Wednesday November 16, 2005 - 05:57:02 GMT
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Tricom Futures and Foreign Exchange -
Forex: My US data today = More upside for the USD
The US dollar was trading weaker against the euro and yen on profit-taking after fresh highs, while the market awaits further indicators to boost the currency over coming weeks. The US dollar was supported overnight on solid economic data in the US, with the euro trading to a new recent low of 1.1640 usd despite stronger gross domestic product data for the September quarter in the euro zone. The US dollar/yen rate also strengthened to a fresh recent high of 1.1942 yen, before profit-taking reversed the US dollar buying as traders viewed the current rally as overextended.
US producer price inflation for October rose 0.7 pct following a rise of 1.9 pct in September, and was mostly due to high energy costs while the market expectation was for a flat result. The core PPI, excluding volatile food and energy prices, fell 0.3 pct in October from a rise of 0.3 pct a month earlier and was below the market consensus of a 0.2 pct rise. The advance estimate for US October retail sales fell 0.1 pct from a rise of 0.3 pct in September, while the market had expected a 0.7 pct fall.
Another quiet Asian session today, as the market starts to think that maybe this USD rally is becoming slightly over-stretched. I on the other hand believe that if the US is the only major country hiking rates at present, then why wouldn't their currency be appreciatting.
Just over Asian lunch we've seen the USD/JPY move back above 119.20, on the back of strong fund buying, and also some USD buying across the board.
Once again, tonight's CPI and TICS data should continue to be USD supportive.
Today's Economic Release:
UK: BOE Inflation Report
US: TICS Data
Today's Top Trades
- Sell EUR/USD around 1.1740
- Sell GBP/USD around 1.7400
For more ideas send me an email, [email protected]
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