The Forex Daily Digest – July 29, 2009
The USD hit the lowest level this year against the currencies of six major U.S. trading partners as supposition that the global economy is emerging from the recession lessened the demand for a refuge. The AUD advanced to the highest level since September against the USD after the Reserve Bank said the economy may rebound faster than forecast six months ago. The EUR had a seven-week high against the USD.
The United States and China discussed two sensitive topics -- currencies and climate change -- in summit talks that appeared to be more about establishing positions than really finding solid solutions and commitments. The People's Bank of China chief Zhou Xiaochuan said that the two countries also "touched upon" the exchange rate between China's Yuan and the USD, but there were no comprehensive discussions. The United States has largely steered clear of a public appeal for China to allow its currency to rise faster, but Beijing did take a sharper tone, warning against letting the dollar slide too far. Held almost entirely behind closed doors, the formal session of the two-day talks wrapped up near midday yesterday.
The JPY gained some ground against all of the other major currencies as risk aversion spurred advancement. On the economic scene, traders are looking toward the release of retail sales figures which are expected to increase from the previous month as the effects of the global recession diminishes just a bit. Even so, the release of industrial production figures will determine the pace of recovery in the world’s second largest economy. According to the Bank of Japan, improvements in trade and factory production stopped its economy from worsening and forecasters are predicting that factory outputs will grow for the fourth consecutive month in June.
The economic calendar for the U.K. will heat up and there could be some GBP price action but at the same time, there is doubt that the housing market report is significant enough to trigger a breakout in the GBP/USD. U.K. mortgage approvals, consumer credit, money supply and net lending on dwellings are due for release. The increase in the lending data suggests that activity in the U.K. housing market may have picked up last month.
The only action in the currency market was in the Australian dollar which rose to a new year to date high on the heels of surprisingly hawkish comments from Reserve Bank of Australia (RBA) Governor Stevens. Governor Stevens noted that Australia’s downturn may not be “one of the more serious” of the post-World War II era adding that, “we can much more easily imagine upside risks to the outlook than six months ago.” Markets interpreted Steven’s commentary as a sign that the RBA may be ready to consider reversing its accommodative monetary policy that has brought rates down to 3% which is still the highest in the industrialized world.
On the economic calendar in the U.S. today, expect the June Durable Goods report to be released on Wednesday morning. Last month the figures came in at 1.8% but this month they are expected to slip into the negative. The normal Crude Inventories report will be released mid-morning and later in the afternoon watch for the Fed Beige Book.
On the earnings calendar, Coca Cola Enterprises, General Dynamics, ConocoPhillips, Daimler AG, Sprint-Nextel, Visa, Choice Hotels International, Time Warner, Bayer AG, Honda Motor Co., Nissan Motors, Sanofi-Aventis, and Royal Caribbean Cruises are all scheduled to release their numbers today.
Have a great trading day!
James Dicks
The United States and China discussed two sensitive topics -- currencies and climate change -- in summit talks that appeared to be more about establishing positions than really finding solid solutions and commitments. The People's Bank of China chief Zhou Xiaochuan said that the two countries also "touched upon" the exchange rate between China's Yuan and the USD, but there were no comprehensive discussions. The United States has largely steered clear of a public appeal for China to allow its currency to rise faster, but Beijing did take a sharper tone, warning against letting the dollar slide too far. Held almost entirely behind closed doors, the formal session of the two-day talks wrapped up near midday yesterday.
The JPY gained some ground against all of the other major currencies as risk aversion spurred advancement. On the economic scene, traders are looking toward the release of retail sales figures which are expected to increase from the previous month as the effects of the global recession diminishes just a bit. Even so, the release of industrial production figures will determine the pace of recovery in the world’s second largest economy. According to the Bank of Japan, improvements in trade and factory production stopped its economy from worsening and forecasters are predicting that factory outputs will grow for the fourth consecutive month in June.
The economic calendar for the U.K. will heat up and there could be some GBP price action but at the same time, there is doubt that the housing market report is significant enough to trigger a breakout in the GBP/USD. U.K. mortgage approvals, consumer credit, money supply and net lending on dwellings are due for release. The increase in the lending data suggests that activity in the U.K. housing market may have picked up last month.
The only action in the currency market was in the Australian dollar which rose to a new year to date high on the heels of surprisingly hawkish comments from Reserve Bank of Australia (RBA) Governor Stevens. Governor Stevens noted that Australia’s downturn may not be “one of the more serious” of the post-World War II era adding that, “we can much more easily imagine upside risks to the outlook than six months ago.” Markets interpreted Steven’s commentary as a sign that the RBA may be ready to consider reversing its accommodative monetary policy that has brought rates down to 3% which is still the highest in the industrialized world.
On the economic calendar in the U.S. today, expect the June Durable Goods report to be released on Wednesday morning. Last month the figures came in at 1.8% but this month they are expected to slip into the negative. The normal Crude Inventories report will be released mid-morning and later in the afternoon watch for the Fed Beige Book.
On the earnings calendar, Coca Cola Enterprises, General Dynamics, ConocoPhillips, Daimler AG, Sprint-Nextel, Visa, Choice Hotels International, Time Warner, Bayer AG, Honda Motor Co., Nissan Motors, Sanofi-Aventis, and Royal Caribbean Cruises are all scheduled to release their numbers today.
Have a great trading day!
James Dicks
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