Down for another day! The Greenback posted more losses against its counterparts yesterday as traders sold the dollar ahead of the FOMC statement. So what exactly happened during the U.S. session that prompted big retracements on EUR/USD, GBP/USD and even USD/CHF?!
In the early trading sessions the Greenback was hit with a triple whammy. First, Lawrence Summers’ withdrawal from the Fed race over the weekend hit caused gaps in favor of the dollar’s counterparts. Easing concerns over Syria also lessened the dollar’s safe haven appeal. Last but definitely not the least, the dollar was sold ahead of the FOMC statement due this week.
Good thing that economic reports printed in the Greenback’s favor! The Empire State manufacturing index unexpectedly declined from 8.2 to a reading of 6.3 in September. Although the report didn’t exactly inspire cartwheels, it still showed that manufacturing in New York had expanded for the fourth straight month.
The good vibes kept coming when the industrial production numbers were released a few minutes after the NY manufacturing report. Growth accelerated to 0.4% in August, which is a heck of a lot better than the 0.0% growth seen in July.
Will the positive U.S. reports spell an intraweek reversal for the dollar pairs? At 12:15 pm GMT Treasury Secretary Jacob Lew is set to take center stage, where he could give hints on the country’s looming debt ceiling vote. Then, at 12:30 pm GMT we’ll see Uncle Sam’s CPI numbers, followed by the TIC long-term purchases and the NAHB housing market index at 1:00 pm and 2:00 pm GMT respectively.
Of course, you should also pay close attention to any talks about the FOMC statement as it could influence the dollar’s price action more than these economic reports.
It’s the day of reckoning for the Greenback! Traders seemed to be pricing in expectations for a disappointing FOMC statement, as the U.S. dollar was shown no lovin’ in yesterday’s trading. For now, it appears that dollar pairs are starting to consolidate. Will it stay that way until the FOMC?
U.S. data came in mixed yesterday, with the headline CPI falling short of consensus and the core CPI matching expectations. Headline inflation ticked up by 0.1% in August, lower than the projected 0.2% rise, while core inflation also posted a 0.1% increase. This reveals that inflationary pressures remain subdued and it may take much longer before the economy is able to meet the Fed’s inflation targets.
TIC long-term purchases posted strong results, with the actual figure improving from a deficit of 67 billion USD in June to a surplus of 31.1 billion USD in July. This reflects larger purchases of U.S. securities and hints at stronger demand for the U.S. dollar.
Building permits and housing starts are up for release at 1:30 pm GMT today, ahead of the much-anticipated FOMC statement. Building permits are expected to hold steady at 0.95 million while housing starts could climb from 0.90 million to 0.93 million.
And now for the main event… The FOMC statement should finally have the answer to the question that’s been bugging traders for a few months now: Will the Fed start tapering or not? Fed officials have hinted that they are ready to reduce bond purchases this month, which might be positive for the dollar as it would eventually lead to higher interest rates.
On the other hand, a couple of months’ worth of bleak economic figures suggest that the Fed might decide to be a little more cautious. Don’t forget to keep close tabs on their economic projections and forward guidance remarks as these might dictate dollar behavior in the long run. The party starts at 7:00 pm GMT!
Was yesterday’s price action crazy or what?! Thanks to a surprising move by the Fed, the Greenback fell to a seven-month low against a basket of currencies. USD/JPY also fell by 108 pips while GBP/USD rocketed by a ridiculous 206 pips.
A few hours ago the Fed’s much awaited FOMC statement didn’t disappoint those who were looking for some action. Ben Bernanke and his gang completely blindsided the markets when they refrained from adjusting their monthly asset purchases. Remember that analysts had been expecting at least a token amount of reduction in the Fed’s asset-buying program.
As it turned out, the Fed is more worried about the economy as we had thought. Not only did it decide to keep its purchases at $85 billion per month, but it had also downgraded its growth forecasts for 2013 (from 2.3% - 2.6% to 2.0% to 2.3%) and 2014 (3.0% - 3.5% to 2.9%-3.1%). In addition, the Fed said that the declining Federal spending and rising mortgage rates are hindering economic growth.
