Forex Blog

While the April CPI report was expected by many Forex traders to improve the dollar positions and helped greenback gain before the actual release, disappointing CPI reading pushed EUR/USD up from its daily lows and it’s now trading almost without any loss (1.5459 currently with an open rate at 1.5465).

CPI (all items) was at 0.2% in April — that’s below the March value (0.3%) and the average market forecast (also 0.3%). Core CPI (except energy and food prices) was at 0.1% in April — also below the March value (0.2%) and the forecast expectations (0.2%).

Crude oil inventories increased insignificantly last week. Energy Information Administration reported a 200 thousand barrels growth after more than 5.6 million barrels gain a week ago.

U.S. fundamental statistics, that were released today in abundance, appeared to be worse than the market analysts expected. It helped the EUR/USD currency pair to reach its new absolute maximum value at 1.5968 and kept dollar bearish also against the other major currencies.

CPI (Consumer Price Index) rose 0.3% in March — at the same pace as expected. In February this indicator was at 0%.

Housing starts and building permits declined rapidly in March — they were at 947k and 927k respectively, while the forecast values were at 1,010k and 970k respectively. In February housing starts were at 1,075k and building permits were at 984k. All numbers are presented at a seasonally adjusted annual rate.

Industrial production showed a surprise growth at 0.3%, while a fall by 0.1% was expected and it fell 0.7% in February. Capacity utilization remained at the same level in March as in February and as expected — 80.3%.

Crude oil inventories dropped 2.3 million and are in the lower half of the average range for this time of year, as the Energy Information Administration reported.

During the last nine days, only one day didn’t bring a new absolute record level on EUR/USD; it was last Friday, March 7. Today EUR/USD reached a new maximum value at 1.5687 renewing the yesterday’s record at 1.5644.

In February seasonally adjusted CPI didn’t change at all according the report of the Bureau of Labor Statistics. In January it grew by 0.4% and for this month the majority of the market analysts expected a 0.3% growth.

March preliminary Michigan Sentiment index was released at 70.5, while it was expected to fall from 70.8 to 69.5.

CPI release for January along with some moderate data on housing lifted traders’ expectations and spurred some good growth of the U.S. dollar with both EUR/USD and GBP/USD losing about a half percent for the day. It may be a good sign for the dollar bulls eventually as it is almost definite now that the recession is either ending or is not going to happen at all.

January CPI grew at the same pace as in December — 0.4% up above the expected by the markets 0.3% growth.

Housing starts during the same month increased from 1,004k to 1,012k, but were slightly below the expected 1,015k level, while building permits decreased from 1,080k to 1,048k and were slightly above the expectations (1,040k).

EUR/USD unexpectedly fell today after the moderate fundamental statistics were released in the United States. This currency pair declined from 1.4803 opening price to 1.4656 making it the largest daily drop for EUR/USD since December 14.

CPI (Consumer Price Index) in December showed a better than expected growth, increasing by 0.3% - still lower than in previous month (0.8%), but above the forecasted 0.2%.

Net foreign purchases of the long-term securities in November were at quite a high level - $90.9 billion, but lower than October’s $114.0 billion.

December’s industrial production stalled with 0% change, but that can be considered a good news, because the negative change has been expected. Industrial capacity utilization dropped slightly, going down from 81.6% (revised from 81.5%) to 81.4%.

U.S. crude oil inventories last week showed a gain at last increasing by almost 4.3 billion barrels after the previous report of 6.7 billion barrels dropdown.

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%.

The release of the not so good news from the U.S. economy caused a wave of bullish dollar speculation on Forex with the increased risk aversion sentiments among traders. Going back from stocks to bonds wasn’t prevented even by the fear of another possible cut rate before the year’s end. EUR/USD fell from almost 1.4700 to the powerful psychological support level of 1.4600.

Bureau of Labor Statistics published its consumer inflation data - CPI increased only by 0.2% in October, whereas 0.3% growth was mostly anticipated. U.S. Department of Labor gave its numbers for the previous week’s initial jobless claims - 339,000 - 14,000 higher than expected.

Crude oil inventories report finally gave a positive sentiment for the dollar bullish traders - there was a 2.8 million barrels growth last week. A good sign after some major decreases, which spiked oil prices to $100/barrel and depreciated dollar against other currencies.

Unexpectedly, Philadelphia Fed General Business Conditions Index increased significantly in November compared to October - constituting 8.2 against 6.8 in October with even more pessimistic forecasts for November.

EUR/USD retraced back to 1.4200 level today after some very disappointing housing data came out in U.S. Overall situation continues to remain uncertain with the EUR/USD ranging between 1.4050 and 1.4250. It now formed a clear plateau pattern on the daily chart marking some major break in the Euro vs. Dollar struggle.

Housing report for September showed a further downfall in this economics sector with the decrease in both housing starts and building permits numbers exceeding pessimistic market forecasts. There were 1,191k housing starts (against 1,285k expected) and 1,226k new building permits (against 1,300k expected) this September.

Contrary to real estate sector bad news September CPI report showed a better than expected value - 0.3% against 0.2% expected, and that’s from the -0.1% in August.

Crude oil inventories report for the October 8-12 week showed a major increase in commercial oil inventories - 1.8 million barrels, which can easily compensate for the previous decrease by 1.67 million barrels.

EUR/USD hit its new significant bottom near 1.3455 level after dollar continued to grow on the high Euro liquidity level and good economical releases from U.S. Next technical support for EUR/USD lies near 1.3330 mark, so it is reasonable to expect some more USD rallying by the end of this week or next week.
Consumer Price Index (CPI) report, released by Bureau of Labor Statistics, showed 0.1% growth in July (as expected) compared to 0.2% growth in June.
Industrial Production report didn’t make any surprises too and came out with a 0.3% growth in July (in June it grew by 0.5%).
Net Foreign Purchases in July fell by $5.2B compared with June number and came out at $120.9B level, which is still historically high.