Economic News

USD - General Information

The United States Dollar is the official USA currency unit. It is used ever science July 6 1785 when it was officially adopted by the United States Government. The official sign of the USD is $. The United States Dollar is the most common used currency unit in international transactions. In this Daily updating review we will discuss the developing of USD as the world leading currency unit.

United States Dollar is widely known as the powerful currency of United States and is also called by its abbreviation USD or the signature form "$". The United States dollar has been dominating the currency or foreign exchange market, and thus, it is known for its stronger grip on any economic zone than any other currency.

The origin of "$" sign used worldwide for abbreviating dollar is not very well known, although it is believed that the sign came from 'Spanish coat of arms', since it consists of two Hercules pillars and S shape non-plus ultra motto.

United States accepted USD as their national currency on 6th July, year 1785, but before becoming the influential currency it had its own history and role in American war. As in colonial times, American due to large shortage of a currency used various alternatives such as wampum and tobacco. In 1775, colonists or continental congress came up with paper money, which was the biggest sign or initial stage of the beginning of American war or revolution.

This paper form of money printed and issued was used as rebels to financially support their fight for freedom against British rule and they named the paper currency as continentals. Using the conflicting notes and help from French associates, America won the war. At the end of the war, the currency was labeled or reduced to worthless due to its fall, which gave rise to "not worth a continental" phrase.

The USD notes printed by Federal Reserve are available in the denomination of one dollar, two dollar, five dollar, ten dollar, twenty dollar, fifty dollar and hundred dollars. USD is also provided in form of coins ever since year 1792 in the denomination of one cent, five cent, ten cent, 25 cent and fifty cent (also famous as a penny, nickel, dime, quarter and half dollar), but the USD notes have been quit a popular form of currency in United States as compared to the USD coins. Thus, nickel or five cent coin is the only USD coin left and is being used till today.

Apart from United States of nation, many other countries have also been using USD as their national or official currency, such as Ecuador, Palau, Marshall Islands, El Salvador, British Virgin Island, panama, federal states of Micronesia, East Timor, Turks and Caicos Islands. Domination of USD can also be seen in this Dollarization (a system where other countries also begin to use dollar as their currency). This world famous currency is also has been nicknamed at several occasions such as buck, greenback, green potato or cash. Often, a five dollar bill is called a fiver, ten dollar bill a Hamilton and hundred dollar bill is known as a Benjamin, as Benjamin Franklin is the face on the hundred dollar note.

United States dollar is a standard or generalized currency used for petroleum or gold buying and selling in the international marketplace. USD is also one of the major currencies in foreign exchange market and large number of traders and brokers bank on it for their trade objectives.

Go USD Weekly archive updates

Go to Mer 04-03 updates archive

Go to Jun 3-11 updates archive

Go to Feb 5-29 USD archive

Daily Economic News - May 06, 2008

Yesterday, The USD briefly extended its decline vs. the EUR for the first time in three days after Oil prices hit a record high at more than $120 a barrel. High commodity prices are only exacerbating an already weak economic backdrop, sparking debate over the strength of the U.S. economy. Also yesterday, the ISM Non-Manufacturing Composite index showed that the U.S. services sector grew in April for the first time in 3 months. The Institute for Supply Management's Non-Manufacturing index came in at 52.0 in April vs. 49.6 in March, snapping a three-month period of contraction. A reading above 50 indicates growth in the service sector. The service sector represents about 80 percent of U.S. economic activity, including businesses such as banks, airlines, hotels and restaurants. Nevertheless, this news was overshadowed by a Federal Reserve survey showing that the banking sector remained in the grips of a credit crunch. A quarterly Fed survey showed that 70% of U.S. banks increased loan rates due to costs from funding commercial and industrial borrowing. The credit crunch worries left investors wary of dollar fallout causing the dollar to fall against a basket While last week's better than expected US jobs report has tempered expectations for a June Fed rate cut, the economy still remains weak and has yet to bottom out. Analysts continue to believe that there is ongoing downside risk to the U.S. economy. Nonetheless, traders anticipate that the Fed will leave its main interest rate unchanged at 2% through October, based on futures prices on the Chicago Board of Trade. Looking ahead to today, there will be no significant news released from the U.S. markets. The greenback is expected to weaken vs. the EUR ahead of this weeks' crucial U.S. fundamental data. On Wednesday, we expect the Unit Labor Costs, the Nonfarm Productivity and the Pending Home Sales indices. Remarks from Fed Governor Kroszner, and the former Federal Reserve Chairman Greenspan will also be closely monitored

