Daily Economic Commentary: United States

Trading Discussion News and Economy
448

The dollar’s scorecard was as mixed as reviews for the movie Beastly as the NFP report fell short of impressing markets. It gained against the Aussie and Kiwi but lost to the euro, yen, and Swissy.

Looking at the drop in U.S. Treasury and equities, it seems like risk aversion is still the name of the game in the FX hood. The unrest in Libya still hasn’t eased and might have forced investors to stay away from higher-yielding currencies.

Too bad for the dollar, the good-but-not-good-enough NFP report might have undermined its safe haven status.

On Friday we saw that 192,000 people joined the U.S. labor market in February which beat expectations by 1,000. The unemployment rate also came in better than expected by 0.2% when it printed at its lowest since April 2009 at 8.9%, following its 9.0 reading for January. Making it even better was the upward revision in the January figure to 63,000 from 36,000.

A few economic gurus say that positive figures had already been expected because it was no secret that extreme weather conditions kept a lot of Americans from finding work in January. And so, the NFP report didn’t really knock investors off their feet as the figures aren’t expected to change the Fed’s relatively-dovish stance.

But perhaps a few more positive figures will get traders going gaga for the dollar again.

This week we have the much-anticipated retail sales report for February to look forward to. The headline figure expected to show that consumer spending doubled during the month at 0.6% from its 0.3% reading in January. Meanwhile, the core version of the report is seen to come in at 0.7%.

That won’t be released until Friday though, along with the University of Michigan Consumer Sentiment index for March. So until then, you may want to pay attention to other high-caliber reports from the U.S.

On Thursday, the trade balance report for January is anticipated to show that imports outpaced exports by 41.3 billion USD, while the unemployment claims report is expected to print at 373,000.

Our economic calendar is blank for reports from the U.S. today, so be sure to gauge market sentiment. Remember that the dollar usually rallies in times of risk aversion. Good luck!

449

Since it was such a light day data-wise, it wasn’t surprising to see that both bears and bulls were snoozin’ on the sidelines. EUR/USD couldn’t close above 1.4000 and finished the day just 12 pips lower at 1.3972, and USD/JPY ended just 8 pips below its opening price! What a bore!

About the only thing we had to work with yesterday was the fact that Fed member Fisher, a known hawk, and Fed member Evans, a dove, decided to duke it out with their words.

One on hand, Fisher argues that large-scale asset purchases could be “counterproductive,” which is why he’ll be voting against an extension of the Fed’s bond buying program. Actually, he says he may even vote to discontinue it before it expires in June. I can almost hear the hawks squawking now!

But on the other hand, Evans believes the current rate of monetary easing is a good pace, and that the economy will need low interest rates for a long period of time. Score one for the doves!

With such divergent views on quantitative easing, it’s difficult to see how the Fed will act down the line. What’s clear is that the Fed is still split on what it should do, and that means the fate of the dollar is still hanging in the balance.

I’m sorry to say this, but we’ve got another empty economic calendar today. In the meantime, keep an eye on risk sentiment as it may help the dollar recover some more of its recent losses if it turns sour. Stay cool, my fellow pipsters!

450

…and the dollar buying continues! In the absence of big reports, the dollar continued to march higher, forming a beautiful bearish engulfing candle on EUR/USD’s daily chart. The pair ended the day 74 pips lower at 1.3899, mirroring an equally impressive rise in USD/JPY.

The newswires were virtually silent yesterday since the U.S. didn’t publish anything noteworthy. However, the dollar got a boost from the small dip in oil prices, which recently reached a 29-month high. If y’all have been keepin’ track, you’ll notice the dollar has had an inverse relationship with oil lately. Currency traders have been wary about the negative implications on growth that rising commodity prices may have on the U.S. economy.

Today, we’re finally getting something good on our plates. At 3:30 pm GMT, the U.S. will be rolling out its crude oil inventories report, which is expected to show an 800,000 increase in the number of barrels of black crack held in inventory. Hmm… It’ll be interesting to see whether a decrease in demand has caused oil inventories to pile up.

