The Forex Daily Digest – September 3, 2009
The USD held onto gains against major currency counterparts, as weaker-than-expected private sector employment pressured stocks and fueled demand for safe-haven, low-yielding currencies. ADP reported that employment in the U.S. private sector fell by 298,000 in August. The drop suggests non-farm payrolls may drop by more than the 250,000 anticipated by economists ahead of the government's much-anticipated report due out Friday morning.
The AUD jumped against its U.S. counterpart, as data on second-quarter gross domestic product reinforced expectations that Australia will be among the first countries to return to a tightening cycle on interest rates. The Australian Bureau of Statistics said GDP rose a seasonally adjusted 0.6% in the April-through-June quarter from the first three months of the year, beating economists' consensus forecast that called for a 0.2% increase. And Goldman Sachs Group Inc. raised its forecast for the AUD against the USD after a report showed the nation’s economic expansion unexpectedly pick up the pace in the second quarter.
The CAD traded close to a two- week low against its USD as declines in worldwide stocks prompted speculation that investors’ appetite for risk is declining, lessening the appeal of currencies tied to growth. Also putting pressure on the CAD is worry that Canada’s minority government may fall after the largest opposition party withdrew its support this week.
According to the minutes of the last FOMC policy meeting, Federal Reserve officials were more convinced than ever that the sharp downturn in the U.S. economy is coming to an end, but has no firm grasp about the strength of the likely recovery. A key unknown is whether consumer spending would be restrained and if households will continue the new-found habit of saving more of their income. According to the report, the current thinking is that the recovery will be unstable at first and likely be led by businesses rebuilding inventories.
U.S. Treasury Secretary Geithner said he will set out principles for a new global accord to constrain the excessive use of leverage by banks. Speaking ahead of a meeting on Friday and Saturday in London of G20 finance chiefs, he stressed that he was not asking for an immediate agreement and said it was too soon to get tough on on the financial sector as it attempts to return to normal lending.
On the economic calendar today, look for the Initial Jobless Claims report for the week of August 29th. Last week the claims came in at 570 thousand…this week analysts are expecting slightly better numbers. Later in the morning the ISM Services Index will be released. The report showed 46.4 last month and economists are expecting 48.0 this time around.
Earnings scheduled for release include Ciena Corporation, Del Monte Foods, Canadian Western Bank, Layne Christensen, Jackson Hewitt Tax Service Inc., Movado, Global Crossing, Krispy Kreme Doughnut, and The Cooper Companies, Inc.
Happy Trading,
James Dicks
The AUD jumped against its U.S. counterpart, as data on second-quarter gross domestic product reinforced expectations that Australia will be among the first countries to return to a tightening cycle on interest rates. The Australian Bureau of Statistics said GDP rose a seasonally adjusted 0.6% in the April-through-June quarter from the first three months of the year, beating economists' consensus forecast that called for a 0.2% increase. And Goldman Sachs Group Inc. raised its forecast for the AUD against the USD after a report showed the nation’s economic expansion unexpectedly pick up the pace in the second quarter.
The CAD traded close to a two- week low against its USD as declines in worldwide stocks prompted speculation that investors’ appetite for risk is declining, lessening the appeal of currencies tied to growth. Also putting pressure on the CAD is worry that Canada’s minority government may fall after the largest opposition party withdrew its support this week.
According to the minutes of the last FOMC policy meeting, Federal Reserve officials were more convinced than ever that the sharp downturn in the U.S. economy is coming to an end, but has no firm grasp about the strength of the likely recovery. A key unknown is whether consumer spending would be restrained and if households will continue the new-found habit of saving more of their income. According to the report, the current thinking is that the recovery will be unstable at first and likely be led by businesses rebuilding inventories.
U.S. Treasury Secretary Geithner said he will set out principles for a new global accord to constrain the excessive use of leverage by banks. Speaking ahead of a meeting on Friday and Saturday in London of G20 finance chiefs, he stressed that he was not asking for an immediate agreement and said it was too soon to get tough on on the financial sector as it attempts to return to normal lending.
On the economic calendar today, look for the Initial Jobless Claims report for the week of August 29th. Last week the claims came in at 570 thousand…this week analysts are expecting slightly better numbers. Later in the morning the ISM Services Index will be released. The report showed 46.4 last month and economists are expecting 48.0 this time around.
Earnings scheduled for release include Ciena Corporation, Del Monte Foods, Canadian Western Bank, Layne Christensen, Jackson Hewitt Tax Service Inc., Movado, Global Crossing, Krispy Kreme Doughnut, and The Cooper Companies, Inc.
Happy Trading,
James Dicks
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