As the USA is slowing down, all the hopes are about stimulation. | IFCM
IFC Markets Online CFD Broker

As the USA is slowing down, all the hopes are about stimulation. - 29.8.2011

USD The summit it the Jackson Hall was the main event on Friday and it strongly influenced the behavior of currency pairs. The first reaction to the speech of Bernanke was sale of the dollar, but the brevity and fogginess of the Fed Chairman speech has chastened risk-takers and returned to the U. S. currency its earlier positions. After some time market players realized that Bernanke still supports an additional stimulation of the economy, and the decision is delayed till September. It is impossible to escape the weak economic data and Friday’s GDP report is the confirmation of this. The economic growth in the USA was revised into fall against the initial value of the second quarter jamming the 6 month restoration that has started in the middle of 2009. The GDP has grown by 1% y / y in Q2 vs. the initial value of 1. 3%, as it was reflected in the data published today. The revision to decrease is associated with a slowing down the growth resourses and exports. In addition, U. S. consumer confidence has reached its minimum in November 2008, meaning that growth in consumer spending can not be expected. The final index of consumer sentiment of the Michigan University / Thomson Reuters has fallen to its minimum 55. 7 this month from 63. 7 in July. Nevertheless, the index was revised to increase from the previous value - 54. 9. The additional stimulation is just a matter of time. EUR The EUR tried to leave its trading range vs. the USD on Monday reaching for its maximum - 1.4548, but the European traders have not supported the movement. We continue counting on the fact that the results of the summit in Jackson Hole will help the pair escape from the long range. Inflationary pressure in the Euro area is still kept (prices in German import are the confirmation of this). So it is not necessary yet to worry about lowering in interest rates. JPY The Japanese Yen got stronger against its main opponents except AUD and NZD. Even though USD/JPY strengthened during Bernanke’s speech testing its key level – 77,00, the pair was quickly reversed and and finished the day with significant losses. Nevertheless, the price hike of the JPY continues to be the main problem of the Japanese economy that is still weak after the catastrophe in March. Recently the former deputy of BOJ - Muto noted that the Central Bank should consider additional purchases of assets to ease the JPY, as the currensy interventions have only a temporary effect. That is the point. We will see reports of retail sales, industrial production, and PMI in the manufacturing industry this week.
IFCM Trading Academy - New era in Forex education
Pass Your Course:
  • Get Certificate
trading academy

See Also

image
Follow the Market with Our Live Tools and Calendars
Close support
Call to Skype Call to WhatsApp Call to telegram Call Back Call to messenger