Forex Blog

U.S. dollar gained against other currencies today, showing a significant change in GBP/USD, along with a little less strong appreciation in EUR/USD. As no important positive data was released for USD, this growth may be accounted to the inertial buying of dollar and position closing on the previous good news and the loss of interest to carry trade.

Final numbers for GDP growth and GDP deflator in Q3 2007 were released today, but they didn’t change anything at all as they were known long before today. GDP growth remained the same - at 4.9%, a very high number for U.S. economy, GDP deflator was revised from 0.9% to 1.0% - an insignificant change.

Weekly report from the U.S. Department of Labor showed that initial jobless claims reached 346k - above the expected 335k and 12k above the previous 334k amount.

Leading indicators continued their decline in November - they fell by 0.4% - a slightly better then 0.5% dropdown in October, but worse than -0.3% that was expected by market analysts. On the bright side, leading indicators is not an important market parameter for Forex.

Philadelphia Fed November index disappointed dollar bulls with a -5.7 value, whereas October value was at 8.2 and a slight drop to 6.0 was expected by the market participants.

Dollar remains almost unchanged against euro even after the release of the U.S. housing data. EUR/USD grew up by about 16 pips only for the whole day with the main movement direction changing constantly. Supported by the yesterday data on the net foreign purchases, dollar doesn’t want to give up positions even after the not so good data in the real estate sector.

U.S. Census Bureau released the New Residential Construction report for November. The new building permits in November was at 1,152k annualized. That’s compared to 1,170k in October and to 1,150k expected for this month. New housing starts annualized rate in November was at 1.187k - well below 1.232k in October, but slightly above the expected 1.175k.

Dollar continued to strengthen against major currency pairs (except the Swiss franc) even after the very pessimistic release of the December NY Empire State Manufacturing Index report, which fell down by 17 points to 10.3. Federal Reserve Bank of New York reported that the new orders and shipments declined significantly in December according to their survey.

Among the good news was the Treasury International Capital report for October - net foreign purchases of the long-term securities was at the pretty high number (compared to $15.4B revised for September) - $114 billion, showing some elevated confidence in the U.S. economy.

I’ve updated the brokers section adding another Muslim-friendly Forex broker that doesn’t charge or give any overnight interest over the open positions. While being crucial to Muslim traders this quality can be useful to other traders that prefer positions with negative overnight interest. GCI Financial is not a new Forex broker, it operates since 2002, which is rather old for the on-line brokers. GCI Financial also supports PyaPal as an account funding method with the minimum Forex trading account size starting from $500.

Some good news from LiteForex broker came on Friday - the cost of CFD trading has been lowered twice. Now the commission on opening a CFD (NYSE stocks contracts for difference) position is 0.05% only, which is below the average level of other CFD Forex brokers:

Dealing centre LiteForex has always tried to provide the best trading conditions for our customers and today we have just made a big step forward to it. Since today Liteforex is a first MetaTrader broker who can provide 2 times lower comission! Now it will be 0.05% only!

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: hold.

EUR/USD fell down to its monthly minimum value today as the traders expected for the CPI release for November to come out. It touched 1.4468 - the lowest value since November 6 minutes after the data was released.

Consumer Price Index in November rose at 0.6% annualized rate, as it was already expected by the majority of analysts, while Core CPI showed a 0.3% growth that month.

Industrial production and productivity numbers gave a little more surprising picture to the dollar bullish traders. Industrial production increased 0.3% in November, while capacity utilization for a total industry rose up from 81.4% (revised down from 81.7%) to 81.5%.

EUR/USD began the day with some slow downtrend, but continued to accelerate its bearish tendencies after news releases from U.S. showed some well above average macroeconomic stats.

Advance retail sales report for November from U.S. Census Bureau showed that this indicator increased by 1.2% compared with October - much better than 0.6%, which was expected by the market analysts.

The Producer Price Index (PPI) in November rose by surprising 3.2%, compared with 0.1% in October and 1.5% expected growth.

Initial jobless claims for the week ending December 8 were also released today - 333k against 340k (revised up from 338k) last week and below the 335k, as the economists were expecting.

Manufacturing and trade business inventories in October increased by 0.1% - less than expected value of 0.3% growth rate.

EUR/USD was ranging today inside the yesterday’s rate limits which were formed with the bullish tendencies triggered by the Tuesday FOMC meeting’s statement. Main operational interest rate in the United States was cut by 25 basis points, which equals 0.25% - from 4.50% to 4.25%, while futures markets for the interest rate predicted a 0.50% cut.

Today came out the information on the international trading balance deficit for October 2007 - it increased from $57.1B (a revised value from $56.5B) to $57.8B, while only a mild growth to $57.0B was expected. The reason for the deficit growth was in the fact that imports growing faster than the exports.

U.S. crude oil inventories already made it a habit to drop every week, like there are not enough reasons for the oil prices rally yet. Last week inventories fell by 0.7 million barrels after 8 million decline in a previous week.

Meanwhile federal budget deficit appeared above the average expectation value of $90.0B. In November it went up from the October’s $55.5B to $98.2B.

Two new Forex e-books were uploaded to my site today, again, they are more articles than books, but I think that they fit better in Forex books section rather than articles, because they are finely formatted into the Word documents (EDIT: I’ve converted them to PDF as a more conventional format) and are more complex than other articles. These e-books both come from Mr. S.A. Ghafari, who decided to share his Forex trading experience with other traders on the non-profit basis. The titles of the articles speak for themselves:

A Practical Guide to Technical Indicators; Moving Averages
How to Trade Both Trend and Range Markets by Single Strategy?

EDIT: Added another two Forex articles by the same author. This time they are more articles with less pictures and tables:

Too Many Strategies, But Still Frustrated?
Stop Loss?? I Don’t Want To Use It

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: hold.