Last week saw the Dollar make large gains against the majors. It achieved a near 6 month high against the Euro on speculation U.S. consumer spending would keep the world's biggest economy out of recession. Data last week revealed that Euro zone growth slowed in Q2 making future rate hikes unlikely. Tuesday’s economic statement in Germany will give helpful indicators regarding the Euro economy.
Meanwhile Sterling traded near a two year low against the Dollar on the back of weak employment figures and tumbling property prices. Negative UK economic data fuelled speculation that there would be an imminent interest rate cut.The pound fell almost 3 percent against the dollar last week, after Bank of England Governor Marvin King said the housing market faced ``a significant adjustment'' and banks limited loans for homebuyers.
The strong dollar also pushed commodities lower. Last week Gold traded at the lowest level since Oct.26th at $772.98 an ounce. Crude, as high as $147.27 on July 11 has declined 22% as the slowing world economy has curbed demand.
This week the Dollar is showing initial signs of weakness. With US inflation and Government housing results out this week, speculation is growing that the Fed will refrain from raising rates. If these results are confirmed we could well see more downside for the Dollar. Gold, typically an alternative investment against the falling dollar could go higher. In addition, Storm Fay in the Gulf of Mexico is causing a recovery of Crude prices after last week’s dismal showing.
Meanwhile Sterling traded near a two year low against the Dollar on the back of weak employment figures and tumbling property prices. Negative UK economic data fuelled speculation that there would be an imminent interest rate cut.The pound fell almost 3 percent against the dollar last week, after Bank of England Governor Marvin King said the housing market faced ``a significant adjustment'' and banks limited loans for homebuyers.
The strong dollar also pushed commodities lower. Last week Gold traded at the lowest level since Oct.26th at $772.98 an ounce. Crude, as high as $147.27 on July 11 has declined 22% as the slowing world economy has curbed demand.
This week the Dollar is showing initial signs of weakness. With US inflation and Government housing results out this week, speculation is growing that the Fed will refrain from raising rates. If these results are confirmed we could well see more downside for the Dollar. Gold, typically an alternative investment against the falling dollar could go higher. In addition, Storm Fay in the Gulf of Mexico is causing a recovery of Crude prices after last week’s dismal showing.
No comments:
Post a Comment