The Forex Daily Digest - June 19, 2009

After a very busy week, there are no major U.S. economic reports scheduled for today. Next week you can expect to see a number of important events that just might have a major impact on your Forex trading. Scheduled for release is the Existing and New Homes Sales reports, Durable Goods, first quarter Gross Domestic Product, Personal Income and Spending and the announcement from the next FOMC meeting will be released on Wednesday afternoon. There was a report this week that said Federal Reserve officials are considering whether to use next week’s policy statement to hold back any conjecture that they’re ready to raise interest rates as soon as this year.

The euro traded higher earlier today after European Union leaders in Brussels announced the region is on track for a "sustainable economic recovery." The euro was trading against the dollar at $1.39. European Union leaders agreed late yesterday to the extensive principles for instituting new financial supervisors, but stopped short of assigning them with the power to force European Union governments to bail out corporate entities. The euro also gained some strength on speculation that European Central Bank officials speaking today will indicate they plan to keep interest rates on hold amid signs the global economic doldrums are moderating.

The JPY fell as rising stocks prompt investors to search for returns in higher-yielding assets, thus reducing the need for the Japanese currency as a safe haven. The yen is still expected to record gains for the week against the dollar and the euro after U.S. reports this week revealed that confidence among homebuilders fell unexpectedly and industrial production dropped for a seventh month, increasing concerns that a recovery by the U.S. economy will definitely take some time to develop.

The GBP improved from its lowest level since June 9th against the USD after Bank of England Governor Mervyn King said that policy makers are “now seeing some signs that the rate at which the outlook was falling is beginning to flatten off.” The dollar traded higher for a second straight day against the JPY as the British Bankers’ Association said it may allow more institutions to take part in the daily survey that sets the London interbank offered rate, which is the benchmark for more than $360 trillion of financial products around the world.

The CAD was little changed as returns in crude oil and stock prices equalized pressure from a USD that was reinforced by rumors that it will be made more appealing by changes to the way the offered rate is set. Bank of Canada Governor Mark Carney said Canada’s typical households are facing increasing “stresses” that just might lead to losses for nation’s banks.

The AUD and NZD dollars gained the most in a week against the USD after reports showed the recession may be moderating, adding to demand for assets denominated in higher-yielding currencies. The AUD recovered from an earlier decline set off by a central bank statement that it sold A$1.4 billion ($1.1 billion) of its own currency in May, that’s the largest net sales since February 2004. A central bank spokesman said the purpose was to restock its reserves.

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 one of our webcasts yet, I urge you to consider doing so. We have an exciting week ahead – see you on Monday.

Happy Trading –

James Dicks