Stockpair traders should keep an eye on these events today:
|AUD||RBA Governor Stevens|
|NZD||CPI (QoQ) (Q2)|
|CNY||HSBC Manufacturing PMI|
|EUR||German Manufacturing PMI|
|EUR||German Services PMI (Oct)|
|EUR||Manufacturing PMI (Oct)|
|EUR||Services PMI (Oct)|
|GBP||BBA Mortgage Approvals|
|GBP||Retail Sales (MoM) (Sep)|
|GBP||CBI Industrial Trends Orders|
|USD||Initial Jobless Claims|
US Dollar Continues To Gain Momentum
October 23, 2014
The US dollar gained its dominance today as traders dumped the euro on worries about ECB stimulus and monetary policy changes. The euro fell close to 60 points on Wednesday to trade at 1.2660. The US is doing better than it has in years. Jobs growth is up, unemployment is down, the manufacturing sector carries the rest of the world on its shoulders and the World Economic Forum named the U.S. the third-most competitive nation, our highest ranking since before the recession. Although our currency has softened recently, it has put pressure on two commodities that we consider our lifeblood at U.S. Global Investors: gold and oil.
It’s worth noting that we’ve been here before. In October 2011, a similar correction occurred in energy, commodities and resources stocks based on European and Chinese growth fears. The US dollar gained 0.4% today to forcing dollar denominated commodities to trade in the red. Gold prices pulled back with the yellow metal — often viewed as an inflation hedge — making a leg down after a report showed inflation remains in check.
The metal is pulling back after rising on Tuesday to levels last seen in early September, and some analysts suggest it’s just catching its breath after a solid advance.
A Labor Department report on Wednesday indicated that U.S. consumer prices rose slightly last month owing to higher costs for food and housing, but inflationary pressures continue to be held in check by falling energy expenses. The consumer price index climbed a seasonally-adjusted 0.1% in September, meeting the consensus forecast from economists. At this writing gold is trading at 1243.60 down over $8.00 on the day. Crude oil reversed its up movement earlier today to fall 4 cents to trade at 82.45. On Thursday there is a rash of economic data due throughout the day but German PMI data could send the euro tumbling while retail sales in the UK are pegged to reach expectations but there is a possibility that it might miss sending the pound on a downward spiral.