Dollar bears unite! The Greenback was smacked down across the board yesterday after a weak U.S. report fueled the demand for higher-yielding currencies. EUR/GBP and GBP/USD jumped up the chart while USD/JPY and USD/CHF slid by 40 and 80 pips respectively.
The dollar’s selloff probably would not have had much teeth in it if only the U.S. existing home sales report didn’t surprise to the downside. The data showed that 5.08 million USD worth of existing homes were sold, which is just short of the 5.27 million USD figure that analysts had been waiting for.
Today we only have the house price index on tap at 1:00 pm GMT followed by the Richmond manufacturing index at 2:00 pm GMT. The Richmond manufacturing report is expected at a slightly lower figure than its open price, so watch out for possibilities of more USD losses if this report also ends up disappointing investors.
The dollar bears were at it again yesterday after data from the U.S. revealed more weaknesses. EUR/USD shot up by another 39 pips while USD/CHF ended the day 59 pips lower than its intraday high. What gives?
As with the other day, the dollar was doing pretty well against its counterparts until Uncle Sam printed out economic reports. The house price index only showed a 0.7% growth in May when many had their fingers crossed for a 0.9% uptick. Not only that, but April’s figures were revised from 0.7% to 0.5%!
The Richmond manufacturing index scared the heebeejeebies out of many other investors when it surprisingly dropped to a reading of -11 thanks to weak sales and orders. That’s a heck of a lot weaker than June’s figures (it was at 8)!
The action continues at 1:00 pm GMT today when the U.S. releases its flash manufacturing PMI, followed by the new home sales data at 2:00 pm GMT. Both reports are expected to show better performances than last month’s releases, but we now know that there’s always room for disappointments. Also, these reports are more closely watched than yesterday’s data, so y’all better watch your trades closely!
USA! USA! USA! The markets cheered for the American currency yesterday as it racked up win after win against its major counterparts. Is this the comeback we’ve been waiting for?
With help from a couple of upbeat releases, the dollar made its way back into the winner’s circle.
New home sales rose from 459,000 to 497,000 in June, conquering the 482,000 estimate that many had anticipated and recording its best figure in 5 years! Looks like the Fed’s historically low borrowing costs are working, eh? Meanwhile, the flash manufacturing PMI printed a similar upside surprise as it rose from 51.9 to 53.2 (versus 52.5 forecasts).
Of course, saw these reports as a green light to load up on dollars, since U.S. policymakers have said in the past that they “intend to be very responsive to incoming data.”
Up ahead, we have more numbers coming our way in the form of jobless claims and durable goods orders data. The number of unemployment benefit claims is said to have risen from 334,000 to 339,000. Headline durable goods orders is expected to print a 1.1% increase following the previous month’s 3.7% surge, while core orders are slated to grow by 0.5% once again.
I wouldn’t be surprised to find the dollar chalk up more gains should these numbers deliver more upbeat results!
So much for ending the day in the green! After getting off to a solid start during the London session, the dollar came crashing lower on weak data, allowing EUR/USD and GBP/USD to soar to new highs. What the heck happened?!
While headline durable goods orders printed way better than expected (4.2% vs 1.1%), the Greenback bulls got tuned out once the data showed that a spike in automobile sales was the primary cause. Once the market found out that core durable goods – which doesn’t include transportation sales – printed flat growth (as opposed to the 0.5% growth expectation), it was all downhill for the Greenback!
In other news, weekly unemployment claims checked in at 343,000, marking a slight increase from last week’s 336,000 pace.
Can the dollar bounce back today or are we in for more losses as we enter weekend mode? Tune in at 1:55 pm GMT for the revised University of Michigan consumer sentiment index for more clues at what direction the dollar will trade.
Booooooooring. Due to the absence of high profile economic data, EUR/USD’s price action was as dead as a doornail last Friday. After opening the Asian trading session at 1.3286, the pair simply moved sideways, finding support at 1.3252 and resistance at 1.3298. It closed the day barely changed at 1.3282.
This week should prove to be a more exciting one though as tier 1 events are scheduled to happen every single day of the week. I’ve listed them all down below, together with the days they will be released.
Monday:
· Pending Home Sales (-1.1% forecast; 6.7% previous)
Tuesday:
· CB Consumer Confidence (81.1 forecast; 81.4 previous)
Wednesday
· ADP Employment Change (179K forecast; 188K previous)
· Advance GDP q/q (1.1% forecast; 1.8% previous)
· Chicago PMI (53.7 forecast; 51.6 previous)
· FOMC Statement (< 0.25% forecast; < 0.25% previous)
Given the recent FOMC meeting minutes, the market will be interested to hear what policymakers will have to say about the entire tapering issue. If the central bankers still show signs that tapering isn’t a “done deal,” we may see the Greenback rally again.
