Forex Blog

EUR/USD played back fully the yesterday’s decline, but still ended the last week before the holiday period with a small loss. Forex market will be open despite of any holidays, but the price volatility will be low and no major movements can be expected.

November personal income and spendings report turned out to be better than it was for October and not the least reason for it lies in the pre-holiday sales period. Personal income growth of 0.4% failed to meet the 0.5% expectation, but personal spendings grew up 1.1% which is a lot better than 0.7% forecast. Core PCE inflation, as forecast showed, remained at the same level as in October - 0.2%.

Michigan sentiment index for December was revised from 74.5 to 75.5, which is still below the previous the October’s 76.1 value. The consensus among the analysts was that the value be left at 74.5.

Overall, these news are positive for dollar, that might make FOMC think twice before lowering the interest rates further.

Euro tried to regain some of its strong positions against U.S. dollar today after some new weak economical statistics regarding personal income and spendings were released to the financial market traders. But after construction spending and very optimistic PMI reports were released dollar started to press on euro and EUR/USD returned to its daily open value.

The most notable are the personal income and personal consumption expenditures (PCE) data reported by U.S. Bureau of Economic Analysis - in October they both rose by 0.2% while markets were expecting 0.4% growth in personal income (same as in September) and 0.2% for PCE.

Chicago PMI report (Business Barometer) showed an increase of this index above the average expectations by the analysts. It was at 52.9 in November, while 50.5 was expected it was 49.7 in October.

Total housing construction spending in October 2007 decreased by 0.8% (seasonally adjusted) compared to September’s value, that’s below pessimistic expectations of 0.3% drop. Real estate sector of the U.S. economy is heading into a deep crisis and new data reports prove that easily.