US Housing Data Still Weakening

Daily Forex Fundamentals | Written by Easy Forex | Mar 04 09 03:14 GMT |

U.S. Dollar Trading (USD) weakened in Asia as traders covered shorts and stocks rallied off lows. The losses proved short lived though as US economic data continued to surprise to the downside. January Pending Home Sales fell -7.7% vs. -3% forecast. Fed Chief Bernanke also spoke to senators and painted a bleak picture of the US banking industry. Crude Oil closed up $1.50 ending the New York session at $41.65 per barrel. In US share markets, the Nasdaq was down -1.84 points or -0.15% whilst the Dow Jones fell -37 points or -0.55%. Looking ahead, January Non-Manufacturing for February expected at 41 vs. 42.9. Also released, February ADP National Employment expected at -610K vs. -522k previously. The Euro (EUR) bounced back above 1.2600 level as EUR/JPY buying emerged on the back of AUD/JPY buying after the RBA meeting. Gains topped out in Europe and fell back as US stocks reversed early positive sentiment. German January WPI fell -0.4% vs. -3% forecast. Overall the EUR/USD traded with a low of 1.2524 and a high of 1.2676 before closing the day at 1.2560. Looking ahead, February PMI forecast at 38.9 vs. 42.2. The Japanese Yen (JPY) broke back above 98 Yen as the market shrugged off weak stocks and resumed its march upward. AUD/JPY was especially buoyant and helped to pull all the crosses higher. The deterioration of the Japanese Export market is hurting Yen sentiment. Overall the USDJPY traded with a low of 97.05 and a high of 98.58 before closing the day around 98.30 in the New York session. The Sterling (GBP) tested 1.400 again as reports emerged that the BOE was considering Quantitative Easing as early as this month. The rebound from Heavy GBP/JPY buying was capped in Europe as February Construction PMI fell to a record low 27.8. The market is pricing in a 0.5% rate cut. Overall the GBP/USD traded with a low of 1.3987 and a high of 1.4157 before closing the day at 1.4040 in the New York session. Looking ahead, PMI Services forecast at 41.8 vs. 42.5 previously. The Australian Dollar (AUD) jumped off 0.6300 as retail sales beat forecasts at 0.2% in January vs. -0.5% previously. With stocks rallying off lows in Asia the upside came back into focus ahead of the RBA meeting. The RBA held at 3.25% in a surprise to many analysts and caused the AUD to rally past 0.6400 and test 0.6450 in the European session. Weak US stocks took the shine off Aussie and is now awaiting the Q4 GDP Wednesday . Overall the AUD/USD traded with a low of 0.6295 and a high of 0.6462 before closing the US session at 0.6380. Looking ahead, Q4 GDP forecast at 0.2% vs. 0.1% previously. UPDATE Q4 shocks market -0.5% Gold (XAU) tested the downside but fell short of the $900 target as ETF demand continued to slump. Overall trading with a low of USD$906 and high of USD$932 before ending the New York session at USD$916 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products