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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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And again Jobless claims…Rate dynamics and recommendations on USD-CHF and USD-CAD
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10:08 08/05/2004
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And again Jobless claims…Rate dynamics and recommendations on USD-CHF and USD-CAD
Market activity is rather low, as it is summer vacations period now and because investors are expecting key data of the week – Friday Labor market report for July that is to be published in the U.S. Let us remind that the report is of extreme importance prior to the regular meeting of the Federal Open Market Committee of FRS U.S., which is scheduled for August 10.
On the background of all those expectations, factors that put pressure on the dollar get stronger. Thus, after militant attacks on oil wells that were conducted in Iraq, oil price reached $44.34 a barrel in New York, the record one since the year 1983. However, later on the price dropped lower than $43 a barrel. Besides, OPEC President Purnomo Yusgiantoro said on Tuesday the producers\\\' cartel had no extra oil to immediately supply the world market to bring down prices.
Let us also remind that ISM services index in the U.S. in July made up 64,8, whereas forecasted 63,0 and the previous value equaled 59,9. That rendered immediate support to American currency.
But note that such ISM index component, as employment, dropped from 57.4 to 50.0, which was the most significant fall of the given component and brought in close to the key level of 50. Going lower than that will strengthen negative sentiments on the dollar.
Factory orders index in the U.S. in June proved to be positive for the dollar, as it came out as +0.7%. The forecast was +0.7%, previous value was revised from -0.3% to +0.4%. Durable goods orders in the U.S. in June was revised aside increase from +0.7% to +0.9%.
In London, regular two-day meeting of the Monetary Policy Committee of the Bank of England is to finish today. The results of the meeting will e announced at 11:00 GMT, August 5. The majority of economists forecast that Repo rate will be raised 0,25% to 4,75%. This is expected to be the last hike this year.
The results of the meeting of the Board of Governors of ECB will be released at 11:45 GMT. Interest rates are likely to remain unchanged in Europe (12).
Jobless claims in the U.S. in the week ended July 31 are to be made public at 12:30 GMT. The forecast here is 340 000, previous value equaled 345 000.
Recommendations: we are still expecting downward dollar rate correction. 1,2600 on USD-CHF might become the level of that correction. Though, negative on Labor market can easily push the rate way down to, for example, 1,2450. For now, we recommend being ready to open strategy longs on USD from 1,2600. USD-CAD rate looks heavy and seems to be far from the near rise. However, positive data can change the situation.
Recommendations: we are still expecting downward dollar rate correction. 1,2600 on USD-CHF might become the level of that correction. Though, negative on Labor market can easily push the rate way down to, for example, 1,2450. For now, we recommend being ready to open strategy longs on USD from 1,2600. USD-CAD rate looks heavy and seems to be far from the near rise. However, positive data can change the situation.
The forecast was created by trans1.
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