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Is there something with the USD going down?

  • Post #1
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  • First Post: Jul 7, 2006 3:33am Jul 7, 2006 3:33am
Is there anything fundamental in the news that is lowering the USD as of late?
Well, I will assume you are not playing a joke on us... Could it be NFP? And the anticipation of it? I am just pulling that out of the air...

Maybe I did not get what your bigger question is?

Thanks Scott
no im not joking. according to the front page of forexfactory, the anticipated nonfarm employment is 175K from 75K, isn't this a good sign?

also, the unemployment rate is down slightly...again a good sign

im not a fundamentals guy, so let me know if i am way off here
Oh I see what you are asking now... I am not much on fundys either.. Sorry, Scott

Quoting clam61
no im not joking. according to the front page of forexfactory, the anticipated nonfarm employment is 175K from 75K, isn't this a good sign?

also, the unemployment rate is down slightly...again a good sign

im not a fundamentals guy, so let me know if i am way off here
u will see now and till the time of Non Farm Payrolls release that eurusd will be up and down within tight ranges ofcourse untill the big move occurs just after the realease...ofcourse having said that all this will happen providing things are quiet in the rest of the world (i.e no missiles in the air and no other geopolitical risk that can trigger action)
i am not a fundamentalist either. but what i have noticed is that the market is already attuned to the "expected value". so if everyone projected that the interest rates would go up 500 points it would already be in the market, but when the actual news came out if it was 500.25 then the market would move.
The move happened during the European session. Maybe that has something to do with it. Cause, now look whats happening, price is go back in the other direction. Although, this is Forex we're talking about so, anything is possible.
JOHN 3:16
oh and something else i forgot ....China is holding an emergency meeting closed door and many speculate that MIGHt mean yuan appreciation....but we heard it before...wait and see...therefore the yen gets stronger versus the usd so it means weakness in usd.....
Quoting renasdad
The move happened during the European session. Maybe that has something to do with it. Cause, now look whats happening, price is go back in the other direction. Although, this is Forex we're talking about so, anything is possible.

is that something that typically happens during the euro session? i keep getting stopped out by a few pips in these surges
Boy oh Boy,

I am not sure if I want to answer your question. I am no expert in this stuff I am just learning like everyone else. I will give it a shot though. Now, on a night/day, depending on where you are, when the european session opens, it almost always will move the forex market. the amount always varies. But, on a night like this, the night before NFP, price will move on the open of the Euro session. And with everyone knowing the NFP is coming out, they will not keep buying/selling into it. Price will be range bound. On a regular night when the european session starts and people see price going a certain way with no big news coming out, then it is more likely to keep going in that direction a bit better. Another thing to remember about the numbers that are "suppose" to come out, it isn't just what the numbers actually are, it is how they are said. This happens in everyday life as well. I could tell someone something and they will take it one way. I could say the same exact thing to the same person in a differant tone and they will take it differantly. Or I could say the same thing in the same tone and just change the words a little and they could take it another way.
Here is an example: My pastor has 7 boys. His wife tells him she is pregnant with another child and it is a boy. Now, he goes to his friend and says " I am gonna have another baby and its gonna be a boy". Depending on how he tells his friend, that friend could take it many differant ways. So, not only do the numbers matter but, the tone of voice used when those words are said and the order the words are stated. Ugh, I think I went a bit far there but, I hope you get the idea.

Go Forex!!!
JOHN 3:16
Quoting renasdad
And with everyone knowing the NFP is coming out, they will not keep buying/selling into it
so you mean on a night like this the prices are more stable? they havent...but shouldnt they be going the other way? im sure forexfactory is not the only one that forecasts the NFP numbers to be in favor of the US economy
I don't pay much attention to the forecasted numbers at all. And yes I do think price is more stable right now. There isn't many people placing big $$$ orders because they know NFP is coming out in the morning. So, it is safe to say, price is pretty stable right now cause there are not many orders being put in until 8:31 A.M. EST. With no orders put in, price doesnt move. If a bunch of people feel that way, when price jumps up 20-30 pips and knowing price is stable because of the NFP, some people will scalp in the opposite direction of that 20-30 pip jump which makes price go back to where it was. If I am wrong about this, I hope someone steps in and corrects me. This is just my experiences from watching these charts every night.
JOHN 3:16
We're in a dollar bear. All the fundamentals point towards the dollar being weak against almost everything-- commodities, other currencies, precious metals, oil, whatever.

Every now and again there's a piece of news or a rate hike that injects a tiny bit of life into the dollar. It's like a cadaver jerking when you run electric jolts through it.

Basically there are too many dollars in existance and right now foreign countries are trading real things for paper promises to pay. But it's becoming more and more apparent than the promises to pay won't be worth anything. America's manufacturing base is toast. The economy is based on services and imported goods brought on by consumers racking up credit card and home equity debt in order to consume. It's not sustainable and we're just in the beginning stages of a lot of bad stagflation to come in the future.

Also, the dollar as a reserve currency is coming under attack. Central Banks are moving to Euros and gold for their reserves. It's only starting, but I think over the next decade, we're going to see a massive flight from the dollar and it'll lose massive amounts of it's purchasing power.
Damn theirs a reality check. Have a happy day everybody and i think ill put a little more alcohol in my coffee this morning to help get me through this friday.......
hi grickherder

where do you get forex fundamental info? and when you say we are in a dollar bear trend, you are talking about a trend in the very long term, right?

is there anything new right now that is going against the dollar?

