User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday January 21, 2009 - 22:32:05 GMT
Global Forex Trading - www.gftforex.com

Share This Story:
| | Email

Forex Research - US Dollar Hits Historic Levels

US Dollar Hits Historic Levels

Last Updated 1/21/2009 5:17:35 PM EST (GMT +5)

EXPECTATIONS FOR UPCOMING FED MEETINGS

CURRENT US INTEREST RATE: 0.25% Traders Expect No Rate Hike in January
  1/28 Meeting 3/17 Meeting
NO CHANGE 78.0% 72.4%
CUT TO 0BP 22.0% 19.8%
INCREASE TO 50BP 0.0% 7.8%
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 HITS HISTORIC LEVELS

It is not often that we can see the US dollar hit a 23 year high against one currency and a 13 year low against another on the very same day. However that was exactly what happened this morning when the greenback surged against the British pound and collapsed against the Japanese Yen. Volatility ripped through the foreign exchange market as central bank and other US officials comment on their economies and currencies.  The milestones were not limited to the GBP/USD and USD/JPY as the NZD/USD and EUR/JPY also fell to a 6 year low intraday.  However what was most impressive is the fact that none of the staggering losses were sustained.  

What Was Volcker Thinking?

Comments from former Fed Chairman Paul Volcker triggered a wave of risk aversion that led to a technical break in the currency market. He said the US is “in serious recession, with no end clearly in sight." Although there is no question that the US economy is in trouble, by saying that there is no end in sight suggests that there is no hope. Coming from the chairman of Obama's newly formed Economic Recovery Advisory Board, we would expect more advice.  Treasury Secretary Nominee Geithner expects an Obama economic stimulus plan to be released in the next few weeks but unfortunately Volcker's comments overshadowed the prospect of a stimulus plan for the foreign exchange markets. Investors were already nervous following yesterday’s sell-off and Volcker's comments pushed them over the edge.

FX, Stocks and Bonds: Who is Right?

With the Dow rising 279 points, the correlation between the currency and equity market broke down leading traders to wonder which market participants had the right reaction to Volcker and Geithner’s comments. Given that bond and gold prices fell as well, it suggests that today’s developments made investors less pessimistic about the outlook for the US economy. Therefore we could see currencies “catch up” over the next 24 hours which means the potential for a corresponding bounce in the EUR/USD, GBP/USD and USD/JPY.  We are already beginning to see an intraday reversal going into the US close and we would not be surprised to see it continue in Asia and Europe. Looking ahead, housing market data and the weekly jobless claims report are due on Thursday.  The NAHB Housing market index measuring builder confidence fell to another record low in the month of January.  

GBP/USD: IS THE RECOVERY FORESHADOWING A BOTTOM?

The British pound staged a dramatic recovery after having fallen to a 23 year low of 1.3621 against the US dollar.  The strength of the reversal will have many investors wondering if the currency has hit a bottom.  Since last Friday it has fallen more than 1000 pips as the market grows more concerned about the UK’s ability to pay for all of their stimulus packages and the threat of Standard and Poor’s putting the country on credit watch negative.   The sell-off in the British pound over the past few trading days has been driven by a pessimistic outlook for the UK economy and there has been no UK news during the US trading session to fuel the currency’s reversal.  Therefore the GBP/USD could still resume its downtrend since nothing has changed that can shift UK sentiment.  According to the minutes from the most recent Bank of England meeting, the members of the monetary policy committee voted 8-1 to cut interest rates by 50bp in January.  The dissenter continues to be Blanchflower who called for a larger 100bp rate cut.  The minutes were not entirely dovish as the committee also considered leaving interest rates unchanged. Their plans to buy private sector assets is a move towards quantitative easing which suggests that the BoE will continue to cut interest rates.  Employment data was mixed with the number of people claiming jobless benefits rising more than expected but the unemployment rate surged while average hourly earnings plunged.  Given that the outlook for the pound has not changed, the latest rally could be nothing more than a bear market bounce.  

