The Forex Daily Digest – November 18, 2009
The USD came off lows early after government reports showed U.S. consumer prices rose more than expected last month while construction of new homes fell sharply last month. The consumer price index has fallen 0.2% in the past year. The core CPI - which excludes food and energy prices in order to get a better look at underlying inflation - increased 0.2% in October, led by higher prices for cars and trucks, due in part to the unwinding of the government's cash-for-clunkers deal.
In another U.S. economic report, new construction on U.S. housing fell 10.6% to a seasonally adjusted annual rate of 529,000, which is the lowest level since April. It was the largest percentage decline in housing starts since January. Meantime, building Permits fell 4.0% to a seasonally adjusted annual rate of 552,000 in October.
Gold futures hit record highs as the USD dropped against other major currencies. December gold hit $1,149.60 an ounce and as a result the USD dropped against its major rivals, as European shares posted gains for the fifth time in six sessions.
The EUR fell against the USD after data showed tame underlying U.S. inflation and a decline in housing starts last month, suggesting a U.S. recovery will be a slow one. Sluggish U.S. growth could cause a drag on global recovery, and that can prompt investors to pare risky trades in higher-yielding currencies and assets.
The CAD gained against the USD as oil prices increased and a government report showed consumer prices increased at an annual rate for the first time in five months. Statistics Canada reported that the Canadian CPI increase 0.1 percent last month from a year ago after falling 0.9 percent in September. And Bank of Canada policy makers left the overnight lending rate at a record low 0.25 percent at their last meeting in October and repeated a pledge to maintain that level through June 2010 unless the inflation outlook changes.
President Obama, visiting mainland China, called on the Chinese government to make good on a commitment to permit the yuan to appreciate to help in trade imbalances that ten to worsen the global economic crisis. America’s trade deficit with China widened to a 10-month high in September, raising concern that the combination of a recovering U.S. economy and a fixed yuan exchange rate against the USD will worsen global imbalances.
On the economic calendar on Thursday will be the Initial Jobless Claims report for the week of November 14, Leading Indicators for October and the Philly Fed Index for November.
On the earnings calendar for Thursday watch for Intuit, Books-A-Million, Ditech, Gap, Dick’s Sporting Goods, Sears Holdings, and Williams-Sonoma.
Happy trading,
James Dicks
In another U.S. economic report, new construction on U.S. housing fell 10.6% to a seasonally adjusted annual rate of 529,000, which is the lowest level since April. It was the largest percentage decline in housing starts since January. Meantime, building Permits fell 4.0% to a seasonally adjusted annual rate of 552,000 in October.
Gold futures hit record highs as the USD dropped against other major currencies. December gold hit $1,149.60 an ounce and as a result the USD dropped against its major rivals, as European shares posted gains for the fifth time in six sessions.
The EUR fell against the USD after data showed tame underlying U.S. inflation and a decline in housing starts last month, suggesting a U.S. recovery will be a slow one. Sluggish U.S. growth could cause a drag on global recovery, and that can prompt investors to pare risky trades in higher-yielding currencies and assets.
The CAD gained against the USD as oil prices increased and a government report showed consumer prices increased at an annual rate for the first time in five months. Statistics Canada reported that the Canadian CPI increase 0.1 percent last month from a year ago after falling 0.9 percent in September. And Bank of Canada policy makers left the overnight lending rate at a record low 0.25 percent at their last meeting in October and repeated a pledge to maintain that level through June 2010 unless the inflation outlook changes.
President Obama, visiting mainland China, called on the Chinese government to make good on a commitment to permit the yuan to appreciate to help in trade imbalances that ten to worsen the global economic crisis. America’s trade deficit with China widened to a 10-month high in September, raising concern that the combination of a recovering U.S. economy and a fixed yuan exchange rate against the USD will worsen global imbalances.
On the economic calendar on Thursday will be the Initial Jobless Claims report for the week of November 14, Leading Indicators for October and the Philly Fed Index for November.
On the earnings calendar for Thursday watch for Intuit, Books-A-Million, Ditech, Gap, Dick’s Sporting Goods, Sears Holdings, and Williams-Sonoma.
Happy trading,
James Dicks
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