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Euro-dollar Declines On Profit-Taking; Crude Prices Recede |
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Written by Jason
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Monday, 05 September 2005 |
With the US Markets closed for the Labor Day holiday, the dollar remained steady and even gained slightly on profit-taking by medium-term traders and short-selling interest by day traders. Crude oil has fallen to $66.44 per barrel, bolstering demand for the yen. Further adding to a bullish yen sentiment are increasing indications that PM Koizumi will sweep back into power after Japan’s September 11 election, thus enabling him to push new reforms through. Despite this, a broad U.S. dollar correction is inevitable as the single currency remains overextended from last week’s aggressive selling.
 ClockworkFX's Daily Forex Insight - September 5, 2005 (87.20 KB)
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Dollar Suffers Biggest Weekly Drop in 10 Months |
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Written by Jason
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Friday, 02 September 2005 |
The dollar succumbed to further selling on increased speculation that the Fed will pause its campaign of interest rate increases. Destruction from Hurricane Katrina, soaring oil prices, and indications of slowing economic growth have all contributed to this bet that the Fed will raise its benchmark rate just one more time this year. The euro-dollar was capped at 1.2590 today, the highest level since May as the dollar depreciated 1.9% versus the euro this week alone. The yen appreciated once again for its fourth weekly rise in five not just because of the backdrop of a weaker dollar, but a rise in Japanese stocks and higher approval ratings for PM Koizumi ahead of Sept. 11 elections.
 ClockworkFX's Daily Forex Insight - September 2, 2005 (85.97 KB)
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Dollar Extends Slide On Growth, Rate Concerns |
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Written by Jason
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Thursday, 01 September 2005 |
The dollar further extended its losses today on growth & rate concerns fuelled by speculation that the Fed will pause interest-rate increases to prevent the economy from slowing. Interest rate differentials have played a strong role in the dollar’s strength this year attracting short-term capital. Further influencing the dollars decline are surging crude oil prices and an expected slowdown in economic growth from Hurricane Katrina’s carnage.
ClockworkFX's Daily Forex Insight - September 1, 2005 (83.92 KB)
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Weak Chicago PMI Delivers Blow to Dollar |
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Written by Jason
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Wednesday, 31 August 2005 |
The dollar fell today after a report revealed business activity in the U.S. Midwest dropped unexpectedly, for the first time in two years. The Chicago PMI index for August was 49.2, well below forecasts of 61.5 and below the threshold of 50, denoting a contraction in the manufacturing sector. This could potentially be the first sign that oil prices are beginning to dampen growth. Further assisting the dollar’s decline was the Commerce Department revising the U.S. GDP to 3.3% annual rate in the second quarter, lower than the 3.8% rise in the first quarter. Economists had a consensus for a rise of 3.5%. Oil importing countries in general, especially the U.S. and Japan, will face an increased threat to domestic growth on the headwind of inflated oil prices.
ClockworkFX's Daily Forex Insight - August 31, 2005 (84.15 KB)
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Oil Soars Above $70/bbl Again; EUR/USD Rallies Off Low |
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Written by Jason
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Tuesday, 30 August 2005 |
The euro-dollar was marginally higher today off the 1.2170 low as crude prices soared above $70 per barrel for the second time. The euro has struggled mightily as of late with long bets being unwound the past 24 hours as hurricane Katrina was downgraded. On the backdrop of higher oil prices, weakening poll ratings for PM Koizumi, and an unexpected drop in industrial production, the dollar has seen a four day rise against the yen to a high of 111.62. Japan, which imports nearly all of its crude oil, will be severely hurt if oil is sustained at these higher levels as it would curb any sort of economic growth vital to pulling the country out of recession.
ClockworkFX's Daily Forex Insight - August 30, 2005 (84.06 KB)
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