USD Flat Ahead of Election - November 7, 2012

The U.S. Dollar traded lower in what is expected to be a light trading session. Today’s focus is on the U.S. presidential election with very little emphasis on the news or key fundamentals.

Although the EUR/USD posted as small gain yesterday, much of the move was attributed to position squaring ahead of the election. Uncertainty continues to be the driving force behind the weakness in the Euro. Investors are waiting for Spain to ask for financial aid. In the meantime, there is still risk surrounding Greece. Today it was reported that German factory orders fell the most in a year in September. This could be an indication that Europe is headed toward a recession.

Short-covering and position squaring helped boost the GBP/USD. Without any major economic news, traders are focusing on the outcome of the U.S. election. The general consensus is that a win by President Obama will mean a continuation of the dovish Federal Reserve. A win by Romney could mean that Fed Chairman Bernanke is out.

December Gold traded better as traders hedged themselves against the uncertainty of the election with long positions. Overall, low inflation has been helping to drive gold prices lower. Additionally, the stronger dollar has made gold relatively expensive to foreign traders.

Oversold conditions helped drive crude oil prices slightly higher. Oversupply concerns have been the driving force behind the recent lower prices, but technical factors kicked in today, reversing the current trend. Wednesday’s crude oil report is going to be important because it will be the first to reflect supply and demand after Hurricane Sandy.

Overall, look for light volume early in the session, but for it to increase as the election results become known.

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USD rebound signals - October 12, 2012

The US economy appears to have turned the corner at last after flirting with danger earlier this summer, according to a rash of new data.

The tentative US rebound comes as forward-looking indicators across the world suggest that a clutch of countries are poised to pick up momentum again, though dangers abound.

New jobless claims in the US fell last week to the lowest since the onset of Great Recession, while home foreclosures have dropped to levels last seen before the sub-prime crash.

A burst of monetary and fiscal stimulus has begun to reignite the kindling wood in Asia and Latin America. Goldman Sachs said its early warning signal or Global Leading Indicator for September has shifted into the “recovery phase”. Its US tracking indicator shows a jump in the economic growth rate last month to 2.4pc from just 0.5pc in August.

Meanwhile, worldwide PMI manufacturing indexes have risen for a second month. Korean exports – watched as a proxy for China – have bounced back after crashing in August, and Brazil is perking up after cutting interest rates to a record low of 7.25pc.

Bank of America said its global momentum indicators “all point to better news”, with signs that the worldwide run-down in inventories over the summer has run its course. Once restocking begins, it tends to act as a spring for recovery.

Global banks and hedge funds seem willing to defy the grim forecasts of the International Monetary Fund, betting that it has missed the turning point in the economic cycle.

Simon Ward from Henderson Global Investors said a key money gauge – six month real M1 – has picked up and is now growing at 3.1pc in the top 14 advanced and emerging economies, the fastest since January. He expects global output to rebound in early 2013. “When the IMF turns gloomy, it is usually safe to bet on sunny uplands,” he said.

Yet risks remain. The IMF fears the world could tip into an “adverse feedback loop” if the US Congress lets fiscal policy tighten automatically by 4pc of GDP later this year, or if EU leaders let the Club Med debt crisis fester. The eurozone economy is still sliding into deeper recession.

Nor is it clear that better global growth will lift equities much further. Investors have already pocketed the promised manna from the Federal Reserve, the Bank of Japan, and the European Central Bank.

Ashraf Laidi from City Index said Wall Street’s measure of rail, shipping and key transport stocks has been falling since June, failing to “confirm” the rally in the broader Dow Jones industrials.

This so-called Dow Theory signal is a favourite of Wall Street veterans. It screamed danger three months before stocks peaked in 2007, though it falsely cried wolf in 2006. The implication is that either economic growth will catch up, or the main equity markets will deflate to reflect economic fundamentals.

The Dow signal comes as third quarter earnings in the US turn negative for the first time since 2009, and at a time when profits claim a record share of GDP. “History is not on the side of those who expect the market to prosper once the earnings cycle has turned,” said Capital Economics.