Then at 6:30 pm GMT, Treasury secretary Timothy Geithner is due to speak before the House Appropriations Committee. It won’t hurt to check in on what he has to say. Any surprising statements from Geithner may cause small waves in the dollar’s price action.

451

Bears did The Creep on the dollar and stalked it during yesterday’s trading. Save for the yen and the Kiwi, the dollar ended the day lower against the rest of its major counterparts. It lost the most to the Swissy when USD/CHF closed 56 pips lower at .9299. Bummer!

I bet the lack of high-caliber economic reports from the U.S. made the dollar vulnerable to market sentiment and cost it its pips.

Yesterday we only saw the wholesale inventories report for January come in at 1.1% and overshoot the market’s 0.9% forecast. Remember that a higher-than-expected figure for this report is considered bearish for the currency because it could mean that businesses will spend less in the future to stack up their inventories.

U.S. Treasury Secretary Timothy Geithner didn’t provide the dollar any support either. His speech which outlined the need for more moolah to fund international programs turned out to be a snoozer for the currency market. Zzzz…

But fear not dollar bulls! Today we have a couple of top-tier economic reports due at 1:30 pm GMT to finally sink our teeth into!

The unemployment claims report for last week is expected to show that the number of people who filed for unemployment benefits increased more by 375,000 compared to the 368,000 people who applied the week prior.

Meanwhile, analysts are bracing themselves for the trade balance report to show a wider trade deficit for January following the 40.6 billion USD deficit we saw in December. Imports are seen to have outpaced exports by 41.4 billion USD during the month.

Yikes! It looks like analysts aren’t keeping their hopes up for the reports, huh? But you know what they say, “The secret to happiness is low expectations.” Watch out for better-than-expected figures as these would probably get traders giddy for the dollar!

452

Talk about dollar domination! The Greenback put its game face on and strengthened against its major counterparts, as risk aversion took over the markets yesterday. Among the biggest losers were AUD/USD and EUR/USD, which both suffered from disappointing economic news.

Risk aversion gripped the markets yesterday as several news reports caused investors to worry. The sob-fest started during the Asian session, when Australia printed worse than expected employment figures. Around that time, China also released a weak trade balance, which showed that the world’s second largest economy suffered a trade deficit. Later on, Moody’s credit rating agency dealt a downgrade to Spain, reminding everyone that the euro zone debt troubles are still around. It didn’t help that the U.K., which was largely exposed to Spanish debt, didn’t enjoy a rate hike as many expected. Then, during the U.S. session, both Canada and the U.S. showed disappointing trade figures, leading market participants to worry about the harmful effects of rising inflation.

Can you hear Daniel Powter’s “Bad Day” playing yet?

Maybe today’s set of economic reports could turn it all around. China is scheduled to release a boatload of economic data during the Asian session, and this could set the tone for the rest of the day. A brief glance at the economic calendar reveals that the Asian giant could print slightly weaker figures compared to the ones previously reported. For one thing, its yearly CPI is expected to come in at 4.8%, a notch lower than the 4.9% increase before. Retail sales are projected to be up by 19.0%, instead of the 19.1% rise seen in the prior period. Brace yourselves for weaker than expected figures because it’ll probably be an effect of the PBoC’s aggressive tightening measures.

Uncle Sam is set to print its retail sales and consumer sentiment figures today. Core retail sales are predicted to be up by 0.7% in February, while the headline figure could post a 0.8% uptick. Watch out for the actual figure due 1:30 pm GMT because a huge upside surprise could bring risk appetite back. Also, keep an eye out for the University of Michigan’s consumer sentiment reading, which is due 2:55 pm GMT. Americans are expected to be a tad less optimistic lately, which is why the reading could drop from 77.5 to 77.0 this month.

453

Is it just me or was the Greenback acting funny last Friday? At first I thought that risk aversion from the recent calamity in Japan was going to drive the Greenback higher against all of its counterparts, and it did… before quickly reversing! USD/JPY even dropped more than a hundred pips from its 82.94 open price.