Another important thing to note is that the Bernanke has retracted his call to watch for a 7% unemployment rate before reducing asset purchases. The Fed now believes that there is no magic number to look for, and that they’re now looking for an overall improvement in the labor market.
I’ll let Forex Gump explain some of the finer points of the Fed’s speech later on, but for now we have the initial jobless claims at 12:30 pm GMT and existing home sales and Philly Fed index reports at 2:00 pm GMT to watch out for. These reports might not inspire as much volatility as the Fed’s statement, but keep close tabs for possible retracements or trend continuation with these reports!
Retracement or reversal? After getting beat up during the FOMC statement, the Greenback licked its wounds and was able to recover against some of its major counterparts. GBP/USD retreated below the 1.6100 handle while USD/JPY bounced back to the 99.50 area.
Dollar traders seemed ready to move on from the recent FOMC hullabaloo as they focused on the positive reports from the U.S. economy yesterday. The existing home sales report showed a 5.48M reading, higher than the estimated 5.27M figure and an improvement from the previous 5.39M figure for July. The Philly Fed manufacturing index also printed an upside surprise, as the reading jumped from 9.3 to 22.3, outpacing the consensus at 10.2.
There are no major reports due from the U.S. today but there are a few speeches from FOMC members George, Tarullo, and Bullard scheduled during the New York session. These policymakers could shed more light on why the central bank decided against reducing bond purchases this month and if they’re likely to hold off tapering until the end of the year. Dovish remarks could worsen the dollar’s decline so watch out for those testimonies starting 5:30 pm GMT!
The Greenback ended the week with a snoozer despite some buzzer-beater moments from the FOMC members. Heck, EUR/USD, USD/JPY, and USD/CHF barely moved from their open prices! What’s up with that?!
Uncle Sam didn’t print any economic report last Friday, but FOMC members like James Bullard and Esther George provided some last-minute action. According to Bullard, their decision to keep things steady in September was a close one, as a $10 billion taper was also very much on the table. He even hinted that a taper could be seen in October if we see positive reports this month! Esther George also provided momentum for the bulls when she slammed the Fed for not tapering at all in September.
Will the dollar see more positive action this week? At 1:00 pm GMT we’ll see the U.S. flash manufacturing PMI, which is expected to increase from 53.1 to a reading of 54.2 in September. FOMC member Dudley will also hit center stage at 1:30 pm GMT in New York, where he could give his two cents over the Fed’s tapering schedule.
The Greenback’s performance was as mixed as a bag of nuts, as the currency recovered against the euro but lost ground to the British pound. The U.S. dollar was also able to end the day stronger against the comdolls. What’s in store for the Greenback today?
Data from the U.S. came in weaker than expected yesterday. The manufacturing PMI for September stood at 52.8 instead of the estimated 54.2 reading while the figure for August was revised down from the initial 53.9 estimate to 53.1. This reveals that, although the manufacturing sector expanded for the month, growth wasn’t as strong as analysts estimated.
Meanwhile, FOMC member Dudley gave a relatively downbeat outlook for the U.S. economy as he spoke of the debt ceiling and other fiscal uncertainties. Unlike Bullard’s speech last week though, Dudley’s testimony didn’t have much of a reaction from the U.S. dollar, but it might be enough to remind traders that policymakers are still undecided about tapering.
The CB consumer confidence figure is up for release today and number crunchers are expecting to see a drop from 81.5 to 79.9, reflecting weaker optimism in September. The S&P/CS composite HPI is also up for release and a 12.5% increase in house prices is expected, higher than the previous 12.1% reading. Later on, FOMC member George is set to give a speech that might add volatility to dollar pairs’ movement. Stay on your toes for these event risks starting 2:00 pm GMT!
