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U.S. Data Points to Hiccups Along the Road

Last updated 2/18/2010 10:24 AM ET (GMT -5) 3 Comments

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Kathy Lien

Director of Currency Research, GFT

The currency market is struggling to gain traction this morning as U.S. equities open higher for the third consecutive trading day.  When the first round of U.S. economic data was released, the EUR/USD appeared poised to test a 9 month low but after the stock market opened, the currency pair raced higher after equity traders fail to share their pessimism. The dollar gave back its earlier gains against the euro, Australian and New Zealand dollars as currencies follow in the footsteps of equities.  If stocks turn negative, expect currencies to do so as well. This morning's U.S. economic reports were mixed, but on balance, the recovery story remains in place - albeit with hiccups along with road.  

Like import prices, producer prices were stronger than expected in the month of January. PPI rose 1.4 percent, pushing the annualized pace of wholesale price growth to 4.6 from 4.4 percent, the highest level since October 2008. However the more modest 0.3 percent rise in PPI excluding food and energy prices indicate that inflationary pressures stemmed primarily from higher gasoline and energy costs. Evidence of lower prices on women's apparel, passenger cars and computers indicates that weak consumer demand is still holding back price growth in other parts of the economy.  The Philly Fed index rose from 15.2 to 17.6 which was marginally better than the market's 17.0 forecast while continuing claims were flat at 4.563 million.  The final disappointment came from leading indicators which rose only 0.3 percent last month, a dramatic slowdown from the 1.2 percent rise in December

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Comments (3)

fuji

February 18, 2010 at 12:49 PM ET

Hi, Kathy, is the Currency option have the same expiration date as equity option, they all fall in the 3rd friday every month, or in a day different??? Thank you.

klien

February 18, 2010 at 01:38 PM ET

You can find all of the expiration dates here:

http://www.cboe.com/AboutCBOE/xcal2010.pdf

silver

February 18, 2010 at 03:28 PM ET

Hey Kathy you stated that if stocks turn negative currencies will as well. Are you meaning all currencies except the dollar and yen?

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About The Author

Kathy Lien began her FX trading career 10 years ago at J.P. Morgan Chase. After graduating New York University’s Leonard Stern School of Business at the age of 18, Kathy joined the bank's interbank FX trading desk and eventually moved to the cross markets proprietary trading desk. In the interbank market, her ability to create solid fundamental and technical analysis from the myriad of information on the market helped her trade forex spot and options. Her experience eventually led her to be chief strategist at Daily FX where she worked until she joined GFT in 2008.

With her knowledge of forex, as well as her experience trading other products, such as interest rate derivates, bonds, equities, and futures, Lien has built a reputation as an international currency analyst. She is frequently quoted on CNBC, Bloomberg, Fox Business and Reuters. Lien has also written for publications like Active Trader, Futures, and SFO magazine. She is the author of the newly updated Day Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Boris Schlossberg.

To buy Kathy’s newly updated Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves, click here.