Aug 18 2008
The Greenback Continues to Soar
Last week was a very good week for the US dollar as it continued its appreciation for the fourth straight week. During the previous week, the most notable gain came against its European counterpart as the oft-traded EUR/USD lost 360 pips by weeks end and close at 1.4675. In addition, the USD posed quite a remarkable appreciation vs. the GBP last week. The dollar gained almost 550 pips bringing the British Pound to its lowest in almost a year.
More remarkable then the numbers was the reason behind the movement, as results from last week’s US economic indicators could be defined as “mixed” at best. Still, with yet another week dominated by declining Oil prices, the USD was once again the biggest winner.
This week, the market should begin with lower volatility for the USD, as there are no real important news releases scheduled for today. Later on this week, the market can expect significant news from the U.S. that will likely rekindle volatility. Tuesday will be a very eventful day, as it is packed with market moving indicators such as Building Permits, PPI, Core PPI and Housing Starts. While initial forecasts for the aforementioned events are considered to be un-encouraging for dollar investors, FOMC Member Fisher will give a speech titled “Monetary Policy in a Technology Driven World” which, if hawkish could strengthen the dollar. Wednesday will be a day dominated by Oil news as the new found importance of Crude Oil Inventories should drive market movement for the day. Thursday the Unemployment Claims and Philadelphia Fed Manufacturing Index indicators should come out with encouraging results for the US economy and Friday the market’s direction will be derived by the words of Fed Chairman Bernanke speech concerning financial stability.
Today, the NAHB Housing Index is the only expected indicator from the US, and is expected to provide little to market movement. Investors are advised to follow news events of the USD counterparts before placing there transactions.
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