Dollar Heads For Gains Against The Euro Before Consumer Sentiment Data

Daily Forex Fundamentals | Written by Finotec Group | Aug 15 08 09:16 GMT |

The dollar headed for a huge gain against the euro, its longest winning streak in more than two years, on speculation U.S. consumer spending will keep the world's biggest economy out of recession. ``The dollar could get a boost from positive economic data,'' said Akio Shimizu, chief manager of foreign-exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. ``The risks of an economic slowdown seem to be greater in Europe. That increases the relative appeal of the dollar.'' The Reuters/University of Michigan index of consumer sentiment probably increased to 62 this month, from 61.2 in July, according to economists and traders. The EUR/USD is currently trading at $1.4730 as of 7:39am, GMT. The U.K. currency is poised for a fourth weekly decline, the most since December, after Bank of England Governor Mervyn King said two days ago there was a ``chill in the economic air'' as unemployment rose in July by the most in almost 16 years. Growth is being hurt as tourism flags and tax receipts fall. ``Already this summer we are seeing the start of what we believe is going to be an aggressive move lower in yields and also the pound as the bearish developments in asset markets and the economy continue to overwhelm,'' a team led by Tom Fitzpatrick, global head of currency strategy in New York at Citigroup Global Markets Inc., wrote in an investor report yesterday. The GBP/USD is currently trading at 1.8555 as of 7:49am, GMT. The Australian dollar fell, taking its loss from a 25-year high reached a month ago to 12 percent, as prices of commodities slid and traders bet on lower interest rates. The Australian currency posted its fourth weekly decline, the longest losing streak since October 2006, as gold, the nation's third most-valuable raw material export, slumped almost 8 percent. ``The pressure will be on the downside'' for the Australian and New Zealand dollars, said Brian Redican, senior market economist at Macquarie Group Ltd. in Sydney. ``Commodity prices have pulled down from their peaks and also their central banks are now cutting interest rates.'' The AUD/USD is currently trading at $0.8622 as of 8:10am, GMT Economic Calendar Time Country Event Period Previous Forecast Significance 13:55 Consumer Sentiment USD Jul 61.2 **** 13:15 Capacity Utilization Rate USD Jul 79.9% *** 13:15 Industrial Production m/m USD Jul 0.5% ** 13:00 TIC Net Long-Term Transactions USD Jul 67.0B **** 12:30 Manufacturing Shipments m/m CAD Jul 2.7% ** 12:30 New Motor Vehical Sales m/m CAD Jul 1.1% 12:30 Empire State Business Condition Index USD Jul -4.9 ** 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.