USD Forex Weekly Archive
Daily Economic News - May 09, 2008
Yesterday, the greenback lost its newly acquired bullish momentum and returned to the 1.54 range against the EUR. Unemployment claims in the U.S. this month beat out the forecast of 370K and were measured at 365K, 18K less than March. The USD was on a bearish momentum against most of its currency rivals throughout the trading day, and while it would seem like the positive Unemployment Claims would raise the USD's value, the USD dropped even further after the figure was announced. Monthly Wholesale Inventories also beat our forecasts and a -0.1% change was announced. The negative change actually is a good sign for the American economy because it shows that wholesalers order more goods from manufacturers when they have depleted inventories. Despite the economic news that seemed encouraging for the greenback, the USD lost ground to most of its rivals, specifically the EUR following European Central Bank President, Jean-Claude Trichet's hawkish speech at the ECB Governing Council meeting. As the European Central Bank disappointed markets by providing no hints that it might ease interest rates any time soon in the single currency zone, the USD lost all the value it gained on Wednesday against the EUR.
Looking at the big picture, it seems that the surprising fall in Wholesale Inventories and the dropping amount of unemployed Americans are good signs for the USD's future. As the US moves further away from the credit crisis, it seems like the American economy is rebounding quite well. While there has been a lot of helpful economic data recently the U.S. economy isn't catching a break with oil prices placing a huge tax on the US economy. The American economy will have to face the rising Crude Oil price as the "Black Gold" is trading at its all-time high.
Today, all eyes will be on the Trade Balance which will be announced at 12:30 GMT. Economists predict the value to be -61.4B which is a 0.9B improvement and it seems like the USD will see its trend's direction based on the Trade Balance's value.
Daily Economic News - May 08, 2008
Yesterday, the greenback was revived after several days of bearish behavior. Investors seem to have kept faith about the dollar as traders pushed it toward sharp profits versus most of its currency rivals. It has been briefly touched upon before in fundamental reports that global investors take any positive trend from the US economy and run with it, as the greenback has proven in history that it can take a severe hit and recover. What made the bullish trend even more significant was the overall market condition surrounding it as scheduled events didn't deter profits. Yesterday's US economic calendar was sprinkled with news that returned to negative results and should have had equal effect on the currency. Some though, did contribute to the rise, as Non Farm Productivity returned with higher than expected results at 2.2%. The figure was forecasted to come back at 1.7% annual quarterly gain. Unit Labor Costs came in at 2.2% down 0.4% from its expected return. Pending home sales came back as forecasted at -1.0%, kept the housing crisis as a cloud over many investors heads. Consumer Credit numbers were more than double their previous figure, as it seems that US consumers have taken on credit to do most of their shopping.
As a whole though it seemed that Productivity numbers helped justify the already lop-sided thinking behind investors of a change in dollar trends as most dollar pairs saw sharp gains immediately following its release. When glaring at the currency charts this morning, the USD finds itself in uncharted territory for 2008. The EUR/USD coming ever so close to 1.52, GBP/USD back down to 1.95 and USD/JPY back to 104 technical levels.
Today, Unemployment claims and Wholesale Inventories are on tap. Dollar bullishness will likely continue regardless, but any improvement from the last figure of 370K from unemployment claims will likely magnify bullishness.
Daily Economic News - May 07, 2008
Yesterday, the greenback saw mixed results as it was in a bearish trend versus its major currency rivals during the first half of the day. Later on throughout the day it managed to gain some bullish momentum, the most notable and volatile loss in the first half of day for the USD was 111 pips against the EUR. The pair eventually evened out mid-day to close at 1.5531.
May 6th was a slow news day for the U.S. economy with Fed Chairman Ben Bernanke's speech the only scheduled event of relevance. In his speech, Fed Chairman Bernanke spoke about the need of finding new ways to combat homeowner foreclosures. As most of the important news came from Europe and Canada yesterday, the Dollar traded largely off of investor speculation,
Today at 12:30 GMT, quarterly Nonfarm Productivity will be released and will likely contribute to some volatility within the market. Expectations are for a decreasing trend of about 0.4% compared to the previous announcements. This negative trend should have a positive effect on the USD as it helps drive down consumer prices due to salary increases. Today we expect Unit Labor Costs, Pending Home Sales and Crude Oil Inventories results to be published. Along with the aforementioned events, we will also be expecting to hear from Fed Governor Kroszner. Kroszner has affected the market in a volatile manner recently with some outgoing statements regarding the current state of the US economy. Investors should note that on Friday the Trade Balance will be published and it could be profitable to hear his words and get in on early and insightful investments.
