The Forex Daily Digest – August 20, 2009
The USD fell against the EUR as a rebound on Wall Street reduced safe-haven demand for the dollar. The USD weakened against the JPY, although it came off the day's worst levels as a sharp drop in China's stock market raised concerns about the global economic outlook.
The GBP has had a bad week, a let-down after five months of consistent gains. Currency analysts say the normally volatile currency could still pick up some recently lost ground because its major rival, the USD, is facing its own threats; a combination of low U.S. interest rates and increasing demand for riskier assets. The USD Index is down about 3% so far this year.
One other note from the U.K., Britain's central bank revealed yesterday that its chief and two other monetary policy makers wanted to pump even more money into the financial system through its quantitative easing program -- a strategy also followed by the U.S. that tends to devalue the country's currency.
Crude futures increased nearly 5% yesterday, as rising U.S. equities and an unexpected drop in inventories pushed oil prices to finish at the highest level since the beginning of June. The Energy Information Administration reported that crude stocks fell by 8.4 million barrels to 343.6 million barrels during the week ended Aug. 14th. The data triggered a rally in oil futures. Prior to the report, September crude traded near $69.45 a barrel.
Gold futures wiped out earlier losses to finish higher yesterday, after the unexpected oil inventories numbers. Gold came under pressure earlier as another big drop in Chinese stock markets again applied pressure on global stocks and commodities for the second time this week.
Canada's overall inflation rate fell by 0.9% in July. The Canadian index of leading indicators advanced 0.4% in July led by the equity market with a 5.7% gain. That represents the first time since August 2008 that the index has posted a monthly increase. As a result, the CAD fell against the USD. The drop in Canadian inflation was primarily due to a 12-month decline of 23.4% in prices for energy products, particularly gasoline. The all-items Consumer Price Index excluding energy rose 1.8% in the 12 months to July.
In economic news today, look for the Initial Jobless Claims report for the week of August 15th and the Conference Board’s Leading Indicators at 10:00 am (Eastern Time). Jobless claims are expected to fall a bit from last week’s 558 thousand.
Expect earnings from Sears Holdings Corp, 1-800-FLOWERS.Com, Intuit, Barnes & Noble, China Mobile, Hormel Foods Corporation, Brocade Communications Systems, Inc., and H.J. Heinz Company.
Happy Trading,
James Dicks
The GBP has had a bad week, a let-down after five months of consistent gains. Currency analysts say the normally volatile currency could still pick up some recently lost ground because its major rival, the USD, is facing its own threats; a combination of low U.S. interest rates and increasing demand for riskier assets. The USD Index is down about 3% so far this year.
One other note from the U.K., Britain's central bank revealed yesterday that its chief and two other monetary policy makers wanted to pump even more money into the financial system through its quantitative easing program -- a strategy also followed by the U.S. that tends to devalue the country's currency.
Crude futures increased nearly 5% yesterday, as rising U.S. equities and an unexpected drop in inventories pushed oil prices to finish at the highest level since the beginning of June. The Energy Information Administration reported that crude stocks fell by 8.4 million barrels to 343.6 million barrels during the week ended Aug. 14th. The data triggered a rally in oil futures. Prior to the report, September crude traded near $69.45 a barrel.
Gold futures wiped out earlier losses to finish higher yesterday, after the unexpected oil inventories numbers. Gold came under pressure earlier as another big drop in Chinese stock markets again applied pressure on global stocks and commodities for the second time this week.
Canada's overall inflation rate fell by 0.9% in July. The Canadian index of leading indicators advanced 0.4% in July led by the equity market with a 5.7% gain. That represents the first time since August 2008 that the index has posted a monthly increase. As a result, the CAD fell against the USD. The drop in Canadian inflation was primarily due to a 12-month decline of 23.4% in prices for energy products, particularly gasoline. The all-items Consumer Price Index excluding energy rose 1.8% in the 12 months to July.
In economic news today, look for the Initial Jobless Claims report for the week of August 15th and the Conference Board’s Leading Indicators at 10:00 am (Eastern Time). Jobless claims are expected to fall a bit from last week’s 558 thousand.
Expect earnings from Sears Holdings Corp, 1-800-FLOWERS.Com, Intuit, Barnes & Noble, China Mobile, Hormel Foods Corporation, Brocade Communications Systems, Inc., and H.J. Heinz Company.
Happy Trading,
James Dicks
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