Temporary Dollar Moves- Or Something Bigger To Come

Mar.15.2010

The dollar retreated in the past week on most fronts, says Yohay Elam at Forex Crunch. Catch Yohay, and TheLFB trade team on ForexTV Live.  

Was it a temporary move? The upcoming week provides lots of American events, with Ben Bernanke’s rate decision being the highlight. Here’s an outlook for this week’s market-moving events.

In the forex industry, the proposed regulations by the CFTC are again in the news, as their decision is getting close. Also Introducing Brokers joined the fight against these proposals. We’ll probably hear more about it in the upcoming week. OK, let’s look at the market:

1. American TIC Long-Term Purchases: Published on Monday at 13:00 GMT. Treasury International Capital Long Term Purchases represent the difference between foreign investments in the US and US investments abroad, and actually shows foreign confidence in the US economy. The figure leaped to 126 billion two months ago, but was then cut to half. This time, it’s expected to stand at 38 billion.
2. German ZEW Economic Sentiment: Published on Tuesday at 10:00 GMT. This is a highly regarded survey that is a good indicator of the economy. It has fallen in the past months, hurting the Euro each time. A further drop from 45.1 to 43.3 points is expected this time.
3. Housing figures: Published on Tuesday at 12:30 GMT. The housing sector had a big “contribution” to the global crisis and is now showing a small recovery. Building Permits dropped to 620K last time, and are now expected to tick down to 619K. Also note a very related figure – Housing Starts, published at the same time. They’re expected to drop from 590K to 570K.
4. American rate decision: Published on Tuesday at 18:15 GMT. Ben Bernanke already made his move out of the usual cycle – the “mini rate hike” of the discount rate shocked the markets and signaled that the Federal Reserve will probably be more aggressive than other central banks. Will they finally drop the wording “an extended period of time” for the interest rate? As usual, the FOMC Statement will be in the limelight, as the Federal Funds Rate isn’t expected to move. Note that the statement can be very confusing.

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