Thursday
· Initial Jobless Claims (346K forecast; 343K previous)
· ISM Manufacturing PMI (52.1 forecast; 50.9 previous)
Friday
· Non-Farm Employment Change (180K forecast; 195K previous)
· Unemployment Rate (7.5% forecast; 7.6%)
The jobs report will likely be the main focus of the market this week. After all, it is one of the benchmarks that the Fed uses to determine when it will tighten monetary policy. Better than expected results will probably boost the Greenback while worse than expected results will weaken it. Keep a close eye on the results.
And so it begins. The NFP week volatility started off with the Greenback on top of its major counterparts as a strong U.S. report supported an overall risk aversion theme in the markets. EUR/USD and GBP/USD saw losses while USD/JPY and USD/CHF posted gains.
A few major dollar pairs failed to make technical breakouts early in the day, so it was easy for the dollar bulls to party during the U.S. session when Uncle Sam printed its pending home sales report. The data showed a 0.4% decline for the month of June, which is a bit slower than the 1.1% decrease that many had been expecting.
Will the Greenback win round 2 today? The U.S. is slated to print its S&P composite house price index at 1:00 pm GMT, followed by the CB consumer confidence numbers. The CB consumer data, most likely to be the more closely watched, is expected to print at 81.1 after coming out at 81.4 last month.
Remember that a weaker-than-expected consumer confidence reading could signal weak retail sales, which could then worry investors since consumer spending has to make up for the impact of sequestration in order to maintain a relatively stable GDP.
Boom! There just ain’t nothin’ like good data to get the dollar rallying! Just when everyone thought that the Greenback would finish the day in the bear lair yesterday, the Conference Board consumer confidence index surprised the markets with awesome news.
The headline figure actually missed expectations, coming in at 80.3 versus the 81.1 forecast. However, a closer look at the report reveals that the component which reflects the sentiment on the current situation printed at its highest level since 2008 at 73.6. There was also an improvement in the jobs component of the report, implying that the labor market is on the right track.
This consequently led to the dollar rallying against its counterparts during the New York session, giving it enough fuel to finish the day with a 100 pip gain against the pound and allowing it to limit its loss against the euro.
Today, the dollar will most likely move according to the outcome of the events that we have on tap. So don’t miss them!
At 12:15 pm GMT, the ADP report for June is seen to print at 179,000. Then at 12:30 pm GMT the advance reading for the Q2 2013 GDP is eyed at 1.1%.
Then finally, at 6:00 pm GMT, the much-anticipated FOMC statement will be on tap. If the statement reveals that officials are still looking to taper asset purchases this year, we could see the dollar extend its rally!
Talk about a letdown! After getting off to a solid start early on in the New York session, the Greenback took a hit later on as the FOMC statement turned out to be a dud. When all the smoke cleared, EUR/USD was trading above the 1.3300 handle, while USD/JPY stayed within its recent range.
Reports released early on in the New York session gave the scrilla a nice boost early on, as the ADP employment and GDP reports both printed better than expected. Employment clocked in at 200,000 up from the 179,000 expectation, while matching last month’s upwardly revised 198,000 jobs gains. Meanwhile, the Advance GDP report showed that the U.S. economy grew by 1.7% during Q2 2013, which was higher than the anticipated 1.1% figure.
Unfortunately for the dollar bulls, this wasn’t enough to impress Fed officials. Once again, Fed officials did not give the markets any specific date that it was targeting to begin tapering. Instead, the Fed expressed concerns about the outlook of the economy and the state of the labor market.
This dragged the dollar down, allowing its major counterparts to take advantage and race past it.
Can the dollar bulls make a comeback today?
Make sure you tune in at 12:30 pm GMT, when weekly jobless claims are due. Market players anticipate that unemployment claims will tick in at 346,000, up slightly from last week’s pace of 343,000.
Later on at 2:00 pm GMT, the ISM manufacturing PMI is due as well. Word on the street is that manufacturing managers could be feeling more upbeat and this will be reflect via the index’s improvement from 50.9 to 52.1. Watch out for a worse than expected reading though, as this could lead to further losses for the scrilla.
