Dollar Hits 6 Month High vs Euro

Daily Forex Fundamentals | Written by CMS Forex | Aug 15 08 21:46 GMT |

NZ: Retail Sales Surprise Forecasts on Upside In New Zealand, retail sales for June, surprised forecasts on the upside and increased 0.9%. Expectations had been for a 1.6% decline. That's welcoming news for the New Zealand economy, as the central bank has embarked on a rate cut campaign, in the face of falling demand. AUD/NZD - Aussie Sinks vs Kiwi After Retail Sales Figure With the Reserve Bank of Australia gearing up for its own rate cuts, the Aussie-Kiwi pair fell sharply in today's trading following the better than expected sales data out of New Zealand. The Kiwi surged in the hours after the release, consolidated near 1.24 and capped off its 180 pip rally in NY trading. The pair is now about 360 pips lower for the week. US: Industrial Production Increases 0.2% US industrial production output increased 0.2% in July, a slower pace than June, but better than expectations. The capacity utilization rate, the proportion of factories in use, increased to 79.9% from June's downwardly revised figure. US: NY Empire Manufacturing Index Posts a 2.8 The Empire State Manufacturing index indicates that conditions for New York manufacturers improved marginally in August. The general business conditions index rose several points, to 2.8, after posting negative figures for the last 3 months. US: Consumer Confidence Increases in August The mid-month UMich survey of consumer confidence for August rose slightly to 61.7. Consumers' views of "current conditions" declined, while their "future expectations" brightened. The 12-month forecast for inflation cooled from 5.1% to 4.8%, as consumers factor in the recent fall in commodity prices. EUR/USD - Euro Breaks Below 1.47 vs Dollar The Euro-Dollar pair broke below 1.47 in NY trading, capping another week of strong gains for the greenback. To start the week, the pair fell below key support at 1.50 which then turned to resistance near 1.4950. That resistance held in the middle of the week as the pair consolidated. Dollar bulls used yesterday's higher than expected US CPI data to start a rally, and continued it in today's NY session following another batch of better than expected fundamentals. USD/JPY - Dollar Caps 200-Pip Rally vs Yen The Dollar rose against the Yen overnight as well, capping a 200 pip rally over the last 3 sessions. It met resistance near 110.65. Oil prices were down again today, dipping below $112, and US stocks were in the green. Falling oil prices have been a major catalyst in the Dollar's recent revival. CAN: Manufacturing Shipments Surprise Forecasts In Canada, manufacturing shipments rose 2.1% in June, higher than expected. It's the 5th increase in 6 months, and showed widespread gains. In a separate release, June's sales of new motor vehicles were lower by 1% for the month. Sales of new trucks fell as consumers switch to passenger cars. USD/CAD - Loonie Gains After Shipments Data The US Dollar-Canadian Dollar pair plunged 100 pips from its intra-day high to test 1.0580, with a good amount of it coming in the wake of the shipments release. The last three peaks in the pair have come in successively lower highs, forming a new line of resistance as the pair consolidates this week. It will be interesting to note if a downward channel develops, or if the greenback strengthens again next week. Next Weeks's Upcoming Releases Next week starts with housing prices from the UK, sales data from Switzerland, trade figures from the Euro-zone and producer prices from New Zealand. Monday evening, Australia posts its meeting minutes and the BOJ will conclude their interest rate meeting. 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.