The dollar’s performance was as mixed as a bag of M&M’s on Friday. While it finished the day higher against the pound, Aussie, and the yen (heck, USD/JPY tapped its 2-year high!), it scored losses against the euro, franc, Kiwi, and Loonie.
Volatility on the dollar pairs picked up following the release of December’s NFP report. Statistics revealed that there were 155,000 jobs added during the month, topping expectations by 5,000. November’s reading was also upwardly revised from 146,000 to 161,000 which only painted a prettier picture for the U.S. labor market.
The unemployment rate picked up and disappointed the consensus at 7.7% when it printed at 7.8%. However, analysts say that it could only be because more people joined the workforce during the month after dropping out in November.
There was also the ISM non-manufacturing PMI report for the same month which came in at 56.1. The forecast was for a reading of 54.2 following November’s 54.7 figure.
Although these positive reports resulted to a mixed scorecard for the dollar, I think that they could be bullish for the currency in the longer-term. Remember that the FOMC minutes released early on last week revealed that the Fed is thinking about withdrawing some of its stimulus. Positive data could only give Ben Bernanke and his men more reason to take a step back in pumping liquidity into the economy.
Our forex calendar doesn’t have any top-tier data scheduled for release today. However, you should know that it’s the start of the earnings season. Companies will start releasing their results for Q4 2012 tomorrow and any rally/drop in equities could be reflected in currencies as well. So be sure to keep an ear out for earnings reports this week!
Yesterday’s trading session proved to be a very bad one for the dollar as it fell across the board for the first time in 7 days. The U.S. dollar index, which tracks the performance of the dollar versus a basket of major currencies, plunged to 80.72 from 80.93.
It seems that the dollar’s strength that came from last week’s FOMC meeting minutes surprise is starting to fade. With the gains the dollar had experienced, it was only a matter of time before a pullback took place.
The U.S. economic calendar is pretty light today as only the IBD/TIPP Economic Optimism survey is scheduled for release. It’s going to be published at 2:00 pm GMT and it’s expected to print a reading of 46.3. Last month, it was at 45.1. I don’t expect a lot of volatility today as traders will probably sit on the sidelines ahead of the ECB Interest Rate Decision due later this week.
Once again, consolidation ruled the markets, as the major currencies pairs all pretty much stuck within range. Could we see more of the same today from Greenback pairs?
No data was released yesterday, although we did get some comments from the Bipartisan Policy Center, who said that Uncle Sam may have some problems paying its bills before February 15. Yes, the tax portion of the fiscal cliff issue was resolved, but what remains are unanswered questions about the spending cuts and the debt ceiling and unless these issues are taken care of, the fiscal cliff will simply comeback to haunt the markets sooner or later.
For today, no biggies lined up on the docket, so I think we’ll see the scrilla continue to stick within range. But of course, make sure you keep your radios, T.V. screens, and tablets on, as you never know what might rock the markets’ socks!
For the second straight day, the Greenback was able to show how tough it is by emerging as one of the strongest currencies in the forex market yesterday. The U.S. dollar index, which tracks the relative performance of the Greenback versus other major currencies, rose to 81.03 from 80.81.
It seems that the dollar got most of its strength from the uncertainty surrounding the upcoming interest rate decisions from the European Central Bank (ECB) and the Bank of England (BOE). The dollar was also favored by traders due to the lingering concerns about the political reform deadlock in Italy.
On the economic front, the U.S. consumer credit report for the month of November was released. It came in better than expected as it showed that there was a 16.0 billion USD gain in overall consumer credit.
The U.S. economic calendar is going to be light again today as only red flag is the weekly unemployment claims report. It’s going to publish at 1:30 pm GMT and it is projected to show that 361,000 people availed of jobless insurance last week. In the week prior, there were 372,000 claims. Decreasing claims are usually interpreted as bullish for the dollar as it could mean that the job market is improving.
Finally, a breakout from consolidation! Unfortunately for the dollar bulls though, it was a bloody mess as higher-yielding currencies ruled the day. EUR/USD rose nearly 200 pips to finish at 1.3253, while AUD/USD climbed 90 pips to close at 1.0595.
So what the heck happened yesterday? Why did we see such a strong breakout?
Part of the reason may have been Chinese trade balance data, which showed that the trade surplus increased to 31.6 billion CNY, as exports rose an impressive 14.1%. If you believe in these Chinese government figures, it means that Chinese demand is improving. It’s no wonder sentiment improved yesterday!