Quoting grickherder
We're in a dollar bear. All the fundamentals point towards the dollar being weak against almost everything-- commodities, other currencies, precious metals, oil, whatever.

Every now and again there's a piece of news or a rate hike that injects a tiny bit of life into the dollar. It's like a cadaver jerking when you run electric jolts through it.

Basically there are too many dollars in existance and right now foreign countries are trading real things for paper promises to pay. But it's becoming more and more apparent than the promises to pay won't be worth anything. America's manufacturing base is toast. The economy is based on services and imported goods brought on by consumers racking up credit card and home equity debt in order to consume. It's not sustainable and we're just in the beginning stages of a lot of bad stagflation to come in the future.

Also, the dollar as a reserve currency is coming under attack. Central Banks are moving to Euros and gold for their reserves. It's only starting, but I think over the next decade, we're going to see a massive flight from the dollar and it'll lose massive amounts of it's purchasing power.
Quoting clam61
hi grickherder

where do you get forex fundamental info? and when you say we are in a dollar bear trend, you are talking about a trend in the very long term, right?

is there anything new right now that is going against the dollar?
You need to read more. Check out the beginners room in here.. use the search button... you will find answeres to all your questions.
clam61,

I need to ask...why do you think the dollar should be rising? If you can answer THAT question, then it won't really matter what we say...

What fundamental or technical reason should the dollar be falling against any of the majors at this point?

I think there is more around the mood of the market now that points to a downward to sideways movement of the dollar against all of the majors. Obviously, NFP only validated that sentiment. Of course the dollar will eventually come back into strength, but you need to qualify your statement about more...like:

"why won't the dollar move up in the next week or so?"

by just arbitrarily saying why is the dollar down, the inevitable answer will be, because the market says that right now, the dollar down. NFPs were slightly less than stellar, the Fed will have a hard pill to swallow if the economic picture doesn't clear up considerably in the next couple of months, and in general, political instabilities are sending commodities a bit higher, making the dollar a little less appealing.

With that said, there isn't a STRONG dollar bearish mood. So, I think it's entirely possible that this continued weakness could easily be halted very soon. How long, I don't know...how long do you need and I'll tell you if it's possible.
  • Post #18
  • Quote
  • Edited 12:54pm Jul 7, 2006 12:43pm | Edited 12:54pm
Quoting clam61
hi grickherder

where do you get forex fundamental info? and when you say we are in a dollar bear trend, you are talking about a trend in the very long term, right?

is there anything new right now that is going against the dollar?
I'm talking large and mega-trends. Commodity bull markets (where *real* things are up vs the dollar) typically last 15 to 25 years. I believe it's starting point was just past 2001-2004 when gold and oil prices saw their bottoms.

I don't think there's anything new right now that's going against the dollar. I believe there's just not enough of anything going for it, so it's reverting to the default when supply increases and demand is low-- a drop in price.

I don't really have a single source for info I can point to. I'm disappointed they stopped publishing M3 as it was a useful component in an indicator I was using. I still believe that supply and demand matters. It really sucks when the FED stops reporting the supply side of the equation. Now I have to go on estimates based on old data and trends. The Fed is attempting to restrict supply by raising interest rates, but it might be too little too late. It'll stop the creation of new debt, but it will leave millions who have variable rate mortgages and home equity loans hurting when they can barely make their payment now. There will be no more using home equity to buy big screen tvs. I think the debt fueled economy might have a bit of a siezure.

I pay attention to a lot of numbers but I'm more concerned with larger overarching trends than a days events. I find trading news next to impossible. Even fed rate hikes are getting difficult to predict the results on. The market seemed to have discounted for a 50 basis point hike and was disappointed with a 25. What's going to happen to the dollar when they pause? What if they don't pause? Will they overshoot and destroy the housing powered segments of the US economy by restricting credit too rapidly?

One thing I'm certain of is the month following the first time the Fed doesn't raise interest rates, the USD is going to fall against pretty much everything.

Incidentally I keep my forex accounts in Canadian dollars, Swiss Francs and Euros.

Sorry if everything I'm saying sounds like doom and gloom. But we have a useful vehicle to protect ourselves from the decline of the USD. We should use it. Commodities options and resource stocks will also prove profitable, but that's a whole different beast.
  • Post #19
  • Quote
  • Last Post: Jul 9, 2006 7:51am Jul 9, 2006 7:51am
$ down ! Non Farm was forecast at 175 K but came down low so the impact of less then forecast was that it left the market in doubt on the issue of the fed tightening rates in August. Furthermore, Prior to the Non Farm realease about a day before the korean missile test gave the USD a break as Asian Markets got hammered. However for now the Korean Missile issue is already priced into the market. And therefore the market will focus now on data mostly related to US Economic releases.


Furthermore if you look at recent price action on the majors you see that Euro has supports that have held from 1.2620 and Yen made a double top at 116.80/70. And Yen is gaining from the Euro for the first time in a month.

Apart from the news the key is next week to see if the USD will weaken further and that depends on yen breaking 113.40 and Euro breaking 1.2890
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