The Forex Daily Digest – September 15, 2009
The USD fell against major rivals in trading to begin the week, giving up a small lift amid rising U.S.-China trade tensions, as the EUR and JPY hit technical levels that triggered some buying. While there was no U.S. economic data scheduled on Monday, several reports this week have the potential to influence the currency market. Retail sales, due out this morning, is expected to show a big jump though most attributable to auto sales due to the so-called cash-for-clunkers program. Data on producer prices and consumer prices are expected to show relatively tame inflation.
The Obama Administration went ahead with tariffs on Chinese tires over the weekend, putting lots of jobs and revenue at risk, as well as igniting fears of a potential trade war. And judging by the Forex markets' first reaction, though, apparently it wasn’t all negative. The USD strengthened in early trading on the view of increased risks to trade and the global economy.
The USD traded lower against the JPY in the Asian trading session after remarks by Japanese Vice Finance Minister Tango concerning exchange rates. Tango said officials are paying "close attention" to the yen, but wouldn't comment on specific market levels. The JPY was supported in early Asian trade after funding rates for dollar loans fell below those of its major rivals.
The GBP dropped from near a five-week high versus the USD as a report raised speculation that the U.K.’s housing slump will resume next year. The NZD was the biggest loser against the USD among major currencies as the nation’s retail sales unexpectedly declined in July.
Russia’s central bank lowered its main interest rates by a quarter percentage point after the world’s biggest energy exporter suffered a record economic contraction as the nation faces a slow recovery. Bank Rossii cut its refinancing rate to 10.5 percent from 10.75 percent and lowered the repurchase rate charged on central bank loans to 9.5 percent from 9.75 percent effective today.
According to the Canadian Finance Minister, Jim Flaherty, Canada will stay the course on the government's stimulus plan for the economy. Flaherty said the priority is to ensure that the economy makes a firm recovery from the recession.
And a year after its collapse, the former deputy Governor of the Bank of England said he was "astounded" that Washington allowed Lehman Brothers to go under, and that the bank's collapse marked a clear moment when people lost confidence in the markets. Sir John Gieve said he had fully anticipated U.S. authorities to step in last year and rescue the investment bank, as it had done earlier with Bear Stearns.
On the economic calendar today, look for the August Producer Price Index, Retail Sales for August, the September Empire State Index, and July’s Business Inventories. In earnings, Best Buy, Adobe Systems, and the Kroger Company.
Happy Trading,
James Dicks
The Obama Administration went ahead with tariffs on Chinese tires over the weekend, putting lots of jobs and revenue at risk, as well as igniting fears of a potential trade war. And judging by the Forex markets' first reaction, though, apparently it wasn’t all negative. The USD strengthened in early trading on the view of increased risks to trade and the global economy.
The USD traded lower against the JPY in the Asian trading session after remarks by Japanese Vice Finance Minister Tango concerning exchange rates. Tango said officials are paying "close attention" to the yen, but wouldn't comment on specific market levels. The JPY was supported in early Asian trade after funding rates for dollar loans fell below those of its major rivals.
The GBP dropped from near a five-week high versus the USD as a report raised speculation that the U.K.’s housing slump will resume next year. The NZD was the biggest loser against the USD among major currencies as the nation’s retail sales unexpectedly declined in July.
Russia’s central bank lowered its main interest rates by a quarter percentage point after the world’s biggest energy exporter suffered a record economic contraction as the nation faces a slow recovery. Bank Rossii cut its refinancing rate to 10.5 percent from 10.75 percent and lowered the repurchase rate charged on central bank loans to 9.5 percent from 9.75 percent effective today.
According to the Canadian Finance Minister, Jim Flaherty, Canada will stay the course on the government's stimulus plan for the economy. Flaherty said the priority is to ensure that the economy makes a firm recovery from the recession.
And a year after its collapse, the former deputy Governor of the Bank of England said he was "astounded" that Washington allowed Lehman Brothers to go under, and that the bank's collapse marked a clear moment when people lost confidence in the markets. Sir John Gieve said he had fully anticipated U.S. authorities to step in last year and rescue the investment bank, as it had done earlier with Bear Stearns.
On the economic calendar today, look for the August Producer Price Index, Retail Sales for August, the September Empire State Index, and July’s Business Inventories. In earnings, Best Buy, Adobe Systems, and the Kroger Company.
Happy Trading,
James Dicks
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