Tuesday January 4, 2005 - 11:05:57 GMT
Share This Story
DailyFX.com - www.dailyfx.com
FOREX: US OPEN MARKET POINTS 01-03-05
Euro Dives on Dour Data
Zero GDP growth from France and the highest unemployment rate in Germany since 1997, helped to push the euro below the 1.3400 figure in active European trading today as the possible reality of looming economic stagnation in the Euro-zone suddenly hit the FX market. French GDP, hurt by a –0.2% decline in household consumption, registered 0% growth in the 3rd quarter against estimates of 0.1% gain. Higher oil prices and a weak employment situation caused French consumers to retrench. Meanwhile, weak employment was the story in Germany as well with unemployment claims rising to 17K from 10K expected. The German unemployment rate now stands at 10.8% and in a depressing bit of news for Chancellor Shroeder is actually higher than when he took office six years ago. Furthermore, Mr. Shroeder’s recently enacted welfare reforms which call for those without a job to accept any job offers or risk losing benefits may add further hardship to an already grim consumer environment.
According to our proprietary indicator, the euro broke its uptrend against the dollar on a daily basis as of yesterday. While its far too early to tell if the unit has topped out against the greenback, the price action is very consistent with our “consolidation” thesis. As we noted yesterday, ”we are now likely to range and digest the latest up-move as focus turns to Friday’s NFP report”.
Friday’s payroll report will be key to determining market sentiment going forward. If US economy can generate more than 175K projected jobs in December, the Fed will be free to continue it’s tightening policy unimpeded by economic concerns. At that point the dollar bulls will be able to claim both an interest spread and a growth rate advantage over the euro and will be able to make a stronger fundamental case that a near term top in the pair has been made.
FX Spot Overnight
- EUR dives after eco data disappoints
- JPY breaks 104 as dollar bulls come
- GBP loses 9000 figure as lending activity declines and manufacturing PMI misses
- CHF almost makes it to 1600 on back of euro weakness
- 15:00GMT – (10:00 AM EST) USD Factory Orders (NOV) Expected 1.0% Previous 0.5%
Forex Trading News
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
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."