Other reasons why risk appetite may have caused investors to spurn the dollar were the successful Spanish bond auction, as well as a positive reaction to the ECB interest rate decision. Make sure you hit up my EUR commentary for the 411 on these events!
As for U.S. economic data, the only report released yesterday were weekly unemployment claims figures, which came in slightly more than projected, showing a 4-week running average of 371,000. Expectations were that it would print at just 361,000.
For today, the only top-tier report to keep an eye on will be trade balance figures at 1:30 pm GMT. Early estimate are calling for a deficit of just 41.1 billion USD, down from the previous month’s figure of 42.2 billion USD.
To be honest though, I ain’t too sure how much impact this report will have on the markets. Instead, I’d keep an eye out on risk sentiment, especially since we saw such a strong breakout yesterday. The only question is whether the dollar bears can continue their momentum or will the bulls make a comeback?
The dollar’s scorecard was as mixed as a Piña Colada last Friday. While it was able to end the day higher than the pound, yen, Aussie, and Kiwi, it gave up ground to the euro, Swiss franc, and the Loonie. So what had the dollar trading as though it were tipsy?
My best guess is that the lack of major economic reports from the U.S. left traders feelin’ a little bit unsure of what to do with the dollar and made them focus on the data from its counterparts. Only the trade balance report for November was released and it printed a bigger trade deficit of 48.7 billion USD versus the 41.1 billion USD forecast.
If you’re looking to trade the dollar this coming week, don’t fret because our forex calendar lists a handful of top-tier events from the U.S.
We kick things off later today with Fed Reserve Chairman Ben Bernanke’s speech at the University of Michigan at 9:00 pm GMT. Markets will probably pay close attention to what Bernanke has to say, in case he drops any hints on the bank’s economic outlook.
Then tomorrow, the retail sales and PPI reports will be on tap. The U.S. labor market seems to have stabilized based on the most recent employment reports and it will be very interesting to see if it translated to consumer spending.
For the rest of the week, data on manufacturing, inflation, housing, and consumer sentiment will be aplenty. So be sure to read up on my daily forex fundamental reports to know what to expect of them!
The dollar bulls must have gotten the rest that they need because they certainly were energized yesterday! Except for the euro and the comdolls, the dollar’s major counterparts had nothing on the Greenback’s strength. USD/CHF shot up by 91 pips while USD/JPY inched another 14 pips higher.
The U.S. didn’t release any major report yesterday, but traders paid close attention to Bernanke’s speech. Among other things, the Fed head honcho warned of the negative impact of too much spending cuts and reiterated that the Fed hasn’t run out of ammunition to boost the economy.
Today at 2:30 pm GMT we’ll see Uncle Sam’s retail sales and PPI figures. With the latest NFP numbers printing better-than-expected, analysts are looking for upticks in consumer spending figures. The headline retail sales figure is expected to come in at 0.2% against last month’s 0.3% reading while the core figure is expected to print at 0.2% from last month’s 0.0%.
Also keep your eyes open for any discussion on the Fiscal Cliff. Word on the hood is that Treasury Secretary Tim Geithner had warned that the measures preventing the cliff are only good until February to early March. The warning could put pressure on the U.S. officials and make the dollar bulls and bears pay attention to the related discussions over the next couple of days.
Good luck and good trading, kids!
Now that’s how you make a comeback! The U.S. dollar gained against most of its major counterparts yesterday, with EUR/USD closing a couple of pips below the 1.3300 handle. However, the Greenback was unable to make any headway against the yen as USD/JPY closed 59 pips below its 89.30 open price.
Stronger than expected U.S. retail sales for December boosted the Greenback against its rivals yesterday. The headline figure came in at 0.5%, higher than the estimated 0.2% uptick, while the core version of the report showed a 0.3% increase.
If you’re wondering why these figures lifted the Greenback’s spirits, let me remind you that consumer spending accounts for nearly 70% of the U.S. GDP. Strong spending would then result in good growth for the past quarter, which could give the Fed a reason to withdraw their stimulus sooner than expected.
Later on during the U.S. session though, the U.S. printed a weaker than expected Empire State manufacturing index. The reading for the current month came in at -7.8, significantly lower than the estimated 1.9 figure but a bit better than the previous month’s -8.1 reading. This goes to show that manufacturing is still worsening in New York but at a slower pace.
The U.S. is set to print its CPI data for December at 2:30 pm GMT today so the dollar pairs could be in for another exciting day. Note that the PPI figures for the same month came in slightly weaker than expected, hinting at a potential downside surprise for today’s CPI release.
