Extreme Budget Deficit for UK

Today Great Britain released the highest level of budget deficit since 1993.

As the Office for National Statistics deliverd today, the 16.1 billion-pound ($26.3 billion) deficit in budget is the largest one especially compared with a deficit of 9.9 billion pounds in August 2008. Total current government receipts fell 9.1% from a year ago to 34.1 billion pounds, while total current spending inclined to 45.6 billion from 44.3 billion pounds.

These data may be considered as a significant impact on Gordon Brown`s positions before the elections. David Cameron, the leader of Conservative party accused Brown of misleading Parliament when Treasury documents showed that in April the Labour government was predictong it would have to curb departmental budgets by 9.3 percent in real terms by 2014 because of soaring welfare and debt-interest costs.

The GBP responded negatively falling to its lowest Forex rates.

Dollar Icreases Losses

As the speculations emerge that the economy is growing the USD dropped Tuesday to its lowest level versus the EUR. The appeal for USD was reduced as investors decided to try trading with higher yielding assets that is why traders have sold the U.S. currency. For several months, the USD has a trend to move in the opposite direction as equities move as investors' willingness to buy riskier assets changes and depend on different factors. That trend showed signs of diminishing in August and resuming its more traditional correlation to economic data, as a result the USD index continues its contraction.

Looking ahead to today`s data capable to influence Forex rates, U.S. data will released later. The U.S. consumer price index (CPI) for August, Q2 current account data, August industrial production figures and September NAHB housing data will also be published.

Beach Scandal in Wells Fargo

Wells Fargo, the fourth-largest U.S. bank by assets made a decision to fire its senior vice president Cheronda Guyton after investigating showed that she had violated her policies. Cheronda Guyton who was responsible for Wells Fargo's commercial premises, used the house on Malibu Colony Drive on weekends to organize private parties violating all the regulations. According to Los Angeles Times, citing neighbors, she used to invite guests arriving on a yacht.

Andy Stern, Malibu Mayor in his interview told that he approved the fact that Wells Fargo took appropriate measures.

Wells Fargo remains the second largest US bank in deposits, home mortgage servicing, and debit card service. It appeared to be the only US bank to be rated AAA by S&P, though its rating has since been lowered to AA- as a result of the 2008 Financial Crisis. Its stock is widely traded in futures and CFD market.

No Positive Future for Dollar

Going short on the US currency brought lots of profits for traders last week. The USD continued its fall versus the EUR and other major Forex currencies. This fall accounted for 300 pips versus EUR, 400 pips versus the GBP and 350 pips versus the Japanese currency.

Another fall for the greenback was reasoned by negative US data. The gap between import and export increased by 16 percent or $32 billion, the largest difference since 1999. The U.S Consumer Credit fell by 21.6$ billion in July. Unemployment rate is constantly getting to 10 percent rate. It looks like until the employment condition will take a turn for the better, the Dollar might continue to weaken.At the beginning of the previous week market analysis showed a modest decline, but the final result appeared to be well below all expectations.

This week is full of important business events including the Consumer Price Indices, the Retails Sales Indices, the Producer Price Induces, the Long-Term Purchases, the Building Permits and the weekly Unemployment Claims.

Important Slide for USD

Another bottom for the USD was reached as low borrowing costs spurred investors to sell off the Dollar and buy other assets. The USD index was at 77.002, after dropping on Wednesday as much as 0.7% to 76.803. Coming economic recovery spurs investors leave the greenback and try to trade other high profitable units as the greenback becomes highly unappealing to investors.

While the Federal Reserve stimulus measures helped pull the nation out of the recession, it also pumped an enormous amount of Dollars into the economy and with the continuous rise in the jobless rate the Fed is predicted to lift its interest rate soon.

Among important business events capable to make influence on the currency market are the release of the Trade Balance and the Unemployment Claims figures will be released on Thursday at 12:30 GMT.

US Trades after Labor Day

As the US market was closed yesterday, the US Dollar slid versus other Forex currencies. The Labor Day holiday in the USA and Canada took its toll on the American currency. It came close to its 2-week low versus the GBP after the statement of Kraft Foods to buy British chocolate maker Cadbury. In spite of low trading risk appetite remained high on Monday. The Dollar Index, which measures the value of the Dollar versus its six main counterparts, dropped by 0.2% to 78.00 yesterday.The USD/JPY cross weightened by 25 pips yesterday to the 92.85 level.

On Monday the Australian Dollar performed a significant rise hitting a 1 year high vs. the U.S. Dollar. The AUD was received unexpected support from rising Gold and Crude Oil prices as of late, which Australia's currency is highly dependent. In addition, Australia's currency is in much greater shape than that of America. The CAD made became closer to the greenback. By the end of yesterday's trading, the EUR/USD pair finished trades at 1.4332.

Durable Telecom Alliance

Chinese Unicom and Spain's Telefonica have concluded a deal that will encourage cooperation between the two telecom companies.

According to an agreement signed on Sunday each company will buy $1 billion of the other's stock. The Spanish firm's stock in Unicom will increase to 8%; and China's second-largest phone operating company will hold about 0.9% of Telefonica, the signing of an agreement is a strategic attempt to remain competitive as the global downturn has shortened. China Unicom currently competes with China Mobile and China Telecom. Unicom recently announced a three-year deal with Apple last month to become the number one Chinese phone company to make support of the iPhone, whose start in China is scheduled for Sept. 28. After the signing of the deal in Beijing Chinese Unicom stock appreciated in the CFD market.