Did y’all see that huge comeback by the Greenback? The U.S. dollar partied along with the Americans on Ground Zero yesterday on news that U.S. forces were able to kill Al Qaeda leader Osama bin Laden. Because of that, USDX was able to keep its head above the 73.00 mark while the Greenback gained against most of its counterparts.
News of a successful U.S. military mission which led to Osama bin Laden’s death restored confidence in the U.S. government and boosted the Greenback yesterday. Dollar strength pushed EUR/USD back to the 1.4800 area and kept AUD/USD from breaking above the 1.1000 handle. But will this dollar rally last?
The U.S. won’t be releasing any economic reports today so make sure you keep an eye out for other red flags on the calendar (Hint: Check out my daily economic commentary on Australia!) to determine market sentiment for the day. While the U.S. dollar could still draw support from their government’s successful move against terrorist forces, fears of a retaliation from Al Qaeda could dampen demand for the Greenback later on. Better stay on your toes!
The dollar’s performance yesterday was as mixed as fruit salad yesterday! The dollar staged a nice rally versus the pound and the comdolls, ended the day barely changed against the euro, but gave up ground to the Swissy and the yen. The U.S. dollar index closed the U.S. trading session at 73.58, up .08 from its open.
I guess you could say that the dollar trading reflected the various views of investors and traders ahead of the U.S. jobs report. On the one hand, they’re hesitant on holding on to dollars because of the Fed’s ultra-loose monetary policy. But on the other hand, they could get blown out if they continue to go long dollar due to profit taking.
The only report of interest yesterday was the one on factory orders. It showed a 3.0% gain, significantly better than last month’s increase of 0.7% and the 1.9% increase initially predicted.
Today, there will be two important economic reports to keep an eye out for.
First is the ADP non-farm employment change at 12:15 pm GMT. The market expects that 200,000 jobs were added in April, which is almost the same increase we saw in March. Since the report is considered as a leading indicator of the upcoming non-farm payrolls on Friday, the ADP usually has a hefty impact on the foreign exchange market.
The second one is the ISM non-manufacturing survey. Scheduled to publish at 2:00 pm GMT, the survey is slated to print a 57.9 reading, up .6 from the previous month. If the actual figure comes higher, then we could see the dollar get sold-off.
To recap, the dollar traded in a mixed fashion yesterday because of the different takes of trades on the dollar. And while there will be some important data releases later, the dollar could still continue to trade mixed across the board since the biggest report in the FX market, the non-farm payrolls, is due to come out on Friday.
Boo yeah! Despite the slight bump during the Asian session, the U.S. dollar managed to recoup some of its losses for the day and end higher against most of its counterparts. USDX edged closer to the 73.00 level but managed to land back above the 73.50 mark by the end of the day.
Investors seemed to be back to their risk-taking selves early on when Portugal announced that it agreed to the bailout deal from the EU. Since the terms of the deal seemed feasible for Portugal, many hoped that this was a step in the right direction in terms of ending the euro zone debt crisis.
However, these happy vibes didn’t last when the economic calendar started seeing red. I’m talking about those worse than expected figures from both the U.K. and euro zone! Better check out my daily economic commentary for the U.K. and my economic roundup for the euro zone to see which reports ruined traders’ risk appetite.
The U.S. also had its share of negative figures when it printed an ADP employment change reading of 179,000. This was less than the projected 200,000 rise in private hiring for April and the previous month’s 207,000 increase. Now this can’t be good for the upcoming NFP report!
Also, the ISM non-manufacturing PMI fell short of expectations as it posted a 52.8 reading for April. This was far below the 57.9 consensus and the 57.3 reading seen last March. Although the index is still above 50, which implies that the services industry expanded during the month, the recent reading revealed that the expansion was much slower than expected.
For today, the initial jobless claims is on deck along with a speech by Fed head Bernanke. Weekly jobless claims are projected to be at 415,000 for last week, slightly less than the 429,000 seen the other week. Watch out for the actual figure due 12:30 pm GMT. An hour later, Ben Bernanke will talk about banking supervision and regulation during his speech in Chicago. Better stay on your toes then!
