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- http://www.ac-markets.com/ Foreign Exchange Market (FOREX) daily information and analyst comment (c) 2005, Advanced Currency Markets SA. All rights reserved. 5 - The Dollar dropped against the Euro on Wednesday after a report showed the US private sector shed more jobs than expected in June. The ADP Employer Services data, which showed the largest drop since November 2002, is often seen as a precursor to the government's monthly report on the labor market (early release on Thursday). Poll of Economists expect another drop in non-farm payrolls last month. Forex investors bought the Euro ahead of an expected interest rate hike by the European Central Bank on Thursday. The ECB is widely expected to lift its key lending rate by 25bp to 4.25%, and President Jean-Claude Trichet's news conference after the meeting may indicate further increases. Sterling fell broadly as tumbling UK housing shares and a profit warning from retailer Marks and Spencer cast a shadow over the slowing British economy. Dollar fell against a broadly stronger Australian Dollar, which jumped after Australian retail sales soundly beat expectations for May. http://www.ac-markets.com/forex-news/forex-2008-7-3.aspx Thu, 03 Jul 2008 00:00:00 GMT rss@ac-markets.com - The Dollar fell against the Euro and was little changed against the Yen on Tuesday in a volatile session as investors debated the outlook for the US economy while anticipating a rate hike from the European Central Bank later this week. US stocks retraced earlier losses after General Motors reported stronger-than-expected June sales, keeping the Dollar off session lows. The Institute for Supply Management said its index of national factory activity rose in June to 50.2 from 49.6 in May after four straight months of contraction. Euro-zone manufacturing activity contracted for the first time in 3-year in June and output prices matched April's year high. But analysts said Tuesday's data will not prevent the ECB raising rates. http://www.ac-markets.com/forex-news/forex-2008-7-2.aspx Wed, 02 Jul 2008 00:00:00 GMT rss@ac-markets.com - The Dollar fell to three-week lows against the Euro on Friday, dented after Oil prices surged to a record high, data showed US consumer sentiment hit a 28-year low and Wall Street stocks extended their slide. The Dollar would stay under pressure after US financial shares fell on Friday on worries about more credit losses. Lehman Brothers forecast Merrill Lynch would write down another $5.4bio in the 2nd quarter, while Moody's said it may cut Morgan Stanley's credit rating. The European Central Bank holds a policy meeting on Thursday and is widely expected to raise rates to 4.25% fight rising prices. The key US jobs data is also due on Thursday. http://www.ac-markets.com/forex-news/forex-2008-6-30.aspx Mon, 30 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar slumped on Thursday, hitting its lowest level against the Euro in nearly three weeks, as investors reduced their expectations for a Federal Reserve interest rate rise this year. While the Federal Reserve on Wednesday said inflation risks had increased, it did not use language that convinced markets a rate rise was likely at its next policy meeting in August. In contrast, the ECB has repeatedly said it may lift interest rates in July to fight inflation. That helped push the Euro near a three-week high at 1.5768. The US central bank's move to leave interest rates unchanged on Wednesday effectively ended one of its most aggressive rate-cutting campaigns, launched last September to curb economic fallout from the housing and credit crisis. US financial stocks plummeted while shares of General Motors sank more than 10%. Fitch Ratings' downgrade of General Motors and Chrysler credit ratings also hit the Dollar, as did the Dow's drop to its lowest level in 21 months. Oil prices on http://www.ac-markets.com/forex-news/forex-2008-6-27.aspx Fri, 27 Jun 2008 00:00:00 GMT rss@ac-markets.com - The FOMC left rates on hold at 2% which was widely expected but voiced their growing concern about inflation but also said that they expect price pressure to moderate through the year. These comments lead many to believe that the chance of the Fed hiking rates has become more limited and thus we see an easing of the Dollar against the Euro. Overall the chance of the Fed raising rates during Q3 has already been priced into the market so it’s likely that the Dollar bulls will be disappointed with the news. With the ECB likely to be raising rates at some stage in the near term then the big winner was the Euro. Oil dipped to just above $134 barrel on a surprise rise in stocks. Plenty of data released later including US home sales which may have climbed as prices have become attractive to those who can get credit. http://www.ac-markets.com/forex-news/forex-2008-6-26.aspx Thu, 26 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar retreated on Tuesday as a lower US consumer confidence, 16-year low in June, and declining home prices raised doubts about the Federal Reserve's ability to hike interest rates to stem inflation. The Fed began a two-day monetary policy meeting on Tuesday, with analysts expecting the US central bank to hold interest rates steady at 2%. But traders will pore over the Fed's accompanying statement for clues about possible hikes later in the year. US short-term interest rate futures trimmed the chances of a rate hike in August to 70% from 74%. http://www.ac-markets.com/forex-news/forex-2008-6-25.aspx Wed, 25 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar retreated on Tuesday as a lower US consumer confidence, 16-year low in June, and declining home prices raised doubts about the Federal Reserve's ability to hike interest rates to stem inflation. The Fed began a two-day monetary policy meeting on Tuesday, with analysts expecting the US central bank to hold interest rates steady at 2%. But traders will pore over the Fed's accompanying statement for clues about possible hikes later in the year. US short-term interest rate futures trimmed the chances of a rate hike in August to 70% from 74%. http://www.ac-markets.com/forex-news/forex-2008-6-25.aspx Wed, 25 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar rose on Monday, as weak euro zone data took the steam out of last week's Euro rally and investors braced for a Federal Reserve statement this week that will likely focus on rising US inflation pressures. The Fed's inflation mindset when it announces its monetary policy decision on Wednesday should ensure that US interest rates will remain unchanged after a string of cuts since mid-September, analysts said. The Fed is expected to hold rates at 2% on