The U.S. Dollar is trading mixed overnight. The Greenback istrading higher against he heavyweight Euro and British Pound and down versusthe Japanese Yen and New Zealand Dollar. There is no major theme yet, buttraders seem to be leaning against risk.
The U.S. Dollar is trading mixed overnight. The Greenback istrading higher against he heavyweight Euro and British Pound and down versusthe Japanese Yen and New Zealand Dollar. There is no major theme yet, buttraders seem to be leaning against risk.
There are two economic reports today that may move theDollar. U.S. Housing Starts are expected to show a modest increase to 0.605Mfollowing a drop to 0.575M in February. Traders are speculating that weather improvementsand the new spring building season may have lead to the increase in the numberof new units. The fundamentals remain weak however, based on the supply of newand existing homes available. Foreclosures are also a major problem. A lower than expected number should weakenthe Dollar as it would indicate lower interest rates.
U.S. Consumer Sentiment is expected to show a rise in March.This month’s report is expected to come in at 75.0 versus a February figure of73.6. The improving jobs picture apparently had a major influence on consumers.Earlier this week it was reported that consumers spoke with their pocketbooksafter retail sales rose more than expected. This report is not likely to havethat big of an effect on the Dollar unless it is way of line with expectations.
Late in the trading session, Kansas City Federal ReserveBank President Thomas Hoenig speaks. In his 12:30 pm EDT speech, Hoenig isexpected to discuss the reasoning behind his demand that the Fed begin raisinginterest rates. At the last two FOMC policy meetings, Hoenig was the lonedissenter. Hoenig is also expected to warn about potential asset bubblesbecause of the Fed stance to keep interest rates low for an “extended period”.His speech may catch traders off guard late in the trading session. Talk ofhigher interest rates may spook the equity markets while driving traders intothe U.S. Dollar.
The EUR USD is trading lower ahead of the
Fundamentally, the Euro remains weak and faces a credibilitycrisis because of the lingering sovereign debt problems in
The spread between the Greek Bond and the German Bundcontinues to be the best indicator that problems exist. Investors have drivenup the premium to buy Greek Bonds to over 400 basis points, or its highestlevel since the rescue plan was announced. The consensus among traders is thatthe proposed $61 billion aid package may not be enough to help
The British Pound is trading weaker overnight following anelection debate in the
Technically, this market weakened overnight when anuptrending Gann angle from the 1.4797 bottom at 1.5337 was violated. This moveindicates impending weakness with a strong possibility of a break to at least1.5160 on April 20th.
The weaker Euro is helping to boost the USD CHF overnight.Traders are anticipating another round of intervention by the Swiss NationalBank to protect its currency and exports. For the fourth time this week, thismarket is having trouble penetrating a 50% retracement level at 1.0609 whichmeans a breakout through this price is likely to lead to an acceleration to theupside.
The USD JPY is trading weaker overnight. Traders could bebracing for a sell-off in
Position evening ahead of the April 20th Bank of Canadameeting is helping to boost the USD CAD. Based on the short-term range of1.0104 to .9952, the retracement zone at 1.0028 to 1.0046 could prove to bestrong resistance. The main trend remains down until 1.0104 is taken out.Short-term, the Canadian Dollar may be overbought, but the consensus is thiscurrency is likely to continue to rise because of a better than expectedeconomy and a series of interest rate hikes.
The AUD USD is under pressure overnight as rumors of apotential revaluation of the Chinese Yuan are most likely triggering aliquidation break. The current chart formation suggests that this week’s twoday rally may be setting up a secondary lower top following Monday’s closingprice reversal top. Traders should recall that the Australian Dollar broke hardearlier in the week after it was reported that mortgage approvals were lessthan expected. This raised questions as to whether the Reserve Bank of
The New Zealand Dollar is trading slightly better overnight.Traders continue to use .7124 as a pivot price. Don’t expect this market tomove very much until it pulls away from this price. In fact, don’t expect anacceleration to the upside until this pair closes over .7200. Watch for achange in trend following a break under the last swing bottom at .7085.