Daily Economic News - May 05, 2008

Last Friday, the greenback continued gaining all across the board against the major currencies. The EUR/USD pair fell for the first time in six weeks below the psychological level of 1.5400, closing the trading session at the rate of 1.5380. The USD continued its bullish momentum mainly as a result of favorable economic data release during the day. By midday, the Employment data for April was released and gave traders many good reasons to buy dollars. With the figures released, the USD sharply gained 70pts against the EUR and 82pts against the JPY. As well the figures release assisted the greenback's recovery against the GBP, closing the Cable below the rate of 1.97 by the end of the weeks trading session. Surprisingly, The Non-farm Employment Change showed a strong rising trend in the number of employed people during April. The report showed that fewer than 20K jobs were cut in March Compared to February reading of -81K. Combining Non-farm Employment Change with the non-aggressive interest rate last week, many traders see this as an additional sign of a US economic recovery. Moreover, in April the Unemployment Rate was reduced by 0.1% to 5%. Today, the most important data to be released from the US will be the ISM Non-Manufacturing Composite. This report will reveal to traders more information, about the activity level during April in the US, including new orders and employment. The report is forecasted to fall at a rate of 0.5% to 49.1. Although we expect this fall to weaken the USD, the direction the USD may take may be psychological and continue last week's bullish movement. Traders should closely follow, on Wednesday, the Non-farm Productivity report which will have more information on the US non-farm sector. In addition, Gold prices fell last week by 6% on the back of the strong greenback. Analysis forecast Gold's bearish momentum to be unstoppable in the short term, because the strengthening of the US economy. Meanwhile, Crude Oil prices retreated last week from its all time high above the rate of 119 USD for one single barrel, to Thursday's 16 days low of below the $110 rate. Oil's falling trend came mainly as a result of the strong dollar combined with announcements-free week from the OPEC countries.

Daily Economic News - Apr 10, 2008

Yesterday, the greenback fell to its lowest mark since the beginning of April decreasing sharply against a majority of it's currency rivals. The EUR/USD pair shot up 150pts yesterday, crossing the key psychological rate of 1.5800 for the first time since the positive ISM Manufacturing Index release on April 1st. Expectations for the near future look to hold similar characteristics as the upcoming US calendar doesn't look to have much that can help pull the dollar out of trouble. Yesterday's bearish dollar trend was especially concerning due to the lack of indicators released from both the US and the Euro-zone, as it seems that the greenback crash comes mainly on the heels of traders fearing the US economy woes are not over. Yesterday's standout event from the US calendar was a speech by Fed Chairman Ben Bernanke; the speech did include criticism of the financial literacy system in the US. Bernanke said that the financial education of Americans, mainly the younger generation is not what it should be and this is one of the main reasons behind sub-prime problems in the US. Only 15.3% of the American youth are supplied with personal finance courses before high school graduation compared with 52.4% in Germany and approximated 48.2% in Japan. Looking ahead to today, two leading indicators are expected to show small improvements from within their respective sectors of the US economy. The Trade Balance report (12:30 GMT) is expected to come in at a reading of -57.4B, just under 1 billion dollars less than last month's reading month, mainly due to higher levels of exports from the US. Also on tap are Unemployment claims, which are forecasted to depreciate from 407K to 385K this week. Lastly, we expect to hear from Ben Bernanke as he addresses the World Affairs Council of Greater Richmond. If data returns according to expectations, we should see a slight recovery in dollar movement.

Daily Economic News - Apr 09, 2008

Yesterday, the Greenback spent most of the trading day with bullish momentum against a majority of its currency pairs and crosses. This despite a day of disappointment from US economic news. As the financial world awaited the results of the Federal Open Market Committee (FOMC) Meeting Minutes, the assumption amongst investors was that the summary of the news would be so bad for the US economic outlook, that the dollar would suffer big losses. Though the meeting minutes were released and gave no real positive outlook for future economic progress, a sense of urgency still exists amongst investors regarding a slowdown in growth. Still though it is unknown what the real catalyst behind the bullishness has been. One of the key points of the FOMC Meetings was the discussion of the value of the Dollar and the need or lack there of for another rate cut. Two of the more hard-line Fed bosses, have not shied away form their suggested 75bp rate cut, but instead have embraced what seems to be the foundation of a successful direction for the dollar. It would still be irresponsible for any analysts to use such contrasting results as reasoning for greenback movement. Also released yesterday was the index for Pending Home Sales, as the figure returned to its lowest point since as the creation of the index in 2001. Sinking just under 2% in one month, this figure could once again stir up some uncertainty about the ailing housing market. The current credit crisis and housing issues have become indefinite realities as the US braces itself for more economy changing news throughout the week. As we look ahead to Friday and the beginning of the G-7 Meetings, it is important to note that amidst all the poor economic data of the past week and a half, including a record drop in Non-Farm Payrolls, the greenback is still being traded with confidence. Today, we await several events on the US economic calendar. Crude Oil and Wholesale Inventories are both expected today and should have little change in market conditions, barring any drastic movement in the inventory figures. The more relevant events of the day will come from two of the FOMC's more influential title holders, as we expect speeches from Dallas Fed President Fisher and Fed President Ben Bernanke. These two should contribute directly Dollar movement, as history has shown us in the past. Expect dollar movement to be some what unknown until midday, where the release of events to come will likely shape the outlook of the day for the dollar.

