User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday April 21, 2005 - 14:01:54 GMT
INVESTICA Ltd - www.investica.co.uk

Share This Story:
| | Email

US economy; sweet or sour?

US Treasury Secretary Snow has described the US economy as being in a sweet spot, but there will be increased fears that conditions are now souring rapidly with evidence of slower growth and rising inflation.

If the combination of weaker demand and price pressures continues, the Federal Reserve will face a very difficult task over the second half of the year and confidence in the US economy is likely to falter. One symptom of this would likely to be a weak dollar. If so, the Fed will find it difficult to cut interest rates in response to any sharp slowdown in growth.

Given the domestic structural weaknesses and high debt levels, the US economy will be vulnerable to external shocks and oil prices will be damaging. So far, the indicators are pointing to a measured slowdown in growth rather than a collapse in demand and the Fed is still in a position to maintain control. The possibility of recession late this year should, however, certainly not be discounted.

US strength in doubt

The latest economic data has raised uncertainty whether the US economy is facing rising inflationary pressure, a slowdown in growth, or a combination of both.

The recent US growth data has been generally disappointing. Retail sales growth, for example, was subdued in March with a headline 0.3% increase and the slowest underlying increase for 12 months while the last employment report was also disappointing, although weekly jobless claims data have not shown a significant deterioration. There was also a sharp 17.6% drop in housing starts for March. The decline in housing activity was likely to have been partly weather-related after the strong figures for February and housing activity is still strong in historic terms.

The ISM indices released at the beginning of April remained generally strong, but there was a sharp decline in the New York manufacturing index for April. Fed Governor Yellen also warned this week that the economy suffered a soft patch during March. Concerns over the economy will increase if there is also a slowdown in the other manufacturing indices over the next two weeks.

Main attention is likely to focus on the consumer and there will be concerns that high energy prices will sap spending. The latest figures on real earnings recorded a 0.3% decline for March, with a 0.5% annual decline. A sustained decline in earnings growth would make it extremely difficult for consumers to increase spending, especially as savings rates are already very low. Consumer confidence will be damaged further if there is a sustained decline in equity prices.

Inflation pressure increases

The inflation indices for March recorded significant increases. There was a 0.7% rise in producer prices in March, although the underlying increase was held to 0.1%. The headline increase for consumer prices was also stronger than expected at +0.6% and the underlying increase of 0.4% for the month was double market expectations. There was a clear influence from rising energy costs in the data with transport prices rising strongly, but there were also wider signs of inflationary pressure with clothing costs, for example, rising strongly. The increase may have been affected by faulty seasonal adjustments, but inflation concerns will persist. In the latest Fed Beige Book, the Fed reported an increase in inflationary pressure and evidence of increased pricing power.

US Treasury yields have fallen back to near 4.20% after the subdued economic data from highs beyond 4.5% last month even though inflation concerns have increased. Although yields rose after the US CPI report, there was a swift reversal. Volatility has remained high and the bond markets have struggled to find decisive direction, but the evidence of falling yields suggests greater concern over a slowdown in growth.

Cost increases hurting corporate sector

The combination of rising costs and weaker demand have also been seen in sectors such as the car industry with a huge losses posted by General Motors and Ford. Although car demand has eased slightly, the main pressures on profitability have come from rising costs due in part to higher medical insurance and pension costs. There will be concerns that the symptoms seen within the car industry will spread to the economy as a whole. If there are sustained cost increases and pressures on profitability, there will also be a risk that the corporate sector will not be able to maintain investment levels.

Limited policy response available

It would be a mistake to attach too much credence to recent data, but there will be increasing fears that the US economy will slow sharply at the same time as inflation rises. This pattern of events followed the oil crises of the 1970ís and to a lesser extent the trends were also seen at the time of the first Iraq war in 1991. Oil prices are still above the US$50 p/b level and if the growth data remains disappointing over the next few weeks, there will be fears of a repeat for this economic cycle.

The US vulnerabilities will be increased by the fact that the US consumer and government sectors have little scope to support demand. Consumer balance sheets are already stretched and savings rates are low. Given these stresses, consumers will be looking to rebuild savings rather than increase spending. With the government budget deficit likely to be over US$400bn in the latest fiscal year, there is also very little scope for an expansion of fiscal policy.

Calls for inflation target

The US Federal Reserve will face difficult decisions if there is a combination of rising inflation and weakening growth. The difficulties will be increased by the US Fedís mandate. The Bank of England and ECB, for example, have specific inflation forecast to meet and this makes the task slightly easier as they do not have responsibility for supporting growth. The Fedís mandate is, however, wider as there is also the need to support employment. In this context, there will be greater risks that the Fed will slow or stop monetary tightening if growth starts to slow. There will also be greater discussion over an inflation target over the next few months, particularly with Fed Chairman Greenspanís term of office ending early next year.

 

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 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

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: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.


  • POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
  • POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity

  • POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
  • POTENTIAL PRICE RISK: Medium- Wed --15:30-- US- EIA Crude

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