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Video for March 25th, 2008 (3 min 41 sec): Dollar Down vs Euro, Pound, Yen as Markets Price in More Rate Cuts by Fed
SWZ UBS Consumption Shows Robust Growth in Feb
The UBS Consumption indicator showed robust consumer spending growth for February, surging to a 2.321 reading. This was the highest level in 8 months and came on the back of a strong retail activity and new car registrations. NZ Consumer Confidence Falls In 1st Quarter New Zealand Consumer Confidence for the 1st Quarter plunged The Westpac measure of confidence dipped from 110 to 96.5, the lowest level in over a decade. Consumers turned pessimistic as they face rising food and gas prices, higher mortgage interest rates, drought, falling house prices, and turmoil in global financial markets.
CAN Retail Sales Strong in January
Canadian Retail Sales saw a strong 1.5% increase, the best figure in 8 months. Spending was aided by a one-point cut in the federal sales tax. Spending was widespread, with core retails sales posting a much better-than-expected increase as well.
US Existing Home Sales Better Than Expected
Yesterday, existing home sales surprised forecasts and increased to a pace of 5.03 million when expectations were for a further deterioration. It is the first signal to suggest a bottom may be forming in the existing home market. US S&P Home Price Index Down 10.7% in Jan Today, the S&P released its measure of metropolitan housing prices. The index of the 20 cities measured slid 10.7% compared to the same time last year. Lower prices, and the recent interest rate cuts by the Fed, can perhaps stimulate buying, however it will leave sellers will less money for discretionary spending. US Richmond Fed Surprises on Upside for March, Consumer Confidence Meanwhile Hits New 5 Year Low The Richmond Fed index registered a positive measure for March, for the first showing of growth in 5 months. Economists had expected another month of contraction for the Atlantic Region Manufacturing. This good news was spoiled by the Conference Board measure of consumer confidence falling to a five-year low of 64.5. With weekly jobless claims hovering in the 370K area, workers are starting to feel the effects of a weakening labor market. EUR/USD - Euro Rallies After Setting a Low on Sunday
The Euro-Dollar pair climbed today after setting a new low at 1.5350 during Sunday trading. After last week's surge by the Dollar, the Euro is now rallying. The markets turned Dollar bearish as investors and traders speculated that the Federal Reserve will cut interest rates by as much as a half-percentage point next month to continue trying to prop up the economy. In today's session the pair jumped 150 pips from its open and was trading near 1.5570 as of noon NY time. GBP/USD - Pound In 225 Pip Rally vs Dollar
The Pound-Dollar is up 225 pips since it set a low near 1.9750 during Sunday trading. This week's rally has cut into about half of the pair's losses from its fall last week. USD/JPY - Dollar Gives Up Yesterday's Gains
The Dollar-yen rose in favor of the Dollar as US stock markets were heartened by better than expected existing home sales data and the news that JP Morgan was increasing its offer for Bear Stearns to $10 a share. The pair set a high overnight at 101.03, from which it fell around 130 pips to set a low below 100 in NY trading. Today's fall was precipitated by overall Dollar weakness, and today's pessimistic consumer confidence data. GBP/JPY - Early Week Rally Stalls
Carry trade and risk appetite came back to the Forex markets on Monday as the Pound, Aussie and Kiwi gained on the Yen. However, on Tuesday the rally stalled and began a period of consolidation as can be seen here in the Pound-Yen pair. From the start of the week, the Pound is up 340 pips, with resistance set at 200.90. Upcoming Releases Tonight, Japan will post a measure of producer inflation and its trade balance. This is followed overnight by a survey of German and Euro-zone business conditions. The Euro-zone will also post its current account and industrial new orders. Tomorrow, the US releases durable goods orders and data new home sales. |
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