Dollar is still king of the hill! The Greenback showed its dominance in yesterday’s trading, pushing EUR/USD down to the 1.3200 area and USD/JPY above the 99.00 mark. Can it be able to hold on to its gains this NFP Friday?
Economic data from the U.S. turned out better than expected, with both the ISM manufacturing PMI and jobless claims figures posting strong results. The ISM manufacturing PMI for July climbed from 50.9 to 55.4, outpacing the consensus at 52.1 and chalking up its fastest pace of increase since June 1996. Meanwhile, the initial jobless claims report printed a 326K figure, lower than the estimate at 346K and the previous week’s figure of 345K.
These figures definitely put dollar bulls in a good mood, but it remains to be seen whether the happy vibes would last or not during the NFP release. The U.S. economy is expected to have added 184K jobs in July, slightly lower than the previous 195K increase in hiring. Still, this could be enough to push the jobless rate from 7.6% down to 7.5%, which would reflect a notable improvement in the U.S. labor market and possibly result to more dollar rallies.
Do keep your eyes and ears peeled for the release of the core PCE price index as well since this is rumored to be the Fed’s preferred inflation gauge. A 0.1% uptick is projected for the month of June, but a higher than expected increase might also provide support for the Greenback.
If you’re planning on taking dollar trades during the New York session, make sure that you’re ready for the additional volatility from these releases. Set those stops right, folks!
The NFP release did spark some fireworks across the charts but, at the end of the day, the dollar finished in the red. EUR/USD jumped to a high of 1.3293 while GBP/USD zoomed up to the 1.5300 handle. Is the Greenback in for more weakness today?
The July NFP report printed weaker than expected results as the U.S. economy added only 162,000 jobs during the month, lower than the consensus at 184,000. To make things worse, the previous month’s figure was revised down from 195,000 to just 188,000. However, the good news is that the jobless rate ticked a couple of notches lower from 7.6% to just 7.4%.
For today, the ISM non-manufacturing PMI is up for release and an improvement from 52.2 to 53.2 is expected. Recall that the manufacturing version of this report churned out strong results, which suggests that an upside surprise could be likely for this one! Watch out for the actual release at 3:00 pm GMT today.
As far as top-tier releases go, there are no other biggies on the U.S. schedule for the rest of the week. Do stay tuned for those medium-tier reports, such as the JOLTS job openings data and initial jobless claims, as these could provide clues on how the U.S. economy is performing.
The Greenback started the week on the wrong side of the charts as it fell against most of its counterparts. USD/CHF and USD/JPY registered losses and GBP/USD gained ground, but EUR/USD still slipped by 27 pips. What’s up with that?!
The ISM non-manufacturing report released yesterday should have provided good vibes for the dollar bulls. The report showed a reading of 56.0 for the month of July, its highest since February. Not only that, but components of the report like export and new orders as well as business activity showed strength. Unfortunately, the employment component dropped from 54.7 to 53.2. After last Friday’s weak NFP, the numbers reminded investors not to get ahead of themselves in anticipating a Fed taper.
Will the dollar bears go for two today? At 12:30 pm GMT we’re expected to be treated to the US trade balance data. The report is seen at -43.1 billion USD in June, just a bit better than the 45 billion USD deficit in May. The IBD/TIPP economic optimism data is anticipated at 2:00 am GMT, where a reading of 47.9 is expected. Last but definitely not the least, Fed member Evans is last to arrive at the party with a speech at 5:00 am GMT.
The Greenback was unable to hold its footing yesterday as it lost a bit of ground in the foreign exchange market. The U.S. dollar index, which is widely used by traders to gauge the overall strength of the currency, closed the day at 82.09, 25 percentage points lower from where it had begun.
The Greenback fell due to the positive data elsewhere. In the euro zone, the Italian Preliminary GDP and the German Factory Orders managed to beat market expectations. Meanwhile, in the U.K., Manufacturing Production was double than forecast.
Market sentiment was also supported by the result of the U.S. Trade Balance. It showed that the deficit for June was only at 34.2 billion USD, which was much lower than the 43.1 billion USD deficit the market had initially predicted. In addition, May’s figure was revised up to -44.1 billion USD from -45.0 billion USD.
The U.S. economic cupboard is pretty light today as no tier 1 event is scheduled to happen. Pay attention instead to reports that are going to be released in other major economies. They will probably be the ones that will move the market today.
Wednesday just was not the dollar’s day. No economic reports were released and there were even a few Fed officials who hinted that tapering would happen sooner rather than later. But still, these were not enough. The dollar finished the day lower against all of its major counterparts. What the heck happened??
