Monday 24 March 2008

Dollar Reverses Previous Losses

EUR/USD reversed almost fully its previous weekly earnings today. It fell from 1.5642 to 1.5419 — that’s more than 1.4% in a single day. The euro, being fundamentally overbought, was doomed to a correction. But such a fast drop can mean something more than a short-term correction wave. Though the fundamental data that came out today in U.S. wasn’t very good for dollar.

Initial jobless claims last week increased to 378,000 from the previous week’s 356,000 (revised up from 353,000). The increase to 360,000 has been expected. This indicator is still very bad and is signaling that the employment market in U.S. is still suffering from the financial crisis.

Leading indicators isn’t very important indicator in Forex trading, but it can show the overall health of the economy in U.S. In February leading indicators index fell 0.3% — as expected.

Philadelphia Fed index measures the state of the manufacturing conditions. In March it improved slightly from the record low February’s -24.0 to -17.4. But its value is still very low and indicates the weakness of the manufacturing sector.

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