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FOREX: US Dollar to Extend Gains as Stock Market Selloff Continues
Written by article default Thursday, 22 September 2011 09:28
Talking Points
- US Dollar Poised to Extend Gains as S&P 500 Futures Promise Risk Aversion
- Euro to Stay Under Pressure as Debt Crisis Worries Linger, PMIs Fall Again
- NZ Dollar Slumps as Weak GDP Figures Undercut Interest Rate Hike Outlook
The US Dollar continued to push higher in overnight trade, rising against all of its leading counterparts on the back of safe-haven demand as Asian bourses followed Wall Street lower after the Federal Reserve interest rate decision, where policymakers opted not to expand its balance sheet as we expected. Chinese Manufacturing PMI figures HSBC stoked the selloff, showing the factory sector in the world’s second-largest economy shrank for the third consecutive month. S&P 500 stock index futures are pointing aggressively ahead of the opening bell in Europe, hinting the benchmark unit has room to continue higher as risk aversion carriers over into the coming session.
The New Zealand Dollar led the way lower among greenback’s leading counterparts as disappointing economic data compounded downward pressure on the already risk-sensitive currency after Gross Domestic Product figures missed expectations, showing the economy added just 0.1 percent in the three months through June. The result amounted to the weakest reading in there quarters and weighed heavily on RBNZ rate hike expectations, with a Credit Suisse gauge tracking the priced-in policy outlook for the year ahead dropping 9bps to the lowest level in six months.
The preliminary set of Euro Zone Manufacturing PMI figures headline the economic calendar in European hours, with expectations pointing to continued slowdown across the region’s manufacturing and services sectors. While such outcomes are certainly not supportive for the Euro, the reality of broadly slowing growth in the currency bloc has been a foregone conclusion for some time now, meaning further signs of weakness ought not to prove materially market-moving by themselves. With that in mind, periphery CDS spreads are ticking higher, suggesting the EU debt crisis remains a major near-term headwind facing the single currency.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
22:45 |
NZD |
Gross Domestic Product (QoQ) (2Q) |
0.1% |
0.5% |
0.9% (R+) |
|
22:45 |
NZD |
Gross Domestic Product (YoY) (2Q) |
1.5% |
1.7% |
1.7% (R+) |
|
2:30 |
CNY |
HSBC China Flash Manufacturing PMI (SEP) |
49.4 |
- |
49.9 |
|
5:00 |
JPY |
Supermarket Sales (YoY) (AUG) |
-2.2% |
- |
2.1% |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
7:00 |
EUR |
France PMI Manufacturing (SEP P) |
48.5 |
49.1 |
Low |
|
7:00 |
EUR |
France PMI Services (SEP P) |
54.2 |
56.8 |
Low |
|
7:30 |
EUR |
Germany PMI Manufacturing (SEP A) |
50.5 |
50.9 |
Medium |
|
7:30 |
EUR |
Germany PMI Services (SEP A) |
50.5 |
51.1 |
Medium |
|
8:00 |
EUR |
Euro Zone PMI Services (SEP A) |
51 |
51.5 |
Medium |
|
8:00 |
EUR |
Euro Zone PMI Composite (SEP A) |
49.8 |
50.7 |
Medium |
|
8:00 |
EUR |
Euro Zone PMI Manufacturing (SEP A) |
48.5 |
49 |
Medium |
|
9:00 |
EUR |
Euro-Zone Industrial New Orders (YoY) (JUL) |
10.5% |
11.1% |
Medium |
|
9:00 |
EUR |
Euro-Zone Industrial New Orders (MoM) (JUL) |
-1.2% |
-0.9% |
Low |
|
9:00 |
CHF |
ZEW Survey (Expectations) (SEP) |
- |
-71.4 |
Medium |
|
10:00 |
GBP |
CBI Trends Total Orders (SEP) |
-5 |
1 |
Low |
|
10:00 |
GBP |
CBI Trends Selling Prices (SEP) |
7 |
9 |
Low |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.3412 |
1.3725 |
|
GBPUSD |
1.5318 |
1.5669 |
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