Up to now, forex gurus are still scratching their heads and wondering why the U.S. dollar sold off last Friday. One possibility could be that traders decided to take profits that day and close out their long dollar positions. Another theory is that the Greenback emerged as the only funding currency left for those traders looking to pursue riskier and higher-yielding currencies. Besides, traders were probably confident that Japan can bounce back from the natural calamity in no time and they focused on thinking about the positive effects of Japanese rebuilding efforts on their GDP.

U.S. economic data seemed to take the backseat then as traders were glued to their screens watching the devastating aftermath of the earthquake in Japan. Retail sales showed a 1.0% increase in February while the core figure came in as expected and printed a 0.7% uptick. On top of that, the previous month’s figures were revised upwards to show a 0.6% rise in retail sales and 0.7% growth in core retail sales. Hooray for consumer spending!

However, consumers don’t seem to be so upbeat this month as the University of Michigan’s index of consumer sentiment dropped from 77.5 to 68.2. Is it because average Joes aren’t too happy with the rising price levels? It seems that they expect inflation to rise even further by 4.6% during the next twelve months. I suppose higher prices of goods could eventually hurt consumption later on…

But for now, let’s take a quick look at the upcoming U.S. data for the week. The big event for this week is the FOMC decision scheduled on Tuesday 6:15 pm GMT. Many are expecting the Fed to drop the “extended statement” phrase from the accompanying statement and, if they do, we could see a huge dollar rally. However, the Fed could focus on the recent surge in price levels and decide against ending their easing soon. I’m sure this event is gonna be exciting so make sure you keep your eyes and ears peeled then!

By Wednesday, Uncle Sam will release its building permits and PPI figures. Building permits are slated to land at 0.58 million in February, a couple of notches higher than the 0.56 million new residential building permits issued in January. Meanwhile, producer prices are expecting a 0.7% increase for February on top of the 0.8% rise previously seen.

Stronger than expected producer inflation could hint at a higher CPI figure set for release on Thursday. Along with the inflation report, the weekly jobless claims and Philly Fed manufacturing index are due. Initial jobless claims are expected to be slightly lower last week’s, as it is projected to print 388,000 in first-time unemployment claimants. However, the Philly Fed index could usher in some negative vibes since it is projected to dip from 35.9 to 29.9 this month.

No other big reports are due from the U.S. this week but I’d stay on my toes if I were you because there’s no telling whether we’ll see another set of surprises like we did last week!

454

Without any economic report from the U.S., the dollar seemed as out of place as Rebecca Black in Youtube’s most watched list yesterday. It was feelin’ so fly in the bull turf when it gained against the comdolls, but it landed in the bear lair against the rest of its major counterparts.

Why so, you ask?

Well, I think risk aversion sparked by the massive earthquake in Japan allowed the dollar to party like it was Friday against the Aussie, Kiwi, and Loonie. Meanwhile, perhaps the FOMC interest rate decision, which scheduled later at 6:15 pm GMT, gave traders a reason to give the greenback the cold shoulder.

I know, I know! The thought of the Fed announcing an interest rate hike seems as silly as Cyclopip wearing a pink, fluffy tutu. But market participants are on their toes for hints about when the Fed will end QE2, knowing that this could make or break the dollar’s fate on the charts in the coming trading sessions. So you should too!

I think Huck mentioned in one of her posts last week that there are rumors about the Fed dropping the “extended period” part of its usual rhetoric. And because of this, a few giddy investors are expecting the asset purchase program to end as scheduled in June.

Take note though, that there are members of the FOMC who are hollering to extend asset purchases given the vulnerability of the U.S. economy to externalities like oil price spikes and the earthquake in Japan.

Aside from the FOMC, we also have a few more reports on tap including the Empire State Survey due at 12:30 pm GMT. It is expected to show an improvement in business conditions with the index for March seen at 16.2 after it came in at 15.4 in February.

Along with that will be the import prices report for February which is anticipated to show that inflation pressures eased with the consensus down at 0.9% following January’s 1.5% uptick.

