Daily Economic Commentary: United States

Trading Discussion News and Economy
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What a wild and funky April Fools’ Day it was for the Greenback last Friday! The better-than-expected results of the non-farm payrolls proved to be positive for the Greenback, but dovish words from FOMC Vice Chairman William Dudley caused the Greenback to totally reverse its move.

EUR/USD, for example, fell as low as 1.4063 and then skyrocketed to a new weekly high at 1.4245!

According to Dudley, the Fed shouldn’t be overly optimistic about growth prospects as the economy is still in the recovery stage. He added that while the economy has indeed strengthened, the Fed is still far away from achieving its mission of maximum sustainable employment and price stability.

Dudely’s dovish remarks overshadowed the non-farm payrolls that showed that 216,000 jobs were added in March, much higher than the 191,000 initially predicted. Meanwhile, the ISM manufacturing PMI came in as expected with a reading of 61.2.

In contrast to last week, this one will be pretty light in terms of economic data because the only high-profile economic reports that will coming out are the ISM non-manufacturing PMI and the FOMC meeting minutes. Both reports will be released on Tuesday, with the ISM non-manufacturing PMI at 2:00 pm GMT and the meeting minutes at 6:00 pm GMT.

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With the dollar’s price action as mixed as Happy Pip’s CD collection, it looks like the currency bulls and bears played a waiting game yesterday! No major economic reports were released from the U.S., but the dollar gained 12 pips on the euro and lost a few pips to its other counterparts. USD/JPY stepped 16 pips back to 84.03 while GBP/USD inched up by 14 pips to 1.6126.

Maybe markets are just waiting to see how hawkish the Fed members are in their speeches. As Forex Gump told me over our online chess game, the RBA, BOJ, BOE, and ECB are going to announce their interest rate decisions this week. In contrast to some of these central banks though, investors aren’t really expecting the Fed to give up their easy monetary policy anytime soon. Heck, Fed President Ben Bernanke didn’t even sound like he was expecting too much inflationary pressures! In his speech yesterday he stressed that while the Fed is willing to respond if needed; it sees high inflation as temporary.

While we wait for other central banks to give announce their interest rate decisions, we can watch out for the ISM non-manufacturing PMI report coming out at 2:00 pm GMT, followed by FOMC member Charles Plosser’s speech at 3:15 pm GMT. Since Plosser is a known FOMC hawk we might see the dollar gain support during his speech.

Last to come out for the day is the big FOMC meeting minutes out at 6:00 pm GMT. If the minutes turns out to be more hawkish than Bernanke was in his speech yesterday, then we just might see the dollar bulls charge!

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“I’ll have one of everything!” said the dollar as it chalked up mixed results across the boards. Maybe it’s because the U.S. economy also received mixed feedback yesterday from non-manufacturing data and the FOMC minutes. The dollar ended practically unchanged against the euro, while posting a big win against the yen and a big loss against the pound.
The ISM non-manufacturing PMI ticked down from 59.7 to 57.3 last month, which is basically the opposite of what economists forecasted. They had the index rising to 59.8 because of accelerating job growth, but rising oil prices had other things in mind.

Because of higher fuel costs, non-manufacturing companies are seeing ominous clouds ahead. They feel that rising gas prices will kill future sales, which is why they’re feeling down in the dumps.

On the other hand, the Fed doesn’t seem as pessimistic as it did a few months back. The FOMC meeting minutes yesterday revealed that the central bank is starting to feel more optimistic about the outlook for its economy. However, its members still seem to be divided about whether it should tighten monetary policy within the year.

Some argue that the recovery and inflationary risks call for a rate hike, while others believe it’s too early to pull the economy’s life support plug. Who’s right and who’s wrong? Well, we can’ really tell. But the fact that some members are actually considering rate hikes again is a sign that things are starting to look up for the U.S. economy.

After yesterday’s heavy releases, we’re getting a break from U.S. reports today. So in the meantime, head on over to the U.K., euro zone, and Canada if you’re looking to trade the news. Good luck, pipsters!

