Forex Blog

EUR/USD fell today significantly, recovering from its two-day fall that was observed this week. It went down by more than 0.8% today — from 1.5532 to 1.5380. Good fundamental indicators from U.S. helped dollar to strengthen on Forex.

Productivity in business sector grew up in first quarter of 2008 according to a preliminary report that was released today. Annual rate of the seasonally adjusted productivity growth was 1.9% in Q1 — above 1.5% forecasted by market analysts.

Crude oil inventories last week increased by 5.7 million barrels (quite a lot compared to recent increases) and are now in the middle of the average range for this time of the year.

EUR/USD remains mostly unchanged today as the markets await the Federal Reserve decision on the interest rate. Even some important indicators that were released in U.S. today failed to move the currency pair significantly on Forex.

Advance data for the first quarter GDP in U.S. were releasd today, showing 0.6% growth (the same as in Q4 2007), above the estimate of 0.5%.

Chicago PMI index in April rose from 48.2 to 48.3, exceeding the pessimistic expectations, according to which it should have fallen to 47.5 this month.

Crude oil inventories rose 3.8 million barrels last week — more than 2.4 million previous week, but are still in the lower half of the average range for this time of the year.

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.

Dollar failed to sustain the growth that it has been showing recently and today it fell down against euro to 1.5662 from the opening at 1.5621. Although it tried to rally again earlier today, traders didn’t felt that positive about the U.S. currency.

Factory orders in February disappointed the market participants — they fell 1.3%, while the consensus forecast was at -0.8%. Still this decline was better than the January’s 2.3% fall (revised down from 2.5%).

Crude oil inventories grew significantly in U.S. last week — they increased 7.3 million barrels and are in the upper half of the average range for this time of year now. This news may force oil prices to go down below $100/barrel level in a short-term perspective.

EUR/USD gained more than 100 pips today as it continued to grow on Forex before and after the fundamental news releases in U.S. Some of those releases were rather neutral, while one was particularly bad. Although EUR/USD descended from its historical maximums it is now starting to return to the bullish trend.

Durable goods orders in February dropped 1.7%, while a growth of about 0.8% was expected. It followed the 4.7% drop in January.

New home sales in U.S. were at 590,000 in February — they dropped compared to January’s revised value (601,000) , but were both above the expected 580,000 and above the unrevised January’s 588,000.

Crude oil inventories remained unchanged during the last week in U.S. The stagnation followed a very small positive change by 0.1 million barrels in previous week.

The February Treasury budget deficit beat the last signs of life out of the fadollar today as the released numbers were far worse than the most pessimistic expectations of the economic strategists. The budget deficit was at $175,6 billion, while the forecasted value was at $170,0 billion. Last year February budget deficit was at $120,0 billion. That’s an astonishing $55 billion (45.8%) increase of the deficit in a year-to-year comparison.

EUR/USD hit its new record value on Forex today after the news on the budget were released. The currency pair started at 1.5341 today and reached the 1.5526 level soon after the release.

Crude oil inventories report for the last week added a little positive to the markets situation today, they increased by 6.2 million barrels compared with the previous week.

Dollar continued to lose its positions on Forex market today. After the major economic releases came out in U.S. EUR/USD touched a new absolute maximum at 1.5300 and even GBP/USD recovered from the weekly bottom, which was formed after the bad macroeconomic statistics in was released in U.K this morning.

Productivity in the non-farm sector of economy in the fourth quarter of 2007 grew faster than expected — at 1.9%, against annual average of 1.8%; the forecasts were also at 1.8% growth.

Factory orders for the manufactured goods in January fell down at the same pace as they were expected to fall — by 2.5%, that followed a month of 2.0% growth in December.

ISM non-manufacturing index unexpectedly improved in February and went up from 44.6 to 49.3, while an insignificant growth to 47.5 was expected.

Crude oil inventories brought a negative surprise the dollar bulls and the oil bears, as in the past week they declined for the first time in more than two months. They went down by almost 3.06 million barrels.

Today EUR/USD reached its new historical maximum at 1.5105 as the dollar continued to weaken both on the rates cut expectations and later - bad macroeconomic data releases in U.S.

Durable goods orders - a very important indicator of the business’s health - decreased 5.0% in January, more than the expected drop of 0.4%.

New home sales in January fell to 588,000 annualized rate - below the December’s 605,000 and forecasted January value of 600,000.

Crude oil inventories last week again showed a very strong gain - 3.2 million barrels. But nevertheless oil prices continue to break all maximums.

EUR/USD gained more than 100 pips today on the bad macroeconomic data coming out in U.S. This currency pair went up from 1.4714 at the opening of the Asian trading session to 1.4816 at the end of the New York session. GBP/USD also grew very fast today — from 1.9420 to 1.9622. The major trend movement against the European currency happened after the release of the Philadelphia Fed’s business activity index, which showed a significant worsening of the business markets’ situation in U.S., while some definite improvements were expected. It fell from -20.9 to -24.0 (it was expected to increase to -10.0).

Among other important statistical releases that came out today was the initial jobless claims count for the last week — it dropped down slightly — from 358k to 349k (a drop to 345k was expected by the market traders) .

U.S. commercial crude oil inventories again grew sharply — a gain of more than 4.2 million barrels was registered for the last week. It’s the fifth straight weekly gain and almost every time it was far above 1 million barrels. This helped to keep the oil price below the "sacred" $100 level today.

Dollar was almost unchanged versus euro today before some important to fundamental analysis indicators were released in U.S. EUR/USD opened at 1.4580 and made some moderate movements in both directions, but has been near the opening level before the statistics came out. Good data had an improving effect on dollar. It is now trading more than 30 pips below the opening price.

Advance figures for the retails sales in January were released today. They grew up by 0.3% instead of dropping the same value down, as the majority of the economists expected.

Business inventories in December were up 0.6% - a good result, considering 0.5% forecast and 0.4% growth in previous month.

U.S. crude oil inventories last week rose 1.1 million barrels, now they are in the middle of the average range for this time of the year. This is another consequential gain in oil inventories, which may curb oil prices again.