Weak economic data? Pfft. The Greenback shrugged off weak economic reports yesterday as risk aversion clouded the markets. It ended the day unchanged against the yen, but higher against the euro, pound, and the franc. Booyah!
The dollar could have ended the day in the red if investors had only looked at Uncle Sam’s economic reports. For one thing, the S&P house price index only grew by 12.4% in July, which is worse than the 12.5% growth that many had expected. The Richmond manufacturing index also disappointed expectations with a flat growth against estimates of a 17 reading. Last but definitely not the least, the CB consumer confidence supported the weak UoM data last week when it came in at 79.7 after last month’s 81.8 reading. Yikes!
Good thing that traders had paid more attention to risk sentiment! Thanks to the Fed’s surprise last week, investors are left with uncertainty on the dollar pairs’ direction. It also didn’t help that economic reports released from the major economies aren’t doing so well lately.
Let’s see if the dollar can extend its gains today. Up ahead is the durable goods orders report at 12:30 pm GMT, which will be followed by the new home sales data at 2:00 pm GMT. Both reports are expected to print better numbers than last month, but keep an eye out for any downside surprises!
Are the Greenback’s happy days over? The U.S. dollar was unable to keep up its rally yesterday, pushing EUR/USD back above the 1.3500 handle and USD/CHF below the .9100 major psychological level. Was this just a retracement or is the dollar back in selloff mode?
U.S. core durable goods orders came in much weaker than expected, as the actual report printed a 0.1% decline instead of the estimated 1.1% increase. The headline figure came in slightly better than expected as it showed a 0.1% uptick instead of the estimated flat reading. New home sales were somewhat in line with consensus, as it came in at 421K for August while the previous month’s figure was revised lower.
All in all, these reports seemed to remind traders that the U.S. economic recovery isn’t that strong yet. While many are counting on an Octaper to happen, economic data appears to be hinting at a different scenario.
Today we’ll see the pending home sales data, along with the initial jobless claims release. First-time claimants are expected to be at 319K, slightly higher than the earlier week’s 309K, while pending home sales are projected to show a 0.9% decline.
Weaker than expected reports would convince more market watchers that the U.S. economy is on shaky ground, which might force the Greenback to end another day in the red. Watch out for the actual releases starting 1:30 pm GMT!
Are you not entertained?! The Greenback clobbered its counterparts yesterday as risk aversion tipped the mixed US data in favor of the dollar. EUR/USD and GBP/USD saw losses while USD/JPY and USD/CHF inched higher in the charts.
Yesterday the U.S. pending home sales data disappointed expectations with a 1.6% decline for the month of August, which is worse than the 1.4% decrease in July. The final GDP report caused a bit of optimism though, when it stayed at 2.5% as many had expected. Last but not the least was the initial jobless claims data, which clocked in at 305,000 when many had pegged the report at 319,000.
It also helped the Greenback that risk aversion loomed over the markets yesterday. Not only did the U.K. print a weak report, but there were also currency-bearish news reports from the euro zone and Japan.
Today at 9:45 am GMT FOMC member Charles Evans is due to give a speech. This will be followed by the core PCE price index and personal income and spending data at 12:30 pm GMT. Then, at 1:55 pm GMT we’ll see the revised UoM consumer and inflation expectations. Lastly, Fed members Evans and Dudley are due for the hot seat at 6:00 pm GMT. Will we hear more taper-friendly statements from them?
KA-POW! KA-BLAM! The Greenback got hit on all sides last Friday, taking EUR/USD back up to the 1.3550 area and GBP/USD past the 1.6100 major psychological handle. What’s causing dollar weakness these days?
Weaker than expected U.S. data, combined with a few downbeat comments from FOMC members, caused the dollar to lose its shine last Friday. Personal income for August fell short of consensus as it showed a 0.4% increase instead of the estimated uptick while personal spending was as expected at 0.3%. Meanwhile, the revised UoM consumer sentiment figure for September came in below the estimated 78.2 reading and clocked in a 77.5 figure.
