User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday September 5, 2008 - 17:18:45 GMT
Larry Greenberg - currencythoughts.com

Share This Story:
| | Email

Foreign Exchange Insights

The dollar recovery continues, feeding in part off the failure of the economies of Japan and in Europe to withstand a U.S. slowdown.  Several better-than-expected Japanese monthly indicators point to a better-than-expected start for that economy in the third quarter, but second-quarter growth is likely to get revised to negative growth in excess of 3.0% and maybe even as much as -4.0%.  The plainly bad situation in Europe is less ambiguous.  Just about every data point in both the European Monetary Union and Great Britain is arriving weaker than forecast, so much so that the anti-inflationary biases of monetary policy at the ECB and Bank of England has stopped lending discernible exchange rate support.  From its August lows to September 5th highs, the dollar recouped 12% against sterling, 10% versus the euro, and 7% against the Swiss franc.

Two major currencies against which the dollar is not appreciating are the Chinese yuan and Japanese yen.  The yuan’s circumstances reflect a policy decision.  That currency only moves when Beijing officials want such, and they exert pin-point control over when change occurs and how rapid it is.  Official concern has grown over Chinese export prospects amid weakening global demand, while inflation has subsided more than expected, further shifting policy priorities.  The yen’s resilience cannot be entirely explained by better data from Japan than Europe.  As the financing currency for enormous carry trade holdings of once-hot commodity currencies, the yen does well when investors bail out of the latter. From August lows to its highs this past week, the U.S. dollar appreciated over 17% against the Australian dollar, more than 11% against the New Zealand kiwi, and 5.4% relative to the Canadian dollar.  The greenback also reached a 2-month high against the South African rand.  From weekly highs of more than 110 yen in each of the first three weeks of August, in contrast, the dollar fell to as low as 105.55 earlier today.  And from a 2008 low against the euro of Y 169.98, the yen climbed 12.9% to a high this past week of 150.62.  Somewhat simplistically, it’s not unreasonable to assume that the farther that oil and other commodity prices decline from here, the better the yen is likely to perform.

As noted, the yen’s resistance to a dollar resurgence does not seem to be a function only of softer commodity markets and even worse news from Europe.  A look at all global financial trends — stronger bonds, weaker equities, weaker commodities, and a healthier yen — reveals a deepening aversion to risk.  An essential condition for carry trades — borrowing low-yielding currency and investing in the assets of higher-yielding currency — is the tolerance for risk.  Another beneficiary of risk-averse markets tends to be the dollar.  In the land of the blind, the dollar gains respect as the one-eyed king.

The year 2000, when the dot-com boom unraveled, provides a classic example of this pattern.  From early-2000 peaks to the year’s lows, the Nasdaq and DJIA fell by 53.8% and 17.0%, while 10-year Treasury yields sank as much as 177 basis points.  However, the era of dollar hegemony kept going, confounding market pundits.  From lows early that year to its highs in 4Q00, the dollar rose 26.6% against the euro and 13.5% against the yen.  Like now, other developed economies could not decouple from the U.S. business cycle’s turn for the worse in 2000.  The Japanese Nikkei, German Dax, and British Ftse dropped by as much as 35%, 23%, and 13% in 2000, while yields on 10-year Gilts, Bunds, and JGB’s fell by as much as 103 basis points, 80 bps, and 43 bps.  Then, too, holders of the dollar did comparatively well in an otherwise unfriendly financial and business environment.

Year 2000 was like 2008 in another sense.  The U.S. elected a new president with different personnel to manage the economy in a fresh direction.  The winner this coming November remains a huge question mark.  From an economic standpoint, neither choice evokes great inspiration.  The criticism of Senator Obama’s untested experience in an executive capacity has a ring of truth, and Senator McCain’s intent to take America further down the path of tax cuts that was fully explored over the past eight sub-trend years also carries risks.  U.S. stocks, growth in jobs, growth in GDP, and the Federal budget did not do well in most of the Bush43 presidency.  Neither did the dollar, which fell by as much as 48% against the euro, 47% against the Swiss franc, and 44% against the Canadian dollar.  However, these losses did not begin racking up from day one after the power handover.  The dollar’s surprising buoyancy in 2000 lingered through much of 2001, and the currency posted net end-year to end-year gains in 2001 of 14.8% against the yen and 5.8% against the euro.  2002 saw a considerably weaker record, with losses of 9.7% and 15.1% against those two currencies.

The global economic outlook for the next six months is worrisome, and that includes the prognosis in America.  With eight straight monthly declines in U.S. jobs averaging 76K per month, the ability for GDP to expand decently  on the back of brisk productivity, as attested in yesterday’s revised data, will get harder and harder to sustain.  I have doubts about a continuing U.S. dollar recovery based on relative growth trends and central bank interest rate responses.  But I do believe that there will be many more days ahead characterized by high risk aversion than by low risk aversion, and that factor should be enough to extend the dollar’s bounce.  None of these dollar supports is likely to be sustained over many years.  The analogy to 2001 is not perfect.  History repeats exactly hardly ever, and the future course of oil prices and the ability of China and India to carry global demand injects a key new dimension to consider.  That said, my reading of why the dollar has done well recently and the analysis of its experience in 2000-2002 argue against the view that the dollar may have embarked on a five- or six-year period of cumulating strength.

The week ahead features many trade reports, which usually cause little market stir but may attract atypical interest for information such shed on the spread of recessionary and inflationary forces from one region to another.  Some data highlights will be Japanese machinery orders, Economy Watchers’ index, and revised 2Q GDP; Euro-zone industrial production plus German and French trade; British producer prices and trade figures; Canadian trade and productivity; Chinese retail sales, consumer prices, and trades; and U.S. producer prices, trade, and retail sales. The difficulty of running monetary policy in stagflationary times will be underscored by a likely juxtaposition of at least one rate hike (South Korea) and at least one cut (New Zealand) during the week.  The week just ending also saw central bank rates increased as well as cut.

 

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 18 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Wed 18 Oct
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales

Forex Trading Outlook


Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.

  • POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.



  • POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.

  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.



  • POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.


  • POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.



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