Friday August 15, 2008 - 11:16:15 GMT
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Forex Research - Euro Touches 1.4700, As Pound Falls To 2-Year Low
a barren economic calendar, the Euro fell to nearly a six month low
when it touched the 1.4700 handle. Dollar bulls got a boost from U.S.
inflation rising to 5.6% and a report from Goldman Sachs that
proclaimed the dollar had bottomed.
â€˘ Japanese Yen: Breaks Above 110.50
â€˘ New Zealand Dollar: Retail Sales Rise 0.9%, But Fall Minus Inflation
â€˘ Euro: Tests 1.4700 For First Time in Almost Six Months
â€˘ British Pound: Falls To 2-year Low
â€˘ US Dollar: U. of M. on tap
Euro Touches 1.4700, As Pound Falls To 2-Year Low
Despite a barren economic calendar, the Euro fell to nearly a six month
low when it touched the 1.4700 handle. Dollar bulls got a boost from
U.S. inflation rising to 5.6% and a report from Goldman Sachs that
proclaimed the dollar had bottomed. The Sterling pound also saw
continued weakness due to the same factors falling to a two-year low as
it broke below 1.8550. The greenbackâ€™s gains may continue as there is
no reason for dollar bulls to abandon their position with Europe
heading for a recession and the outlook for interest rates is heading
lower for both the ECB and BOE.
The dollar also continues to be the beneficiary of falling commodity
prices as gold dropped under $800 for the first time since December and
oil was below $113 per barrel. The greenbackâ€™s strength and lower crude
has spurred risk appetite which has pushed the USDJPY above the 110.50
price level for the first time since January 2.
New Zealand was the only country reporting significant economic data
during the overnight session as its retail sales report crossed the
wires. June sales rose 0.9% led by automobile and fuel purchases.
However, the quarterly report stripped of inflation showed consumption
falling to a 13 year low which would add further weakness to the New
Zealand dollar and send the pair below 0.6950.
The University of Michiganâ€™s consumer confidence survey, industrial
production and empire manufacturing are due for release today.
Considering inflation has risen above 5.6% and the job market continues
to weaken with jobless claims maintaining above 400,000 for a fourth
week, the expected improvement in consumer sentiment could add to the
current bullish dollar story. Meanwhile manufacturing is expected to
remain flat as global demand slows and a strengthening dollar curbs
demand for U.S. goods. However, a drop in manufacturing and weakening
consumer confidence could lead to the beginning of the end of the
current dollar rally.
Will The EUR/USD Continue to Fall? Join us in EURUSD Forum
For More Fundamental Analysis, Check Out Our Other Daily Reports.
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