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Posted July 31st, 2013 by Charles Purdy

Will they/won’t they “taper” US quantitative easing soon | 31/07/2013

The US dollar remained flimsy yesterday ahead of a very data-heavy few days for the world’s largest economy. The dollar did strengthen against a weak sterling and spiked briefly against the euro before quickly relinquishing the ground it had made. Following the previously cautious approach from the Chairman of the Federal Bank with regards to the tapering back of the US bond-buying programme, investors appear reluctant to back the dollar before this evening’s Federal Open Market Committee statement. Should the Chairman’s comments suggest that a tapering back in the near future is likely then expect to see the dollar strengthen significantly, however it may continue to struggle if we see further hesitancy and commitment to an accommodative monetary policy. Tomorrow also sees the release of employment data alongside quarterly Advance GDP data during the afternoon. Changes in monetary policy will only be affected in response to an improvement in economic conditions and the second quarter GDP figures are sure to play a key part in this. Call your trader now to see if the Federal Reserve can spark a change in US dollar fortunes.

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Posted July 30th, 2013 by Charles Purdy

Dollar shows gains against most major peers | 30/07/2013

The US Dollar appreciated against most of its major trading partners yesterday afternoon in response to better than expected Pending Home Sales data and increased speculation that the Federal Reserve will taper its bond-buying programme this autumn. Whilst the figures did reveal a decline, this decline was not as big as expected after reaching the highest level in over six years in June. Speculation surrounding a reduction in asset-purchasing came following better economic data and more positive data will further contribute to this trend. Crucially, the Federal Open Market Committee’s statement on Thursday is likely to go some way to encourage or discourage further speculation to this effect. In the meantime this afternoon’s Consumer Confidence data, another leading indicator of economic health, is likely to cause short-term market movement if figures differ greatly from expectations. Call your trader to see whether the dollar comeback is imminent.

Posted July 29th, 2013 by Charles Purdy

A busy week ahead for US Dollar | 29/07/2013

The US dollar traded in a fairly narrow range on Friday in absence of any significant market release. Revised Consumer Sentiment figures came in marginally better than expected, but had only caused slight variation for the dollar. We have a raft of employment data released this week with the the headline release being the non-farm payrolls data released on Friday which has caused a great deal of volatility in the past – especially in light of the Federal Banks rhetoric that monetary policy will stay loose until the labour market shows significant improvement. This rhetoric will be scrutinised to a greater extent when the Federal Open Market Committee (FOMC) meet on Wednesday. Traders hope that the FOMC statement could well give greater clarity as to when the tapering of its asset purchasing program may begin. Advance second quarter GDP figures, which also come out on Wednesday, are estimated to show growth of 1.1% although some key figures have expressed more pessimistic views following the inconsistent run of economic data that we have seen from the US recently. Other data released this week includes figures showing the number of homes pending sale, consumer sentiment statistics and manufacturing PMI. An extremely busy week for the US, so call your trader now to see if the dollar can start to make up some of the ground it has lost.

Posted July 26th, 2013 by Charles Purdy

Another tough week for US Dollar | 26/07/2013

As expected, the US dollar sensitivity to economic data has been magnified recently following comments from the Chairman of the Federal Bank expressed his commitment to an accommodative monetary policy and this has caused it to be another tough week for the dollar. Early weakness was experienced in response to worse than expected existing home sales data, causing the dollar to slide against the majority of its major peers and notably to trade at one month lows against sterling. Some positive figures were seen mid-week, with increases seen in new home sales and better than expected growth in the manufacturing sector, prompted a slightly better performance. A survey of leading economists released this week revealed that that around 50% of those surveyed believe that the Federal Open Market Committee (FOMC) would reduce the pace of bond-buying by $20 billion per month in September. Such a result would boost dollar performance in the medium term and as a result this survey had a positive effect, but a reduction is by no means assured at this stage and speculation will continue as further economic data comes through. Finally, yesterday’s Unemployment Claims data and Core Durable Goods Orders figures both fell short of expectations and failed to give the dollar a boost. Whilst medium term forecasts are still geared towards a US dollar recovery, we will need to see some improved data coming through before progress is made in the short term. The only real data of note coming in before the weekend is revised consumer sentiment data being released this afternoon by the University of Michigan. Call in now to see how the US dollar reacts to the latest data releases.

Posted July 26th, 2013 by Charles Purdy

Mixed fortunes for sterling | Smart Daily Currency Note

Last week            This week (GBP/USD – 1.5229)   GBP/USD – 1.5376 After maintaining an upward trajectory for most of last week, sterling experienced more mixed fortunes this week. The pound performed well from Monday as Prime Minister David Cameron announced that improving economic conditions may allow the Coalition Government to implement tax cuts in the near  Continue Reading…

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