May 29 2008
The Greenback Pushes Up Ahead of GDP
Yesterday, the greenback saw bullish trends against most of its major counterparts following positive economic news from the U.S. The EUR\USD was traded as low as 1.5620. The USD was also bullish against the rest of the major currencies. The greenback’s daily momentum was driven by the better than forecasted Core Durable Goods Orders and general Durable Goods Orders, as both beat forecasts by at least 1%.
The USD’s bullish trend yesterday quickly developed after the news announcements regarding the Durable Goods Orders. Experts predicted the results to be worse than last month, but in both cases the actual results beat forecasts and in the Durable Goods Orders, the result was actually better than last month’s result. The other main factor that led to the incline in the greenback’s value was the fall of the Crude Oil’s price, which breached under the $127 range. As the American economy is greatly affected by the Crude Oil’s price, the latest decline in the price of Crude Oil has finally taken some pressure off the USD.
Today will be a very active trading day for the USD, as there are a lot of news announcements expected from the U.S. The first major economic news event will be the Preliminary Quarterly GDP for the 1st quarter, which is expected to rise by 0.3% from last quarter’s result. Traders should be aware of the increase in Unemployment Claims expected to be announced as well. Crude Oil Inventories and the Natural Gas Storage announcements are not expected to cause a major impact on the USD as there are both inflationary and growth implications to the results. In the evening the greenback’s volatility should increase even more as both Fed Chairman Bernanke and Fed Vice Chairman Kohn will hold speeches in different events and times.
As there are many news announcements expected today, the USD’s trading will be very active and volatile. Results are expected to be mixed, as it seems that the main positive announcements will be the Preliminary Quarterly GDP which should give the USD momentum. The wild card will be Bernanke and Kohn’s speeches which will determine the USD’s trend.
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