Archive for March 2009

Euro to Dollar News : 31st March 2009

Tuesday, March 31st, 2009

Tiptoeing through the fundamental news from the economic calendar from this morning all Eurozone numbers came in worse than expected (other than Italian retail sales which posted much better than expected figures – as an Italian why does this not surprise me!!)  which has, so far, failed to dent this morning Euro’s rally.  The market is now waiting for some very important numbers starting with the Chicago PMI followed shortly afterwards by the red flag CB consumer confidence data.

The PMI data is a leading indicator and is based on a survey of purchasing managers in Chicago which asks them to rate the current business conditions including employment, production, new orders, prices and inventories and is released monthly.   This month’s figures will be particularly interesting given the problems in the US auto industry.  The data source is Kingsbury International and subscribers to the service receive the news 3 mins before the public release allowing them to trade the news in advance.  A figure above 50 indicates expansion whilst below indicates contraction and the forecast for this afternoon is for 34.3, virtually flat on last month’s number of 34.2.  15 mins later we have the CB Consumer Confidence number released by the Conference Board and again is a survey this time of 5000 households asking for a response on the current and future economic conditions.  Again this is considered a leading indicator and if the actual is better than forecast then this should be good news for the dollar.  Forecast is 26.8 against a previous of 25.

You can keep up to date with all the latest fundamental news developments, latest currency news on the economic calendar and live currency charts by simply clicking the appropriate links.  Finally if you are looking for a good ECN broker or fx broker simply follow the relevant link.

EURO to DOLLAR News for 30th March 2009

Monday, March 30th, 2009

A very quiet day on the fundamental news front which could best be described as the calm before the torrent of economic news, scheduled and unscheduled statements from various financial luminaries and government apparachiks all culminating in the non farm payroll numbers on Friday coupled with the G20 summit in London.    All of this is likely to lead to significant and unpredictable market volatility in all markets and particularly in the euro to dollar pair.

On the economic calendar for today we have a raft minor announcements ranging from German retail sales, Spanish Flash HICP, Belgian CPI but the main focus of attention is a speech by Jean Claude Trichet ECB President who is due to testify on the economy to the European Parliament Committee on Economic and Monetary affairs in Brussels this afternoon.  Traders and market watchers will be waiting for any signal either directly relating to the euro economy or indirectly to the G20 summit.

On such a quiet day (nothing from scheduled from the US) the markets sometimes pick on relatively minor fundamental news events in order to inject some movement which can make trading very tricky.

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Euro to Dollar Fundamental News for 27th March 2009

Friday, March 27th, 2009

Although there no overtly “red flag” fundamental news items on the economic calendar today nevertheless there is a raft of data due to be released throughout the day affecting the euro to dollar pair.  The first of these is an interesting one and is the German Preliminary CPI which is actually drip fed into the market throughout the day as the various regions in German (of which there are 6) report their CPI figures at different times.  The preliminary release is the Eurozone’s earliest consumer inflation estimate and is given the size and current state of the German economy will be eagerly awaited.  These could come in at any time so just be aware of any peculiar and unexpected movements in currency pair today.  The forecast is for around 0.1%.

The next item on the economic radar for Europe is Industrial New Orders which is the change in the total of new purchase orders placed with manufacturers and is generally considered a leading indicator.   The forecast is for -5.7% against a previous of -5.2% indicating a further fall in this measure of economic sentiment.   If the actual is better than forecast then it will seen as positive for the Euro.

The focus now shifts to the US where the morning starts with Core PCE Price Index Data which measures the change in the price of goods and services purchased by consumers but excludes food and energy.  It differs from the Core CPI of yesterday as the index only measures those goods and services targetted at individuals.  Forecast is for 0.1% which is the same as last time. At the same time we have an index entitled Personal Spending which records the change in the total value of inflation adjusted expenditure by consumers.  The forecast here is for 0.2% against a previous of 0.6% and if the figures are better than expected we could see some positive dollar reaction.  This set of data rounds off with personal income which again is another index of income correlated spending which has a relatively minor impact on the market.

