User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday October 31, 2008 - 21:42:14 GMT
Global Forex Trading - www.gftforex.com

Share This Story:
| | Email

Forex Research - Sustainability of Dollar Strength Will be Determined by 3 Central Bank Meetings

Sustainability of Dollar Strength Will be Determined by 3 Central Bank Meetings Last Updated 10/31/2008 5:34:39 PM EST (GMT +5)

TODAY’S BIGGEST PERCENTAGE MOVERS

GBP/JPY ( -287 pips or -1.75%)

AUD/JPY ( -120 pips or -1.80%)

AUD/USD ( -113 pips or -1.67%)

THE STORIES IN THE CURRENCY MARKET

  • USD: SUSTAINABILITY OF DOLLAR STRENGTH WILL BE DETERMINED BY 3 CENTRAL BANK MEETINGS
  • EUR: EURO EXPERIENCES RECORD MONTHLY LOSSES AGAINST DOLLAR AND YEN
  • GBP: UK CONSUMER CONFIDENCE FALLS TO 34 YEAR LOWS
  • CAD: CANADIAN GROWTH HAS HIT NEGATIVE TERRITORY
  • AUD: TRADERS AWAIT RBA RATE DECISION
  • NZD: FALLS 12% THIS MONTH AGAINST THE DOLLAR
  • JPY: BoJ CUTS RATES BY 25bp

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

SUSTAINABILITY OF DOLLAR STRENGTH WILL BE DETERMINED BY 3 CENTRAL BANK MEETINGS

Dow ends the day up more than 140 points. The most important thing to take away from this is that prices did not dive in the 10 minutes approaching the closing bell. The dollar strengthens again today against all major currencies, except for the Japanese Yen. The continued strength of the dollar will be determined by three central bank meetings approaching in next week’s trading. Tuesday we will have the RBA decision, along with the ECB and BoE decisions on Thursday. An unexpected coordinated cut or new innovative central bank initiatives may hurt the dollar as many might believe the Fed has not done enough compared to foreign colleagues.

Another Wave of Negative News

Economic indicators continue to leave investors doubtful that a significant rebound is approaching. Several important indicators, the Chicago Manufacturer Purchasing Index, personal income, and personal spending, all reported declines from previous figures. The PMI, an index that measures business conditions, has fallen nearly 20 points from previous monthly figures to 37.8, the weakest level since the beginning of the 2001 recession. The report marked the extreme pessimism experienced by businesses. The report also bears a negative shadow upon the more important ISM report expected for Monday. Personal consumption expenditures also took a hit, falling by 0.3%, compared to an unchanged report issued last month. Such a decline indicated a severely depressed consumer and was the main reason behind this month’s negative growth figures. Consumers are being depressed by a terrible job market and a credit market than makes home purchases/financing very expensive to obtain. Suppressed consumer spending will be a main factor that will keep the economy far from a potential upswing. In addition, Personal Income, a gauge of the earnings of salaried employees, was also reported worse than expected. Perhaps the only neutral report released today was a surprising uptick in University of Michigan Consumer Confidence.

Have the Feds Policy Measures Been Working?

The Fed has been taking new and extreme steps in ensuring a recession will not extend into a depression, most recently by cutting the target Federal Funds rate in Wednesday’s meeting. Today, Federal Reserve Chairman Ben Bernanke urged a government official to start considering new policies to support the mortgage-back bond market. The question that remains is whether or not these initiatives have been working. Although it will be months until the true impacts of interest rate cuts will be felt, Federal Reserve stimulation in the Commercial Paper market have had some more immediate results. This week, the commercial paper market has seen Fed purchases boosting the market by $100 billion. Such stimulation has loosened and promoted lending while dropping rates to four year lows. Libor rates eased in accordance with commercial paper. In retrospect, the commercial paper market has been at a standstill since the decline of Lehman Brothers, one of the most active members in these markets. Such fear and uncertainty has made it nearly impossible for businesses to obtain the financing necessary to continue daily operations. Such market conditions have accelerated the credit crunch this month to become a global financial crisis.

On the other hand, there is no doubt that investors are still fearful. Every day we see stock markets swing hundreds of points in either direction, only to change course completely in the last ten-minutes of trading. What the Fed has not yet been able to accomplish is calming the nerves of investors and financial institutions alike, and being able to influence rates in the mortgage market. Aside from promoting liquidity in commercial paper, the Fed has been unable to ease rates more important to consumers. 30-year mortgage rates rose nearly 50bp, despite rate cuts of the same amount. The Ted spread, an important indicator of credit risk, has also been pushing higher.

Will Negative News Continue Into Next Week?

In store for next week, we have the influential ISM manufacturing report scheduled for Monday. We have received indication in today’s Chicago PMI that numbers will likely fail to meet expectations. The manufacturing sector has been slowed by the housing crisis and credit crisis that followed. Along with ABC Consumer Confidence, Tuesday will have the US Presidential elections. We will have a comprehensive elections report in Monday’s commentary. The most important economic release next week, and perhaps for the ensuing month, will be Friday’s employment situation. Many are expecting that the trend of consistent monthly declines in employment will continue, thereby hindering consumer spending, and directly GDP.