Original link : http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9602803/US-rebound-signals-IMF-gloom-may-be-overdone.html

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USD How To Anticipate The NFP Today - October 5, 2012

In yesterday's trading, USD again get a great blow from the opponent's main pair. EUR / USD shot up by 116 pips while USD / CHF plunged by 82 pips.
The main opponent USD pair is already showing signs of going to skyrocket in the london session, when the BOE and ECB rate decisions revealed that the central banks are not adding to their stimulus efforts this month.
Then followed a weaker-than-expected the data from the U.S. that pushed the dollar selloff in the U.S. session. The Challenger jobs report Showed that the US-based companies are planning to cut 33.816 jobs in September, up 4.9% from August's figure 32.229.
Meanwhile, the initial jobless claims rose to 367,000 from last week's 363,000 figure. Even the factory orders report, disappointed with a 5.2% Decrease from last month's 2.8%. Last but not the least, the Fed's FOMC minutes Showed the central bank's focus on the weak jobs report and its willingness to cough up more stimulus if needed.
To this day all the attention to the NFP release, this report will examine whether the FED's able to provide more stimulus.
Many rumors are circulating that the market players are predicting that the unemployment rate will rise from 8.1% to 8.2%. Furthermore, they are also expecting payrolls figures showed 115,000 for September, up from the 96.000 we saw in August.
However, we can not ignore other employment reports hinting that we might receive a worse-than-expected result in tomorrow's release. First, the employment index of the ISM non-manufacturing surveys dropped from 53.8 to 51.1. This is Considered to be the strongest leading indicator of non-farm payrolls.
Second, while the ADP report did print better than expected at 162,000, it was a lot less than the downwardly revised 189,000 figure we saw for August. Remember that while the ADP report failed to predict the drastic drop in payrolls from July to August, it has been pretty accurate in determining the direction of the labor market.

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USD Toward Fry-Day - October 5, 2012

A review before today analysis coming up:

Thanks to a couple of upbeat reports, the dollar had a few blows at all major pairs. It snatched 15 pips away from the euro to take EUR/USD to 1.2903, while stealing 40 pips away from the yen to carry USD/JPY up to 78.52.

The first wave of the dollar's rally came after the ADP non-farm employment report delivered an upside surprise. Jobs grew by 162,000 last month, beating forecasts which called for an increase of just 145,000. Although this figure is higher than expected, it's also a big downgrade from the previous month's gains of 189,000.

Afterwards, the ISM non-manufacturing PMI came out with a reading of 55.1 versus the 53.2 consensus forecast. The services industry expanded the most in 6 months in September, as business activity picked up thanks to improved consumer confidence.

Today, we'll have a bit of over yesterday's reports since we only have tier 2 data on tap. At 12:30 pm GMT, initial jobless claims data will be available. Look for the report to show an increase from 359,000 to 371,000. After that, we'll take a look at factory orders, which is expected to post a 6.0% decline for the month of August, following July's 2.8% uptick.

Last but not least, we have the FOMC meeting minutes scheduled for release at 6:00 pm GMT. The markets will be watching this like a hawk since it covers the Fed's recent QE3 announcement.

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USD/CAD Anticipating ADP Non-Farm Employment Change - October 3, 2012

Today's focus will be on the ADP Non-Farm Employment Change. This report will give investors a heads up on what to expect from Friday’s U.S. Non-Farm Payrolls report. If the number is bullish then demand for higher risk will rise, pressuring the U.S. Dollar. This will give the Canadian Dollar a boost. If the report shows weakness then look for the USD/CAD to get stronger.
Another factor that may drive up the Canadian Dollar is demand for higher risk assets that could come about if Spain makes a formal request to the European Central Bank for financial aid. Traders are waiting for this to take place and it could trigger a sharp rise in global equity markets, gold and crude oil. Since the prices of these two commodities have a major influence on the Canadian economy.

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USD Failed To Jump Start - October 2, 2012

Not a strong start in the fourth quarter for USD, having failed to jump start against almost all major pairs despite the release of the data is better than what was expected.
Manufcturing ISM PMI surprised many investors with the release of 51.5, which is much better than median forecast of 49.8. Thanks to increasing demand, the manufacturing industry made ​​it out of the contraction that has lasted three months subs.
After that, attention turned to Fed Chairman Ben Bernanke, who tried desperately to retain QE3 program. He tried to make sure that the program must be done in order to boost the economy and generate employment growth and it shows commitment to easy monetary policy.

