The U.S. dollar edged lower on Wednesday as investors adjusted their interest rate outlook for the United States and the eurozone after conflicting economic data and monetary authorities toned down threats of tighter monetary policy.
Competing central bank rhetoric was likely to make trading conditions more volatile in the days ahead while declining U.S. stock markets also helped erode the appeal of the greenback. Traders scrambled to revise downward their expectations of an August Federal Reserve interest rate rise after data this week showed U.S. housing starts plunged to a 17-year low in May.
In late afternoon trade, the New York Board of Trade's dollar index, which tracks the dollar's performance against a basket of six currencies, was slightly lower at 73.419 after rising to 73.774 in overnight trade. U.S. short-term interest rate futures are pricing in a roughly 48 percent chance of a 25 basis points Fed rate increase in August, down from 90 percent earlier in the week.
The euro edged higher by 0.1 percent to 1.5538 after slipping earlier to 1.5463. It remained confined to a 1.5303-1.5552 range in the absence of fresh economic data. The Japanese yen was little changed versus euro after yesterday's fall to 168.05 (lowest since July 2007). The dollar was trading lower and declined to 107.72 and 1.0363 versus Japanese yen and Swiss franc respectively, tracking a fall in U.S. stocks, which were weighed down by a quarterly loss from FedEx Corp, Dow closed 131 points lower. Remarks by San Francisco Federal Reserve Bank President Janet Yellen on Wednesday also suggested the volatility in financial markets was showing signs of easing.
The U.S. central bank is widely expected to keep its benchmark fed funds rate target at 2.0 percent next week, having cut it by 3.25 percentage points since mid-September 2007 to fend off a housing-led economic downturn.
Crude oil for July delivery rose 1.8 percent yesterday to $136.40 a barrel. The price reached a record $139.89 a barrel on June 16. The correlation of the dollar versus the euro and oil prices is minus 0.93 for the past year, indicating they move in the opposite direction 93 percent of the time.
On Wednesday, economic data releases include Japan's all industrial index, Switzerland’s trade data and SNB rate decision (08:30GMT), UK's PSNCR and retail sales data for May, Canada's CPI, and U.S. jobless claims, leading indicators and Philadelphia survey, which probably increased to -10 in June from -15.6 the previous month.
**********************************************************
from: http://www.fxstreet.com/technical/market-view/daily-market-outlook/2008-06-19.v03.html
Wednesday, June 18, 2008
U.S. Forex Market Commentary
Wed, Jun 18 2008, 23:56 GMT
by GCI Financial Team
GCI
EURO
The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5465 level and was capped around the $1.5535 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from $1.6020 to $1.5280. European Central Bank member Stark spoke today and reported “The current annual inflation rate in the euro zone of 3.7 percent in May is unacceptably high. This is cause for alarm and for heightened alertness. Given the price dynamics and the continuing, if not increased, risks to price stability, along with clear declines in real interest rates, I consider it advisable to review the appropriateness of the current level of leading interest rates.” Most traders believe the ECB will lift its main refinancing target rate by 25bps to 4.25% next month. Stark added “increasing tendencies in price and wage-setting behaviour…point to second-round effects.” The German government reported it expects economic growth in Q2 2008 to be “dampened” compared with Q1. In U.S. news, the Financial Times reported expectations for Fed rate hikes are inconsistent with Fed policymakers’ current views. Also, the Wall Street Journal reported the Fed is likely to keep rates steady until Q3 or Q4 “unless the inflation outlook deteriorates considerably.” Euro bids are cited around the $1.5230 level.
