User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday April 17, 2009 - 15:21:49 GMT
BHF-Bank - www.bhf-bank.com

Share This Story:
| | Email

FX Briefing - US economy: velocity of fall diminishing

FX Briefing 17 April 2009

Highlights

·        US manufacturing sector plunge seems to be slowing down

·        US residential construction is creeping sideways – at rock bottom

·        IMF warns of long recession and slow recovery

 

US economy: velocity of fall diminishing

Over the last few weeks, the euro has weakened somewhat in relation to most major currencies. EUR-USD is currently around 1.31, a good 2 per cent lower than a fortnight ago. Similarly, EURJPY has fallen to about 130. USD-JPY has remained virtually unchanged at just under 100.

 

However, contrary to what one might have expected, given the experiences of the last few

months, equity markets actually brightened up a bit. This was because earnings reports, particularly from the banking sector, turned out to be remarkably positive on the whole. Furthermore, numerous US politicians, from President Barack Obama and his advisor Lawrence Summers to Fed chairman Ben Bernanke tried to raise confidence. They all saw the first signs of stabilization in the US.

 

We should not get our hopes up too high, however. About all that can be deduced from the

data, is that the velocity of the fall could be diminishing. Industrial production fell to its lowest

level in 10 years in March; the decline in the first quarter was 5.4% quarter-on-quarter – much steeper than in Q4. In the last quarter, the ISM index rose modestly, but its current level of 36.3 (the neutral level is 50) is still signalling an ongoing sharp contraction. The regional surveys of the Federal Reserve Banks of New York and Philadelphia, which were published this week, went up slightly more in April, but these indicators too are continuing to show contraction in the manufacturing sector.

 

After increasing the previous month, the number of housing starts and building permits dropped in March, almost reaching January’s record low. With a bit of good will, this could be interpreted as “bottoming out”. But building activity is still at a catastrophically low level. At about 500,000, the number of housing starts was only a third of the average for the last 50 years; nominal (!) expenditure is currently at the same level as at the beginning of 1998. The situation is not likely to change much in the foreseeable future either. The massive supply overhang both for new and existing homes is making it less attractive to build new ones. And rising unemployment will probably also play a part in keeping the supply of houses up and demand down.

 

In the first quarter as a whole, private consumption seems to have remained relatively stable; it

is possible that the increase in unemployment was initially balanced out by the purchasing power effect of lower energy prices. However, after having risen in the two previous months, retail sales fell again quite significantly by 1.1% in March. People are putting larger purchases of durable consumer goods on hold.

 

The International Monetary Fund published two chapters of the new World Economic Outlook in advance this week containing an interesting analysis on how long the global recession could

last and what the upswing could look like. The IMF economists come to the conclusion that there is little possibility of a V-shaped recovery.

 

This is because, unlike in earlier recessions, no impetus can be expected from US domestic demand; in the recession at the beginning of the 1980s, for example, there was considerable pentup demand for property and durable consumer goods due to the high interest rate policy. When interest rates began to fall, people started spending, thus triggering a powerful spurt of growth. Things are quite different this time: consumers are deeply in debt (the monetary fund describes the situation as “overleveraged”), and their first priority will be to reduce their debts. They will therefore probably hold back on spending.

 

Another factor which is different from earlier recessions is the global dimension of the downswing. As a result, there is not much scope for countries to generate a recovery by means of exports. Therefore, the International Monetary Fund is expecting the recession to be long and the recovery to be sluggish.

 

We share the IMF’s view. The job losses, credit defaults and insolvencies all pose significant

economic risks in our opinion. The fact that the downswing has slowed down is currently being hailed as a positive sign, but it could drag on for several quarters and cause great damage. At present, capacity utilization is so low that “stabilizing tendencies” are no longer enough to sustain companies and jobs.

 

In this environment, it is hard to make exchange rate predictions. In the short term, we are expecting the dollar to strengthen, primarily due to safe haven considerations and hopes of the more aggressive US economic policy succeeding (and vice versa, a critical assessment of the economic policy measures in the eurozone). In the longer term, however, we see a danger of the US discovering the dollar exchange rate as an additional policy instrument. A depreciation of the dollar could be justified from an economical point of view by the balance of payment situation, but it would exacerbate the problem, particularly in Europe.

 

Stephan Rieke +49 69 718-4114

Economics Department

+49 69 718-3642

volkswirtschaft@bhf-bank.com

Foreign Exchange Trading

devisenhandel@bhf-bank.com

Jörg Isselmann

+49 69 718-2695

Matthias Grabbe / Klaus Näfken

+49 69 718-2688

 

<i>This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHF-BANK Group") solely for the information of its clients. The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities. This publication must not be distributed in the United States.

© 2007 BHF-BANK Aktiengesellschaft

All rights reserved. Please mention source when quoting from it.





 

 

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