It would seem that talks of tapering is to blame for the dollar’s losses. Fed Reserve President Pianalto showed her support behind withdrawing stimulus along with Fed President Evans. Their remarks, in turn, have led to concerns in the equities markets as investors become worried if the U.S. economy will be able to handle a reduction in stimulus.
Consequently, as some stock traders pulled out of the market, the dollar fell.
I wonder if the dollar weakness would carry on today. The unemployment claims is due to be released at 12:30 pm GMT. A figure higher than 336,000 would probably be bullish for the currency as this would help ease concerns about the economy. Don’t miss it!
Without any economic data on tap, the dollar once again became vulnerable to market sentiment. Unfortunately for the Greenback, it finished yet another day in the bear lair! EUR/USD was up at 1.3386 after starting the day at 1.3338. Meanwhile, AUD/USD was up 119 pips by the day’s close.
It would seem that we saw risk appetite pick up a bit following the Chinese trade balance data. Sure, the headline figure of 17.8 billion USD fell short of the 26.2 billion USD forecast, but a closer look at the report reveals that both imports and exports surged in July.
The unemployment claims report did very little to help the dollar. It printed at 333,000 versus the 336,000 forecast.
Since there are still no reports due from the U.S. today. don’t be surprised to see market sentiment continue to dictate the dollar’s price action. Keep tabs on the roster of data due to be released from its counterparts!
While the dollar gave up ground to the comdolls and the yen, it registered wins against its European counterparts. Which way will it go this week?
It could go anywhere, considering that we’ve got plenty of catalysts on tap this week. The U.S. is scheduled to publish some key reports, homies!
At 6:00 pm today, we have the Fed budget balance set to print a deficit of 95.3 billion USD, down from a surplus of 116.5 billion USD.
But the action will really heat up tomorrow, when the latest retail sales numbers come out. Forecasts have the headline figure showing a 0.2% increase, which is just half that of the previous month.
Then on Wednesday, we have the PPI report and a speech from FOMC member Bullard on tap. Thursday will kick off with CPI, and unemployment claims data, as well as the Philly Fed manufacturing index.
And to cap the week off on Friday, we’ll take a look at building permits, housing starts, and the preliminary University of Michigan consumer sentiment index. Phew! We’ve got an action-packed week ahead of us, so make it a habit to check my daily economic roundup to prepare for these hardcore events!
Now that’s how you start a week! Thanks to “Septaper” expectations, the Greenback posted gains against most of its counterparts. EUR/USD and GBP/USD showed losses while USD/JPY and USD/CHF capped the day in the green.
Only the Federal budget balance report was scheduled to come out yesterday, but the dollar bulls had already been partying in the streets long before the data was printed. You see, speculators who believe that the Fed would cut back on its asset purchases in September woke up yesterday and pushed the dollar higher across the board.
Will today’s retail sales confirm their bias? At 12:30 pm GMT Uncle Sam will print the retail sales numbers in for July. The headline figure is expected to print at 0.2% from last month’s 0.4% growth while the core reading is estimated at 0.4%, up from June’s 0.0% growth. With September only a few sleepless nights away, every U.S. report will be closely watched. Strong economic reports will most likely be taken as confirmation for a “Septaper” and push the dollar higher, while downside surprises could drag the Greenback lower.
Look at the Greenback go! Better than expected data from the U.S. boosted the dollar against its major counterparts during the New York session, pushing EUR/USD below the 1.3250 area and taking USD/JPY above the 98.00 mark. Will it be able to hold on to its gains today?
U.S. core retail sales increased by 0.5% in July, higher than the estimate at 0.4%, while the headline figure showed a 0.2% uptick as expected. On top of that, the June headline figure was revised from 0.4% to 0.6% while the core reading was upgraded from 0.0% to 0.1%.
This goes to show that consumer spending in the U.S. is still going strong and that it could continue to lift overall economic performance. With that, traders bought up the U.S. dollar as most were convinced that the strong spending figures would be enough to convince the Fed to push through with their “Septaper” plans.
The U.S. is set to release its PPI figures today and possibly report a 0.4% increase in producer price levels. Remember that the Fed is also keeping close tabs on inflation and that this PPI release provides some clues on how the CPI could turn out. The actual figures are due 1:30 pm GMT along with the crude oil inventories report.
