Jul 04 2008
Low Liquidity Expected Due to 4th of July.
The USD appreciated against all of the major currencies during yesterday’s trading session. The US Dollar gained over 160 points versus the EUR and closed at a rate of 1.5702. This happened in spite of the mostly disappointing results for the economy. . The Unemployment Rate was higher than forecasted at 5.5%. The Average Hourly Earnings did not change since last published at 0.3%. The Unemployment Claims indicator rose to 404K. The ISM Non-Manufacturing Composite plummeted to 48.2 meaning the service sector is shrinking. And the Natural Gas Storage Gauge came in 4B lower than predicted at 85B. Thus to find a better explanation for this, phenomenon traders might like to look at the crucial Nonfarm Employment Change which did came in lower than expected at -62K, however most expected a larger drop as the ADP came in a with a big disappointment and the actual Nonfarm Employment Change was fairly close to the forecast and not too far from the previous result. The USD also took advantage of its inferior counterparts yesterday.
General Motors, which is known for the 3.5-ton Hummer, might start selling a mini-car, Chevrolet Beat, in US markets. The Chevrolet Beat is more than a foot shorter than anything else General Motors sells in the U.S. They are doing this to win drivers whom are deterred by the record fuel prices. If this plan works out for GM it might help bring down oil price that in return might help strengthen the Dollar.
Today, floor trading will not take place in the US as Independence Day is celebrated. Thus volatility may be low trading versus the greenback. Investors are advised to keep in eye on news from the USD’s counterparts before placing their transactions.
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