User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday August 31, 2005 - 21:55:51 GMT

Share This Story:
| | Email

Forex: Dollar Slides as Weak Chicago PMI and Gasoline Shortages Counter Release of Oil Reserves

DailyFX Fundamentals 08-31-05

By Kathy Lien, Chief Strategist of and

- Dollar Slides as Weak Chicago PMI and Gasoline Shortages Counter Release of Oil Reserves
- Katrina Could Leave Hundreds of Thousands Jobless in September
- Global Consumer Consumption Beginning to Contract – Starting with Germany, Italy and Japan

US Dollar

The dollar sold off over 150 pips today against the euro. For our readers, this move should come as no surprise since as early as Monday we were talking about how irrational the market was acting, rallying the dollar when the devastation of Hurricane Katrina was far from being over and the damage was yet to be properly assessed. Yesterday, we chimed in again and said that even though the dollar remained unchanged and the Conference Board survey was stronger, we doubted that the improvement in confidence was a real reflection of how Americans feel now. With at least 8 refineries (representing 9% of US refinery capacity) in the region still remaining shut and even though President Bush announced plans to release oil from the nation’s Strategic Reserves, we doubt that it would help much in such dire situations. Florida Governor Bush has already warned of possible gas shortages in the coming days in Florida because of Katrina. Airliners have cancelled flights and are rationing fuel, especially since hubs such as Washington’s Dulles Airport and Atlanta’s Hartsfield airport rely primarily on jet fuel supplies from Louisiana and Memphis. With most of Louisiana, Alabama and Mississippi expected to be at a near stand-still in terms of economic activity for at least a week, Katrina could shave a minimum of one percent off of Q3 GDP. As if things weren’t bad enough already, we had some extremely disappointing data release this morning. The preliminary Q2 GDP report indicated that the economy grew by only 3.3% compared to the market’s forecast for 3.4% growth. The biggest disappointment though came in the Chicago PMI report, which slipped from 63.5 to 49.2. We had expected a slide, but certainly did not anticipate that the slide would be so deep that it would indicate that the Chicago region’s manufacturing activity actually contracted during the month of August. This is exceptionally negative ahead of the release of the national ISM report tomorrow. With so many uncertainties ahead and clear signs of weakness, we doubt that the Federal Reserve would risk a sharp contraction in growth just to combat inflation – especially if this inflationary pressure could cause deflation in other sectors of the economy. We also think that even if this Friday’s non-farm payrolls report comes out strong, it may not do much to help the dollar because at this point, the one million people minimum evacuated out of the region could very well now be jobless. If this is really true, the September non-farm payrolls report could be horrendous even if the August report is good.


The Euro traded higher today as some traders realize that comparatively speaking, the future of US growth looks bleaker than the future of Eurozone growth at this moment. Spending data out of Germany was weak, but the unemployment reports from both France and Germany showed signs of improvement. However, before getting too excited, even though the number of unemployed individuals decreased in Germany, the private sector did not add any jobs and instead, the job growth came primarily from the public sector. Q2 GDP was unrevised at 0.3%, but first quarter GDP was revised downwards from 0.5% to 0.4%. As such, we do not expect any surprises from the ECB at the meeting as well as at the following press conference. The central bank will probably continue to keep an eye on inflation, monetary growth and express their belief that economic activity should continue to improve over the next few months.

British Pound

Consumer confidence drifted lower as per today’s GfK optimism index leading some to speculate that further interest rate cut considerations may be in the works for the U.K. economy. Expected to dip to a reading of negative one, the report saw optimism decline to a negative 4 reading, suggestive that confidence may be shakier than previously expected. This may raise a few eyebrows as policy officials were banking on the recent interest rate cut to work its way into the economy, ultimately bolstering consumer interest and spending. However, consumers remain reluctant to consume given the fact that housing valuations are stunted. Additionally, overall domestic output continues to be staid to slightly bearish and crude oil prices are continually rising higher, posing further taxes on consumer and business spending. This ultimately makes the upcoming decision increasingly difficult for the Bank of England, as consumers may need further cuts to be coaxed into consuming. However, with inflation relatively high in the region, policy makers may not be willing to cast aside their hawkish beliefs for renewed domestic demand. This poses a great setup for the next meeting as the market is relatively convinced Mervyn and his band will opt for inflationary prevention rather than positive consumption.

Japanese Yen

Pounded by short sellers earlier on, the Japanese yen fell for the fourth day as concerns over the effects of oil on the country’s productivity arose. However, the currency regained some footing later on and looks to continue the ranging environment that has been taking place for the past week. Although relatively brief, the earlier weakness does seem to reflect some hesitance by the market, especially after this morning’s industrial production print. Rising 1.6 percent in the previous month, output actually fell 1.1 percent in July. Although not at all surprising, as previous figures had led up to the notion, it confirms the utterly slow pace that the Japanese economy is taking in turning the corner. It also looks as if the domestic consumer isn’t willing to contribute their hard earned yen, as taxes are now becoming an increasingly difficult consideration, especially with the repeal of the previously lofty tax rebate and higher pension contributions. Worker earnings actually rose for the fourth month as demand for labor increased. Adding to woes, were suggestions by Prime Minister Koizumi that the national sales tax looks likely to increase, he actually said that it is “inevitable”. Given all of these factors, including an upcoming political election and waning interest in a tepid equities market, focus may ultimately shift to basic fundamentals, leading interest away from the currency. As a result, until proactive growth reform can be implemented and accommodations made to the bolster consumer consumption, economic expansion may be a foregone thought.


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