The Forex Daily Digest – November 16, 2009
The USD remained under pressure today, after the government reported U.S. retail sales rose more than expected in October. The dollar also fell against most of its major counterparts as Japan’s better-than-anticipated economic growth forecast in the third quarter encouraged demand for higher yielding assets.
U.S. retail sales rose 1.4% in October, more than analysts expected. A large downward revision to September's sales offset the upside surprise. Separately, the New York Federal Reserve Bank said manufacturing activity in the New York area expanded at a slower pace in November. The bank's Empire State Manufacturing index fell to 23.5 in November from 34.6 in October.
Federal Reserve Chairman Ben Bernanke said that the U.S. economy still faces considerable challenges, but the most likely outcome is moderate economic growth with subdued inflation. He said he expects “moderate economic growth to continue next year." But he also said that "significant economic challenges remain" for the nation and jobs will likely remain limited for some time.
The U.S. dollar remained under pressure as Asia-Pacific nations pledged to maintain stimulus measures until there is “durable” economic growth. The 21-member Asia-Pacific Economic Cooperation group, representing 54 percent of the global economy, pledged in a statement over the weekend to “refrain from raising new barriers” to investment and trade. The group didn’t mention currency alterations, which U.S. companies say give China unfair trade advantages.
President Obama flew to Shanghai from an Asia-Pacific summit where leaders questioned his commitment to free trade, endorsed China’s stance on fighting protectionism and declined to back U.S. calls for a stronger yuan. As Obama began his four-day visit to China, the Chinese Ministry of Commerce said the international pressure for appreciation in the yuan was “not fair.” But the managing director of the International Monetary Fund, Dominique Strauss-Kahn, said in Beijing that the appreciation of the yuan is part of the “package of necessary reforms” for China’s economy.
The GBP showed some weakness versus the EUR after U.K. home sellers reduced asking prices in November for the first time in three months. This is raising concerns that the U.K. may continue to trail other nations in emerging from the global recession. Average home prices in the U.K. fell 1.6 percent in November after rising 2.8 percent in October.
The CAD increased on the back of higher commodity prices, firmer global equities and broad based U.S. dollar weakness in the wake of the Asia Pacific Economic Cooperation over the weekend. Commodities are expected to dominate the resource-heavy Canadian markets as gold prices climbed to a fresh high and oil rose. Statistics Canada said Canadian manufacturing sales grew 1.4 percent in September from August after auto sales surged to a one-year high.
The economic calendar is extremely busy this week. On Tuesday you can expect the Producer Price Index and the Core PPI for October to be released, September TIC Data is on the calendar as well as the Capacity Utilization and Industrial Production reports for October.
On the earnings calendar look for Home Depot, La-Z-Boy Inc., Saks Inc., The TJX Companies, VT Group, China Precision Steel, and Autodesk Inc.
Happy Trading,
James Dicks
U.S. retail sales rose 1.4% in October, more than analysts expected. A large downward revision to September's sales offset the upside surprise. Separately, the New York Federal Reserve Bank said manufacturing activity in the New York area expanded at a slower pace in November. The bank's Empire State Manufacturing index fell to 23.5 in November from 34.6 in October.
Federal Reserve Chairman Ben Bernanke said that the U.S. economy still faces considerable challenges, but the most likely outcome is moderate economic growth with subdued inflation. He said he expects “moderate economic growth to continue next year." But he also said that "significant economic challenges remain" for the nation and jobs will likely remain limited for some time.
The U.S. dollar remained under pressure as Asia-Pacific nations pledged to maintain stimulus measures until there is “durable” economic growth. The 21-member Asia-Pacific Economic Cooperation group, representing 54 percent of the global economy, pledged in a statement over the weekend to “refrain from raising new barriers” to investment and trade. The group didn’t mention currency alterations, which U.S. companies say give China unfair trade advantages.
President Obama flew to Shanghai from an Asia-Pacific summit where leaders questioned his commitment to free trade, endorsed China’s stance on fighting protectionism and declined to back U.S. calls for a stronger yuan. As Obama began his four-day visit to China, the Chinese Ministry of Commerce said the international pressure for appreciation in the yuan was “not fair.” But the managing director of the International Monetary Fund, Dominique Strauss-Kahn, said in Beijing that the appreciation of the yuan is part of the “package of necessary reforms” for China’s economy.
The GBP showed some weakness versus the EUR after U.K. home sellers reduced asking prices in November for the first time in three months. This is raising concerns that the U.K. may continue to trail other nations in emerging from the global recession. Average home prices in the U.K. fell 1.6 percent in November after rising 2.8 percent in October.
The CAD increased on the back of higher commodity prices, firmer global equities and broad based U.S. dollar weakness in the wake of the Asia Pacific Economic Cooperation over the weekend. Commodities are expected to dominate the resource-heavy Canadian markets as gold prices climbed to a fresh high and oil rose. Statistics Canada said Canadian manufacturing sales grew 1.4 percent in September from August after auto sales surged to a one-year high.
The economic calendar is extremely busy this week. On Tuesday you can expect the Producer Price Index and the Core PPI for October to be released, September TIC Data is on the calendar as well as the Capacity Utilization and Industrial Production reports for October.
On the earnings calendar look for Home Depot, La-Z-Boy Inc., Saks Inc., The TJX Companies, VT Group, China Precision Steel, and Autodesk Inc.
Happy Trading,
James Dicks
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