Thursday January 6, 2005 - 10:58:11 GMT
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FOREX: US OPEN MARKET POINTS 01-06-05
Euro Gets Pounded
Just as the euro benefited from dollar bearish sentiment reaching record highs at the end of 2004, so now at the beginning of 2005, the dollar is enjoying a 500 point reversal move with sentiment towards the euro souring quickly, as evidence of economic stagnation in the Euro-zone mounts daily.
The latest string of disappointing data comes from significantly lower German Retail Sales and a slide in EZ Economic Confidence surveys. Weighed by double digit unemployment, November retail sales in Germany slipped 2.5% versus and expectation of only a -0.2% decline. The dour news was somewhat offset by EZ Retail PMI data for December which increased to 50.6 from 48.0 as European consumers opened their wallets for Christmas. The reprieve was short lived, however, as EZ Economic confidence survey unexpectedly declined to 100.3 from 100.9 projected on fears that a strong euro would hurt the export sector.
Having crashed nearly 5 cents since the beginning of the year, the price action in the pair is likely to stall ahead of the NFP. As we wrote in your special report on the upcoming release, Only in the case of drastically lower numbers (less than 50K), will the FX market consider the possibility of a Fed pause and recent dollar bullish sentiment amongst speculators may then reverse. Absent such a scenario, the 2005 dollar rally may yet continue if US economic data continues to impress while Euro-zone fundamentals disappoint.
FX Spot Overnight
- EUR continues its post-holiday rout as eco data continues to disappoint
- JPY breaks 105 on general dollar bullishness
- GBP services data misses driving the pound lower
- CHF targets 1800 in reverse of the EUR/USD
- 13:30GMT (08:30 AM EST) USD Initial Jobless Claims (Jan 1) Expected 330K Previous 326K - 18:00GMT (13:30 PM EST) Fed's Hoenig Speaks on US Economic Outlook in Kansas
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