Then at 1:00 pm GMT, we’ll have the TIC report. Keep in mind that analysts have predicted the report to show that foreign demand for U.S. securities outpaced domestic demand by 59.3 billion USD. So watch out for a better-than-expected figure as this will probably be bullish for the dollar.

455

With the FOMC statement more optimistic than expected, you’d expect the dollar to have gotten rave reviews right off the bat like Daniel Radcliffe’s dancing skills, right? But it didn’t. It only gained against the comdolls and the pound, and lost to the rest of its major counterparts.

According to the Fed, the U.S. economy’s recovery seems to be more robust now. The statement described it being “on firmer footing” and cited the decline of the unemployment rate as a sign of improving labor market conditions.

I think almost everyone found the FOMC statement more upbeat and took it to mean that QE2 will probably end in June. However, it wasn’t enough to start rumors about an interest rate hike from the Fed.

As for the dollar’s price action yesterday, I have a feeling that risk aversion sparked by concerns about a nuclear breakdown in Japan allowed it to rally against its higher-yielding counterparts but weighed down on its performance against the yen and the Swissy. Take note that those two are also considered as safe haven currencies.

Maybe the roster of mixed reports also weighed down the dollar. The Empire State Manufacturing Index suggested improving business conditions when it printed at 17.5 and topped the 16.2 forecast. February’s import prices report also beat expectations when it overshot the consensus by 0.5% when it came in at 1.4%.

On the other hand, the TIC report for January disappointed markets when it clocked in at 51.5 billion USD. Analysts had predicted foreign demand for U.S. securities to have outpaced domestic demand by 59.3 billion during the month. Boo!

Perhaps more positive news from the U.S. will allow the dollar to finally get its groove on on the charts. So watch out for the reports we have on our economic calendar today!

At 12:30 pm GMT, we’ll have the building permits report for February and analysts have predicted that there were 580,000 residential permits issued during the month. Further helping us gauge the health of the housing market will be the housing starts report for the same month which is also seen to print at 580,000.

We’ll also get dibs on inflation with the PPI report for February. Take note that the headline figure is seen to come in at 0.7% while the core version is expected to show a 0.2% uptick.

Then to finish our roster will be the current account report for the fourth quarter of 2010. A narrower account deficit is expected with the forecast at 111 billion USD following the 127 billion deficit that clocked in for the third quarter.

Make sure you ain’t snoozin’ when the figures are released this noon! You wouldn’t want to miss out on those pips, would you?

456

With all the hoopla that popped up in markets yesterday, the Greenback’s price action was as mixed as the personalities of Happy Pip’s friends. While USD/CHF and USD/JPY dropped to RECORD LOWS, EUR/USD plunged by 99 pips to 1.3899. Meanwhile, GBP/USD also took a 53-pip hit and ended the day at 1.6026.

Risk aversion in markets might be giving the Greenback a boost recently, but economic reports from the U.S. sure aren’t making it easy for the dollar bulls to continue their buying. The building permits report released yesterday showed only 520,000 permits in February, down from January’s 560,000 figure. The housing starts report was also a disappointment with only 480,000 in February against the 620,000 figure in January. Good thing the producer price index report leveled off the bad vibes by printing a 1.6% growth in February from its 0.8% number in January.

A lot of big reports will be released from the U.S. again today, so watch closely to see if they’re slated to remain in the backseat again. At 12:30 pm GMT we’ll see the CPI report for February. The data rose by 0.2% in January, but we’ll see if rising commodity prices have already taken a toll on February figures.

Also released at 12:30 pm is the U.S. initial jobless claims report. The data surprised to the downside last week, so keep close tabs on this one. Last to come out to the pip stages is the big Philly Fed index report at 2:00 pm GMT. Market geeks are currently expecting the report to slip to a 29.9 figure, but keep your eyes peeled for any surprises!

457

The dollar was one of the major currencies that stood out yesterday as it wore red candlesticks instead of green ones ahead of St. Patrick’s Day. Bears must have pinched pips out of it and scored it losses against all of its counterparts except for the Aussie and the Kiwi.

