Dollar Awaits Trade Deficit Wednesday, September 13, 2006
04:30AM UK August core CPI y/y (exp 1.1%, prev 0.9%) UK August CPI y/y (exp 2.4%, prev 2.4%) 08:30AM Canada July Trade Balance (exp C$5.0 bln, prev C$4.7 bln) US July Trade Balance ($-65.4 bln, prev $64.8 bln) 07:50PM Japan July Current Account Balance (exp 1.535 bln yen, prev 1.542 bln yen)
The dollar may weaken on concern that the US trade deficit due later might widen in July. The trade deficit is forecasted to grow to 65.4 billion in July from 64.8 billion in the previous month. In contrast, China trade surplus expanded in the same month and Japan Current Account Balance due later is expected to increase. The huge trade deficit still puts pressure on the dollar.
The yen weakened across the board after machinery orders posted their biggest decline in nearly twenty years, reducing the bearish expectations for a second rate hike by the Bank of Japan within year end. However, the yen is supported before the G7 meeting to be held in Singapore this week.
The dollar may weaken on concern that the US trade deficit due later might widen in July. The trade deficit is forecasted to grow to 65.4 billion in July from 64.8 billion in the previous month. In contrast, China trade surplus expanded in the same month and Japan Current Account Balance due later is expected to increase. The huge trade deficit still puts pressure on the dollar.
The yen weakened across the board after machinery orders posted their biggest decline in nearly twenty years, reducing the bearish expectations for a second rate hike by the Bank of Japan within year end. However, the yen is supported before the G7 meeting to be held in Singapore this week.
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