Daily Economic Commentary: United States

The almighty Greenback showed the markets who’s king of pips as it posted significant gains against the euro, pound, and the yen. How the heck did the lack of NFP report lead to that?!

Word around the hood is that the dollar bears squared their positions ahead of the weekend in anticipation of a weekend deal between the Republicans and the Democrats. It also didn’t hurt that economic reports from other major economies were less-than-awesome.

This week we’re looking forward to the IBD/TIPP economic optimism report tomorrow at 2:00 pm GMT, followed by the big FOMC minutes on Wednesday at 6:00 pm GMT. Many analysts aren’t expecting “Octaper” to happen, but the close votes from September’s meeting could still lead to a surprise tapering by the Fed. The last major report that you would want to pay attention to is the preliminary University of Michigan report on Friday at 1:55 pm GMT.

Best of luck on your dollar trades this week, fellas!

Monday wasn’t a good day to be a dollar bull, as the Greenback chalked up losses against its major currency rivals. EUR/USD bounced from the 1.3550 area to a high of 1.3592 while GBP/USD rallied back to the 1.6100 mark. What’s in store for the dollar today?

Medium-tier data from the U.S. came in better than expected yesterday, with the consumer credit report for August showing a 13.6 billion USD figure. This was higher than the previous 10.4 billion USD reading and the estimate at 12.6 billion USD, reflecting strong consumer spending for the month.

However, the prolonged U.S. government shutdown discouraged traders from piling up their long dollar positions. After all, it has already been a week since the government temporarily furloughed some of its employees and closed its non-essential services. Now that can’t be good for overall economic activity!

Only a couple of medium-tier reports are up for release from the U.S. today, and these are the NFIB small business index and the IBD/TIPP economic optimism report. Better than expected data could shield the dollar from larger losses, especially if the shutdown carries on for another day. Make sure you keep tabs on market sentiment if you’re trading the dollar!

USD/JPY, USD/CHF, EUR/USD, and GBP/USD ended the day with mixed results as traders priced in a lack of progress in Washington as well as some U.S. economic reports. What exactly moved the Greenback yesterday?

USD/JPY started the day strong as it encountered support at the 97.00 handle, but weak U.S. data soon took its toll on the Greenback. The NFIB small business index came in at 93.9 after the previous month’s reading while the IBD/TIPP economic optimism clocked in at 38.4 instead of the expected 46.2 figure.

What bothered investors more though is that the Gallup daily tracker for U.S. consumer confidence fell to its lowest reading since December 2011, and hinted that the government shutdown is taking its toll on consumer sentiment.

Up ahead we have the big FOMC meeting minutes due at 6:00 pm GMT. While the Fed didn’t taper in September, word on the hood is that it was a close call and that many members had actually voted a yes. Will the minutes hint at an Octaper?

What a comeback by the Greenback! The U.S. dollar hit the brakes on its recent losing streak against most of its major counterparts, pushing EUR/USD down to the 1.3500 handle and GBP/USD below the 1.6000 mark. Was that just a pullback or is the Greenback in for more gains?

Minutes of the latest FOMC meeting revealed that policymakers believed that tapering could still take place within the year, as the U.S. economy has been showing signs of a recovery. Although this was enough to give the dollar a boost in yesterday’s New York session, bear in mind that the FOMC meeting took place in September, prior to the ongoing U.S. government shutdown and the looming debt ceiling deadline. Hmm, I wonder if Fed policymakers changed their minds about the taper since then…

In other news, Obama has already announced the nomination of Janet Yellen as the next Fed head. In case you have no idea who she is, you should read Forex Gump’s latest article on the 8 Things You Should Know about Janet Yellen!

The only report due from the U.S. today is the initial jobless claims data, which is expected to print a figure of 307K. A higher than expected number of first-time claimants might force the dollar to return some of its gains, as it would reflect a downturn in hiring. Stay on your toes for any potential changes in risk sentiment as well!

Back-to-back, baby! Thanks to speculations of a debt ceiling agreement, the Greenback was able to extend its gains on most of its counterparts. USD/JPY and USD/CHF popped up, while EUR/USD and GBP/USD got hit by risk appetite.

Yesterday’s initial jobless claims data came in worse-than-expected at 374K instead of the expected 307K reading. It didn’t matter much though, as traders still had their focus on the rumors that there would be a six-week debt ceiling extension.

Although the rumors eventually led to a rejection of the Republicans’ offer, the dollar’s rally against its low-yielding counterparts wasn’t hampered.

Will the Greenback go for three today? We’re only looking forward to the preliminary UoM consumer sentiment data at 1:55 pm GMT since the retail sales numbers are delayed. The report is expected to print at 77.2 from last month’s 77.5 but keep an eye out for any surprises!

