User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday December 12, 2005 - 23:17:42 GMT
FXCM - www.dailyfx.com

Share This Story:
| | Email

Forex: Dollar Sells off on Fear That Fed Will Change Language

DailyFX Fundamentals 12-12-05

By Kathy Lien, Chief Strategist of www.dailyfx.com

• Dollar Sells off on Fear That Fed Will Change Language
• Euro Rallies on Talk of Dollar Reserve Diversification
• Pound Shoots Higher on Stronger PPI Data

US Dollar

Traders took the dollar lower today on fears that the Federal Reserve may be making significant changes to their FOMC statement tomorrow afternoon. For the eighth time this year, the Fed is expected to raise interest rates by 25 basis points to 4.25 percent. As had been the focus of the past, the market will be paying more attention to the accompanying statement rather than the near guaranteed move. According to the minutes from the November meeting, members of the Federal Reserve had believed that “several aspects of the statement language would have to be changed before long, particularly those related to the characterization of and outlook for policy.” The markets are looking for two possible changes – either the Fed drops the word “measured” or tweaks the “accommodation” statement by saying that after their December rate hike, policy is only slightly accommodative. If either change is indeed made, we could see the dollar continue to sell-off. However, with only one more interest rate meeting after this one that he will be chairing, Greenspan may instead choose to play it safe and pull for an unchanged statement until January, after which it becomes Bernanke’s problem. This may not be too hard to pull off, especially since the differing views within the FOMC may make it difficult to agree on what changes should be made. However, before the market fully shifts into FOMC mode, we do have retail sales due for release at the beginning of the US session. Sales are expected to rebound, but stripping out the automobile component, it is predicted to be unchanged, which means that the release may still bring a bit of uncertainty. Meanwhile, the market completely shrugged off the November budget deficit figure, which hit a record of -$83.1 billion. Spending related to Hurricane Katrina as well as higher interest payments both pushed costs higher by 15.3 percent year over year. With the deficit having been a concern for some time now, the market seems to be giving more priority to unknown events this upcoming week.

Euro

The Euro broke higher against the dollar today following comments from People’s Bank of China adviser Yu Yongding who said that China and other Asian countries may be looking to reduce their dollar denominated reserves or at least slow the rate of accumulation. More specifically, he called for more changes to China’s foreign exchange regime, such as a further widening of the trading band and a cut in the dollar’s percentage makeup in the CNY FX basket. Reserve diversification is an age old topic that we have been talking about for some time now and a topic that fell to the sidelines after China moved to a weighted basket. With the Euro beginning to turn, topics of the past should begin to resurface as traders or economists look for justification for the dollar’s sell-off. Concerns such as the US’ record budget deficit, and central bank reserve diversification could all be factors that will be brought up. Ultimately, even though recent ECB speak has confirmed to the markets that the central bank has no intentions of following in the Fed’s footsteps by beginning their own aggressive rate hike campaign, the market is looking for the ECB to continue to hike rates in the year ahead. Meanwhile with the US, traders have become complacent with rate hikes and are actually watching the Fed very closely for signs of when they will stop raising interest rates.

British Pound

The British pound shot higher for the third consecutive trading session, erasing the past two months of losses as producer prices increase more than expected. Input prices increased 1.4 percent in the month of November as output prices fell 0.2 percent. This is the second month that we are seeing producers bear more of the higher cost than their end users. This trend cannot continue forever. Tomorrow’s consumer price report should be a bit more telling as to whether the growing costs have hit the pocketbooks of consumers at all. Also helping to bolster the pound today was the improvement in the CBI’s survey of the manufacturing sector for the month of December. The total orders index increased from -25 to -22 despite a slide in export orders from -13 to -23. With the index still negative, the manufacturing sector is far from healthy and the UK economy has yet to fully stabilize. The central bank should still be watching the housing sector very closely for signs of a renewed downturn. The ODPM reported today that growth in house prices moderated to 2.2 percent y/y in November from 3.3 percent in October.

Japanese Yen

These days, the true direction in the Japanese Yen is being reflected more in the trading of the Yen against the crosses than the Yen against the dollar. Taking a look at today’s price action, we saw the Yen trade lower against the EUR, CHF, and GBP but higher against the USD. Japanese economic data released overnight was mixed to negative with the trade surplus shrinking and the prices of consumer goods falling, while consumer confidence rebounded. Japan has been struggling to recover and the recent rebound in oil prices is certainly not helping. Against the dollar however, the Yen has rallied, which confirms that the currency pair’s price action is primarily driven by dollar factors and not yen factors. USDJPY is still one of the most attractive carry trades of 2005, but with the fear that the Fed may be softening the tone in the FOMC statement tomorrow, traders are treading very carefully. Comments from PBoC adviser Yu also helped to bolster Yen gains as a reduction in the dollar’s share of the basket could possibly mean an increase to the Yen’s share. This is especially true since China is now Japan’s largest trading partner and Japan is China’s third largest trading partner.

 

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 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


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



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