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Recent Growth in Natural Gas Production in the Lower 48 States Breaks with Historical Trends

Where Are Natural Gas Production Increases Coming from?

The large recent increases in supply came from across the Lower 48 States. But, more than half of the increase in natural gas production between the first quarter of 2007 and the first quarter of 2008 came from Texas, where supplies grew by an exceptionally high 15%. Other contributing regions included Wyoming with growth of 9%, Oklahoma with 6% growth, and Louisiana with 4% growth. Even production from the offshore Gulf of Mexico, which had been declining for years, increased 2% from first-quarter 2007 to first-quarter 2008. The start-up last year of production from the deepwater Independence Hub, with wells in 9,000 feet of water, alone added about 1% to Lower 48 States production. Production in the rest of the States as a group increased by 8%.

Why Is Natural Gas Production Increasing Now?

Improved technology, developed over many years, now allows economic production of resources in deep water and large "unconventional" resources, which are difficult to produce. High and increasing natural gas prices have spurred more natural gas drilling and the trend to move from drilling simpler vertical wells to horizontal wells.

One indicator of the transition from conventional to unconventional production is the number of rigs drilling "horizontal wells." In the late 1990s, about 40 drilling rigs, or 6%, were drilling horizontally. As of May 2008, the number of rigs drilling horizontal wells has grown to 519 rigs, or 28% of the total. Horizontal wells don’t simply go straight down, but also have one or more horizontal sections. In the Barnett Shale, the wells go down about a mile and a half, make a turn and go horizontally about a mile, running through the rocks that hold natural gas.

Horizontal drilling is fast becoming the primary method used to produce gas from geologic formations like shale. Drilling and completing a horizontal well through shale has required improved technology, but these wells have become essential to the rapid economic development of unconventional resources in the United States.

Texas' Barnett Shale Is a Major Unconventional Resource

Texas accounts for one third of the nation’s natural gas production. Spearheading Texas’ recent rapid growth has been horizontal drilling in a geologic formation known as the Barnett Shale. The Barnett Shale contains a vast amount of natural gas, but its rock is so dense that wells drilled into this formation cannot produce gas at high rates without extensive additional efforts, even beyond horizontal drilling.

Much of the Barnett Shale is located beneath the city of Fort Worth and surrounding suburbs, a highly urbanized area that adds to the challenges of field development. Advanced drilling technologies, including horizontal drilling, are being used to reduce the "footprint" of drilling and allow production from the area without disrupting surface activity. Drilling rigs are already located on the Dallas/Fort Worth airport, and inside the Fort Worth city limits, and are headed toward downtown.

Will Natural Gas Production Continue To Increase in the Lower 48 States?

Most likely, production will continue to increase for the next few years if demand and prices stay high, though possibly not at the same rate as in 2007. There will be some ups and downs in monthly production. Fluctuations in monthly production are often known to come from hurricanes, winter storms, or new projects. The new Independence Hub project was offline all of May for some repairs which should cause a noticeable dip in production.

Total U.S. proved natural gas reserves – resources that have been identified and tested and either have been or will be developed – have increased for the last eight years, and in 10 of the last 11 years. Recent drilling trends indicate continued growth, with a stronger concentration on unconventional resources like shales. Shale formations in the lower 48 States are widely distributed, large, and contain huge resources of natural gas. They are just starting their full development. Already, the production from just one Barnett Shale field in Texas contributes more than 6% of production from the lower 48 States, which is more than from the large producing State of Louisiana.

Tags: Barnett, economic development, Forex, growth, Improved technology, increase, Mexico, natural gas, natural gas, Natural Gas Production, production, technology, Texas accounts, U.S.

