Monday October 17, 2005 - 06:27:13 GMT
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Tricom Futures and Foreign Exchange -
Forex: Is this the start of the USD routing?
The dollar slid in late trade Friday, pressured by news that headline consumer inflation last month registered its largest advance in more than 25 years while consumer spending slowed. Traders said the weight on the dollar was compounded by liquidations of long positions as institutions shifted accounts away from the scandal-rocked commodities broker Refco Inc.
The Labor Department said consumer prices rose a larger-than-expected 1.2 pct. A record 12 pct rise in energy prices fueled the historic jump in consumer price index, but core inflation -- which excludes food and energy -- increased just 0.1 pct. Economists were expecting the CPI to rise 0.9 pct and the core CPI to rise 0.2 pct. The dollar was hurt by the headline CPI figure because the currency market this week is focusing on the risks to US economic growth posed by soaring energy prices and recent hurricanes.
Well is this the start of the USD routing we've been looking for since late Augsut? I'm cautiously optimistic that it is. What makes this different from just mere profittaking in the USD, is that the market talk is starting to centre on inflation cooling, consumer sentiment falling, and the effects of Katrina are starting to come through in the data. All this is starting to get traders talking about the FOMC possibly turning its monetary policy to a neutral stance.
Today’s Economic Releases:
US: Empire State Manufacturing Index
Today's Top Trades
- Buy dips in EUR/USD towards 1.2050-40
- Sell rallies in USD/CHF towards 1.2870-80
For more ideas send me an email, [email protected]
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