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Having no U.S. economic data to direct its moves, it’s no wonder the dollar looked lost on the charts! It was able to salvage a victory against the yen, but it pretty much lost to all of the other major currencies. USD/JPY continued to forge new heights, climbing 61 pips to 85.44 while EUR/USD staged a rally of its own from 1.4221 to 1.4331.

Risk on, baby! Yesterday looked like a day at the casino from the way investors were taking risks. Equities, commodities, currencies—they all rallied strongly across the boards, fueled by the markets’ heavy risk appetite.

Sadly, no one had their bets on the dollar as traders felt confident enough to diversify away from the traditional safe-haven asset.

Again, no ground-shaking reports from the U.S. due today, but y’all should savor the silence ‘cause this doesn’t happen often! This gives us time to focus on the other countries’ big events. On tap today, we have a trifecta of rate statements from the euro zone, Japan, and the U.K.! Expect big, BIG waves on the charts of the major pairs when these reports come out!

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With the spotlight away from the U.S. yesterday, the Greenback capped the day with mixed results against its major counterparts. It lost a few pips to its fellow low-yielding buddies with USD/JPY falling by 51 pips to 84.93, but gained on the high-yielding ones as is shown by EUR/USD’s 28-pip slip to 1.4303.

Aha! I see a pattern here! Just when we thought that hawkish news would continue to push high-yielding currencies up the charts, we saw them plunge when word got around that another earthquake hit Japan. As the third largest economy in the world, any serious damage to Japan might take its toll on the economies of its trading partners. There was no damage done though, so the selling subsided a bit towards the end of the day.

For more good news, the U.S. jobless claims report released yesterday showed that workers filing for unemployment insurance fell by another 10,000 to 382,000 from its 392,000 number last week. I guess the positive NFP number is more credible now, huh?

No major economic report will hit the U.S. stages today, but make sure you stick around for any surprises!

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The dollar’s demise reminds me of my first love… or rather, the way I got dumped! Once again, the dollar found itself eating ice cream and crying itself to sleep, as it got rejected in the forex market last Friday. EUR/USD rose 150 pips to close at 1.4456, its highest level in a year.

One major reason why the dollar has been on a solid down trend lately is the continued speculation that the Fed will not follow the lead of other central banks and will not be raising interest rates any time soon. Low rates makes the dollar less attractive, which is why investors have been putting their funds in other higher yielding currencies.

The only good news that came out on Friday was that our beloved Republicans and Democrats put their differences aside and the U.S. government was able to avoid a lockout. Boo yeah baby! This alleviated some off tension off the dollar, but I suspect that this could be an issue that may resurface sometime later down the road.

No hardcore data on deck today, but watch out as a couple of FOMC members will be speaking today. Dudley, Evans, and Yellen are all scheduled to speak today. Considering how some members have been hawkish in their comments over the past couple of weeks, it’ll be interesting to see whether any of these three drop hints about what direction the Fed will take on interest rates. Any mention that the Fed should raise rates sooner rather than later might just give the dollar the boost it needs to recuperate some of its losses.

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With no hardcore data coming out, risk hungry investors took a break allowing the dollar to edge slightly higher versus its major counterparts. EUR/USD closed 26 pips to finish at 1.4428, while GBP/USD fell 29 pips to end at 1.6348.

The reason why the dollar gained yesterday is most likely due to some profit taking that took place. After all, higher yielding currencies had been straight up killin’ the past couple of weeks, so a break every now and then is expected.

For now, the dollar is still stuck in the loser’s corner, as it seems that some Fed officials are quite dovish on the state of the economy. FOMC Vice Chairwoman Yellen talked about commodity prices and said that the recent surge was not reason enough for the Fed to start raising rates. She pointed to high unemployment as a reason why the Fed should not be a in rush to exit quantitative easing measures.