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US Dollar Rally Extended As Growth, Rate Forecasts Lifted Conditions seem to be improving for the ailing US dollar. A strong showing from the economic docket, falling crude prices and a boost to interest rate expectations all helped to drive the greenback to its third consecutive rally today. Looking at the fundamental source of this dollar strength, the first quarter GDP revision took the lead. Though the change to the annualized figure from an initially reported 0.6 percent clip to 0.9 percent merely matched economists’ expectations, the rebound helped sideline fears of an impending recession. The breakdown of the growth report revealed the narrowing of the trade balance to a five-year low - thanks to record exports and curbed imports - marked the largest positive change to the headline reading. However, consumer spending was unchanged at 1.0 percent growth from the year before – the slowest pace of expansion since the 2001 recession. This statistic should act as a warning for traders not to be too optimistic on the outlook for the second half. Indeed, the past two quarters expansion was still the worst period of growth in five years and consumer spending is expected to drop much further as the housing recession deepens and employment trends recede. Looking beyond the economic calendar, the pickup in the growth number added to the hawkish outlook for the June FOMC rate decision that has already been padded by the heavy inflation concerns in the minute’s forecasts and recent Fed speak. Fed Fund futures suggest the market is pricing in a 98 percent chance that rates will be held in June and a 34 percent probability of a quarter point hike in September. Euro Tumbles As A Break In Employment Overwhelms Strong Retail Figures The euro dropped nearly 120 points against the US dollar and 50 points against its British counterpart Thursday as a mixed batch of data found bears a little more receptive to fundamentals. From well-stocked European economic calendars, the title of top event risk went to the frequently market-moving German employment numbers. Recently, this indicator has lost some of its clout among the FX crowd as the series has steadily improved for over two years. With the May figures, the unemployment rate was unchanged at a 15-year low 7.9 percent. However, the unemployment change was a considerable surprise when the indicator printed the first increase in jobless claims since January of 2006. The news clearly caught the market off guard; but such a reading was long overdue considering the cooling in exports and sharp rise in input costs that has weighed on business sentiment was bound to catch up with hiring trends. And, while the employment numbers are restraining growth forecasts for vigil rate watchers, the session’s other releases may still have an impact on the speculation down the line. The Bloomberg German retail PMI marked its biggest jump in 18 months - a strong sign for domestic spending. If tomorrow’s German retail sales figure confirms today’s PMI, the balance may be restored to euro and EURUSD can recover some of its losses. British Pound Weighed Down By Sharp Drop In UK Home Prices While the British pound recovered somewhat from a steep decline during the European trading session, the release of weaker-than-expected house price data undoubtedly took a toll on sentiment on the currency. UK home prices, as measured by Nationwide Building Society, tumbled 2.5 percent during the month of May – the sharpest decline since record keeping began in 1991 – while prices fell 4.4 percent from a year earlier. Indeed, tighter lending standards have cooled demand for properties and mortgages, leaving the UK housing sector a major soft spot for the national economy. However, given the fact that recent consumer price growth has proven to be stronger than expected and is only forecasted to accelerate faster in coming months, the Bank of England has very little scope to cut rates from the current level of 5.00 percent. If the reality of this situation takes a hold of the markets, GBP/USD could regain footing to climb toward 2.00. Commodity Dollars: Why Canadian Q1 GDP Could Be Stronger Than Expected on Friday A reversal in commodity prices, including oil and gold, weighed on the Australian and New Zealand dollars on Thursday. However, the Canadian dollar was impervious to the plunge in crude – with which the currency normally has a strong correlation – as Canada's current account balance nearly doubled forecasts as exports of goods surged through the first quarter. The current account balance jumped to a C$5.6 billion surplus that was not only a strong rebound from the previous reading but also the largest positive gap for the series since the third quarter of 2006. Even more encouraging for the health of trade was the fact that the fourth quarter balance was revised from its previously stated deficit to a positive C$0.8 billion surplus. The data bodes very well for Friday’s Canadian Q1 GDP release. According to a Bloomberg News poll, economists expect growth to slow to a tepid 0.4 percent pace from 0.8 percent in Q4 2007. However, given the significant jump in exports, the data could be surprisingly strong and lead the Canadian dollar to rally, but regardless, traders should expect a pick up in volatility on this release. Japanese Yen Tumbles Versus the US Dollar, British Pound While the Japanese yen traded wildly across most of the majors but made little headway, the currency tumbled against the US dollar and British pound. Indeed, market-wide we’ve seen that traders are becoming a bit more risk seeking, as indicated by the sell-off in the yen and government bonds, and mild gains in equities. Upcoming event risk for the Japanese yen includes CPI and industrial production, but as usual, Japanese fundamentals are not likely to play a big role in price action for the currency. Nevertheless, it’ll be worth watching to see if inflation pressures pick up in line with expectations, and if industrial output continues to falter amidst weaker foreign export demand. Tags: economic calendar, economic docket, EUR/USD, Euro, European trading session, Forex, Forex TV, Forex Videos, GDP, growth, growth forecasts, interest rate, Japanese Yen, Rate Forecasts, stocked, stocks, U.S. Dollar