And just like that, the dollar’s back in style! Not-so-hawkish remarks from the ECB and a sharp slide in commodities saw the USDX climb from 73.53 to a one-week high of 74.59. Meanwhile, EUR/USD finally broke out of consolidation, falling from its seven-month highs to post a 304-pip drop to 1.4527.
Judging by ECB President Jean-Claude Trichet’s words, it doesn’t seem likely that the central bank will be hiking rates in June. Since his comments basically erased any short term increase of the euro’s main advantage over the dollar (interest rate differential), those who were holding on to euros in hopes of another rate hike quickly sold off their holdings to return to the dollar.
Aside from that, a bout of risk aversion also had the dollar lookin’ more attractive than its major counterparts. Commodities and equities took a dive yesterday as concerns about a global economic slowdown wiped out higher-yielding assets. I guess the dollar hasn’t lost its safe haven status yet, eh?
All of this occurred alongside the release of worse-than-expected initial claims data, which revealed that a total of 474,000 Joes (versus 415,000 forecast) have joined the ranks of the unemployed last week.
It’ll be interesting to see if the dollar will post humongous gains again today as it publishes its NFP report. Survey says we’ll probably see a net increase of 185,000 for April following the previous month’s 216,000 rise, though this isn’t expected to affect the unemployment rate, which currently stands at 8.8%.
To learn more about what to expect, I suggest you read Forex Gump’s take on the NFP report. He gives a pretty good analysis on today’s release and even shows you what happened the last time the report came out!
What a grand finale for the Greenback! The dollar capped its week of gains with fireworks last Friday when a surprisingly better-than-expected NFP report boosted the scrilla in the charts. Though the dollar pared back some of its gains against the comdolls, USD/JPY rose by 44 pips to 80.56 while EUR/USD dropped by another 174 pips to 1.4353. Boo yeah!
Last Friday’s NFP report rocked the markets when it showed that 244,000 more workers found jobs in April against the consensus of only 185,000. What’s more, March figures were revised up from 216,000 to 235,000! The numbers inspired a brief rally in risk appetite, even if the unemployment rate also inched higher from 8.8% to 9.0%.
Today the U.S. will take a chill pill from releasing economic reports, but strap on your seatbelts because I’m seeing more red flags in the next few days!
Tomorrow at 12:30 pm GMT we’ll get hold of the country’s import prices report, followed by a reading on the IBD/TIPP economic optimism. Then, on Wednesday at 12:30 pm GMT we’ll see the big trade balance report. Analysts are predicting a higher deficit for March, but be on your toes for any surprises!
We’ll see most of the U.S. action happen on Thursday when the retail sales, PPI, and the unemployment claims report is released at 12:30 pm GMT. Not only that, we’ll also see Fed Chairman Ben Bernanke hit the stages at 2:00 pm GMT! Lastly, U.S. will end the week with the core CPI report at 12:30 pm GMT and the University of Michigan consumer sentiment data at 1:55 pm GMT.
Good luck in your trades this week, everyone!
The dollar may have ended last week with a grand finale, but the way it started this week was anything but amazing! Except against the euro, it retreated against ALL of its counterparts! How weak sauce is that?? EUR/USD slipped 14 pips to 1.4351 while USD/JPY fell 40 pips to 80.21.
It seems the dollar has eased off its recent beastliness (y’all saw how strong it was last week!) to allow other currencies to recover a bit. But something tells me we haven’t seen the end of its run. Old ghosts such as the euro zone’s debt woes are coming to light again, and this could cause risk sentiment to turn in favor of the Greenback once more.
Nothing much to look forward from the U.S. today. The only report on tap is last month’s import prices data (12:30 pm GMT), which is anticipated to show a 1.8% rise, slightly softer than the previous month’s 2.7% uptick. Don’t count on this baby to shake the markets unless it prints a reading that’s REEEEALLY off the consensus forecast.
With forex markets mostly in consolidation mode yesterday, the dollar found itself on the losing end against most of its major counterparts. European currency pairs like EUR/USD and GBP/USD edged slightly higher, while the comdolls made a run for it. AUD/USD closed above the 1.0800 handle, while USD/CAD closed 57 pips lower to end at .9579.
