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 0.6% and closed under 1.4520 versus the EUR in yesterday’s trading session, even seeing prices dip under 1.45. Also, the USD saw gains against the GBP, as the GBP/USD pair hit a 2-1/2-year low of $1.7784 before pulling back to $1.7832.
The greenback saw significant bullishness yesterday as a sharp drop in Oil prices and persistent concerns about the health of other major global economies drove investors to positions supporting the greenback. The theme driving global financial markets yesterday was crude oil’s tumble to as low as $105.46 per barrel in early trading, as Hurricane Gustav had limited impact on energy infrastructure. U.S. Manufacturing PMI shrank slightly to 49.9 in August from July’s mark of 50.0, the level separating contraction from expansion, while inflation pressures also eased. The indicator result returned according to expectations and did not affect the dollar as much as expected due to the poor economic data from the Euro-Zone.

There are few economic data releases expected to be released today from the US at 14:00 GMT with Factory Orders being the main release. The Factory Orders index measures the value of new purchase orders placed with domestic manufacturers for durable and non-durable goods. Factory Orders tend to have a low impact because it reports much of the same information contained in the Durable Goods Orders report released over a week earlier. The other economic indicator expected today, Total Vehicle Sales, is expected to slightly rise compared to previous readings but should contribute little to volatility.

The USD saw a bullish trading session versus all of its major currency crosses yesterday. The USD took advantage of the falling Crude Oil Prices that reached a four month low and some bearishness by its counterpart currencies. Against the EUR, the USD reached its highest value in more than half a year as the pair traded under 1.46. The biggest gains for the USD were seen against the weak GBP as the two were traded in the low 1.79’s.

There were no economic data releases for the USD yesterday because of the Labor Day holiday and the closed markets, however much volatility was seen from the greenback. In Federal Reserve Governor Randall Kroszner’s speech yesterday, he noted that the influence of U.S. housing and financial problems on economic weakness elsewhere demonstrates how intertwined the world’s economies are and explained that the theory that the USD had become independent from the world’s economies is incorrect. The other main spark for the USD volatility was the larger than $4 drop in Crude Oil prices, which occurred as Hurricane Gustav hit the United States weaker than expected. Louisiana Governer Bobby Jindal estimated that roughly one fifth of the oil and natural-gas output that was shut prior to Gustav could be back on line by the weekend and no major damages have been reported by the oil companies thus far.

In terms of economic data, today will be a lot more interesting for the USD. There are 3 economic releases expected to be released at 2:00 GMT with the ISM Manufacturing PMI being the main release. As it measures the level of diffusion based on surveyed purchasing managers in the manufacturing industry, this index is expected to slight fall along with the ISM Manufacturing Prices. The other economic indicator, the Construction Spending, is expected to slightly rise compared to last month. Overall, it seems like trades should keep track of Hurricane Gustav’s developments and the three releases which are expected to add volatility to the USD trends with their mixed expected results.