Forex Investment and Currency Trading

Our mind is drawn to the USD-Oil link. The past story arguing rising oil prices (spot US$133.30/b) were caused by a weak USD has given way to stories that state rising oil prices are a downside risk to USD. This theme is drawn from nervous glances at US energy prices, specifically gasoline prices, which pose two key risks to the US economy. As both have been well articulated for a long time, it is unclear why they are gaining traction in markets now. First, the US Memorial Day long weekend is all
about driving. It is the weekend of the Indianapolis [...]

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The “R” word has been increasingly suggested as an appropriate characterization of the current situation. Some argue that without two consecutive quarters of negative GDP growth there simply cannot be a recession, while others castigate policymakers who demur from using the term as being dishonest. As is usual, the truth lies somewhere between these polar positions. As to the two consecutive quarters of negative GDP growth requirement, it simply does not exist. Perhaps the reason for this “urban legend” is that recessions generally involve two negative quarters of growth, but note that while the 2001 recession lasted from Mar – [...]

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The macro data in the US continues to surprise to the upside, with Non-Manufacturing ISM rising to 52, which is consistent with modest growth in the service sector, and the employment component rebounded to 50.8 from 46.9, which tallies with the less than expected fall in payrolls. The Fed’s quarterly Senior Loan Officer Opinion Survey, however, was less encouraging, with 71% of respondents reporting that they had increased standards, and many of the components have reached the peaks of the 2001 and 1990/1 recessions - it is hard to find anything positive from this report, aside from the fact that [...]

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U.S. GDP grew fractionally in 1Q 2008, with final sales to domestic purchasers falling for the first time since 1991. Weak consumer spending, a dramatic shift to decline in business investment, continued rapid declines in residential investment and even a slowing in state and local government purchases were notable contributors. Modest decline in domestic final sales should continue this quarter. With inventory declines also likely, market looks for a modest outright GDP decline this quarter.
While home prices have declined rapidly in recent months, many indications of financial turmoil have receded somewhat, partly in response to the Fed’s creative mechanisms for enhancing [...]

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