Forex Trading TV Video Blog

The USD underwent a bullish trading session yesterday, as it appreciated against all of its major currency rivals. The dollar rose 0.1% and closed at around 1.4710 versus the Euro in yesterday’s trading session. Also, the USD saw steady gains against the GBP and CHF.

The greenback saw gains yesterday as Preliminary GDP figures beat out already positive forecasts which showed an expected rise of 2.6%. Instead, the indicator rose 3.3% and added to another day of surprising US economic data supporting the USD. In addition, a rally in U.S. stocks, seen mostly by industrial and financial companies as well as a decline in oil prices also boosted the greenback. The US economy grew at a 3.3% annualized rate in the second quarter of 2008, a sharp upward revision from the 1.9% growth reported in the US Department of Commerce’s first estimate a month ago and higher than the 0.9% rise in the first quarter. The 3.3% GDP increase is the fastest pace since the third quarter of 2007, when GDP grew at a 4.8% annualized rate. The report prompted investors to buy back the dollar, with bids accelerating broadly as U.S. stocks climbed and oil prices plummeted midway through the New York session. In addition, the unemployment claims report saw a decline of 2000 from the expected mark of 427K. The swing in a Preliminary GDP, despite unemployment claims data adds even more to the growing speculation that the US could begin to see steady growth. The data also backed expectations of U.S. rate hikes this year, which fueled a rebound in the dollar during trading session yesterday.

Today we can expect a slower pace to the news cycle from the US as few events of lesser significance will be released. But those events should contribute little to volatility.

The greenback saw mixed results versus its rival counterparts during yesterday’s trading session. The USD initially retreated from recent highs against a basket of rival currencies caused mainly by a rise in Oil prices, as well as another round of concerns over the U.S. healthcare and banking system. The USD pared losses after a report showed that US Durable Goods Orders for July rose by 1.3% causing the USD climb against its counterparts immediately after the results were published. However, despite the positive release the USD continued its decline shortly after hawkish comments several ECB executives that helped the EUR rebound from a 6-month low versus the greenback.

In recent days the USD has gained some strength and been broadly supported over the fear of a deteriorating global economy, which would lead the Central Banks in those major economies affected by the global slowdown to lower Interest Rates. In contrast, most economists expect the Federal Reserve’s next step to most likely raise Interest Rates to ease inflationary pressures.

Today will be a very active trading day for the USD, as there are a few important news announcements expected from the U.S. economy. The first major economic news event will be the Preliminary Quarterly GDP for the 2nd quarter, which is expected to rise by 0.7% from last quarter’s result. Another expected event will be the Unemployment Claims report, one of the most influential USD indicators, which is forecasted by analysts to show a decrease of 5000 jobless individuals, from 432K last week. The Natural Gas Storage announcements are not expected to cause a major impact on the USD as there are inflationary and growth implications to the results. News is expected to be positive for the greenback, as it seems that the main positive announcements will be coming from the Preliminary Quarterly GDP which should give the USD momentum.