The Forex Daily Digest – August 24, 2009
European Central Bank officials, led by President Jean-Claude Trichet, addressed mounting evidence of an economic recovery with caution, suggesting they won’t rush to reverse their emergency stimulus anytime soon. Economic numbers scheduled to be released this week may increase optimism that a recovery is currently in progress.
At a meeting over the weekend in Jackson Hole, Wyoming, the U.S. Federal Reserve continued to hold to its intention to maintain interest rates exceptionally low for "an extended period" but remains concerned that the policy may conflict with its desire to avoid inflation. Fed Chairman Bernanke, European Central Bank President Trichet and other central bankers from around the world gathered in Jackson Hole for the sensitive economic discussions.
The EUR gained for a fourth day against the USD, its longest run of gains since June, after German services and French manufacturing unexpectedly expanded in August. The EUR advanced to the strongest level in two weeks against the USD and erased losses versus the yen after an index of the German services industry grew for the first time in a year, adding to signs that the European is easing.
The CAD strengthened for the first week this month as oil and stocks surged amid speculation the global economy is recovering, increasing the appeal of growth-linked currencies. The CAD advanced as crude oil, the nation’s biggest export, reached its highest price in the past 10 months. Stocks also reached a 10-month high. The CAD gained for four straight days from Aug. 18th, its longest winning streak since July, after beginning the week lower as investors’ risk appetite shrank after a stock tumble that began in China.
There was good news for consumers over the weekend. Prices at the pump held steady over the past two weeks, leaving the nationwide average at $2.64 for a gallon of self-serve regular gasoline. The Lundberg Survey, which tabulates prices at thousands of gas stations nationwide, found the average, was a quarter of a penny below the average in the previous survey. The survey’s publisher, Trilby Lundberg, said demand remains relatively low compared to previous years "because our economy is still very sickly."
Economic experts believe that much of the economic data to be released this week should show small improvements. The data on this week’s calendar covers a wide range of the economy, from the consumer to manufacturing to housing. The best news is likely to come from the factory sector, which appears to be gaining some momentum as the inventory cycle turns favorable. The news on housing is also expected to be better than last month.
Look for the July Durable Goods report along with the August Consumer Confidence Index and the Case-Shiller Home Price Index. Other economic reports scheduled this week include New Home Sales, Crude Inventories, Initial Jobless Claims, the Second Quarter Gross Domestic Product, Personal Income & Spending as well as the Michigan Consumer Sentiment Report.
In earnings this week you can expect Winn-Dixie Stores, Bank of Montreal, Sanderson Farms, Borders Group, Staples, Inc., Isle of Capri Casinos, Burger King, Heineken N.V., Tivo, Avis Europe plc, Bank of Beijing Co. Ltd, J. Crew Group, Inc, Royal Bank Of Canada, Toll Brothers, and Tiffany & Co.
Happy Trading,
James Dicks
At a meeting over the weekend in Jackson Hole, Wyoming, the U.S. Federal Reserve continued to hold to its intention to maintain interest rates exceptionally low for "an extended period" but remains concerned that the policy may conflict with its desire to avoid inflation. Fed Chairman Bernanke, European Central Bank President Trichet and other central bankers from around the world gathered in Jackson Hole for the sensitive economic discussions.
The EUR gained for a fourth day against the USD, its longest run of gains since June, after German services and French manufacturing unexpectedly expanded in August. The EUR advanced to the strongest level in two weeks against the USD and erased losses versus the yen after an index of the German services industry grew for the first time in a year, adding to signs that the European is easing.
The CAD strengthened for the first week this month as oil and stocks surged amid speculation the global economy is recovering, increasing the appeal of growth-linked currencies. The CAD advanced as crude oil, the nation’s biggest export, reached its highest price in the past 10 months. Stocks also reached a 10-month high. The CAD gained for four straight days from Aug. 18th, its longest winning streak since July, after beginning the week lower as investors’ risk appetite shrank after a stock tumble that began in China.
There was good news for consumers over the weekend. Prices at the pump held steady over the past two weeks, leaving the nationwide average at $2.64 for a gallon of self-serve regular gasoline. The Lundberg Survey, which tabulates prices at thousands of gas stations nationwide, found the average, was a quarter of a penny below the average in the previous survey. The survey’s publisher, Trilby Lundberg, said demand remains relatively low compared to previous years "because our economy is still very sickly."
Economic experts believe that much of the economic data to be released this week should show small improvements. The data on this week’s calendar covers a wide range of the economy, from the consumer to manufacturing to housing. The best news is likely to come from the factory sector, which appears to be gaining some momentum as the inventory cycle turns favorable. The news on housing is also expected to be better than last month.
Look for the July Durable Goods report along with the August Consumer Confidence Index and the Case-Shiller Home Price Index. Other economic reports scheduled this week include New Home Sales, Crude Inventories, Initial Jobless Claims, the Second Quarter Gross Domestic Product, Personal Income & Spending as well as the Michigan Consumer Sentiment Report.
In earnings this week you can expect Winn-Dixie Stores, Bank of Montreal, Sanderson Farms, Borders Group, Staples, Inc., Isle of Capri Casinos, Burger King, Heineken N.V., Tivo, Avis Europe plc, Bank of Beijing Co. Ltd, J. Crew Group, Inc, Royal Bank Of Canada, Toll Brothers, and Tiffany & Co.
Happy Trading,
James Dicks
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