User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday July 17, 2006 - 21:37:11 GMT

Share This Story:
| | Email

FXCM - Dollar Rally Faces Hurdles at Present Level

DailyFX Fundamentals 07-17-06

By Kathy Lien, Chief Strategist of

• Dollar Rally Faces Hurdles at Present Level
• Is BoJ’s “Gradual” the Same as the Fed’s “Measured?”
• Sharp Drop in Gold Prices Sends Aussie Tumbling

US Dollar

Risk aversion around the world is sending traders piling into the long dollar trade. As geopolitical risks rise, so does the US dollar. The relative stability of the country and its high interest rates is making dollar denominated assets an attractive place to hide for many. However, the dollar’s rally could very well have run its course as we come up on major support in the EUR/USD and resistance in USD/JPY. It is time to refocus on fundamentals and the future of the US economy as we prepare for this week’s extremely busy US economic calendar. We have already seen the Empire State Manufacturing survey and industrial production report, which were conflicting and gave us little directional indication. The NY Fed survey reported surprisingly sluggish growth in the month of July which suggests more weakness in the months ahead. On the other hand, industrial production surged by 0.8 percent in the month of June and although the report is more backward looking, it marked the strongest quarter in seven years. Capacity utilization also hit a six year high which suggests that inflationary pressures are still prevalent. We look for confirmation of inflation pressures in tomorrow’s producer price and Wednesday’s consumer price reports. Strong numbers on both fronts will prompt traders to position for slightly more aggressive comments by Bernanke late Wednesday morning when he delivers his semiannual testimony on the economy and monetary policy. The market is still predicting another rate hike in August, especially in the context of higher energy prices which means that they will be relating incoming economic data with the need for tighter monetary policy. Aside from PPI, we are also expecting the net foreign purchases report (also known as TIC) for the month of May. After the weak $46.7 billion inflow reported in the month of April, we need to see inflow in excess of $60 billion for traders not to punish the dollar. One month does not make a trend, but two certainly raises that concern. The current forecast is already calling for a weak demand of $56 billion. With central banks talking of reserve diversification and the Dow plunging 600 points in the month of May, there is ample evidence that demand could be waning which would bring the US’ structural deficiencies back to the forefront.


The Euro has been moving to the tone of the US dollar as in line economic numbers and a clear stance by the European Central bank gives way to the uncertainty in the Federal Reserve and the world in general. Despite solid economic performance, the Euro has seen its longest stretch of weakness in a month. This suggests that once things calm down, we could see a nice rebound in the Euro if its fundamentals prevail. The high level of oil prices at a time when temperatures are also at record highs around the US poses a significant risk to US consumer spending. We already saw a surprising contraction in spending in the month of June and the risks are for repeated weakness in July. In fact, the yield curve has inverted even deeper indicating that traders fear the Fed’s aggressive stance could cripple the US economy. With the “dollar” component of the EUR/USD driving the pair’s price action, our primary focus will be on the US economy this week. Eurozone economic data continues to confirm the central bank’s need to raise interest rates in August. Consumer prices accelerated by 0.1 percent in the month of June, bringing the annualized pace of growth up to 2.5 percent, firmly above the ECB’s 2 percent target. Industrial production also remains strong, rising by a more than expected 1.6 percent in the month of May. This should be promising for tomorrow’s ZEW survey of economic sentiment as the combination of stronger economic data and the World Cup effect keep analysts optimistic on the health of the German economy.

British Pound

Like the Euro, the British pound fell victim to dollar strength. The sole scheduled release coming out of UK for the session was Rightmove's measure of housing prices leading into July. According to the release, the average price for homes on sale in the Kingdom rose 2.9 percent for the four weeks ending July 8th, while the annual gauge climbed to an impressive 10.6 percent pace. In itself, the jump in prices was a month away from a five-year high rate. However measuring it up in broad terms, it seems far from a foundation to a rebound in the housing market. Nationwide housing prices last month failed to reach conservative predictions of an increase, while the HBOS gauge for the same month actually declined 1.2 percent. A few explanations for the unexpected rise range from unusual activity in the south all the way to a lack of cheaper options in the summer months when developers move inventory. Whichever way it adds up, the fundamentals are not supporting a full return to a roaring housing market, which in some measures accounts for nearly 60 percent of consumers' total wealth. With unemployment running high, wages slowing and another cut to the overnight lending rate seemingly a ways off, there is little support for the Brits to jump into the expensive venture of new home ownership en masse. Some form of confirmation could be offered from the RICS price balance scheduled for tonight, but pound traders are really holding out for the CPI gauge scheduled for release at 8:30 GMT.

Japanese Yen

Last week, we saw broad based Japanese Yen weakness that was exacerbated by the neutral comments from the Bank of Japan after they raised interest rates by a quarter of a point. Today, the performance of the Yen was more mixed with the Japanese currency recuperating against the Euro, Swiss Franc and British pound, but extending its weakness against the US dollar. The future of the Japanese Yen is really dependent upon how much more you expect the Bank of Japan to raise interest rates. In a conversation with the Chief Currency Strategist of a leading Australian bank (interview to be posted on DailyFX in the next week), an interesting perspective was brought to the table. Although most interpreted the BoJ’s comments to mean no more rate hikes in the near future, it is possible that the BoJ’s usage of the word “gradual” is similar to the Fed’s use of the word “measured.” The Bank of Japan has seen the Fed’s success in taming the US dollar’s rise despite having raised interest rates by 425bp and they are mostly likely envious to do the same. As an export dependent economy, Japan has even more to lose if the Yen appreciates too quickly.


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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105