Don’t forget to keep your eyes and ears peeled for FOMC voting member Bullard’s speech at 6:20 pm GMT. Word through the forex grapevine is that he’s a dovish policymaker but, if he starts acknowledging the recent developments in the U.S. economy and expresses support for the “Septaper”, the dollar could be in for bigger gains.
It was a mixed day of trading for the Greenback yesterday. While the currency traded sideways versus the euro and the Swissy, it was unable to hold off the advances of the pound, the yen, and the commodity-based currencies like the Aussie and the Loonie. As a result, the U.S. Dollar Index took a small blow, falling slightly to 82.16 from 82.21.
Data from the U.S. provided no support for the Greenback. The country’s Producer Price Index printed a flat reading, which was significantly lower than the 0.4% increase the market had initially expected. Moreover, the core version of the report that excludes the prices of volatile items such as energy and food, only posted a 0.1% rise. The forecast was for a 0.2% increase.
Today will be a relatively heavy day for the dollar as several tier 1 and tier 2 reports are scheduled to be released. I have listed them down below:
· Headline Consumer Price Index - 0.2% from 0.5%
· Core Consumer Price Index - 0.2% from 0.2%
· Unemployment Claims - 334K from 333K
· Empire State Manufacturing Index - 10.2 from 9.5
· Industrial Production - 0.5% from 0.3%
· Philadelphia Fed Manufacturing Index - 15.6 from 19.8
Given how the Greenback has been moving in accordance to fundamentals, I’d expect better than expected results to provide support for the currency. Keep a close eye on the actual results folks, as we could see a bit of fireworks later! You can check out our trusty forex calendar for the exact times that the reports will be released.
Uh-oh, I think I smell trouble. Yesterday’s roster of economic data from the U.S. printed mixed figures and led to speculations that Septaper may be a bad idea. Consequently, they caused the dollar to tank against all of its major counterparts!
Here’s how each report turned out:
· Headline Consumer Price Index - as expected at 0.2%
· Core Consumer Price Index - as expected at 0.2%
· Unemployment Claims - better than expected at 320k vs 334k
· Empire State Manufacturing Index - worse than expected at 8.2 vs 10.2
· Industrial Production - worse than expected at 0.0% vs 0.5%
· Philadelphia Fed Manufacturing Index - worse than expected at 9.3 vs 15.6
As you can see, only the unemployment claims topped expectations. The latest figures signifies that the labor market continues to improve, with the 4-week moving average now nearing its 6-year lows.However, the other reports got market participants jittery as they hint that growth is uneven and inflationary pressures are muted.
Of course, it also didn’t help the dollar that 10-year Treasury yields rose sharply yesterday. It reached 2.8% which is the highest level we’ve seen since July 2011. This was bearish for the dollar as higher yields will make it more expensive to borrow and could get in the way of recovery.
Is the economy not yet ready for Septaper? This is now the question in everyone’s mind.
Today, make sure you keep tabs on the housing and consumer confidence reports we have on tap. At 12:30 pm GMT, the building permits (eyed at 950k) and housing starts (seen at 910k) could give us a glimpse on how the housing market is doing. Meanwhile, at 1:55 pm GMT, the preliminary University of Michigan consumer sentiment report is anticipated to show that optimism improved to 85.6 for August.
Better-than-expected figures will probably be bullish for the dollar, so watch out!
Despite the worse-than-expected economic data, the Greenback was able to remain afloat versus other major currencies last Friday. The U.S. dollar index that tracks the performance of the Greenback versus other majors climbed to 81.75 from its opening level at 81.60.
The Greenback held on for dear life as the Preliminary University of Michigan Consumer Sentiment survey fell to 80.0 after the previous month’s 85.1 reading. The actual reading was also significantly lower than the 85.6 forecast. A falling reading suggests that consumers are becoming less confident about their financial standing, which could lead to a decline in economic activity in the future.
In other news, the building permits and housing starts reports were mostly in line with forecast. Building permits was at 940,000 while housing starts was at 900,000.
No red flags on the U.S. economic calendar today and tomorrow, but we’ve got a couple on Wednesday, Thursday, and Friday. I’ve listed them down below together with the corresponding market forecasts. Be sure to be on your toes when they get released, as they will probably cause some much-needed volatility on the charts.
· (Wednesday, 2:00 pm GMT) Existing Home Sales: 5.15M from 5.08M
· (Wednesday, 6:00 pm GMT) FOMC Meeting Minutes
· (Thursday, 12:30 pm GMT) Unemployment Claims: 322K from 320K
· (Friday, 2:00 pm GMT) New Home Sales: 492K from 497K