The dollar bulls and bears were stuck in indecisionville last Friday as traders waited for a debt ceiling deal from Washington. The dollar dominated on GBP/USD and USD/JPY while EUR/USD also saw gains.

The U.S. retail sales data was delayed by the government shutdown, so we only saw the preliminary UoM consumer sentiment numbers. The report showed up with a 75.2 reading, which is just below the expected 76.0 figure.

Uncertainty over a U.S. debt ceiling deal and a lack of major data are keeping the bulls and bears from making any significant moves. Will the Greenback traders step up their game this week?

The U.S. is on a bank holiday to celebrate Columbus Day today, but over the week we’re expecting to see reports such as the NY manufacturing index, Beige book report, and the Philly Fed manufacturing index.

Of course, the big October 17 deadline is also up this week. Don’t forget to prepare for different scenarios if you have any open trades by then!

We got mostly mixed trading and a tight range from currencies to open the week, including the Greenback. The US Dollar Index traded in a tight 25 point range and closing almost right at the day’s opening price at about 80.76.

This is probably due to the US bank holiday, as well as the continued uncertainty over when the US government shutdown will end and when/if the debt ceiling will be raised.

There was big support for USD and risk assets late in the Europe/US overlap when Senate Republican and Democratic leaders stated that significant progress has been made towards avoiding the US debt ceiling breach on Oct. 17. This sentiment may continue in today’s trading session until we get fresh US economic data or a change in the US government debt fiasco story.

In today’s lineup, we’ve got the Empire State Manufacturing Index (forecasted at 7.0 vs. the 6.29 previous read); this can bring about short-term volatility so stay alert!

Boo yah! The Greenback showed the rest of the major currencies who’s boss, as it stayed undefeated in yesterday’s trading. EUR/USD slipped to a low of 1.3479 while USD/JPY climed above the 98.50 minor psychological level.

And the shutdown continues! Risk aversion seemed to drive price action yesterday, much to the benefit of the safe-haven U.S. dollar. Lawmakers are still negotiating about spending cuts, as the White House recently rejected the proposal passed by House Republicans while the Senate was unable to decide on whether or not to raise the debt ceiling before the October 17 deadline.

Economic data from the U.S. was weaker than expected, with the Empire State manufacturing index dropping from 6.3 to 1.5 instead of improving to the estimate at 8.2. However, economic releases seem to be taking the backseat these days since traders are focused on the budget and debt talks in the U.S.

Up ahead, the Fed Beige Book is up for release and it is likely to show that economic recovery has been moderate and mixed among regions. Make sure you take a look at the assessment and outlook for the Fed regions, as these would serve as clues on how overall economic performance has been faring.

And just like that, the dollar bulls are back in the game! USD/JPY soared to a three-week high while EUR/USD touched a two-week low after rumors of the U.S. Senate sealing a debt ceiling deal made the news wires.

Yesterday the Senate voted 81-18 in favor re-opening the federal government and lifting the debt ceiling. The politicians will hash out the details later, but for now they have agreed to fund the federal government through January 15, 2014 and lift the debt ceiling until February 7, 2014.

Not surprisingly, the dollar was boosted across the board. Heck, investors even shrugged off a weaker-than-expected NAHB housing market index data (55 vs. 58) and a mixed Beige Book report!

Until we see some more details though, it is likely that the dollar will trade on tight intraday ranges or react to the reports due today. At 12:30 pm GMT we’re expected to see the initial jobless claims, followed by the Philly Fed manufacturing index at 2:00 pm GMT.

If the government is really set to re-open, then investor attention will most likely revert to the Fed’s monetary policies. That means that we gotta pay attention to U.S. economic reports again!

Dollar bulls, retreat! The Greenback was under heavy fire yesterday, pushing USD/JPY back below the 98.00 handle and EUR/USD past the 1.3650 minor psychological mark. What was that all about?!

Now that the Senate and Congress have come up with a deal to extend the debt ceiling deadline, the U.S. government shutdown is officially over and furloughed workers can come back to work again. Although this news boosted the dollar’s spirits earlier in the day, profit-taking took place later on as the “buy the rumor, sell the news” phenomenon weighed on the Greenback.

It didn’t help that a Chinese rating agency decided to dole out debt downgrades on the U.S. after the recent budget fiasco. Dagong announced a downgrade from A to A-, which was possibly a part of their plan to reduce exposure to American assets. Market participants took this as a cue to dump more dollars throughout the day.

As for data, the Philly Fed index came in better than expected as it fell from 22.3 to 19.8 instead of the estimated 15.4 figure. There are no reports due from the U.S. today but a bunch of FOMC officials namely Tarullo, Evans, Dudley, and Stein are set to give testimonies during the NY session.

