Currency news - Dollar faces retail sales test

Dollar faces retail sales test - 13-03-08

The dollar was unable to sustain Tuesday’s gains and the Euro made several challenges on fresh record highs above 1.55. Despite some initial US currency support close to this level, the Euro pushed strongly to a fresh high around 1.5570 in New York trade. There were persistent reports of aggressive Middle East Euro buying during the session which helped to push the dollar weaker. Reports of major hedge-fund difficulties also undermined the dollar as Carlyle Group faced a seizure of assets after failing to meet margin calls.

There were no significant US economic releases during the day, but a private report on consumer spending recorded a sharp monthly decline for February which will increase fears over the official sales report due for release on Thursday. A significant decline in sales would reinforce recession fears, especially if there is also an increase in jobless claims.

Overall confidence in the US economy and capital markets has continued to deteriorate which is undermining the dollar. If the stresses do not ease and there is weak economic data, there will be renewed speculation over a 0.75% cut in interest rates next week. The dollar remained under pressure on Thursday with lows beyond 1.56

Tim Clayton
Investica Ltd
E-mail: tim.clayton@investica.co.uk
+44 (0) 1452 781001

Full list of daily currency analysis

This analysis report is intended for distribution to ACM Advanced Currency Markets SA private, corporate customers and members. Information contained in this report is based on data obtained from sources considered to be reliable, however, no guarantees be made by ACM Advanced Currency Markets SA as to the accuracy, timeliness and completeness of the data. The opinions and forecasts contained herein are subject to change without notice and ACM Advanced Currency Markets SA accepts no liability for any losses, damages and/or expenses incurred arising from or in any way connected with the utilisation of all or part of this report. This report is meant for information purposes and is not intended to be and should not be construed as an offer or solicitation to buy, sell foreign exchange or indeed any other financial instruments. This report, or any part of it may not be reproduced or distributed without the prior consent of ACM Advanced Currency Markets SA.