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Daily Forex Overview
Wed, Jul 2 2008, 07:39 GMT
by Raivis Zile
Previous session overview
On Tuesday, the dollar declined modestly against the euro despite a better than expected ISM report on the U.S. manufacturing sector, as more record-high oil prices depressed overall sentiment for the greenback.
EURUSD closed in NY Tuesday at USD1.5792/95, having seen a late rally to USD1.5827 on reported US Paulson comments (after a meeting with ECB Trichet), easing back to USD1.5773 as Wall Street moved into positive territory before closing at the mentioned level. The euro's gains were also fueled by expectations of a rate hike by the European Central Bank at its meeting Thursday. The market expects a 25-basis- point hike in the central bank's benchmark rate to 4.25%.
The Sterling shrugged off weak UK data to test the key 2.00 level on the cable. Nationwide House prices continued to fall -0.9% in June m/m and -6.3% y/y. The June Manufacturing PMI capped the rally though with a disappointing 45.8(forecast 49.8). GBPUSD traded with a low of 1.9890 and a high of 2.006 before closing the day at 1.9941.
The Japanese yen hit a 3 week high against the dollar on the heels of record high oil prices and mounting risk aversion as heightened fears of further losses in the banking sector and global stocks prompted investors to sell dollars.
The Canadian dollar remains strong supported by record high oil and gold prices. Canada is the biggest oil supplier to the US.
The Australian dollar climbed strongly Wednesday buoyed by an unexpected surge in May retail sales that kept the prospect of a further interest rate hike later this year on the table. The currency recaptured the ground it lost Tuesday when the Reserve Bank of Australia issued a statement indicating its increasing satisfaction with signs of a slowdown in the economy. Retail sales rose 0.7% in May from April, the strongest gain since November 2007 and far outstripping expectations of a rise of just 0.1%.
Market expectation
USDCHF seems set to recover and may take a stab at 1.0287/1.0393. Dip towards 1.01 could follow through before the upward move.
EURUSD is holding firm Wednesday ahead of a possible rate hike by the ECB Thursday. But traders saying that any euro rise would be limited, with players adopting wait and see attitude before release of ADP's U.S. jobs data later Wednesday.
Euro zone May industrial PPI is due and is expected to rise 0.8% m/m, 6.7% y/y.
The focus is now on Super Thursday. The ECB meeting will be followed by June's Payrolls data as Friday is 4th July, Independence Day.
Most important events of the day
| Date | Time:GMT | Currency | Indicator | Forecast | Prior |
| 2008-07-02 | 01:30 | AUD | Building Approvals m/m | -3.3% | 5.4% |
| 2008-07-02 | 01:30 | AUD | Retail Sales m/m | 0.1% | -0.1% |
| 2008-07-02 | 07:15 | EUR | ECB President Trichet Speaks | ||
| 2008-07-02 | 08:30 | GBP | Construction PMI | 43.1 | 43.9 |
| 2008-07-02 | 08:30 | GBP | Housing Equity Withdrawal q/q | 5.4B | 7.3B |
| 2008-07-02 | 09:00 | EUR | PPI m/m | 0.9% | 0.8% |
| 2008-07-02 | 11:30 | USD | Challenger Job Cuts y/y | 45.6% | |
| 2008-07-02 | 12:15 | USD | ADP Nonfarm Employment Change | -20K | 40K |
| 2008-07-02 | 14:00 | USD | Factory Orders m/m | 0.4% | 1.1% |
| 2008-07-02 | 14:35 | USD | Crude Oil Inventories | -0.1M | 0.8M |
| 2008-07-02 | 15:00 | USD | Treasury Sec Paulson Speaks | ||
| 2008-07-02 | 16:00 | USD | FOMC Member Mishkin Speaks | ||
| 2008-07-02 | 23:30 | AUD | Services PMI | 49.7 |
Published on Wed, Jul 2 2008, 07:41 GMT
Archive
- Daily Forex Overview
Published On Tue, Dec 2 2008, 08:25 GMT - Daily Forex Overview
Published On Mon, Dec 1 2008, 08:13 GMT - Daily Forex Overview
Published On Fri, Nov 28 2008, 08:44 GMT - Daily Forex Overview
Published On Thu, Nov 27 2008, 10:39 GMT - Daily Forex Overview
Published On Wed, Nov 26 2008, 08:45 GMT
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