Meanwhile, Fed Governor (and also FOMC voting member) Dudley also laid down the dovish smack down, saying that people shouldn’t get too excited about tightening measures and not to overreact to inflation.

Later today, we get our first red flag of the week in the form of trade balance data. It’ll be interesting to see how the recent weakness of the dollar and the rise of commodities have affected the U.S. economy. According to forecasts, the U.S. posted a trade deficit of 44 billion USD this past February. I wonder though – could the past winter’s harsh conditions have affected trade? Tune in at 12:30 pm GMT to find out!

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The Greenback’s performance was as mixed as a bag of nuts as it ended higher against the Loonie, Aussie, and pound but was outpaced by the rest of the major currencies. Will the upcoming U.S. retail sales report set a clearer direction for the Greenback?

Yesterday, the U.S. trade balance report turned out to be a disappointment as it fell short of the expected 44.1 billion USD deficit. The actual figure showed a 45.8 billion USD deficit for February, a tad better than the 47.0 billion USD deficit in January.

Up ahead, we have the U.S. retail sales report due 1:30 pm GMT. The report could show that retail sales are up by 1.0% while core retail sales increased by another 0.7% in March. If you’re planning on playing this report, I suggest you read up on my buddy Forex Gump’s take on trading the U.S. retail sales. Good luck!

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It was a mixed day for the dollar, which advanced against the euro but failed to do so versus the pound. EUR/USD dropped 33 pips to close at 1.4444, while GBP/USD stayed within a tight range of less than 70 pips and ultimately closed at 1.6267, up 14 pips on the day.

The retail sales report had some encouraging results, as headline and core sales rose by 0.4% and 0.8% respectively. This marked the 9th consecutive month that retail sales showed growth. Meanwhile, business inventories also picked up by 0.5%, indicating that the retailers are responding to the recent uptick in job growth by stockpiling inventory. Boo yeah!

However, while this figures were encouraging, the markets are still hesitant to take the dollar higher. Why?

It’s all about interest rates baby! The markets still don’t think that the Fed will be raising rates or withdrawing stimulus measures any time soon. As long as the Fed lags behind other central banks in terms of tightening, the dollar may struggle to gather any buying momentum.

Looking at today’s calendar, we’ve got a couple of second tier reports on deck in the form of the PPI and weekly unemployment claims reports.

Producers input prices are expected to have risen by just 1.0% over the past month, down from the 1.6% figure we saw in February. This may temper inflationary concerns, which would give the Fed even less reason to raise rates. Meanwhile, jobless claims are projected to be at 380,000, pretty much in line with the number we saw last.

Tune in at 12:30 pm GMT to find out the results of these reports!

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Just when you thought the Greenback has brought sexy back, dovish comments and worse-than-expected data come up and turn off traders. It lost to almost all of its major counterparts, giving up 50 pips to the euro and 80 pips to the pound.

Three FOMC voting members, namely: Fed President of Minneapolis Narayana Kocherlakota, Fed President of Philadelphia Charles Plosser, and Federal Reserve Governor Daniel Tarullo, talked about how the recent signs of inflation shouldn’t be a worry. Consequently, their remarks fueled speculations that we won’t hear the Fed holler an interest rate hike anytime soon.

Although all of them agreed that the earthquake in Japan and sovereign debt crisis in Europe have very little impact on the economy, none of them showed swag for the U.S. economy. Boo!

Adding more insult to the dollar’s injury were the reports in yesterday’s roster, all of which supported the not-so-giddy comments of the three FOMC members.

The headline figure for the March PPI report showed that prices of finished goods and services sold by producers increased at a slower pace of 0.7% than the rate that the market was eyeing at 1.1%. Meanwhile, the core figure overshot the consensus by 0.1% and reflected a 0.3% uptick in prices, excluding food and energy.

It was also reported that the number of people who filed for unemployment benefits last week was at 412,000. Not only did it come higher than the 379,000 forecast, but it’s also the first reading over 400,000 we’ve seen in five weeks!

