A day of range trading was experienced on Wednesday as the markets tried to interpret rather disappointing data and news from the States. Core Durable Goods turned in a disappointing drop of minus -0.6% compared to the estimated gain of 0.6%. Also the Federal Reserve’s Beige Book report did not provide a glowing outlook on economy. Today weekly Unemployment Claims figures will make their way forth and a number of 457K is anticipated, this would be a slight improvement on last week’s result of 464K. The jobless problem in the U.S. remains a concern to investors who fear that without an improvement in employment that the housing and consumer sectors will remain weak. Yesterday’s poor Durable Goods numbers and tepid Beige Book report are clear signs that the American economy remains sluggish.
Tomorrow the Advance GDP will be brought forth and a gain of 2.5% is the forecast. It will be of keen interest to investors to see if the GDP number meets expectation or underperforms. A double dip recession has been a talking point for the U.S. economy for nearly a month based upon the lack of improvement in data. Investors have been said to be standing on the sidelines for a couple of months as they have taken a wait and see approach, thus making the broad markets a domain for traders who have been making their daily bread on the back of speculation and ranges. The USD after having trended very well against the EUR and GBP for over half a year has suddenly ran into a wall of resistance. The question is if this is a ‘short term’ move or a ‘sea change’ in fundamental movement. With so many questions hovering over international economies it is a safe wager to say what is happening to the USD is a short term movement, and that its safe haven status may find renewed interest down the road.
Written by bforex.com
