Bumpy Roads Ahead for Investors as Uncertainty Remains High in 3Q 2011 According to FOREX.com Markets Outlook

By Gain Capital Holdings Inc., PRNE
Tuesday, July 12, 2011

NEW YORK and LONDON, July 13, 2011 -


- High
Unemployment and Deleveraging are Major Contributors to Sluggish

Investor uncertainty remains high going into the 3Q as key
emerging markets, which had been the primary source of global
growth in the first half of the year, are feeling the effects of
higher interest rates and other policy measures, according to an
outlook presented by FOREX.com, the retail division of GAIN Capital
(NYSE: GCAP), a global provider of online trading services.

In its 3Q 2011 Markets Outlook report, the FOREX.com research
team believes emerging economy growth, especially out of Asia, may
be unable to pick up the slack seen from major developed economies.

“Unfortunately, high unemployment in the major developed
economies remains the primary obstacle towards recovery,” said
Brian Dolan, chief currency strategist, FOREX.com.  ”We think
job creation numbers will be the critical data points in the months
ahead which will drive our outlook on global demand.”

In addition, major economies are likely to see a continuation of
deleveraging (saving more and spending less) at both the government
and household levels, which could generate further headwinds to
consumption growth.

The FOREX.com research team also sees major risks from Eurozone
debt markets as credit contagion appears to be spreading into core
economies like Italy and Spain.  In the U.S., the major risk
is a failure of negotiations to increase the debt limit and a
temporary default or government shutdown.  

Between weaker than expected growth in major economies and
on-going debt crises in the U.S. and Europe, FOREX.com expects risk
sentiment to remain fragile, exposing stocks and commodities to
broad-based weakness.

Other expectations from the FOREX.com 3Q 2011 Markets Outlook

  • The U.S. dollar is most likely to stay on the soft-side against
    other major currencies, but there are also expectations of periodic
    bouts of dollar strength on safe haven buying.
  • The euro is not out of the woods yet as Europe continues to
    live dangerously in the second phase of the sovereign debt
  • The U.K. economy may continue to disappoint in the 3Q with
    signs pointing to further weakness as elevated commodity prices hit
    consumer confidence.
  • Japan continues its long and winding road to recovery after the
    devastating earthquake took its toll on 1Q GDP, but recent rebounds
    in industrial production suggest a corner has been turned.
  • Reconstruction efforts in Australia and New Zealand may support
    an earlier than expected recovery for the Oceanic nations, but a
    hard landing in China would short-circuit the expected rebound in
    Australia and New Zealand.
  • The recent outperformance of gold relative to silver suggests a
    potentially significant turning point for risk appetite as the
    prospects for global growth are not quite as rosy as earlier
    thought.  This suggests the potential for more significant
    downside in global equities and other risk assets.
  • In the oil markets, lingering effects from recent output
    increases alongside a still firm underlying structure may be the
    catalysts for a modest return of crude oil strength in the 3Q.

The FOREX.com research team highlights potential price ranges
for key pairs, such as EUR/USD, GBP/USD, USD/JPY, USD/CHF, and
AUD/USD.  Key cross-currency pairs like EUR/JPY and EUR/GBP
are also covered.

The FOREX.com Markets Outlook provides commentary and market
forecasts with its view of the direction of the world’s major
currencies and other key financial markets. The report is prepared
by Mr. Dolan, Research Director Kathleen Brooks and Senior
Technical Strategists Daniel Hwang, Chris Tevere, CMT and Eric
, CMT.

The full FOREX.com 3Q 2011 Markets Outlook Report is now
available at href="www.forex.com/">www.forex.com under
“Research & Ideas.”

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significant risk of loss and is not suitable for all investors.
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About GAIN Capital

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of
online trading services. GAIN’s innovative trading technology
provides market access and highly automated trade execution
services across multiple asset classes, including foreign exchange
(forex or FX), contracts for difference (CFDs) and exchange-based
products, to a diverse client base of retail and institutional

A pioneer in online forex trading, GAIN Capital operates
FOREX.com®, one of the largest and best-known brands in the retail
forex industry. GAIN’s other businesses include GAIN GTX, a fully
independent FX ECN for hedge funds and institutions, and GAIN
Securities, Inc. (member FINRA/SIPC) a licensed U.S.

GAIN Capital and its affiliates have offices in New York City;
Bedminster, New Jersey; London; Sydney; Hong Kong; Tokyo;
Singapore; and Seoul.

For company information, visit href="www.gaincapital.com/">www.gaincapital.com.


In North America: Christa Conte or Savannah Tikotsky, Feintuch Communications, gain at feintuchpr.com, +1-212-808-4902 or +1-212-808-4903; In Europe: Sorrel Beynon or Laura Crooks, Edelman, gain at edelman.com, +44-(0)-20-3047-2368 or +44-(0)-20-3047-2366

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