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At the beginning of trade this week the Dollar was driven into a corner and seemed like it was about to fall down with the fear over the GSE bailout drove EURUSD to record highs at 1.6040. As soon as the hysteria calmed when Wells Fargo informed better than anticipated numbers, the pair hit that very high level and oil fell by more than $15/bbl and capital markets were calmed for a moment about credit value of GSE debt.
To sum up a lot of positive overall factors ease up the Dollar’s turn-down and before Friday ended the buck was trading up on the week. Will there be a disaster? Surely the FX markets are seeing that way and the sharp rebound in the Dow is being reflected by the sharp rebound in greenbacks. If oil continues to go lower next week it might give yet another reason for a dollar counter trend rally, however the focus should also return to additional ordinary micro issues as both US and EZ calendars hold definitely additional event risk than this week.
The data of the economic front of Wednesdays’ Beige Book and Friday’s Durable Goods is supposed to be the most exciting issue for currency traders. The market is even now also arguing over whether US market is in a simple delay or a real depression and the Beige Book examination of trade and industry situations in a range of Fed districts could drop some hint on that matter.
In conclusion, the unemployed shows numbers have been shockingly tough for the last two weeks positioning way below the 400K levels that indicate depression. Market experts have pointed out that some of the development might be because of cyclic factors. But if this week’s statistics also confirms better than anticipated it might mean a positive trend regarding the work market and might go a extended road to making the case that the market is in a delay rather than a all blown reduction.
20:03
Posted on Jul-22-2008