Analysts are expecting to see the headline figure stay flat and the core figure to print a 0.2% uptick. Judging from yesterday’s reaction to the retail sales results, a stronger than expected reading could be positive for the Greenback while a weaker than expected figure could trigger a dollar selloff.
The dollar sure brought its sexy back on the charts yesterday. It finished the day higher against the euro, pound, and the comdolls. Boo yeah! However, it seems like it didn’t flex its muscles enough for a sweep. It gave up ground to the other “safe haven” currencies, the yen and the Swiss franc.
Reports released from the U.S. were mostly positive. The TIC report for November showed that foreign demand for U.S. long-term assets outpaced domestic demand by 52.3 billion USD and topped expectations for a 19.8 billion USD surplus. Industrial production also picked up by 0.3% in December and overshot the market’s 0.2% forecast.
However, while the headline CPI figure came in just as expected at 0.0%, the core CPI showed that prices only rose by 0.1% and missed the consensus by 0.1%.
If you ask me though, I don’t think that these reports would have a lasting effect on the dollar. The Fed will be looking for dire figures before it makes up its mind on the direction of monetary policy. But of course, if you’re looking to trade the dollar in the short- to medium-term, make sure you still keep tabs on the U.S. reports.
For today, the building permits report for December will be released at 1:30 pm GMT and it is eyed at 910k. Along with that, the unemployment claims (estimated at 369k) and housing starts (seen at 890k) will also be on tap.
Then at 3:00 pm GMT, the Philly Fed manufacturing index is eyed to come in at 7.1.
Don’t miss them, ayt?
Well, you can’t win 'em all, can you? The Greenback had a mixed performance against its major counterparts yesterday as it outpaced its lower-yielding rivals but lagged behind the euro. Will the U.S. dollar be able to find a clearer direction today?
U.S. housing data came in better than expected for December as building permits printed a 0.90M reading while housing starts showed a 0.95M figure, much higher than the estimated 0.89M increase. This could spell good prospects for the U.S. economy as an increase in housing activity tends to have a positive effect on spending and overall growth.
The manufacturing sector, on the other hand, painted a completely different picture as the Philly Fed index missed expectations. The reading for January slipped from 8.1 to -5.8, far below the consensus at 7.1. The negative figure for the month indicates that conditions are worsening in the sector and this could have a negative impact on future production, hiring, and investment. Talk about getting mixed signals for the U.S. economy!
Let’s see how U.S. consumers feel about the economy when the preliminary University of Michigan consumer sentiment figure is released at 3:55 pm GMT today. The reading is expected to climb from 72.9 to 75.1 for the current month, reflecting a slight improvement in consumer confidence. Note that a weaker than expected figure would mean that consumers are feeling cautious about the economy and this could result in dollar weakness.
Don’t forget to keep close tabs on the Chinese GDP release as this could have an impact on market sentiment for the rest of the day. A higher than expected figure could boost risk appetite, which could be dollar-negative, while a weaker than expected result could trigger safe-haven dollar buying.
Ain’t nothin’ gonna stop the dollar from extending its gains on higher-yielding currencies! Even with U.S. data printing in the red, the American currency was able to end the day higher against the euro and pound, forcing EUR/USD down 64 pips to 1.3322 while GBP/USD slid 143 pips to 1.5865.
The preliminary University of Michigan consumer sentiment report unexpectedly ticked down from 72.9 to 71.3 in January. Not only is this figure the lowest since December 2011, but it’s also a far cry from the strong reading of 75.1 that many economists had predicted. With figures like this, it’s hard to imagine the Fed withdrawing its stimulus program earlier than it had initially planned. After all, any prolonged signs of low consumer confidence could easily translate to weaker economic activity.
We’ve got nothing on tap today, but we’ve got a couple of housing market reports due later this week. In the meantime, y’all better sit tight and keep a close eye on risk sentiment if you plan on trading the dollar. Good luck and happy pippin’!
With the U.S. celebrating Martin Luther King day as well as Obama’s second inauguration, the dollar ended up in mixed territories against its counterparts. EUR/USD inched 6 pips higher than its open price while USD/CHF gave up 29 pips.
The dollar wasn’t the star of the show yesterday as investors focused on the upcoming BOJ monetary policy announcement and the potential market catalysts brought about by the ongoing Eurogroup meetings. But don’t ignore the Greenback just yet! The dollar could end up acting as a safe haven if the potential market movers above veer too far from current market expectations.
If you’re into day trading U.S. economic reports, then you better pay attention to the existing home sales and the Richmond manufacturing index coming up at 4:00 pm GMT. The former is expected to tick higher than its previous reading, while the latter is expected to slip from a reading of 5 to 4 for the month of January.
