Forex Trading TV Video Blog

Yesterday, the US market continued to witness a further deterioration.
The USD fell again, setting a fresh record low mainly against the EUR and the CAD. Growing concerns about the US economy and the possibility of further interest rate cuts by the Federal Reserve are the main reasons behind the US dollar’s continuous weakness. The USD is trading around the 1.4095 level against the EUR.

Yesterday, trader’s attention was focused primarily on the Fed Chairman’s Bernanke Speech in front of the U.S Congress. Bernanke told Congress that the credit crisis has created a “significant market stress”, but reassured that regulators would take steps to curb fallout due to the mortgage crisis.
Fed Chairman’s Speech came just two days after the Federal Reserve cut a key interest rate by 0.5% in order to prevent the weight of housing and credit problems from sinking the economy.

The Greenback weakness continues to dominate financial markets as last day’s headline figures showed little signs of hope. One of the few positive US economic indicators seen through recent trade was yesterday’s Philadelphia Fed manufacturing report that showed a slightly more optimistic picture of regional industrial production. The headline figure released at 10.9, far above consensus estimates of 3.0, for the month of September.

There is no significant economic news expected to come out of the U.S today, apart from the Fed Governor’s Mishkin and Fed Governor’s Kohn speeches on monetary policy in Frankfurt.

The USD fell to an all-time low against the EUR Yesterday, however grazed back slightly due to data showing a decline in U.S. consumer prices. The Greenback also fell against the GPB taking it to 2.0173 before declining back to 2.0025.

Yesterday, data coming from the US showed some concerns about the country’s economic outlook data such as: CPI, Housing Starts index, and the Building Permits index; the consumer price index surprisingly decreased and pushed lower by 0.1% from the previous month and new home construction strike a 12-year low.

Home construction Index decreased by 2.6% last month to its lowest in more than 12 years, while building permit activity, a sign of future construction plans, also dropped to a low which has not been seen since mid-1995, Building permits fell 5.9% to an annual rate of 1.307 million.
As it seems at the moment the housing recession may deepen, causing more damage on an already slowing economy, after borrowing costs rose and lenders shut off access to credit, and of course still dealing with the delicate issue of the mortgage defaults which will probably delay the recovery from the worst homebuilding recession in 16 years.
The U.S. Federal Reserve announced on Wednesday that it added $9.75 billion of impermanent reserves to the banking system in the course of overnight repurchase agreements and today, the Federal Open Market Committee (FOMC) cut its fed funds target rate by 50 basis points; the first cut in that rate in four years.