Daily Economic News - Apr 08, 2008

The USD rose against the EUR yesterday on speculation the Fed is close to ending the biggest series of Interest Rate reductions since 1984. Stability in equity and credit markets raised optimism that the worst of the financial crisis might be over, encouraging investors to buy riskier assets. Yesterday, the U.S. currency advanced 0.3% to 1.5693 vs. the EUR, however later deteriorated and closed trading at 1.5718. The greenback has been receiving support after the recent stabilization of the financial markets, as seen by Lehman Brothers, UBS and now Washington Mutual having the ability to raise cash, will allow the Fed to refrain from further rate cuts. While sentiment toward the dollar had improved, worries about the overall health of the U.S. economy continued to cast a shadow over the market, restricting the greenback's gains. The U.S. central bank has reduced the federal funds rate by 3% since September, pumped $628 billion through the financial system, and allowed securities firms to borrow directly from it for the first time since its creation in 1913. Rate futures are pricing in a roughly 36% chance of a 50 basis points rate cut at the end of this month. Traders await this Friday's G7 meeting in Washington, D.C. to see if policymakers will agree on a plan to support the dollar because rising exports may be the only blessing of a weak currency in a slowing economy. As for today's calendar, we expect Pending Home sales to have improved slightly in February to a level of 86.3 from 85.9 in the previous month. We also expect the FOMC Meeting Minutes which will contain detailed record of the committee's interest rate meeting held about two weeks earlier and might shed some light on future monetary policy. The USD, and US equity markets will most probably sail quiet waters until the release of the FOMC March meeting minutes at 14:00 EDT, which will than might push the greenback further up.

Daily Economic News - Apr 07, 2008

The USD pared its gain against the EUR on Friday as investors digested the U.S. March Unemployment Report and the Nonfarm Employment Change figures. Last Friday's Payrolls hit the -80K mark, marking the biggest decline in 5 years. Unemployment also spurred downside risks for the economy as it rose to 5.1% from 4.8%, and heightening the bearish sentiment for the U.S. economy in general. In fact, Fed Chairman Bernanke acknowledged last week that the economic expansion may slow down significantly, as homebuilding, employment and spending deteriorate. As for the USD, it will probably continue to move lower in the next couple of months, until the U.S. economy improves. Fed Chairman Bernanke, for example, expects a return to trend growth as early as 2009. Export, is another key economic factor. By now, exports are really keeping the U.S. economy from falling into a much deeper recession. The export boost provided by a weaker dollar, which makes American-made goods less expensive for overseas buyers, is helping to avert a deeper slump in manufacturing. This week's Trade Balance figure may show the trade deficit shrank to $57.5B in March from $58.2B the prior month. Looking ahead, this week will be quite an eventful one as 3 major central banks - BoJ, ECB, and the BoE will meet to set their monetary policies. On Tuesday, Pending Home Sales are expected to fall, further dragging the U.S. economy down. The Consumer Sentiment report for this month is also expected to drop its lowest in 16 years. Today, however, we do not expect major price action in the USD as the Consumer Credit index is the only U.S. data to be released. The volatility is expected pick up on Tuesday as the FOMC will release their Minutes report at 18:00GMT.