Some naysayers think that the reason why the greenback wasn’t able to bring sexy back on the charts was because it lost its safe haven reputation. On the other hand, there are a few giddy analysts who say that the upward rally in USD/JPY during the latter part of the day could be because of improved risk appetite that had traders unwinding their long dollar positions.

I also think that the mixed roster of economic reports that were released from the U.S. helped keep the dollar in the bear lair too.

On the brighter side of things, the Philly Fed Manufacturing Index surged to its highest level since 1984 at 43.4 in March, after printing at 35.9 in February. A lot of traders surely didn’t see that coming! In fact, it was predicted that the optimism of manufacturers in Philadelphia waned during the month as the forecast only at 29.9.

The CPI report for February should have also been bullish for the dollar as it could give the Fed one more reason to stop sounding oh-so dovish! The headline figure came in as expected at 0.5%, showing a 0.1% uptick from January’s reading. Meanwhile, the core version printed at 0.2% which is 0.1% higher than what markets were eyeing. On an annual basis, the CPI is shows the strongest pace of inflation at 1.5%, thanks to higher food and energy prices.

As for the initial jobless claims report, it showed that the number of people who filed for unemployment benefits was lower by 3,000 than what markets were bracing for at 385K. It also showed a 16,000 decline from the prior week’s figure, but then again, the reading was revised to 401K from 397K.

Probably weighing down the dollar even further was the industrial production report for January. We saw that the value of output produced by the industrial sector declined by 0.1% and disappointed the consensus which was for a 0.7% uptick. Boo!

For today, our economic calendar is blank for data from the U.S. But from what I’ve heard, the dollar rallied strongly against the yen early on in today’s trading when talks of a joint interventionby the G7 to weaken the yen hit the airwaves.

Don’t be so eager in betting you pips on the greenback just yet though! Make sure you gauge market sentiment first to see if it will be able to sustain its rally.

458

Ka-pow! The dollar got knocked out by its higher-yielding counterparts during Friday’s trading. Good thing it managed jab pips out of the yen and the Swissy as the G7 joint intervention rang the risk appetite bell. Ding, ding, ding!

The dollar’s tale of the tape all throughout last week’s trading was focused on developments from Japan and overshadowed the stats that we saw from U.S. economic reports.

Heck! Even China’s sixth hike in its reserve requirement ratio in six months took the back seat to news about BOJ getting help from the G7 to weaken the yen! Because of the market’s muted reaction to the PBOC’s 50 basis point rate hike, economic gurus are starting to think that perhaps markets undermining the central bank’s ability to tame the country’s economic growth.

In addition to that, there are also speculations that until fears of a nuclear breakdown are relieved in The Land of The Rising Sun, we will continue to see the dollar’s fight for pips be dictated by market sentiment. This means that it will probably win against its higher-yielding counterparts and lose to the yen and Swissy which are also seen as safe haven currencies.

Given that we only have very few top-tier economic data on tap from the U.S., I’m led to believe that we may actually see this happen.

We start this week’s roster of economic reports with data on existing home sales which is on tap tomorrow at 2:00 pm GMT. The number of residential buildings that were sold in February is expected to have amounted to 5.15 million after coming in at 5.36 million in January. On the other hand, the new home sales report for the same month, due on Wednesday at 2:00 pm GMT, is anticipated to print at 292,000.

Also take note that Fed Reserve Chairman Ben Bernanke is also scheduled take center stage on Wednesday at 4:00 pm GMT. So keep an ear out for his remarks on the economy!

Our roster of high-caliber reports will then end on Thursday with the stats for durable goods and initial jobless claims. Analysts are expecting to see that the value of orders placed with manufacturers in February increased at a slower pace of 1.2%, compared to the rate it printed at 3.2% in January. Meanwhile, the core version is seen at 2.2% after posting a -3.0% the month before.

Finally, the number of people who filed for unemployment benefits is expected to have increased to 392,000 last week after the figure came in at 385,000 the week prior.