JPY / CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥108.40 level and was supported around the ¥107.85 level. The pair retraced some of yesterday’s losses as traders continued to speculate Bank of Japan’s Policy Board will not lift the overnight call rate target from 0.50% anytime soon. Minutes from Bank of Japan’s Policy Board meetings on 19-20 May revealed concerns over “both supply and demand shocks” to the Japanese economy. Data released in Japan overnight saw May department store sales off 2.7%, the third consecutive monthly decline. Also, the April index of leading economic indicators printed at 92.8 while the coincident index remained steady at 101.7. The Nikkei 225 stock index gained 0.73% to close at ¥14,452.82. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥167.00 figure and was capped around the ¥168.05 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested bids around the ¥210.40 and ¥103.40 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8821 in the over-the-counter market, down from CNY 6.8915 and the pair’s lowest close since the yuan revaluation of July 2005. People’s Bank of China advisor Wei Benhua reported “China needs to appropriately increase the flexibility of the exchange rate and gradually let the exchange rate be basically decided by market forces.” PBoC Governor Zhou noted “A weak dollar will inevitably result in a rise in primary products including commodities, including oil. Therefore, the RMB will also face a rising pressure, which will drive up inflation.”
STERLING
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9575 level and was supported around the $1.9475 level. Cable clawed back its earlier intraday losses as traders continued to weigh higher inflation pressures and expectations against a slowing U.K. economy. Minutes from Bank of England’s June Monetary Policy Committee meeting were released today in which rate-setters voted 8-to-1 to keep the headline repo rate unchanged at 5.0%. MPC archdove Blanchflower voted for a 25bps reduction. Policymakers acknowledged the economy may require “a somewhat greater degree of slack…to ensure inflation returned to the target.” CBI released its June industrial trends survey and it evidenced a balance of +28% of manufacturers indicating they intend to raise prices over the next three months, down from +30% in May, a thirteen-month high. Also, the orders sub-index climbed to +1 from -10 in May. Chancellor of the Exchequer Darling, who may announce a sweeping overhaul of financial industry regulation this week, cautioned against inflation from becoming “embedded” in the economy through wage deals. The market continues to scale back its expectations regarding two or three rate hikes by the end of the year. Cable bids are cited around the US$ 1.9360/ 1.9100 levels. The euro weakened vis-à-vis the British pound as the single currency tested offers around the ₤0.7950 level and was supported around the ₤0.7915 level.
SWISS
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0390 level and was capped around the CHF 1.0465 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from CHF 0.9645 to CHF 1.0625. Data released in Switzerland today saw the June ZEW indicator for economic expectations decline to -63.8 from -60.4 in May while the current economic situation sub-index slipped to 53.2 from 64.6. U.S. dollar bids are cited around the CHF 1.0250 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6125 and CHF 2.0335 levels, respectively.
From: http://www.fxstreet.com/technical/market-view/us-forex-market-commentary/2008-06-18.html
by GCI Financial Team
GCI
EURO
The euro weakened vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5465 level and was capped around the $1.5535 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from $1.6020 to $1.5280. European Central Bank member Stark spoke today and reported “The current annual inflation rate in the euro zone of 3.7 percent in May is unacceptably high. This is cause for alarm and for heightened alertness. Given the price dynamics and the continuing, if not increased, risks to price stability, along with clear declines in real interest rates, I consider it advisable to review the appropriateness of the current level of leading interest rates.” Most traders believe the ECB will lift its main refinancing target rate by 25bps to 4.25% next month. Stark added “increasing tendencies in price and wage-setting behaviour…point to second-round effects.” The German government reported it expects economic growth in Q2 2008 to be “dampened” compared with Q1. In U.S. news, the Financial Times reported expectations for Fed rate hikes are inconsistent with Fed policymakers’ current views. Also, the Wall Street Journal reported the Fed is likely to keep rates steady until Q3 or Q4 “unless the inflation outlook deteriorates considerably.” Euro bids are cited around the $1.5230 level.
JPY / CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥108.40 level and was supported around the ¥107.85 level. The pair retraced some of yesterday’s losses as traders continued to speculate Bank of Japan’s Policy Board will not lift the overnight call rate target from 0.50% anytime soon. Minutes from Bank of Japan’s Policy Board meetings on 19-20 May revealed concerns over “both supply and demand shocks” to the Japanese economy. Data released in Japan overnight saw May department store sales off 2.7%, the third consecutive monthly decline. Also, the April index of leading economic indicators printed at 92.8 while the coincident index remained steady at 101.7. The Nikkei 225 stock index gained 0.73% to close at ¥14,452.82. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro came off vis-à-vis the yen as the single currency tested bids around the ¥167.00 figure and was capped around the ¥168.05 level. The British pound and Swiss franc weakened vis-à-vis the yen as the crosses tested bids around the ¥210.40 and ¥103.40 levels, respectively. The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8821 in the over-the-counter market, down from CNY 6.8915 and the pair’s lowest close since the yuan revaluation of July 2005. People’s Bank of China advisor Wei Benhua reported “China needs to appropriately increase the flexibility of the exchange rate and gradually let the exchange rate be basically decided by market forces.” PBoC Governor Zhou noted “A weak dollar will inevitably result in a rise in primary products including commodities, including oil. Therefore, the RMB will also face a rising pressure, which will drive up inflation.”
