FOREX NEWS-US inflation, growth worries keep dlr under pressure
Mon May 19, 2008 6:41am EDT
(Changes byline, updates prices, adds quotes)
By Toni Vorobyova
LONDON, May 19 (Reuters) - The dollar slipped to a 2-1/2 week low against a basket of major currencies on Monday, as the worst U.S. consumer confidence reading in nearly three decades raised concerns about stagflation.
The May Reuters/University of Michigan index of U.S. consumer confidence dropped to 59.5 on Friday, the lowest level since June 1980, while short-term inflation expectations surged to their highest in a quarter of a century [ID:nN16406494].
In contrast, analysts said that there was scope for relatively robust readings from key German sentiment surveys this week to support the euro by reinforcing the case for the European Central Bank to leave rates on hold a while longer rather than cutting them.
"For now it looks as though markets are going to continue to press the (euro's) top up towards $1.5650... but I don't think we are really going to have the momentum to break out of the current ranges," said Jeremy Stretch, strategist at Rabobank.
"Investors might be buying into the idea that the German data -- ZEW and Ifo later this week -- might be a little bit on the firmer side of expectations," Stretch said.
"And at the same time there's increasing nervousness about the inflation picture in the U.S. ... if growth remains weak and inflation is elevated then that's not a particularly comfortable place to be," he added.
The euro rose to its highest level since May 1 at $1.5632, according to Reuters data <EUR=>, before paring gains to stand at $1.5588 by 1018 GMT.
The dollar also fell as low as 72.552 against a basket of major currencies .DXY, its weakest in over two weeks.
The yen edged up to 103.92 per dollar <JPY=>.
The Australian dollar scaled a 24-year peak of $0.9564 <AUD=>, boosted by firm commodity prices, better risk appetite and expectations that domestic interest rates will stay high.
The surprisingly steep fall in U.S. consumer confidence slightly tempered market expectations for the Federal Reserve to raise interest rates later in the year. FEDWATCH
U.S. short-term interest rate futures show a roughly 80 to 85 percent chance of the Fed raising rates by 0.25 percentage point to 2.25 percent by year-end. They had been fully pricing in such an increase before the consumer confidence data.
Investors will look for more clues on the outlook for U.S. monetary policy from minutes of the Federal Open Market Committee that will be released on Wednesday.
The Bank of Japan is widely expected to keep interest rates at 0.50 percent at a two-day policy meeting that starts on Monday. [ID:nT305710]
The European Central Bank's rate decision is due next week, and most analysts expect inflation worries will keep it hawkish as long as economic data holds up reasonably well.
German ZEW economic sentiment data on Tuesday, the Ifo index of German business sentiment on Wednesday and euro zone services and manufacturing PMI data on Friday.
"ZEW survey may edge higher given it is a poll of investment professionals where sentiment has likely improved alongside greater market stability, and also in the wake of Germany's impressive Q1 GDP growth," Calyon said in a note to clients.
"The greater test for euro bulls though will come later in the week when softer readings on the PMI estimates and a lower German Ifo point to a moderation in activity entering Q2." (Editing by David Christian-Edwards)
Reuters journalists are subject to the Reuters Editorial Handbook which requires fair presentation and disclosure of relevant interests.
Forex Trading News
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
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.
POTENTIAL PRICE RISK: HIGH to Medium- Wed --14:15 GMT-- US- Industrial Production
POTENTIAL PRICE RISK: HIGH- Wed -- 15:00 GMT-- CA- Bank Of Canada Decision
John M. Bland, MBA co-founding Partner, Global-View.com
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.
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.
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.
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 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.
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 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.
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.
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.