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11:28 2006/08/07
Dollar was left down last Friday
By Marc Spaelti - ACM Senior Trader |
Yesterdays News and Events:
Last week, a soft payrolls report left the USD down against all of the major currencies as the market bets the FOMC will leaves rate on hold on Tuesday, and possibly for the remainder of the year. Non-farm payrolls for July rose by just 113k versus consensus of 145k and up slightly from 124k in June. Most of Forex traders now no longer expect one final 25 bp rise in the funds rate at this week's FOMC meeting and instead expect the Fed to be on hold for the rest of this year and will be easing rates in 2007.
The ECB's Bini Smaghi said on Sunday that he sees further increases in interest rates in the coming months. He said the ECB's acceleration in rate hikes was due to higher than expected growth in the first half of the first year (look closely Tuesday Euro zone Industrial production June data this week).
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Todays Key Issues:
This morning Swiss Jobless July data came, as expected, unchanged at 3.1%. Today numbers; GB June Industrial Production (prior -0.7% June) and Manufacturing Production (prior 0.9% June). Later today, US June consumer Credit (previous $4.4b May). Looking ahead to this week and unit labor costs are also due on Tuesday ahead of the FOMC decision. The trade balance is due on Wednesday and retail sales on Friday. The worst case scenario for the USD this week clearly would be a dovish Fed, a widening in the trade deficit and a disappointment in retail sales.
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