STERLING
The British pound appreciated vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.9575 level and was supported around the $1.9475 level. Cable clawed back its earlier intraday losses as traders continued to weigh higher inflation pressures and expectations against a slowing U.K. economy. Minutes from Bank of England’s June Monetary Policy Committee meeting were released today in which rate-setters voted 8-to-1 to keep the headline repo rate unchanged at 5.0%. MPC archdove Blanchflower voted for a 25bps reduction. Policymakers acknowledged the economy may require “a somewhat greater degree of slack…to ensure inflation returned to the target.” CBI released its June industrial trends survey and it evidenced a balance of +28% of manufacturers indicating they intend to raise prices over the next three months, down from +30% in May, a thirteen-month high. Also, the orders sub-index climbed to +1 from -10 in May. Chancellor of the Exchequer Darling, who may announce a sweeping overhaul of financial industry regulation this week, cautioned against inflation from becoming “embedded” in the economy through wage deals. The market continues to scale back its expectations regarding two or three rate hikes by the end of the year. Cable bids are cited around the US$ 1.9360/ 1.9100 levels. The euro weakened vis-à-vis the British pound as the single currency tested offers around the ₤0.7950 level and was supported around the ₤0.7915 level.
SWISS
The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0390 level and was capped around the CHF 1.0465 level. Technically, today’s intraday low was right around the 23.6% retracement of the move from CHF 0.9645 to CHF 1.0625. Data released in Switzerland today saw the June ZEW indicator for economic expectations decline to -63.8 from -60.4 in May while the current economic situation sub-index slipped to 53.2 from 64.6. U.S. dollar bids are cited around the CHF 1.0250 level. The euro and British pound weakened vis-à-vis the Swiss franc as the crosses tested bids around the CHF 1.6125 and CHF 2.0335 levels, respectively.
From: http://www.fxstreet.com/technical/market-view/us-forex-market-commentary/2008-06-18.html
Thursday, June 12, 2008
FOREX-Dollar up on retail data, euro off on rate outlook
FOREX-Dollar up on retail data, euro off on rate outlook
(Recasts, updates prices, adds comment, byline)
* Dollar rally gathers steam, index at 3-1/2-month high
* Euro heads for biggest weekly loss vs dollar in 3 years
* ECB rate hike outlook tempered by Lagarde, Smaghi
By Steven C. Johnson
NEW YORK, June 12 (Reuters) - The dollar rallied broadly on Thursday after data showed a surprisingly strong gain in U.S. retail sales last month, boosting expectations that the Federal Reserve may raise interest rates this year.
The euro, meanwhile, was on track for its biggest weekly decline against the dollar in three years, buffeted by comments from officials that suggested the European Central Bank was not about to embark on an extended period of monetary tightening.
The greenback got a boost from data showing total sales at U.S. retailers rose 1 percent in May as consumers used government rebate checks to support spending at a time of high gas prices and falling housing prices. For more see [ID:nN11255522].
"The data is certainly dollar-positive," said David Powell, currency strategist at Bank of America in New York. "The report shows strength in consumer spending which is probably due to the tax rebate checks. We're seeing the fiscal stimulus coming into the economy and seeing the effect on retail sales data."
Late afternoon in New York, the euro was down 0.8 percent at $1.5421, on track for its biggest weekly loss in percentage terms since early June 2005.
The dollar hit a 3-1/2-month high versus a basket of six major currencies at 74.038 <.DXY> and added 1 percent against the Japanese currency to 107.90 yen , near a session peak of 108.08, the highest since late February.
