NEWS / Foreign Exchange

Flurry of economic numbers set to direct dollar, Euro, ahead of Bernanke comments

August 24th - The economic calendar is picking up momentum marginally although tomorrow??™s speech by Ben Bernanke on inflation is continuing to dominate many traders??™ thoughts. Yesterday??™s disappointing existing home sales data didn??™t perhaps have the effect many would have envisaged on the greenback after the dollar quickly bounced back off session lows although further numbers today ??“ including weekly jobless claims, durable goods orders and the new home sales ??“ will likely offer some more sustainable direction, especially if we see a degree of consensus emerging amongst this data. The Eurozone IFO numbers can however also expect to be under scrutiny after Tuesday??™s notably lower than expected ZEW reading. Again although the Euro seems poised for a jump higher ??“ we??™ve seen repeated moves towards the 2006 highs just under 1.3000 ??“ so far this has simply been too big a stretch for traders to take. The ECB is however expected to hike rates again soon so any suggestion that this need is becoming more pressing ??“ especially if combined with a not-too-hawkish statement from the Fed on Friday - could see the common currency find the required support.

Andy Cottrill