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It has been a very unstable week for the US dollar, although compared to the start of the week, the exchange rate for the EUR/USD and USD/JPY has stayed almost untouched. On Monday, the EUR/USD traded at 1.5922 whilst USD/JPY traded at 106.26, close to present levels, but certainly these rates covers what could just be described as a nosedive in the monetary markets. There was a several event risks and financial data disclosure over the past week, but the members of the monetary market instability can be summarized to 2 things; the health of the monetary division and oil prices. The Federal Reserve and the Treasury have provided diverse resolutions to prevent more severe troubles whilst Freddie Mac has revealed preparations to lift up capital by selling as much as $10 billion in new shares to investors. From the basis for the 600 point revival in the Dow off of Tuesday’s intraday low, for the moment, traders think that this can be sufficient. JPMorgan and Citigroup have announced more than anticipated profits although Merrill Lynch disappointed; 2 out of 3 appears to satisfy the markets for the moment. For financial information, price rises keep on growing but purchaser expenditure is starting to fade. With the US financial chart significantly emptier next week, the health of the financial division, oil and the stock market will keep on setting the tone for the FX markets. Profits period is in full-blown. Bank of America is going to report their profit data on Monday and for the remaining week there is going to be several local banks exposure. Leading signs, strong goods, the last July UMich purchaser confidence numbers, new and existing home sales are going to be released together with the Federal Reserve’s Beige Book report. We will be focusing on the Beige Book report since it is going to serve as an indicator for what the US economy situation is and how businesses and consumers are going to cope with the newest developments in the stock and commodity markets.
08:30
Posted on Jul-21-2008
