User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday July 26, 2007 - 21:35:25 GMT

Share This Story:
| | Email

Forex - Commodity Currencies Suffer as High Yielders Go Out of Favor

DailyFX Fundamentals 07-26-07

By Kathy Lien, Chief Strategist of

•    Dollar Collapses, Fed Fund Futures Show 90% Chance of Rate Cut by Year End
•    Dow Plummets 300 Points, Carry Trade Liquidation Continues
•    Commodity Currencies Suffer as High Yielders Go Out of Favor

Dollar Collapses, Fed Fund Futures Show 90% Chance of Rate Cut by Year End

The problems in the US housing market are worsening and anyone who is long stocks, carry trades or the US dollar is feeling the pain.  Next to the 3.2 percent decline in the Dow back in February, this is the largest one day point loss since the beginning of the year.  Unlike the previous corrections that we had in June, there were plenty of clues that this one could be a lot worse.  In yesterday’s Daily Fundamentals we talked about how even though the stock market recovered, yields were lower, which suggests that there may be more bad news to come.  On Tuesday, we warned that risk aversion is returning, which meant that the sell-off in the yen crosses may be closer to liquidation than the profit taking that we have seen in the past.  We were watching the Chicago Board Options Exchange Volatility Index or the VIX.  At the time it was nearing February levels and today, it hit a new 13 month high.  High VIX readings represent a rise in risk aversion and typically coincides with a sharp sell-off in US stocks.  We can also tell that risk aversion has returned because credit spreads have widened significantly.  The latest wave of panic selling has been caused by the combination of weak US economic data and news that Wells Fargo, the nation’s second largest home lender and fifth largest bank will stop making sub prime loans through third party brokers.  We are clearly seeing the problems in the housing market extend beyond subprime.  New home sales dropped 6.6 percent in the month of June while rising inventories drove the median price down 2.2 percent.  Durable goods sales also fell short of expectation as defense spending slowed.  The labor market may even be affected with newspaper help-wanted ads dipping to a 49 year low last month.  The fact that jobless claims remains at healthy levels indicates that companies are not firing, but at the same time, it does not mean that they are hiring. In light of all of this weak data, Fed fund futures are now pricing in a 90 percent chance of a rate cut by the end of the year; this represents a sharp jump from the 44 percent chance reported yesterday.   Given all of the disappointments reported today, there is a decent chance that tomorrow’s second quarter GDP growth figure will miss expectations.  Even though the stock market has rebounded, yields are still sharply lower which suggests that dollar weakness may not be over.    

Dow Plummets 300 Points, Carry Trade Liquidation Continues

Rising risk aversion has caused a wave of carry trade liquidation.  None of the Yen crosses were spared in the second worst day for carry traders this year.  The biggest losers were NZD/JPY and AUD/JPY, which dropped 400 and 340 points respectively.  Carry trades only work in a market that is willing to take on risk.  With evidence that things could get worse before they get better in the US, it may be wise for carry traders to stand aside for the time being.  Some economists are once again calling for a recession.  Market expectations have shifted dramatically which makes it a far more unstable environment than a few months ago.  Tonight’s Japanese data is not likely to matter at this point because the problems are far more severe than the risk of a rate hike by Japan.  Consumer prices and retail sales are due for release.  Inflation is expected to remain nonexistent while retail sales are predicted to rebound.  A rebound in the Yen crosses will however be contingent upon whether we see any follow through selling in the US stock market.  

Commodity Currencies Suffer as High Yielders Go Out of Favor

As victims of carry trade liquidation, the Australian, New Zealand and Canadian dollars also sold off aggressively today.  Unsurprisingly, the biggest mover was the New Zealand dollar which suffered greatly from last night’s dovish comments by Reserve Bank of New Zealand Governor Bollard.  The trade balance is due for release tonight.  The strong kiwi is expected to turn the surplus into a deficit, which could exacerbate the currency’s weakness.  The New Zealand dollar should also begin to under perform its Australian counterpart as the recent inflation data from Australia has the market pricing in another rate hike this year.  A turn is in place for all three currency pairs.  We continue to expect more weakness in the Canadian dollar, particularly against the Japanese Yen.  

Euro Rebounds on Broad Dollar Weakness; Swiss KoF Expected to be Strong

On a day with big moves in all of the financial markets, the EUR/USD was left out of the action.  The meager 0.14 percent or 20 pip rally in the currency pair suggests that even though traders are bearish dollars, they are not all that bullish Euros either.  Business sentiment in Germany is deteriorating with the IFO survey dropping from 107 to 106.4 in July.  This past week, we have seen plenty of evidence that the strong Euro is having a negative impact on the Eurozone economy.  However for the time being, the “negative impact” has not become severe enough to keep ECB members from enjoying their month long holidays.  The rise in money supply indicates that inflation is still a problem, which means that the central bank can use a strong Euro to reduce inflationary pressures.  Meanwhile Switzerland will be releasing its leading indicators report tomorrow.  The economy has performed well over the past month thanks to the weakness of the Swiss franc.  We expect the release to continue to reflect the country’s solid growth prospects.  

Weak Housing Numbers Weight on British Pound

The British pound sold off for the second day in a row on the back of weak housing market data.  Nationwide house prices increased only 0.1 percent in the month of July, dragging the annualized pace of price growth down to 9.9 percent from 11.1 percent.  The Chief Economist at Nationwide blames the increase in house prices, but even so, traders should not lose sight of the fact that the UK economy is out performing the US economy.  What is really weighing on the pound is GBP/JPY liquidation.  When that comes to an end, so could GBP selling.


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 9 July 2018
AA 12:00 EZ- Draghi EU Parliament Testimony
Tue 10 July 2018
AA 08:30 GB- Ind/Prod Output, Trade
AA 09:00 DE- ZEW Survey
Wed 11 July 2018
A 12:30 US- PPI
A 14:00 CA- Bank Of Canada Decision
A 14:30 US- EIA Crude
Thu 12 July 2018
AA 12:30 US- CPI
Fri 13 July 2018
A 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