The USD continued to trade in a rather well defined range on Thursday. The U.S. released weekly Unemployment Claims that came in a little better than expected, but quarterly earnings from corporate America disappointed investors and this put Wall Street into in a decline. Today the Advance GDP will come from the U.S. and the anticipated mark is a gain of 2.5%, it will be followed by the Chicago PMI and the Revised Consumer Sentiment reading from the University of Michigan. Data from the States the past couple of months has begun to turn lackluster and because of this, talk about another statistical downturn is prevalent.
While politicians try to speak positively about the prospects for the American recovery, unfortunately there are enough weak signs that point to an unimproved job market, consumers who still are watching their purse strings carefully, and housing prices that seem stuck. Today’s Advance GDP could prove a lynchpin with any surprises and investors who have been watching the broad markets and standing in place unwilling to commit to long term positions will likely not change their stance without a strong push. The currency markets and equities appear to be the realm of short term participants and with another pure month of summer to go may continue to gain strength. Data from Europe yesterday proved rather tame, meeting its rather lackluster estimates. Today German Retail Sales will be published and are expecting to be unchanged from the previous month. The U.K. did show once again that while the Sterling is continuing to perform well, that investors fears about economic conditions do have its reasons. The Nationwide HPI underperformed and the GkK Consumer Confidence fell to minus -22. Having said the above both the EUR and GBP have been strong as of late and reflect the ability of traders to digest bad news such as the Sovereign Debt worries and put this behind them, and take advantage of rather disconcerting data from the States at least in the short term.
The JPY picked up a large amount of ground against the USD yesterday and finds itself knocking at the door of its strongest values. Bourses around Asian took hits following their major counterparts as they were collectively punished on the heels of poor sentiment being generated from afar. The commodity markets continue to turn in mixed results and Gold continues to be under pressure as the USD continues to wobble also. This is not a typical correlation, but one that has been evident the past few months. Perhaps showing that Gold was finding backers under the weight of investors who were worried the EUR was about to fall completely off the table. The AUD has range traded too for most of this week, reflecting the values not only in the commodities, but its mixed sentiment due to the rather poor economic outlooks coming from the States and Europe collectively. The Australian economy has certainly outperformed many of the major economies the past year and half, but it does have worries if exports are called into question.
Written by bforex.com
