Jun 29 2007
Daily Forex Analysis
Daily Forex Analysis
The Greenback was pushing a bit stronger yesterday after the FOMC decision to keep the Interest Rate unchanged at 5.25%. The positive effect was felt mostly against European currencies, in contrast to the JPY which had the opposite effect, and took the USD a bit lower. The Rate decision was widely expected to remain unchanged, and demonstrated the Fed’s opinion regarding the inflation saying: “readings on core inflation have improved modestly in recent months”. The Feds also showed a bit of concern for future unfolding of inflationary policy by saying: “predominant policy concern remains the risk that inflation will fail to moderate as expectedâ€.
The second focus point yesterday was the release of the GDP Annualized Revision that came in a bit weaker than expected at 0.7% with a 0.8% consensus. The GDP Deflator on the other hand came in stronger than expected at 4.2% and a consensus of 4.0%.
As for today, there is several important news events expected to be released, starting with the Core PCE Price Index, which is expected to be released at 13:30 GMT at a rate of 0.1%. The Core Personal Consumption Expenditures Price Index measures the rate of inflation experienced by consumers when purchasing goods and services, excluding Food and Energy. Like the CPI, it reflects the price change in consumer goods and services. The PCE differs slightly from the CPI in that it only measures goods and services targeted towards and consumed by individuals. Food and Energy account for roughly 25% of PCE, but they can be very volatile from month to month and can distort the overall picture. PCE with the exclusion of these volatile components is thought to be a better indicator of the underlying inflation trend.
A bit later at 13:45 the Chicago PMI is expected to be released at 58.0 after coming in at 61.7 last month. The Consumer Sentiment will be released at 14:00 GMT and is expected to come in at 83.9 which is a slight increase from last month’s 83.7.
It looks as if the Greenback will maintain a certain amount of stability until the Forex market closes, preparing the grounds for next week’s session, which is expected to provide more price action, especially towards the end of it, with the Monthly Job Report.