The reason for the dollar’s demise can probably be attributed to a nice run in commodity trading. Whenever commodities are trading higher, it can be seen as a sign that risk appetite is helping drive the market. So make sure that when you’re trading that you keep an eye out on the commodities markets, as it can help you determine whether traders are being risk hungry or risk averse.
In other news, import prices rose by 2.2% in April, slightly down from the previous month’s 2.6% figure but still better than forecast (1.8%). This indicates that business and consumers are paying more for imported goods. You might be saying, this means that inflation is rising right? Does this mean that the Fed will be raising rates soon?
Errr… Not exactly. This might just be a reflection of rising cost everywhere BUT the U.S. Remember, these are the prices of imported goods and services, not domestic! Until we see the price of local goods and services rise, I don’t think the Fed will consider inflation to a problem.
Looking ahead, we’ve got trade balance data coming out at 12:30 pm GMT. Word is that the monthly deficit for March was at 46.8 billion USD. This would mean a slight increase from January’s deficit of 45.8 billion USD. I wonder though, with the dollar being so weak lately, could we be in a for a surprise and get a smaller deficit figure?
The Greenback was off to a rocky start but was able to get its act together later on as risk aversion popped its head back in the markets. It ended the day higher against all its major counterparts after USDX landed above the 75.50 mark. Continue reading to find out whether risk aversion could linger and keep the Greenback afloat today.
Mixed results of the Chinese reports released yesterday and the weak U.S. trade balance seemed to dampen traders’ risk appetite. Not even the pound, which got a strong boost from the upbeat BOE inflation report, was able to close higher than the safe-haven Greenback at the end of the day.
Traders flocked back to the lower-yielding U.S. dollar when the U.S. trade balance printed a 48.2 billion USD deficit, wider than the projected 46.8 billion USD shortfall. Components of the report revealed that higher oil prices pumped up imports by 4.9%, outpacing the 4.6% rise in exports.
Today the U.S. is set to release another set of top-tier reports namely their PPI and retail sales figures. Producer prices are projected to have risen by 0.6% in April, following the 0.7% uptick seen last March. Core PPI is expected to post a mere 0.2% increase because this figure doesn’t include the impact of food and energy prices. Meanwhile, the headline retail sales figure could print a 0.5% increase while the core version could show a 0.7% rise in consumer spending.
If you’re planning to trade those reports due 12:30 pm GMT, make sure you read my buddy Forex Gump’s take on the upcoming U.S. retail sales data!
Winning doesn’t last forever! The dollar found itself giving up some of its gains yesterday as the overall aversion to risk in the market tempered. EUR/USD, for one, was able to climb to 1.4238 to close the day with a 36-pip gain.
Economic data that were released in the U.S. were mixed.
On the negative side, even though the headline version of the retail sales report in as expected at 0.5%, the core version only showed a 0.6% gain and not the 0.7% the market was expecting. The unemployment claims report wasn’t also promising. It came in slightly worse than expected as it showed a 434,000 figure versus the 430,000 expected.
On the positive side, the U.S. producer price index (PPI) came in above consensus and printed a 0.8% gain. The report showed a 0.3% gain.
Today, we’ll be treated to more important reports. The first one is the consumer price index at 12:30 pm GMT. It is predicted to show a 0.4% gain. Then, at 1:55 pm GMT, the preliminary University of Michigan consumer sentiment survey will be published. A reading of 70 is expected from the survey, 0.2 points higher from the previous month.
The upcoming reports will be vital in determining market sentiment. If they come in better than expected, we could see the dollar lose again today as risk appetite picks up. Good luck in your trading today folks!
Aaarg! During Friday’s trading, the dollar seemed lost like Jack Sparrow in a sea of pips! It gained against its higher-yielding counterparts, gaining 132 pips from the euro and 93 pips from the pound. However, it scored an 8-pip loss against the yen.
Continued talks about a Greek debt restructuring might have highlighted the dollar’s safe haven currency reputation and allowed it to rally despite a not-so-impressive inflation report from the U.S.
Both the headline and core figures for April’s CPI report came in as expected at 0.4% and 0.2%, respectively. Some naysayers think that the figures will do very little to make the Fed sound more hawkish. This is probably the reason why USD/JPY plunged 74 pips from its opening price on Friday.