"Despite record high crude oil prices and rising expectations of an ECB rate hike later this summer, the dollar bottom appears to have been put in with the U.S. economy recovering and the Federal Reserve preparing to raise rates itself," said Bank of New York Mellon senior currency strategist Michael Woolfolk in New York.
Philadelphia Fed President Charles Plosser was the latest monetary policy official to hint at the possibility of higher U.S. interest rates. On Thursday, he said current U.S. monetary policy was supportive for growth but the Fed needs to stay vigilant in keeping inflation expectations contained.
Fed Chairman Ben Bernanke last week linked the weak dollar to import price inflation, sparking expectations that benchmark rates could rise from the current 2 percent this year.
ECB CONTRAST
ECB President Jean-Claude Trichet last week also opened the door to a July rate hike, but policymakers since then have reiterated his message that this would not be the start of a big monetary policy tightening campaign.
French economy minister Christine Lagarde on Thursday went one step further, saying that the ECB may even reconsider the July move after this weekend's G8 meeting [ID:nPAB004122].
ECB Executive Board member Lorenzo Bini Smaghi said on Thursday the bank will do what is needed to lower inflation but it has given indications on policy moves only as far as July.
Adding pressure on the euro was news of a potential $46.3 billion outflow from euros to dollars as Belgium's InBev -- the world's largest brewer by volume -- launched a bid for Anheuser-Busch , the U.S. maker of Budweiser and Michelob [ID:nL12592065].
"The announcement that InBev NV has offered $46.3 billion for Anheuser-Busch Cos weighed on euro/dollar overnight," said RBC Capital Markets in a research note to clients.
Although the dollar was cashing in on reduced ECB rate hike expectations, some analysts said markets' Fed expectations were also looking overdone with the possibility of three rate hikes priced in by year-end .
http://money.ninemsn.com.au/article.aspx?id=579407
(Recasts, updates prices, adds comment, byline)
* Dollar rally gathers steam, index at 3-1/2-month high
* Euro heads for biggest weekly loss vs dollar in 3 years
* ECB rate hike outlook tempered by Lagarde, Smaghi
By Steven C. Johnson
NEW YORK, June 12 (Reuters) - The dollar rallied broadly on Thursday after data showed a surprisingly strong gain in U.S. retail sales last month, boosting expectations that the Federal Reserve may raise interest rates this year.
The euro, meanwhile, was on track for its biggest weekly decline against the dollar in three years, buffeted by comments from officials that suggested the European Central Bank was not about to embark on an extended period of monetary tightening.
The greenback got a boost from data showing total sales at U.S. retailers rose 1 percent in May as consumers used government rebate checks to support spending at a time of high gas prices and falling housing prices. For more see [ID:nN11255522].
"The data is certainly dollar-positive," said David Powell, currency strategist at Bank of America in New York. "The report shows strength in consumer spending which is probably due to the tax rebate checks. We're seeing the fiscal stimulus coming into the economy and seeing the effect on retail sales data."
Late afternoon in New York, the euro was down 0.8 percent at $1.5421, on track for its biggest weekly loss in percentage terms since early June 2005.
The dollar hit a 3-1/2-month high versus a basket of six major currencies at 74.038 <.DXY> and added 1 percent against the Japanese currency to 107.90 yen , near a session peak of 108.08, the highest since late February.
"Despite record high crude oil prices and rising expectations of an ECB rate hike later this summer, the dollar bottom appears to have been put in with the U.S. economy recovering and the Federal Reserve preparing to raise rates itself," said Bank of New York Mellon senior currency strategist Michael Woolfolk in New York.
Philadelphia Fed President Charles Plosser was the latest monetary policy official to hint at the possibility of higher U.S. interest rates. On Thursday, he said current U.S. monetary policy was supportive for growth but the Fed needs to stay vigilant in keeping inflation expectations contained.
Fed Chairman Ben Bernanke last week linked the weak dollar to import price inflation, sparking expectations that benchmark rates could rise from the current 2 percent this year.
ECB CONTRAST
ECB President Jean-Claude Trichet last week also opened the door to a July rate hike, but policymakers since then have reiterated his message that this would not be the start of a big monetary policy tightening campaign.
