EUR/USD Down for 4th Day

Euro is dropping down against the U.S. dollar for the fourth day in a row now. Declining stock markets force traders to cash out into dollars, increasing the demand for them. Today's fall is minimal (less than 20 pips), but still keeps euro from rising and dominating over the dollar as it has been doing in 2007.

Leading indicators in U.S. released by the Conference Board showed a decrease in December by 0.2% after 0.4% drop in November, but still worse than 0.1% decline that was expected by the markets.

Reuters/University of Michigan released the preliminary results of its sentiment index today showing the unexpected rise from 75.5 to 80.5, while analysts expected a drop to 74.5.

Dollar Steady Against Pound, Euro

U.S. dollar gained against other currencies today, showing a significant change in GBP/USD, along with a little less strong appreciation in EUR/USD. As no important positive data was released for USD, this growth may be accounted to the inertial buying of dollar and position closing on the previous good news and the loss of interest to carry trade.

Final numbers for GDP growth and GDP deflator in Q3 2007 were released today, but they didn't change anything at all as they were known long before today. GDP growth remained the same - at 4.9%, a very high number for U.S. economy, GDP deflator was revised from 0.9% to 1.0% - an insignificant change.

Weekly report from the U.S. Department of Labor showed that initial jobless claims reached 346k - above the expected 335k and 12k above the previous 334k amount.

Leading indicators continued their decline in November - they fell by 0.4% - a slightly better then 0.5% dropdown in October, but worse than -0.3% that was expected by market analysts. On the bright side, leading indicators is not an important market parameter for Forex.

Philadelphia Fed November index disappointed dollar bulls with a -5.7 value, whereas October value was at 8.2 and a slight drop to 6.0 was expected by the market participants.

Pessimistic Indicators from U.S.

U.S. dollar looks unsure whether to fall or to rise on the Forex market after some important macroeconomic indicators were released today. One of the most important data came out from the University of Michigan and Reuters - Michigan Sentiments Index, which represents consumer confidence. Consumer confidence is important, because it will determine future consumer spendings that in their turn fuel the U.S. economy growth.

Michigan Sentiments Index in November was 76.1; it fell by 4.8 points compared to its October value of 80.9. But according to over-pessimistic expectations (that were at 75.0), Michigan index did quite well this month. Of course, objectively it didn't.

Initial jobless claims for the previous week were released today by the U.S. Department of Labor. They fell right into the market forecast value of 330k, lower than last week's 341k (revised from 339k).

Leading market indicators are considered to be weak in their influence on markets behavior, but nevertheless their value for the October reflects current U.S. economical situation - decrease by 0.5%, below 0.3% expected drop and, of course, worse than 0.3% growth in September.

And with the U.S. commercial crude oil inventories another falling week, oil can be expected to see new record highs in the next days. Crude oil inventories decreased by 1.1 million barrels last week, following the 2.8 growth on previous week. High oil prices may hit dollar on Forex, pushing to the new bottoms.

Dollar Takes More Beating

Today U.S. dollar continued its way down the Forex market to historical bottoms of its rate against Euro currency. With EUR/USD hitting its new historical maximum at 1.4309, there is a little doubt now that dollar will stop euro reaching and breaking 1.4500 level. This is mainly caused by bad U.S. data coming out last weeks, which might mean another Fed rate cut by the end of the month.

First strike on dollar bulls was delivered today by the initial jobless claims report for the past week with 29k increase from the previous week - to 337k. Then the leading indicators by the Conference Board Inc. came out showing a 0.3% growth, which appeared as expected. But it is a very weak indicator that doesn't mean a lot to Forex traders usually.

Second strike was Philladelphia Fed Business Outlook Survey showed a very strong decrease in the diffusion index of current activity from 10.9 in September to 6.8 in October, whereas even pessimistic market analysts were expecting to see 7.0 value.

To sum it up - it is a bad time to be long on dollar, but good to be long on EUR/USD.

Key Fundamental Forex Data from U.S.

A rich day for the economical news releases from United States was today.
First, the weekly initial jobless claims data came out at the better than expected level showing only 301,000 claims for the previous week which signals the continued moderation of the U.S. unemployment rate.
Second, the leading indicators came out unexpectedly low at -0.3%, while analysts were expecting a growth of 0.1%.
Third, Philadelphia Federal Reserve manufacturing index came out at 9.2 - nearly a half of the expected 14.0.
And, at last, today's main news maker - FOMC minutes for the June 27-28 meeting were released today. The main idea of the minutes is that while the in the first quarter of 2007 economy grew at a slightly slowed down pace, the second quarter is more promising with the good news on industrial production and employment indicators; still the main concern for the Committee remain the inflation risks, while the GDP growth is estimated to be rather high in the rest of 2007.