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  • The Greenback Softly Retreates Again.

    Posted on: August 9th, 2007 by Forextvblog No Comments
    Forex TV Blog

    There were no significant news releases from the US yesterday. The US dollar softened throughout the New York trading session. Markets are still reacting to Tuesday’s Feds key interest rate statement, which left the interest rate unchanged at 5.25 %. Before the release of the statement, the greenback experienced a slight revival against the majors, but yesterday the USD managed to gain strength only against the Japanese Yen, while weakening against every other major currency. In fact, the dollar is slipping back towards its record lows against the Euro.
    It seems that the Fed is shirking the credit and housing woes as it is disregarding the US economic growth concerns by stating that the US economy will continue to expand at a moderate pace. However once again it is important for us to reiterate that traders should pay close attention to any future comments from the Fed regarding its monetary policy as it seems that the Fed’s belief that the US economy will continue to expand is just an attempt to calm the market.
    Today is relatively light on news with only Unemployment Claims data expected to be released from the US. The indicator measures the number of individuals who filed for unemployment insurance for the first time over the past week. The Unemployment Claims data is expected to be released with a slightly negative expectation of 310K. The direction of the USD will heavily depend on whether future indicators continue to apply pressure on the Fed to cut rates, but in the meanwhile with the shrinking interest rate differential between the US and Europe the greenback will remain under pressure.

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