Thursday July 28, 2005 - 02:44:37 GMT
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Tricom Futures and Foreign Exchange -
Forex: If you can play with a Yo-Yo, you can traded the EUR
The USD weakened on Wednesday, snapping a three-day advance against major currencies after unexpectedly strong U.S. economic data failed to push it through a key technical level against the euro.
A surprise increase in orders for durable goods in June briefly pushed the dollar up early in the New York session, but options-related buying kept the euro above $1.1950 and its subsequent rally spilled over into other currencies.
The Federal Reserve's latest snapshot of the U.S. economy , its so-called "Beige Book," was released later in the day but also failed to give the dollar much support. It showed that economic activity continued to expand in June and early July, suggesting a relatively robust economy. But it also said labor market hiring was mixed and pricing pressures eased or were flat in most regions, which, on the margins, could temper expectations of dollar-supportive interest rate rises. The Fed has raised benchmark interest rates nine times since June last year to 3.25 percent, and has shown no signs of stopping any time soon.
All eyes are now on the first estimate of U.S. gross domestic product for the second quarter, which will be released on Friday. If the data shows growth of 3.5 percent or more, then the dollar could head back up again, pushing the euro back down toward that key $1.1950 support again.
The NZ central bank announced earlier today kiwi rates would be left unchanged, as expected, and also toned down their statement, but not as much expected.
So far this morning, we've seen the USD retreat further from the NY close. The PBOC Vice Governor made some comments earlier suggesting the Yuan maybe allowed to fluctuate with the market somewhat more than traders expect. It seemed like a somewhat nothing comment, but it's been a quite news day thus far.
The EUR looks like it might extend a little further towards 1.2100-20, but i think we will eventually test 1.1800 in coming weeks before turning around. A break below 1.2930 in USD/CHF could get a bit ugly. Otherwise, i think the day will be fairly uneventful ahead of tomorrow's US GDP.
Today’s Economic Releases:
JPN: Retail Sales
US: Weekly Jobless Claims
Today’s Top Trades
· Buy AUD/NZD around 1.1110-20
· Sell EUR/USD around 1.2080-90
· Sell NZD/USD around .6810-20
For more ideas send me an email, [email protected]
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