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This should be the article many have been waiting for. A more detail explanation of Pipholic’s forex signals generating system. In case you are new here, please note that this is a subsequence of trading the gbp-usd daily pivot article. Both articles are meant to explain the way I generate Pipholic Daily Free Forex Signals. In the previous article I explained many aspects to be considered as regards defining the daily pivot point. Now, after we get the pivot point, the next step is to determine the trade direction; whether it is to go long (buy) or short (sell). Also, to determine at what price we should place the order; whether it is at the (+/-) 20 pips or (+/-) 40 pips distance from the pivot point. Below are steps I do for those purpose:

1. I open the 15 minute chart of GBP/USD
2. I divide the chart into 6 areas divided by: pivot lines and lines drawn at 20 and 40 pips above/below the pivot lines. Please see the picture below



3. At 22.00 GMT, I watch the last three candles; the current candle and previous two candles.
4. If at 22.00 GMT, the last three candles are at the A area, I will buy at +40 pips (40 pips above pivot)
5. If at 22.00 GMT, the last three candles are at the B area, I will buy at +20 pips (20 pips above pivot)
6. If at 22.00 GMT, the last three candles are at the C area, I will sell at -20 pips (20 pips below pivot)
7. If at 22.00 GMT, the last three candles are at the D area, I will sell at -20 pips (20 pips below pivot)
8. If at 22.00 GMT, the last three candles are at the E area, I will sell at -20 pips (20 pips below pivot)
9. If at 22.00 GMT, the last three candles are at the F area, I will sell at -40 pips (20 pips below pivot)

Since I take the last three candles to be observed, instead of only the current candle (22.00 GMT candle), there could be many variations of the candles position. It is frequent that I can’t find all those three candles in a distinct position (e.g, all at the A area or all at the B area). In this case, I usually wait and watch the next 2 or 3 candles. This is indeed the discretionary part of this trading systems. I’m gonna try to give some case studies later for a better explanation. Tags: better explanation, chart, Forex, GBP/USD, Pipholic Daily Free Forex Signals, pips, pivot lines, price, system, trading systems, trading systems

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Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said: “The price of a typical house fell by 1.7% in July, bringing the annual fall to 8.1%. This brings the average price to £169,316, almost £15,000 less than this time last year and its lowest level since August 2006. House prices have now been falling for nine consecutive months, but on average are still almost £11,000 higher than three years ago."

Economic conditions weaken…

“The latest batch of economic data has been fairly poor. GDP estimates for the second quarter show a slowing in each of the main economic sectors. Retail sales collapsed in June, reversing May’s surprisingly strong outturn, and confirming the view that consumers are tightening their belts in the current climate. Inflation remains well above target and is expected to continue to rise this year and the labour market is also showing signs of deteriorating. The claimant count measure of unemployment increased for the fifth consecutive month in June to 840,000. Although it is 2.7% lower than this time last year, the Bank of England Agents’ Report shows a fall in employers’ employment intentions, which would suggest that the situation is unlikely to improve in the coming months. The risk of an economic recession in the UK is now clearly rising. “Continued mild wage growth and the sharp fall in retail sales in June will give the MPC some comfort, as will the slide in oil prices in the last week. But, the impact of the sharp rises in food prices and further news of rises in gas and electricity prices have the double edged effect of pushing up inflation while at the same time slowing the economy as disposable incomes are squeezed. In our view the latter effect will begin to dominate, eventually giving the MPC enough comfort to begin cutting rates.