EUR/USD: TRICHET TALKS MORE RATE CUTS, SNB WARNS

The Euro rebounded strongly despite ECB President Jean-Claude Trichet’s warnings of further rate cuts.  German producer prices continued to fall, albeit less than the market expected.  Trichet defended the central bank’s less aggressive monetary policies and indicated that they have decided if 2 percent is the lowest level for interest rates.  However declining prices will support the market’s call for more rate cuts from the ECB.  Trichet reiterates that there is presently “no threat of deflation” and recognized the recent downgrades in the credit rating of Spain and Greece. With more downgrades expected to follow, Trichet is convinced that the vast span of the European Union will inevitably have certain disequilibriums.  Meanwhile the Swiss franc collapsed after SNB Hildebrand said that the central bank is considering selling francs to halt the currency’s gains. With interest rates already at 0.5 percent, there is no room to ease monetary policy and they may have to resort to fixed rate currency intervention.  We believe that this is more bark than bite from the SNB since they have always opted for verbal over physical intervention.  

USD/CAD: OIL PRICES RISE 8%

The Australian, New Zealand and Canadian dollars have recovered against the greenback. The rallies are based on a small pocket of risk tolerance as spurred by advances in US indices and some significant rallies in Crude Oil. Crude showed more than a 8.3% gain in today’s trading. The Canadian dollar has reacted favorably. The level of urgency expressed within the ranks of Canada’s economic policy-makers has not alleviated since the rate cut. We are now learning that the Finance Minister, Jim Flaherty, is trying to obtain the power to inject capital directly into the country’s banks. Even though this technique was common practice in the last few months, it appears that the Canadians are seeing their situation worsen considerably. We saw a disappointing Wholesale Sales report today which should be overshadowed by the importance of tomorrow’s Retail Sales figures. New Zealand’s Minister of Finance, Bill English, had some more upbeat news to share with traders. Apparently the quick recovery many were expecting may be materializing for the country as the severe depreciation in the NZD is starting to benefit exporters. However, Mr. English acknowledged the fact that the country was put on S&P’s warning list for a credit downgrade as well as the need for additional rate cuts. For Australia, no economic news will be reported until tomorrow’s Consumer Inflation Expectations and New Motor Vehicle Sales.

USD/JPY: BOJ TO LEAVE RATES UNCHANGED

The unrelenting strength of the yen presents many questions for the rate decision expected tomorrow. It is clear that rate cuts are over as the Japanese are looking at practically zero interest rates despite the marginal 10bp buffer. Therefore the potential for something truly market moving will exist in either the BoJ’s announced attempts to combat the strength in the Yen or some more proposed strategies that will replace rate cuts as the monetary tool of choice. One major probability is that the bank tries to talk down currency prices like many expect the SNB is doing. This should provide a relatively short period of breathing room for the Japanese to plan for a large scale decision. One major catalyst for a potential intervention would be a break of the 87.00 level in USD/JPY, which would bring the pair down to fifteen year lows. Aside from the rate decision, we expect the Merchandise Trade Balance to come in tonight.

EUR/USD: Currency in Play for Next 24 Hours

EUR/USD will be the currency in play for the next 24 hours. A vast array of European data is expected, which includes French Consumer Spending at 2:45 am ET or 7:45 GMT, the ECB Monthly Report at 4:00 am ET or 9:00 GMT, and EZ Industrial New Orders at 5:00 am ET or 10:00 GMT. Following these European events will be Housing Starts and Building Permits reported by the US at 8:30 am ET or 13:30 GMT.

EUR/USD has managed to stay in the Bollinger band sell zone for an impressive eight days. The sheer strength of the upswing encountered in the month of December has almost been completely countered. The retracement levels drawn from the October 28th lows to the December 18th high does a fairly good job at providing us with the most relevant levels. For support, we have seen prices fail the 78.6% retracement at 1.2839 for the second consecutive day. For resistance, we have the confluence of the 61.8% retracement, one-standard deviation Bollinger band, and the 10-day SMA. Since prices have not been able to break from the sell zone, it is likely that this level will be sufficient in pushing prices downward. A break of the 1.2839 support should see prices extend down to 1.2328, or the October 28th low.

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 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