Dollar rose Friday helped by lower Crude Oil prices and Warren Buffer comments

The Dollar surged on Friday, recovering from the previous day's losses, as gloomy British growth data backed views of a slowing global economy and raised prospects of interest rate cuts outside the United States. A sharp drop in US crude oil prices to below $115 per barrel and comments by influential investor Warren Buffett that he has no bets against the Dollar also added to the US currency's upward momentum. Federal Reserve Chairman Ben Bernanke's comments that a stable Dollar and falling commodities should help slow inflation this year and next. His remarks on Friday prompted analysts to reduce expectations of a US interest rate increase this year.


News and Events:

The Dollar surged on Friday, recovering from the previous day's losses, as gloomy British growth data backed views of a slowing global economy and raised prospects of interest rate cuts outside the United States.

A sharp drop in US crude oil prices to below $115 per barrel and comments by influential investor Warren Buffett that he has no bets against the Dollar also added to the US currency's upward momentum.

UK data showed the British economy stalled on Q2, suggesting a recession might be looming, and added to the outlook of a slowing European economy. It raised the possibility of European Central Bank and Bank of England monetary easing.

EurUsd dropped to a session low of 1.4758, edging toward a six-month low hit earlier last week at 1.4631. It was last trading at 1.4788, down 0.68%. UsdJpy jumped 1.52% to 110.09. GbpUsd dropped 1.32% to 1.8517. UsdChf rose 1.06% to 1.0988.

Federal Reserve Chairman Ben Bernanke's comments that a stable Dollar and falling commodities should help slow inflation this year and next. Bernanke's remarks at an annual Fed symposium in Jackson Hole, Wyoming, prompted analysts to reduce expectations of a US interest rate increase this year, which could diminish the Dollar's appeal to investors. But analysts said even without an interest rate hike this year, the Dollar would probably continue to recover.

Persistent problems at US mortgage finance companies Fannie Mae and Freddie Mac and speculation over the future of investment bank Lehman Brothers could make the road to recovery difficult.




Today's Key Issues (time in GMT):

00:00 GBP Market Holiday
07:30 DKK August Consumer confidence -8 vs -9.7
07:30 SEK July Trade balance 8.2b (mom)
09:00 EUR June Industrial new orders -6.3% vs -4.4% (yoy)
12:30 USD July National Activity Index -0.6
14:00 USD Existing home sale 4.92m vs 4.86m
22:45 NZD Merchandise trade 4b vs 3.81b
22:45 NZD Merchandise trade – expo 3.44b vs 3.59
22:45 NZD Trade Balance Month -526m vs -223m
22:45 NZD Trade Balance Year -4.2b vs -4.48b


The Risk Today:

EurUsd: Market dropped as low as 1.4631 last week, new initial support. Further weakness will put the focus on strong support 1.4366 22nd January low. On the upside, only a return over 1.5000 and 1.5500 will release actual pressure and put key initial resistance 1.6000 into focus. Still a break up there would open the way to Trendline resistance 1.6200.

GbpUsd: Cable hit 2.0158 high 6-weeks ago and 1.8505 low last Friday. On the downside, further weakness would open the way down to 1.8395 end July 2006 low and maybe 1.8091 June 2006 low. Initial support holds 1.8414 today low. On the upside, initial resistance holds 1.8795 last week high. Former support 1.9363 holds also strong resistance. Key level holds 2.0100 resistance.

UsdJpy: Last 6-weeks recovery pushed the market up to 110.67 high. Further advance would open the way toward 111.92 early January high. On the downside, a return below 108.59 former resistance and 108.14 last week low will undermine the current advance. Profit taking might bring back down to 105 level and may open the way toward 102.73 support and 100 pivot point. Initial support holds 108.14 Thursday low.

UsdChf: Continuous Dollar strength consolidated over 1.0800 last week and hit 1.1041 6-months high on last Wednesday. Initial resistance holds 1.1107 13th February high. Strong resistance holds 1.1593 December 2007 high. On the downside, initial support holds 1.0863. Only renewed weakness below 1.0500 and 1.0375 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.


