• Home ::
• Fundamental ::
• Market View ::
• European and US summary

• Send
• Print
• Add To
• Rss

European and US summary

879136eb-f4a0-4261-b359-1583503cb24a

0

0

Upbeat Data Props USD

Sun, Jul 27 2008, 15:06 GMT
by Korman Tam

Forexnews.com

7/25/2008 3:20 PM: EUR/$..1.5695 $/JPY..107.86 GBP/$..1.9898 $/CHF..1.0365 AUD/$..0.9566 $/CAD..1.0187

Upbeat Data Props USD

The greenback was higher in the Friday session, rallying near the 108-level against the yen and 1.5650 versus the euro on the heels of better than expected US economic reports. The data released today consisted of June durable goods orders, new home sales and the July University of Michigan sentiment survey, all of which exceeded consensus estimates.

The headline durable goods orders report increased by 0.8%, beating calls for a 0.3% decline and up from a flat reading from May, while the excluding transportations figure shot up by 2.0%, reversing the 0.8% decline a month earlier. The University of Michigan sentiment survey improved by larger than expected jumping to 61.2 and sharply improving from its 28-year low in June at 56.4. Meanwhile, new home sales also jumped to 530k units in June, edging out consensus estimates of a decline to 500k units from 512k units from May.

A combination of weak data overseas and better than expected reports from the US helped prop the dollar to one-month highs against the yen and near two-week highs versus the euro. The economic calendar for next week will provide additional news for traders to digest to gauge the state of the US economy. The reports consist of July consumer confidence, Q2 GDP, employment cost index, PCE, weekly jobless claims, Chicago PMI, July non-farm payrolls, unemployment rate, and manufacturing ISM. The US economy is seen expanding by 1.9% in the second quarter, improving from 1.0% previously. The July manufacturing ISM is estimated to bode poorly for the economy, falling beneath the key 50-level which distinguishes between expansion and contraction to 49.8, versus 50.2 a month earlier. The key highlight will be Friday’s July jobs report, with the unemployment rate expected to edge back higher to 5.6% from 5.5% a month earlier.

 
GBP Extends Losses

The sterling continued to slide despite UK GDP largely inline with expectations, with cable falling to 1.9828. The UK economy expanded by 0.2% in Q2 versus 0.3% in the previous quarter and 1.6% compared with 2.3% a year earlier. Although the reports were as expected, it continues to reflect deteriorating economic conditions in the UK, with pressure growing on the BoE to cut rates to stimulate the struggling economy.

Cable hovers near 1.99, with support seen at 1.9840, followed by 1.98 and 1.9760. Additional floors are seen at 1.9730, backed by 1.97 and 1.9650. On the upside, resistance is seen at 1.9920, followed by 1.9970 and 2. Subsequent ceilings are eyed 2.0040, backed by 2.0075 and 2.01

Published on  Sun, Jul 27 2008, 15:07 GMT