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14/4/2008 − the current market sentiment

Mon, Apr 14 2008, 07:17 GMT
by Walid Salah El Din

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As we have expected earlier, the greenback has found support from he G7 hawkish comments and concerns about the weak dollar. The greenback appreciated across the broad and the market is mixed currently between a serious action from the central bank against the greenback weakness which can be by a joint intervention if there can be further close deterioration of the US dollar. It looks that these minutes can provide a support to the greenback in the short term.

This greater concern about excessive volatility in the forex market is undesirable was not pricing to come out from the G7 causing a USD appreciation gap across the broad. The G7 look not just looking for liquidity solution to spur investment tackling crediting problems which triggered by the bad loans of the sub-prime market which caused a  global financial turmoil but also a higher value of this liquidity can contain inflation sticking to the meaning of the US strong dollar policy. The idea is not bad but can it change the current USD dovish pushing the greenback higher1? I see it is still hard as the market is still expecting of further Fed's interest rate cuts.

We wait today for UK Mar PPI data and EU industrial productions which are expected to be increased by just .2$ from its last surprising rise by .9% and the yearly it is expected to be 2.9% from 3.8% in Feb and from US we have the US retail sales of March which is expected to be flat with no change but the broad figure which is adding the auto sales are expected to rise by .2% from a decline of -.2% last month. There is an actual concern about the consuming in US the data coming weaker and weaker. Last week we have had again weaker consuming sentiment figure from US UN Michigan survey of this month showed a decline to 63.2 and further weaker number today can put pressure on the greenback.

Published on  Mon, Apr 14 2008, 07:18 GMT