Daily Economic News - Apr 01, 2008

Yesterday, the greenback fell close to a record low against the EUR at the rate of 1.5890. The USD depreciated during the first hours of the trading session mainly as a result of higher than expected CPI released from the Euro-zone at 9:00 GMT yesterday. Later, the greenback gained back all its losses with the Chicago PMI release which came well higher than expected. Yesterday's Chicago PMI reading rose to 48.2, well higher than expectations of 46.0 and a much better reading than last month's 44.5. With the report release, many investors gained back their faith in the greenback and went short on the EUR/USD, considering the report as an improvement in the U.S. economy and a first result of the Fed's moves which are forecasted to help the U.S. economy avoiding the recession. Meanwhile, Gold continued to lose ground yesterday. The impact of the Chicago PMI release made traders seek less risky investments than Gold and thus Gold depreciated sharply closing the trading session at 8 day low at the price of 915 USD for an Ounce. Today, analysts expect the ISM Manufacturing Index to drop to 47.5 from last month's reading of 48.3. This important indicator gives an overall view of the U.S. economic behavior over the previous month. Traders should watch these surveys closely to have larger picture of the direction of the USD for the next days. Meanwhile, tomorrow's employment component will also be watched carefully as a gauge for Friday's Non-Farm Payroll report. NFP is expected to fall into negative for the 3rd consecutive month, which will significantly raise expectations for another sharp rate cut by the Fed at the end of April. Till now, the Federal Reserve has slashed rates by 300 basis points and is expected to cut again as soon as next month. Currently, futures are fully pricing in a 25bp cut, while increasingly leaning towards a 50bp cut. If we see today's Manufacturing Sector Report and other data, including the NFP, add to the pile of evidence pointing toward a U.S. recession, futures markets may shift quickly to fully price in a 50bp cut.

Daily Economic News - Jan 31, 2008

Yesterday the greenback slipped sharply against most of the major currencies on the back of the news that the Fed had slashed the Fed Fund Rate and the Discount Rate by an additional 0.5%. The Federal Funded rate, which is the U.S inter-bank lending rate, was cut from 3.50% to 3.00%. While the Discount Rate, which is the rate at which U.S banks can borrow funds directly from the Reserve Bank, was slashed from 4.00% to 3.50%. The Fed has been continuously slashing the interest rate over the last few months in an attempt to stabilize the faltering U.S economy and to stave off a recession. Yesterday's rate cut comes just over a week after the Fed surprisingly cut its benchmark lending rate by 0.75%, in order to stimulate the economy. This series of aggressive monetary expansion by the Fed will significantly boost U.S consumer spending, which will mean that the number of unsold U.S homes will decrease thereby alleviating the housing slump and loosening the persistency of the recent credit crisis. However the Fed will have to keep a close eye on future inflation figures, particularly since the recent Personnel Consumer Expenditure figure released above expectations. The PCE figure is not relied upon by many economists and therefore it's is widely believed that inflation is not a major concern and that yesterday's 0.50% rate cut was absolutely necessary in order to prevent the U.S economy from spiraling into recession. Inflation is expected to remain moderate in the near term, although there is a slight risk of it spiking on the back of the rate cuts. Nevertheless, stagflation is highly unlikely and it seems that the worst case scenario for the U.S economy will be a recession. In other U.S news yesterday, the Annualized GDP quarterly figure released at 0.6%, which was well below the forecasted figure of 1.2%, giving further indication of slowing U.S economy. Also released yesterday was the ADP report, which has some predictive value for the Non-Farm Payrolls report which is to be released this Friday. The ADP report surprised on the upside, coming in at 130K and far-surpassing the expected figure of 40K. Therefore looking ahead, traders will now begin to shift their focus on Friday's NFP report, which is usually a major market mover. The greenback may be able to pull back some lost ground on Friday as according to the ADP report we may see a positive surprise for the significant NFP report. Nevertheless, due to instability in the U.S financial markets coupled with slowing growth the short term outlook for the greenback remains very bleak. However we remain optimistic longer term and believe that towards the second half of 2008 the U.S economy will climb out of this deep pit and it will be accompanied by a sustained USD rally.

