Major Market Mover: Strong Greenback

Daily Forex Fundamentals | Written by Crown Forex | Sep 11 08 07:45 GMT |

Equilibriums changed, the weak has now become stronger while the bully has weakened to be the center of attention to all markets participants; the US spillover and slowing global growth pressured the resilient economies, as they now face threat of recession...

This would prompt some rate cuts in the future, narrowing the difference between the economies which hold high interest rates and the economies with lower rates.

The weakness Europeans face in the current period had made the US dollar gain massively against their shared currency 'Euro', as it fell in the early Asian session to the lowest in a year at 1.3966 levels, where it breached some important support and psychological levels leaving the Euro to face a bearish market. Investments in the Union narrowed where investors fear the worst believing that it would take them a long period to recover once again.

As the European Economies remain weak with expectation of stagnating growth in the current quarter according to the report released yesterday by European Commission, a revision took place for the yearly output from 1.7% to 1.3%, as this released report ensured fears from a weak growth in the upcoming readings. But with the lack of major fundamentals from the Zone and the United Kingdom, this will allow the dollar bulls to trade freely pressuring currency's to head down south.

A whole bunch of fundamentals will be released later today when the Americans join the markets starting with the July Trade Balance, the surge in oil prices in July reaching an all time high above $1.47 per barrel levels had curbed the exports in addition to the rising US dollar from 103 levels against the Japanese Yen to 108 levels, the deficit balance widened to 58.0 billion according to the median estimate.

Yet analysts' predictions vary between the highest forecast a deficit of 54.6 billion as they believe at that time American goods were considered to be cheapest between all other competitors in markets especially after the Europeans couldn't get win the competition from the rapid appreciation to the Euro prices; while the lowest forecast fall is at a widening deficit to 62.5 billion, but personally I believe that those levels are a bit overstated because with the above factors I mentioned I don't think a widening deficit will reach those levels.

Other data are to be released, the labor department will release the import prices index reading, expectation points out that prices will drop in August supported by the easing oil prices, the monthly prices might fall 1.8% from the previous rise of 1.7%, in addition to the yearly price easing slightly to 20.2% from the previous 21.6%. Logically prices should ease in August because the main booster of prices which is oil cooled down to take prices to lower levels.

Also the department will release its weekly jobless report, indicating that individuals filling for unemployment insurance eased to 440 thousand from the previous 444 thousand claims; yet the continuing claims might incline to 3460 thousand from the previous 3435 thousand claims in the past week.

Today's reading will be watched closely especially the trade balance reading, cause markets are curious to see if exports will continue playing the major role in boosting the overall Americans growth.

Crown Forex

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