User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday August 15, 2006 - 21:19:15 GMT

Share This Story:
| | Email

Forex: Traders Send Dollar Lower on the Fear that Weak PPI Equals Weak CPI

DailyFX Fundamentals 08-15-06

By Kathy Lien, Chief Strategist of

• Traders Send Dollar Lower on the Fear that Weak PPI Equals Weak CPI
• Pound Loses Out to Euro After Disappointing PPI Numbers
• Things Turn Up Down Under, Helping Aussie and Kiwi to Rally

US Dollar

Disappointments in US data could very well mark a turning point for the US dollar. Over the past three trading days, the US dollar has remained firm and quietly scored some more gains after the surprisingly strong retail sales number on Friday. The market’s focus has now turned to inflation and the first report of producer prices failed to meet expectations suggesting that consumer prices due out tomorrow could disappoint as well. The Federal Reserve’s mandate is to maintain both price stability and sustainable economic growth. We would need to see strength in both sides of the equation - inflation and consumer spending figures - to have a good enough reason to expect the Fed to change their mind by reigniting their tightening cycle. Unfortunately, today’s softer PPI report not only failed to signal that another rate hike was needed before the year’s end, but actually validated the Fed’s decision to pause and suggests that rates will remain on hold for the remainder of the year. More specifically, despite a large increase in energy prices, headline producer prices only rose by 0.1 percent in the month of July while core prices fell by 0.3 percent. Traders are still waiting for the consumer price report to seal the deal and should it also disappoint, the turn in the dollar would be validated. In addition to the PPI report, sharp declines were also reported in the Empire State manufacturing survey and NAHB housing market index. The index measuring the manufacturing activity in the New York area fell from 16.6 to 10.3 while the NAHB housing index dropped from 39 to 32, a 15 year low. The confidence of builders have slumped significantly and with so many housing projects underway, many builders may have to rely on price cuts to drive sales. It is slowly becoming a buyers market as they become more selective in the midst of rising inventories. This hasn’t quite spilled over to the consumer yet, which is the main reason why the dollar did not react significantly to it. However things are getting grimmer by the day for the US economy and we will be closely watching the retail sales reports over the next few months to see if consumers are reacting to the slowdown. Meanwhile the only piece of good news was the report net foreign purchases of US securities. Foreign demand rose from a downwardly revised $63.6 billion to $75.1 billion in the month of June, driven primarily by an increase in private demand. However, the strong TIC data was not completely bullish for the US dollar. Foreign central banks were net sellers of US Treasuries, confirming that reserve diversification is indeed underway. Aside from the UK, no one was a major buyer. Japan, the world's largest holder of US Treasuries actually sold Treasuries for the fourth month in six. The high yield of US fixed income investments is the only thing that is keeping foreign investors here as June marked the strongest level of private inflows since November.


The Euro is stronger against the US dollar despite the lack of any economic reports from the Eurozone. Part of the strength was due to broad dollar weakness and the other part was an extension of Euro bullishness following yesterday’s robust GDP numbers. We are still expecting Eurozone CPI and industrial production along with German producer prices and French payrolls later this week, so there is more to come. For the time being, another rate hike is still expected from European Central Bank this year while traders are still trying to confirm whether the Federal Reserve is truly done with raising rates. Therefore, any evidence confirming or denying the Fed’s present stance will have a more significant impact on the EUR/USD currency pair until the ECB suggests otherwise.

British Pound

Even though the British pound has appreciated in value against the US dollar, it is benefiting purely from broad dollar weakness as the pound sells off against the Euro after weaker than expected economic data. Originally expected to remain unchanged, headline consumer prices fell by 0.1 percent in the month of July, driving down the annualized pace of price acceleration from 2.5 percent to 2.4 percent. Annualized core prices fell from 1.2 percent to 0.9 percent. The softer inflation reports suggests that the Bank of England’s interest rate hike earlier this month could very well be their last for the year, especially with oil prices quietly trending lower. Meanwhile the housing market continues to show signs of stabilization with the RICS house price index jumping from 28 percent to 31 percent, recording the fastest pace of increase in more than 2 years.

Japanese Yen

Trading in the Japanese Yen has been very mixed today after the tertiary activity index came out weaker than expected. The Yen is stronger against the dollar thanks to the combination of weaker US numbers and large US Treasury coupon payments made to bond investors, of which the Japanese represent a big lot. The rest of the week is fairly quiet for Japan will little on the calendar. The Bank of Japan will be releasing the minutes from their monetary policy meeting last month and we will be looking for not only how urgent they felt that the rate hike needed to be delivered, but also any timing of future rate hikes.

Australia, New Zealand

The Australian and New Zealand dollars were the best performing currencies against the US dollar today The Aussie benefited from comments from Finance Minister Costello who said that inflation risks are still significant due to higher oil prices. After last week’s stronger employment data and smaller trade deficit, the market has already begun to price in the possibility of another rate hike by the Reserve Bank. However this may not come until the fourth quarter as Reserve Bank Governor Macfarlane prepares to hand over his seat to the Deputy Governor Glenn Stevens on September 18. Meanwhile, the Kiwi is higher thanks to the sharp rise in producer prices. Input prices jumped from 0.9 to 2.7 percent in the second quarter while output prices increased from 0.7 to 2.7 percent. Both were much stronger than expected and are quietly suggesting that the RBNZ may have to reconsider raising rates further down the line as well. It is still a bit early to tell, but it is certainly a possibility.


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

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

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