User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday September 22, 2005 - 14:56:55 GMT
INVESTICA Ltd - www.investica.co.uk

Share This Story:
| | Email

Running on empty - US growth under threat

External shocks such as hurricanes Katrina and Rita would not normally disrupt longer-term economic trends. There are, however, likely to be major concerns over spending levels this time, especially with the US consumer already over-stretched. The US is also running substantial current account and budget deficits and there will be upward pressures on both deficits over the next few months. Overall, the economy is not in a good position to manage external shocks, especially with a very low internal savings rate.

The Federal Reserve will need to monitor inflation levels closely due to the impact of high energy prices and will also have to steer policy very carefully over the next few months as mistakes could prove costly. Given the net risks, it is likely to be more difficult to maintain overseas confidence in the US economy, especially given the underlying trade deficit fears.

The US economy has proved extremely resilient over the past few years and could certainly power ahead again. Overall, however, there is a considerable risk that the twin-hurricane threat will help trigger an important tipping point for the US economy which results in a sharp slowdown in growth over the next year.

Second hurricane threat

US confidence levels will remain an important focus in the short term, particularly with the US again under threat from another hurricane. Rita has developed from a tropical storm and is now officially a category 5 hurricane.

Hurricane Katrina has certainly had a short-term impact. Consumer confidence weakened sharply in the latest University of Michigan survey with a slump to a 13-year low in the early September reading. There was also a sharp drop in the Philadelphia Fed manufacturing index survey for September.

Weather events such as hurricanes Katrina and Rita would not normally have a long-term impact on the US economy with optimism that confidence levels would recover quickly over the next few weeks. There are, however, reasons to be concerned over underlying US trends and there is a greater risk that the hurricanes will prove to be a significant watershed for the US economy. The risks will inevitably be magnified if there is serious damage from Rita over the next few days.

Vulnerable to external shocks

The principal concerns are likely to surround the fact that the US consumer sector is not well placed to managed to external shocks. The latest personal spending data recorded that the US was running a negative savings rate, the lowest rate for at least 60 years. If there are any downward pressures on income levels, there will quickly be pressure for spending levels to be cut as there will be little cushion from lowering savings rates.

Similarly, US consumers will fell a significant impact from high energy prices and rising essential costs, especially as prices have increased strongly for 2005 as a whole. US retailers have been successful in pushing sales over the past few months, but there is a high risk that there will now be a sharp slowdown in consumer spending, especially as purchases are likely to have been brought forward, effectively robbing the economy of future growth.

It is also the case that the US is likely to have a medium-term shortage of oil-refining capacity and this will tend to keep upward pressure on energy prices or force the US to increase imports. In either case, growth trends are liable to deteriorate.

Federal deficit will widen

There will be substantial federal spending associated with reconstruction efforts and, if there is substantial damage from hurricane Rita, there will be further government spending increases. Estimates suggest that additional federal spending could easily exceed US$200bn over the next 2 years. Construction spending will help support growth in the economy. The US government is, however, already running a high budget deficit in excess of 3.0% of GDP and there is only limited scope for increasing government borrowing without having an adverse impact on long-term interest rates.

Any sustained rise in bond yields would have a negative impact on the economy, especially as the housing sector is closely associated with the level of interest rates. Rising interest rates would risk a significant slowdown in the housing sector which would, in turn, increase pressures to curb spending levels.

There is also the threat that rising US federal borrowing will crowd out private-sector investment and this would undermine the underlying GDP growth rate.

Inflation concerns will continue

Inflation has already been pushed up be rising energy costs and the dislocation to key infrastructure will put further upward pressure on headline inflation in the short term. The Federal Reserve will be looking to prevent secondary inflation pressures and will, therefore, also be looking to increase interest rates further. The Fed will certainly be in a weaker position to support the economy through interest rate cuts if there is a sustained downturn in demand.

Market confidence vital

Overseas confidence in the US economy has remained firm during 2005 and this has allowed the dollar to remain firm despite persistent concern over the level of US external deficits. The confidence has, however, been built on expectations that US growth will continue to out-perform Europe and Japan. If this out-performance is in doubt, there will be an increased risk that overseas investors will pull funds out of the US. The US should, however, still be protected from severe pressure by the fact that Europe and Japanís growth prospects will also be weakened by the jump in energy costs.

A resilient performance by Wall Street would increase the potential for the US economy to weather the storm. A sustained downturn in the key US market would however, be damaging, especially as it would undermine domestic and overseas confidence in the economy.

 

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 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Wed 18 Oct
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales

Forex Trading Outlook


Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.

  • POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.



  • POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.

  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.



  • POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.


  • POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.



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