Tuesday, 01 April 2008 11:24:00 GMT

Written by John Rivera, Currency Analyst

German retail sales unexpectedly fell by 1.6% in February, against expectations of an increase of 0.5%.

Fundamental Headlines

• AUDUSD – After consecutive increases over the past two months the RBA left their benchmark interest rate unchanged at 7.25%, as was expected. Evidence is mounting that the Australian economy is cooling. Manufacturing growth slowed in March to 51.2 , as new orders fell to 51.9 from 54.9 the month prior. As the global economy slows speculation is increasing the RBA may have to reverse their policy and consider cutting rates in the near term. For more news and resources please visit our Australian Dollar Currency Room.
• USDJPY – Japan’s Tankan business confidence survey fell to a four year low of 11, as automobile and electronic exports are being pressured by a strong Yen and a U.S. slowdown. Companies also indicated the they planned to cut capital expenditures, which will weigh on future growth. Therefore, the BoJ may consider cutting their benchmark rate by the end of the year in an attempt to stave off a recession. For more news and resources please visit our Japanese Yen Currency Room.
• EURUSD – German retail sales unexpectedly fell by 1.6% in February, against expectations of an increase of 0.5%. Rising inflation is eroding consumer purchasing power and offsetting the strong labor market, which saw unemployment fall to a 15 ½ year low. Meanwhile, Eurozone manufacturing growth slowed to 52.0 from 52.3 the month prior as a strong Euro and slowing global economy weighed on demand for exports. Discuss the topic and your trade ideas in the EUR/USD Forum.

• UBS Seeks Fresh Capital, Expects $19 Billion in Write-downs (link) – Wall Street Journal
• Deutsche Bank Faces Write-downs of About $3.95 Billion (link) – Wall Street Journal
• Radical Action To Fight Credit Crisis Discussed (link) – Financial Times
• Euro Falls Most In Almost Two Weeks as UBS Reports Credit Loss (link) – Bloomberg
• German Unemployment Drops to Lowest in 15 ½ Years (link) – Bloomberg