User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday February 14, 2008 - 23:44:38 GMT
FXCM - www.dailyfx.com

Share This Story:
| | Email

Forex Research - Dollar Takes a Nosedive After Federal Reserve Lowers Growth Forecast

Thursday, 14 February 2008 22:08:26 GMT

Written by Kathy Lien, Chief Strategist

• Euro Recovery Halted by Weaker Industrial Production
• Bank of Japan Not Expected to Raise Interest Rates

Dollar Takes a Nosedive After Federal Reserve Lowers Growth Forecast
With the US economy deteriorating, we have been very suspicious of the recent dollar rally. The rebound has been primarily attributed to the hope for a shallow downturn and a swift recovery, but today’s comments from Federal Reserve Chairman Ben Bernanke suggests otherwise. In his testimony to Congress, Bernanke warned about the downside risks to growth and despite the recent recovery in consumer spending, he expressed concern that the weakness of the labor market will pressure consumer spending going forward. As a result, the Federal Reserve will be lowering their projections for US growth next week. Back in November, they projected growth to be between 1.8 to 2.5 percent in 2008. To put these numbers into perspective, the market expects the Eurozone to grow by 1.8 percent this year as well. The US central bank stands ready to act in a timely manner” which means that they plan on cutting interest rates further. Before getting too excited however, Bernanke also stressed that monetary policy works with a lag. He may be telling us that the Fed plans on slowing down because the economy needs time to absorb the recent rate cuts. Easing interest rates too sharply over a short period of time could backfire, by driving up inflation pressures and making it difficult to fight inflation if the economy continues to slow. Bernanke’s comments completely overshadowed the better than expected trade balance. The deficit fell from $63.1 billion to $58.8 billion as the weaker US dollar drives exports to a record high. This confirms the improvements that we have seen in the manufacturing sector. Tomorrow, we have a very long list of US data due for release including Import Prices, the Empire State Manufacturing Survey, the Treasury International Capital Flow report, Industrial Production and the University of Michigan Consumer Confidence report. Aside from confidence, we expect most of the numbers to be dollar bullish.

Euro Recovery Halted by Weaker Industrial Production

The Federal Reserve’s continued for concern about growth and the European Central Banks “mixed messages” has helped the Euro rally another 100 pips. According to the ECB’s February monthly bulletin, the central bank is really not sure how much of an impact the turmoil in the financial markets will have on the real economy. Quaden believes that slower growth could actually bring higher inflation while Gonzalez-Paramo sees no sign of a hard landing for the economy. This follows slightly better than expected fourth quarter GDP numbers. Growth slowed from 2.7 percent to 2.3 percent, which was slightly better than the market’s 2.2 percent forecast. Even though the Swiss franc is stronger across the board today, we had very bad Swiss data released this morning. The ZEW survey of analyst sentiment dropped to a record low while the unemployment rate jumped from 5.6 to 6.4 percent. UBS also reported $13.7B in write downs, the biggest loss by a bank in the fourth quarter. These numbers make a rate hike from the Swiss National Bank very unlikely. Swiss retail sales and the Eurozone trade balance are due for release tomorrow. Both numbers should reflect continued deterioration.

Visit the Euro Currency Room for resources dedicated specifically to the Euro.

Bank of Japan Not Expected to Raise Interest Rates
The Dow dropped 175 points today, erasing nearly all of yesterday’s gains, but carry trades were mixed with some pairs like AUD/JPY and CHF/JPY gaining strength while others like GBP/JPY and USD/JPY selling off. This price action confirms our belief that the relationship between stocks and carry trades continue to breakdown even though we can still see some evidence of a mild correlation on an intraday basis. Japanese economic data was good with GDP rising from 0.4 to 0.9 percent in the fourth quarter and industrial production accelerating more than expected on an annualized basis. The Bank of Japan will be making their interest rate decision this evening. They are not expected to raise interest rates and the announcement should be a non-event for the Japanese Yen.

Visit the Japanese Yen Currency Room for resources dedicated specifically to the Euro.

Fifth Straight Day of Gains for the British Pound
Over the past five trading days, the British pound has rallied more than 300 pips. Stronger economic data and a hawkish Quarterly Inflation Report have reduced the chance that the Bank of England will ease interest rates aggressively. With inflation potentially breaching the government’s 3 percent limit, the BoE will be treading very carefully going forward. Unless they believe think that growth will slow materially, they will prefer to space out rate cuts in order to prevent inflation from getting out of hand. They are in the same situation as the Fed was last year where they are juggling persistent inflationary pressures with slowing growth. When data materially worsened and the credit crunch got out of hand, the Federal Reserve was forced to shift their focus away from inflation and onto growth, which was when they began cutting the discount rate and then the Fed funds rate.

Visit the British Pound Currency Room for resources dedicated specifically to the Euro.

Stronger Employment Data Drives Australian and New Zealand dollars Higher, Canada Suffers from Weak Trade Numbers

Not only did we have mixed price action in the commodity currencies once again, but also mixed economic data. The Australian and New Zealand dollars are up strongly today thanks to a sharp rise in Australian employment. With another 26k people added onto Australian payrolls, the unemployment rate fell to a 34 year low of 4.1 percent. The strength of the Australian economy and the tightness of the labor market explain why the Reserve Bank of Australia is the only major central bank that is continuing to raise interest rates. New Zealand reported a decline in business PMI and food prices, but these numbers are not very market moving. Instead, Kiwi traders are holding out for tonight’s retail sales report. Unlike the US, Canada’s trade surplus fell to a 9 year low, driving the Canadian dollar back towards parity.

Tell us what you think on the Canadian dollar Forum.

daily2-14-01

daily2-14-02

daily2-14-03

 



By Kathy Lien, Chief Strategist of DailyFX.com
Contact Kathy Lien about this article at klien@dailyfx.com

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 20 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales


Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: High Fri-- 12:30 GMT CA- Retail Sales and CPI. Top economic indicators.


  • POTENTIAL PRICE RISK: HIGH Fri-- 14:00 GMT US- Existing Homes Sales. Top Housing statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105