"...Oh my....., the DOOM-&-GLOOM'rs are wrong again.... (..I'll bet they invest in AirBus, too..)..
Monday May 9, 6:00 AM - FOREX VIEW: Soft Patch Dodged, Trade Data Looms For Dlr
By Steven Vames - Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Last week, a major source of pressure on the dollar was relieved with strong payrolls data suggesting fears over a soft patch in U.S. growth were overblown. But with international trade data due this week, a second bullet might prove harder to dodge.
The dollar found a friend last week in the revelation that Federal Reserve policymakers remain worried over inflation, and that U.S. job creation surged in April. For the week, the euro ended down only 0.3% versus the dollar, but it was off 1.3% from the week's high point. Versus the yen, the dollar eked out a 0.1% advance.
With those gains, the dollar remains not far from the upper reaches of its 2005 range versus the euro, and is in the middle of its range against the yen.
Analysts said the dollar made stronger post-payrolls gains versus European currencies than versus Asian currencies because of the continued concerns about economic and political developments in the euro zone.
These include worries over the May 29 vote in France over the European Union constitution, as well as renewed signs of stagnation in the euro-zone economy. The yen and other Asian currencies, meanwhile, have been supported by ongoing speculation over a revaluation of the Chinese yuan.
This week, the dollar will face fresh data on the U.S. trade gap and international capital flows, which could prove too hard to ignore for traders. The trade deficit and its role in the overall current account financing gap had been a huge factor in the dollar's declines late last year.
On Friday, the euro was at $1.2822 from $1.2952 late Thursday. The dollar was at Y104.92 from Y104.45, and at CHF1.2063 from CHF1.1934. The euro slipped to a 12-week low versus the yen and was at Y134.58 in late new York trading from Y135.29. The dollar also gained on the pound, which was at $1.8902 late Friday from $1.9049.
While the dollar has shown resilience amid strength in the economy, the data might be enough to knock it down a notch.
This week's trade and flow data "will make it clear that the U.S. cannot maintain its outperforming economic position without the risk of running into a severe funding crisis," said Hans Redeker, global head of foreign exchange at BNP Paribas in a research note Friday.
On Tuesday, the government will publish the latest U.S. international trade figures for March. The consensus of economists surveyed by Dow Jones Newswires and CNBC looks for the deficit to bulge to a new record of $61.5 billion from February's record $61 billion.
On Friday, the Treasury will report on its monthly Treasury International Capital System flows data for March. The last report showed a comfortable $84.5 billion in capital inflows for February.
Other data will include Thursday's report on April retail sales. Investors are likely to take special interest in the data, given that March's sluggish 0.3% pace of sales growth was one factor that sparked beliefs that the economy was in a soft patch in the first place. The April figure is expected by economists to register a 0.6% pace of growth.
That will be followed Friday by the University of Michigan's preliminary May reading on consumer confidence, which economists expect to register 88 from 87.7 in April.
Elsewhere, the U.K. has a busy week ahead, following fast on the heels of Thursday's election. The Bank of England's Monetary Policy Committee is widely expected to keep rates at 4.75% when its meeting ends Monday. The U.K. also reports wholesale prices, trade and retail data, while the central bank issues its first-quarter inflation report.
In Japan, March household spending and machinery orders and April bank lending are the main indicators, while Australia reports the NAB business confidence index for April.
In the euro zone, Germany reports consumer inflation, industrial production and final first quarter growth. The European Central Bank also publishes its monthly bulletin.
There also are a number of U.S. Federal Reserve officials speaking this week. On Tuesday, Federal Reserve Bank of Kansas City President Thomas Hoenig speaks on "Monetary Policy and the Economic Outlook" and Federal Reserve Bank of Dallas President Richard Fisher speaks on "A Walk Around the World Economy." The following day, Federal Reserve Bank of St. Louis President William Poole will weigh in on "The Economic Outlook."
sg.biz.yahoo.com
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