Dollar Ends Week With a Bang, Surges vs Rivals Setting Multi-Month Highs

Daily Forex Fundamentals | Written by CMS Forex | Aug 08 08 22:21 GMT |

EUR/USD - Euro Slides 300 Pips as 1.53 Barrier Breached Dollar bulls were out in full force today. The Euro-Dollar pair plunged 300 pips from its global open, slicing through the 1.53 barrier, to test 1.50. Investors and traders reduced bets that the ECB will raise rates anytime soon, following yesterday's ECB meeting and statement. For the week, the Dollar is now up close to 600 pips, and today's jump was the largest in nearly 4 years. GBP/USD - Pound Sinks on Concerns over Recession, Down 280 Pips Friday The Pound-Dollar pair also faced a steep sell off falling nearly 280 pips to test 1.9150. That's a 17-month low. Traders are seeing a UK economy teetering towards recession. Reports this week showed the UK housing sector faced large repossessions in the first half of the year and home prices slipped more than 8% compared to last year. CAN Canadian Economy Sheds 55K in July The Canadian labor market slowed significantly in July, shedding 55,200 jobs. That was a big surprise to forecasts, which expected some small positive growth. The unemployment rate improved however, to 6.1%, as a large number of workers, especially younger ones, are exiting the workforce. Most of the jobs lost were part-time and were clustered in manufacturing. USD/CAD - Greenback Highest in Almost a Year Against Loonie The US Dollar-Canadian Dollar pair rallied around 150 pips to test the 1.07 area. It has had a clear breakout from its downward channel seen through most of June and July, and is at the highest level in almost a year. If the Canadian economy shows serious strains, the central bank may be compelled to lower rates. The outlook for interest rates, and the 2 week slide in oil and commodity prices, have all combined to make a perfect storm for Dollar strength. AUD/USD - Aussie Falls for 9th Day, Down 900 Pips in 3 Weeks The Australian dollar fell for a ninth day, cracking below 0.90 in a 180 pip fall this session. The pair is now almost 900 pips lower than it was three weeks ago. The RBA on Tuesday said in their statement that they are ready to ease rates from their 12-year high. USD/JPY - Dollar Hits 110.35 vs Yen, Highest Since January US stocks were up as well, with the Dow surging more than 200 points by 1 PM. Oil retreated as much as $4, falling to lows last seen in May. The Dollar-Yen pair extended its gains from earlier in the week to climb to 110.35, the highest it's been since the beginning of the year. Next Week Next week, fundamental data will focus on inflation, as the UK, US, and Euro-zone release CPI figures. Some other highlights will be retail sales from the US, trade data from Canada and the US, and Japanese GDP. Capital Market Services, L.L.C. www.cmsfx.com ©C2004-2005 Globicus International, Inc. and Capital Market Services, L.L.C. Any information in this report is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Capital Market Services, L.L.C. with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Capital Market Services, L.L.C. accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this report. No part of this report may be reproduced or distributed in any manner without the permission of Capital Market Services, L.L.C.