Do you think the market is selling the dollar ,,based on the rumor that China will widen its band ????
- | Joined Oct 2006 | Status: Member | 535 Posts
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Swoopen in for my pips while no one is lookin !!
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Quoting frankyDislikedDo you think the market is selling the dollar ,,based on the rumor that China will widen its band ????Ignored
Quoting BurgerKingDislikedNo fundamentals this week that can support USD.
Holiday in USA is likewise making it easy to weaken the USD.
However next monday, we'd have USD Durable Goods.
THIS should be the next true test of US economy.
BTW. Boeing is enjoying a HUGE sales the past few months! I bet their sales contracts last October could easily amount to as much as USD10B. This should drive the Durable Goods up! But exluding transportation, its another story.Ignored
Quoting NewstraderFXDislikedSomething to Think about:
A friend of mine pointed this out to me. You can check the charts yourself.
In the last 4 years (2002-2005) the EURO and the GBP have made huge gains against the $ from about this time thru the end of December. Since it's a holiday and I'm lookin to get out of here, i'm not gonna go into the details so check it out yourself. I'm talkin about really big moves though, so it's something you definately want to look at.
Happy ThanksgivingIgnored
Quoting NewstraderFXDisliked............ I'd like to think the market is selling the $ because the minutes of the last Fed meeting show they expect inflation pressures to be "moderating"...Ignored
Quoting NewstraderFXDislikedWhy the Big Run?
As always, it's the implied direction of future interest rates. It's easy enough to check BB and read all about how everyone now thinks the ECB is gonna rate rates, but could you have known earlier? I think so.
Do you have the FOMC, ECB and BoE websites on your favorites list? You should. The FOMC and BoE minutes and the ECB bulletin should be required reading for any forex trader. Lets look at some quotes.
From the November ECB monthly bulletin:
"If the governing council's assumptions and baseline scenarios continue to be confirmed, it will be warranted to further withdraw monetary accomodation...inflation rates are likely to increase in the next few months and into early 2007...annual inflation rates are projected to remain elevated in 2006 and 2007, with risks to this outlook remaining clearly on the upside".
From the Nov 15 FOMC minutes:
"Core inflation was anticipated to edge down in 2007 and 2008 relative to the second half of this year because of the diminishing impetus from the prices of energy and other commodities and because of the modest easing in resource utilization...Participants continued to expect the economy to expand at a rate close to or a little below the economy's long-run sustainable pace over coming quarters...Most participants expected core inflation to moderate gradually...Most participants expected core inflation to edge lower, in part as the effects of the run-up in energy prices in recent years waned. And shelter costs were not expected to add materially to inflation going forward. Moreover, moderate growth in aggregate demand and the associated modest easing of pressures on resource utilization should also contribute slightly to the slowing in core inflation".
Finally: The Committee's view of the outlook for economic growth and inflation had changed little since the previous meeting. Nearly all members expected that the economy would expand close to or a little below its potential growth rate and that inflation would ebb gradually from its elevated levels.
Here was the core PPI released the day before and the core CPI released 2 days later:
<table class="tborder" style="margin-top: 12px;" align="center" border="0" cellpadding="3" cellspacing="0" width="100%"><thead><tr><td class="alt1" align="center">USD</td><td class="alt1">PPI m/m</td><td class="alt1" align="center">http://www.forexfactory.com/forexfor...sc/mi_high.gif</td><td class="alt1" align="center">-1.6%</td><td class="alt1" align="center">-0.3%</td><td class="alt1" align="center">-1.3%</td></tr></thead><tbody></tbody></table>
<table class="tborder" style="margin-top: 12px;" align="center" border="0" cellpadding="3" cellspacing="0" width="100%"><thead><tr><td class="alt1" align="center">USD</td><td class="alt1">CPI m/m</td><td class="alt1" align="center">http://www.forexfactory.com/forexfor...isc/mi_med.gif</td><td class="alt1" align="center">-0.5%</td><td class="alt1" align="center">-0.3%</td><td class="alt1" align="center">-0.5%</td></tr></thead><tbody></tbody></table>
So the ECB expected to be raising rates and the Fed expected inflation to moderate and this view was confirmed by the core readings. Even a relatively inexperienced trader could interpet the minutes as meaning that no rate increase was immenent and certainly the market took it that way. You can go on the Cleveland Fed's website to see how traders are playing the Fed futures rate as traded on the CBOT on a daily basis.
It's pretty obvious that there are diverging interest rate expectations, but the important thing is that the info comes from the CB's. You could have taken a long position in the EURO right after the FOMC minutes were published, or even waited for the core CPI readings 2 days later. In my opinion, CB publications might be the ultimate fundamental to trade from...Ignored