The Forex Daily Digest – January 29, 2010
The USD increased to a fresh six-month high, pushed forward by data that showed the U.S. economy grew at a faster-than-expected pace in the final quarter of the year and consumer confidence rose this month. The gains came after the Commerce Department reported that real gross domestic product grew at a 5.7% seasonally-adjusted annual rate in the final three months of the year, posting the best quarterly growth since late 2003.
The CAD traded near the lowest level since December against the USD after government reports showed both nations’ economies expanded more than anticipated. GDP in Canada increased for a third straight month in November. It grew 0.4 percent, after a revised 0.3 percent gain the previous month.
The GBP fell against the USD and the EUR as a report following the U.S. gross domestic product report was released, increasing the appeal of investment in the world’s largest economy and more export-oriented nations. U.K. government bonds rose, pushing the yield on the 10- year gilt down 3 basis points to 3.91 percent. The two-year yield also fell 3 basis points, to 1.24 percent.
The EUR increased to session highs against the CHF, with traders saying the Bank of International Settlements was buying the euro zone single currency. The BIS has acted on behalf of the Swiss National Bank to weaken the franc in the past.
The NZD increased against the JPY as global stocks advanced on evidence of a recovery in America, boosting demand for higher-yielding assets. The kiwi rose from almost a seven-week low against the JPY. Both South Pacific currencies tumbled this month over speculation that China’s efforts to control loan growth and Greece’s effort to cut its budget deficit will impede the global economic recovery. The USD extended gains against the JPY to hit a session high after the Chicago PMI showed business activity in the U.S. Midwest expanded much more than expected in December.
China's central bank says it will ensure that money and credit growth remain ample in 2010, even though inflation is likely to rise further. The bank’s announcement that its loan growth should be reasonable and balanced came at the end of a week in which fears that China was slamming the door on lending shook markets around the world. In a quarterly statistics report, the People's Bank of China (PBOC) expressed contentment with both the state of the economy and current policy settings, insisting that it will continue its "appropriately loose" monetary posture.
On the economic calendar next week watch for Personal Income and Spending, Construction Spending, ISM Manufacturing and Services Index, Auto and Truck Sales, Challenger Job Cuts, the ADP Employment Change Report, Crude Inventories, Preliminary Productivity, Factory Orders, and on Friday it’s the Nonfarm Payrolls report along with the Unemployment Rate, Average Workweek, and Hourly Earnings.
It looks to be a very busy week on the earnings calendar. Some of the major scheduled earnings reports include ExxonMobil, Anadarko Pete, Archer Daniels Midland, DR Horton, International Paper, Pfizer, Cisco, Visa, MasterCard, Northrop Grumman, Sony, Aetna and Weyerhaeuser.
Happy trading,
James Dicks
The CAD traded near the lowest level since December against the USD after government reports showed both nations’ economies expanded more than anticipated. GDP in Canada increased for a third straight month in November. It grew 0.4 percent, after a revised 0.3 percent gain the previous month.
The GBP fell against the USD and the EUR as a report following the U.S. gross domestic product report was released, increasing the appeal of investment in the world’s largest economy and more export-oriented nations. U.K. government bonds rose, pushing the yield on the 10- year gilt down 3 basis points to 3.91 percent. The two-year yield also fell 3 basis points, to 1.24 percent.
The EUR increased to session highs against the CHF, with traders saying the Bank of International Settlements was buying the euro zone single currency. The BIS has acted on behalf of the Swiss National Bank to weaken the franc in the past.
The NZD increased against the JPY as global stocks advanced on evidence of a recovery in America, boosting demand for higher-yielding assets. The kiwi rose from almost a seven-week low against the JPY. Both South Pacific currencies tumbled this month over speculation that China’s efforts to control loan growth and Greece’s effort to cut its budget deficit will impede the global economic recovery. The USD extended gains against the JPY to hit a session high after the Chicago PMI showed business activity in the U.S. Midwest expanded much more than expected in December.
China's central bank says it will ensure that money and credit growth remain ample in 2010, even though inflation is likely to rise further. The bank’s announcement that its loan growth should be reasonable and balanced came at the end of a week in which fears that China was slamming the door on lending shook markets around the world. In a quarterly statistics report, the People's Bank of China (PBOC) expressed contentment with both the state of the economy and current policy settings, insisting that it will continue its "appropriately loose" monetary posture.
On the economic calendar next week watch for Personal Income and Spending, Construction Spending, ISM Manufacturing and Services Index, Auto and Truck Sales, Challenger Job Cuts, the ADP Employment Change Report, Crude Inventories, Preliminary Productivity, Factory Orders, and on Friday it’s the Nonfarm Payrolls report along with the Unemployment Rate, Average Workweek, and Hourly Earnings.
It looks to be a very busy week on the earnings calendar. Some of the major scheduled earnings reports include ExxonMobil, Anadarko Pete, Archer Daniels Midland, DR Horton, International Paper, Pfizer, Cisco, Visa, MasterCard, Northrop Grumman, Sony, Aetna and Weyerhaeuser.
Happy trading,
James Dicks
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