User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday March 6, 2008 - 23:38:59 GMT

Share This Story:
| | Email

FOREX RESEARCH - 5 Reasons Why the US Dollar Will Continue to Fall

Written by Kathy Lien, Chief Strategist

• Don’t Expect Any Intervention from the ECB
• USD/JPY Hits 3 Year Low

5 Reasons Why the US Dollar Will Continue to Fall
The US dollar has fallen to a record low against the Euro and there are at least 5 reasons why the weakness will continue. The first is the most immediate, which is tomorrow’s non-farm payrolls report. Although the market is looking for a rebound in job growth, we actually believe that there could be significant job losses. As we mentioned in yesterday’s Daily Fundamentals, the last time service sector ISM contracted for 2 months in a row was back in late 2001. During that period there was actually 15 consecutive months of job losses with -300k being the biggest single month job loss and -147k the average. In comparison to these numbers, a back to back month of negative job growth seems like nothing. However if we do see two months of consecutive job losses, the dollar will continue to fall, taking the EURUSD up to another record high. The second reason is interest rates. Two year bond yields are currently yielding slightly more than 1.50 percent while the Fed Funds rate is at 3 percent. That is a difference of 150bp which means that in order for the gap to be neutral, the Fed would need to immediately cut interest rates by 150bp. Since 1990, the average spread between the 2 year treasury rates and Fed funds is approximately +50bp and over the past 10 years, it is +25bp. Therefore it is not rocket science to see that a gap of -150bp is a huge discrepancy. Lower interest rates equal a lower US dollar. The third reason is technicals. According to our Technical Analyst Jamie Saettele, a spike above 1.56 in the EUR/USD is very possible before dollar bulls see relief. Our latest FXCM Speculative Sentiment Index which is a contrarian indicator also calls for further gains in the Euro against the US dollar as speculative short positioning continues to grow. The hawkishness of the European Central Bank is the fifth and final reason why the US dollar could extend its losses. Not only did they leave interest rates unchanged today, but they also let the market know how serious they are about maintaining price stability, which means that rates should remain unchanged for the foreseeable future.

Don’t Expect Any Intervention from the ECB
The Euro hit an all time record high as ECB President Trichet left interest rates unchanged, remains hawkish and expresses no concern about the level of the currency. With the manufacturing and service sector continuing to expand, while retail sales and employment remain steady, there was no other choice for the ECB. Food and other commodity prices are hot and Trichet needs a strong currency and high interest rates to stand any chance of bringing inflation back below their 2 percent target. The Introductory statement was very hawkish with the words “price stability” used 8 times by Trichet. Although the ECB lowered their growth forecast, they upgraded their inflation forecasts, sending a strong message to the markets that interest rates will remain unchanged for some time. As for intervention, don’t expect the central bank to step in any time soon either verbally or physically. When Trichet used the words “brutal” to describe the currency’s move in 2004, the EUR/USD had rallied 13 percent in 2 months. Since the beginning of this year, the EUR/USD is only up 6 percent which explains why the central bank is not stressed about the latest moves. Meanwhile the Swiss franc is stronger across the board following a better than expected employment report. The unemployment rate dropped from 2.8 to 2.7 percent, a 5 ½ year low. Watch out for USD/CHF because could be the next currency pair to fall below parity.

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

USD/JPY Hits 3 Year Low
The 200 point drop in US stocks has triggered a round of selling in USD/JPY that took the currency pair down to a 3 year low. This is sure to put further strain on Japanese corporations who will see their profits dwindle as the US dollar continues to fall. The leading and coincident index both deteriorated in the month of January reflecting the softness of Japanese growth. There is no major support in USD/JPY until 101.70, the 2005 low. The S&P 500 and NASDAQ are also trading at the lowest levels since 2006. If this pessimism spills into Asia, we could see further weakness in the Yen crosses. At this time, the market’s appetite for risk is the only thing that matters.

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

British Pound Falls to Record Lows Against the Euro
The British pound fell to a record low against the Euro even though it climbed close to 1 percent against the US dollar. The divergent price action of the British pound indicates that the move in the currency pairs was driven not by the pound but by the Euro and US dollars. As the market expected, the Bank of England kept interest rates unchanged at 5.25 percent. No statement is released when the central bank fails to alter interest rates. The minutes will be released on March 19 and we suspect that some of members of the monetary policy committee such as Blanchflower voted in favor of cutting interest rates.

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

Australian, New Zealand and Canadian Dollars Sell Off

The Australian, New Zealand and Canadian dollars all sold off against the greenback. The biggest loser was the Aussie which was already suffering under the weight of a larger deficit. Imports were three times larger than exports which could be a growing problem as the US and Chinese economies begin to slow. There was no economic data released from New Zealand, but Canada actually reported stronger than expected IVEY PMI. After a series of disappointments, the surge to an 8 month high comes as a complete surprise. Canada will be releasing their employment report tomorrow morning before the US numbers. The rebound in the employment component of IVEY PMI suggests that employment growth should be stronger than the market’s 3k forecast.

Tell us what you think on the Canadian dollar Forum.





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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

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