The Dollar gained versus most majors after the FOMC left the interest unchanged at 0.25% but gave an optimistic outlook on the economy. Consumer Confidence reached a 21 month high in September with 73.5 versus the 70.2 forecast and prior. Durable Goods order showed an unexpected drop of -2.4% versus the 0.3% expected; signaling production is still troubled with the recession. NASDAQ and Dow Jones weakened by -1.97% and -1.58% respectively. Crude Oil declined by 6$ the past week closing at 66.02$ a barrel and Gold (XAU) dropped by 19$ closing at 990.3$ an ounce. Looking ahead, On Tuesday Consumer Confidence for September will be released and expected at 1 year high of 57.0 versus 54.1 prior. On Wednesday, Final GDP for the second quarter is expected worse at -1.2% versus -1.0% prior, but still improved versus the 1st quarter drop of 6.4%. ADP Non-Farm Employment Change is also due on Wednesday with -194K versus -298K prior. On Thursday, the ISM Manufacturing PMI is expected to show a 9th month of gains with 53.9 versus 52.9 prior. The Non Farm Employment Change on Friday is expected to show -186K more job losses, a slower pace than -216K the previous month. The Unemployment Rate is expected higher with 9.8% versus 9.7% prior. Disappointing NFP results might lead to a flight from riskier assets, pushing the Dollar higher.
The Euro weakened modestly versus the Dollar after earlier reaching new yearly highs. The Euro is still on a 6 month uptrend but it is showing early signs of a technical reversal after breaking below the 1.46 level. Overall, EUR/USD traded with a high of 1.4843 and a low of 1.4611. Looking ahead, On Monday German Prelim CPI is expected worse with -0.2% versus 0.2% prior. Consumer Confidence will be released on Tuesday expected slightly better with -21 versus -22 prior. On Wednesday, German Unemployment Change is expected stronger at 19K versus -1K prior. The European Unemployment Rate will be released on Thursday, expected higher with 9.6% versus 9.5% prior.
The Pound continued to weaken versus the Dollar reaching a 3 month low as weak UK fundamentals override the appeal of the high yielding currency. Bank of England Minutes showed a unanimous vote to keep the bond purchasing program unchanged at 175 billion pounds was made. Even if the sentiment will favor risk appetite the Pound is expected lag behind other currencies. Overall, GBP/USD traded with a high of 1.6467 and a low of 1.5913. Looking ahead, On Tuesday the Final GDP will be released expected to show improvement to -0.6% versus -0.7% prior. Gfk Consumer Confidence is expected slightly better at -24 versus -25 prior and the Current Account is expected better with -7.7B versus -8.5B prior. On Thursday, the Manufacturing PMI will be released expected to show growth with 50.2 versus 49.7 prior. The Construction PMI released on Friday is expected better with 48.2 versus 47.7 prior but will still signal contraction.