The major currencies have continued their assault on the USD as Monday has begun. After trading slightly stronger on Thursday, the Greenback quickly became vulnerable again. The Single Currency, Sterling, Aussie, and JPY are all approaching high water marks against the USD. Gold has also continued to get stronger. The precious metal is near 1351.00 as of this moment.
CBI Realized Sales will come from the U.K shortly. From the States Industrial Production and Pending Homes Sales numbers will be published. Tomorrow’s highlight will be Retail Sales data from the U.S.. And importantly the FOMC Statement will come from the Fed on Wednesday.
It is apparent that investors are banking on cheap money to continue making its way into the U.S. economy with an unchanged monetary policy. Never mind that economic data has shown deterioration among American consumers and that recent economic data from Europe has been rather lackluster, investors appear hell-bent on taking advantage of the short-term trading environment. While quarterly earnings will lurch forward still this week, the name of the game is the Fed and its back pedaling back from its early summer whispers to begin a tapering. In other words, weak data from the States is actually turning into a risk on gambit by investors who see the near zero interest rates continuing well into 2014.
Traders would be wise to follow trends carefully under this sun. FX has shown the desire to interpret recent comments from the Fed as a clear sign that a weaker USD is not exactly a concern at this juncture. The Greenback has been on a decline since July on a fairly steady basis.
Of interest should be Crude Oil which continues to show some odd signs of distress as some claim that the solid returns from Wall Street and global bourses prove a recovery is underway. WTI has been trading lower still and is certainly testing support levels. The fact that demand has remained rather mediocre for Crude Oil is a rather stern warning that obstacles remain for industries who are worried about where their orders are going to come from. Meaning that the never-never land of stagnation is still largely hovering over most economic spheres and recession just as much as growth is still on the minds of many.