Daily FX Profit Signal September 1st, 2009

Summary: A bit more price consolidation during the last day of the month. We saw the Dollar gain strength overnight, only to lose it late London session into the U.S. close. Equities are coming down but it’s still too early to say if this is anything more than position readjustments. We should start to see move volume along with volatility starting today through Friday. Keep an eye on Reserve Bank of Australia’s interest rate announcement, German and E.U. unemployment data, followed by UK Halifax and manufacturing PMI, and the ISM manufacturing PMI along with Pending Home Sales out of the US. Still, we’re waiting for the market to pick up even more steam following Non-Farm Payrolls and Labor Day holiday weekend.  

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Free Daily Forex Video September 1, 2009

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Weekly Forex Report

August 29, 2009

The rally in equities continued last week, although at this point it might need some resuscitation. The meager gains posted by U.S. stocks probably had more than a few investors feeling like it was down week instead of a positive week. Then again, it is fair to say that equity investors have become quite spoiled by the recent bullish tenor of most global equity markets and a week like this one past probably was not enough to send the bulls cheering into the weekend.

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Economic Calendar 31 August- 4 September

 

DATE	TIME	CRNCY	EVENT	ACTUAL	FORECAST	PREVIOUS
Mon	GMT	CAD	CAD Quarterly Gross Domestic Product Annualized (2Q)	-3.40%	-3.00%	-6.1% (R-)
31-Aug	12:30 PM
Tue	GMT	AUD	AUD Reserve Bank of Australia Interest Rate Decision	3.00%	3.00%	3.00%
1-Sep	4:30 AM
	GMT	CHF	CHF Gross Domestic Product (YoY) (2Q)	-2.00%	-3.00%	-2.2% (R+)
	5:45 AM
	GMT	CHF	CHF Gross Domestic Product (QoQ) (2Q)	-0.30%	-1.00%	-0.9% (R-)
	5:45 AM
	GMT	USD	USD ISM Manufacturing (AUG)	52.9	50.5	48.9
	14:00 PM
Wed	GMT	AUD	AUD Gross Domestic Product (QoQ) (2Q)	0.6%	0.60%	0.40%
2-Sep	1:30 AM
	GMT	AUD	AUD Gross Domestic Product (YoY) (2Q)	0.6%	0.70%	0.40%
	1:30 AM
	GMT	EUR	EUR Euro-Zone Gross Domestic Product s.a. (QoQ) (2Q P)	0.1%	-0.10%	-0.10%
	9:00 AM
	GMT	EUR	EUR Euro-Zone Gross Domestic Product s.a. (YoY) (2Q P)	-4.7%	-4.70%	-4.60%
	9:00 AM
Thu	GMT	EUR	EUR European Central Bank Interest Rate Decision	1.00%	1.00%	1.00%
3-Sep	11:45 AM
Fri	GMT	CAD	CAD Net Change in Employment (AUG)	27.1K	-20.0K	-44.5K
4-Sep	11:00 AM
	GMT	USD	USD Unemployment Rate (AUG)	9.7%	9.50%	9.40%
	12:30 PM
	GMT	USD	USD Change in Non-Farm Payrolls (AUG)		-225K	-247K
	12:30 PM

Interest Rate Decisions
Interest rates decisions news flashes provide guidelines for the overnight lending rate which are bound to have an effect on businesses and consumers alike. An upward surge in the cost of living - inflation and a runaway economy is slowed by hiking the interest rates. Lowering interest rates rejuvenates an economy from the doldrums by enabling consumers to get easy credit thus increasing consumption. Currencies strengthen when interest rates move north and weaken when the rates move southwards.

Change in Employment
Change in employment index compares the employment to the unemployment rates in a certain economy. The index which is calculated by economist is used to predict future spending and consumption pertains which are likely to occur due to change of one of the parameters. An economy can either grow or contract depending on which of the two parameters changes.

Consumer Price Index (CPI)
CPI is one of the most reliable parameters used to gauge the extent of inflation on the economy. Every household spends money on some basic commodities and utilities, these items are collectively referred to as “the consumer basket”. By monitoring the changes in price of the consumer basket, economists are able to predict the interest trends. This is largely due to the fact that central bank will more often than not act to tame inflation by raising interest rates and vice versa. The adjustments of interest rates to keep consumer basket within the majorities reach will affect the underlying currency either strengthening or weakening it.

Retail Sales
Retails sales are good pointers of the state of the economy. When the economy is strong and growing, retails sales escalate and consumer are more willing to spend money on luxury goods. Conversely, a shrinking economy is characterized by a reduction in retail sales and cautious spending by consumers.

Trade Balance
This is simply the difference between total exports and total exports between two or more trading nations. Multinational trade involves the export and import of goods and services between nations. When one country exports more than it imports the net effect is a trade surplus. The reverse of this is known as trade deficit. Great emphasis is placed on Trade Balance Report as it shows the movement of goods and services between nations. Countries with trade surplus usually have stronger economies as there have more money in than what there are spending.

Gross Domestic Product - GDP
GDP is derived at by measuring the consumers’ ability to consume / afford goods and services produced within their economy. A strong GDP is a sign of a robust economy which should be checked for inflation - rising interest rates - while a weak GDP could be interpreted to indicate a recession meaning interest rates are likely to head south.

ISM Manufacturing Survey
This survey gauges the mood and sentiments of companies’ top brass, decision and policy makers towards inflation. The centerpiece of this survey is their take on business outlook - new business, production capacities, backlogs, inventory levels and manpower issues. A 50 points scale is used to interpret the findings with value 50 indicating expansion, while values below 50 are a sign of recession.

 

Daily FX Profit Signal August 31st, 2009

Summary: Happy Monday! This week is going to be very important for the markets. There is  a lot of economic data to be released and most importantly, we’ll be looking for the U.S. Non-Farm Payrolls on Friday to lead us into a new trend. We’ll be taking this trading week one day at a time and pay close attention to how the markets react to positive or negative surprises. I have included two articles in today’s notes for our members to read over. The latter is more interesting. It talks about the new ruling party in Japan and the economic changes they will institute. Feel free to leave comments.

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Daily FX Profit Signal August 28th, 2009

Summary: The USD buckled under pressure today as the equity markets staged a strong rally to finish the day in positive territory after the release of better than expected US GDP.  With a bit more data out later today, well see if the bulls can finish the week on a strong note. Next week will be action packed. We will have a lot of important economic data to process so at this point, anything goes. It’s too early to tell if there is any trend in the market right now so we must remain patient. 

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Free Daily Forex Video August 28, 2009

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Daily FX Profit Signal August 27th, 2009

Summary: We continue to see very little reaction to any major news announcement. Again, we have to consider that the last 2 weeks of August are very slow and we may not have much action until beginning of September. We continue to see better than expected economic data out of the G7. We have to ask ourselves if this better data is dependent on the stimuli packages that the governments are providing and if we will continue to see a natural improvement in economics or if we’ll regress into a period of stagflation. We continue to look for opportunities, favoring strength in the USD.

Dear members, our sincere apologies for the delay in yesterday’s video. We had a technical issue while uploading the videos and didn’t get it fixed until a few hours later. We’ve taken steps to ensure that it will not happen again.

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