Traders Short Dollar After Horrid Confidence Data
By Grace Cheng on March 25, 2008 | More Posts By Grace Cheng | Author's WebsiteLatest report shows that the malaise of the US economy may already have spread to American consumers. Conference Board US consumer confidence data came out far worse than expected, with the headline index at 64.5 - a five-year low - vs a prior 76.4 and expectations centered on a reading around 73.6. Its component of expectations for the next six months declined to 47.9, the lowest since December 1973, when the Watergate scandal rocked the Nixon administration and an embargo by a group of Arab oil exporters was in effect. Only 14.9% of those 5000 households surveyed expect their incomes to rise over the next six months, the lowest since records began in 1967, down from a prior 18%. Another piece of report which is unfavorable to the US is the Case/Shiller 20-city home price index released Tuesday which shows prices falling 2.36% in January after a 2.10% drop in December. Prices are down 10.7% compared to a year ago, and 12.5% from its July 2006 peak. 16 of 20 regions measured posted record annual declines, and Las Vegas and Miami fell the most of any region, at 19.3% year-over-year. The housing market is definitely not improving, and looks like more correction will be underway.
Forex Trading
The US dollar is slammed hard Tuesday after the release of horrible US data, and is posting its steepest loss against the Euro in two weeks. Seems that USD’s recent five-session rebound was short-lived and is now under a lot of shorting pressure again. EUR/USD is back up above 1.5600 and if it breaks successfully above 1.5620, it could next target 1.5680-1.5700. If USD/CHF slides below 1.0050, it could possibly target 1.0000. USD/JPY fell to an intraday low of 99.60.
Wednesday:
German IFO business climate 0900 GMT
ECB’s Trichet attends Parliament debate 0930 GMT
Eurozone industrial new orders 1000 GMT
US durable goods 1230 GMT
US new home sales 1400 GMT
NZ trade balance 2145 GMT
Posted in Categories: Eurozone, Forex, Japan, Switzerland, USA.
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I think the USD still has a way to drop and last week was just profit taking