As though those bleak figures weren’t bad enough for the dollar, FOMC member Charles Evans spoke of the probability of Fed tapering before the year comes to a close. He pointed out that lower confidence in the economic outlook could push the Fed to refrain from tapering next month, but said that signs of solid economic growth could still result in a reduction of bond purchases in the upcoming months.
Only the Chicago PMI is up for release from the U.S. today and analysts are expecting to see an improvement from 53.0 to 54.5, reflecting a stronger expansion in the manufacturing sector. Watch out for the actual release at 2:45 pm GMT, as weaker than expected data could reinforce the dollar selloff.
On Tuesday, the U.S. will print its ISM manufacturing PMI while the non-manufacturing component will be reported on Thursday. Wednesday has the ADP non-farm employment change on tap, along with a speech by Fed head Bernanke. Then on Friday, the much-anticipated NFP report will be released, and some say that this could make or break the Fed’s chances of tapering in October.
Don’t forget that the U.S. lawmakers are also currently working on plans to avoid a government shutdown this week. The deadline for their proposal is tomorrow and any indication that they might be able to reach an agreement on the last-minute could be positive for the dollar.
It’ll be a pretty exciting week for the Greenback, with plenty of opportunities to grab some pips! Make sure you do your homework if you plan to trade any of these events.
The countdown continues! The Greenback lost a couple more pips to its counterparts yesterday thanks to speculations of a U.S. government shutdown. EUR/USD, GBP/USD, and USD/CHF all showed dollar weakness with Cable popping to its highest level this year.
Only the Chicago PMI report was released yesterday. The report came in at 55.7 when many had expected the reading at 54.5. Unfortunately, it wasn’t enough to lend support to the Greenback.
Speculations of a U.S. government shutdown intensified yesterday after the Senate swiftly rejected the spending bill submitted by the House. With no resolution in sight and only a couple more hours until the debt ceiling deadline, traders felt like selling the dollar. Remember that Treasury Secretary Jack Lew believes that Uncle Sam could default on its debts (for the first time in history!) by no later than October 17 if the debt ceiling isn’t raised on time.
While we’re waiting for the political brouhaha to sort itself out, you might want to keep close tabs on the U.S. ISM manufacturing PMI at 2:00 pm GMT. The data is expected to show a 55.3 reading after last month’s 55.7 figure, but watch out for any surprises that could inspire more volatility on the dollar pairs!
Government shutdown? Bring it on! The Greenback was surprisingly resilient in yesterday’s trading, as EUR/USD spiked higher then closed back below the 1.3550 mark while USD/JPY held on to the 98.00 handle. Can the U.S. dollar keep it up today?
As the countdown to the shutdown ticked to its final minutes, the U.S. dollar started selling off against its major counterparts. The selloff lasted for a few hours into the London session, but the Greenback was soon able to get back on its feet when U.S. data came in better than expected.
The ISM manufacturing PMI for August showed an improvement from 55.7 to 56.2, reflecting a stronger pace of expansion in the industry for the month. This is its highest reading since April 2011!
Traders also paid extra attention to the jobs component of the report, as the ongoing government shutdown means that the non-farm payrolls report might not be released on Friday. The ISM report revealed that hiring was up, mostly spurred by the rise in construction and housing activity.
The ADP non-farm employment change report due 1:15 pm GMT today should provide a better picture of the jobs sector. The report is expected to show a 177K rise in hiring for August, following July’s 176K increase. A stronger than expected figure could provide support for the dollar and might actually trigger a larger-than-usual effect among the majors.
Don’t forget that Fed head Bernanke is scheduled to give a speech at 8:30 pm GMT and possibly cause more volatility for dollar pairs. After all, he is expected to comment on the recent U.S. government shutdown and its potential impact on the economy and their monetary policy plans. Hints that the Fed isn’t looking to taper until the end of the year could be negative for the Greenback, so y’all better keep your eyes and ears peeled for Big Ben’s words!
