USD Forex Weekly Archive
Daily Economic News - May 28, 2008
Yesterday, the greenback saw bullish trends against most of its major counterparts. The EUR\USD went as low as 1.5670, gaining additional 90 pips vs. the EUR. Accordingly, the USD gained against the rest of the major currencies. A large portion of data was delivered yesterday from the US markets. The National Home Price Index decreased by 14.4% to the 172.12 level concluding a 15 straight months of yearly declines. However, the New Home Sales report reflected a 3.3% increase, from 509K on March to 526K on April. The report also showed that the median price of new homes in April was $246,100, up 9.1% from March. Later on, the Consumer Confidence plunged to a 16-year low, after dropping to 57.2 reading point.
Today two major indicators are scheduled on the U.S. calendar. The most crucial is the Core Durable Goods Orders, which is expected to come in at -0.4%. The second indicator is the Durable Goods Orders that should mark -1.3%. Both indicators are forecasted to be lower than their previous printings. Later, Minneapolis Fed President Stern is expected to deliver a speech. Traders are advised to look closely for clues regarding future monetary policy. Given the fact that today's U.S. fundamental data is expected to see a declining trend, the greenback may decline as well.
From where we stand, there might be a great day to check out the calendar for the rest of the week. Additional important indicators are scheduled to be published. The Prelim GDP , Fed Chairman Bernanke Speech, Chicago PMI, Personal Spending, Core PCE Price Index and many more. Analyzing them properly may contribute to investors' possible profits.
Though the forthcoming indices are expected to establish a falling USD trend, the decreasing Oil prices might as well have a stronger affect on the greenback. Therefore, traders should follow today's events with extra caution.
Daily Economic News - May 27, 2008
Yesterday was a relatively volatile session for greenback pairs. Because of Memorial Day in the US, banks remained closed during the day, and as a result an extremely low volume was observed within USD trading. The EUR\USD saw volatile behavior from the beginning of the trading week until the end of the day yesterday, as well as the USD\JPY. The GBP\USD started the day with bearish momentum, dropping as low as 1.9768, but than made a reversal and rose back up to 1.9825. In observance of Memorial Day no data was released yesterday from the US regarding the USD. As for today, a basket of data is scheduled for the USD. At 12:15 (GMT) Federal Reserve Governor Kroszner will deliver a speech titled "prospects for recovery and repair of mortgage markets", in Sao Paolo. In his speech, clues regarding future monetary policy might be scattered. Later on, the National Home Price Index Composite-20 will be published, and it's predicted to decrease by 14.3%. The main event for today will take place at 14:00 (GMT), when the U.S New Home Sales is due. This survey measures the new residential buildings that were sold during the previous month, and analysts forecast it to come in at 522K, lower than last month's 526K. The previous month's figure was the lowest figure since October 1991, and further descending trends will demonstrate six consecutive months of deterioration. At the same time, the Consumer Confidence is scheduled. It measures the mood of consumers in regard to economic conditions. It is also expected to reflect a lower reading point than the previous month - 60.0, as opposed to 62.3.
If analysts' expectations of negative results for all U.S data will occur, a bearish trend is likely for the greenback. More importantly, the combination of bad results from these two events can very easily contribute to the EUR/USD testing 1.60 once again. However, traders should follow carefully over today's developments as unpredicted figures might take place.
Daily Economic News - May 26, 2008
Last week, rising Crude Oil prices highlighted a series of events that led to the third consecutive week of Dollar bearishness in the Forex market. The greenback spent the backend of April into the first week of May recovering strongly versus a basket of its most rivaled currencies. The most notable turnaround was a 4% gain against the EUR. These gains were made in large part by positive US economic data which revived investor confidence in the U.S. currency. Unfortunately, the US economy failed to produce the same set of news in the second half of May as most of the ground it made up against the major currencies has disappeared.
With Crude Oil prices catapulting in May, companies like Ford, American Airlines and General Motors have all reported planned cuts in production to try and combat rising Oil prices. Also contributing to the already tenuous US economic outlook was the revival of Housing slump scares. Existing Home Sales numbers for the month of April were down 1%, as Fridays' report pushed the oft traded EUR/USD pair up by 60 pips. At the end of the trading session last week the EUR/USD pair closed above 1.5750, as the key psychological level of 1.60 once again looms. It will be interesting to see how the Fed responds to rekindled economic concerns and if it will cut Interest Rates yet again in 2008.
This week looks to be equally important for the US economy, as a basket of significant economic data is on tap. The week will cover nearly all of the relevant industries from within the US economy highlighted by New Home Sales, Core Durable Goods Orders, Preliminary GDP, and Chicago PMI figures. Also on the docket on Thursday is a speech by Federal Reserve Chairman Ben Bernanke, who will have a week worth of economic data at his disposal when addressing audience at the Risk Transfer Mechanisms and Financial Stability Workshop in Switzerland. Bernanke will likely be dealing with negative data, as forecasts have the USD experiencing another bearish trading week.
Today is Memorial Day in the US as well as Spring Bank Holiday in the UK. With no other relevant news from Europe or Asia on tap, Monday will likely provide little volatility. The USD should range trade in its major pairs and crosses throughout the day.
Daily Economic News - May 22, 2008
Yesterday the greenback was bearish against its rival currencies, continuing its decline from the beginning of the week. Throughout the trading day, the EUR\USD was being traded just under 1.5800, the GBP\USD reached 1.9730 and the USD\JPY declined to under 103.00. Following the previous day highlighted by the lower than forecasted PPI, yesterday the greenback was greatly affected by the announcement of -5.4M Crude Oil Inventories and hawkish comments from the FOMC meeting. Crude Oil has reached an all time high this week and its bullish surge continues to negatively affect the American economy.
As hawkish comments and notes from the FOMC meeting were released, traders became ever more wary of the USD. The main news coming from the FOMC meeting has been the intention of the Federal Reserve to resist any possible Interest Rate cuts in the near future, downgrading estimates for economic growth in 2008. As a result of the weaker USD and the negative American Inventories, Crude Oil reached a new all time record, trading above $134 per barrel.
Looking into the very important FOMC meeting held yesterday, traders should focus on the data that was released by Fed policymakers. In their projections, Fed officials predict the US economy to grow somewhere between 0.3% and 1.2% this year, much slower than the 1.3% to 2.8 % forecast made in January. Last October, the Fed expected US economic growth as high as 2.5% this year. The Fed now expects the US jobless rate to rise to 5.5% - 5.7% this year, higher than the 5.2% rate seen in January.
Looking ahead to today, the very important US Unemployment Claims will be released with forecasts predicting 373K claims, 2K higher than the previous month's claims. Half an hour later, Fed Governor Kroszner will deliver a speech titled "Prospects for Recovery and Repair of Mortgage Markets". Traders should look for further hints regarding the Fed's future intentions. The main news event that will affect the USD's momentum will be Unemployment Claims. As forecasts expect more claims than previously, traders should expect further bearish momentum from the greenback.