Resistance and Support:

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FOMC Expected Rates

FOMC Kept Rate Steady At 2% As Expected

News and Events:

The Dollar climbed to seven-week peaks against the Euro and major currencies on Tuesday, as oil prices plunged and the Federal Reserve maintained its focus on slowing persistent US inflation pressure in the economy.

Analysts said Tuesday's Fed statement was more balanced than what the market had expected, as it expressed concern about both economic growth and inflation. Another comment showed the Fed statement does not point to one clear rate path.

The drop to a three-month trough of $118 per barrel helped ease fears that high energy prices will continue to weigh on the US economy at a time consumer prices are showing an unexpectedly fast rise.

AudUsd was among the weakest performers on Tuesday, falling to a four-month low at 0.9133.

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Forex Market Overview

Forex Market Overview 04 August 2008

The Usd was broadly unchanged for Friday's close in the Asian session. The EurUsd closed at 1.5560 and is now trading at 1.5580, while the UsdJpy closed at 107.60 and is now trading at 107.80. The Jpy fueled carry trades gained slightly, with EurJpy easing up towards 168.00 and the AudJpy strengthened to 100.50. Emerging Asia was slightly stronger, with the UsdSgd falling to the 1.3690 support. The commodities are seeing a broad rally, with crude wti up 0.76% to $126.06bll and gold up 0.37% to $914.35oz (also giving the commodity bloc ccy a small bounce). Regional Asian equity markets are following Wall Street weak close across the board, with Shanghai's down -1.00%. European stock futures are pointing to a negative open lead by the FTSE down -1.17%. Ominous start to the week, where most analysis are calling for continued Usd gains.

A big week for Central Banks (and currency markets), with the Fed, RBA, BoE and ECB deciding on rates. In this event studded lineup, perhaps the most anticipated event will be the ECB accompanying statement and Trichet's subsequent comments. We have seen recent economic data in the Eurozone hit a soft patch, while commodities have sold off. The market is gambling on that in the near future the ECB will change its hawkish tune, which will push the EurUsd even lower. In addition, with increasing probability that Central Banks in the developed countries will now have room to stave out economic collapse with inflation expectations declining, the dollar seems to be in the driver's seat. Note: CFTC positioning data for the week up to July 29 points to an adjustment out of USD short positions against the G10, with only the Aud holding a significant net long position against the greenback.

In the European session, the Eurozone producer price inflation will have the markets attention. We are expecting another surge in prices across the region (currently at it highest level in 25 years). While we expect the ECB to stay hawkish, with the economy stagnating and food and energy prices softening, the interest rates will not rise again.

Daily Forex Pivot Point
AUDUSD
R 3: 0.9528
R 2: 0.9476
R 1: 0.9419
CURRENT: 0.9306
S 1: 0.9286
S 2: 0.9276
S 3: 0.9206

EURJPY
R 3: 169.73
R 2: 169.19
R 1: 168.31
CURRENT: 167.70
S 1: 166.98
S 2: 166.01
S 3: 165.33

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3728
CURRENT: 1.3721
S 1: 1.3651
S 2: 1.3606
S 3: 1.3567

Forex News | Dollar News

Dollar rallied last week on better economic data and lower stress in financial markets

News and Events:

The Dollar climbed to five-week peaks against the Euro and three-week highs against the Sterling on Friday as better-than-expected economic data reduced worries about a much sharper slowdown. The Yen gained broadly helped by stress in financial markets on news that General Motors had hefty losses in Q2. That dragged US stocks lower and triggered safe-haven bids for Treasuries.

Friday's data showed that US employers eliminated 51k jobs in July, lower than market expectations for a payrolls decline of 75k. A separate report said US factory activity was unchanged in July, compared with the previous month, but above market forecasts.

Investors widely expect the Fed's policy-making Federal Open Market Committee (FOMC) to keep its benchmark federal funds rate steady at 2% when it meets on Tuesday.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Oil Slide And Wells Fargo Results

FX market Dollar fears receded after Oil slide and Wells Fargo results

News and Events:

Investor attention remains focused on the turmoil around Fannie and Freddie and fears about more credit losses at regional banks drove the Dollar sharply lower a day ago, with the Euro hitting a record high at 1.6037. But concerns about the US financial sector receded a bit on Wednesday after Wells Fargo, the fifth-largest US bank, raised its dividend despite a 23% decline in profit caused by bad loans.