Daily Economic News - Jan 30, 2008

Today at 19:15 GMT, we are scheduled to see the release of the US interest rate statement. The greenback was steady against its major crosses yesterday, as investors waited to see how big an interest rate cut the Federal Reserve will deliver today in its fight against the threat of a U.S. recession. With the Dow rising as well yesterday, investors look towards bullish behavior of the dollar ahead of the expected 50bp rate cut, which will likely drive the dollar's value down. Federal Reserve fund futures were pricing in a roughly 75% chance that the rate cut will come in at 50bp, with the other quarter allocated to the much more conservative and unlikely 25bp cut. A hefty cut from the current interest rate of 3.5 % could send the dollar in either direction, as lately it has slipped back towards record lows hit last year against a basket of currencies. A rate drop any bigger than 50bp would deteriorate the dollar's yield appeal for investors. A rate cut of 25bp would service as a medium between keeping with market expectations and servicing the real needs of the economy. During yesterday's trading news events from the US came back with mixed results, nonetheless far better than what was originally expected, giving investors even more incentive to push the dollar up. Durable goods returned roughly 3% higher than initially forecasted, as the 5.2% mark, coupled with solid core durable goods figures gave a much needed boost to the dollar in afternoon trading. National HPI Composite and Consumer Confidence figures were released as well yesterday to predicted negative results, preventing any real significant gains in the greenback. Before the evening release of the US interest rate, we will see several key US figures. The 15:30 GMT release of ADP Non Farm Employment Change is expected to stay put at 40K, ahead of Friday's non farm payroll data. Also, an advanced release of quarterly GDP and the GDP deflator is scheduled to come back with negative results. If today's economic data comes back with better than expected results, the dollar and the US economy as a whole will see some much needed relief.

Daily Economic News - Jan 29, 2008

The greenback continued to take a hit as yesterday's New Home sales figure spurred speculation that the Federal Reserve will cut its benchmark lending rate by 0.5% this week to prop up the economy. The Fed will announce its rate decision tomorrow at the end of a two-day policy meeting. Interest Rate Futures reflect a roughly 90% chance of a 0.5% rate cut by the Fed this week. Short-term U.S. interest rates are already among the lowest in the developed world, encouraging investors to borrow in dollars and buy another currency to profit on the difference in yields, which would put pressure on the dollar. Data showing sales of new U.S. homes declined in December, stoking fears of an imminent economic recession. Purchases of new homes in the U.S. unexpectedly fell yesterday to a 12-year low in December, ending the worst sales year since 1963. Sales decreased 4.7% to an annual pace of 604K, according to Washington Commerce Department. By now, markets show little willingness to force a dollar bounce ahead of a critical week of U.S. economic developments. We may see the greenback remain in a relatively narrow range against the EUR ahead of the highly anticipated U.S. Federal Reserve rate decision due Wednesday, while similarly critical Non Farm Payrolls data will be due Friday. Today, the release of the U.S. economic data will likely highlight some of the reasons why traders are ramping up speculation that the country is in midst of a recession. Durable Goods Orders are forecasted to rise 0.1% after falling 0.8 % during the month prior. On the other hand, the U.S. Consumer Confidence is forecasted to fall to a 2 year low.

Daily Economic News - Jan 24, 2008

The greenback is floating in relatively quite waters, after the storm caused by the fed's surprise cut of 75 basis points two days ago. When taking a deeper a look at the USD behavior post cut we can see that the reaction of the USD was in fact softer than one would expect from such a radical move that was not seen since 9/11. This could partly be explained by the fact that the cut was partly priced in, as the crisis was quite strong and traders were expecting a massive cut. Now there is a certain argument amongst some traders about whether the Fed will again lower its rates by at least a quarter of a percentage point next week. Others said it would depend on how Wall Street would perform for the rest of the week until their meeting on Tuesday. These extreme policy changes are aimed at boosting liquidity and easing the credit crunch, restoring confidence and encouraging consumers and businesses to start borrowing, investing and spending again to keep the world's largest economy from slipping into a recession, although many predict that a recession might be inevitable. As for today there are two major economical events expected to come from the US, the first is Unemployment Claims which is widely expected to be released at 320K after a previous figure of 301K, and the second is Existing Home Sales that is expected to remain at the 5 Million level, and will probably not generate strong volatility that is usually expected from housing data at this poor economical period. US Treasury Secretary Henry Paulson will speak today about risk and the financial system at the World Economic Forum, in Switzerland. The speech might generate some choppy price movements, as those speeches often do. It appears that if no other surprises will be pulled from the fed's sleeve, we should see the Greenback continue to drop as a part of the ongoing attempts to initiate the healing process for the American economy.

Daily Economic News - Jan 21, 2008

The greenback made a local correction against the EUR and the CHF on Friday, and appears to be continuing what it started at the opening of this week's trading session. The EURUSD now trades around 1.4530 and the USD/CHF went up by 150 pips to the 1.1050 area. Although on the local level things look pretty positive for the USD, most traders believe that this is merely a technical correction that would probably end towards next week's rate statement. On Friday, President Bush announced plans for a stimulus package that would put a small chunk of change into the pockets of American taxpayers. President Bush proposed a series of short-term tax cuts which will provide a boost for the struggling U.S. economy.

