Weekly Analysis

• U.S. Dollar Rallies for two month high, will it continue?
  The dollar fell half a cent versus the euro on last Friday as investors took profits on the U.S. currency's rally to two-month highs and thin end-of-year trading conditions exacerbated market volatility. " Its technical profit taking, closing the books ahead of the end of the year in very thin markets. There are almost no more market participants at the moment ahead of the Christmas holidays," Reported from the Finotec dealing desk. “Many traders still have concerns about the impact of
• Investors are looking very closely into U.S economic data
  U.S dollar opens higher this week as result of straight affect from recent positive U.S data run and fall-out from Friday’s strong inflation numbers. A gradual turnaround brought fresh EUR/USD losses and a drop to new lows around 1.4329. The pair EUR/USD can drop more cause of the option expiry today. Economic data from U.S run continues with third-quarter current account numbers for October and appreciates positively to the market after decrease in deficit. This week, Liquidity and credit
• The market awaits Fed rate decision
  After two winning weeks on Wall Street, investors find out Tuesday if their wish for an interest rate cut. This is the main reason that support the indexes gain profits. Federal Reserve officials in recent weeks have indicated a willingness to cut rates further, so it's almost a foregone conclusion that the target federal funds rate is headed lower. The Fed has already dropped rates twice since the credit markets froze up over the summer due to surging mortgage defaults, and the only point of
• Will the Dollar Continue Forward?
  The dollar rallied into the closing on Friday to tow week high vs. the Euro and a basket of currencies. The strong move by the dollar was partly due to corporation cutting short position on the dollar toward year end. The traders reacted opposite to weak fundamental data published in the last few days showing a continuing housing slump and a slow down in the real economy. Core durable goods went well below expectation followed by a lower then expected personal spending and income. The
• The Dollar Ended Another Week of Record Lows Vs. the Euro
  The dollar ended another week of breaking new record lows against the Euro when reaching to 1.4967 on Friday. The fed lower the growth expectation to 1.8% -2.5% for 2008 from 2.5% to 2.75%. The downgrade of the economic outlook released by the Fed, emphasized the vulnerability of the world biggest economy. The sub prime crises the deepening recession in the housing market and the credit crunch are expected to stall the world biggest economy. Fears from recession are prompting speculation that
• Investor Awaits The Meetings of the central Banks in US and GB
  Growing concerns about the impact of the credit crunch, caused mainly by sub prime mortgage problems, on the broader economy increased speculation the fed may cut interest rate again not later than the end of March. Interest-rate futures traded on the Chicago Board of Trade show a 90 percent chance the Fed will lower its benchmark rate a quarter-percentage point to 4.25 percent on Dec. 11. The weak data realist at the end of last week showing the slowest rate of industrial production since the
• Is the dollar downtrend will change due to the data this week?
  Why the dollar weakened when the non-farm payroll jobs data was so strong, and such a positive surprise? The basic conclusion was the number is not always just the number, and we need to dive a little deeper. The released data in the past week such as ADP survey, annualized GDP q/q and the non farm payroll were good. First ADP gave a glimpse of up and coming non-farm payroll with expected 60k, and actual coming in at a whopping 106k. Second, annualized GDP q/q with expected at 3.1, had actual
• WAITING FOR G7
  The strong retail sales data on Friday didn’t hold for the dollar as he failed to make a sustainable and significant movement against the Euro.As of late U.S. trading on Friday, U.S. interest rate futures were implying a roughly 30 percent chance of a Fed rate cut in October, compared to virtually a toss-up a week ago. One of the main reasons for the dollar current weakness, albeit strong data in the last weeks, is that investors lost confidence in the greenback. Market players are cautious
• US Dollar Sees Hope for Rebound Against Euro
  Friday's figures showed the U.S. created 110,000 non-agricultural jobs in September, the most since May. The loss of jobs in August -- seen as the key reason behind the Federal Reserve's 50 basis point rate cut last month -- was reversed to a gain and July's numbers were also revised up. This encouraged investors to buy back dollars after a heavy sell-off fuelled by expectations of more Fed cuts. The futures market reflected a 54 percent chance the Fed would hold rates steady when it meets on
• Sterling hitting two-month highs against the USD
  The dollar edged up from earlier record lows against the euro and a basket of currencies as investors braced for a fresh batch of U.S. data for confirmation that more interest rate cuts are on the cards. The dollar index lost 3.8 percent in September, more than doubling its year-to-date fall, as a squeeze in credit markets and signs of slower growth prompted the Fed to slash rates by 50 basis points, fuelling expectations of more cuts to come. On Friday, the Fed's favored inflation gauge such
• Dollar Falls to Lifetime Low Vs. Euro
  The dollar fell to a record low against the Euro for a third straight session on Monday, weighed down by expectations of further U.S. interest rate cuts, which are tarnishing the currency's appeal to global investors. Investors ignored more complaints from French officials about the euros’ strength versus the greenback, which again dropped to a 15-year low against a basket of major currencies.” Sentiment is still sluggish for the dollar and as long as a U.S. rate cut speculation is there, the
• The Dollar Index Dips to a 15-yr Low on Job Cuts
  The dollar fell to a 15-year low against major currencies on Friday as data showed U.S. payrolls fell last month for the first time in four years, raising recession fears and pressure for an interest-rate cut. Traders dumped the dollar after the government said the United States shed 4,000 net jobs last month, the first contraction since August 2003. It also reduced estimated June and July job gains. The payrolls data followed a larger-than-expected decline in July pending home sales reported
• Sub prime mortgage crisis has sparked fears of global liquidity crunch
  The market will open with Trichet’s speech and the clues regarding a September rate hike Event risk on Monday will be contained to US housing data, and the release may only exacerbate current risk aversion trends. The National Association of Realtor’s measure of existing home sales during the month of July is anticipated to have fallen back 0.9 percent to a nearly five-year low of 5.70M. Such a weak figure will not come as much of a shock to the markets, as the dour status of the US housing
• Is The Dollar Rally Done?
  Forex outlook: The US stock market and carry trades took a beating this week. The US dollar on the other completely reversed its downtrend and came close to erasing all of its year to date losses against some of the majors. Central banks have pumped over $350 billion in liquidity into the markets with limited success, forcing the Federal Reserve to lower the discount rate from 6.25 to 5.75 percent on Friday in addition to injecting more liquidity into the financial system. Along with the cut,
• Central Bank Around The Globe Act To Head Off Global Credit Crisis
  Forex outlook: Summer doldrums quickly disappeared as capital markets scrambled wildly to cope with the liquidity crisis unleashed by the BNP Paribas announcement that it’s was suspending redemptions in its asset backed funds. This was the third such move by a major financial player over the