... but swap rates have fallen

“While the economic conditions are not looking good, there is some encouraging news for the housing market. With poor economic news, the sentiment around interest rates has become much less hawkish. Only a month ago the market was expecting the MPC to increase the Bank Rate twice this year: they now expect no change. The encouraging news is that this has filtered through to the swaps market. Swap rates have fallen which has allowed new fixed mortgage rates to come down.

Housing market activity at new lows

“Household goods suffered in the collapse of retail sales in June. This is hardly surprising given the sharp slowing in housing market activity this year. House purchase transactions fell to 36,000 in June, only a third of the level of this time last year. Difficulties with credit availability are likely to have had some effect, particularly at the higher end of the loan-to-value range (LTV). Indeed the proportion of loans completed at higher LTVs has come down disproportionately in the last year. This will reflect the fact that some lending is not taking place, but the distribution of the remaining loans may suggest some further displacement to the LTV bands below 90%, encouraged by better pricing at these levels.

Credit availability is holding activity back …

“The Bank of England Credit Condition Survey still signals tight credit conditions ahead. 22% more lenders expect that there will be less credit available to households over the next three months and this could limit a recovery in transactions. The cost and availability of funds is part of the issue, which James Crosby hopes to address, but general macroeconomic conditions and risk management are becoming more important. “The Bank’s survey revealed that credit scores are expected to tighten, and that lenders’ views about house prices are an increasingly significant factor affecting the availability of credit over the next three months. “But other factors aside from the supply of credit are also important for activity levels. There are around 41% fewer first time buyers now than at the same time last year. This may be due to their own desire to delay purchase because they expect prices to continue to fall, or frustration in obtaining finance, but the impact on the market is likely to be the same. That is that chains become longer and have a greater propensity to break down.

… but indicators suggest low levels of forced sales

“Estate agents are reporting up to 40% of transactions falling through and the average number of sales per surveyor is at its lowest ever level. This could be partly due to the availability of finance but the Bank of England Agent’s report suggests that this may also be due to the reluctance of sellers to accept lower offers. While this does little for liquidity in the housing market, it does indicate that sellers are largely not in a position where they are forced to sell. “As the cost of mortgages begins to come down, activity could be bolstered and restore some liquidity to the housing market. However this is not likely to happen overnight. Overall the weakening economy and poor housing market sentiment do not suggest that the market will recover quickly. But, if oil prices continue to fall and the MPC is satisfied that its inflation credentials are intact, the possibility of earlier rapid cuts in interest rates increases, which would be good news for borrowers.” Tags: Economic conditions, economic sectors, England, Forex, Forex Analysis, GDP, Housing market activity, market, MPC, prices, risk management, swap rate, typical house fell, UK, unemployment

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Best time to place this order: 05.00 GMT buy @ 1.9793 ( Stop/Limit/Market Order) Set Stop Loss @ -30pip Set Profit Target @ 20 pip Daily Pivot: 1.9773 Below are previous trade’s result and the Eur/Usd Signals: Previous Gbp/Usd (22-05-2008) trade and its result: buy @1.9709 (+20 pip profits) Today’s EUR/USD Forex Signals (23-05-2008) Best time to place this order: 05.00 GMT sell @ 1.5718 ( Stop/Limit/Market Order) Set Stop Loss @ -30pip Set Profit Target @ 20 pip Daily Pivot: 1.5738 Previous Eur/Usd (22-05-2008) trade and its result: No Signal (Corpus Christi Day Holiday) Please note that I don’t use the Eur/Usd signals for live trade. It is here for performance tracking purpose. Previous Day’s HLC (High Low Close) Data Gbp-Usd H: 1.9849 L: 1.9683 C: 1.9786 Eur-Usd H: 1.5813 L: 1.5710 C: 1.5692 Tags: Daily Pivot, Eur/Usd Signals, Forex, Forex Analysis, forex signals, Limit, market, Market Order, order, pips, profits, stop, Trade