A few market junkies are worried that this could be the start of the trend reversal in jobless claims. But let’s not jump into conclusions just yet. After all, it’s only a week’s worth of data.

Today we have quite a handful of reports on tap that may just cause some wild moves on the dollar. So make sure you don’t snooze on ‘em!

We start at 12:30 pm GMT with the CPI report for March. Both headline and core readings are expected to match their readings for February at 0.5% and 0.2% respectively. Along with that will be the Empire State Manufacturing Index for February which is seen to print at 17.1.

The TIC Long-Term Purchases report will also be released at 1:00 pm GMT. It is anticipated to show that long-term securities purchased by foreigners outpaced those bought by U.S. citizens in February by 59.4 billion USD.

A few minutes after, at 1:15 pm GMT, the industrial production report for March is eyed to post a 0.5% uptick after coming in flat in February.

We’ll then end the day with the University of Michigan’s preliminary report on consumer sentiment at 2:00 pm GMT. Consumer confidence is seen to have improved in March with the index predicted at 68.7 following its 67.5 reading in February.

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After selling off in the last couple of weeks, it seems the dollar has finally said “Enough is enough!” The dollar bearishness appears to have eased as it was able to chalk up minor gains against most of its major counterparts last Friday. The dollar posted its biggest gains against the euro and the pound, but slid back a bit against the yen and the Aussie.

Data last Friday was about as mixed as a bowl of nuts! On the sweet side, we had Empire State manufacturing index, industrial production data, and the preliminary University of Michigan consumer sentiment report.

The Empire State manufacturing index showed a healthy rise from 17.5 to 21.7 for the month of April to beat forecasts for a reading of 17.1.

Industrial production mirrored the Empire State manufacturing index and also posted nice gains of its own. It recorded its fifth straight increase and showed a solid 0.8% rise in output last month to beat the expected 0.5% rise.

Likewise, the University of Michigan consumer sentiment report printed better than the expected 68.7 figure when it delivered a reading of 69.6. It seems the Average Joe has more skip in his step now that the economy has posted six straight months of gains in the labor market.

On the bitter end of the spectrum, CPI data and the TIC long-term purchases report came in worse than expected.

CPI came in line with expectations when it printed a 0.5% rise. Core CPI, on the other hand, failed to meet the forecasted 0.2% uptick and only delivered half the expected figure. Unlike other countries, the U.S. has been relatively protected from rising prices, and these figures are a testament to this. Unfortunately, this could mean that it may take more time for the Fed to start tightening its monetary policy.

Also, it was noted in the TIC long-term purchases report that demand for U.S. assets declined in February. This explains why the report showed a net value of 26.9 billion USD, which is less than half the expected 59.4 billion USD figure.

This week, the action won’t begin until housing starts and building permits data come out tomorrow at 12:30 pm GMT. Then at 2:00 pm GMT on Wednesday, we pick up with more housing data as the existing home sales report is due at 2:00 pm GMT. Finally, we’ll cap off the week early on Thursday with initial claims numbers (12:30 pm GMT) and the Philly Fed manufacturing index (2:00 pm GMT).

Phew! ‘Til then, y’all should stay sharp and keep your eyes on other countries for developments that may rock the dollar! Good luck, pipsters!

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Whoohoo! The dollar must have felt so fly during yesterday’s trading like Kanye West in his grand Coachella entrance. Almost as soon as it opened at 1.4412, EUR/USD tumbled down the charts and ended the day at 1.4232.

I bet many didn’t think we’d see a lot of movement in the dollar yesterday with only the NAHB housing market index listed in our line up. According to the report, the outlook of home builders worsened in April with the index down one point at 16.0 from where it was in March.

However, there were a lot of surprises that popped up. For instance, Greece and Portugal once again troubled investors with renewed sovereign debt concerns, and China raised its Reserve Requirement ratio (for the fourth time!) by another 50 basis points to 20.5%.

