Dollar Down Before Consumer And Housing Reports

Daily Forex Fundamentals | Written by Finotec Group | Oct 17 08 09:39 GMT |

The dollar was down against the euro on Friday as fears regarding the global financial crisis diminished slightly. It was down also against the pound on the back of speculation of a further Federal Reserve interest rate cut. However, investors will be keeping an eye on today's U.S. consumer and housing reports that could well reinforce that the economy in the states is pushing towards a recession.

'The reports may reinforce worries that the U.S. is in a recession and concerns linger over its financial markets,' said the general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd. 'the dollar is still a sell.'

The pound was up against the dollar and the euro approaching weekly gains against both currency pairs, on sentiment that the proposed UK bank bailout and interest rate cuts will help revive the economy. Sterling was up against 14 of 16 most actively traded currencies. Analysts at RBC Capital Markets recommend to buy the British currency against the euro on sentiment that the BoE will slash interest rates at a faster rate than the European Central Bank.

Today we have key data releases in the U.S. At 12:30pm GMT building permits for the month of September will be released. Expectations are that there was a drop from 860k to 840k. At 1.55pm GMT the University of Michigan will be releasing its monthly Consumer Sentiment statement. This survey of 500 consumers is expected to show continued pessimism about the US economy.
Economic Calendar

Time (GMT)	E Event	Currency	Period	Previous	Previous	Significance
12:30	Building Permits	USD	Sep	0.85M		***
12:30	Housing Starts	USD	Sep	0.90M		**
09:00	Trade Balance	EUR	Aug	-6.4B		**

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