On a brighter note, the preliminary University of Michigan Consumer Sentiment report for May came in at 72.4 and beat the market’s 70.0 forecast.
I wonder how the TIC report for March will factor in to the dollar’s fate on the charts today. Due at 1:00 pm GMT, analysts are expecting to see that the foreign demand for long-term U.S. securities outpaced domestic demand by 57.7 billion USD. Err, I don’t know if it’s wise to keep your hopes up though. After all, the report has disappointed the forecast for three consecutive months already.
We’ll also get dibs how New York’s manufacturing sector at 12:30 pm GMT. The Empire State Manufacturing index for May is seen to come in at 20.7.
Oh yeah! Also take note that Federal Reserve Chairman Ben Bernanke is scheduled to talk in D.C. at the same time. So keep an ear out for what he has to say. Who knows, he might come off hawkish to the market and spark a dollar rally.
What a day! It had its ups and it had its downs, but ultimately, the dollar ended the day weaker as risk aversion seems to have eased, thanks to the EU meeting. While it managed to post nice wins against the Loonie and Kiwi, it didn’t fare as well against the other major currencies. EUR/USD climbed 105 pips to 1.4181 while USD/CHF slid about 100 pips to .8839.
Another possible explanation for the dollar’s uncharacteristic puny-ness is the worse-than-expected TIC long-term purchases data we saw yesterday. Dollar bears’ eyeballs must have popped out of their sockets when they saw purchases at only 24.0 billion USD in March, less than half the forecasted figure! Soon after the report was published, dollar bears kicked into a higher gear and took the dollar down.
Lookin’ to get your daily fix of economic data? You’re in luck! On tap today we have housing starts and building permits data at 12:30 pm GMT. While building permits are expected to repeat the previous month’s 590,000 figure, housing starts are anticipated to climb from an annualized number of 550,000 to 580,000.
Soon after that, at 1:15 pm GMT, we’ll take a look at industrial production and capacity utilization data. Survey says industrial production growth probably softened from 0.8% to 0.5% last month. On the other hand, analysts believe the U.S. is starting to pick up its slack as the capacity utilization rate is forecasted to come in at 77.7%, up from 77.4%.
If you’re a dollar bull, you’ll probably want to see better-than-expected figures in these reports since they tend to be bullish for the currency. But don’t let yourself be blinded by whatever figures these reports print! Risk appetite has been driving the markets lately, so remember to keep tabs on risk sentiment, too!
With a handful of negative reports, how can the dollar get its groove on?! It ended yesterday’s trading lower against all of its major counterparts except the yen. It was able to shake its tush to a high of 1.4121 against the euro, but quickly gave up its gains and ended the day with a 55-pip loss. Boo!
Let me give a you a recap of yesterday’s roster of economic data.
First there was the building permits report for April which fell short of expectations when it printed at 550,000. Analysts had predicted it to come in at 590,000.
The housing starts report also might have also weighed down the dollar’s swagger. The forecast was that 580,000 new residential buildings started construction in April. However, the actual figure only tapped in at 520,000.
Making things even worse, the industrial production report showed that growth in the sector was flat during the month when the consensus was for a 0.5% uptick.
Our forex calendar is blank for economic data from the U.S. today. BUT! We do have the minutes of the most recent FOMC meeting on tap at 6:00 pm GMT.
Market junkies aren’t expecting anything new from the Fed which means that the minutes will probably reveal the bank’s lack of urgency to raise rates. In the last meeting we heard that the FOMC members acknowledge the uptick in inflation but said that the rise in prices would only be temporary. And it seems to be the case, looking at the recent decline of commodity prices.
You know what, I think this might have been another reason why the dollar lost in yesterday’s trading. So make sure you ain’t snoozin’ when it’s released later!
The dollar’s price action was as mixed as bowl of fruit salad! While it did post a gain over the pound and the yen, the dollar lost slightly against commodity-based currencies and the euro. USD/CAD, for instance, fell to .9706 after opening the day at .9726.
The only important piece of data that was released yesterday was the FOMC Meeting Minutes. According to the report, FOMC members have begun talking about exit strategies (i.e., unwinding the large amount of liquidity they injected into the market). Most members seem to favor selling the Fed’s assets first before they go ahead and hike rates.
