Monday September 26, 2005 - 14:09:02 GMT
Share This Story
Mellon Bank Foreign Exchange - https://fx.mellon.com/
Forex: Mellon FX Daily - U.S. EditionKey Points
• USD maintains support as Rita fails to inflict maximum damage.
• Further USD strength likely this week as long as weak economic data can be avoided.
• Oil prices will also be key - $63 is major trigger support for light crude.
The USD surge on Friday has been validated by the course Rita took over the weekend, with the hurricane failing to exact the widespread damage to the oil industry generally feared. In fact, the USD move on Friday (USD index breaking up to new 2-mth highs) was all the more significant for happening in the face of such potential adversity. While there is a chance of some consolidation initially this week, further USD upside is now favoured and there is a clear risk of the July low of 1.1866 being tested on EUR-USD
over the next 1-2 weeks.
Most currencies are likely to suffer in the face of such a move, although the European currencies are likely to be the hardest hit. If there are risks to this view, it will come from this week’s US economic data (new and existing home sales, Conference Board consumer confidence, Michigan sentiment, durable orders, final Q2 GDP, August core PCE prices and Chicago PMI) and the performance of energy prices. Each piece of data will be seen as a potential hurdle the advancing USD will need to overcome.
The market is still trying to gauge the extent of fresh disruptions as a result of Rita, but initial reports are reasonably encouraging. In an extra NYMEX trading session yesterday, light crude
fell back to key support at $63 before bouncing a little last night. This level is key in the short-term – below it would signal a head and shoulders formation on the chart and risk towards $55-$56. Such a development would be positive for equity markets and the USD.
Data overnight out of Japan
was generally encouraging, with the MoF business sentiment survey showing improvements in all the main balances. The all industry balance (+9.7) moved above the recent high of 9.6 recorded in Q3 last year and in doing so recorded its highest level since 1991. This survey is usually a good indicator of the Tankan, which is out October 3. The data and a further advance in Japanese equity markets should provide some support for the JPY in the face of any advances in the USD, suggesting that the JPY will likely do well on European crosses.
not that much scheduled for today, although existing home sales will be watched to see if there has been any faltering in the overall uptrend. Fed speakers appear, although Moskow and Greenspan are unlikely to touch upon areas close to policy. However, Hoenig will speak on the economic outlook tonight.
Data/event EDT Consensus*
DE CPI states (Sep, prel) m/m n/a +0.2%
US Fed’s Moskow speaks 09.00
US Existing home sales (Aug) 10.00 7.12m
US Fed’s Greenspan on regulation 13.30
NZ Trade balance (Aug) 18.45 -NZ$0.8bn
JP CSPI (Aug) y/y 19.50 -0.7%
US Fed’s Hoenig on econ 21.45
Latest data Actual Consensus*
JP MoF manu survey (Q3) +6.4 -2.4 last
JP MoF all-industry survey (Q3) +9.7 +0.9 last
SE Trade balance (Aug) SEK7.2bn SEK9.0bn
IT Ind orders (Jul) y/y +5.6% +3.3% last
* Consensus unless stated
2005, Mellon Financial Corporation Note: Although obtained from sources believed by us to be reliable, Mellon Financial Corporation and its affiliates cannot guarantee the accuracy or completeness of the information upon which this report is based. This report does not purport to disclose the risks or benefits of entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.
Ian Gunner 44 20 7163 5996 06.40 EDT Monday May 31 2005
Forex Trading News
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
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."