USD Forex Weekly Archive
Daily Economic News - May 16, 2008
Yesterday, the greenback maintained its volatile trading momentum against its rivals, while mixed important economic figures were released from all over the world. The greenback rate hit a 10 day low against the EUR at the rate of 1.5542 before recovering most of its losses following positive economic releases from the U.S. markets.
Yesterday was an important news day on the US economic calendar. The release of some key economic indicators showed that some improvement or more importantly stability has returned to the US economy. The Unemployment Claims report showed a moderate increment, with the final figure of 371K. The Philadelphia Fed Manufacturing Index recovered to the level of -15.6, which is a great deal healthier than the April reading of -24.9. Overall, yesterday's mixed fundamental data imposed a very volatile and risky session.
Today should provide some expected volatility in the market, ahead of a day full of U.S. news events highlighted by the housing market and consumer confidence data. Traders may expect another fall in Housing Starts and Building Permits in April. However, the University of Michigan Confidence index in May could rise to 65.0 from a record low of 62.6 in April.
For the time being EUR/USD seems trapped in a range between 153.50 and 155.75. As long as market participants are in doubt whether the U.S. economy will weather the storm without any further rate cuts, traders should not expect drastic moves on the currency cross rate.
Daily Economic News - May 15, 2008
Yesterday the greenback had a volatile trading session against its major currency rivals. It underwent contrasting trends vs. the EUR and the GBP and was bullish vs. the JPY. The main news from the US economy revolved around the Consumer Price Indices. The Consumer Price Index was released at 0.2%, a little bit lower than last month's 0.3% mark. The Core Consumer Price Index was also slightly lower than last month's 0.2% mark as it came in at 0.1% for April. The biggest repercussion from the reports is that the Fed can now cut rates once again if needed, rather than worry about rising inflationary trends. This very understanding might be what reversed the USD bullish trend into a bearish one.
Today, an extremely intensive news day can be expected for the US economy. First off on the day will be the Empire State Business Conditions Index. The index measures the general business conditions of manufacturers in New York State. Although the survey is limited to New York only, it's highly important as the New York Federal Reserve report serves as a precursor for national manufacturing numbers. Later on, the Treasury International Capital (TIC) Net Long-Term Transactions will be published. Analysts forecast it to release at 63.6B, well below last month's 72.5B mark. Such a descent should have negative effect on the USD. At 13:30 (GMT) Fed Chairman Bernanke will deliver a speech in Chicago on Risk Management in Banking Organizations. As always, Bernanke's speeches are very intriguing, as clues regarding interest rate changes might be scattered throughout. Considering that analysts predict an interest rate cut to be imminent, this particular speech could be vital. At 14:00 (GMT) The Philadelphia Fed Manufacturing Index will be published. Just like the New York Index, its importance derives from the fact that it's released weeks before other major reports on manufacturing.
Today will be a fascinating day for traders, yet it obligates them to stay fully alert. For today, trading the USD could create significant profits as high volatility is expected throughout most of the day.
Daily Economic News - May 14, 2008
The USD strengthened throughout yesterday's trading and as a result of mostly positive economic releases; it saw a day long bullish trend. Although the USD did lose momentum on Monday, yesterday it gained strength against most of its rivals. Against the EUR, the greenback rose and led to a decline of the pair to a level of 1.5480 in late New York market trading. The main factor that led to the USD's rise was the better than expected Core Retail Sales figure.
Yesterday's batch of American economic announcements started with Fed Chairman Bernanke's speech. Bernanke said that the financial markets improved, but cautioned that the central bankers and the markets are still a long way from the point when they can say the credit crisis is near its end. Traders looking for hints about future Interest Rate cuts in his speech were disappointed as he did not discuss the Fed's next Interest Rate move. Right after his speech, a batch of economic data was released, highlighted by Core Retail Sales of 0.5% and Import Price Index of 1.8%, both higher than forecasted.
Further adding to the USD's bullish momentum was the lower than expected Business Inventories figure which is a good sign for the American economy. Retailers order more goods when they have depleted inventories. This creates more business for the wholesales, who in turn increase their orders to manufacturers.
Looking ahead to today, we have the Consumer Price Index due to be announced. Forecasts have the index at the same rate as last month which should not affect the USD's value very much. Following the CPI announcement, Fed Governor Kroszner speaks at the Federal Reserve Bank of Boston. Lastly, traders will wait to hear the Crude Oil Inventories and watch how that release will affect the very high Crude Oil price, which high a record of nearly $127 yesterday. Traders should not expect much volatility from the USD today as the news releases are expected to be steady, but any surprise will either keep up the bullish momentum or lead to negative momentum.
Daily Economic News - May 12, 2008
The Greenback traded with mixed results last week as the turbulent relationship between the USD and the EUR grows even stronger. The oft traded pair saw record highs towards the end of the month of April. Since, the pair has faltered by just under 4%. The 1.6019 mark set on April 22nd saw it largest drop off in the middle of last week, when the pair dropped to the 1.52 support level. Forex traders looked prime to ride dollar bullishness, even as the progress halted going into Friday's market closing.
The US dollar reacted mainly to investor interest, as the economic data from America was mixed last week. Forex traders have regained some much needed confidence in the USD even amidst ongoing US economic concerns. The futures market is posting bullish trends by traders for the first time since late 2005 in regards to the US dollar. To add to the current positivity surrounding the greenback, the Chicago Board of Trade is showing an 80% chance that the Federal Reserve will leave the 2% interest rate as is. While investors are enjoying being on the positive side of the dollar, they must still be wary of a shaky US economic picture.
This week on the US economic calendar, we will be seeing data, which will likely contribute to liquidity and volatility in the Forex market. Core Retail Sales, Core CPI Empire State Business Conditions Index, Unemployment Claims, TIC Net Long-Term Transactions, Industrial Production, Philadelphia Fed Manufacturing Index Housing Starts and Consumer Sentiment highlight a heavy week from the Greenback's home. If mediocre forecasts hold true, the dollar will have to fight hard to have a positive week, especially against its most traded currency rivals.
Today, the US is absent from the economic calendar. Expect the dollar to trade mostly off of investor speculation and in response to outside news events and Oil pricing. Forex traders are ready to continue to ride a bullish dollar; however the US economy will have to hold up, as investors cannot blatantly ignore important economic data.