After Friday’s bloodbath, the Greenback was able to catch a breather against its counterparts. Thanks to a lack of catalyst, EUR/USD, GBP/USD, USD/JPY, and even USD/CHF ended the day not far from its open prices. Phew!

Aside from speeches from FOMC members Tarullo, Evans, Dudley, and Stein, we didn’t really see any major news report from the U.S. This helped investors foster the limited price action environment that we also saw in London session trading.

Will the dollar show a direction this NFP week? Yep, you heard that right! While we only have the existing home sales numbers at 2:00 pm GMT today, we’ll also be dealing with delayed NFP report tomorrow at 12:30 pm GMT.

Word around the hood is that the Fed will delay tapering until next year even if the jobs numbers print better-than-expected. Anything can happen though, so make sure you don’t miss this one!

Looks like the Greenback needed to pull up for some air after all those deep dives! USD/JPY climbed back above the 98.00 handle after dipping to a low of 97.55 while GBP/USD retreated below the 1.6150 minor psychological mark. What can we expect for the U.S. dollar today?

Data from the U.S. came in weaker than expected yesterday, as existing home sales for September amounted to 5.29M instead of the estimated 5.31M reading. On top of that, the previous month’s figure was revised down to 5.39M from 5.48M, revealing that there are still some weak spots in the U.S. housing sector.

Today could be a more volatile day for dollar pairs, as the U.S. is set to print its September non-farm payrolls figure. As Forex Gump mentioned in his recent article on the things to remember when playing the September NFP, trading this event could be a tricky one as the U.S. dollar seems to be reacting to risk sentiment these days. A 182K rise in hiring is expected while the jobless rate is projected to stay at 7.3%, but a weaker than expected reading might push the dollar to dive again. Stay on your toes for the actual release at 1:30 pm GMT!

Geronimoooo!!! The Greenback fell sharply against its counterparts yesterday after a weak NFP report supported the idea of no Fed taper this year. EUR/USD and GBP/USD popped higher while USD/CHF dropped to a two-year low. Yikes!

It wasn’t a good day for Uncle Sam yesterday as the delayed September NFP numbers disappointed the market players. Although the unemployment rate dropped from 7.3% to 7.2%, the report also revealed that there were only 148,000 workers who found work in September. That’s a lot less than the expected 182,000 uptick! Not only that, but the average hourly earnings also slipped from 0.4% to a growth of 0.1%.

Investors dumped the dollar at the release of the report because it suggests that the Fed will wait for more positive numbers before they begin their tapering. After all, they have yet to see just how much damage the recent government shutdown has affected the economy.

But that’s for later. Today the U.S. isn’t scheduled to release any tier 1 economic data. That means you should keep your eyes peeled for other events, such as the MPC meeting minutes and the BOC rate statement, which could move the major currency pairs.

Rally and reverse! The safe-haven U.S. dollar took advantage of risk aversion during the Asian and London sessions but gave up most of its intraday gains when the U.S. session rolled along. What were those moves all about?!

Earlier in the day, news of China’s surging money market rates reminded traders that the central bank stopped doling out stimulus this month. This sparked concerns that liquidity will be low and that the economic recovery might not be sustained, prompting a flight to safety in financial markets. It didn’t help that most of China’s banks also recently decided to write off non-performing loans from their balance sheets, which led some to worry that bank defaults could follow.

There were no major reports released from the U.S. then, as the dollar’s topsy-turvy behavior was driven by risk sentiment. For today, U.S. new home sales, flash manufacturing PMI, and trade balance could play a bigger role in price action. New home sales could be up from 421K to 427K while the flash manufacturing PMI could stay at 52.8 for October. The trade deficit is projected to have widened from 39.1 billion USD to 39.4 billion USD in September. Watch out for these releases starting 1:30 pm GMT!

The dollar’s price action was as mixed as Forex Gump’s tie collection as it ended the day higher against the comdolls but lower against the euro, pound, and its fellow low-yielding currencies. What’s up with that?!

Well, it seems that the dollar bulls weren’t too impressed with yesterday’s U.S. economic data. While the initial jobless claims fell from 362K to 350K, the Bureau of Labor Statistics had expressed its concern over the backlog in California as well as the one-time impact of the U.S. government shutdown. Good thing that the U.S. trade deficit held the fort for the bulls when it showed a 38.8 billion USD trade deficit instead of the expected 39.4 billion USD figure.

At 12:30 pm GMT we’ll see the U.S. durable goods orders report, followed by the revised UoM consumer sentiment data. Both reports are generally expected to print better numbers than last month, but make sure you’re prepared in case we see disappointing readings!

The Greenback’s performance was as mixed as a bag of nuts last Friday, as the U.S. currency consolidated against the euro but rallied against the Loonie and Kiwi. USD/JPY gapped higher over the weekend and opened at 97.75. What’s in store for the dollar today?