But their outlook on inflation went against this. The minutes revealed that there were still some upside risks to inflation due to the rising oil and food prices. This could mean that the Fed may raise rates earlier than the market expects.
Hmmm, it looks like the FOMC members have taken the first steps to normalize monetary policy, but they still aren’t sure when to really begin tightening.
Today, the forex calendar is full of juicy data.
The data parade kicks off at 12:30 pm GMT, as the weekly initial jobless claims report will be released. The market expects claims to fall to 421,000 after it had climbed to 434,000 last week. Then, at 2:00 pm GMT, the existing home sales and Philadelphia manufacturing index will come out. Existing home sales are predicted to have risen to an annualized rate of 5.21 million while the Philadelphia index is anticipated to print a reading of 20.2.
Alright, that’s it for today! With high amount of data releases today, we’ll probably see quite a lot of volatility in the forex market. Good luck folks!
Who be killin’ tha scrilla yo? Why, everybody! Thanks to poor economic data, the dollar found itself in the gutter, losing against all its major counterparts. EUR/USD rose another 80 pips to finish at 1.4310. Meanwhile, GBP/USD gained 74 pips, erasing most of its losses from the day before.
The main culprits in yesterday’s disaster were the existing home sales report and the Philly Fed manufacturing index. Existing home sales came in at an annualized 5.05 million, after it was expected to hit 5.12 million this past April. The manufacturing index also disappointed, printing a score of 3.9. This was WAYYYYY off the anticipated 20.2 figure.
These reports indicate that the U.S. economy is still struggling, which gives the Fed even less reason to raise rates sooner rather than later. With interest rates being one of the main focuses of the market right now, any data that supports the notion that the Fed will be keeping loose monetary policy could lead to more dollar beatings.
The only piece of good data was the unemployment claims report, which came in at 409,000, slightly better than the expected 421,000 number. While this means that less people filed for unemployment benefits last week, this is still above 400,000, indicating weakness in the labor market.
No data on the docket today, so we may not see any big moves. Considering how the dollar has lost out this week, let’s see if some traders will book some profits before heading off for the weekend.
Certainly, the daily economic of United States are very important fo a trader to make decision to buy or sell. That is why I think that maybe there is any special web that speaks about the daily economic news an its analyzing in relation with the currency as it against
Friday turned out to be a very good for the dollar as it was able to post some nice gains against other major currencies. The U.S. dollar index, which tracks the performance of the Greenback versus a basket of currencies, sat at 76.08 by the end of the U.S. trading session, 54 percentage points higher from its opening level that day.
The dollar’s gains were once again a result of the market’s continued concern over euro zone’s debt crisis. Germany’s Bundesbank cautioned on Friday that extending the maturity of Greece’s bonds could make their bonds unacceptable as collateral. This could make it difficult for Greek banks to secure additional funds.
The forex calendar last Friday lacked any major reports to speak of, but this week could be different as a bunch of high-profile data are scheduled to come out.
Tomorrow, at 2:00 pm GMT, the new home sales report will be released. It is expected to show that sales rose to 308,00 annually in April from 300,000 in March.
Then, on Wednesday, at 12:30 pm GMT, the durable goods orders report will be published. The market expects orders to fall 1.8%. On the other hand, the core version of the report that excludes transportation items such as aircrafts and vehicles is predicted to rise by 0.7%.
But the most important report this week will come out on Thursday. At 12:30 pm GMT, the U.S. preliminary GDP report is slated to print. The consensus is that the U.S. economy grew 2.2% during the first quarter after expanding 1.8% during the last quarter of 2010.
With risk sentiment seemingly being the driving force behind the dollar’s price action, we could see better-than-expected results from U.S. reports lead to a dollar sell-off. In any case, it’ll be better to keep a close eye on price action upon the release of those reports!
The Greenback once again proved that it’s the king of the hill as it gained on its major counterparts when risk aversion pushed traders towards safe-haven assets. USD/JPY capped the day 23 pips higher at 82.01 after falling to a low of 81.32, while EUR/USD dropped by 79 pips to 1.4048.