The president did not give details of his plan but mentioned it would include tax breaks for businesses and individuals worth at least 1% of the nation's GDP, or approximately $140 billion to $150 billion. Although having some optimistic data in the U.S. economy, the U.S. economy tribulations appear to remain severe, and on the basis of this fact many traders expect the Fed to cut a further 50 basis points at its next meeting on Jan. 29-30, as bad news is expected to come from the house prices and investment banking losses. Today, the US markets will be closed for Martin Luther King Day, and no major news events are expected to come from the area. Low volatility is expected in Dollar crosses, and it looks like most of the price movement will come from Europe which will also be quite light with news.

Daily Economic News - Jan 16, 2008

Yesterday the greenback continued its bearish trend against most of the majors, nevertheless it did eventually manage to rally back sharply against the EUR on the back of weak Eurozone news. The most significant news released from the U.S yesterday was the Retail Sales and PPI figures which both came in well below expectations. These soft figures once again raised concerns that the U.S economy is heading towards a recession and therefore the greenback slipped sharply on the back of these news releases, falling beyond the 1.4900 level against the EUR and continuing its dramatic slide versus the JPY. The greenback fell to a 2-1/2 year low versus the JPY yesterday as the current global growth problem is creating a risk-averse sentiment among investors and therefore we are now seeing a sustained carry trade unwind.

The greenback has been on a steep decline since last week Friday which was mainly driven by increased speculation of an aggressive rate cut by the Fed. Yesterday's weak U.S news only fuelled the fire once more as it seems that only an aggressive rate cut will save the U.S economy from increasingly likely recession. However it may not all be doom and gloom for the greenback this week as many major U.S banks will be announcing there quarterly earnings and already yesterday Citigroup reported quarterly losses which were less than what the market expected . Investors will be closely following these figures for an indication as to how deeply the credit crisis has affected some of the largest financial institutions in the U.S. The Citigroup surprise helped the greenback regain some lost ground against the EUR and if other major U.S banks also report smaller than expected losses then this will provide a boost for the U.S equitiy markets and therefore the greenback could also regain some ground against the JPY as carry trades will be back in action.

Looking ahead, there is another string of important U.S news releases today which will kick off with the CPI figures. Due to yesterday's disappointing PPI figures there is a strong possibility that the CPI figures will also release below expectations, as the producer prices are usually passed on to the consumer. This news release will be followed by the TIC Report, Industrial Production and the Capacity Utilization Rate. All these events will be closely followed by investors as any downside surprise will place the greenback firmly on the bearish express. Another important report to follow today will be the Beige Book, which is produced two weeks before each Federal Open Market Committee (FOMC) meeting to help guide the committee when setting short term interest rates. Now although the FOMC receives two other books that are not made public, the Green Book and the Blue Book and it is widely believed that the FOMC pays more notice to these private publications, investors will nevertheless be sifting through the report for future monetary policy clues. At the moment many analysts believe that the Fed will cut rates by at least 25-50bps at its next meeting on 29-30 Jan. The size of the rate cut will have a significant impact on the future direction of the greenback, so the economic indicators throughout today and leading up to that time are expected to cause sharp volatility as investors continuously adjust to the resulting ever-changing rate cut speculation.

Daily Economic News - Jan 15, 2008

The greenback continued to see significant decline yesterday, as it posted close to record lows against several major currency pairs. Concerns over the state of the US economy are still dismal, as the dovish stance taken by the Feds has done nothing to change current trends.

Investors are gearing up for what most feel will be another interest rate cut from the Fed, by as much as 0.5%. With the EUR/USD already traded well within the range of its all-time high of 1.4960, speculation that it will break the 1.50 support level is gaining steam.

One of the main issues for the Feds is whether or not the problems from the failing credit and housing markets will spill over into other economic sectors, such as retail and consumer confidence. With the mostly disappointing figures that have been released in 2008 so far, there is little that can be expected in the way of drastically changing the dollar's downward pile.

Today is expected to produce a host of key economic data from the US. Events from the US start at 13:30 GMT, as the release Retails Sales, Core PPI, PPI, and the Empire State Business Conditions Index are on tap. The aforementioned events will be followed by the 14:00 GMT of Business Inventories for the month of December. The real standout figure of the bunch should be Retail Sales, which could single-handedly drive the dollar down, if already poor expectations return even worse.

If US economic data returns with negative results, it could very well be the day that the EUR/USD makes a serious push toward 1.50 and even further as the market approaches the rate statement. It appears that from all points of view the greenback's near future looks extremely gloomy.