USD Forex Weekly Archive
Daily Economic News - May 21, 2008
Yesterday the greenback underwent coherent bearish trends against most of its major counterparts. The EUR\USD went up to 1.5674, the GBP\USD rose to 1.9717, and the USD\JPY fell down to 103.61.
The day began with some concerning news for the USD, after the Producer Price Index was published. The index came at 0.2% mark, lower than the expected 0.4%, and increased the worries from the rising inflation in the U.S. such a result suggests that local producers might pass through some of these increases to the retail level, especially considering the rising Oil prices. The Crude Oil reached another all time record, getting close to $130 per barrel. The Light Crude was trade at $129.46 in New York markets for delivers in June despite promises from Saudi Arabia to pump 300K barrels extra per day. Also yesterday, Fed Vice Chairman Kohn gave a speech. In his speech Kohn pointed out that low Interest Rates are not the main reason behind the rising commodities prices in the U.S. markets. He also mentioned that he expects the U.S. economy to begin a slow recovery in the second half of the year, followed by a descending inflation threat.
Today, Fed Governor Warsh will deliver a speech in Washington D.C, in which he's expected to discuss Fed's role in manipulating Interest Rates. An hour later, the Federal Open Market Committee Meeting Minutes (FOMC) is scheduled. The Minutes provide detailed insights regarding the FOMC stance on monetary policy. Trader's main focus for today should be the FOMC meeting which is expected to determine today's USD trend. Traders should pay attention for clues regarding future Interest Rate shifts. Traders should also closely follow the Crude Oil prices, which also have a broad impact over the U.S. currency.
Daily Economic News - May 20, 2008
Yesterday saw the resumption of rising trends for the greenback after bearish momentum had started off the trading week. The EUR\USD pair traded below 1.5510, and the GBP\USD traded below 1.9480.
The only data released yesterday from the US economy markets was the Leading Index which came back at 0.1%, better than the 0.0% mark that was forecasted. The main outcome of this survey suggests that the Federal Reserve (Fed) will have room to hike Interest Rates later this year in case Crude Oil prices will continue to put upward pressure on the local inflation. Yesterday, Crude Oil reached an all time record, breaching $127 per barrel. On tap today, the Producer Price and the Core Producer Price Indices (PPI) will probably be the main catalysts of possible fluctuation in the market. These two surveys measure the rate of inflation experienced by manufacturers in the US. The inflation rate is the main concern for U.S economic chiefs at the moment, as a continuance of rising commodities prices (especially the Crude Oil) will compel them to generate Interest Rate manipulations. Later on in the day, Fed's Vice Chairman Kohn will deliver a speech regarding the economic outlook in New Orleans. His speech should include further clues regarding U.S methods of dealing with the rising inflation as well as changes in monetary policy. Traders should focus mainly on the PPI results, as they might determine the greenback's direction for today. If results return with positive movement expect the USD to extend its bullish behavior.
Daily Economic News - May 19, 2008
The USD saw another week of decline vs. its major currency rivals last week, as Friday capped off what had been a slow weekly trading session. Last week produced mixed results for the US economy as improving manufacturing and retail numbers, along with better CPI figures were offset by Friday's Prelim Michigan Confidence.
The greenback experienced bearish behavior on Friday, most notably against the EUR, due to falling Michigan Confidence numbers and record high Oil prices. Concerns over the slowdown of US economic growth have once again picked up steam, as Michigan Confidence showed lows that haven't been seen since the early 1980's. Remarkably the May numbers were affected little to none by US Tax Rebates, which generally boost Michigan confidence. Crude Oil prices continue to rise and break freshly hit record highs, causing even more damage to the US currency. On last Friday the Oil saw record highs of $127.82 per barrel. The EUR/USD pair dropped 100 pips from the opening of last week's market. It will be intriguing to see how investors enter this weeks trading session in terms of confidence toward the US economic outlook.
Looking ahead to this week, it should be a quiet one for the US economy in regards to scheduled news. The bulk of key economic data for the week is expected from the Euro-Zone, Canada and the UK. US news will be highlighted by PPI, The Federal Open Market Committee (FOMC) Meeting Minutes, Unemployment Claims and Friday's publishing of Existing Home Sales. The overall forecast shows negative results for these figures, as we also expect some less than favorable news from the Fed's monetary policy meeting from April. Due to the scarcity of the news from the US, it is likely that the currency will continue its bearish behavior as it will be manipulated by non-US data and rising Oil prices.
Today, the US has two scheduled news events on the economic calendar. Leading Index figures and the TAF Auction held by the Fed are both on tap. These indices should have little contribution to market movement as the Dollar can be expected to see close range trading for the day.