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Weekend Story: USD Thanks God Its Friday - September 29, 2012

USD higher after U.S. consumer sentiment rose to point its highest in four months. The increase is caused by optimism about the labor market and the economy.
Meanwhile, concerns about the financial sector objec will still take USD fell back. Consumers also have lowered their expectations on inflation.
Concerns that will slow the global economy will keep demand down on the energy sector, have also weighed on oil prices.
There was very little follow-through to the top after gold managed to withstand the stress caused by skyrocketing USD. Correction happened yet keep the gold price target of 1790, though the current price is already too high and forcing effect of strengthening USD bearish on the overall market.
The conclusion was that the USD is a good time to say THANKS GOD ITS FRIDAY ... :)

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USD will it win again today? - September 26, 2012

Once again, USD won the battle yesterday. Driven by the release of data is better than expected and the risk aversion markets. EUR / USD fell to 67 pips from its intraday highs, while the USD / CHF closed up 15 pips.
USD had entered the red zone when the London session. The U.S. data even went with the risk appetite train as the S & P house prices printed a 1.2% uptick for July against June's 0.6% growth.
To this day, the New Home Sales data will be released, if the same scenario will happen? Report is expected to release in July 381 000 after 372 000 released figures. Whatever pliers will be released later, it seems the London session may be contrary to the U.S. session.

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USD/CAD dollar was picking up strength = September 26, 2012

The USD/CAD pair is trading at 0.9765, with the U.S. dollar.UU. a little strong on the morning trade US session as the markets opened the dollar was picking up strength as expectations of positive data will be today. The confidence of the consumer and housing data, as well as the Richmond Fed index is scheduled for its premiere in Canada, while retail sales could take a lot of risk for the CAD

This report is written earlier than usual, so most of the echo data not yet released in North America.

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USD Anticipation Of Philadelphia Fed Index - September 20, 2012

Various data released last night was not much help on the USD, but we could see an increase in existing home sales and building permits. As existing home sales rose impressively to 4.82 M, and building permits rose to 800.000.

Today, will be released some important data, starting with the weekly jobless claims report will mengangalami reduction in prediction which means kondis improved from last week 382.000 to 374.000.
And the most important is the Philadelphia Fed Index will also be released. Many analysts predict the figure to be released is -4.1, which means higher than the previous month -7.1. If the report turns out to be released above the 0.0 mark, it may just spark risk appetite, which will bring USD back to its lowest point. And vice versa.

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USD Highlight Of The Day - September 18, 2012

According to a few market analyst, profit-taking after last week's strong moves still moved the price action yesterday. Plus, the forex calendar showed no high impact news.

Still, there are a few economic news releases scheduled for the dollar today. At 19:30 (GMT +7), the current account report for Q2 2012 is anticipated at 126 billion USD deficit.
Then at 21:00 (GMT +7), the NAHB housing market index is expected to show that housing conditions continued to improve in September. The release is anticipated at 38.

However, the most awaited for today is NY Fed President William Dudley has to say in his speech later at 22:30 (GMT +7). Here traders will be on watching closely for the FOMC voting member's outlook on the economy.

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JPY Will BOJ Follow The Fed? - September 18, 2012

Investors are now centering on if the BOJ will accompany the Federal Reserve in expanding monetary easing.

The Fed's decision a few days ago, to receive QE.3 has now put more force on the BOJ to initiate encourage movement against Yen strength. Should the BOJ not adopt any new easing policy on Wednesday, look for the Dollar-Yen to come back to the lows of last week.

As Japan's markets are closed for a national holiday today.

On Thursday last, the U.S. central bank had published its choice to broaden its monetary record with open-ended purchases of $40 billion a month of mortgage debt. It did so with an an intend to help the labor market.

On Tuesday, Fed Bank of Chicago President Charles Evans and New York Fed chief William C. Dudley, are scheduled to discuss the economy. Evans has previously urged the central bank to begin a third round of bond buying.

Overall, the U.S. Dollar remaining weak in the near term.

The Yen earlier today rose 0.2% to 102.75 per Euro after having dropped 3.1% since mid last week. It has edged higher by 0.2% to 78.25 per Dollar, its strongest level since the 9th of February.

It's nice to see what will it be...

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USD Bears Don't Want To Stop Yet -September 17, 2012

The bears didn’t want to stop last Friday as the dollar extended its losses against its major counterparts. As EUR/USD get 131 pips higher and GBP/USD get 76 pips.

