User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday October 23, 2008 - 21:39:00 GMT
Global Forex Trading - www.gftforex.com

Share This Story:
| | Email

Forex Research - US Dollar: Stabilization?

US Dollar: Stabilization? Last Updated 10/23/2008 5:17:13 PM EST (GMT +5)

TODAY’S BIGGEST PERCENTAGE MOVERS

AUD/JPY ( -72 pips or -1.09%)

AUD/CAD( -95 pips or -1.08%)

EUR/AUD ( 194 pips or +1.02%)

THE STORIES IN THE CURRENCY MARKET

  • USD: STABILIZATION?
  • EUR: WILL THE EUROZONE FOLLOW IN SWEDEN’S FOOTSTEPS WITH A 50BP CUT?
  • CAD: CLIMBS TO 4 YEAR HIGH
  • AUD: GOLD PRICES STABILIZE
  • NZD: TURNS HIGHER AFTER US EQUITY MARKETS CLOSE
  • JPY: JAPANESE TRADE TAKES A BIT HIT FROM GLOBAL SLOWDOWN

EXPECTATIONS FOR UPCOMING FED MEETINGS

 

** PERCENTAGES MAY NOT ADD UP TO 100% BECAUSE OF THE PROBABILITY OF LARGER OR SMALLER MOVES BEYOND THOSE SHOWN ON THIS TABLE

US DOLLAR: STABILIZATION?

In the face of today’s 200 point positive and negative swings in the Dow, it could be argued that the US dollar has been relatively stable if you only look at the daily change of the 3 major currency pairs. The EUR/USD rallied 100 pips, the GBP/USD was unchanged while USD/JPY fell 75 pips. This compares to multi hundred pip moves for all 3 currency pairs on Wednesday. Even the largest market movers had a far milder move today than yesterday. On a percentage basis, the largest market mover was AUD/JPY which dropped 1.09% while it was CAD/JPY yesterday which dropped five times that amount. These moves however masks the volatility that we are still seeing on an intraday basis; the EUR/USD hit a new 20 month low while the GBP/USD fell to a fresh 5 year low. Although it may be very tempting to say that the dollar has hit a top, especially against the Euro, in order for this EUR/USD rally to be real and for investors to be convinced to stop selling higher yielding currencies, we need to see stabilization in the financial markets and a return of confidence.

Keep an Eye on Job Losses

Even though the non-farm payrolls report is not due for another 2 weeks, all signs point to serious job losses and for that reason we are still concerned about the outlook for the US economy and by extension we are also wary of today’s rally in US equities. According to the Financial Times, more than 78,000 people could be laid off from Wall Street. For the world outside of finance, massive job cuts have also been announced by companies like Yahoo, Merck and General Motors. Although we will not get to the double digit unemployment rates that we saw during the Great depression, we do expect the current unemployment rate to climb to a new 5 year high. Since consumer spending is the backbone of the US economy, a weak labor market will depress spending, which should in turn lead to softer growth. Therefore even though buyers have returned to the equity markets, there will be plenty of reasons for them to bail once again.

Emerging Markets to Welcome any Dollar Correction

Any correction in the US dollar will be cheered by the emerging market nations who have had to take drastic measures to combat the dollar’s strength against their own currencies. The rally in the greenback has taken a big toll on the Brazilian Real, South African Rand, Hungarian Forint, Turkish Lira and Polish Zloty. In order to avoid a mass exodus out of their local currencies, central banks of some of these countries have been forced to raise interest rates. Since the strength of the dollar has been the primary catalyst for the sharp decline in these currencies, a correction would be welcomed by all of these nations because it would help stabilize their currencies and make their jobs a lot easier.

Oil Prices Could Bottom on OPEC Production Cuts

US existing home sales are due for release tomorrow but the biggest event risk is undoubtedly the emergency meeting by OPEC. Oil prices have firmed up today on the expectation of a 1 million to 1.5 million production cut from the oil producing nations. The price of crude has fallen more than 50 percent since its July highs, giving the OPEC nations a valid reason to cut interest rates. However since 2000, whenever oil prices have fallen by more than 20 percent on a rolling 6 month basis, production cuts have marked major turning points for oil prices. There is a decent chance that we have seen the bottom in oil prices and for the currency market that could fuel a rebound in the Euro and Canadian dollar.

EUR/USD: WILL THE EUROZONE FOLLOW IN SWEDEN’S FOOTSTEPS WITH A 50BP CUT?

