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Posted June 23rd, 2014 by Charles Purdy

US Dollar under pressure, how will it react to important data releases?

Last week the US Dollar weakened by just under one cent against the Euro and moved to 5 year lows against sterling. The currency was affected by Wednesday’s Federal Reserve announcement for the USA’s economic forecasts, which confirmed that the interest rates across the country are set remain low. Positive economic data did little to change the position of the currency, although if the situation in Iraq becomes worse this could strengthen the US dollar given its safe haven status.

At 3pm today we are expecting data from the US property sector, looking at existing home sales; forecasters expect it to rise by 0.1M to 4.74M. Further insight on the health of the US property market is expected to be released on Tuesday, also at 3pm. The data set is expected to come in line with the existing home sales, a slight increase to 440,000. Finally, mid-week data on durable goods orders will be released; this is expected to increase month on month to 0.5%.

If you are looking to buy or sell US dollars, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.

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Posted June 20th, 2014 by Charles Purdy

Mixed data announcements encourage US dollar to lose ground

There has been a mixed bag of data from the US this week. First we saw disappointing data from the housing market, particularly the number of building permits month on month. This was followed by the inflation data, which came in slightly better than expected; year on year inflation is now at 2%. And yesterday we saw the initial jobless claims come in better than expected, at 312,000.

But the key event of the week was the Federal Reserve meeting and the announcement that follows it. Although the Federal reserve Chair Janet Yellen was circumspect about interest rate rises she was positive about the state of the US economy and this boosted risk appetite which perversely undermined the US dollar as it is viewed as a safe haven asset and which is at odds at what is happening in Iraq.

Posted June 19th, 2014 by Charles Purdy

Federal Reserve talks up US economy

Yesterday we saw the US current account deficit come in worse than expected, -US$111.2 billion compared to the consensus expectation of -US$96 billion. This data failed to move the dollar significantly as most participants where still waiting for last night’s Federal Open Market Committee statement and the rhetoric around the interest rate decision. When the wait was finally over and  the Chair of the Federal Reserve spoke, the US dollar weakened across the board as the rhetoric was more positive about the US economy than expected, increasing risk appetite and undermining the US dollar given its safe haven status. The FOMC continued to reduce their programme of quantitative easing by another US$10 billion.

Posted June 18th, 2014 by Charles Purdy

Will the Federal Reserve meeting spring any surprises later today?

In terms of actual market movement yesterday, the US dollar traded in a tight range against most pairs, with the sterling-dollar pair continuing its third day with no clear direction. The only movement worth noting was a slight gain against the euro, in favour of the dollar. In terms of data released, we saw mixed results: housing permits and building starts disappointed by coming in lower than expected, whilst there were positive surprises in all data sets measuring US inflation being higher than forecast.

Today we are expecting a number of events that will affect the dollar pairs: at 1.30pm UK time the US Current account details will be released, followed at 7pm by the Federal Reserve interest rate decision and FOMC statement.

Posted June 17th, 2014 by Charles Purdy

US Dollar remains steady ahead of Wednesdays Federal Reserve meeting

The US Dollar had a steady day yesterday as the markets remain focused on Wednesdays key Federal Reserve meeting, although we did see the UD dollar reach break above 1.70 against sterling for the first time since August 2009. The New York Federation announced that the Empire State Index of regional business activity was 19.3 for June, much better than the forecast of 15. This bodes well for the US economy overall and in particular for the Philadelphia Fed Index which is released on Thursday.

There is little data out in the US today apart from the inflation data for May which are expected to mirror Aprils figures.

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