Forex rebates on every trade - win or lose!

anyone watching cable, bit volatile this am

Hi Gfi,

Not around much for a couple of days.

Still using P&F. It's great for pattern recognition and the more I watch Cable on it the more clues it gives me. I'm still here and profiting after several months so pleased with how things are going.

Good to see you back and good luck with your trading again.

Following on from this week's data, if Bernanke offers comments of substance tomorrow, his views and choice of words are likely to become part of the market's dialogue going into next month's FOMC meeting.


Forex - Dollar firms, shrugs off more weak housing data
AFX


NEW YORK (MNI) - The dollar posted its third successive day of gains Thursday, bucking the notion that weak data from the US housing sector would undermine the greenback this week.

Euro-dollar was trading at 1.2770 usd in afternoon trade Thursday, noticeably below its 1.2832 usd starting level of the U.S. session and at the lower end of a 1.2755/2840 usd US hours trading range.

Similarly dollar-yen was trading around 116.50 yen, modestly above its 116.30 yen starting level and in the upper part of a 116.15/116.57 yen range seen in US hours.

On the day, the dollar saw slight losses early in the session as traders reacted to the release of data on durable goods orders for July where the overall headline of a drop in orders masked a better picture in the details of the report.

But traders were saving their firepower for a report later in the session that would enable the pulse of the US housing market to be taken, but when the report on new home sales was released, showing weaker than expected sales in July, the dollar barely blinked, holding steady and then lifting slowly in subsequent trade.

That reaction mirrored similar action seen Wednesday where the greenback lifted in the wake of data that underscored a slowing of sales of existing homes.

Late last week, and early this week, traders had anticipated that signs of a slowdown in the US housing market could undermine the dollar, the greenback already on the defensive amid speculation that the US Federal Reserve may be done with its multi-year tightening cycle that has lifted the key fed funds target rate from a record low 1 pct to the current 5.25 pct.

But despite the soft economic data, the dollar has posted steady gains versus the euro and yen in recent days, pressing the euro down from Monday highs at 1.2940 usd and dragging dollar-yen up from lows near 115.30 yen.

On the day, euro-dollar found support from bids at 1.2750 usd, a level seen just ahead of a report that showed sentiment among German business held about steady in the month. With some business sentiment indicators from Europe showing falling confidence, concern was that weakness in German business sentiment could undermine plans by the European Central Bank.

While the ECB has declared that it has no 'ex-ante' plans for future rate hikes, remarks by ECB officials have indicated that the bank remains concerned about inflation pressures at a time when the European economy appears to be strengthening.

Such is a recipe for future rate hikes, market participants remind.

US economic data released Thursday:

July durable goods orders fell 2.4 pct but, ex-transportation, orders were up 0.5 pct after subtracting the impact of civilian aircraft orders and motor vehicle orders.

Analysts quickly determined that orders are still strong - non-defense orders are up 3 months in a row, and up in 10 of the last 12 months.

July new home sales fell a steeper-than-expected 4.3 pct to a 1.072 mln seasonally adjusted annual rate, below the median expectation of 1.100 mln and following downward revisions to the sales pace in the prior three months. The supply of new homes rose 1.1 pct to another new record of 568,000 in July, while the months supply rose to 6.5 at the current sales rate, the highest since November 1995. The July median sales price fell 1.6 pct to 230,000 usd, up only 0.3 pct from a year earlier.

Weekly US jobless claims fell 1,000 to 313,000 in the Aug 19 week and were the lowest since July 29 versus 315,000 expected and 305,000 in the July employment survey week.

ta fx fairy from a pleasantly warm spain, have a good week all

goforit: you're welcome, as are all the intrepid FXers. I think our Hil is in Spain this week as well.

MM.

Expect Hils taking it abit more leisurely than I've been. Do you know which part of spain she's gone to? Been helping a friend set up for a concreting job over the wkend that he's doing next week up on the campo. It only got upto 33c today(36 yesterday), we unloaded over a ton of cement about 3pm, pleased he didn't have room for the other ton because I was F....D! Certainly lost a few lbs until we had lunch!

Thanks Dezza :)

Don't you just love the name Swonk ...


No consensus on Fed's next move on rates
AFX


JACKSON, Wyo. (AFX) - After two-plus years, is the pain from the long march of higher interest rates over for good? Borrowers finally got a reprieve this month when the Federal Reserve decided to halt a campaign that produced the longest stretch of rate increases in recent history.

Where the Fed is headed next, at its next meeting Sept. 20 and later, generated chatter on the sidelines of economic conference that focused on globalization. Outside the meeting, talk turned to how the Fed chairman, Ben Bernanke, and his colleagues at the central will steer the course of interest rate policy.

The goal is to lift rates enough to subdue inflation, but not so much that the strategy would cripple the economy.

It's a tricky task.

While the economy is slowing, inflation is outside the comfort zone of some economists and Fed policymakers.

At its last meeting, on Aug. 8, the Fed held steady at 5.25 percent an important rate. As a result, commercial banks' prime interest rate -- for certain credit cards, home equity lines of credit and other loans -- stayed at 8.25 percent.