Whew! Okay that’s all the red-flag reports we have on tap on our economic calendar for the dollar. Make sure you also gauge market sentiment and remember that it usually rallies in times of risk aversion! Good luck!

459

When will the bleeding stop? For the third consecutive day yesterday, the U.S. dollar turned out to be one of the biggest losers in the foreign exchange market. The USDX, which measures the strength of dollar versus other major currencies, fell to 75.84 from 76.00.

The primary driver behind the dollar’s weakness yesterday was none other than Mr. Risk Appetite. It seems like the nuclear fallout fears from Japan have finally subsided, which has allowed other major currencies, particularly the Aussie and the Loonie, to rally strongly against the low-yielding dollar.

The sole economic release, the existing home sales report, was unable to provide support for the dollar. It showed that the annualized number of existing home sales was only 4.88 million, and not 5.15 million as predicted.

Nothing important on the forex calendar today, but we will be seeing the New Home Sales report at 2:00 pm GMT on Wednesday. Stay tuned for that!

460

After all those days of wild price action, the Greenback decided to kick back and grab an ice cold bottle of beer. But even though volatility chilled out yesterday, the U.S. dollar found itself sliding lower against some of its major counterparts such as the pound, Aussie, Kiwi, franc, and yen.

Will the dollar jump back into action today? The economic calendar shows that there are a couple of red flags on Uncle Sam’s schedule. First off, the new home sales will be released 2:00 pm GMT. This report is expected to reveal that sales of new single-family homes reached 291,000 in February. Stay on your toes for a downside surprise though, since the previously released existing home sales failed to meet expectations.

A couple of hours after that, Fed head Ben Bernanke will testify about community banking in America. Keep your eyes and ears peeled in case he starts dropping hints on whether the central bank is set to end its QE program soon. If he does, the dollar could have a chance to recover from yesterday’s losses!

461

The dollar’s performance was as messy as a sloppy joe during yesterday’s trading. It managed to munch on enough pips from its European counterparts to score wins. However, it also spilled a few pips and ended the day with losses against the Aussie, Kiwi, and yen.

Economic gurus are saying that perhaps risk aversion, stemming from the continuing tensions in the Middle East and the possible collapse of the Portuguese government, highlighted the dollar’s safe haven reputation. But the rise in commodity prices might have shielded the comdolls from its binge-pipping.

Remember that the Fed is among the few central banks who aren’t worried about inflation. So speculations about interest rate hikes for its counterparts may keep the Greenback from rallying.

Fed Reserve Chairman Ben Bernanke also said very little to boost the dollar. In his speech in San Diego, he avoided commenting on the economic outlook of the U.S. and monetary policy. And I don’t think that the New Home Sales report for February helped the currency either. The actual figure came in at 250,000 and fell short of the market’s 291,000 forecast.

If you’re planning to root for the dollar today, you may want to keep your fingers crossed and hope that today’s economic reports will impress markets.

At 12:30 pm GMT we will have the durable goods report for February. Analysts are expecting to see that the orders received by manufacturers for the month increased by 2.1% after declining by 3.0% in January.

Along with that we’ll also get dibs on the labor market with the unemployment claims report for the previous week. Note that a slight increase to 388,000 from its prior reading of 385,000 is anticipated.

Good luck and be careful, ayt?

462

Going once…going twice… SOLD! The Greenback was aggressively sold across the board yesterday when investors flocked to the high-yielding currencies in anticipation of interest rate hikes. EUR/USD ended up rising by 90 pips to 1.4177 while GBP/USD dropped to 1.6122. Meanwhile, USD/CHF and USD/JPY capped the day in a near draws.

Continued worries over the global economy has been driving prices higher for the past couple of days, threatening the resolve of central banks to maintain price stability. If consumer prices continue to rise, central banks like the ECB and the BOE might be tempted to finally increase their interest rates.

U.S. Fed Chairman Ben Bernanke also rocked the pip charts yesterday when he announced that the Fed will be holding press briefings at least four times a year to show transparency. I guess he’s not so camera-shy now, huh?

