EU Morning Report - Bernanke in the spotlight

The euro (EUR) recorded gains against most of its major counterparts as the sizeable selling pressure witnessed over the past days lessened. The IMF released its mid-year report, where it reduced the global growth forecast for 2013 to 3.9% from 4.1%. This included a 0.2% downward revision to 0.7% for the eurozone. The report presented positive growth estimates for Germany and France, offset by contractions in Italy and Spain. German ZEW Economic Sentiment index, due today at 09:00 GMT will capture investors’ attention as it is a leading indicator of Germany’s economic health. Versus the US dollar (USD), the single currency rose to 1.2265 from 1.2245.

The US dollar (USD) produced losses versus a basket of currencies as the disappointing Retails Sales figure heightened additional quantitative easing (QE) speculation. Federal Reserve Chairman Bernanke is due to testify today at 14:00 GMT before the Senate Banking Committee and market participants are expected to closely monitor every word. Versus the Japanese yen (JPY), the greenback dropped to 78.83 from 79.18.

Oil prices rose to 87.79 from 86.75 dollars a barrel. Gold (XAU) remained flat around 1590 US dollars an ounce. Against the euro, gold dropped to 1295.05 from 1297.51 euro an ounce. Silver (XAG) moved up to 27.3655 from 26.9700 dollars an ounce. Stay in tune throughout the day with foreign exchange bullets!