Wednesday, 29 Jul 2009

US Core Durable Goods Rising; Oil Prices Still Falling

With the report calling for the tightening of credit standards in the Euro-Zone, traders have witnessed the EUR lose some steam in its recent bullish rally. The EUR/USD is now trading near 1.41, and the EUR/JPY has begun dropping back towards 133.00 after a short-lived jump.

Prior to the opening of the US markets we received reports detailing the level of growth in durable goods sales. With positive growth in Core Durable Goods and a decline in general Durable Goods, the reports helped show that sales in the United States are indeed climbing, but the transportation industry (airlines and auto sales) are still in a slight decline. The transportation industry in decline supports the notion of declining Crude Oil prices since the demand for oil is simply not there.

We still have a few significant reports being released later in the day which may create volatility for Crude Oil as well as the Pacific currencies. The Crude Oil Inventories report is scheduled to be released at 14:30 GMT today, which may continue to show a continued decline in oil reserves. Also, the Reserve Bank of New Zealand (RBNZ) will make a decision regarding its short-term interest rates. Such an announcement always brings heavy volatility to the NZD and if traders aren't at their platforms they may miss out on some excellent price volatility!