The Forex Daily Digest - June 8, 2009

There are plenty of U.S. economic events scheduled for this week that could very well effect your Forex trading. Be on the lookout for Wholesale Inventories on Tuesday. The market expects inventories to come in at a negative 1.0 percent. Last month it recorded at negative 1.6 percent decline. Wednesday the U.S. Trade Balance will be released; expected at a negative $28.7 billion. Also on Wednesday, Crude Oil Inventory figures will be on the street, as well as the Federal Budget figures and the Fed Beige Book. Thursday you can expect some larger movements with the release of Retail Sales, Initial Jobless Claims, and the Business Inventory numbers. Finally, on Friday, watch for the Import and Export Prices and the University of Michigan Consumer Sentiment results.

There are reports out that some Fed officials are saying interest rates should begin increasing. San Francisco Federal Reserve President Janet Yellen believes the Fed should be considering raising interest rates in order to “present asset bubbles from getting too big.” She also said that she had raised her preferred target for long-run inflation to a 2% rate of inflation.

Meanwhile, Boston’s Fed President Eric Rosengren asked the Fed to play an "integral role" in the financial regulatory framework of the U.S. Rosengren spoke at the conference on Financial Markets and Monetary Policy. He also called for more preventative measures to be used. In discussing the “stress tests” on the banking and financial industries, he said they were “instructive to banks and supervisors.”

Although the U.S. Dollar rallied after last week’s surprising jobs numbers, the USD continues to lose its global shine and is setting up a positive outlook for gold while increasing the need to use the metal as a financial advantage in personal portfolios. As normally happens, when the dollars loses ground, gold gains in value. Some market makers contend that the reason gold is continuing to increase in value is because investors are running out of places to put their money. Plus, the recent debt that the U.S. government has incurred has not done the dollar any favors either. Investors are always attracted to safe havens and these days gold seems to be the safest place to be invested.

One pair to keep your eye on is the AUD/USD. The pair remains above the rising trend line on daily chart and is in uptrend. The Pound Sterling was hammered on increasing concern that Prime Minister Brown might be forced to step down after two years on the job. The fifth British minister has resigned within a week. And Steven Barrow, Standard Bank Plc’s head of research for Group of 10 currencies in London, is saying that the “Loonie” will strengthen to parity with the USD within a year amid increased demand for oil and other Canadian commodities.

This is the very first Forex Digest offered on JDfn! Look for this report on a daily basis. Now, keep your eye on the news and the economic calendar this week, we could be in for some very positive trading activity.

Happy Trading -

James Dicks