Long Term Purchases: Hit Or Miss?
Release of Treasury Long Term Capital (TIC) long term purchase figures will occur at 9:00 AM EST on Thursday, April 15th.
The TIC long term purchases release is a monthly economic event that measures the difference in value between foreign long term securities purchased by U.S. citizens and U.S. long term securities purchased by non-U.S. residents during the period. If it beats estimates it is considered good for the USD. Non U.S. residents buying U.S. securities is bullish for the USD since foreign currency must be converted into USD to purchase U.S. securities.
This event can have variable effects on the EUR/USD pair. Sometimes the effects are significant, other times they are barely a blip on the chart. The dollar has just gotten slammed against the Euro over the last 5 days. The prime driver is the improved situation in Greece leading to Euro strength. The fear of the economic contagion spreading to other 2nd and third tier EU nations has abated for now. 1.4000 is the next significant resistance on the EUR/USD up move with 1.3253 serving as support. The TIC is expected to be 39.2B which is up from last month’s 19.1B. It will be interesting to see how the USD reacts to a miss of this number.
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.