Friday June 17, 2005 - 04:37:57 GMT
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Tricom Futures and Foreign Exchange -
Forex:The US Current Account or The EU - what weigh's heavier on the market?
I can see the market treading water ahead of today's US Current Account balance. As for the EU's woes, earlier today some of the EU members announced they would defer their EU constitutional vote, thereby hammering another hammer into the coffin of the United States of Europe dream. This result did not cause a rapid sell-off in the EUR, as it was largely expected, however it will work to cap any immediatte upside in the currency. How do we trade today's data then you may ask? I suspect the data will show a further deteriation, leading to weakness in the USD, and firmness in the EUR immediately after the data release. Use this opportunity to buy USD, and sell the EUR on any resulting rally. I suspect that the move after the data will be limited to only 30-40 points.
The dollar chalked up another day of gains against the euro and Swiss franc on Thursday, with technical strength and bullish market sentiment enough to shield the greenback from weak U.S. economic data.
The dollar pared some gains after a reading of minus 2.2 in the Philadelphia Federal Reserve's business outlook survey for June, below economists' median forecasts for a reading of 10.0 and the first negative reading in the widely watched index in 25 months.
But the dollar continues to gain support from political and economic concerns that have soured euro sentiment. European Union leaders gathered in Brussels to broker a budget deal and salvage the EU constitution after its rejection by French and Dutch voters, a meeting which intensified the currency market's focus on factors hurting the currency.
U.S. Treasury debt prices turned higher on Thursday after the Philadelphia Federal Reserve Bank's June regional economic survey showed a contraction for the first time in over two years.
But the survey of factories in the highly industrialized mid-Atlantic region in and around Philadelphia also showed that optimism about the six-month outlook was higher than last month, softening the report's effect on the bond market.
U.S. blue-chip stocks inched higher on Thursday, as rising oil prices lifted energy shares like Exxon Mobil and helped offset a report showing an unexpected drop in factory activity in the mid-Atlantic states.
Oil jumped more than a dollar, with U.S. crude futures for July delivery up $1.01 to settle at $56.58 a barrel. Shares of Exxon Mobil Corp. climbed 1.3 percent to $60.04, boosting both the blue-chip Dow and the broad S&P 500.
Today’s Economic Releases:
· US: Current Account Balance: Exp:189 Bln. Prev: 187.9
· US: Univ. Michigan Sentiment Index Exp: 87.5. Prev: 86.9Today’s Top Trades
· Sell EUR/USD strength towards 1.2140-50
. Buy USD/CHF around 1.2670-80
. Sell Spot Gold around 436.50-437, with a stop above 440.50
. Buy AUD/NZD at 1.0811, and again at 1.0781
For more ideas send me an email, [email protected]
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