Mid-Day Forex Report

As was typical with most recent sessions including U.S. non-farm payrolls data,
Euro zone economic news failed to make much of an impact on the markets. 
Germany proved to be the economic leader once again, as industrial production
jumped 1.4 percent in June, far better than the expected 0.3 percent gain. 
Companies benefited from a depreciated euro, causing exports to become cheaper
for foreign buyers and ultimately more competitive in the global markets.  The
success led companies to invest more into construction and machinery, along with
improving business sentiment to a five-month high.  The Organization for
Economic Cooperation and Development leading indicator for the Euro zone also
painted a brighter picture, as the figure rose to 104.9 in June.  The
organization said that the way the indicator had moved over six months, an
important reading of the medium-term trend, pointed to an improving climate in
all of the seven biggest OECD economies, except in Italy.  The euro currently
trades slightly higher compared to this morning at $1.2345 against the dollar.

Subsequently, European equities were relatively unchanged on mixed earnings
reports from companies and higher oil prices.  The FTSE 100 gained 0.22 percent
to 5,327.30 while the DAX lost 0.55 percent to 4,847.45 and the CAC 40 dipped
0.34 percent to 4,443.94.

Barclays, Britain’s third-biggest lender, rose 3.7 percent to 579.5 pence after
the company reported an unexpected gain in first-half profit on higher earnings
at Barclays Capital, its investment-banking unit.

Rhodia, the French chemicals group, fell 5.4 per cent to 1.58 euros after it
reported widening second-quarter losses on a 101 million euro charge to write
off its struggling pharmaceuticals unit. The company forecasts a full-year net
loss due to asset write-offs and restructuring costs, but a return to net profit
in 2006.