% as expected but said that there is still “scope for further easing of monetary policy” and identified credit conditions and the effects of economic weakness on asset quality as “a challenge”.

Once again, we are starting the week with the sense that risk appetite could face a momentous shift; yet once again, the elements for a breakout are already falling apart. In the meantime, we have seen many pairs produce false breakouts (EURJPY for example) to invalidate clear range scenarios. Why Would GBPAUD Hold a Range

- US Dollar Retraces Gains, Japanese Yen Up as Risk Appetite Remains on Edge - British Pound Tumbles Amidst Speculation BOE Will Expand UK Quantitative Easing Program - Canadian Dollar to Face Ivey PMI on Tuesday - Swiss Franc Remains Range-Bound vs. Euro, SNB Intervention Risk Looms Australian Dollar Rebounds Ahead of Key Reserve Bank of Australian (RBA) Rate Decision The Australian dollar staged a solid comeback through the second half of the US trading session as the currency retraced most, if not all, of its losses from the European trading session against the US dollar and Japanese yen

Euro session price action tomorrow might not be directed so much by fundamentals as they are by momentum and technical levels. Tomorrow presents only one piece of key data, the Sentix Investor Survey. Forecasts see the figure rising for a fourth straight month, but a recent increase in the Unemployment Rate may actually change the minds of those surveyed

Consumer prices rose in June for the first month since February, said TD Securities in an estimate released today. In it, the brokerage firm stated that inflation came in at 0.4% on the month, dissenting from the previous period’s decline of 0.3%. The 12 months through the end of June saw such prices rise at a slower pace than they had prior, by only 1.4% vs 1.5%.

Bank of Japan Governor Shirakawa spoke in Tokyo today addressing the weighing sentiment about the Japanese economy.

Written by Terri Belkas, Currency Strategist
The British pound and commodity dollars all face high event risk from rate decisions by the Bank of England and Reserve Bank of Australian, along with Canadian employment and business activity reports. The US dollar could also feel the impact of the ISM non-manufacturing index, but ultimately, risk trends remain [...]

Trading the News: Reserve Bank of Australia Interest Rate Decision What’s Expected Time of release:?? ??? ? 07/07/2009 04:30 GMT, 00:30 EST Primary Pair Impact :?? ? AUDUSD Expected: ?? ??? ?3.00%??? Previous: ?? ??? ?3.00% Impact the RBA Rate Decision had on AUDUSD over the last 2 months mont hs ? Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) June 2009 06/02/2009 09:00 GMT 3.00% 3.00% +10 +116 May 2009 05/05/2009 09:00 GMT 3.00% 3.00% –4 +17 June 2009 RBA Rate Decision The Reserve Bank of Australia kept the benchmark interest unchanged at 3.00% for the second consecutive month in June, but continued to hold a dovish outlook for future policy as price growth falters. The RBA minutes said that the current policy in place ‘would be consistent with fostering sustainable growth and low inflation,’ but continued to see scope for ‘some further easing’ as the outlook for global growth remains weak