Federal Reserve Chairman Ben Bernanke reiterated to a House of Representatives panel on Wednesday that the risks to US growth have increased along with upside inflation risks, mirroring remarks he made a day earlier before the Senate.

Analysts said FX investors were increasingly certain of at least one Fed rate hike before the year is out. US short-term interest rate futures are pricing in a 76% chance that the Fed raises interest rates from their current 2% by December.

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Forex Market Overview

Forex Market Overview 17 July 2008

Usd has been able to hold gain in the Asian session as risk appetite slowly crept back into the markets. EurUsd was range bound between 1.5801 – 1.5868 while UsdJpy bounced around the 104.70 - 105.30 levels. Jpy fueled carry trades saw renewed buying with AudJpy and EurJpy trending upward to 102.76 and 166.73. EM currencies also got a boost with UsdMxn and EurPln sliding to 10.2200 and 3.2083. The Usd was help as oil prices dropped sharply as EIA data showed an unexpected rise in inventories.

The Fed minutes released yesterday were perhaps slightly more hawkish then the market had anticipated. While members were clearly apprehensive with placing inflation worries over growth concerns, the minutes did state "the next change in the stance of policy could well be an increase in the funds rate". Note, that given the rapid evolution of events, these minutes are old news and therefore the weight we attached should be limited. Especially considering at the time of the FOMC meeting there was a general feeling that the US was stabilizing (which we know now is not the case). With yesterdays sharp increase in Junes headline inflation (5.0% vs. 4.5% exp) the Fed will have to stay diligent but given the downside risk to growth it would be irresponsible for the Fed to tighten. We expected the pause in Usd volatility will be short lived as uncertainty around domestic economic conditions, inflation and unsettled GSEs position are still very much outstanding.

With no major data to be released in the UK, Eurozone todays movement will be purely based on sentiment and positioning. A good way to guage what the fx market is thinking. In addition, keep an eye on other assets classes such as the equity market and energy prices for directional confirmation.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9895
R 2: 0.9850
R 1: 0.9817
CURRENT: 0.9767
S 1: 0.9709
S 2: 0.9664
S 3: 0.9597

EURJPY
R 3: 169.67
R 2: 168.95
R 1: 166.85
CURRENT: 167.16
S 1: 165.23
S 2: 164.75
S 3: 163.60

USDSGD
R 3: 1.3717
R 2: 1.3660
R 1: 1.3565
CURRENT: 1.3517
S 1: 1.3451
S 2: 1.3399
S 3: 1.3300

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

USA Financial And Housing Sectors

Dollar stays weak near record lows on concerns about health of financial and housing sectors.

News and Events:

The Dollar rose from a near record low against the Euro on Monday after the United States announced an emergency plan to restore confidence in mortgage finance companies Fannie Mae and Freddie Mac. The plan helped calm market concerns about the health of the US financial and housing sectors, since the two companies fund half of all US mortgages.

Billionaire investor George Soros told Reuters on Monday that government debt accumulation coupled with a U.S. recession leaves the Dollar vulnerable. Analysts said the Dollar's recovery would depend on whether the U.S. initiatives were enough to calm investors' concerns about the financial health of Fannie Mae and Freddie Mac.

Investors will also be watching to see how the latest developments affect Fed Chairman Ben Bernanke's views on monetary policy and the economic outlook when he testifies before the Senate Banking Committee on Tuesday. Money markets have scaled back their expectations for monetary policy tightening from the Fed and now don't expect it to start hiking until the final months of the year.

USA Financial Sector Worries

US financial sector worries. Bank of England left rates unchanged

News and Events:

The Dollar fell against the Euro on Thursday, dragged down by persistent worries over the health of US financial sector, as shares and bonds of the
country's two mortgage finance giants tumbled on capitalization fears. The yield spread premium for the larger Fannie Mae rose to its highest since before the Fed's bailout of US Investment bank Bear Stearns in March.

