Economic News

USD - Is the Dollar Recovering?

The Dollar corrected some of its losses against the Euro and the Pound during last week's trading session. The Dollar gained about 200 pips against the Euro, and gained almost 400 pips against the Pound as the GBP/USD pair dropped to the 1.6470 level.

The main reason for the Dollar's recovery seems to be the positive data that was published from the U.S economy. The Retails Sales rose by 1.4% in October, beating expectations for a 1.0% rise. In addition, the Long-Term Purchases report for September delivered much better figures than forecasted. This report measures the difference in value between foreign long-term securities purchased by U.S citizens to the ones purchased by foreigners. The surprising positive figures showed that foreigners have increased their investments in the U.S economy, and this usually tends to strengthen the Dollar. Also last week, the Core Consumer Price Index (CPI), which measures the change in the price of goods and services purchased by consumers, excluding food and energy, rose by 0.2%. The increasing CPI is one of the greatest signs that the U.S economy is indeed recovering.

As for the week ahead, many interesting publications are expected from the U.S economy. Traders are advised to follow the following news events: The Existing Home Sales, the CB Consumer Confidence, the Unemployment Claims and the New Home Sales. As for today, the most significant publication is likely to be the Existing Home Sales report. Positive end result will show that the U.S housing sector is recovering as well, and has the potential to boost the Dollar.

EUR - Euro's Bullishness Halts

The Euro dropped against most of the major currencies during last week's trading session. The Euro continued to drop against the Yen, and the EUR/JPY dropped below the 132.0 level. The Euro also fell against the Dollar.

The Euro's drop seems to be a direct result to the disappointing data published from the Euro-Zone during the past week. The European Consumer Price Index dropped by 0.1% in October, and thus marked the fifth consecutive drop of this indicator. This is a warning sign that the European nations are far from being fully recovered. In addition, the European Current Account, which measures the difference in value between imported and exported goods and services, unexpectedly dropped in October.

Analysts have forecasted that the Current Account will stand on 0.6B on October, yet the end result showed a -5.4B figure.