Reply #27: dollar watch

[UpInArms]

http://quotes.ino.com/chart/?acs=NYBOT_DX&v=i

Last trade 80.555 Change +0.561 (+0.72%)

Daily Sound Bites 02.12

http://www.dailyfx.com/forex/fundamental/article/daily_...



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Euro Selling May Resume If German, EZ GDP Figures Reveal Over-Reliance on Stimulus

http://www.dailyfx.com/forex/fundamental/daily_briefing...

The Euro may come under selling pressure once again if fourth-quarter GDP figures from Germany and the Euro Zone reveal an over-reliance on fiscal stimulus just as investors are acutely concerned about public deficits in the currency bloc.

Key Overnight Developments

• New Zealand Core Retail Sales Disappoint, Fall Most in 14 Years
• Euro Consolidates, British Pound Lower in Overnight Trade

Critical Levels



The Euro consolidated in a narrow 40-pip range below 1.3700 to the US Dollar. The British Pound traded gently lower, shedding as much as 0.3% against the greenback. We remain short EURUSD at 1.4881 and GBPUSD at 1.5765.

Asia Session Highlights



New Zealand’s Retail Sales disappointed, yielding a flat result in December and snapping a four-month trend of consecutive expansion. Economists had forecast a 0.6% increase ahead of the release. Factoring out car dealers, gas stations and auto repair shops, receipts fell -1.8% to mark the largest monthly drop in at least 14 years. Separately, REINZ House Sales fell 1.1% in the year to January, marking the first decline in 11 months. Despite an outsized export sector, New Zealand still counts on private consumption to contribute the largest share of overall economic growth. To that effect, lackluster sales activity bodes ill for economic recovery and a speedy return to higher interest rates, meaning the central bank may be forced to delay withdrawing monetary stimulus beyond the mid-year timeframe set by RBNZ chief Alan Bollard.

Euro Session: What to Expect



Fourth-quarter Gross Domestic Product figures headline the economic calendar, with Germany’s economy expected to have added 0.2% in the three to December 2009 while that of the overall Euro Zone expanded 0.3%. Traders are likely to look past the headline figure, however, looking specifically for signs of life in private consumption and investment to show that economic recovery can survive after stimulus runs dry. This will be especially significant this time around as the fiasco in Greece has markets worried about public deficits in the currency bloc, with investors likely to punish the Euro if a lack of self-sufficient growth breeds fears that governments will need to keep the region on life-support and lead to a further fiscal deterioration.

Risk sentiment are likely to overtake price action late into the session as January’s US Advance Retail Sales report comes across the wires, with traders still looking to the health of America’s economy as a proxy for economic recovery in the world at large.

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