USD – Opportunistic Ranges In Cautious Markets

The currency and equity markets traded in rather consolidated fashion on Tuesday. Market participants continue to exhibit nervousness and there has been little in the way of economic data so far this week in order to push them off of the fence. The USD traded in range against the EUR and GBP as traders displayed little conviction. Wednesday’s calendar will be rather light for data as Crude Oil Inventories and Wholesale Inventories numbers come forth, along with Beige Book figures. Ben Bernanke may find himself the focus for many in what may prove to be an otherwise quiet day of news. Tomorrow Trade Balance, weekly Unemployment Claims, and the Federal Budget Balance will all be reported and if today proves to be another tentative session, it could be Thursday that sees data cause an impact. Wrapping up the week on Friday will be Retail Sales and Consumer Sentiment statistics.

Thus, investors who last week reacted badly to a poor Non Farm Employment Change number may be holding their breath as they wait to see where American consumers are lining up (or not lining up as may be the case). The GDP from the States relies heavily upon the American pocketbook – as do many export nations – and unless people begin to spend more there stands the chance that stagnation will become the byword instead of recovery. Until powerhouse economic data is produced from the jobless front it remains doubtful that the Retail or Consumer numbers will astonish anybody. The additional problem now exist – which is still being played down by American officials – that if the European financial crisis truly ruptures and causes contagion, that international economies including the States are likely going to find themselves effected by the spillover and it will not be in a positive manner. The USD finds itself holding serve and traders in the meantime may find some opportunistic ranges.

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