We round off the week with the revised UoM – University of Michigan consumer sentiment figures which is a composite index based on a survey of around 500 consumers which asks for their views on the current and future economic climate.  The survey assesses consumer confidence regarding personal finances, business conditions and purchasing power, and it is especially valued for its quick turnaround.  The University of Michigan Confidence survey is considered one of the foremost indicators of US consumer sentiment.  Declining consumer confidence levels usually accompany any fall in income or wages and precede drops in consumer spending. A low or falling UoM Sentiment value is considered an early indicator of an economic downturn. As a result, investors, retailers and traders alike all watch the figure for some  insight into the general health of the economy. UoM figures have recently a reliable forecasting tool in overall GDP.   The headline figure is calculated by subtracting the percentage of unfavorable replies from the percentage of favorable replies, and the forecast this time around is 56.7 against a previous of 56.6.

Attached to the UoM report is a further set of numbers which provide a view on inflation expectations and is based on a survey of consumers once again and their views on the expected price of goods and services over the next 12 months.

You can keep up to date with all the latest fundamental news, live currency charts and latest currency news by clicking on the relevant links.

Euro to Dollar News for 26th March 2009

Thursday, March 26th, 2009

Yesterday’s surprise speech by Treasury Secretary Timothy Geithner spooked the markets as it was completely unscheduled and his remarks about the long term future of the US dollar as the world’s currency reserve sent the currency into a spin.  This was seen as a 100 pip spike in a 10 minute trading session in the euro to dollar pair.  Clearly, Mr Geithner needs to learn how to choose his words more carefully and think twice about ambushing the markets in this way.

Today’s (scheduled!!) fundamental news on the economic calendar began in europe earlier with the GFK consumer sentiment index being released which came in slightly below at 2.4 versus a forecast of 2.5.  The index is based on a survey of around 2000 consumers who are asked to rate the current economic climate based on their personal views of the current financial situation.

The main news out later is in the US with the release of the unemployment claims followed by final GDP figures along with the GDP price index.  The first of these is expected to come in at around 650k and is the number of people filing for unemployment insurance on the week.  Although generally considered a lagging indicator it is, nevertheless, an important indicator of economic health.   Week on week figures suggest little change.  The final GDP figures are the least important of GDP results with the Advance being the most important.  Those released today are simply a confirmation of what the market already knows and therefore tend to have less of an impact.  The forecast is for -6.6% against a previous of -6.2%.  The GDP Price Index is also released at the same time and represents the change in price of all goods and services which are included in the GDP data.  Forecast is as for the last quarter at 0.5%.

At 14.00 GMT we have an appearance by Mr Geithner before the House Financial Services Committee where he is due to testify on “Financial Market Regulation” (ha ha) – the words horses, stables and doors spring immediately to mind.  Quite what market reaction will be is anyone’s guess given his less than stellar performances to date – Mr Geithner is rapidly turning into Henry Paulson Mark II.  Later in the afternoon we have yet more speeches, this time from Jeffrey Lacker, an FOMC member who is speaking at a Chamber of Commerce conference in Charleston.

You can keep up to date with all the latest currency news, economic news, live currency charts, live news and details on how to choose an ECN broker by simply following the relevant links.

