Tuesday September 14, 2004 - 10:20:47 GMT
Share This Story
DailyFX.com - www.dailyfx.com
Forex: US OPEN MARKET POINTS 09-14-04
Escaping from no Man’s Land
Perhaps we’ve seen too many WWI movies and are unduly affected by scenes of some poor slob caught between two trenches, desperately trying to make it to safety as bullets from both his countrymen and his enemies wiz through the air rendering him motionless. The recent price action in FX certainly make us think of “no man’s land” as pairs grind through mind numbingly boring sessions trapped in directionless ranges with neither the buyers nor selling having much sway. Hopefully, today kicks off a heavy week of data that may offer if not direction – at least some near term volatility.
Tonight’ s inflation data from UK is muted reporting 0.3% versus 0.4% expected leaving little immediate reason for BOE to increase rates. Overall, UK inflation is growing at a slower pace than of its much larger European neighbor. Initially, this fact may appear pound bearish, but given UK’s 4.8% unemployment rate versus the Euro-zone ‘s 9.9% figure, it is instead a testament to the strength of UK economy.
On the other hand the ZEW investor survey today reported a much worse than expected reading of 44.7 versus 51 consensus estimate as oil spikes and stubbornly high unemployment data weigh heavily on European investors. With almost all of the EZ growth coming from exports European investors are deeply concerned about the slowdown of US consumer demand. Should US curtail its buying, Europeans are afraid that internal demand will not be strong enough to sustain additional growth.
While, the EZ data is hardly encouraging, few analysts expect today’s US numbers to be dollar bullish. In fact, both CALYON and UBS project Current Account deficits in excess of the Bloomberg estimate of -$158.3Bn. CALYON is calling for the figure to print -$159.8Bn while UBS expects a whopping -$165Bn. If the analysts are correct, the euro will most likely recover it’s session losses against the dollar as market players will question US ability to finance such massive deficits. In short, should the US data disappoint we will resume the familiar FX game of last man standing as dealers will flock not to the currency that is best, but rather that is least worst.
FX Spot Overnight
- EUR trades to 2230 on weak ZEW data
- JPY inches towards 110 in very quiet trade as new data offers little support
- GBP trades down to 7950 off mild CPI data but find support
- CHF mirrors EUR/USD taking out the 2600 handle
12:30GMT – (8:30 AM EST) USD Current Account Q2 Expected at -$158.3Bn, Previous –$144.9Bn
12:30GMT – (8:30 AM EST) USD Retail Sales (August) Expected at -0.1%, Previous 0.7%
12:30GMT – (8:30 AM EST) USD Retail Sales ex-Autos (August) Expected at 0.2%, Previous 0.2%
Forex Trading News
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
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."