The biggest story though was in the U.S. Standard and Poor’s announced yesterday that it has downgraded its outlook for the economy from stable to negative. Duhn, duhn, duhn! According to an analyst at the hotshot credit ratings agency, the primary reason for the move is because they don’t see U.S. policymakers being capable of addressing the country’s fiscal issues effectively.

It seems like there was a lot for investors to digest yesterday, huh? So it’s not that big of a shock to see the dollar rally against most of its counterparts as risk aversion dominated market sentiment. However, I don’t think markets were completely impressed with the dollar. USD/JPY ended the day 44 pips lower from its opening price at 82.70.

I wonder if today’s reports on the housing market will help the dollar woo bulls. At 12:30 pm GMT, the building permits report for March will be on tap and it is expected that there were 550,000 permits issued. To be released along that will be the data on housing starts for the same month. Take note that the forecast is up at 530,000 from its 480,000 reading in February.

If you’re planning to root for the dollar, keep your fingers crossed for better-than-expected figures!

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When there’s a will, there’s a way! After two days of getting pummeled, the dollar bears decided they have had enough of the bulls’ shenanigans and sprang into action. The bears sold the dollar across the board like madmen yesterday, and took the currency 98 pips lower against the euro and 46 pips lower versus the pound.

Compared to Monday, market sentiment was relatively upbeat due positive economic data. The U.S. building permits came out with a 590,000 figure, higher than the 550,000 initially predicted. The housing starts report also beat expectations as it rose to 550,000.

Today, we’ll see more housing data in the form of existing home sales. Scheduled to come out at 2:00 pm GMT, the existing home sales report is expected to rise to 5.02 million from 4.88 million the month prior. Since market sentiment has been driving price action, a better-than-expected result could actually be detrimental for the dollar!

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Not since my last Call of Duty session with Pipcrawler have I seen such a brutal beating! The dollar was the biggest loser yesterday, taking hits across the board as risk appetite continued to stir up the markets. EUR/USD is now above key resistance at 1.4500 after testing the 1.4200 handle earlier this week. Meanwhile, the comdolls are all at or are testing for new highs. When will the bleeding stop?!?

The only major piece of data released from the U.S. yesterday was the existing home sales report. The report showed that the annualized rate of sales rose to 5.10 million, a slight improvement from the 4.88 million we got in last month’s report. This reflects an improving housing market, indicating that demand is picking up.

Coupling these results with successful Spanish bond auctions and overall risk appetite, you’ve got a recipe to satisfy anyone’s risk appetite!

For today, we could see more dollar selling take place, especially if the weekly unemployment claims report (12:30 am GMT) and Philly Fed Manufacturing Index (2:00 pm GMT) come in better than expected.

Initial jobless claims are expected to come in at 390,000, a slight improvement over the 412,000 figure we saw last week. Meanwhile, the Philly Index is projected to print at 36.4, indicating improving conditions but not at the same pace as last month, when the index had a score of 43.4.

Be on the look out for these reports, as they may just spark another death streak for the dollar!

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I hope y’all had a cup of joe while trading last Friday, ‘cause price action was a real snoozer! The dollar’s movements were quite limited as many of our fellow traders were out on holiday. As a result, EUR/USD moved just 10 pips lower to 1.4548. Meanwhile, GBP/USD slid 12 pips down to 1.6516.

You would think that with so many players out of the markets, we would see a bit more volatility as a result of low liquidity. Unfortunately, that wasn’t the case last Friday! Though liquidity was thin, traders didn’t see much reason to bust a move since they had no economic data to groove to.

Sadly, today’s price action may be a repeat of last Friday’s since many countries are still out on holiday. But maybe the U.S.’s new home sales data can manage to stir the markets up when it comes out at 2:00 pm GMT. Forecasts say home sales likely rose by an annualized number of 280,000 in March, but a higher-than-expected figure could be enough to get the dollar back on the winning side.

