News and opinion from the ground

0

0
Dollar Rally Likely To Stall Ahead Of US GDP Data
Thu, Jul 31 2008, 08:39 GMT
by Grace Cheng
GraceCheng.com
The US dollar’s rally against major currencies from Tuesday, as a result of better-than-forecast US consumer confidence, was carried over to Wednesday, albeit at a slower pace. EUR/USD dipped to another 1-month low of 1.5520 today while USD/CHF rose to a 6-week high of 1.0520 after the release of an unexpectedly positive jobs report from ADP which showed that private employers added 6000 jobs last month, versus an average forecast cut of 60,000 jobs.
This surprising outcome is leading many to think that maybe, just maybe, this Friday’s release of the government NFP report won’t be as bad as forecast. The estimate is for a cut of 75,000 jobs in July, following a decline of 62,000 in June. The dollar later gave up some of its gains when oil shot up $5 after US DOE oil inventories data showed crude inventories fell unexpectedly. Nymex crude oil closed at $126.77 after falling to $120.42 on Tuesday, the lowest level since May 6.
Another factor that could capped dollar’s gains for the moment has been a Fed announcement Wednesday that it will extend its emergency credit facilities, established in March, through January 30. Both the Primary Dealer Credit Facility for direct loans to securities firms and the Term Securities Lending Facility for loans of Treasuries will now be extended to non-banks “in light of continued fragile circumstances in financial markets”.
Such an action suggests that the financial firms are still having much difficulty and credit conditions remain very tight. Not a good sign for the US financial system as a whole, but then again, it could be seen by market players as a positive sign that the Fed is doing something concrete to help the markets. People only see what they want to see.
For now, EUR/USD has a cushion of support between 1.5480-1.5510. Further selling could pull the currency pair towards 1.5440-50. USD/CHF’s next challenge is to tackle 1.0540-50 before it can reach for 1.0600.
Watch out for Thursday’s release of US GDP estimate for the second quarter which is expected to increase 1.8%, up from 10% in the first quarter and 0.6% in the fourth quarter of 2007.
Economic Calendar For Thursday:
- Australia retail sales 0130 GMT
- Swiss CPI 0545 GMT
- Eurozone CPI 0900 GMT
- Canada GDP 1230 GMT
- US GDP, core PCE 1230 GMT
Published on
Thu, Jul 31 2008, 08:41 GMT
Archive
- Dollar Rally Likely To Stall Ahead Of US GDP Data
Published On Thu, Jul 31 2008, 08:39 GMT
- Near-Term Rally Of Dollar A Possibility As Fed's Plosser Voices Out Rate Hike Urgency
Published On Wed, Jul 23 2008, 07:21 GMT
- Stay Profitable In These Volatile Market Conditions By Making Quick Trades
Published On Mon, Jul 21 2008, 09:35 GMT
- Bernanke's Bleak Outlook Could Pressure Dollar To Further Record Lows Against Euro
Published On Wed, Jul 16 2008, 10:10 GMT
- US Dollar On The Defensive Ahead Of Bernanke's Testimony And Retail Sales Data
Published On Tue, Jul 15 2008, 09:14 GMT
[ View All ]
Grace Cheng Media Inc.
| 14 Wall Street, 20th Floor - New York NY 10005
http://www.gracecheng.com/ | gracecheng@gracecheng.com
Legal disclaimer and risk disclosure
Important Risk Disclaimer
Trading and/or investing of any security, product, asset or derivatives involves risk, and there is always the potential for loss. You understand that discussions of any product, asset or security published on the Site will not contain a list or description of relevant risk factors.
No content published on this Site constitutes a recommendation that any particular product, security, portfolio of securities, transaction or investment or trading strategy is suitable for any specific person. You understand that none of the bloggers, information providers or their affiliates are advising you personally concerning the nature, potential, value or suitability of any particular product, asset, security, portfolio of securities, transaction, investment or trading strategy or other matter.
As markets change continuously, previously published information and data may not be current and should not be relied upon. All content on the Site is presented only as of the date published or indicated, and may be superseded by subsequent market events or for other reasons. In addition, you are responsible for setting the cache settings on your browser to ensure you are receiving the most recent data.
You understand and agree that, although we require all employees to disclose every stock in which they, their immediate family, or any entity under their control, have a personal interest, if such stock is mentioned in a blog, post, or content which they write, outside bloggers or other content contributors or their affiliates may write about securities in which they or their firms have a position, and that they may trade for their own account, and that they may or may not be subject to a disclosure policy.
No representation is being made that the PowerFX Course, and any associated advice or training, will guarantee profits, or not result in losses from trading. Your trading results may vary. Neither the products, any explanation or demonstration of their operation, nor any training held in conjunction therewith, including, without limitation, through online chat, in conjunction with any advertising and promotional campaigns, during in-person seminars or otherwise, should be construed as providing a trade recommendation or the giving of investment advice.
The Site is not intended to provide tax, legal, insurance or investment advice, and nothing on the Site should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product, asset or security by Grace Cheng Media Inc or Grace Cheng or any third party. You alone are solely responsible for determining whether any investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal and financial situation. You should consult an attorney or tax professional regarding your specific legal or tax situation.
Grace Cheng Media Inc and Grace Cheng assume no responsibility for anything posted on the forex forum. Authors of posts will be individually responsible. All external links and advertisements are for information purposes only and neither Grace Cheng Media Inc or Grace Cheng will assume any responsibility for their contents.
The TOU and the relationship between you and Grace Cheng Media Inc are governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflict of laws. You and Grace Cheng Media Inc agree to submit to the personal and exclusive jurisdiction of the federal and state courts located within New York County, New York, and waive any jurisdictional, venue, or inconvenient forum objections to such courts. If any provision of the TOU is found to be unlawful, void, or for any reason unenforceable, then that provision shall be deemed severable from the TOU and shall not affect the validity and enforceability of any remaining provisions. No waiver by either party of any breach or default hereunder shall be deemed to be a waiver of any preceding or subsequent breach or default.