There were no economic reports released from the U.S. yesterday, so the markets maintained their focus on the sovereign debt crisis in the euro region and weak economic reports from other economies. China, for example, clocked in a five-month low on its manufacturing PMI data. And then, we also saw more downgrades from the euro zone! With grim news like these popping up all over the markets, it’s no wonder my forex buddies are jittery on investing their moolah!
Let’s see if the dollar bulls can keep up their momentum today when the new home sales report is released at 2:00 pm GMT. Will the data disappoint expectations like last week’s existing home sales figures? The report is expected to show 305,000 new houses from last March’s 300,000 figure.
The dollar lost to almost all of its counterparts in yesterday’s trading. Oh, somebody has been snoozin’! EUR/USD ended the day 61 pips higher at 1.4109 while GBP/USD closed 79 pips higher at 1.6191, and USD/JPY ended the day 8 pips lower at 81.93.
With the dollar’s weak performance, a lot of naysayers are asking if what we’re seeing is more than just a relief rally. Perhaps it’s already a reversal!
As I pointed out yesterday, without a lot of economic data on tap for this week, I wouldn’t really declare that dollar pairs have already bottomed (or topped in the case of USD/JPY). So I wouldn’t panic yet, if I were you.
And besides, maybe the positive reports we saw from euro zone and the U.S. also sparked a wave of risk appetite in the market.
Yesterday, the New Home Sales report for April showed that the demand for new houses increased by 323,000 and beat the market’s expected 305,000 rise.
I wonder if the durable goods report will also have the same effect on the market. Later at 12:30 pm GMT, we’ll get dibs on the change in the value of orders placed with manufacturers in April. The consensus for the headline figure is a 2.0% decline. However, the core version of the report which excludes volatile items such as transportation, is seen to print a 0.7% increase.
If risk sentiment would dictate price action, we may see the dollar give up more pips if the report comes in better than expected. Be on your toes!
Ooomph! The dollar took another hit against many of its major counterparts yesterday as weaker-than-expected economic data weighed on the Greenback. Though EUR/USD 25 pips lower at 1.4084, USD/CHF plunged by 64 pips to .8728 while GBP/USD rose by 90 pips to 1.6281.
With economic data from the U.S. still showing an economic growth that’s slower than Pipcrawler’s driving, you can’t blame markets for losing love for the Greenback. For one, durable goods orders not including transportation items dell by 1.5% in April after rising by 2.5% in March. Meanwhile, its headline figure also showed a downside surprise, clocking in a 3.5% plunge against March’s 4.4% rise. Yikes!
Today we’ll see the country’s preliminary GDP figures at 12:30 pm GMT. While many expect economic growth to climb 2.2% higher in the first quarter from the previous quarter’s 1.8% growth, some traders aren’t holding their breath.
Also due for release at 12:30 pm GMT is this week’s initial jobless claims report, which is expected to show just about the same numbers as last week. Keep close tabs on these reports though, as they could provide volatility in your charts!
The Greenback turned out to be a big loser yesterday as it lost ground to most of its major counterparts, except for the euro. Is it just me or is the U.S. dollar starting to lose its safe-haven appeal and follow fundamentals now?
Weak economic figures from the U.S. pushed the Greenback lower against its peers yesterday. The preliminary GDP reading for the first quarter, which was expecting an upward revision to 2.2%, was kept at 1.8% as initially reported. Imagine the U.S. dollar’s disappointment then!
Add to that the worse than expected jobless claims data, which revealed that 424,000 people filed for unemployment claims for the first-time last week. This was higher than the projected 403,000 in first-time jobless claims, suggesting that the U.S. labor market is seeing some weak spots.
Today, the U.S. is set to release its core PCE price index, which has been rumored to be the Fed’s preferred measure of inflation. My buddy Forex Gump has some mind-blowing ideas on how this inflation report could impact the Fed’s monetary policy stance and also the U.S. dollar so make sure you check his article on whether PCE is hot or not! Don’t forget to wait for the actual results of the report at 12:30 pm GMT as well.
A few hours after that, the pending home sales report will be released. This could show that pending home sales dipped by 0.9% in April, following the massive 5.1% increase seen last March. Bear in mind that weaker than expected figures could drag the U.S. dollar even lower!