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Video for April 24th, 2008 (3 min 26 sec): Euro Sinks vs Dollar on Weak German Business Confidence 

GER IFO Business Climate Index Slips to 102.4, Expectations Down to 96

The IFO measure of German business climate slipped decidedly to 102.4 in April, as business sentiments deteriorated. Outlooks for coming months are dimmer as well. The index for "Future Expectations " fell to a reading of 96.8. Along with yesterday's weak Eurozone manufacturing figures, the ECB will have to consider a rate cut.

US Durable Goods Decline 0.3%, but Core Orders up 1.5%

In the US, durable goods declined 0.3% as orders for autos, planes and military equipment declined. The "Core" measure, which excludes transportation, rose 1.5% surprising forecasts on the upside. The Core numbers had a greater impact as the release gave the greenback a boost.

US Weekly Jobless Claims Surprisingly Fall 33K to 342K

Weekly jobless claims came in 33,000 less than last week, and those continuing to receive benefits eased from a 4 year high of almost 3 million. Today's decline puts claims at a 2 month low, as companies wait to assess economic conditions before laying off more workers. The better than expected employment data also helped to lift the US dollar.

US New Home Sales Weak, Fall 8.5% to 526K

Finally from the US, new home sales fell 8.5% to an annual pace of 526,000 units, a 17 year-low. Even with prices declining more than 13% compared to last year, there is still an oversupply of new homes.

EUR/USD - Euro Plunges 250 Pips, Biggest Fall in 4 Years

 

The Euro fell almost 250 pips to the Dollar from today's open and around 350 pips lower than its record high set on Tuesday. The Euro's losses accelerated following the German business report. If weak growth continues it will increase pressure on the ECB to lower rates.

USD/CHF - Franc Falls to Dollar,  US Stock Market Up

 

The Dollar-Swiss Franc pair surged today and is also up almost 250 pips for the session. Stocks in the US bounced back from a slow morning and posted modest gains. The Dow was up 135 points by 1 PM. The better mood among investors increased risk appetite and helped this carry trade pair.

USD/JPY - Dollar Gains On Gains in US Stock Market

 

The Dollar-Yen pair also strengthened climbing to test resistance near Friday's high at 104.50. The pair is up around 170 since Tuesday's low. Other currencies like the Pound and Aussie which are used in carry trade against the Yen were mostly trading in ranges set yesterday.

UK Retail Sales Fall 0.4% in March, but Perform Better Than Expected in Annual Terms

In the UK, retail sales fell 0.4% on a monthly basis after two months of gains above 1%. Sales compared to a year ago rose 4.6%, higher than forecast. A second release from the UK showed a measure of domestic manufacturing orders slipped to -13. This was lower than expectations of a fall to positive 4. 

GBP/USD - Pound Lower vs Dollar Following Retail Sales

 

Following the releases the Pound-Dollar pair had a knee-jerk reaction, but eventually traded lower, as the European session progressed. By 2PM EST the pair tested support near 1.9690, and was trading slightly above 1.97.

Upcoming Releases

Tonight Japan reveals its national and Tokyo consumer prices. Overnight, the UK posts GDP data. Tomorrow the US will release the revised version of the UMich consumer sentiment.