Today’s US Dollar Trading
• USD whipsaws after early sideways start
• US data unfriendly to the Greenback
• As expected, FOMC holds rates firm

Overnight Preview
• USD likely to continue to weaken
• EURO above resistance

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Final GDP q/q
• 8:30am USD Unemployment Claims
• 8:30am USD Final GDP Price Index q/q
• 10:00am USD Existing Home Sales
• 10:35am USD Natural Gas Storage

Today’s US Dollar Trading
• USD two-way all day
• Starts on the offensive—ends on the defensive
• GBP and EURO at technical resistance.

Overnight Preview
• Look for a quiet evening ahead of FOMC

Looking Ahead
All times EASTERN (-5 GMT)
• 8:30am USD Core Durable Goods Orders m/m
• 8:30am USD Durable Goods Orders m/m
• 10:00am USD New Home Sales
• 10:30am USD Crude Oil Inventories
• 2:15pm USD FOMC Statement
• 2:15pm USD Federal Funds Rate

Today’s US Dollar Trading
• USD holds gains but flows light
• S/R holds as expected
• Speculation that the Fed will not move rates capping the USD

Overnight Preview
• Consolidation likely
• Two-way action with a downside bias

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 9:00am USD National HPI Composite-20
• 10:00am USD Consumer Confidence
• 10:00am USD House Price Index m/m
• 10:00am USD Richmond Fed Index

Overnight Asia/Europe
• USD firms a bit
• Technical trade and stops drive GBP and EURO
• Volumes moderate

Today’s Economic Reports
All times EASTERN (-5 GMT)
• None for the day
Expect technical trade for the most part

Looking Ahead
All times EASTERN (-5 GMT)
• 9:00am USD National HPI Composite-20
• 10:00am USD Consumer Confidence
• 10:00am USD House Price Index m/m
• 10:00am USD Richmond Fed Index

The USD saw a significant swing in momentum last week as it saw losses versus most of its currency rivals. The dollar was affected in large part due to the rekindling of economic worries in the US that has put the potential Federal Reserve (Fed) rate hike in jeopardy. Fed Chairman Ben Bernanke and his constituents have been adamant lately about the intention of raising rates if inflationary behavior continued. The oft traded EUR/USD pair saw its biggest weekly jump in over 3 months, after the US currency previously spent weeks recovering versus the very same EUR.

Yesterday the greenback saw rising trends against most of its major currency rivals. During the prior trading session the EUR\USD dropped 98 points from 1.5573 down do 1.5475. In addition the USD experienced bullish behavior against the JPY and the CHF. Yesterday was packed with data for the U.S economy. The most important indicator was the Unemployment Claims, which showed that the U.S weekly jobless claims rose by 5,000 to 381,000 individuals filing new claims for unemployment. The Philadelphia Fed Manufacturing Index, which measures the general business conditions of manufacturers in the Philadelphia Federal Reserve district, fell to -17.1 in June from -15.6 in May. This figure is much lower than the -10.0 reading that analysts expected. Later on in the day Treasury Secretary Henry Paulson spoke in Washington DC. In his speech, Secretary Paulson stated that energy prices could extend economic slowdown, stating that "the headwind of high energy prices has potential to lengthen the economic slowdown". The last event to come out yesterday was a speech delivered by Federal Reserve Governor Donald Kohn. Governor Kohn articulated his belief "that primary dealers are strengthening liquidity and capital positions to better protect themselves against the extreme events", thus this achievement will prevent the risk of widespread financial market deterioration in the future.

Today’s US Dollar Trading
• USD two-way overnight
• Weakens in NY trade
• All eyes on US data tomorrow

Overnight Preview
• Look for the USD to consolidate with a lower tone

Looking Ahead to Thursday
All times EASTERN (-5 GMT)
• 8:30am USD Unemployment Claims
• 10:00am USD Philadelphia Fed Manufacturing Index
• 10:00am USD Leading Index m/m
• 10:35am USD Natural Gas Storage
• 2:30pm USD FOMC Member Kohn Speaks

Today’s US Dollar Trading
• Overseas data USD negative
• USD rally falters in US trade
• Volumes lighter

Overnight Preview
• USD likely to remain technical in nature
• Look for more downside pressure

Looking Ahead to Wednesday
All times EASTERN (-5 GMT)
• 10:35am USD Crude Oil Inventories

Today’s US Dollar Trading
• USD retreats from Friday’s gain
• US data benign—points to more losses
• Speculation grows that USD will fall
 
Overnight Preview
• Look for the USD to consolidate
• Expect two-way action

Looking Ahead to Tuesday
All times EASTERN (-5 GMT)
• 8:30am USD Housing Starts
• 8:30am USD PPI m/m
• 8:30am USD Building Permits
• 8:30am USD Core PPI m/m
• 8:30am USD Current Account
• 9:15am USD Capacity Utilization Rate

Yesterday the EUR/USD par experienced a highly volatile trading session and ultimately closed at 1.5466. This closing price represented almost a 90 pip loss for the Dollar versus the Euro. Early morning trading in Asia added another 100 pip to the EUR/USD pair as it raced passed 1.55. In addition the greenback depreciated versus the rest of its major currency rivals yesterday as well. A possible explanation for the dollar's decline can be found in yesterday's issued reports on the economy. The Empire State Business Conditions Index came in much lower than expected. The index which measures the general business conditions of manufacturers in New York State came in at -8.7, nearly 8 points lower than initially forecasted. The NAHB Housing Market Index surprised many investors with a slight drop from the forecasted reading. Economists were surprised because they thought homebuilders had begun to recover from the subprime credit crisis that has ravaged the US economy. Also yesterday Federal Reserve (Fed) Chairman Ben Bernanke spoke in front of the Senate Finance Committee Health Reform Summit, where he addressed the poor state of the US HealthCare system. Surprisingly, Bernanke did not touch upon the state of the US economy or the monetary policy. On a positive note, TIC Net Long-Term Transactions were released at $115.1B. This event which measures the monthly difference in cross-border foreign and domestic purchases of long-term securities, returned much higher than the expected mark of $63.0B.