Fundamental forex analysis for the euro to dollar pair today is restricted to a very small number of news items as all markets are continuing to respond to last week’s sharp sell off in equities as traders and investors once again shy away from riskier assets.  The only item of news for Europe was this morning’s Trade Balance figure which despite missing the target forecast by 0.4bn has confirmed that the Eurozone seems to be showing further signs of coming out of this current recession.  Meanwhile in the US the Empire State Manufacturing Index has posted an extraordinary 12.1 against a forecast of 3.1, rising from a negative -0.6 in July.  It is the first positive reading since April 2008 and the highest since November 2007.  Any reading over zero signifies that firms consider business to be improving compared with the previous month.  The two key components of the index – new orders and shipments – rose to their highest levels in more than a year.   The other key item of fundamental news for the US Dollar has been the TIC data which has posted the extraordinary figure of 90.7bn against a forecast of 17.7bn, having risen phoenix like from a -19.8bn in July.  TIC measures the difference in value between foreign long-term securities purchased by US citizens and US long-term securities purchased by foreigners during the reported period and if the actual is better than forecast then this should be good for the US Dollar.  The last item of data for the US will be the NAHB Housing Market Index – a diffusion index based on a survey of about 900 home builders which asks respondents to rate the relative level of current and future single-family home sales.  The forecast number is 18 and the market will be looking to see if the housing market has finally bottomed out and whether the index is finally clawing its way back towards 50, the point at which the housing market is considered positive.

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