The Forex Daily Digest – July 17, 2009
The USD ended slightly weaker against most widely traded currencies yesterday, as more optimistic economic data and corporate earnings results continued to support risk appetites, even if it was at a lower level of intensity than earlier this week. Increased global acceptance for risk - which usually heightens other currencies at the expense of the safe-haven USD - remained in effect because of economic events like the solid second -quarter earnings announced by J.P. Morgan Chase, and China's announcement which showed a strong 7.9% expansion of its gross domestic product in the quarter.
The USD and EUR fell against the JPY in Asia yesterday as Chinese second-quarter growth disappointed some investors and prompted hedge funds to reduce risky bets by selling the two currencies. The U.S. and European currencies started their fall soon after the release of Chinese data.
Technology and energy sectors will benefit most should the USD weaken in the second half, with S&P 500 increasingly dependent on foreign sales to meet earnings expectations. One analyst said that if the dollar index falls an average of 5% in the second half, and “a company like an IBM sells $1 billion of product outside the U.S., then a billion dollars worth of revenue “just got 5% more profitable.” Overseas sales have U.S. companies collecting euros, pounds and other currencies, which are then shipped back to the U.S. and reported in U.S. dollars.
Gold dropped in value for the first time in six days as the USD bounced back, lessening the demand for the precious metal as an alternative investment. The Dollar Index increased from a five-week low after technical charts showed its 1.4 percent drop in the past month was extreme. Bullion jumped 1.5 percent to a two-week high as oil rose the most in three weeks.
Look for major earnings today from Bank of America, General Electric, and Citigroup. Economic reports that may affect your Forex trading include Building Permits and Housing Starts for June. Both reports are not expected to show much change from last month.
Have a profitable day today and an enjoyable weekend. Don’t forget to listen to the JDfn professionals each and every morning on the JDfn Internet broadcasts to find out what they see as far as daily setups. And if you haven’t signed up for the new James Dicks Forex Alerts yet, I urge you to consider doing so. Just visit www.JDForexAlerts.com on the Internet. There’s another exciting week ahead – see you on Monday.
Happy Trading,
James Dicks
The USD and EUR fell against the JPY in Asia yesterday as Chinese second-quarter growth disappointed some investors and prompted hedge funds to reduce risky bets by selling the two currencies. The U.S. and European currencies started their fall soon after the release of Chinese data.
Technology and energy sectors will benefit most should the USD weaken in the second half, with S&P 500 increasingly dependent on foreign sales to meet earnings expectations. One analyst said that if the dollar index falls an average of 5% in the second half, and “a company like an IBM sells $1 billion of product outside the U.S., then a billion dollars worth of revenue “just got 5% more profitable.” Overseas sales have U.S. companies collecting euros, pounds and other currencies, which are then shipped back to the U.S. and reported in U.S. dollars.
Gold dropped in value for the first time in six days as the USD bounced back, lessening the demand for the precious metal as an alternative investment. The Dollar Index increased from a five-week low after technical charts showed its 1.4 percent drop in the past month was extreme. Bullion jumped 1.5 percent to a two-week high as oil rose the most in three weeks.
Look for major earnings today from Bank of America, General Electric, and Citigroup. Economic reports that may affect your Forex trading include Building Permits and Housing Starts for June. Both reports are not expected to show much change from last month.
Have a profitable day today and an enjoyable weekend. Don’t forget to listen to the JDfn professionals each and every morning on the JDfn Internet broadcasts to find out what they see as far as daily setups. And if you haven’t signed up for the new James Dicks Forex Alerts yet, I urge you to consider doing so. Just visit www.JDForexAlerts.com on the Internet. There’s another exciting week ahead – see you on Monday.
Happy Trading,
James Dicks
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