The USD traded in a consolidated manner on Friday against the EUR and GBP, albeit at the weaker side of its range. Divergence has taken hold within the broad markets and this has occurred as U.S. data continues to underperform, sparking genuine concern that the ‘softening’ numbers may represent a rather ugly future to come. The Consumer Sentiment reading from the University of Michigan produced an outcome of 66.5 compared to the estimate of 74.2, which was already estimated to be weaker than the previous mark. On top of this the CPI data showed that inflation simply is not much of a factor and that deflation remains the real threat. As if that weren’t enough before going into the weekend, corporate earnings from General Electric and a couple of major banks, Citigroup and Bank of America, missed expectations.
Wall Street continues to show weakness and all signs highlight that traders are in control of the marketplace as they move equities according to the whims. There will be no major economic data today, but quarterly earnings reports will keep up their steady diet and investors appear to be waiting for glimmer of hopes from guidance, but ‘good prospects’ have been in relatively short supply. The hard economic data from the States the past few weeks could be called merely a soft patch, but bears who have been underscoring a lack of improvement in the job and housing sector certainly have additional meat to bite into. Important data will start to be published tomorrow as Building Permits and Housing Starts come forth. On Wednesday, Ben Bernanke, the Federal Reserve Chairman, will begin his biannual hearings before Congress and discuss the health of the American economy. Risk adverse trading may predominate today. The USD finds itself being tested as traders seek ‘fair value’ and for those with the stomach to participate, ranges could offer opportunity.
Written by bforex.com