Wednesday but the futures markets have priced in a pair of rate hikes by year end due to surging energy and food price inflation. Unlike the Fed, the European Central Bank has signaled a rate hike in July, though officials have been at pains to make clear that this would not necessarily lead to a series of hikes. US crude futures were up more 1% at $137.36 on Nigerian supply disruptions and escalating tensions between Israel and Iran. Gold fell 1.94% at 883.35 extending last week sell-off as investors took more profits on the ba http://www.ac-markets.com/forex-news/forex-2008-6-24.aspx Tue, 24 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar rose versus the Euro on Thursday, helped by a sharp drop in crude Oil prices to 131.93 and a surge in British retail sales that caused traders to offload the European single currency to buy Sterling. May's surprise jump in retail sales raised expectations the Bank of England will raise interest rates, helping to drive the pound to its highest level in over a week against the Dollar and spark a rally versus the Euro. Swiss National Bank left interest rates unchanged at 2.75% despite inflation at multiyear highs had some psychological effect on the market. Some analyst suggested that the Swiss bank's decision could mean the European Central Bank would not tighten policy further after an anticipated rate increase in July. http://www.ac-markets.com/forex-news/forex-2008-6-20.aspx Fri, 20 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar edged lower on Wednesday as investors adjusted their interest rate outlooks for the United States and the euro zone after conflicting economic data and monetary authorities toned down threats of tighter policy. Traders scrambled to revise downward their expectations of an August Federal Reserve interest rate rise after data this week showed US housing starts plunged to a 17-year low in May. In addition, Wholesale prices shot up, driven by energy costs, but analysts reckon the Fed will not rush to tighten policy in the absence of signs of stability in the housing sector, which threatens to drag the broader economy into a recession. The US central bank is widely expected to keep its benchmark fed funds rate target at 2% next week. While expectations of a series of rates hikes from the ECB have also been scaled back in recent days, a move to 4.25% in July is still widely expected. http://www.ac-markets.com/forex-news/forex-2008-6-19.aspx Thu, 19 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar fell against the Euro on Tuesday as US housing starts plunged to their lowest level in more than 17 years in May, casting more doubt over an anticipated early Federal Reserve interest rate increase. Euro zone interest rate expectations were also trimmed after the European Central Bank's Smaghi indicated a single hike would be sufficient to bring back inflation below the bank's 2% target. Analysts remain convinced that the Fed will raise interest rates by year-end, citing an unexpected 1.4% rise in the headline producer price index in May, which pointed to growing inflation pressures already highlighted by the central bank. http://www.ac-markets.com/forex-news/forex-2008-6-18.aspx Wed, 18 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar fell against the Euro on Monday as record euro-zone inflation supported expectations of a European Central Bank interest rate hike next month. Euro zone inflation rose to a record high of 3.7% in May. Analysts said the surge in May's annual euro-zone inflation suggested that a July ECB rate hike was almost certain. An ECB interest rate increase would further enhance the appeal of the Euro at the expense of the Dollar. Lehman's $2.8B quarterly loss, while in line with market expectations, served as a reminder to investors that the credit crisis was still far from over. http://www.ac-markets.com/forex-news/forex-2008-6-17.aspx Tue, 17 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar slipped in early trade on Monday on disappointment that finance ministers from the Group of Eight (G8) countries failed to address the weakness of the US currency at a meeting over the weekend in Japan. Many traders had expected ministers to discuss currencies after a series of comments linking a weak Dollar and rising Oil prices, but most appeared more worried about slowing growth in economies hit by a credit crisis. French Economy Minister Christine Lagarde said Dollar weakness and commodity price inflation were inextricably linked. Paulson said on Saturday he disagreed, and stuck only to his oft repeated line that the United States supported a Strong Dollar. Last Friday, the Dollar jumped against the Euro on Friday and notched up its best week against a basket of currencies since 2005 as mounting inflation fears had investors bracing for Federal Reserve interest rate hikes this year. http://www.ac-markets.com/forex-news/forex-2008-6-16.aspx Mon, 16 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar rallied broadly on Thursday after data showed a surprisingly strong gain in US retail sales, up 1% last month, boosting expectations that the Federal Reserve may raise interest rates this year. Philadelphia Fed President Charles Plosser was the latest monetary policy official to hint at the possibility of higher US interest rates. On Thursday, he said current US monetary policy was supportive for growth but the Fed needs to stay vigilant in keeping inflation expectations contained. French economy minister Christine Lagarde said that the ECB may even reconsider the July move after this weekend's G8 meeting. ECB Executive Board member Lorenzo Bini Smaghi said the bank will do what is needed to lower inflation but it has given indications on policy moves only as far as July. http://www.ac-markets.com/forex-news/forex-2008-6-13.aspx Fri, 13 Jun 2008 00:00:00 GMT rss@ac-markets.com - The Dollar slid on Wednesday as investors debated the outlook for interest rates in the US and Europe given statements from central bank officials in recent days. Investors expect a euro-zone rate rise as soon as July based on comments from ECB President Jean-Claude Trichet last week, although some of the bank's policymakers have whispered expectations of further rate rises. But ECB board member Juergen Stark said the central bank is not considering a series of rate rises. Fed Vice Chairman Donald Kohn said that a steady rise in energy prices has fueled an inflationary psychology in the United States and could be a problem if it does not reverse. Investors will look to today’s US retail report for further clues about the state of the US economy. http://www.ac-markets.com/forex-news/forex-2008-6-12.aspx Thu, 12 Jun 2008 00:00:00 GMT rss@ac-markets.com