The dollar did a Limp Bizkit and kept rollin’, rollin’, rollin’ down the charts yesterday as disappointing data encouraged dollar aversion. EUR/USD and GBP/USD both jumped while USD/JPY and USD/CHF both fell by at least 30 pips.
With the possibility of having no NFP report this Friday becoming more likely, traders paid extra attention to the ADP report released yesterday. Unfortunately for the Greenback, it came in at 166,000 when many were expecting an increase of 177,000.
Speeches of some FOMC members didn’t help either. Fed President Rosengren warned that the lack of economic data would make it even harder for the Fed to schedule its taper plans. This means that the longer the shutdown continues, the longer the delay for the Fed’s taper schedule.
Assuming that we won’t get the NFP report on Friday, investors will most likely look to the employment-related reports scheduled today. Special attention would be given to the ISM non-manufacturing PMI at 2:00 pm GMT, which is expected to slip from 58.6 to 57.2.
If you can’t wait to trade though, you can always watch out for the Challenger job cuts due at 11:30 am GMT as well as the initial jobless claims due at 12:30 pm GMT. It’s gonna be a relatively action-packed day for U.S. data, so y’all better watch your trades closely!
Well, you can’t win 'em all, can you? The Greenback had a mixed performance against its major currency rivals, as it ended lower against the euro and the yen but scored some gains against the pound and the Kiwi. Can it find a clearer direction today?
Data from the U.S. was also mixed yesterday, with the ISM non-manufacturing PMI falling short of consensus. The figure fell from 58.6 to 54.4 for September, lower than the 57.2 estimate, reflecting a slower expansion in the manufacturing industry. Meanwhile, the initial jobless claims report printed a lower than expected reading of 308K versus the consensus at 315K.
The U.S. government shutdown marked its third day, causing huge selloffs in the U.S. equity market. Lawmakers still haven’t come up with a deal on spending cuts, which then raises the probability of a default. Market watchers are confident though that President Obama will do everything in his power to prevent this from happening, but it will still be interesting to see how events unfold in the coming days.
There are no reports due from the U.S. today as the government shutdown means there will be no NFP release. Boo!
In that case, make sure you keep close tabs on how U.S. markets behave as traders await updates on the negotiations between Democrats and Republicans.
The almighty Greenback showed the markets who’s king of pips as it posted significant gains against the euro, pound, and the yen. How the heck did the lack of NFP report lead to that?!
Word around the hood is that the dollar bears squared their positions ahead of the weekend in anticipation of a weekend deal between the Republicans and the Democrats. It also didn’t hurt that economic reports from other major economies were less-than-awesome.
This week we’re looking forward to the IBD/TIPP economic optimism report tomorrow at 2:00 pm GMT, followed by the big FOMC minutes on Wednesday at 6:00 pm GMT. Many analysts aren’t expecting “Octaper” to happen, but the close votes from September’s meeting could still lead to a surprise tapering by the Fed. The last major report that you would want to pay attention to is the preliminary University of Michigan report on Friday at 1:55 pm GMT.
Best of luck on your dollar trades this week, fellas!
Monday wasn’t a good day to be a dollar bull, as the Greenback chalked up losses against its major currency rivals. EUR/USD bounced from the 1.3550 area to a high of 1.3592 while GBP/USD rallied back to the 1.6100 mark. What’s in store for the dollar today?
Medium-tier data from the U.S. came in better than expected yesterday, with the consumer credit report for August showing a 13.6 billion USD figure. This was higher than the previous 10.4 billion USD reading and the estimate at 12.6 billion USD, reflecting strong consumer spending for the month.
However, the prolonged U.S. government shutdown discouraged traders from piling up their long dollar positions. After all, it has already been a week since the government temporarily furloughed some of its employees and closed its non-essential services. Now that can’t be good for overall economic activity!
