Reply #15: dollar watch

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 75.326 Change -0.124 (-0.16%)

Settle Time 15:04 Open 75.429

Previous Close 75.45 High 75.436

Low 74.978 2007-11-09 07:29:20, 30 min delay

52wk High 85.7 52wk High Date 2006-11-17

52wk Low 75.077 52wk Low Date 2007-11-07

Bernanke Kills Any Chance for a Dollar Rally

http://www.dailyfx.com/story/bio1/Bernanke_Kills_Any_Chance_for_1194559622966.html

The US dollar remained weak as Federal Reserve Chairman Ben Bernanke killed any chance for a dollar rally. In his testimony to Congress today, Bernanke commented on the upside risks to inflation but focused more on the downside risks to growth. More specifically, the Fed Chairman expects growth to slow noticeably in the fourth quarter, which confirms his dovishness. If he had done the opposite and focused more on inflation like his counterparts in the Eurozone and Australia, the dollar could have rallied. However he chose to spend his time expressing concern that higher energy prices, tighter credit and continued weakness in the US housing market would lead to softer consumer spending. This coincides with the survey results from 10 of the nation’s largest retailers, 7 of which including Wal-Mart and Macy’s reported sales below forecasts. For dollar bears still looking for a recession, the Fed’s acknowledgement that consumer spending could be at risk indicate that they haven’t completely ruled out another rate cut. Although extremely volatile, Fed funds future are now pricing in a 90 percent chance for an interest rate cut next month. We have seen these expectations turn on a dime over the past few weeks so there is only so much credit that we can give to this data especially since we will not be receiving the most up to date retail sales and inflation reports until next week. Rising gasoline prices are becoming a growing problem; over the past 2 weeks, average gas prices according to AAA have increased 15 cents in California. In Santa Cruz, the average price per gallon is $3.37 and in Gorda, California, some drivers are paying up to $5 a gallon. Winter heating bills across the nation are expected to rise as much as 25 percent according to the Energy Information Administration’s latest monthly forecast. As a result, our call for EUR/USD to rise to 1.50 remains intact even though tomorrow’s data has a better chance of being dollar positive than negative. We are expecting the release of trade balance numbers for the month of September as well as import prices and consumer confidence. The recent weakness of the US dollar should help to improve the trade balance and drive up import prices. Consumer confidence however will probably suffer.

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Forex News: Yuan Posts Biggest Weekly Gain Against The Dollar In Two Years, Carry Trades Falter

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Forex_News__Yuan_Posts_Biggest_1194610839422.html



• NZDUSD – New Zealand housing sales plummeted 22.6 percent in October from a year earlier, signaling that interest rates at a record high has led to a sharp slowdown in the property market.
• USDJPY – Carry trades unwound as the yuan posted the biggest weekly gain against the dollar in two years after US Treasury Secretary Henry Paulson said China is "out of step" with the rest of the world's calls for faster appreciation.
• USDCHF –The SECO consumer confidence survey for Switzerland unexpectedly held steady at a reading of 15 in October, suggesting that tight labor market conditions are keeping households optimistic.
• EURUSD – The EU raised the 2008 inflation forecast for the region to 2.1 percent from 1.9 percent, reiterating ECB President Trichet’s comments that upside inflation risks remain. However, the outlook for 2008 GDP was revised lower, all of which suggests that the ECB has very little room to maneuver in monetary policy.

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