Given that the housing market is losing more steam and companies are showing caution in hiring, some economists at the conference said the Fed should keep to the sidelines in the months ahead. That would give policymakers time to assess how the most recent moves in a rate-raising campaign that started in June 2004 are affecting economic activity.

Diane Swonk, chief economist at Mesirow Financial, believes the Fed will not change rates in September. Adds a former Fed governor, Laurence Meyer, 'I think they will stay on the sidelines for a while.'

If the economy continues to lag, Swonk said there is a chance the Fed might cut rates in December or early next year.

Options include:

--boosting rates to fend off inflation.

--cutting rates to shore up a wobbly economy.

--holding rates steady, which gives policymakers time to assess which risk is greater, inflation or a weakening economy.

Allan Meltzer, a professor at Carnegie Mellon University, questioned whether it was wise for the Fed to halt its credit-tightening campaign with inflation on the rise. 'The Fed may be on the verge of a very big mistake,' he suggested.

Meltzer is concerned that inflation could creep higher and that the Fed might lose some of its inflation-fighting credibility with investors. Then investors, companies and consumers might change their behavior in ways that could worsen inflation. For instance, companies might opt to boost prices even more and workers might demand bigger pay increases because of that.

Inflation is a worry for R. Glenn Hubbard, professor and dean of Columbia University's business school who once was viewed as a potential successor to longtime Fed chief Alan Greenspan.

'It is hard for me to believe that inflation will come down without further policy action,' Hubbard said.

It was Bernanke, an economist, academic and former Fed member, who got the chairman's job and took over in February.

Economists and investors will have more insight into the Fed's thinking when minutes of its Aug. 8 meeting are released Tuesday.

Upcoming government reports on the economy also may help shape opinions on the fate of interest rates.

An updated reading on economic growth in the April-to-June period comes out Wednesday. Economists predict a higher revision in growth, to a rate of 3 percent, compared with an earlier estimate of 2.5 percent.

Yet that still would fall short of the first quarter's brisk 5.6 percent pace, the strongest in 2 1/2 years.

The Fed believes the slowing economy eventually will ease inflationary pressures. Yet lofty energy prices are a concern and are under close watch by the Fed. They were the main culprit for the 0.4 percent rise in consumer prices in July, twice the increase in June.

Fresh employment figures come out Friday. Hiring slowed in July, with companies adding just 113,000 new jobs. The unemployment rate climbed to 4.8 percent, a five-month high.

Economists are looking for better jobs figures for August, forecasting a 4.7 jobless rate and the addition of 125,000 jobs.

'I would want the Fed to stay on the pause button until we get much clearer signs of where the economy is going,' said Gene Sperling, senior fellow for economic policy for the Council on Foreign Relations and a former official in the Clinton administration.

--


And from Mr Bean:

Winds of globalization could turn sour

At August meeting, many Fed members saw rate decision as a close call
AFX


WASHINGTON (AFX) - Federal Reserve Board Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee thought the decision to keep interest rates unchanged was a close call at their most recent meeting, but decided that it would be better to have more information about the economy before deciding whether or not to continue making money more expensive.

'In view of the elevated readings on costs and prices, many members thought that the decision to keep policy unchanged at this meeting was a close call and noted that additional firming could well be needed,' the Fed said, according to minutes of the August 8 meeting, released today.

Still, members of the FOMC said keeping the federal funds rate unchanged would allow the committee to gather more information about the economy before deciding on their next move.

'But with economic growth having moderated some, most members anticipated that inflation pressures quite possibly would ease gradually over coming quarters and the current stance of policy could well prove to be consistent with satisfactory economic performance,' the minutes said.

After 17 consecutive rate hikes, the FOMC members decided to keep the key federal funds rate at 5.25 pct at the August meeting, with just one member calling for an additional rate hike. Their next meeting is Oct 24-25.

newsdesk@afxnews.com

The dollar obviously didn't like that assessment!

Thanks for the posts Choccie.

The market was expecting a tougher inflationary stance from the minutes, and all they got was a regurgitation of what has already been 'said'.

Well that was all pretty unspectacular - but September approaches.

Bonjour

Bonjour Hil, ca va?

Le bon apr-midi mon Petit F. Je suis tr bien merci mais tout fait fatigu

Et la carte de Vodafone UMTS, cela fonctionne bien?

Non. The SFR prepaid SIM was incompatible with the datacard despite it saying on the box that it was 2G and 3G compatible. Having wasted an age (and a total of around 80) running around trying to find somewhere that sold the damn thing and then trying to make it work, I eventually opted for the local cyber cafe at 5/hour. I think that it cost 2 to transfer some money, check the footy and cricket scores and find out who'd died (there's always somebody who dies when I'm away - last time it was my mum's cat).

Is Maclaurin the Vodafone chairman? He's on my hit list for a snotty email tomorrow!!!

Hil, quelle dommage! The name's Bond, Sir John Bond. I expect his mobile number starts 07 . . .

He took over from Lord MacLaurin this year.

Can you get my boots warm please MM? Just booked a week in Meribel at Crimbo.

:o)

only a week?

hils, good to see you back, hope yo had a bon vacation

Merci goforit,

By the way, I see the 1.8830 region as initial support. It looks to have bounced from there on 25/8. Biding time for now to see what it's going to do next.