Dollar Continue To Bull Through Resistance...
The dollar yet rise for another day while tension in Middle East has yet to subside and fundamentals are showing that the Fed might signal for a hike in interest rates in early August. The German ZEW Economic Sentiment Survey fell 15.1 from 37.8 in June. Economists expected a decline to 35, the median of 44 estimates in a Bloomberg News survey showed. The measure's fallen every month since it reached a two-year high in January. This fall is heavily dependant due to high oil price that is ruining the investor's confidence despite the strong economic growth.
For the dollar, Producer Price Index for the month of June rises to 0.5% vs 0.3% and Core-PPI Up 0.2% matching consensus. Prices paid to U.S. producers rose at a faster rate in June on higher costs for food, energy and automobiles, adding to the risk that inflation may accelerate. The 0.5 percent increase in producer prices followed a 0.2 percent rise in May, the Labor Department said today in Washington. The core rate, which excludes food and energy, rose 0.2 percent and was up 1.9 percent from the same month last year. While another dollar supporting data, overseas investors purchased a net 69.6 billion dollars of U.S. securities in May, up by 36 percent from the foreign net purchases in April, the Treasury Department reported on Tuesday. The department also said that the foreign net purchases of U.S. securities in April totaled 51.1 billion dollars, compared with the previously reported figure of 46.7 billion dollars.
As for the CPI and core-CPI which will key inflation indicator that will mostly determine on whether the Fed will either raise interest rates early next month or not. From the current view of economic data release in the US, there's still chances that the Fed might choose to pause under certain circumstances. I'll be expecting higher than consensus CPI but a lower core-CPI versus the previous month mainly because higher oil prices are just making everything in life more expensive. Therefore, the situation again stands and up to Fed Chairman Ben Bernanke to make a tough decision on whether to continue raise interest rates or not. FXCM Kathy Lien said that there are clear signs that the economy is beginning to weaken and should the Fed persist with their interest rate hikes, they will at the same time raise the possibility of a recession. Bernanke has quite a task before him and one that we can only hope he handles well.
For my trades, I've accidentally triggered my stops for USD/CHF at a price where I shouldn't have since the USD/CHF has again reached a new higher ground. I've closed all of my USD/CHF trades and took 1 gold trade. Hopefully I'm on the right track of seeing gold at this price is an acceptable long term trade unless I get a margin call. I'm expecting USD to continue it's bullishness today since speculations have been spreading around that Bernanke might be signalling the interest rate hike tomorrow at 14:00 GMT or 10:00 EST. For me, I'm expecting him to be slightly dovish if he considers that the core-cpi and core-ppi is the main key of inflation level without the food and energy prices.
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Existing Trades
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Long EUR/USD @ 1.2750
Long EUR/USD @ 1.2820
Long EUR/USD @ 1.2960
Long XAU/USD @ 641.80
Gold has extended it's losses on the speculation of U.S. Will Raise Interest Rates to Curb Inflation. Gold in New York tumbled 3.4 percent to close at a one-week low on Tuesday, as speculative selling sparked mainly by a stronger dollar slammed the market below $630 an ounce. Gold is expecting to trade in range trading until the CPI data is release and after Ben Bernanke's speech to determine a direction.
For the dollar, Producer Price Index for the month of June rises to 0.5% vs 0.3% and Core-PPI Up 0.2% matching consensus. Prices paid to U.S. producers rose at a faster rate in June on higher costs for food, energy and automobiles, adding to the risk that inflation may accelerate. The 0.5 percent increase in producer prices followed a 0.2 percent rise in May, the Labor Department said today in Washington. The core rate, which excludes food and energy, rose 0.2 percent and was up 1.9 percent from the same month last year. While another dollar supporting data, overseas investors purchased a net 69.6 billion dollars of U.S. securities in May, up by 36 percent from the foreign net purchases in April, the Treasury Department reported on Tuesday. The department also said that the foreign net purchases of U.S. securities in April totaled 51.1 billion dollars, compared with the previously reported figure of 46.7 billion dollars.
As for the CPI and core-CPI which will key inflation indicator that will mostly determine on whether the Fed will either raise interest rates early next month or not. From the current view of economic data release in the US, there's still chances that the Fed might choose to pause under certain circumstances. I'll be expecting higher than consensus CPI but a lower core-CPI versus the previous month mainly because higher oil prices are just making everything in life more expensive. Therefore, the situation again stands and up to Fed Chairman Ben Bernanke to make a tough decision on whether to continue raise interest rates or not. FXCM Kathy Lien said that there are clear signs that the economy is beginning to weaken and should the Fed persist with their interest rate hikes, they will at the same time raise the possibility of a recession. Bernanke has quite a task before him and one that we can only hope he handles well.
For my trades, I've accidentally triggered my stops for USD/CHF at a price where I shouldn't have since the USD/CHF has again reached a new higher ground. I've closed all of my USD/CHF trades and took 1 gold trade. Hopefully I'm on the right track of seeing gold at this price is an acceptable long term trade unless I get a margin call. I'm expecting USD to continue it's bullishness today since speculations have been spreading around that Bernanke might be signalling the interest rate hike tomorrow at 14:00 GMT or 10:00 EST. For me, I'm expecting him to be slightly dovish if he considers that the core-cpi and core-ppi is the main key of inflation level without the food and energy prices.
============
Existing Trades
============
Long EUR/USD @ 1.2750
Long EUR/USD @ 1.2820
Long EUR/USD @ 1.2960
Long XAU/USD @ 641.80
Gold has extended it's losses on the speculation of U.S. Will Raise Interest Rates to Curb Inflation. Gold in New York tumbled 3.4 percent to close at a one-week low on Tuesday, as speculative selling sparked mainly by a stronger dollar slammed the market below $630 an ounce. Gold is expecting to trade in range trading until the CPI data is release and after Ben Bernanke's speech to determine a direction.
posted by 4xTrader at
11:22 PM
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