If you plan on trading the dollar in the next couple of days, just keep in mind that the U.S. has major data coming out later this week. On Wednesday (4:30 pm GMT), the Fed will be making its FOMC statement, while on Thursday (12:30 pm GMT) we have U.S. GDP data rolling out. These events are about as heavy as they get in the forex world, so there’s a chance that dollar markets will remain steady ahead of these big events.

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As most markets were coming back from the holidays, so did the dollar selling that took place last week, with the other safe havens benefitting the most! After hitting a high at 82.43, USD/JPY dropped a solid 74 pips to finish at a closing price of 81.69. Meanwhile, USD/CHF fell 48 pips to end the day at .8808.

Not even yesterday’s better than expected new home sales report could bust the dollar out of its gut-wrenching slump! Annualized new home sales came in at 300,000, much higher than the forecasted 280,000 figure. This was also a nice improvement from the previous month’s release, which was revised up from 250,000 to 270,000.

Still, this failed to stop the dollar from dropping across the charts. It seems that traders are still betting that the Fed will NOT be raising interest rates anytime soon, no matter how hot inflation gets.

For today, we get another set of housing data, as the S&P Case-Shiller home price report will be released at 1:00 pm GMT. The report is expected to show that housing prices are still down 3.27% from levels a year ago.

At 2:00 pm GMT, the monthly consumer confidence report will be available. Word is that consumers are feeling more giddy about the economy, as the index is projected to print at 64.70, an improvement from last month’s 63.40 figure. If today’s report comes in exceedingly better than expected, it may give the dollar some support.

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The Greenback found itself in a world of hurt yesterday as traders dumped it in favor of other major currencies. EUR/USD, for instance, had rallied to a new year-to-date high at 1.4658 before it closed the U.S. trading session at 1.4582.

The negative market sentiment towards the U.S. economy has really been taking a toll on the Greenback. In a speech yesterday, Tim Geithner of the U.S. treasury went all gloomy on the market and reiterated that unemployment is still pretty high and that the economy is “unfairly hard.”

Economic data releases offered the Greenback very little support. S&P house price index showed that the selling price of homes dropped by 3.3% year-on-year, slightly worse than the 3.2% decline initially expected. On the other hand, the CB Consumer Confidence survey printed a reading of 65.4, up the 63.8 figure seen the month before.

Today, focus will turn to the FOMC as they are scheduled to announce their decision on interest rates. The FOMC is expected to keep the Feds Funds Rate below 0.25% and announce that QE2 will be allowed to expire in June. The FOMC will reveal their decision late in the afternoon at 4:30 pm GMT.

Before that, however, the report on durable goods orders will publish at 12:30 pm GMT. While not as market moving as the FOMC statement, it still does create some volatility. The report is slated to show a 2.1% rise after the 0.6% decrease seen last month. Meanwhile, the core version of the report that includes volatile items such as aircraft orders is expected to print a 1.7% gain.

That’s about it for the Greenback today! If the FOMC comes out with a surprise, make sure you’ve got a plan prepared!

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Guess who just came in and cheered the markets up like it was Christmas! Yesterday Fed Chairman Ben Bernanke announced the Fed’s decision to end its QE2 program as scheduled, which boosted risk appetite in markets. As a result, the low-yielding Greenback took major hits, with EUR/USD flying by 154 pips to 1.4794 and GBP/USD rocketing by 160 pips to 1.6635.

If you’re more of a details kind of guy, then you should know that Bernanke mentioned in his speech that the Fed plans to end its second quantitative easing program in June, but it is also reinvesting the earnings earned from maturing securities it’s keeping in its pockets. This basically means that the Fed doesn’t think that a QE3 is needed, but it also doesn’t want to completely yank off the U.S. economy’s support.

Today all dollar bulls and bears will be keeping close tabs on the advance U.S. GDP report released at 12:30 pm GMT. One of the things that Bernanke mentioned in his first news conference is that he doesn’t expect an economic growth figure higher than 2% for the fourth quarter, so the news release might be priced in already.

