Forex Trading TV Video Blog

As we wrap up 2007, the greenback finished up the last week of the year, similar to how it started it; at a loss. A flurry of negative economic data has ransacked any chance that the dollar might have had, to recover against its major counterparts before the year’s end. Friday was no different, as New Home Sales figures came back lower than the already disappointing expectations. Chicago PMI numbers, which focus on manufacturer purchases, returned with positive results but could not revive the dollar’s momentous drop following housing sales numbers.

The housing market has been one of the main catalysts in the greenback’s detrimental fall over the second half of 2007. Along with the credit crisis, housing has not shown any signs of turning the corner, and continues to put a heavy strain on the US economy. Prospective home owners in the US are holding out, with the expectation that market prices will still drop. Unfortunately, buyers are what are needed most in the economy right now.

This week, the US economy will continue to release critical economic data, which should map out how the month of January will proceed. As we head into the New Year’s holiday on Tuesday, the economic calendar will see CPI, ISM and Non-Farm indices released. This data, coupled with Unemployment claims, will be started off by today’s 15:00 GMT publication of Existing Home Sales. Expectations are that the figure will return equal to last month’s figure of just under 5 million dollars.

As the dollar continues to falter against its major currency counterparts (closing in on 1.48 versus the Euro), it is likely that we will continue to see the same bearish movement as we approach 2008.

Yesterday saw the release of the Durable goods figures from the US. As the slowing US economy continues its direction, there was little hope that Novembers Durable goods numbers would surprise on the upside. Initial expectations had goods making a modest growth of roughly 3%, however the reality was only 0.1%. After steady declines over the last four months, some had hoped that the lethargic US economy might get some sort of boost. Instead, durable goods came back disappointing and once again the greenback began to tumble. The dollar found itself in familiar territory against the EUR, once again passing the 1.46 level.

International news was a big factor in Wednesday trading as the assassination of former Pakistani Prime Minister Benazir Bhutto, left the dollar in a freefall against it major counterparts. Turmoil within allied US countries has had an abysmal effect on the greenback, this latest event being the proverbial “Icing on the Cake”, as some hoped the dollar would continue to strengthen as it has been doing in the last week or so. Now the Fed is once again put in the precarious position of having to facilitate some more confidence in the greenback to avoid any more of its current losses. As we wrap up the month of December and the 2007 calendar year, it is growing increasingly evident that the dollar will most likely not make a charge into 2008. It should be interesting, as investors generally see a rise in the dollar in January as people renew their investments.

Today, amidst a fairly slow economic news day, we will see the release of the Chicago PMI and US Home Sales figures. Investors remain cautious of manufacturing figures out of the US, which leads some to believe that PMI numbers will also be disappointing. The housing market in the US has been the brunt of most of the problems in the US for quite some time. Forecasts for today’s 1500 GMT release expect a 10K decrease in New Home Sales from 728K to 718K. The dollar should likely continue its bearish spell.