Dollar Reclaims Overnight Losses and Climbs Following Strong GDP Data
Daily Forex Fundamentals |
Written by CMS Forex |
Aug 28 08 21:56 GMT |
Dollar Reclaims Overnight Losses and Climbs Following Strong GDP Data
AUS Leading Index Falls 0.5% in July
In Australia, the Conference board leading index declined again in June, posting a 0.5% decrease. That reinforces the impression that the Australian economy is going through a slowdown and that the central bank is ready to act on rates.
AUS Capital Spending Beats Forecasts for 2nd Quarter
On a brighter note, capital expenditure rose 5.7% in the June quarter, beating forecasts, and the 1st quarter's figure was revised up into the positive as well. The data should be a welcome sign for the central bank, as businesses increased spending. The ill effects of the credit crunch seem to have been contained to the 1st quarter.
AUD/USD - Aussie Rises as Business Spending Beats Estimates
Following the Australia report on capital spending, the Aussie-US Dollar pair rallied about 100 pips to trade near 0.0860. This was about 170 Pips higher than the 8-month low set on Tuesday. However the Aussie gave up a good portion of its overnight gains in NY trading.
UK Nationwide House Prices Down 10.5% on the Year
Housing prices in the UK took another tumble in August, dropping 1.9% on the month, according to Nationwide. On the year, prices are down 10.5%.
UK CBI Distributive Trades Survey Shows Poor UK Retail Sector
A survey of the UK retail sector showed a net 46% of respondents saying sales were lower in the first half of August compared to a year ago. 38% of them believe the retail business will be worse off over the next three months, which has dampened investment spending.
GBP/USD - Pound Falls in Downward Channel
The Pound continues to suffer against the Dollar. Though its 2 releases didn't move the pair much during overnight trading, the Pound hit a fresh 2-year low around noon NY time. The Dollar got a strong boost from its GDP data, and the pair continued to be falling in a downward channel.
GER Unemployment Rate Falls To 16 Year Low
After several releases showering doom and gloom on the German economy, today's unemployment figures had to boost spirits in the ECB. It showed unemployment fell by 40K in August, four times the consensus forecast. The unemployment rate, which lags the jobs report by 1 month, slid to 7.6% for July. That's the lowest in 16 years.
EUR Retail PMI in Contractions for 3rd Month
The Bloomberg Euro-Zone Retail PMI showed a third consecutive month of contraction in sales. While the PMI rose to a three-month high at 47.7 it remains below the crucial 50 boom-bust mark.
US Jobless Claims Fall 10K to 425K
In the US this week, initial jobless claims dipped by 10K to 425K, which is lower than the pace seen recently. The 4-week moving average fell to 440K. Those Americans continuing to claim benefits hit 3.42 million, the highest that figure has been since November 2003.
US GDP Revised Up to Show 3.3% Growth
The US economy turned out to be stronger in the 2nd quarter than expected. In the second release growth was revised up to show an annualized 3.3% rate, compared to the 1.9% originally reported. In the first quarter GDP stood at 0.9%. There were upward revisions to production of durable goods, exports, and consumer spending. Company profits increased 1% in the quarter, after seeing a steep decline in the 1st quarter.
EUR/USD - Euro Gives Up Overnight Gais as Dollar Boosted by GDP Data
The Euro-Dollar had been gaining overnight, but ran up against resistance near 1.48. The pair formed a double-top at the start of the NY session, and with the better-than-expected US release fell to an intra-day low near 1.4670.
CAN Current Account for 2nd Quarter Shows Wider Surplus
In Canada, the current account widened to C$6.8 billion as higher prices for the country's commodities helped boost exports. The number was less than expected and the 1st quarter's figure was revised lower.
USD/CAD - Greenback Jumps on Loonie Following GDP Report
The US Dollar jumped about 80 pips against the Canadian Dollar in the aftermath of the two countries' morning releases. The pair has found some strong support near 1.0430, and is now testing the upper part of this week's sideways range near the 1.0520 area.
Upcoming Releases
With the end of the month coming up Japan posts a slew of data tonight. Those releases include CPI, household spending, unemployment rate, retail sales, industrial production, and housing starts.
Also tonight, Australia releases a report on credit to the private sector, and the UK releases its consumer confidence. Overnight, the Euro-zone releases data on consumer prices and unemployment. It will also post its end of the month indicators on economic sentiment and business climate.
Tomorrow, Canada reveals its monthly GDP growth and producer prices. The US finished the week off with data on personal income and spending for August along with the Chicago PMI and the UMich consumer confidence index.
