User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday January 7, 2009 - 23:09:04 GMT
Global Forex Trading - www.gftforex.com

Share This Story:
| | Email

Forex Research - CONCERNS MOUNT ABOUT NFP AND GDP

CONCERNS MOUNT ABOUT NFP AND GDP

Last Updated 1/7/2009 6:03:29 PM EST (GMT +5)

EXPECTATIONS FOR UPCOMING FED MEETINGS

CURRENT US INTEREST RATE: 0.25% Traders Favor No Rate Cut in Jan
  1/28 Meeting 3/17 Meeting
NO CHANGE 72.0% 65.8%
CUT TO 25BP 28.0% 24.1%
INCREASE TO 50BP 0.0% 10.1%
INCREASE TO 75BP 0.0% 0.0%
** PERCENTAGES MAY NOT ADD UP TO 100% BECAUSE OF THE PROBABILITY OF LARGER OR SMALLER MOVES BEYOND THOSE SHOWN ON THIS TABLE

US DOLLAR: CONCERNS MOUNT ABOUT NFP AND GDP

Concerns about the US economy are growing as the Dow Jones Industrial Average erases all of its year to date gains, taking the US dollar down with it.  The rally that we have seen in the first few days of trading will be difficult to sustain with all of the weak economic data that we expect in this month.  Although the US government has thrown a lot of monetary and fiscal stimulus at the US economy, we may not see the fruits of their labor until the second quarter at the earliest.  There is a major risk of a sharp drop in this month’s non-farm payrolls, retail sales and fourth quarter GDP reports and only after we have seen the last of depression like numbers can we begin to see a meaningful recovery in the US dollar. 

ADP Signals Big Trouble for NFP

This is a big week in the currency market with non-farm payrolls due for release on Friday.  The leading indicators for the pivotal labor market report are coming in and the latest report suggests that in the last 2 months of the year, more than 1 million Americans may have lost their jobs.  According to the ADP private sector employment report, 693k jobs were lost in the private sector last month.  This was much weaker than the market’s -493k forecast and suggests that non-farm payrolls could have dropped by more than 600k in the month of December.  Layoffs also rose 274.5 percent according to the Challenger report with the biggest declines seen in the financial sector.  Unfortunately big job losses will probably continue with Alcoa and Intel announcing more layoffs.  The only silver lining is the rebound in the employment component of the service sector ISM report, which tends to have a very strong correlation with the non-farm payrolls report.  With that in mind, we believe that job losses last month will be closer to 500k than 700k.  Either way, both numbers spell big trouble for the US labor market.  Q4 will be one of the worst quarters for non-farm payrolls that this generation has ever seen which is why the US dollar is weak and may remain weak going into the NFP report.

Forecasts for GDP, Unemployment and Deficit

Adding pressure to the dollar today were the forecasts for GDP and the budget deficit from the Chamber of Commerce and the Congressional Budget Office (CBO).  Last week we warned that fourth quarter GDP could be very weak given the sharp decline in the retail sales and the increase in the trade deficit.  The Chamber of Commerce predicts that GDP could fall by as much as 5 percent in the last quarter of 2008 and by another 3 percent in the first quarter of 2009. They also expect the unemployment rate to top 8.5 percent.  We also believe that GDP will confirm the recessionary conditions in the US economy and that unemployment will rise sharply, which is why non-farm payrolls may only compound the problems that the US dollar faces this month.  As for the budget, the CBO expects the deficit to hit $1.186 trillion this fiscal year.  For sovereign wealth funds in particular, the deteriorating US balance sheet will be another reason why a run on the dollar remains a risk in 2009.  

GBP/USD: 50BP RATE CUT EXPECTED

The Bank of England is expected to cut interest rates by 50bp on Thursday to 1.50 percent, an all time record low, yet the British pound is rallying.  This bizarre price action stems from the fact that pound traders are looking beyond the rate cut and onto the BoE’s aggressive efforts to revive the struggling economy.  Furthermore a recent uptick in economic data suggests that a 50bp rate cut may not be the only option for the central bank.  The BoE could also entertain the notion of a smaller quarter point rate cut following the improvements in retail sales, manufacturing and service sector PMI.  Inflation also remains above the central bank’s target even though they believe that price pressures will fall sharply in the coming months. Since 2008, the BoE has already cut interest rates by 350bp. As long as the central bank does not surprise the market with a 75bp rate cut, regardless of how much they ease, the British pound will remain the fifth lowest yielding currency in the developed world.  Although interest rates have never fallen below 2 percent in the history of the BoE, they will be forced to make this historic move as there is no convincing evidence that a rebound is near.  The undeniable willingness of the BoE to respond diligently to market troubles leads us to assume that a rate cut is all but certain.  Expect a lot of volatility following the BoE rate decision especially since the monetary policy statement could provide clues to how much further the central bank may lower interest rates.  Given that Chancellor Darling warned that the recession was from over, we could see UK interest rates hit 1.00 percent.  