Data from the U.S. also came in mixed, with the core durable goods orders figure falling short of consensus and printing a 0.1% decline and the headline reading showing an eye-popping 3.7% increase. Meanwhile, the University of Michigan consumer sentiment figure was revised down from an initial estimate of 75.2 to 73.8 for October.

Only the pending home sales report is up for release from the U.S. today. This report, which is due 3:00 pm GMT, is expected to print a 0.5% rebound for September. A weaker than expected reading might be negative for the U.S. dollar since it would remind traders that the Fed isn’t likely to reduce bond purchases this year.

Dollar bulls attaaack! Thanks to some weak reports from the major economies, risk aversion clouded over the markets. EUR/USD retested its lows from last week, GBP/USD dropped to the 1.6150 area, and USD/JPY reached a high at 97.80. Booyah!

The Asian session might have popped up some weekend gaps, but for the most part we saw thin trading during the U.K. and U.S. sessions. This didn’t stop the dollar bulls from attacking though, since we also saw a surprisingly weak report from the U.K.

Speaking of weak reports, the U.S. pending home sales surprisingly dropped by 5.6% in September. Not only is that the FOURTH monthly decline for the report, but it’s also the fastest rate of decline in three years.

Will the dollar bears step up today? The retail sales report is up at 1:30 pm GMT, along with the U.S. PPI report. Then, at 2:00 pm GMT we’ll see the S&P house price index data, followed by the CB consumer confidence report at 3:00 pm GMT.

The retail sales numbers have been delayed due to the government shutdown, but keep your eyes peeled for it nonetheless in case we see hints of more weaknesses in Uncle Sam’s recovery!

Weak U.S. data? So what? Ain’t nothin’ gonna stop the Greenback’s rallies now that risk aversion is driving price action! EUR/USD broke below its previous consolidation and traded to a low of 1.3736 while GBP/USD sank lower to the 1.6050 area.

U.S. headline sales printed bleaker than expected results for September as it showed a 0.1% decline in spending versus the estimated 0.2% uptick. The core figure came in line with the consensus of a 0.4% increase for the same period. Meanwhile, consumer confidence chalked up a sharp decline from 80.2 to 71.2 in October, thanks to the recent government shutdown and debt ceiling drama.

Today could be a volatile one for the dollar pairs, as the FOMC is set to make its interest rate announcement. Given the recent slack in the U.S. economy and the projected damage of the government shutdown, nobody is expecting the Fed to reduce bond purchases at this point. However, if Fed head Bernanke sees the need to reassure the markets that the U.S. economy will get back on its feet, the U.S. dollar could still draw support. Watch out for the actual event at 7:00 pm GMT!

As for data, the U.S. is set to print its inflation reports and ADP non-farm employment change figure starting 1:15 pm GMT today. Both core and headline CPI are expecting to see a 0.2% uptick while the ADP report could post weaker hiring of 151K for October. With the October NFP release delayed for a week, this ADP report might actually trigger a pretty strong reaction! Be careful out there!

Who let the dollar bulls out? The Greenback scored pips against its counterparts after the Fed printed its FOMC statement. What the heck did they say?

EUR/USD, GBP/USD, and USD/JPY all showed Greenback strength when the Fed released its policy statement. Apparently, Bernanke and his gang aren’t as excited to delay tapering as many had thought.

While the central bank remarked on the negative impact of the government shutdown and the slowdown in the housing and labor markets, the central bank also didn’t say anything about delaying its taper plans. Even a hint of tapering some time this year was enough to let the dollar bulls out.

Let’s see if today’s reports will change the tides for the dollar. At 1:30 pm GMT we’ll see the initial jobless claims, followed by the Chicago PMI at 2:45 pm GMT. With the Fed looking closely at economic reports for its next moves, I won’t be surprised if the investors also pay close attention to them. Don’t be left out!

Way to go, Greenback! The U.S. dollar extended its gains to the euro and the Swiss franc, pushing EUR/USD down by roughly 200 pips. It consolidated against the pound and the yen, as GBP/USD was able to stay above the 1.6000 major psychological support. Where is it headed today?

Medium-tier data from the U.S. came in better than expected yesterday, as the initial jobless claims report showed a 340K reading while the Chicago PMI jumped from 55.7 to 65.9, outpacing the consensus at 55.1. However, some are skeptical about this sharp and unexpected rise in the manufacturing index, and will wait to see if there will be downward revisions later on.

For today, the ISM manufacturing PMI is up for release and is expected to print a dip from 56.2 to 55.3 in October, which would reflect a weaker expansion in the industry. Watch out for this release at 3:00 pm GMT and stay on your toes for a potential dollar rally if the actual figure comes in strong!