Jun 19 2008
The Greenback’s Bearish Move is Back.
Yesterday, the USD lost grounds against most of its rival currencies but remained within its recent range. The recent USD weakness has been caused by some traders’ renewed expectations for higher U.S. interest rates after contradictory U.S. economic data. The greenback continues with bearish momentum following Tuesday’s losses, which resulted by the Housing Starts’ plunge to its lowest level in the last 17 years added by the adverse economic information from mortgage and lending markets. The USD was 0.1% lower against the JPY, trading at 107.80, and also depreciated to 1.5528 compared with 1.5462 against the Euro.
Also yesterday, the Crude Oil prices climbed up, passing the $136 following an imminent strike trend in Nigeria. Crude Oil prices moved up in anticipation of the supply data from the U.S, which showed a decrease in stockpiles by 1242k barrels in the week ending on June 13.
On tap today, we are expecting a batch of mixed U.S. data. Unemployment Claims is expected to rebound back to 375K, the Philadelphia Fed will release its Manufacturing Index for June which is expected to hike to -10 compared with May’s reading of -15.6. We also expect hawkish speeches from the Treasury Secretary Paulson and the Fed’s Vice-Chairman Donald Kohn about risk management and its implications for systemic risk. As most indicators are expected to have a rising trend, this should give the greenback a recovery from the previous trading days during today’s trading session.