EUR/USD: TRICHET WORRIED ABOUT THE EZ ECONOMY

After selling off for 3 straight trading days, the Euro rebounded against the US dollar despite weaker economic data.  German unemployment rose 18k last month, the first increase since February 2006.  Germany has not been immune to the global slowdown and we are finally seeing the downturn that has long been expected.  Retail sales have already declined and we expect the job losses to weigh on consumer spending going forward.  Producer prices plunged for the Eurozone as a whole which is not surprising given the sharp drop in oil prices.  It seems that Trichet is finally acknowledging the problems in the Eurozone economy.  In a magazine interview he said that "It's clear that we have had a significant deterioration of the real economy. The ECB and the national central banks' staff projections mention a range of zero to minus one per cent as the average for growth next year."  However with that in mind, he still believes that anchoring inflation expectations should be their top priority especially since deflation is not a threat.  The case for a January rate cut is growing but based upon Trichet’s comments, it is not a done deal.  

USD/CAD: OIL PRICES SEE LARGEST DROP IN 7 YEARS

The only currencies that managed to weaken more than the US dollar are the Canadian, Australian and New Zealand dollars.  Their sell-off is tied directly to the move in oil and gold prices.  Oil dropped more than 12 percent today, the largest decline in 7 years.  The sharp plunge was driven by a report showing a higher than expected increase in supplies.  Oil had been able to stage strong rallies for the last few weeks after hitting a low of $35 a barrel. Gold is extending its declines again, falling 2.5 percent.  The move in the yellow metal overshadowed the improvement in Australian retail sales.  Consumer spending rose 0.4 percent in the month December thanks to higher food consumption.  The Australian construction sector PMI, trade deficit and building approvals are due for release this evening.  The improvement in the New Zealand trade balance yesterday suggests the potential for similar improvement in Australia.  Finally Canada will be releasing the IVEY PMI report tomorrow.  Given the drop in leading indicators, we do not expect Canada to report a rebound in manufacturing conditions.  

USD/JPY: RALLY COMES TO A SCREECHING HALT

The yen is a net winner amid concerns for the US economy and tumbling energy prices. As a country that imports almost all of its oil needs, lower oil prices is a positive for the economy.  The sharpest gains were seen against the Australian and New Zealand dollars. Although the recent strength of the Japanese Yen could cause Japan to be one of the worst performing countries in 2009, the Yen may still rally if US equities continue to slip.  Furthermore, 2008 has been a brutal year for investors across the globe.  Japanese carry traders have been hit particularly hard and for that reason we could see more repatriation by the Japanese heading into their fiscal year end which is in March.   The Japanese government is also taking steps that may lead to more Yen strength.  Earlier this week, they announced plans to scrap capital gains taxes for foreigners who take stakes in Japanese companies through investment funds.  If approved, more foreign investment could lead to more yen strength.   

EUR/USD: Currency in Play for Next 24 Hours

EUR/USD will be the currency pair in play for tomorrow. The Euro-zone is set to release a variety of important economic indicators. On schedule for tomorrow is the German Trade Balance and Current Account at 2:00 am ET or 7:00 GMT and Euro-Zone GDP and Unemployment rate at 5:00 am ET or 10:00 GMT.

The EUR/USD currently resides in the Bollinger band range-trading zone. The 1.3500 area seems highly significant as support for a number of factors. Besides the psychological nature of the level, there is the one-standard-deviation, and 50.0% retracement from December 12th highs to yesterdays is lying slightly above. Yesterday’s price action failed after extending 280 pips below the support. Early retreats today were thwarted once again, and served as the base of a technical move higher. Resistance seems best defined by the 20-period exponential moving average. Prices failed today after advancing slightly above this 1.3700 resistance. The level is further defined since the 38.2% retracement from the aforementioned Fibonacci levels is lying slightly above. This is also where prices gapped lower on October 6th. A break of the several resistance levels lying above, could see the pair pushing beyond where the previous rally left off.

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 15 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Thu 14 Dec
23:50 JP- Tankan Survey

Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --23:50-- JP- Tankan Survey
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