The Forex Daily Digest – November 10, 2009
The dollar rose from almost a 15- month low against the currencies of major U.S. trading partners as a fall in U.S. stock-index futures slowed demand for higher- yielding assets. Sterling fell against the USD as Fitch Ratings said the U.K.’s credit rating is the most at risk among top-rated nations. The International Monetary Fund said in a report that the USD may still be overvalued as traders use the currency to fund carry trades. The IMF said that the dollar “has moved closer to medium-run equilibrium” yet is still “on the strong side.”
According to news reports, President Obama says he will discuss China's yuan currency when he meets with Chinese officials in Beijing next week. He told reporters that "Currency, along with a host of other issues, will come up, and I'm confident that both the United States and China can arrive at a broad set of policies that encourages trade that benefits both countries, that allows ongoing economic growth." Obama said that the success of the U.S. is important to China since the communist nation has large holdings in dollar assets.
Janet Yellen, the president of the San Francisco Federal Reserve Bank said the most recent economic data suggests that the U.S. could be about to experience another jobless recovery. The past two recessions, in 1991 and 2001, were followed by so-called jobless recoveries, and she said, "Things seem to be shaping up similarly this time around," Yellen told a Phoenix audience she believes "the overall economic recovery is likely to be gradual and remain vulnerable to shocks." With such a slow rebound, unemployment could stay high for several years to come.
Dennis Lockhart, the president of the Atlanta Federal Reserve Bank, said the U.S. economy will expand at a relatively subdued pace in the coming quarters. Lockhart said the banking system is still far from being fully recovered and will be hampered by weakness in the commercial real estate sector. Troubled non-residential real estate loans are “very worrisome” to small banks. But for the overall economy, the commercial real estate sector shouldn’t be a “show stopper” but just headwind on growth.
Treasury Secretary Geithner told his Japanese counterpart that a commitment by Tokyo to rely less on exports and more on domestic consumption to power growth will benefit the global economy. According to a senior U.S. Treasury official, Geithner told Japanese Finance Minister Hirohisa Fujii at a dinner meeting that he welcomed a commitment by Japan to "shift its economy away from exports toward demand-led growth." Meantime, Fujii said he supports Geithner’s strong dollar policy.
There are no major economic reports scheduled in the U.S. on Wednesday. On the earnings calendar, look for Applied Materials, Macy’s, Advance Auto Parts, Bertelsmann AG, Flowers Foods, Emerson Radio, and RailAmerica.
Happy trading,
James Dicks
According to news reports, President Obama says he will discuss China's yuan currency when he meets with Chinese officials in Beijing next week. He told reporters that "Currency, along with a host of other issues, will come up, and I'm confident that both the United States and China can arrive at a broad set of policies that encourages trade that benefits both countries, that allows ongoing economic growth." Obama said that the success of the U.S. is important to China since the communist nation has large holdings in dollar assets.
Janet Yellen, the president of the San Francisco Federal Reserve Bank said the most recent economic data suggests that the U.S. could be about to experience another jobless recovery. The past two recessions, in 1991 and 2001, were followed by so-called jobless recoveries, and she said, "Things seem to be shaping up similarly this time around," Yellen told a Phoenix audience she believes "the overall economic recovery is likely to be gradual and remain vulnerable to shocks." With such a slow rebound, unemployment could stay high for several years to come.
Dennis Lockhart, the president of the Atlanta Federal Reserve Bank, said the U.S. economy will expand at a relatively subdued pace in the coming quarters. Lockhart said the banking system is still far from being fully recovered and will be hampered by weakness in the commercial real estate sector. Troubled non-residential real estate loans are “very worrisome” to small banks. But for the overall economy, the commercial real estate sector shouldn’t be a “show stopper” but just headwind on growth.
Treasury Secretary Geithner told his Japanese counterpart that a commitment by Tokyo to rely less on exports and more on domestic consumption to power growth will benefit the global economy. According to a senior U.S. Treasury official, Geithner told Japanese Finance Minister Hirohisa Fujii at a dinner meeting that he welcomed a commitment by Japan to "shift its economy away from exports toward demand-led growth." Meantime, Fujii said he supports Geithner’s strong dollar policy.
There are no major economic reports scheduled in the U.S. on Wednesday. On the earnings calendar, look for Applied Materials, Macy’s, Advance Auto Parts, Bertelsmann AG, Flowers Foods, Emerson Radio, and RailAmerica.
Happy trading,
James Dicks
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