Good luck trading today, kids!
U.S. traders returned from their three-day weekend, but it seems like they didn’t miss the dollar at all while they were away. They sold the American currency, leading it to weaken against all of its major counterparts. Will it stay at the bottom of the dog pile today?
Existing home sales took an unexpected dip last month, falling from 4.99 million to 4.94 million instead of rising to 5.09 million. However, there is a silver lining to this dark cloud: the losses were mainly because of a shortage in supply rather than a lack of demand. Despite this little road bump, experts believe the uptrend in the housing market remains intact (thanks to the historically low mortgage rates)!
In other news, U.S. lawmakers will be voting to suspend the U.S. borrowing limit for another four months. They’re hoping to buy the Congress time to sort out a deal that will hopefully lead to spending cuts and tax hikes that everyone can agree on.
From the looks of it, the markets are expecting this to put the debt issue on hold at least for the near term. Stocks are up and so are high-yielding currencies! That being said, if the U.S. fails to extend its debt limit, it could lead to a case of risk aversion, so stay on your toes, folks!
What a crazy day for the scrilla yesterday, as it was simply all over the dance floor! The dollar consolidated against the euro, managed to edge higher versus the pound and the Loonie, but lost out versus the Kiwi.
With no hard data released yesterday, it seems as if the dollar simply followed the flows of its major counterparts. That could all change today though, when weekly jobless claims and the flash manufacturing PMI are released during the NY session.
Unemployment claims are projected to clock in at 359,000, which would be higher than last week’s 335,000. Take note that last week’s figure was the lowest since October last year, so if we see another low number today, it could signal a small improvement in the labor market. Tune in at 1:30 pm GMT for the results!
Later on at 2:00 pm GMT, the flash manufacturing PMI is forecasted to print at 53.2, just below the previous month’s reading of 54.2. The report has been on the rise the past two months, so lets see if the report can continue the trend and print a better-than-expected figure in today’s release.
The Greenback sure likes to mix things up, doesn’t it? After yesterday’s showdown, the U.S. dollar reigned supreme against the pound, Aussie, Loonie, Kiwi, and yen but was outperformed by the euro and Swissy. What can we expect for the U.S. dollar today?
Uncle Sam didn’t release any major economic reports yesterday, except perhaps for the initial jobless claims report. Last week’s figure came in at 330K, slightly better than the consensus at 359K and the other week’s reading of 335K. Although this reflected an improvement in the U.S. jobs sector as initial claimants dropped to their lowest level in five years, it wasn’t enough to ensure a landslide victory for the Greenback during the U.S. session!
The new home sales report is the only top-tier release on the U.S. economic schedule for today so y’all better keep an eye out for that if you’re trading dollar pairs. The report could show a 387K reading for December, higher than November’s 377K, hinting at a potential increase in construction activity and big-ticket purchases. A stronger than expected figure could spark risk appetite, which could trigger a safe-haven dollar selloff.
Once again, the dollar’s price action last Friday was as mixed as a bag of jellybeans. The Greenback finished the day higher against the yen and the comdolls but lower against the euro and the franc. What gives?
It seems that investors were excited to buy up the dollar’s European counterparts. As I mentioned in my EUR piece, several reports have propped up appetite for the euro last week. Meanwhile, USD/JPY got support from the news that the BOJ is cutting its interest rates on bank deposits. The comdolls didn’t have a chance against the dollar bulls either, as the relatively better-than-expected U.S. reports outweighed the recent disappointments in comdoll data.
We might see a more active dollar price action this week as the U.S. is slated to release its NFP numbers by the end of the week. The fireworks will start today at around 2:30 pm GMT when the durable goods orders report is released, followed by the pending home sales data at 4:00 pm GMT. Between today and the NFP report on Friday we’ll also see major reports like the ADP numbers, quarterly GDP data, and the ISM manufacturing PMI.
The reports mentioned above could be your tickets to big pips, so make sure you prepare well!
Mixed data? No problemo! The dollar still managed to finish the day higher against most of its major counterparts as the currency mimicked the move in the equity markets despite a negative U.S. housing report.
Pending home sales for December declined by 4.3% which disappointed expectations for a growth uptick of 0.5%. On the brighter side of things though, durable goods rose by 4.6% and topped forecasts for a 1.8% increase. Excluding volatile items, core durable goods grew by 1.3%.
With only second-tier data on tap from the U.S. today, we’ll probably see the dollar mimick the moves in the equities market.