French economy minister Christine Lagarde on Thursday went one step further, saying that the ECB may even reconsider the July move after this weekend's G8 meeting [ID:nPAB004122].
ECB Executive Board member Lorenzo Bini Smaghi said on Thursday the bank will do what is needed to lower inflation but it has given indications on policy moves only as far as July.
Adding pressure on the euro was news of a potential $46.3 billion outflow from euros to dollars as Belgium's InBev -- the world's largest brewer by volume -- launched a bid for Anheuser-Busch , the U.S. maker of Budweiser and Michelob [ID:nL12592065].
"The announcement that InBev NV has offered $46.3 billion for Anheuser-Busch Cos weighed on euro/dollar overnight," said RBC Capital Markets in a research note to clients.
Although the dollar was cashing in on reduced ECB rate hike expectations, some analysts said markets' Fed expectations were also looking overdone with the possibility of three rate hikes priced in by year-end .
http://money.ninemsn.com.au/article.aspx?id=579407
Dollar rises against euro as US retail figures improve
Dollar rises against euro as US retail figures improve
June 12, 2008 - 1:06 p.m.
FRANKFURT, Germany (AP) - The euro lost ground against the dollar Thursday after the U.S. Commerce Department reported a jump in retail sales, helped by an economic stimulus package.
The euro bought $1.5407 in afternoon European trading, down from its level of $1.5571 in New York late Wednesday.
The dollar rose to 108.02 Japanese yen from 106.93, while the British pound fell to $1.9455 from $1.9631.
The Commerce Department reported that retail sales jumped by 1 percent last month, the biggest increase since November.
The May increase was double what economists had been expecting and indicated that the economy is getting a boost from the $50 million in economic stimulus payments the government sent to Americans in May.
The U.S. administration is hoping the stimulus payments will help avert a deep recession. Still, other data Thursday were gloomier.
The Labor Department reported that new applications for jobless benefits rose by 25,000 last week to 384,000, the highest level since late March. It was a much bigger increase than analysts had been expecting.
On Wednesday, the Federal Reserve's Beige Book, which provides readings on the U.S. economy by region, indicated that Americans are feeling the pinch of rising energy and food costs and said the economy remains "generally weak
http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D918LGK81
June 12, 2008 - 1:06 p.m.
FRANKFURT, Germany (AP) - The euro lost ground against the dollar Thursday after the U.S. Commerce Department reported a jump in retail sales, helped by an economic stimulus package.
The euro bought $1.5407 in afternoon European trading, down from its level of $1.5571 in New York late Wednesday.
The dollar rose to 108.02 Japanese yen from 106.93, while the British pound fell to $1.9455 from $1.9631.
The Commerce Department reported that retail sales jumped by 1 percent last month, the biggest increase since November.
The May increase was double what economists had been expecting and indicated that the economy is getting a boost from the $50 million in economic stimulus payments the government sent to Americans in May.
The U.S. administration is hoping the stimulus payments will help avert a deep recession. Still, other data Thursday were gloomier.
The Labor Department reported that new applications for jobless benefits rose by 25,000 last week to 384,000, the highest level since late March. It was a much bigger increase than analysts had been expecting.
On Wednesday, the Federal Reserve's Beige Book, which provides readings on the U.S. economy by region, indicated that Americans are feeling the pinch of rising energy and food costs and said the economy remains "generally weak
http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D918LGK81
Friday, June 6, 2008
Trade #061
Trade #061
BUY - USD / JPY(H1)
Entry = 99.21
Exited = 100.00
Result = + 80 pips
Total = 3600 pips (61 trades)
http://www.forexfactory.com/showthread.php?t=64768&page=11
BUY - USD / JPY(H1)
Entry = 99.21
Exited = 100.00
Result = + 80 pips
Total = 3600 pips (61 trades)
http://www.forexfactory.com/showthread.php?t=64768&page=11
Tuesday, June 3, 2008
Trade #059
Trade #059
SELL GBP/JPY (H4)
Entry = 205.25
Exit = 204.10
Result = 115 pips
Total = 3770 pips ( 59 trades)
Monday, June 2, 2008
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