Jul 31 2007
Busy US schedule today – Chicago PMI on tap
Busy US schedule today – Chicago PMI on tap
The Greenback retreated a bit yesterday, after a small strengthening sensation started to appear among traders at the end of last week.
The US calendar is full of interesting and important news releases today, after yesterday’s almost empty calendar which produced no major price movements.
The US Core PCE Price Index is expected to be released today at 0.2%, which is a slight increase from last month’s 0.1%.
Personal spending is also expected to be released today, and past data shows that personal spending rose by 0.1% during the month of June, compared to a rise of 0.5% during May. As we can expect, the USD may loose again some of its strength due to the fact that the average American consumer’s spending power has decreased. A sharp drop in confidence as well as a widening gap between spending and income will resurrect talk of an end of the year interest rate cut.
The most important news release of the day would no doubt be the Chicago PMI, which is expected to go down from 60.2 to 59.0. although the expected figure indicates growth in the manufacturing sector, it still means the growth level is decreasing, had it comes inline with expectations, and will probably shift the USD down a bit.
It appears that the USD will continue to weaken today against the 13-nation currency, on the basis of the diverse data which is going to be published today in the market. The forecast indicates a slowdown in personal spending growth while an inflation gauge closely watched by the Federal Reserve may stay in the same level. US economy is expected to have Additional negative signals especially after the Rising mortgage rates and defaults which have hurt badly the mortgage lenders this year. More than 50 lenders have filed for bankruptcy or sold themselves.
Traders will be watching the price movement closely today, as it is a direct preparation to Friday’s main event – the release of the Nonfarm Payrolls.
