GDP Reports & Central Bankers
27-08-2010
The USD traded in range against the major currencies for much of Thursday as traders became increasing cautious due to the data scheduled for today and news events that may unfold too. While the weekly Unemployment Claims turned in a slightly better figure than expected it was certainly not rosy and continues to show that the jobless situation may be actually worsening. Today the U.S. will release its Preliminary GDP and a figure of only 1.5% is expected. The U.K. will also be publishing its Revised GDP report today. Essentially both the States and Britain are going to get a chance to show what their economies are achieving under tough economic conditions. Unfortunately, investors are primed for rather disappointing statistics and international equity markets (and currencies) have reflected that.
Europe had little in the way of data yesterday with only the GfK German Consumer Climate reading and it met expectations head on. Today Germany will release CPI data. What investors will be watching internationally today is the conference taking place in Jackson Hole, Wyoming in the U.S. where central bankers are holding a symposium. Fed Chairman Ben Bernanke is scheduled to speak today and some are expecting him to grapple publically with the specter of diminishing economic conditions. Other central bankers will be likely speaking and investors will be keen on listening to the pronouncements from the ECB and the BoJ. The American, European, and Japanese economies are all showing signs of being under stress and it will be more than interesting to see how officials speak about their collective problems.
The JPY continues to trade towards the strongest parts of its value and while the Japanese government continues to warn speculators that it may intervene, perceptions internationally suggest that investors do not believe that the BoJ is likely to get much help with an intervention. The AUD has been mired in a tight range as investors remain on the fence as they await any signs for a resolution from the Australian election which took place last weekend.
Wall Street was not able to sustain any momentum on Thursday as it turned in a losing day. Sentiment remains fixated on the rather downcast economic data from the U.S. and this has made investors focused on preservation. Going into the weekend it is clear that traders should be watching the GDP reports from the U.K. and the States carefully. Safe haven trading has been prevalent for two weeks and it is likely to be a cornerstone today. Investors are fully aware that September and October are historically rather crucial months for Wall Street and with only one week left before the calendar changes the broad markets are displaying a heightened sense of nervousness.