Then, around the same time we’ll also get hold of this week’s initial unemployment claims. The data has been printing dangerously close to the 400,000 figure for the past couple of weeks, so a number higher than the psychological level might imply that recovery in the jobs sector might be losing steam. Last to come out of the pip stages today is the pending home sales report for March. Will the report exceed its 2.1% growth in March? Stick around in your charts at around 2:00 pm GMT!

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All you dollar bulls must be hurtin’ right now! Once again, the dollar found itself on the losing end during yesterday’s trading, as it struggled against most of its major counterparts. EUR/USD edged 26 pips higher to finish at 1.4821, while USD/JPY dropped 50 pips to end at 81.54.

It seems like nobody wants to buy the dollar right now, and looking at yesterday’s economic data, I can see why!

First, unemployment claims jumped up to 429,000 last week, way higher than the anticipated 395,000 figure. This brought jobless claims to its highest level in three months, hinting that improvements in the labor market may be slowing down.

Second, advance GDP numbers also came in disappointing, indicating that the U.S. economy grew by an annualized 1.8% during the first quarter of 2011. This was down from the 3.1% figure we saw the previous quarter and marked the slowest pace of growth since the 2nd quarter of 2010.

Apparently, one reason why GDP fell was because Uncle Sam decided to scrimp on its spending last quarter. Yesterday’s report indicated that government spending fell by an annualized 5.2%, the biggest drop in 28 years! In addition to this, declines in consumer spending, exports, and residential construction all contributed to the relatively weak GDP number.

The only good news to come out yesterday was the pending home sales report. The report showed an increase of 5.1%, way higher than the projected 1.6% increase and a nice improvement from the upwardly revised 0.7% we saw last month. Still, it seems like market participants didn’t pay much attention to the report as they still seemed to be sour on the dollar.

Looking ahead, we’ve got a full platter of economic data coming out.

At 12:30 pm GMT, the core PCE price index (the Fed’s preferred measure of inflation) and personal spending figures are due. The PCE is expected to show that consumer prices rose just 0.1% last month, indicating that inflation still remains subdued. Meanwhile, consumer spending growth is expected to be at just 0.6%.

Later on at 1:45 pm GMT, the Chicago PMI and revised University of Michigan consumer sentiment reports will be released. Word is that Chicago PMI will come at 68.7, down from the 70.6 last month but still indicating business expansion. As for the consumer sentiment report, it’s projected to increase slightly from 69.6 to 70.0, reflecting a slight improvement in consumer confidence.

Phew, that was a long one! It’s the last day of the trading month – good luck and grab some pips!

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[I]Keep rollin’ rollin’ rollin’ rollin’[/I]. The dollar bears danced to the tune of my brothas Limp Bizkit’s single last Friday as they continued to drag the Greenback lower against its major counterparts. USD/JPY plunged by another 41 pips to 81.13, EUR/USD slipped 11 pips more to 1.4810, and USD/CHF dropped to a new low of .8650.

With mixed U.S. reports released last Friday, who would want to get hold of the scrilla? Although personal spending was in line with expectations and personal income rose more than analysts had expected, Chicago’s PMI disappointed markets with its 67.6 reading from last March’s 70.6 figure. What’s more, the core PCE index supported the Fed’s dovish comments, while the University of Michigan consumer sentiment was revised to 69.8 when markets were expecting the number at 70.0.

Will the currency bulls give the Greenback some lovin’ this week? There will be tons of economic report due this NFP week, starting with the ISM manufacturing PMI at 2:00 pm GMT, followed by tomorrow’s factory orders report at 2:00 pm GMT.

The real action will begin on Wednesday when the ADP non-farm employment report is released at 12:15 pm GMT and the ISM non-manufacturing PMI at 2:00 pm GMT. On Thursday we’ll not only see the unemployment claims at 12:30 pm GMT, but we’ll also hear Bernanke speak at 1:30 pm GMT. Lastly, we’ll get hold of the big NFP report on Friday at 12:20 pm GMT together with the U.S. jobless rate.

Make sure you position your trades carefully this week!