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Where Will Next Push Come From?

Discussion in 'Forex Daily News & Outlook' started by mercaforex, Mar 9, 2010.

  1. mercaforex

    mercaforex New Member

    Jul 1, 2009
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    By Mercaforex

    The USD gained slightly on the major currencies Monday with little in the way of economic data to guide investors. Trading appeared to be cautious most of the day and Wall Street reflected this as the indexes turned in mixed performances. The U.S. will be quiet with releases today and tomorrow there is not much in the way of an impact coming with only the Wholesale Inventories numbers on the calendar. Politics and economics from the States and Europe will converge today when the Greek Prime Minister meets with President Obama. It is unlikely that Greece will go with cap in hand asking the States for any money – at least publically, but the notion that the Greek government is speaking to the Americans about their crisis will have to be examined closely by investors.
    With rather quiet statistics coming forth today and only inventory data tomorrow along with Crude Oil numbers, traders will be left to judge the market and may continue to find uncertainty pervading. The equity markets are now entering the one year anniversary from their lows within the bear market and investors cannot be faulted for asking what is next. While Crude Oil prices have shown some stability as of late and have hovered just above 80.00 USD a barrel, other commodity prices – except for Gold – have continued to stagnate. The data tomorrow could prove interesting tomorrow and are expecting a slight climb regarding the Wholesale Inventories and this may give some insight into the GDP statistics ahead. Also continuing to make waves in the States and being watched by onlookers is the call from President Obama to pass a healthcare initiative of which some analysts are still asking – where the money will come from to pay for such an endeavor. The USD proved battle worthy yesterday, but Wall Street continued to consolidate, and the question is where the next push will come from?

    The EUR stumbled a bit on Monday against the USD. German Industrial Production data proved disappointing with an outcome of 0.6%, which was below the estimated gain of 1.1%. Also the Sentix Investor Confidence reading for Europe was published and came in slightly above expectations. Today numbers will be very light from the continent with only the French Trade Balance statistics on the calendar. Tomorrow German Trade Balance and French and Italian Industrial Production figures will be presented. Having said the above, the main focus for investors will continue to be all developing news surrounding the Greek debt situation. The Greek government is taking their ‘crisis road show’ to the U.S. today, where government officials from both countries will discuss the Sovereign debt problem. It is unlikely that the States will offer anything more than kind words publically to Greece, but investors will monitor any pronouncements as they try to gauge how the U.S. will work with Europe regarding the debt questions. The EUR moved lower yesterday and it may continue to face pressure in an unclear marketplace.

    The Sterling lost value on Monday and the RICS House Price Balance numbers did the GBP traders no favors. The House Price Balance came in with a result of only 17% compared to the estimate of 34% and the previous month’s result was revised downward. Today the U.K. will publish Trade Balance statistics but it is tomorrow’s Manufacturing Production data that could cause additional impetus within for the Sterling. Investors are caught in a rather large debate regarding the implications of the debt that the U.K. government is trying to manage as they have tried to lift the nation out of the recession. Data from Britain has been mixed and while some government officials have spoken encouraging words, others have been quick to point at trouble which mimics its international counterparts like the U.S. and Europe. The Sterling is still within the lower depths of its value against the USD and traders must be ready for opportunities as its range gets tested.

    The JPY gained a bit against the USD in what are definitely cautious markets. Bourses were mixed internationally and with an uncertain sentiment abound, the JPY and USD acted in a risk adverse manner. Gold did come down from its 1134.00 USD mark and showed that it was under some pressure. One consideration could be that a ten dollar move in gold is miniscule from a mathematical standpoint at its current value, but nevertheless the precious metal should be watched.

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