User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday July 5, 2005 - 20:41:04 GMT

Share This Story:
| | Email

Dollar Extends Rally As Market Contemplates 4% Rates

DailyFX Fundamentals 07-05-05

By Kathy Lien, Chief Strategist of

∑ Dollar Extends Rally As Market Contemplates 4% Rates
∑ Pound Extends Slide Despite Better Data
∑ Surge in Oil Prices Keep USDJPY Bid

US Dollar

Traders coming back from the holiday weekend will find dollar strength persisting into non-farm payrolls week. Since the beginning of the year, the dollar has rallied 15 percent against the euro to the highest level in 14 months. Nothing has changed over this past weekend with the marketís rationale for the continuation rally still being the Federal Reserveís aggressive interest rate hikes. Circulating in the market this morning was talk of 4 percent interest rates thanks to a sharp leap in the October Fed Fund contracts. We are seeing the market price in an increasing likelihood of two more interest rate hikes between now and October, which means that we may see consecutive quarter-point hikes at the August 9th and September 20th meetings. However one external factor that we are also observing that could cut short the dollar rally is increased signals that a top may be developing in the housing market. With the real estate market booming for so many years, we do not want to jump the gun and call for an end that may not see until a year or two from now. Yet, the signals are there, making them hard to ignore. One of the primary catalysts for the marketís boom over the past few years have been the Federal Reserveís interest rate cuts. Now, the tables have turned and the Fedís rate hikes are pushing the costs of mortgages higher. Real estate investors for the time being have been sheltered by low long-term yields, but the longer that rates remain low, the more compelling the reason the Fed has to fix this anomaly. The real estate market is a speculators market Ė this weekendís Baltimore Sun reported that two-thirds of the houses sold this year have been to investors. According to a CNN interview with Aaron Brown, in Los Angeles, the number of homes sold that have been owned for less than six months jumped 47 percent in a year. The rise in rates is already beginning to have an affect on the market. Massachusetts reported last month that the number of homes sold plunged 11 percent. Existing home sales on a national basis fell in the month of May while new home sales, increased, but far short of expectations. The performance of the housing market is very important to watch because US consumer wealth and spending habits have become very much tied to the value of their homes. In the past, consumers were banking on Internet Stocks for retirement, now it is their housing market investments. Should house prices tip over, like they are beginning to in Australia and the UK, we could very well see a mirror image of the poundís price action in the dollar.


The recent weakness in the Euro continues to be mostly beneficial for the Eurozoneís economy. Retail sales for the region increased 1.1 percent, which pretty much erases last monthís fall. German retail sales came in particularly strong rising 2.7 percent compared to a 0.7 percent slide the previous month. ECB officials continue to oppose a rate cut, with Market News even reporting that central bank officials may be discussing the possibility of raising rates. Yet not all news was good news. Unlike the manufacturing sector, the service sector did not rebound, but thanks to strong consumer spending in France, the fall in the index was limited. The ECB meets this Thursday to discuss interest rates Ė they are expected to confirm their overall neutral stance.

British Pound

We have yet another session of bleeding in the pound as traders shorted the currency for the sixth consecutive session. An improved service sector PMI and better than expected BRC retail sales number failed to stop the currency pair from losing approximately 800 pips in 6 days with no reprieve in sight ahead of the Bank of Englandís interest rate announcement on Thursday. Citing further confirmation of a slowdown in consumer spending as the reason for keeping rates unchanged, more central bankers may side with the cut this time around as individual consumption has dipped slightly along with consumer confidence. Additionally underpinning the notion has been lackluster industrial and manufacturing production reports. However, remaining a concern on the minds of central bankers has been consumer borrowing figures. For the month, consumer lending actually increased as did net lending on residential housing. A decrease in short term interest rates, although beneficial as it spurs economic activity, may in fact lead to further inflation of both figures. Creating fears of a potential credit bubble, this may hinder any firm bets on a definitive decrease in benchmark rates by policy makers on Thursday, suggesting that policy makers may subsequently pass on moving once again, postponing any major decisions until August.

Japanese Yen

No economic data, not a problem. Traders took to the data absent session in pounding the currency lower as crude oil prices regained their strength on temporary supply concerns. An impending tropical storm centralized in the Gulf Coast led traders on the NYMEX to push the commodityís price higher, testing the $60 a barrel resistance. With the land of the rising sun importing 98 percent of its oil, the growth that we witnessed earlier in 2005 could be in jeopardy, especially as it may affect timid consumers. On the brighter side, this could solve the persistent deflationary concerns as higher producer prices would ultimately trickle on to the consumer, leading to a whole new can of worms. Separately though, and the foremost reason on yen bearishness, looks to be the confirmed emergence of the 2005 carry trade. With the Federal Reserve lifting, as expected, interest rates to 3.25 percent, benchmark rate spreads have now widened to a whopping 325 basis points. This offers an investor the advantage of not only gaining from the inherent upward appreciation, but also accruing a significant amount of interest. Regardless of either rising oil prices or the carry trade bandwagon, further downside may be forthcoming in the currency until there is a significant improvement in the economy and monetary policy can be established.


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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105