Dollar Weakens After American Says Profits Fell

Daily Forex Fundamentals | Written by Finotec Group | Jul 22 08 08:59 GMT |

The dollar traded near a record low against the euro after American Express Co. said profit dropped because more consumers defaulted on loans, raising concern the U.S. economic slowdown will deepen. The currency may extend declines against the yen before reports this week forecast by economists to show that U.S. home sales and durable-goods orders dropped in June. American Express, the biggest U.S. credit-card company by purchases, reported second-quarter profit fell 37 percent on bad consumer loans, as the housing market slumped and economic growth slowed. 'Traders will look for opportunities to sell the dollar,' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. 'The housing market and corporate earnings show that the U.S. economy's fundamentals are weak.' EUR/Dollar is currently trading at 1.5921 as of 7:40 am, GMT. Chancellor of the Exchequer Alistair Darling said fallout from a global credit crunch is proving worse than previously expected, a sign that U.K. policy makers are bracing for slower growth. 'The effect of what has happened is going to be far more profound than people predicted even at the turn of this year,' Darling said in an interview with Bloomberg Television, which will air excerpts today. 'It is quite clear that if you look during the course of this year, conditions have become more difficult across the world.' The finance minister, whose tenure has coincided with the sharpest decline in house prices and the steepest rise in living costs in a decade, reiterated his belief the British economy will escape recession and pledged to keep up the fight against inflation. GBP/USD is currently trading at 2.0026 as of 7:43 am, GMT. The euro is also poised to strengthen versus the yen. 'The euro still looks strong on charts,' said Hashimoto at the unit of Japan's biggest publicly traded lender by assets. The next target of about 173.60 yen is also a 123.6 percent reversal of the euro's decline to 149.27 on Aug. 17 from a high of 168.99 set on July 23, 2007, based on the Fibonacci sequence, he said. Other Fibonacci points are 50 percent, 61.8 percent and 76.4 percent. A break of one of these indicates a currency may move to the next level. A failure suggests a trend may stall. Resistance is a level where selling may outweigh buying. Economic Calendar Time Country Event Period Previous Forecast Significance 14:00 Household Confidence USD -0.8% 14:00 Richmond Fed Index USD Jul -12 12:30 Core Retail Sales m/m CAD May 1.1% *** 12:30 Retail Sales m/m CAD May 0.6% ** 12:30 FOMC Meeting Minutes USD *** 08:45 BOE Governor King Speaks GBP *** 07:15 Trade Balance CHF Jun 1.87B ** 00:50 All Industries Activity Index m/m JPY 0.8% ** 00:50 All Industries Activity Index m/m JPY 0.8% ** Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.