Only a couple of medium-tier reports are up for release from the U.S. today, and these are the NFIB small business index and the IBD/TIPP economic optimism report. Better than expected data could shield the dollar from larger losses, especially if the shutdown carries on for another day. Make sure you keep tabs on market sentiment if you’re trading the dollar!
USD/JPY, USD/CHF, EUR/USD, and GBP/USD ended the day with mixed results as traders priced in a lack of progress in Washington as well as some U.S. economic reports. What exactly moved the Greenback yesterday?
USD/JPY started the day strong as it encountered support at the 97.00 handle, but weak U.S. data soon took its toll on the Greenback. The NFIB small business index came in at 93.9 after the previous month’s reading while the IBD/TIPP economic optimism clocked in at 38.4 instead of the expected 46.2 figure.
What bothered investors more though is that the Gallup daily tracker for U.S. consumer confidence fell to its lowest reading since December 2011, and hinted that the government shutdown is taking its toll on consumer sentiment.
Up ahead we have the big FOMC meeting minutes due at 6:00 pm GMT. While the Fed didn’t taper in September, word on the hood is that it was a close call and that many members had actually voted a yes. Will the minutes hint at an Octaper?
What a comeback by the Greenback! The U.S. dollar hit the brakes on its recent losing streak against most of its major counterparts, pushing EUR/USD down to the 1.3500 handle and GBP/USD below the 1.6000 mark. Was that just a pullback or is the Greenback in for more gains?
Minutes of the latest FOMC meeting revealed that policymakers believed that tapering could still take place within the year, as the U.S. economy has been showing signs of a recovery. Although this was enough to give the dollar a boost in yesterday’s New York session, bear in mind that the FOMC meeting took place in September, prior to the ongoing U.S. government shutdown and the looming debt ceiling deadline. Hmm, I wonder if Fed policymakers changed their minds about the taper since then…
In other news, Obama has already announced the nomination of Janet Yellen as the next Fed head. In case you have no idea who she is, you should read Forex Gump’s latest article on the 8 Things You Should Know about Janet Yellen!
The only report due from the U.S. today is the initial jobless claims data, which is expected to print a figure of 307K. A higher than expected number of first-time claimants might force the dollar to return some of its gains, as it would reflect a downturn in hiring. Stay on your toes for any potential changes in risk sentiment as well!
Back-to-back, baby! Thanks to speculations of a debt ceiling agreement, the Greenback was able to extend its gains on most of its counterparts. USD/JPY and USD/CHF popped up, while EUR/USD and GBP/USD got hit by risk appetite.
Yesterday’s initial jobless claims data came in worse-than-expected at 374K instead of the expected 307K reading. It didn’t matter much though, as traders still had their focus on the rumors that there would be a six-week debt ceiling extension.
Although the rumors eventually led to a rejection of the Republicans’ offer, the dollar’s rally against its low-yielding counterparts wasn’t hampered.
Will the Greenback go for three today? We’re only looking forward to the preliminary UoM consumer sentiment data at 1:55 pm GMT since the retail sales numbers are delayed. The report is expected to print at 77.2 from last month’s 77.5 but keep an eye out for any surprises!
The dollar bulls and bears were stuck in indecisionville last Friday as traders waited for a debt ceiling deal from Washington. The dollar dominated on GBP/USD and USD/JPY while EUR/USD also saw gains.
The U.S. retail sales data was delayed by the government shutdown, so we only saw the preliminary UoM consumer sentiment numbers. The report showed up with a 75.2 reading, which is just below the expected 76.0 figure.
Uncertainty over a U.S. debt ceiling deal and a lack of major data are keeping the bulls and bears from making any significant moves. Will the Greenback traders step up their game this week?
The U.S. is on a bank holiday to celebrate Columbus Day today, but over the week we’re expecting to see reports such as the NY manufacturing index, Beige book report, and the Philly Fed manufacturing index.
Of course, the big October 17 deadline is also up this week. Don’t forget to prepare for different scenarios if you have any open trades by then!