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AUS Leading Index Falls in Annual Terms for 6th Month The Australian Leading Index rose 0.2% for the month of March and 3.3% on the year. The fall in the annual rate was the fourth decline in a row and shows that the economy is held back by the 12-year high official cash rate of interest rates of 7.25%. AUS Construction Rebounds in 1st Quarter Construction spending for the 1^st quarter grew 2.3%, rebounding from its 4^th quarter decline. Despite higher credit costs, construction seems to be doing fairly well and will be a positive factor in the 1^st quarter GDP figures slated to come out next Wednesday. AUD/JPY - Aussie Breaks Further Above Range

The Aussie-Yen pair kept its rally going, setting a new intra-day high near 100.90 for the session. It is up about 150 pips for the week, and has managed to break above its recent trading range. Most of the gains came during the European session as strong performance in European stocks outweighed weaker results in Asian markets. The Aussie traded in a choppy range against the US Dollar. NZD/USD - Kiwi Rally Stalls

The New Zealand Dollar-US Dollar pair declined today, after a rally of 350 pips going back two weeks. The pair hit resistance at the 0.7930 area, which was the intra-month high for May. The pair is at a critical point as recent indications have pointed to a slowing economy. If inflation is under control, the bank may move to ease borrowing costs to help spur growth. GER Import Prices Rise 0.9% in April In Germany, import prices rose by 0.9% in April, pushed higher by oil prices. The annual rate remained at 5.7%. GER Consumer Inflation Higher Than Expected in May Preliminary data showed that consumer price in Germany rose 0.6% for the month of May, and 3% on the year. Both were higher than expected, as the monthly rate was led by price increases in heating oil and diesel fuel. The data only reinforces the bias of the ECB to hold rates steady in order to combat inflation. EUR Current Account Deficit At 15.3 Billion Euros for March On a Euro-negative note, the current account for March showed a deficit of 15.3B euros in seasonally adjusted terms, as trade in goods showed a deficit of 3.9 billion compared to a surplus of 4.5 billion in February. This could be partially attributed to a higher Euro and the ongoing slowdown in developed nations. US Durable Goods Surprise Forecasts on Upside In the US, orders of durable goods were down a tame 0.5% in April. Expectations had been for a 1.5% decline, and the news was a welcome sign. Core durable goods orders, which excludes the transportation sector, saw a 2.5% increase, reflecting resilience in demand. EUR/USD - Euro Falls for Second Session vs Dollar

The Euro-Dollar pair had been climbing in overnight trading boosted by the elevated inflation data from Germany. After reaching a session high just above 1.5750, oil prices eased to $128/bbl, helping the dollar pare last week's losses. The current account deficit data also pressured the Euro. From its session high the pair fell more than 100 pips finding support at the 1.56 level. USD/JPY - Dollar Makes Up Last Week's Losses vs Yen

The Dollar-Yen pair continued its rally, erasing all of last week's losses and testing resistance at 105.30. Most of today's gains came during the European session, after which the pair retreated in NY trading. US stocks reversed earlier gains and were pressured by financials such as AIG. GBP/JPY - Pound Gains on Carry Trade Sentiment

Thanks to the easing oil prices, carry trade sentiments were rather strong today, especially for the Pound-Yen pair. From today's session low the pair was up more than 200 pips, breaking above its high from last week. Upcoming Releases Tonight Japan releases retial sales data and Australia posts information on capital spending. Overnight, the UK reveals a report on housing prices, while the euro-zone reveals end of month business and consumer confidence figures. Tags: AUD/JPY, AUS, EUR/USD, Europe, European session, Forex, Forex, forex market, Forex Videos, GDP, NZD/USD, official cash rate, Preliminary data, prices rose, Trade, U.S. Dollar

