Weekly Market Outlook Recap From Last Week The U.S. Dollar had a mixed week against the major currencies, falling against most of them, but gaining slightly against the Australian Dollar and the Euro. The set of economic data out from the United States had a net negative effect on the Greenback. The U.S. Dollar Index declined by -0.21 last week from 77.47 to 77.27, and showing a net loss of -0.26 percent on the week. The Dollar Index is now showing a net loss of 0.59 points or -0.76 percent for the year to date. The U.S. Dollar’s mixed performance last week had the Pound Sterling and the New Zealand Dollar each gaining by +2.1% as they tied as the best performers of the week. In addition, the Japanese Yen rose by 1.1% and the Canadian Dollar was up by +0.7% last week. On the other hand, the Euro and Aussie each lost fractionally, with the Euro down only -0.1% versus the Greenback while the Australian Dollar was down just -0.2%. The Australian Dollar was the weakest overall performer against the Greenback last week. U.S. Dollar Performance Mixed After Corrective Rally The U.S. Dollar’s mixed performance last week came after a corrective rally seen the previous week. This overall corrective price action comes after the extended rally seen in all the major currencies against the Greenback during the early part of the past month. The Greenback has suffered over the past month largely due to continued weak economic fundamentals out of the United States, such as the downward revision to the Advance GDP number seen last week. In addition, the Dollar has been under pressure because of the tentative new round of quantitative easing measures the Fed is expected to adopt at its November 3rd FOMC meeting coming up later this week. Adding to the Greenback’s minimal strength last week against the Australian Dollar was the recent pull back in the price of gold, although gold managed to bounce back somewhat last week. The precious metal rose by $29.82 per ounce, or +2.2%, with spot gold closing at $1,357.47 per ounce on Friday. Economic data out of the United States continues showing an overall weakness in growth as evidenced by a disappointing result for the Advance GDP data seen out last week, that included a severe downward revision to the previous quarter. Nevertheless, Initial Jobless Claims were better than expected and that result might bode well for some improvement in this coming week’s key Non Farm Payrolls data. USDJPY Makes a 15 Year Low Despite New BOJ Easing Measures The beginning of last week saw the U.S. Dollar trade as low as 80.41 Yen during last Monday’s session. USDJPY also fell sharply last Thursday after the BOJ decided to leave its benchmark Overnight Call Rate at a range of between 0 to 0.10%, as was widely expected. The Japanese central bank also announced details of its new debt repurchase easing measures. The USDJPY rate moved down even further early this Monday, hitting a fresh 15 year low of 80.24. Cable Recovers After S&P Outlook Upgrade The British Pound Sterling tied with the New Zealand Dollar as the best performer against the Greenback last week, rising by +2.1% on the week. Traders largely attributed the sharp rise to an upgrade to the outlook for Britain’s sovereign debt rating by the S&P rating agency from negative to stable. Kiwi Stronger on Hawkish Comments After RBNZ Leaves Rates Steady The New Zealand Dollar matched gains against the Greenback last week with the Pound Sterling, rising by +2.1% after the Reserve Bank of New Zealand left its benchmark Overnight Cash Rate unchanged at 3.00%, as was widely expected. The strength in the Kiwi came after RBNZ Governor Bollard made some especially hawkish comments in the associated Rate Statement. Forex Market Implications After the overall move lower in the U.S. Dollar last week, a number of upcoming events will give a clearer indication to the Greenback’s future direction. Perhaps the most important event will be the Tuesday, November 2nd mid term elections in the United States in which the ruling Democrats are expected to give away significant power to the Republicans. Another key event will be the announcement of the Fed’s next rate decision after the FOMC’s November 3rd meeting. The market will be closely scrutinizing the released information for signs of additional easing measures. Finally, this coming week will feature considerable employment data out from the United States, including the crucial Non Farm Payrolls number due out on Friday. With the Dollar’s reversal to the downside seen last week, the previous corrective move higher in the Greenback may well have now run its course and so this week’s data releases could well prove very influential on its future direction. In addition, movements in the price of gold and other commodity prices could shift the outlook for the commodity currencies. Nevertheless, indications still point to the long term outlook remaining bearish on the U.S. Dollar, with the commodity dollars still being favored over both the Euro and the Greenback. Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 11/01/2010 The U.S. Dollar turned in a mixed performance last week, with the currency trading mostly lower against the other major currencies. The Greenback gained slightly against the Euro and the Australian Dollar, but fell against the New Zealand Dollar, the Pound Sterling, the Japanese Yen and the Canadian Dollar. Read full report Weekly Recap and Outlook for EURUSD – 11/01/2010 EURUSD came off slightly again last week as the pair consolidated its recent gains. The rate started the week off on Monday by coming down from its weekly high at the 1.4079 level after the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” Furthermore, the G-20’s official meeting statement stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” With respect to economic releases out last Monday in the Eurozone, Industrial New Orders gained 5.3% for the month that was somewhat higher than the 2.1% gain anticipated. The previous result was also revised higher from -2.4% to -1.8%. In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result. Read full report Weekly Recap and Outlook for GBPUSD – 11/01/2010 GBPUSD showed considerable strength last week on the back of positive U.K. economic results and an improvement in S&P’s outlook for their U.K. debt rating. Cable began the week on a positive note by trading off of its weekly low of 1.5661 on Monday despite U.K. BBA Mortgage Approvals coming out at 31.1K compared with an anticipated 31.6K. In addition, the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” The G-20’s official meeting statement also stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result. Read full report Weekly Recap and Outlook for AUDUSD – 11/01/2010 During last week’s trading sessions, AUDUSD sold off a bit after mixed economic results came out of Australia and despite some recovery in the price of gold. The pair started the week out on a firm note by trading up to its weekly high of 0.9973 on Monday after Australian PPI gained by +1.3% for the quarter that was over twice the consensus of a +0.6% gain. In addition, the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” The G-20’s official meeting statement also stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result.. Read full report Weekly Recap and Outlook for NZDUSD – 11/01/2010 NZDUSD gained substantially last week to make a new recent high after finance ministers at the G-20 meeting in Korea pledged to avoid weakening their currencies with the hopes of increasing exports. NZDUSD began the week on a positive note as New Zealand observed its Labour Day Bank Holiday on Monday. In addition, the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” The G-20’s official meeting statement also stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result. Read full report Weekly Recap and Outlook for USDJPY – 11/01/2010 USDJPY made fresh 15 year lows yet again last week as the Bank of Japan refrained once more from officially intervening in the forex market. The week began with USDJPY trading off of its weekly low of 80.41 that set another 15 year low mark on Monday after the Japanese Trade Balance showed a surplus of +0.59T that was a bit higher than the +0.50T surplus anticipated. In addition, the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” The G-20’s official meeting statement also stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result. Read full report Weekly Recap and Outlook for USDCAD – 11/01/2010 USDCAD lost some ground last week despite very little significant economic data coming out of Canada early in the week. The pair began the week on a soft note by making its weekly low of 1.0154 on Monday, with the Loonie gaining strength despite a positive U.S. Existing New Home Sales result. In addition, the G-20 Summit meeting the previous weekend held in Gyeongju, South Korea saw finance ministers come to an agreement to, “move towards more market-determined exchange-rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.” The G-20’s official meeting statement also stressed that developed economies would stay, “vigilant against excess volatility and disorderly movements in exchange rates.” In the United States, Existing Home Sales showed improvement at 4.53M on Monday, which beat the consensus call for 4.29M and was also a substantial step up from the former 4.12M result. Read full report | 
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