Investors were slightly reassured by comments by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson in testimony to Congress that they were doing everything possible to restore calm to financial markets.

Bank of England held interest rates steady at 5% on Thursday, but analysts say rates will have to fall, making the GBP less attractive.

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.

The Forex Market Overview

The Forex Market Overview 9 July 2008

The Usd was weaker in Asian session as news that Iran had tested 9 surface to surface missiles spooked the market. Eurusd trade up from 1.5660 to 1.5728 while UsdJpy slipped from 107.50 to 107.02. Risk sentiment had already been on shaky ground after the Lehman report on Fannie and Freddie and with rising tensions in the region the missile test (actually facts were a little vague) had traders quick to respond. Crude prices rallied back above the $137.00bll mark. Reassurance from Fed Chairman Ben Bernanke that the central bank will keep assisting financial markets in these turbulent times also helped both the Dollar and equities . In Mr. Bernankes prepared remarks yesterday stating that ``The Federal Reserve is strongly committed'' to financial stability and is ``considering several options, including extending the duration of our facilities for primary dealers beyond year-end,'' did help relieve some pressure.

US Stocks were sharply higher Tuesday, led by banks and transports as oil and natural gas prices retreated. The major indexes finished around their best levels for the session. Asian markets are trading higher this morning on the strength of Wall Street's finish overnight. The Shanghai stocks rose as investors plunge on bargain buying amid the steep recent losses and also on speculation that the Chinese government might need to provide support to the market. USD slipped in Asia after it was reported that Iran had test fired nine long and medium range missiles which could possibly strike as far as Israel. Gold closed lower, pressured by a strong dollar and falling crude prices ; the most active Aug '08 contract down $5.50 to $923.30. Sep '08 silver +3.5 ¢ at $17.955/oz.

In Japan machinery orders for May came in much better than expected at 10.4% vs. 5.5% exp while Core orders also strengthened, rising 5.1% vs. 3.4% exp. However while the BoJ expectations (and ours) has continued economic deterioration well entrenched, with markets trading on risk we could see short periods of Jpy strength (but we see those as opportunity to build short Jpy positions).

In Australia consumer sentiment fell -6.7% which was much weaker the Junes -2.0% reading. The number is at its lowest level since 1992 and doesn’t bode well for speculators expecting the RBA to continue higher (and maintain its neutral stance). AudUsd trade down from 0.9549 to 0.9480 on the disappointing data. We will be watching for a sell off in the commodities caused by the global slowdowns and mounting evidence that the RBA will need to shift towards a growth bias before we begin to look for opportunities to sell Aud.

In the UK consumer confidence in June dropped to 61 its lowest since the survey was launched in 2004. In addition the expectations index on the labor market & economy also fell to a new low of 64. Just more evidence that the BoE will need to address the growth side of the story sooner then later.

In European session today, markets will be watching Eurozone GDP (q1 final release) and UK external trade. Euro-zone GDP in Q1will give us a better suggestion of the composition of growth by income while markets will be watching for price change on import prices rather then change in deficit.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9670
R 2: 0.9642
R 1: 0.9565
CURRENT: 0.9501
S 1: 0.9477
S 2: 0.9460
S 3: 0.9409

EURJPY
R 3: 169.45
R 2: 169.15
R 1: 168.62
CURRENT: 168.62
S 1: 167.13
S 2: 166.10
S 3: 166.00

USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3730
CURRENT: 1.3635
S 1: 1.3565
S 2: 1.3506
S 3: 1.3470

The ForexGen's provided services are all restricted and regulated by the international banking and financial regulatory standards. All our provided activities are supported by creativeness and modernization. Ambitious & motivated employees are working simultaneously to protect the customer's confidentiality. ForexGen is continuously providing the market's most competitive conditions.

ForexGen complies with the trade commissions in the USA, EU and Australia. Being registered by the commercial authorities in 18+ countries, we adhere to the United Nations Commission on International Trade Law (UNCITRAL).

Profile regulatory information:

ForexGen is complying with all applicable international laws and all financial regulations and procedures governing its industry in order to sustain the security standards in the financial services world.