Forex Blog

EUR/USD is up today after two days of decline. Employment statistics is hurting the dollar during the last two days and the bets that the Fed will have to continue cutting the interest rates become more popular. EUR/USD is currently trading near 1.2748.

Nonfarm payrolls declined by 240,000 in October — that’s even more than the analysts expected (200,000), being quite pessimistic. September’s decline was also revised — from 159,000 to 284,000. Unemployment rate increased from 6.1% to 6.5%. That’s the very bad news for the U.S. economy and for the U.S. dollar too. Yesterday’s report on the initial jobless claims showed a decline from 485,000 to 481,000 last week.

Pending home sales dropped by 4.6% in September after 7.5% in August and 3.4% decline forecast for September.

Wholesales inventories were down by 0.1% in September after increasing 0.8% in August and 0.4% growth forecast for September.

EUR/USD currency pair is growing for the second day in a row today after the Federal Reserve and the major central banks cut the interest rates to provide additional help to the tumbling markets. Fed cut the interest rate from 2% to 1.5%, Bank of England — from 5% to 4.5%, European Central Bank — from 4.25% to 3.75%, Bank of Canada — from 3% to 2.5% and Swiss National Bank — from 2.75% to 2.50%. This didn’t influence dollar much — it continued to fall despite some positive fundamentals reports from U.S. today. EUR/USD is currently trading near 1.3652 level above the opening value of 1.3621.

Pending home sales index rose by 7.4% in August after 2.7% drop in July. It’s good growth for the national realty sector because the average forecast was at 1.1% fall for August.

Crude oil inventories added 8.1 million barrels last week following 4.3 million barrels gain a week before. The last two weekly increases pushed crude oil inventories to the upper half of the average range for this time of year.

EUR/USD traded today with a great deal of the intraday volatility — it managed to reach its almost two year minimum level at 1.4046 during the early Asian trading and post an upward spike later.After today’s portion of the U.S. macroeconomic statistics came out, the currency pair left its equilibrium point and rose a little. It is now trading close to 1.4126 level.

Pending home sales index fell 3.2% to 86.5 in July. This decline followed 5.8% increase in June (revised up from 5.3%). The estimated decline for July was at 1.3%.

Wholesale inventories continued to grow July — they gained 1.4% after 0.9% growth a month before. Average forecast for this indicator’s growth was 0.6%.

EUR/USD declined today to its new minimum level since June 13 after a bearish commentaries by Jean-Claude Trichet that followed ECB’s rate decision. Even bad reports on U.S. employment and housing couldn’t save the currency pair from falling. It is now trading near 1.5326 level.

Initial jobless claims rose to 455,000 last week, up from 448,000 a week before. Analysts estimated a decline to 420,000 claims for the last week.

Pending home sales rose by 5.3% in United States in June. This growth followed 4.9% decline in May. Median forecast for the June was at 1% decline.

Consumer credit rose by $14.3 billion in June. That’s above the recorded $8 billion May growth and exceeds $6.4 billion analytics’ estimate for June.

The EUR/USD currency pair declined today before and after the macroeconomic releases that were scheduled for today and even after the speech by the Fed’s Ben Bernanke. In his speech Bernanke said that he will prolong the emergency-loan program for the banks into 2009. This will probably mean less interest rate hikes as it would be hard for the FOMC to raise rate significantly and provide the liquidity to the failing banks simultaneously.

Pending home sales index based on the May data declined from 88.9% to 84.7%, while a moderate decline by 2.8% has been expected. Last time this index showed 7.1% growth (revised up from 6.3%).

Wholesale inventories climbed up 0.8% in May — better than 0.6% forecast, but worse than the 1.3% growth in April.