The Forex Daily Digest – August 18, 2009
The USD and the JPY traded near the highest levels in more than two weeks against the EUR as stocks dropped globally over concern the economic recovery may falter. Wall Street fell in yesterday’s trading, falling for the second straight session, as worries that nervous U.S. consumers will pressure a delicate recovery pulled stocks lower after a five-month advance. The Dow Jones industrial average lost 186 points, or 2%, after having lost as much as 204 points earlier. The S&P 500 index fell 24 points, or 2.4%.
The USD and the JPY rose yesterday, as traders sought the safe-haven of low-yielding currencies after a drop in Chinese stocks and a weaker-than-expected rebound in Japan's economy. Japan's gross domestic product grew by 0.9% in the second quarter, slightly weaker than expected, compared to the first three months of the year amid increased exports and a rise in private spending. Concerns persist about business spending which fell for a fifth straight quarter as Japanese companies delayed capital expenditures on new plants and equipment.
The CAD hit the weakest level in nearly a month as stocks and crude oil dropped on speculation a rally in higher-yielding assets outpaced prospects for a recovery, killing investors’ risk appetite. Crude oil for September fell as much as 3.4 percent to $65.23 a barrel on the New York Mercantile Exchange, which is the lowest price since the end of July.
The GBP fell the most in more than two months against the USD following a U.K. housing report that showed home sellers lowered asking prices in August by the biggest amount this year, indicating that the current global recession may have a way to run. The GBP also fell the most in a month against the JPY after analysts said the average cost home in the U.K. fell 2.2 percent in August after gaining 0.6 percent in July.
The U.S. Federal Reserve decided to boost credit to the ailing market for commercial real estate by extending to mid-2010 an emergency lending program. The move is seen as essential by the $6 trillion market since lending on office, retail and apartment buildings has been slow since the onset of the credit crunch in 2007, and as the recession curbs revenue from rents.
Fannie Mae announced it plans to sell $1.0 billion of three-month benchmark bills due November 18, 2009, and $1.0 billion of six-month bills due Feb. 17, 2010, tomorrow (Wednesday) in a Dutch auction. And Freddie Mac said its sale of $2 billion of bills brought mixed rates and demand was weaker compared with the most recent sales of the same sizes and maturities.
Economic reports today include July Building Permits, the Producer Price Index for July, and July Housing Starts.
Earnings scheduled for release are Target Corp, British Land Company, Gold Reserve, Cardinal Health, Analog Devices, La-Z-Boy, Saks Inc., the New Zealand Refining Co. Ltd., and the TJX Companies.
Happy Trading,
James Dicks
The USD and the JPY rose yesterday, as traders sought the safe-haven of low-yielding currencies after a drop in Chinese stocks and a weaker-than-expected rebound in Japan's economy. Japan's gross domestic product grew by 0.9% in the second quarter, slightly weaker than expected, compared to the first three months of the year amid increased exports and a rise in private spending. Concerns persist about business spending which fell for a fifth straight quarter as Japanese companies delayed capital expenditures on new plants and equipment.
The CAD hit the weakest level in nearly a month as stocks and crude oil dropped on speculation a rally in higher-yielding assets outpaced prospects for a recovery, killing investors’ risk appetite. Crude oil for September fell as much as 3.4 percent to $65.23 a barrel on the New York Mercantile Exchange, which is the lowest price since the end of July.
The GBP fell the most in more than two months against the USD following a U.K. housing report that showed home sellers lowered asking prices in August by the biggest amount this year, indicating that the current global recession may have a way to run. The GBP also fell the most in a month against the JPY after analysts said the average cost home in the U.K. fell 2.2 percent in August after gaining 0.6 percent in July.
The U.S. Federal Reserve decided to boost credit to the ailing market for commercial real estate by extending to mid-2010 an emergency lending program. The move is seen as essential by the $6 trillion market since lending on office, retail and apartment buildings has been slow since the onset of the credit crunch in 2007, and as the recession curbs revenue from rents.
Fannie Mae announced it plans to sell $1.0 billion of three-month benchmark bills due November 18, 2009, and $1.0 billion of six-month bills due Feb. 17, 2010, tomorrow (Wednesday) in a Dutch auction. And Freddie Mac said its sale of $2 billion of bills brought mixed rates and demand was weaker compared with the most recent sales of the same sizes and maturities.
Economic reports today include July Building Permits, the Producer Price Index for July, and July Housing Starts.
Earnings scheduled for release are Target Corp, British Land Company, Gold Reserve, Cardinal Health, Analog Devices, La-Z-Boy, Saks Inc., the New Zealand Refining Co. Ltd., and the TJX Companies.
Happy Trading,
James Dicks
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