While the news report, retail sales were up 0.9% last month, which is better than the 0.7%, a big chunk of the increase is due to the big rise in oil prices in August. As a matter of fact, excluding gas station sales, retail sales was only up 0.3%!

In other news, headline CPI showed a 0.6% increase in prices in August following the 0.0% reading in July. Meanwhile, core CPI only showed a 0.1% increase, which once again proves that gas prices were responsible for a good portion of the change in headline CPI.

We got one last surprise from the University of Michigan, which revealed that consumer sentiment is at its highest level in 5 years! According to the consumer sentiment index (which rose from 74.3 to 79.2), Americans are more upbeat because they're optimistic about the job situation. In any case, it'll be interesting to see if these gains can be sustained in the coming months.

Today, we only have the Empire State manufacturing index on tap at 12:30 pm GMT. Look for it to post a reading of -1.9, down from -5.9 the previous month.

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USD Bad News Is Good News - September 14, 2012

After yesterday's QE Anticipated Wildly, USD bears take control the charts following Fed Chairman Ben Bernanke's statement. It gave up 98 pips to the euro, 85 pips to the Aussie, and 33 pips to the yen.

Bernanke in yesterday's FOMC statement and announced that the Fed will launch an open-ended QE. The central bank promised to purchase 40 billion USD -worth of mortgage- backed securities every month with no expiration date. As if that wasn't enough to get dollars, Big Ben also said that the Fed will keep interest rates low from 2014 to 2015 and warned that if the labor market doesn't pick up, they wouldn't hesitate on launching more stimulus measures.

There were other reports too, but they took the backseat to the Fed's statement. Unemployment claims were higher than the 370,000 consensus at 382,000. Meanwhile, the PPI for August printed higher at 1.7% than the 1.1% forecast.

As for today, at 19:30 (GMT +7), the CPI report for August will be on tap with the core reading anticipated at 0.2% and the headline figure at 0.5%. Data on consumer spending will also be released with both the core and headline numbers estimated at 0.7%.

Then at 20:55 (GMT +7), the preliminary University of Michigan Consumer Sentiment index is predicted at 74.1.

We will be waiting for “bad news is good news”.

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USD QE3 Going Wild Anticipation - September 13,2012

USD’s been getting beated around the past couple of days. The euro and pound edged higher, while the comdolls maintained their lead versus the Greenback. With the FOMC announcement just around the corner, what could be happen today?

The reason why the scrilla has been taking some hits lately is because some traders are already positioning themselves in anticipation of the announcement of QE3 during the FOMC statement. With all the poor data Uncle Sam’s been submitting as of late, some feel that the Fed has no choice but to introduce additional liquidity measures to help boost the economy.

Of course, there’s no telling what might actually happen, so that’s why you should tune in at 4:30 pm when Fed Big Boss Bernanke steps up to the plate. His speech should help divulge more information, such as the size, timing, and limitations of the program.

Just keep in mind that QE2 clocked in at 600 billion USD, with bond purchases spread over 8 months. If QE3 is much smaller in size or is to be implemented over a shorter period of time, it could help the dollar recover some of its recent losses.

Don't forget, that we also have other data on tap earlier in the New York session, in the form of the producer price index and weekly jobless claims report, both of which will be released at 12:30 pm GMT.

The PPI is seen to print at 1.1%, which would be a sharp rise from the 0.3% pace we saw the month before. Meanwhile, the four-week unemployment claims average is seen to rise from 365,000 last week to 370,000.

It's going to be WILD :)

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USD More Consolidation - September 11, 2012

With no hard data yesterday, we saw some profit taking, with the dollar posting decent gains versus the euro and Australian dollar. EUR/USD fell 52 pips finish at 1.2759, while AUD/USD closed at 1.0336, 29 pips below its opening price.

With the market still waiting for the German high court ruling and the FOMC statement coming up later this week, traders unloaded their positions in higher yielding currencies, allowing the dollar to pare back its losses from last Friday.

For today, all we’ve got is trade balance figures due at 19:30 (GMT +7). Expectations are that a deficit of 44.2 billion USD was posted in July, slightly more than the previous month’s 42.9 billion USD deficit. Still, I don’t expect this to move the markets, and we should continue to see more consolidation.

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USD The NFP Impact on QE3 - September 7, 2012

The horizon hunt devastate down the U.S. work business area. Securing in Superb is suspected to have taken a colossal hit, as the number of patched up markets made is deduced to be simply 121,000. It's protuberantly higher than a month in the past, when the business report showed that strength had incorporated a whopping 163,000 occupations.