EURO EXPERIENCES RECORD MONTHLY LOSSES AGAINST DOLLAR AND YEN

The euro is finishing up a month of record losses against the dollar and yen, with declines of 17% and 10 %, respectively. Trading today has so far mimicked similar developments, with the euro losing almost 1.0% against the dollar and yen. Economic surveys show that it is widely expected that the ECB will cut rates by another half point by next Thursday’s rate meeting. It is also predicted that such action will be reported in unison with cuts expected from the BoE. The ECB’s target rate currently stands at 3.75%. German ILO Unemployment rate was reported better than expected at 7.1%, compared to 7.2% recorded in last month’s report. French PPI ticked up to -0.4%, compared to last month’s -0.5%. Euro-zone consumer confidence shows broad weakness with industrial and economic confidence showing similar limitations, with CPI meeting expectations at 3.2%. Today, Germany reported worse than expected retail sales, declining 5.4% from a month ago. Such disappointing results are likely to weigh heavily upon EZ GDP, and Wednesday’s EZ Retail Sales.

BoJ CUTS RATES BY 20BP

The Bank of Japan decided to cut its target interest rate by 0.2% to 0.5%, citing major concerns for growth and the possibility for another prolonged recession. The decision resulted in four dissenting votes, three of which voted for a larger 25bp rate cut. A move like this is surprising based on the fact that Japan spent most of the nineties struggling with a crippling recession because aggressive rate cuts brought target rates down to the zero level. Many assume that a rate cut was elicited based on the grounds that the BoJ did not want to look like it was refusing to take action in a worsening global atmosphere, while many of its peers were aggressively chopping rates in a coordinated effort. Other reasoning may exist in an attempt to reduce the value of the yen without intervening in markets. Many important and heavily relied upon sectors have seen decay as of late, with Japanese exports being hit the hardest. Domestic sectors as well as many of Japan’s largest companies have been seeing overall weakness. The Nikkei equity index has declined even more rapidly than the Dow, with YTD losses totaling more than 40%, reaching lows not seen for more than a quarter century. The Nikkei was down another 5.0% in Japanese trading. While CPI was reported unchanged from the previous month, Housing Starts and Construction orders were up on a year over year basis. Economic reports for next week include Wednesday’s release of the BoJ Meeting Minutes and Thursday’s Leading Index.

UK CONSUMER CONFIDENCE FALLS TO 34 YEAR LOWS

GfK Consumer Confidence falls to historical lows at -36, compared to -32 reported last month. Even though the report is not usually a market moving event, it does hold some relevance in exhibiting the utter slide in consumer purchases and spending that have occurred in recent months. The UK will likely be experiencing the effects of such a slide in fourth quarter GDP. This 34 year low in confidence has declined substantially from a report of -5 released about a year ago. The consumer confidence report is just another link in a string of disappointing results from the UK that has seen the pound decline nearly 20% against the dollar YTD. Next week’s schedule of new economic reports holds Wednesdays Industrial Production and Thursday’s NIESR GDP Estimate and the BoE Rate Decision. As discussed in the above Euro section, it is likely that we will see a coordinated 50bp cut from both the BoE and ECB. It is important to note that compared to the historically low US interest rates, countries like the UK will have more flexibility in dropping by large amounts since their interest rates are still relatively high.

CANADIAN GROWTH HAS HIT NEGATIVE TERRITORY

USD/CAD bounces by about 2.0% today, after Canada reports that growth has slowed by 0.3%. GDP has slowed significantly from last month’s report of 0.7% growth. This also represents Canada’s first step toward a technical recession. Sluggish Canadian wholesalers and manufacturers took the largest notch out of growth for this quarter. A harbinger for continued contraction, weakness reported in today’s US consumer spending report has already taken a toll on Canadian exports, showing that Canada will not escape a US recession unscathed. Today’s weak commodity market has accelerated losses in CAD, while taking similar tolls on the aussie and kiwi. AUD HIA New Home Sales slowed to -1.8%, compared to -1.3% reported in August. Scheduled news for AUD next week includes Monday’s Retail Sales and Tuesday’s RBA Rate Decision. A decision from the RBA will follow their attempts to intervene in currency trading. Such a move reflects a certain degree of desperation, and will most likely be backed by a rate cut. The RBA has aggressively cut rates by 125bp since cuts started in August. Trading in NZD has reflected few important economic indicators, with ANZ Commodity Prices expected next Tuesday and Employment Situation expected Wednesday.

AUD/USD: Currency in Play for Monday

AUD/USD will be our currency in play for Monday. We are expecting Australian Retail Sales Sunday at 8:30 pm ET or 00:30 GMT.

The pair has been able to sustain itself in the Bollinger band neutral trading zone. It has even been able to break above the 10-day SMA. Upcoming resistance is represented by Fibonacci levels drawn from mid-July highs to the October 27th low. This yields an immediate resistance level at the 23.6% retracement, or 0.6913. We are marking support as the previous low at 0.6006. Since prices seem to be losing momentum, we would like to see a strong break above the retracement in order to confirm a new direction for AUD/USD.

 

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 Lien 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 Lien 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 11 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
  • POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI

  • POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
  • POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
  • POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
  • POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision


  • POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
  • POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
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