Since the beginning of the week, the EUR/USD has fallen by as much as 6 percent. Having declined for 3 days straight, the currency pair has taken a much needed breather. Despite the continued liquidation of high yielding currencies, the EUR/USD escaped unscathed. A better than expected Belgium business confidence report suggests similar stability for the German IFO index of business confidence. Even though the Eurozone current account deficit increased significantly, French consumer spending jumped in the month of September, catching everyone by surprise. On balance, the economic reports from the Eurozone are encouraging but in no way are they great. In fact, one of the better explanations for the EUR/USD’s rally is the rebound in oil prices ahead of the emergency OPEC meeting. In long run, interest rate expectations will continue to drive the price action of the EUR/USD. We would not be surprised if the European Central Bank followed in the Swedish National Bank’s footsteps. The market expected the central bank to cut interest rates by 25bp but instead they lowered rates by a half-point for the second time this month to provide support for the economy on the expectation that the worst has yet to come for Sweden. With the market pricing in another 100bp of easing over the next 12 months, another half point cut by the ECB could be possible. Service and manufacturing PMI numbers are due for release tomorrow we do not expect the data to help the Euro.

BRITISH POUND TESTS 1.60

It is almost hard to believe that the GBP/USD was trading at 1.85 one month ago as the currency pair came within an arm’s length of the 1.60 level this morning. Consumer spending dropped by 0.4 percent last month, driving the annualized pace of growth to the slowest level in more than 2 years. As Bank of England Governor King indicated earlier this week, the UK economy is in trouble and recent economic data certainly confirms that. The advance release of third quarter GDP is due on Friday. The market is calling for a contraction in growth, but consumer spending improved in the third quarter. However as we have seen today, even if the data is better than expected, the British pound could still weaken with growth predicted to slow further in the coming months. There is a very strong chance that the UK economy will contract next year and in order to avert a sharp contraction, the Bank of England will be compelled to cut interest rates once again.

USD/CAD CLIMBS TO 4 YEAR HIGH

The US dollar climbed to a four year high of 1.2742 against the Canadian dollar. Although picking a top in trends as strong as USD/CAD can be dangerous, the fact that the currency pair closed near its daily low suggests that the currency’s strength may be fleeting. Consumer prices are due for release tomorrow and even though industrial and raw material product prices decreased, the price component of IVEY PMI increased and it tends to be a strong leading indicator for CPI. Meanwhile weakness in commodity currencies continues to be one of predominant themes in the foreign exchange market with the Aussie and Kiwi also slipping against the greenback.

JAPANESE TRADE TAKES A BIT HIT FROM GLOBAL SLOWDOWN

The volatility in the equity market has weighed on all of the Japanese Yen crosses. However even though the Yen has been the one of best performing currencies of 2008, Japan is not without its own problems. The country actually reported a material decline in their trade surplus last month with the balance falling from JPY574B to JPY 95B. Slower growth in the US and China has taken a big toll on Japanese exports. We expect this trend to continue with the strength of the Yen adding to the export sector’s woes. However in a world where every major country is slowing, Japan may prove to be the outlier simply because their banks are healthier.

EUR/USD: Currency in Play Over the Next 24 Hours

The EUR/USD is the currency in play over the next 24 hours with the OPEC meeting, Eurozone PMI data and US housing market numbers due for release on Friday. The manufacturing and service sector PMI reports are due between 3:30 am and 4:00 am ET or 7:30 and 8:00 GMT. US existing home sales will be released at 10:00am ET or 14:00 GMT.

The EUR/USD is trading in our sell zone, which we establish using Bollinger Bands, but there is scope for a bounce to the first standard deviation band which sits at approximately 1.3160. As long as the currency pair does not break above that price level, the downtrend remains intact. If however it does break and close above 1.3330, which is the Fibo resistance from the 2006 to 2008 rally then there is scope for a rally back towards resistance at 1.35.

 

About The Author

Lien has extensive knowledge within the interbank market, particularly in trading spot FX and options. She has written for numerous publications, is frequently quoted on financial media outlets, and is the author of several books, including Millionaire Traders. Read more >>

DISCLAIMER: This forum and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. This forum and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Kathy will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Kathy do not render investment, legal, accounting, tax or other professional advice. If such advice is sought, or other expert assistance is required, the services of a competent professional should be sought.



 

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 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

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: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


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