valbury Foley: The dollar fell sharply and the euro situation worsened further

Us industrial output rose in June as production of cars and electronics increased, Federal Reserve data showed on Tuesday, suggesting businesses and consumers may be ready to pull the economy out of a weak second quarter. Data showed that the US industrial output rose 0.3% in June, better than the expected rise of 0.2%, the previous value was unchanged; Capacity utilization rose to 77.8%, above expectations of 77.7% from a revised 77.7% and 77.6% in the previous estimate. In June, manufacturing output m/m rose 0.3%, expected to rise 0.1%, revised to rise 0.2%, the initial rise of 0.1%; Capacity utilization in the manufacturing sector rose to 76.1% from a revised 76.0% and 75.8%. Auto production climbed 1.4 percent in the month, while home electronics production rose 2.2 percent. Production of all other major consumer durables was up or flat. The Bank of Portugal on Tuesday slashed its economic growth forecast for next year as austerity measures brought activity back into line, raising fears that the country will again miss deficit targets said by its international creditors. Data showed British inflation rose to 2.9 percent in June, below economists' expectations of 3.0 percent, giving the Bank of England some room to ease policy further. Data capped gains in sterling. The focus now turns to the minutes of the Bank of England meeting due on Wednesday, with investors expecting the central bank to maintain an accommodative policy stance. Major currency trend analysis: EUR/USD: EUR/USD is recommended to buy mainly on dips, if the exchange rate is adjusted back to around 1.3121, you can consider buying, stop loss at 1.3086, the target is 1.3181, 1.321. GBP/USD: GBP/USD is recommended to buy mainly on dips, if the pair retreats to around 1.5071, you can consider buying, stop loss at 1.5036, target 1.5151, 1.521. Usdjpy: USDJPY is recommended to sell mainly on rallies, if the pair rebounds to 99.81 can consider selling, stop loss at 100.16, target 99.11, 98.71.