At 2:00 pm GMT, the S&P HPI for December is seen to come in at 5.5%. Then at 3:00 pm GMT, the consumer confidence report for January is eyed to print at 64.8.
These reports may be good for intraday trades. So if you’re looking to scalp some pips, be sure you don’t miss 'em!
The dollar bears are at it again! Yesterday’s risk rally left the dollar at the bottom of the dog pile as it lost pips against ALL of its major counterparts. Will today’s big events help it recover some of its losses?
No wonder traders didn’t buy up dollars yesterday – the reports released didn’t give them any reasons to! First, the S&P/CS Composite-20 HPI showed a 5.5% increase in house prices. No surprises there! Analysts had predicted that exact number! And then the CB consumer confidence report revealed a big slump in confidence, as the index retreated from 66.7 to 58.6, versus forecasts that called for a reading of 64.8. Yikes! Could this mean that we’re in for more disappointment with today’s reports?
Remember, we’ve got a bunch of tier 1 events scheduled for today.
First up is the ADP employment report due at 1:15 pm GMT. Expect it to show an increase of 164,000 jobs, down from 215,000 last month.
Then at 3:00 pm GMT, we’ll have the advance Q4 2012 GDP report on our plates. Considering how poorly retail sales performed and how the trade deficit widened last quarter, chances are that we’ll see a sharp decline in growth. According to forecasts, it probably slowed down from 3.1% to just 1.1%.
And finally at 7:15 am GMT, we’ll be treated to the first FOMC meeting of the year. While no one is really expecting any changes to monetary policy, we have to stay on our toes for comments and clues on what the Fed may do next. One of the things we have to watch out for is the possibility of increased dissension. Some Fed members already believe the central bank is getting too aggressive with its monetary easing. If this kind of mindset spreads, it could raise expectations on an early withdrawal of stimulus and boost the dollar. To learn more about what to expect from this major event, I suggest y’all check out Forex Gump’s awesome preview of the FOMC meeting!
KA-POW! With negative data and a dovish FOMC, the dollar got beaten up by its European counterparts. Although it still managed to keep its ground against the commdolls and the yen, the euro, Swiss franc, and pound racked pips from it. What the heck happened?!
Well for one, the advance GDP report for Q4 2012 showed that the economy contracted by 0.1% and disappointed expectations for a 1.1% growth. Some market junkies think there’s nothing to worry about though. Looking deeper into the data, we see that a huge decline in defense spending weighed on the headline figure.
However, it did not help that the FOMC sounded dovish yesterday. Rates were kept steady but it seems like the committee is not looking to withdraw its stimulus programs anytime soon.
The only bright spot in yesterday’s roster of U.S. events was the ADP report for December which came in more than the market’s 164,000 consensus at 192,000.
We have a couple of economic reports to sink our teeth into today and if fundamentals continue to dictate the dollar’s price action, we may just see the currency give up more pips should the figures disappoint forecasts.
At 1:30 pm GMT, the unemployment claims report is eyed to come in at 350k. Along with that, the core PCE index for December is seen at 0.1%.
The Greenback’s price action was as mixed as a piñacolada yesterday. The safe haven Greenback traded steadily against the euro, gave up a lot of ground to the pound, and rallied magnificently versus the yen.
Economic data from the U.S. gave little direction for the markets as they were also mixed. Also remember that traders could have also chosen to simply sit on the sidelines ahead of the non-farm payrolls due later today.
The weekly jobless claims showed that the number of people who claimed for unemployment insurance was at 368,000, which was slightly higher than forecast.
Meanwhile, the report on consumer activity revealed that personal spending grew only 0.2% in December. Personal income, on the other hand, jumped 2.6% versus the 0.7% forecast.
Lastly, the Chicago Purchasing Managers’ Index printed a reading of 55.6. It was a welcome improvement from last month’s 51.6 reading. This meant that purchasing managers in the Chicago area believe that their businesses are looking up, and are expanding.
We’ll likely see a lot of volatility today as two major reports are coming out from the U.S.
The first one, as you all know, is the U.S. employment report. It’s going to publish at 1:30 pm GMT and it is expected to show that 161,000 (net) jobs were added in December and that the unemployment rate remained steady at 7.8%. Given the current market environment, better-than-expected results could boost the Greenback.
The second major report is the ISM Manufacturing PMI. It’s set to be released at 3:00 pm GMT. It’s projected to show a reading of 50.8. Last month, the reading was at 50.7. Similar to the employment report, if the actual result beats consensus, we could see traders buy up the Greenback.