Forex Trading TV Video Blog

Yesterday the greenback saw rising trends against most of its major currency counterparts, including a 6 month record against the EUR, and a two year high against the GBP. However, equal concerns on downside risks to growth and upside risks to inflation are keeping dollar activity restrained in the aftermath of yesterday’s FOMC Minutes.

Two main reasons led to yesterday’s dollar positive session. First was the batch of poor economic data from the Euro-Zone, especially regarding the German economy, which promptly weakened the EUR, and thus strengthened the USD. Later on, two leading indicators were published from the U.S economy and boosted the Dollar further. The U.S Consumer Confidence Index rose well above the expectations to a 56.9 mark, continuing a series of positive results from the survey. On the other hand, the New Home Sales failed to reach expectations, yet it did show that the poor housing sector has managed to seem positive despite its bleak condition, as the sales of newly constructed U.S single-family homes in July increased from an almost 17-year low in June.

Yesterday’s trading session may definitely be considered a global crossroad in terms of financial developments. Whereas the U.S economy seems to be pulling itself out of its gloomy status, the rest of the world, and the Euro-Zone on top of it, looks to be falling into a deep recession that if proven to be correct, might lead to a long-lasting bullish trend for the USD. Of course, the U.S economy is still far from a total recovery, but things are looking better for the US economy as a whole.

As for today, on tap will be U.S Durable Goods Indices, which analysts forecasted to deliver weak results. If it goes as planned, the USD may suffer a minor pullback. However, in the case of better than expected figures, the USD will likely find itself aiming to establish new records. Another indicator that should be noticed is Crude Oil Inventories that could generate turmoil in Oil prices and as proven, tends to have a great impact on the market.

Intra-day gains in the dollar on a better-than-expected U.S. Existing Home Sales report tended to be short lived even though stabilization in the U.S. housing market is seen as critical to ending some of the concerns on the U.S. economy. The dollar finished yesterday’s trading session with mixed results versus the major currencies while staying relatively unchanged against the EUR ultimately closing at 1.4709.

Still, lingering concerns on problems at U.S. mortgage finance companies Fannie Mae and Freddie Mac are keeping housing data at the forefront of investors’ focus for this week. Data on New Nome Sales for July and 2 surveys of Nationwide House Prices are expected to be released today.

Meanwhile, Federal Reserve Chairman Ben Bernanke spoke on financial stability at the Kansas City Fed’s annual Jackson Hole conference. His commentary didn’t necessarily reveal anything new, though he did say that the recent decline in commodity prices, as well as the increased stability of the dollar, has been encouraging. If not reversed, these developments, together with a pace of growth should lead US inflation to moderate later this year. Analysts estimate that longer term prospects for a stronger USD remain intact given that the United States is likely to overcome the problem of slower growth sooner than other nations. The general sentiment towards possibly lower Interest Rates and towards the U.S. economy managing to get out of the global crisis earlier than the other economic areas will probably support the dollar over the next couple of months.

In today’s housing data investors will look for clues on whether the battered property market is indeed stabilizing - which would be a relief for both the economy as well as for hard-hit US financial firms holding mortgage assets.

Later today, the FOMC Meeting Minutes from the Federal Reserve’s August meeting may also be the event to watch. This record of the FOMC’s latest meeting is expected to provide insights into the economic conditions that influenced member’s vote on Interest Rates as well as offering clues on the possible outcome of future votes.