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Daily Forex Analysis Pattern Main Trend: Up Main Trend Top: None Main Trend Bottom: 1.5283 (05-08-08) Current Pattern: Reversal Top 1.5814 (05-22-08) Price 1.6019 Main Top (04-22-08) 1.5894 Gann Angle Down 1.5814 Closing Price Reversal Top (05-22-08) 1.5769* Gann Angle Down 1.5771 New York Close 1.5803* Gann Angle Up 1.5549 50% Retracement 1.5543 Gann Angle Up 1.5486 .618 Retracement Time 05-23 180 Day Cycle 06-03 180 Day Cycle 06-05 Anniversary Date Top (06-05-07) Analysis The Main Trend is up. The closing price reversal top at 1.5814 on 04-22 has not been negated nor confirmed. A trade through 1.5814 negates the reversal top. A trade through 1.5612 confirms the reversal top. If the reversal top is confirmed then look for the start of a retracement to 1.5549 to 1.5486. A down trending Gann angle at 1.5769 is providing resistance. Regaining this angle would put the market in a strong position to rally. The next upside target would be a down trending angle at 1.5894. Up trending Gann angle support comes in at 1.5803. A failure to hold this price indicates weakness and a possible break back to up trending support at 1.5543. The read today is how the forex market trades at 1.5803 and 1.5769. These two angles are controlling the short-term direction of the market. Go the way of the move on a breakout of either angle. Tags: Daily Forex Analysis, Day Cycle, Forex, forex market, market, pattern, price, price indicates, resistance, short-term direction, trend, trending

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Hello The latest Forex Focus: with a recap: Last week saw oil reach fresh highs of $135 a barrel which spelt bad news for the US economy and led to a general dollar sell-off.... and outlook: Soaring oil prices, the US housing market and problems in the financial sector are all bringing downside pressure on the greenback. However, this week’s FOMC meeting minutes gave a strong signal that the Fed’s series of cuts is over. What’s more speculation is mounting that we could see a rise in rates in September as inflationary pressure increases. In addition there are also noises that the G7 will take further steps to stabilize the markets and strengthen the dollar. There is a lot of US data due this week and much of it is expected to be pessimistic and it will be difficult to buy the dollar. However, long term traders should assess the potential of buying the dollar in the dips.... Tags: Dollar, financial sector, FOMC, Forex, Forex Analysis, Forex Focus, Forex Videos, G7, market, strong signal, US economy

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CMS Forex's Daily Video Recap - 05/23- Dollar Declines To End Week UK Consumer Prices Jump to 3.8% Annual Pace In the UK, consumer inflation jumped to an annual pace of 3.8% in June, up from 3.3% in May. This figure was above expectations and is the fastest annual pace in 11 years. It will keep the pressure on the Bank of England to keep rates at their current levels even as the economy is lurching towards a recession. UK BRC Retail Sales Negative in June, RICS House Price Balance at -88% 'The BRC retail sales monitor showed sales falling 0.4% in June compared to last year. Consumers are becoming more price-conscious and are spending less. In a separate report, the RICS house price balance showed that 88% of surveyors and realtors saw falling house prices in June, a slight improvement. EUR & GER ZEW Economic Sentiment Hits Record Low In Germany, the ZEW Economic sentiment index, which measures the outlook over the next 6 months, fell to a record low of -63.9. In the Euro-zone as a whole the figure was -63.7. This is a sharp fall from May as business sentiments were dampened by a combination of surging oil prices, the strong Euro, a rate hike by the ECB and financial market turmoil. EUR/GBP - Pound Gains on CPI Data

The Euro-Pound pair fell in favor of the Pound following the releases. It's the second straight session that the pair fell as the economic pressures facing the Euro-zone are becoming clearer.  The Pound also hit a 3 ½ month high against the Dollar. EUR/JPY - Euro Sinks vs Yen as European Stocks Suffer

