Jun 12 2008
US Retail Sales On Tap
During yesterday’s trading the greenback suffered a bearish trend versus its major currency rivals. The USD lost 80 pips against the EUR and closed at 1.5552 before reopening of the Japanese market. The dollar also lost against the GBP, seeing a 90 pip drop as it closed trading at 1.9632. The movement can largely be tied to fundamental news from yesterday. Crude Oil Inventories came in lower than expected at -4.6M, as reports had initially expected a 4M swing in the opposite direction. The Beige Book which provides a compilation of evidence supplied by the twelve Federal Reserve districts regarding the economy showed that the U.S. economy is still weak and FOMC Members Kohn and Kroszner speeches were less hawkish than expected. These factors combined with another day of rising oil prices ($138/barrel) contributed to the drop in the USD.
Later on the Japanese session opened with a significant push for the USD as the equity market in Japan saw a sharp drop of nearly 200 pips. The greenback saw recovery against its major counterparts as it erased all its losses from Wednesday. The momentum could be very important as we look toward today’s trading session.
On tap today, we are expecting a batch of mix US data. Core Retail Sales are expected to gain 0.2% to 0.7% and Retail Sales is forecasted to rise to 0.5%. The Import Price Index is currently forecasted at 2.5%, a 0.7% raise from last month and Unemployment Claims is expected to reset back to 370K. The aforementioned events should provide steady liquidity to the market, before the 15:30 GMT speech by Federal Reserve Chairman Ben Bernanke. Bernanke, who will give a speech at the New Federal Reserve Bank of Kansas City, has been a strong defender of the stronger dollar in the last couple of weeks. His speeches will likely contribute once again to volatility in the market. As most indicators are expected to have a rising trend this should give the greenback a bullish push overall versus its rivals during today’s trading session.
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