Reply #2: daily dollar watch [View All]

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 89.96 Change +0.17 (+0.19%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1091000518-9e32d306-13504

Forex - US remains near multi-week highs after US consumer confidence data

LONDON (AFX) - The dollar remained near multi-week highs after yesterday's extremely strong US consumer confidence data cemented expectations of a self-sustaining recovery in the world's largest economy

The Conference Board said consumers grew increasingly confident in July on the back of an improved jobs outlook, despite a weaker than anticipated payrolls report for June

Its main index jumped to a two-year high of 106.1 in July from a revised 102.8 in June and expectations of a flat reading of about 102. Sabrina Jacobs, currency strategist at Dresdner Kleinwort Wasserstein, said the scale of the market's response to the data suggested it had become "overly pessimistic" on the prospects for the US economy and the dollar in the wake of June's disappointing payrolls report

"This week's price action reflects a rebalancing of those views and we believe there is now more two way risk in the market than there was a few weeks ago," she added

The data added credibility to US Federal Reserve chairman Alan Greenspan's assessment last week that the recent batch of weak economic data was merely a blip

Greenspan's optimistic testimony boosted expectations that the central bank will carry on raising the cost of borrowing by a quarter point at its upcoming rate setting meetings, the next one of which takes place on Aug 5

Though the Fed switched gears last month by raising short-term interest rates by a quarter point from 46-year lows of 1.00 pct in a first step to head off inflation, concern about the pace of the US recovery heightened expectations that upcoming rate increases would not be aggressive

...more...

Although the next article was published July 2, I looked to see if the BoJ had made any changes in their policy of intervention. Here is what was put out then:

http://www.dailytimes.com.pk/default.asp?page=story_3-7-2004_pg5_19

On foreign exchange, he said Japan stood by the statement the Group of Seven industrialised nations issued after a meeting in Boca Raton, Florida in February that excessive volatility in currency rates was undesirable, while also calling for exchange rate flexibility.

Japan sold 20 trillion yen last year and another 14 trillion in January- March to tame an export-threatening rise in its currency, raising the hackles of some of its trading partners, but has stayed away from the currency market since.

“There is no change to that view and we will continue to monitor the market and deal with matters accordingly,” he said, declining to comment if that meant Japan would resume the controversial intervention policy if the need arose.

The Durable Orders report is due out 8:30 EST - the Beige Book is due at 2:00 EST.

Have a Great Day Marketeers!

(edited to fix html)