On the other side of the pip streets we also saw how shaky the U.S. economic recovery is. Though initial jobless claims stayed below the psychological 400,000 mark at 382,000, the core durable goods orders report showed a drop of 0.6% in February. If not for a sharp upward revision in January’s figures, we might’ve seen a bigger drop for the scrilla!

Let’s hope the dollar’s fate is greener today when the final GDP report is released at 12:30 pm GMT. The initial figure clocked in at 2.8%, but an upward revision might give the Greenback support. Then, at 1:55 pm GMT we’ll also get hold of the revised University of Michigan consumer sentiment report. Markets are expecting a slight downtick to 68.1 from its initial reading of 68.2, but keep your eyes peeled for any surprises!

463

Like the blockbuster movie last weekend, the dollar sucker punched most of its major counterparts on bullish comments from members of the U.S. Federal Reserve and better-than-expected U.S. economic reports. EUR/USD ended the week with a 90-pip drop to 1.4088, USD/CHF whizzed 113 pips higher at .9199, and GBP/USD dropped by 80 pips to 1.6042. Boo yeah!

With the way the Fed officials’ speeches are harmonized, they might as well start their own boy band! Last Friday Fed members Dennis Lockhart, Richard Fisher, Charles Plosser, and Narayana Kocherlakota made statements about the Fed’s QE2, and they all seemed to support the end of the QE2 in June. With the exception of Atlanta Fed President Dennis Lockhart, these Fed members have the right to vote on the matter.

Of course, the Greenback might have also gotten a lift from the upward revision in the U.S. GDP report. The data as revised up to 3.1% in the fourth quarter last year from its previous figure of 2.8%. Meanwhile, the University of Michigan consumer sentiment was revised down to an index number of 67.5, down from its 68.2 score in February.

Let’s see if the dollar bulls can keep their momentum this week with a parade of big economic reports coming their way. The fireworks will start on Monday when the PCE report is released at 12:30 pm GMT, followed by the data on personal spending and income and even the pending home sales report at 2:00 pm GMT.

Tomorrow at 1:00 pm GMT we’ll also see the S&P home price index, as well as the CB consumer confidence report at 2:00 pm GMT. Then on Wednesday we’ll get hold of the big ADP non-farm employment report at 12:15 pm GMT, which is expected to show only an additional 206,000 from its 217,000 rise in payrolls in February.

On Thursday we’ll also see the initial jobless claims report at 12:30 pm GMT, followed by the Chicago PMI at 1:45 pm GMT and the factory orders data at 2:00 pm GMT. And then, just like my neighbor Rebecca Black said, we will have a fun, fun, fun Friday this week with the big NFP report and unemployment rate released at 12:30 pm GMT and the ISM manufacturing report also showing up at 2:00 pm GMT.

Stick around for these reports, will ya?

464

The dollar looked a lot like Britney Spears in her first live performance in years: lost. During yesterday’s trading, the scrilla seemed out of place as it got its groove on the bull turf against the pound, yen, and Kiwi but landed in the bear lair against the euro, Swissy, and Aussie.

Despite yesterday’s economic reports showcasing a relatively promising outlook for the U.S. economy, they were no match for rising commodities and ecb comments from the ECB that fueled some of the dollar’s counterparts.

The PCE index, known as the Fed’s preferred measure of inflation, came in as expected at 0.2% for February. The reports on personal income and spending should have also been bullish for the currency. According to the official government data, expenditures by consumers rose by 0.7% and overshot the forecast by 0.1%. Meanwhile, disposable personal income grew by 0.3% albeit at a slower pace than the 0.5% consensus. Lastly, pending home sales for February reportedly increased by 2.1% and beat the forecast which was for a 0.5% decline.

I wonder if today’s reports on the housing market and consumer sentiment will be enough for the dollar stage a stellar performance.