Stocks in Europe took a pounding, with the main indexes in London, Frankfurt and Paris down between 2 and 2.5%. The poor performance in equities increased risk aversion and boosted the Yen. The Euro-Yen pair plunged 220 pips during the session, finding support near 166.50. US Retail Sales Only Gain 0.1%, Boost From Rebates Over In the US, retail sales disappointed, showing a 0.1% gain in June. It seems that the boost from the stimulus checks that had propped up the numbers recently has now faded. Excluding autos, sales were up 0.8%. US Producer Prices Surge 1.8% in June Inflation to producers jumped by 1.8% in June, higher than expected, mostly on the back of higher food and energy costs. Core prices were up only 0.2%. US Empire Index Still Negative, Business Inventories Rise 0.3% In other releases, the Empire State Manufacturing Survey showed that manufacturing activity in New York State worsened for a third consecutive month in July. The index increased slightly from last month's level but, at -4.9, remained below zero. Business inventories were up 0.3%, smaller than expected, as firms cutback on stockpiles with lean economic activity ahead. EUR/USD - Euro Sets a New All Time High, But Retreats in NY Trading

The Euro-Dollar pair hit a new record high during European trading, climbing above 1.60, in anticipation of testimony by Fed Chairman Bernanke.  Contrary to expectations, he mainly focused on inflation though he acknowledged the downside risks to growth. In NY trading, the Dollar recovered its overnight losses, as the all time high served as strong resistance. USD/JPY - Dollar Plunges vs. Yen on Risk Aversion and Weak Start to Stocks

The US stock market fell steeply at its open and during Bernanke's testimony. The Dollar-Yen, already pressured overnight, hit a 1-month low near 104.15 a slide of 200 pips from the session's open. Stocks recovered though, as oil prices fell as much as $9 at one point. This helped stop the bleeding in the pair, though the Dollar did not manage a recovery like it did against the Euro. CAN Bank of Canada Holds Rates at 3% The Bank of Canada held rates at 3%. The three major developments affecting the Canadian economy are the protracted weakness in the U.S. economy, ongoing turbulence in global financial markets, and sharp increases in many commodity prices. The statement was rather balanced with members believing the current rate is "appropriate." USD/CAD - Loonie Reaches Parity vs Greenback Prior to BOC Decision

The US Dollar-Canadian Dollar pair reached parity prior to the NY open, the first time that's happened since June 3^rd. The last 5 sessions have seen the pair drop from the 1.02 level. The greenback found some support near 0.9980 in NY trading following the announcement. NZ CPI Increases to 1.6% in 2nd Quarter In New Zealand last night, data showed consumer prices increasing 1.6% in the 2^nd quarter, with the annual rate climbing to 4%. NZD/USD - Kiwi Jumps to New 1 1/2 Month High on CPI Data

As a result the Kiwi-US dollar pair jumped 120 pips overnight, hitting a new high at 0.7760. The Kiwi is expected to continue its interest rate advantage over the US Dollar as the bank is willing to have growth deteriorate as long as higher rates bring down inflation. Upcoming Releases Turning to upcoming releases, overnight the UK will post employment data, and Germany and the Euro-zone post revised CPI data for June. Switzerland meanwhile releases figures on retail sales. Tags: Commodity, CPI data, England, EUR & GER ZEW Economic, EUR/GBP, European Stocks Suffer, Forex, Forex, Forex Videos, Germany, RICS House price, Stock, stocks, UK BRC, UK Consumer Prices, ZEW Economic sentiment index

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Forex Market Update: Early Asia Trading The JPY cross trends were once more the main direction indicator bias in Asia with the crosses heading for decline and flowing with the activity in the DJIA stock futures. The DJIA futures marked 3 digit losses in previous Asian trading, as Asian stock markets declined also. This moved JPY crosses lower, which sequentially dropped on AUD-USD, NZD-USD, EUR-USD, GBP-USD, and USD-JPY. DJIA futures minimized the losses by the afternoon, and this caused USD-JPY and JPY crosses bounce in tandem. USD-JPY which opened around 102.25 in early Asia, went down to lows of 101.13 previous to staying at about 101.40 in the afternoon. EUR-USD went down from 1.3646 to lows of 1.3535 and stayed at about 1.3572. EUR-JPY went down from levels at about 139.30 to lows of 136.95, stabling at about 137.61 into the afternoon. Tags: and USD-JPY, Asian stock markets, asian trading, AUD-USD, DJIA futures, EUR USD, Forex, forex trading, forex trading, Futures, GBP USD, indicator, JPY cross trends, NZD-USD

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