Euro to Dollar News for 25th March 2009

Wednesday, March 25th, 2009

This morning fundamental news in Europe kicked off with the German IFO figures which came in almost  bang on forecast at 82.1 against 82.2.  IFO figures measure the level of business confidence based on a survey of around 7000 businesses which asks respondents to rate business conditions for the next six months.  This morning’s figure is the lowest recorded in more than 26 years which confirms that the recession in Germany is deepening and showing its lowest level since 1982.  The global slump in demand has forced many German companies to cut back production and reduce the workforce accordingly.  This is generally considered a leading indicator of the health of the economy and would, under normal circumstances, impact the currency.  However, the market is waiting for US Core Durable Goods Order due for release later in the morning along with Durable Goods Order and once these numbers have been released we may see some activity in the euro to dollar pair. This data measures the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding major transportation items such as aircraft etc. It is generally considered a leading indicator of the economy and the release is red flagged on the economic calendar so should have an immediate impact on the US dollar. The forecast is for -2.0% against a previous of -3.0%. At the same time the more broad data figures for Durable Goods are also released which includes all durable goods generally defined as products having a life expectancy of more than 3 years.  Again as a leading indicator it sends a clear signal to the market of the economic health of the country.  In this case the forecast is for -2.3% against a previous of -4.5%.

The next major news item on the economic calendar is new home sales which, as the name suggests, indicates the number of new homes sold during the previous month.  The forecast is currently for 302k against a previous of 309k but based on figures released earlier in the month we could see a better than expected result here as some commentators have started to call the bottom of the housing market and hence the start of the long road back to recovery.

The final piece of news is the crude oil inventories released by the EIA which measures the change in the number of barrels of crude oil held in inventory.  The forecast is for stockpiles to jump by as much as 1.4 million barrels whilst gasoline stockpiles as expected to fall by 900000 barrels and distillate stocks to fall by 200000 barrels.  Refinery capacity is expected to remain the same at 82.1%.  Remember that these figures can often influence the usd to cad more significantly than the euro to dollar due to Canada’s pre-eminence in the energy sector.

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Euro to Dollar Update : 24th March 2009

Tuesday, March 24th, 2009

This morning’s raft of fundamental news for the Eurozone covered 8 separate items of data covering a variety of countries and topics.  The day started with French consumer spending which was one of the few pieces of news to come in worse than forecast at -2.0% against a forecast of -1.0%.  As a primary guage of consumer spending it measures the change in total value of inflation adjusted spending by consumers.  By coming in lower consumer confidence is still very weak.  This was followed by two further items of French data, namely Flash Manufacturing PMI and Flash Services PMI, both of which came in better than expected.   Both are diffusion indices and are based on a survey of purchasing managers and both are considered leading indicators where any reading above 50 indicates an economy in expanding and below 50 in contraction.  By coming in at 36.3 and 42.9 respectively against forecasts of 35 and 40.2 it could indicate the economy has at least stabalized.  The equivalent German numbers were released at the same time and here to these came in slightly better than forecast with 32.4 for Maufacturing PMI against 32.1 and 41.7 for Services PMI against 41.2.  A similar trend in the German economy.   Whilst we might have expected the euro to strengthen on these results one does have to remember that these figures cannot be taken in isolation as some of the newer members as well as the PIGS (Portugal, Ireland, Greece and Spain) are in a fairly dire state and it would not take much to see one of two of these tip the balance dramatically.  Indeed this aspect was highlighted by the next data set with the current account figures coming in far worse than expected at -12.7 billion against a forecast of -6.7 billion.   These numbers represent the difference between imports and exports and if the actual is better than forecast it is generally seen as positive for the euro because the figures are directly linked to currency demand – a rising surplus indicates that foreigners are buying more of the currency.  The final set of figures were for the whole of Europe for both manufacturing and services PMI and again these came in slightly better than expected at 34.0 and 40.1.

Later in the day the focus shifts to the US where the Chairman of the Federal Reserve, Ben Bernanke is due to testify along with Tim Geithner, to the Financial Services Committee where they will be speaking about the problems at AIG.  The session is generally in 2 parts – the first of which is a pre-prepared statement followed by a question and answer session, and as always, it will be in the unprompted answers that we are likely to see significant volatility in the market and in the euro to dollar pair.   The problems with AIG are well documented not least the issues surrounding bonus payments awarded after the company was bailed out by taxpayer money.

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