No major upgrade is suspected in the diverse fragments of the work report. Center hourly wages is foreseed to climb to a minor degree to 0.2% from July's 0.1% while the rate of joblessness is slated to remain at 8.3%.

The result of the upcoming occupations report could be key to predicting the Fed's determination to take part in QE3 or not in its taking after social event. For sure, over the weekend, Federal Keep Official Ben Bernanke exchange the gateway fully open for supplemental stimulus. He accentuated that the U.S. work business had not been developing as the halfway reserve funds organization leaned toward it to, and it was a "grave concern."

Bernanke then incorporated that the Supported might "give more methodology advantage as could have done well to development a stronger money related recovery and stood by overhaul in work showcase conditions in a setting of quality stability."

From his description, Bernanke made it to some degree clear that the halfway funds organization bases an amazing part of their decision on the soundness of the work business division.


Gave that the NFP report matches or confuses expectations, it could tip the scales vigorous about progressively moving. This may be seen as dollar bearish as quantitative moving could development to hyperinflation and debilitate the worth of the dollar.

In this way, the U.S. Dollar Post, which is the essential measure used to check the power of the Greenback in resistance to diverse major money related shapes, could break beneath its major uphold at 81.60.

Moreover, a perfect-than-searched for NFP examining could enable suspicions that the Fed wouldn't pull the QE3 trigger yetin its emulating get-together. This could back the Greenback enough to push USDX above its 81.60 back. It is feasible that method, verify that you watch the 81.60 practically as it has all the earmarks of being the business' line in the sand.

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USD A Lot Of Consolidation - September 5, 2012

It looks like the U.S. dollar was able to gain benefit from the risk off environment yesterday as it ended higher against most of its major counterparts. Check out the latest U.S. data to see how it all panned out.

The U.S. manufacturing industry contracted once again in August as the ISM manufacturing PMI for the month slipped from 49.8 to 49.6 instead of rising to 50.0. This marks the third consecutive month of contraction in the industry as new orders and hiring dropped.

There are no red flags on the U.S. economic schedule for today, which means that we'll see either a lot of consolidation or positioning ahead of the top-tier reports due later on.

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USD No More Red Flag For This Week - September 3,2012

As earlier post (USD Economists Anticipating Disappointing News - August 31, 2012) predicted after seeing the Beige Book report, Fed head Bernanke gave vague statements on whether QE3 was necessary or not during his latest speech in Jackson Hole. Bernanke simply stated the obvious, which was that the U.S. labor market wasn't doing so well and that higher unemployment could be their economy's undoing. He also pointed out that the U.S. economy was still facing several risks from the euro zone debt crisis and from their very own Fiscal Cliff.

With U.S. traders on a bank holiday today, the rest of the market participants could be left mulling about Bernanke's latest speech. Should expect QE3 for the upcoming FOMC statement? Or will the Fed simply reiterate their pledge to keep rates exceptionally low for an extended period?

Don't forget that, with the August NFP figure due on Friday, this week is a crucial one when it comes to the Fed's assessment of U.S. economic performance and not to mention their monetary policy decision. Other than the ISM manufacturing PMI due tomorrow and the non-manufacturing PMI due Thursday, there are no other red flags on the U.S. calendar, which means that we might see a lot of consolidation prior to NFP Friday.

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USD Economists Anticipating Disappointing News - August 31, 2012

Although some reports yesterday of red, but it did not make the USD bulls retreated. Buoyed by Bernanke speech pre-expectations, USD beat almost all pairs except the yen.

You'd think the markets would at least think twice about buying the greenback after seeing yesterday's reports! After all, not only did jobless claims rise to 374,000 (forecasts called for 370.000) last week, but the previous week's record was also revised up from 372.000 to 374.000.

Meanwhile, the core PCE price index registered a 0.0% change in prices last month, roomates is slightly lower than the 0.1% that most analysts had predicted.

Today, the U.S. will release the Chicago PMI which is expected to drop to 53.6, and the revised UoM consumer sentiment report which is expected to rise to 73.7.

But apparently, many economists are anticipating disappointing news from the Fed head. And naturally, because It seems unlikely that the Fed will commit to more easing without Completing its economic forecasts.

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