The Forex Daily Digest – July 28, 2009
The USD was down against other major currencies in European trading this morning. Gold was unchanged.
The Obama administration welcomed Chinese government officials to Washington for two days of intensive and wide-ranging talks, saying the White House wanted to promote cooperation on economic and diplomatic issues. Analysts said government officials in the U.S. and China are more aware due to the global recession that the two superpower economies are closely linked. China's central bank holds an estimated $1.2 trillion worth of U.S. dollar assets. President Obama put forward his top economic officials to try to reassure China that the U.S. will not allow huge budget deficits or runaway inflation endanger the value of Chinese investments in the U.S.
In Monday's trading, the USD fell as stocks extended their longest rally since 2003 and investors hunted for higher- yielding assets on speculation that the global economy is emerging from the recession. The Dollar Index dropped to its lowest level this year. The AUD gained for a third day against the USD after the Reserve Bank of Australia announced the economy may rebound faster than forecast six months ago. The EUR climbed to a seven-week high against the USD after Deutsche Bank AG said second- quarter profit increased, beating analysts’ consensus estimates.
Shares in Deutsche Bank dropped over 7% today as strong growth in the bank's bottom line apparently wasn't enough to compensate for concerns over rising bad debt charges and a disappointing performance in debt trading. The bank said net profit for the quarter jumped 68% to 1.09 billion euros ($1.56 billion).
The U.S. stock market will pay closer attention this week as the U.S. Treasury sells a record amount of government debt involving $235 billion in assorted bills, notes and its inflation-indexed 20-year bonds, interest that hasn’t really been there for quite some time. Yesterday’s auction saw the Treasury sell $6 billion in inflation-indexed securities at a yield of 2.387%. Today the government plans to sell $42 billion in two-year notes and analysts expect average to lower demand.
The dollar dropped against most of the major currencies yesterday as a strong positive signal on the U.S. housing market led investors to riskier trades in the EUR as well as in emerging markets. The British pound increased in value, but the dollar rose against the Japanese yen.
As hopes for an end to the recession increase and U.S. companies post better-than-expected earnings for the second quarter, investors are selling off the USD for higher-yielding assets. Analysts say that would be countries with higher interest rates, such as Australia, New Zealand and many developing nations.
On the economic calendar today, look for the July Consumer Confidence report which is expected to come in at 49.0 after a showing of 49.3 last month. Also, the Case-Shiller Home Price Index for May will be released today. Last month is show a negative 18.12% and this report is expected to read a negative 17.90%.
Major companies schedule to release their earnings reports today include BP plc, DreamWorks Animation skg, European Aeronautic Defence and Space Company (EADS), Hertz Global, SBA Communications, Midwest Banc Holdings, Office Depot, and US Steel.
Here’s hoping you have a very profitable day and Happy Trading!
James Dicks
The Obama administration welcomed Chinese government officials to Washington for two days of intensive and wide-ranging talks, saying the White House wanted to promote cooperation on economic and diplomatic issues. Analysts said government officials in the U.S. and China are more aware due to the global recession that the two superpower economies are closely linked. China's central bank holds an estimated $1.2 trillion worth of U.S. dollar assets. President Obama put forward his top economic officials to try to reassure China that the U.S. will not allow huge budget deficits or runaway inflation endanger the value of Chinese investments in the U.S.
In Monday's trading, the USD fell as stocks extended their longest rally since 2003 and investors hunted for higher- yielding assets on speculation that the global economy is emerging from the recession. The Dollar Index dropped to its lowest level this year. The AUD gained for a third day against the USD after the Reserve Bank of Australia announced the economy may rebound faster than forecast six months ago. The EUR climbed to a seven-week high against the USD after Deutsche Bank AG said second- quarter profit increased, beating analysts’ consensus estimates.
Shares in Deutsche Bank dropped over 7% today as strong growth in the bank's bottom line apparently wasn't enough to compensate for concerns over rising bad debt charges and a disappointing performance in debt trading. The bank said net profit for the quarter jumped 68% to 1.09 billion euros ($1.56 billion).
The U.S. stock market will pay closer attention this week as the U.S. Treasury sells a record amount of government debt involving $235 billion in assorted bills, notes and its inflation-indexed 20-year bonds, interest that hasn’t really been there for quite some time. Yesterday’s auction saw the Treasury sell $6 billion in inflation-indexed securities at a yield of 2.387%. Today the government plans to sell $42 billion in two-year notes and analysts expect average to lower demand.
The dollar dropped against most of the major currencies yesterday as a strong positive signal on the U.S. housing market led investors to riskier trades in the EUR as well as in emerging markets. The British pound increased in value, but the dollar rose against the Japanese yen.
As hopes for an end to the recession increase and U.S. companies post better-than-expected earnings for the second quarter, investors are selling off the USD for higher-yielding assets. Analysts say that would be countries with higher interest rates, such as Australia, New Zealand and many developing nations.
On the economic calendar today, look for the July Consumer Confidence report which is expected to come in at 49.0 after a showing of 49.3 last month. Also, the Case-Shiller Home Price Index for May will be released today. Last month is show a negative 18.12% and this report is expected to read a negative 17.90%.
Major companies schedule to release their earnings reports today include BP plc, DreamWorks Animation skg, European Aeronautic Defence and Space Company (EADS), Hertz Global, SBA Communications, Midwest Banc Holdings, Office Depot, and US Steel.
Here’s hoping you have a very profitable day and Happy Trading!
James Dicks
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