First on tap will be the S&P House Price Index at 1:00 pm GMT. The market is expecting to see that selling price of houses in 20 metropolitan areas declined by 3.1% after showing a 2.4% contraction in December. Then at 2:00 pm GMT, Conference Board’s Consumer Confidence report is eyed to come in lower at 64.9 for March than its 70.4 reading in February.

In order for the dollar to get a standing ovation from bulls, we may have to see better-than-expected figures. So watch out for ‘em!

465

Whew! After battling with worse-than-expected economic reports from the U.S., the Greenback ticked higher against its pip comrades and capped the day with an 11-pip gain against the euro at 1.4103, 33 pips ahead of the franc at .9206, and a whopping 71 pips ahead of the yen at 82.43. Boo yeah!

The suffered a setback around the early U.S. session when both the S&P house price index and the CB consumer confidence reports painted a grim picture for the U.S. economy. The S&P data showed that house prices in January declined by 3.1% from its figures from 12 months back. This not only represented the biggest year-over-year decrease since December 2009, but it also highlighted the economy’s problems with the housing market. Yikes!

Another party pooper to the dollar bulls was the CB consumer report. Though Americans felt the love with the improvement in the job sector, they were also spooked with the way commodity prices (especially oil) was rising. Good thing Fed member Fred Bullard spread some good vibes in his speech! Yesterday he said some hawkish comments, saying that the Fed might not need to wait for global uncertainties to be resolved before it starts normalizing its monetary policy. Is that why I heard the bulls screaming “Yabadabadoo!”?

Today will be another big day for the Greenback as a couple of big-hitting reports will be released. At 11:30 am GMT we’ll get hold of the Challenger job cuts data for March. Then, a few rounds of Angry Birds later at 12:15 pm GMT we’ll see the ADP non-farm employment report. Both figures will be closely watched since they give clues on the big NFP report coming our way on Friday so stay sharp!

466

You win some, you lose some! The scrilla showed mixed results against its major counterparts yesterday when a bit of risk appetite in markets took a toll on the low-yielding dollar. EUR/USD inched 23 pips higher to 1.4126 and GBP/USD rocketed by 85 pips to 1.6082. On the other side of the pip streets, USD/JPY rose by 48 pips to 82.91.

Aside from strong appetite for comdolls, the currency bulls cheered at the better-than-expected employment reports in the U.S. For one, the Challenger job cuts data fell by 38.6% in March. Heck, that’s way better than the 20% upsurge in February!

Another sweet treat for the bulls was the ADP non-farm employment change. Although February’s figure was revised from 217,000 to 208,000, the number in March reached a decent 201,000.

If you can’t get enough of job-related numbers from the U.S., then wait no more! The unemployment claims is scheduled today at 12:30 pm GMT, and this time around the markets’ are gearing up for a better-than-expected figure. At 1:45 pm GMT we’ll also get hold of the Chicago PMI numbers, followed by the factory orders report at 2:00 pm GMT.

Good luck in your trades today, mates!

467

If the dollar’s price action was a character in Batman yesterday, it would be Two-Face! Why, you ask? If you look at the charts, you’d see that the dollar moved in two distinct waves yesterday. It fell during the Asian session, but eventually rose and managed to recuperate some of its losses during the U.S. trading session.

Data was mixed. The initial jobless claims, which was slated to report a 379,000 figure, came out worse than expected and printed a 388,000 figure instead. The factory orders was also below forecast when it reported a 0.1% decline instead of a 0.7% gain. In contrast, the Chicago PMI printed 70.6, which was slightly higher than consensus.

The big economic report you should watch out for today is the non-farm payrolls (NFP). Scheduled to come out at 12:30 pm GMT, the NFP is predicted to show that a net number of 191,000 jobs were added in March. The unemployment rate, on the other hand, is expected to have remained unchanged at 8.9%.

Then, at 2:00 pm GMT, you’ll be treated to the ISM manufacturing PMI. The market predicts that it’ll spew out a 61.1 reading, slightly lower than the previous month’s figure.

That’s it for the dollar! With the amount of data on the economic calendar, you better be ready for boatloads of volatility today! Keep those stops tight folks!