Big moves were seen in the Dollar yesterday due to better then expected U.S. GDP numbers. The USD gained more then 370 pips against the EUR as GDP dropped the largest percentage in 7 years. GDP contracted -0.3% in the 3rd quarter. The drop was largely contributed to U.S. consumers who cut back in spending. Consumer spending makes up roughly 70% of GDP.
Traders took the better then expected GDP numbers as a positive sign that the U.S. economy may prove more resilient in the face of the economic slowdown. GDP was forecasted to drop -0.5%, but... ( read more )
Archive for October, 2008
October 30, 2008 - Feds Cut Rate By 0.5%, USD Drops
In a move anticipated by most market analysts, the Federal Reserve cut target lending rates yesterday to a level not seen in almost 50 years! This was done in an attempt to prevent a widening financial crisis from tipping the U.S. economy into a prolonged recession. It was not the first time the Fed cut rates to stave off further economic disaster during these most recent times of financial hardship.
Less than a month ago the Fed joined the European Central Bank (ECB), as well as other counterparts from the U.K., Canada, Sweden and Switzerla... ( read more )
October 22, 2008 - The USD Soars to Remarkable Heights
Simulative government policies are being played out in the market as the USD rose to its highest level against the EUR since February of last year. At the same time poor sentiment is also being thrown into the market as the Federal Reserve announced a new $540 billion lending facility for ailing banks to shore up the money market industry. With the newest government program, the Fed continues to send signals to traders that the financial crisis has not subsided.
Currently, Euro-Zone recessionary fears are helping to drive the USD's recent ga... ( read more )
October 17, 2008 - USD Bullish Move Continues
In a light volatile trading session yesterday, the USD made early gains against the EUR, only to retreat and end the day relatively unchanged as further data released from the U.S. pointed towards a recession. U.S. stock markets rallied late in the day after their worst decline since the 1987 stock market crash, fueling a greater risk appetite as investors moved out of the safety of the dollar, erasing most of its early gains.
Yesterday's data hints at a slowing economy as U.S. consumer prices remained steady. However, these figures tend to ... ( read more )
October 15, 2008 - US Retail Sales – On Tap
Following the U.S. Treasury's announcement to inject $250 billion into financial institutions this week, the dollar finally appears to have broken its 3-day downward trend against the other major currencies. The dollar was traded at $1.3575 against the EUR at the end of yesterday's trading session after climbing steadily to 1.3767 over the course of the last few days. The previous appreciation of the USD was largely due to the reluctance of banks to lend to one another, which spurred a surge in demand for U.S. currency funding in global money m... ( read more )