Euro Falls To New Lows

Our up to the minute currency market news reporting is supplemented by the daily video below. Scroll down for the latest international currency market news news and commentary.
 

Focus on Eurozone

Renewed pressure on euro as the single currency falls to 15-month low versus pound and nears decade low versus yen as investor focus returns to eurozone debt. Risk appetite drives the ‘loonie’ strength of the Canadian dollar, which is now C$1.32 to the euro, is correlated to firmness in growth-focused assets, particularly commodities.

Asian shares lose ground on Europe fears. Stocks stumbled, led by financials and exporters, as investors shifted their focus back to Europe’s debt crisis.

India woos foreign capital to regain lost sheen widening the investor base has been welcomed but few analysts expect to see immediate results. SNB publishes ethical code after currency trades. Political storm over the transactions conducted by Kashya Hildebrand, former foreign
exchange trader married to central bank chairman.

Use the information in the currency market news to improve your currency market news trading.
 

Busy Week For The US Dollar

Daily forex currency trading technical commentary on USD, Euro, Yen, Pound, Australian Dollar, Gold and Oil and the knowledge to improve your forex currency trading.
 

Busy Week For The US Dollar

The Euro has opened lower this morning, sitting below the critical 1.30 barrier as markets remain nervous as to the steps that the Eurozone will take to curb the crisis. In major trading, the US Dollar managed to gain further strength last week trading to a low of 1.2860 at the end of 2011, which was the lowest in the final quarter of 2011. Data from the region, saw manufacturing figures come in from France, Germany and Switzerland, which was higher than previous months for all countries, though not reflecting a drastic expansion as it lay below the median figure of 50.

With regional banks stepping up their deposits in the ECB, panic had started to set in, but the announcement from the ECB last week that these deposits were receding, have calmed fears momentarily. We have had some positive data from Germany, as far as unemployment figures go, pushing the Euro towards the critical support level of 1.30 against the greenback. As we go into the week, we expect further data from Europe on Services PMI and construction figures, which will lend to trading patterns of the Euro, intermittently.

We are straight back into a busy week for the US Dollar with ISM manufacturing out this afternoon along with the minutes of the previous Federal Reserve meeting from the 13th December. On Friday the US non-farm payroll number is also released, with the consensus for around 150K jobs being added over the previous month.

Today also marks the official start of the presidential elections with the voting beginning in the first republican primary in Iowa. A victory by the favorite, Mitt Romney may mean the race is over before it began with Mr Romney holding a 20 point lead in the next state to vote, New Hampshire.

Bookmark this page for forex currency trading and daily forex currency trading news.
 

Forex focus: don’t give up on the euro just yet – Telegraph.co.uk


 

Telegraph.co.uk
Forex focus: don't give up on the euro just yet
Telegraph.co.uk
Given that forex is a "beauty parade", Jeremy Cook of World First believes that "while the euro is looking particularly haggard at the moment, its competitors are no spring chickens either". And then we must not forget that only five of the 17 member …
FOREX-Dollar rises after US debt talks failReuters
FOREX-Dollar gains on US, euro zone debt worriesReuters UK
Forex Market Outlook 11/21/11Forex Market
Trading Point -FXstreet.com
all 857 news articles »
Use the information in the forex analysis to improve your forex currency trading.
 

OBAMA TAX INCREASES TO PAY FOR JOBS BILL NOT IN KEEPING WITH ‘BIPARTISAN … – ForexTV.com


 
OBAMA TAX INCREASES TO PAY FOR JOBS BILL NOT IN KEEPING WITH 'BIPARTISAN …
ForexTV.com
FxWire Pro by IBTimes is a fast-growing professional grade real-time Forex Newsfeed service providing forex traders with a comprehensive overview and insight of the global currency markets in real time. The service is built on IBTimes' global backbone …

and more »

 

Currency Market News And Updates


 

Currency Market News is bought to you from around the globe 24/7 making it easier to keep an eye on your investments and any news effecting your positions. Watch the daily podcasts and videos from the UK and USA for a broader perspective on Europe and the Asian markets.

Currency Market News has contributions from top financial and investment experts at The Wall Street Journal, The Financial Times, Bloomberg’s, FOREX.com, IBTimes and many more.

Bookmark Currency Market News or subscribe to our feed for easy access to the information you need.


 

FAP Turbo: MT4s and Forex Robots – Associated Content


 

Metatrader Brokers, or MT4s, are trading brokers who license Forex robots resembling FAP Turbo to use a Metatrader platform as their buying and selling terminal. These allow these interested to commerce inside the Forex market. There isn’t any universal …


 

Pound Prepares For A Busy Week


 

With Chinese New Year and a lack of new data releases, last week turned into a bit of a non-event for currency markets.

14, February 2011

With the exception of today (where the only thing of interest is the meeting of European finance ministers’) the rest of the week will very busy, especially for the Pound.

On Tuesday, figures will reveal just how far from the Bank of England target inflation actually is. This is the first month that will include the recent VAT rise, with CPI expected to hit 4% and RPI (which I think is a better gauge of the inflation rate experienced by you and me) through 5%. Up till now, for a great many people, it has difficult to distinguish between 2 or 3 per cent inflation. In my opinion, a 5% rate is psychologically important and will push the BoE into action much sooner than people expect.

The bank minutes are due for release next week, which will show how many members voted for a rise this time around, but on Wednesday the quarterly inflation report will detail their outlook for inflation over the coming months. The key point will be if the Bank thinks that current inflation levels are temporary (their current thinking) or that it is more permanent in nature and we will probably be able to guess the voting preferences from the report.

Also this week we see unemployment figures and jobless claims on Tuesday and retail sales, a measure of the health of the high street, on Friday. Positive sales data and no change for unemployment should be positive for Sterling, but we are very dependent of the content and tone of Wednesdays report.

Elsewhere, US retail sales are also out on Tuesday and are expected to show a moderate increase with US CPI data, in contrast to Britain, forecast for 1.6%. The Dollar pushed higher over the weekend after University of Michigan consumer sentiment data moved to eight month highs and until the data flood gates open tomorrow we do not expect any large reversals of this trend.

Once again rising bond yields in periphery nations has started to drag down the Euro. As politicians continue to disagree about debt reduction targets and the enlargement of the EFSF, the merry-go-round may begin to focus again on Europe and this will probably manifest its self in a weaker Euro. Data wise we are pretty light on the ground, with only German GDP and Eurozone industrial production of note later in the week.

Report by Alistair Cotton

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

UK Inflation Rising Again


 

Yesterday’s publication of the UK inflation rate made for an interesting day for Sterling.

19, January 2011

The current rate now stands at 3.7%, getting on for double the Bank of England’s official target rate of 2%, surges in the price of fuel, transport and food the headline grabbers of price rises across the board pushing Sterling over the magical 1.60 level for most of the day.

The usual media circus ensued, most of the articles giving the impression of modern day Britain as the new Weimar Republic and informing anyone who would listen about the Bank of England’s incompetence and why they should raise rates immediately. Once we drill down into the data, we get a slightly less hysteric picture. Tax rises and the drop in the value of Sterling seem to be much more influential to the current inflation rate but even with these effects stripped out the inflation rate would be above target.

The problem for the BoE is in managing inflation expectations with the rate as it is. If current inflationary pressures are indeed temporary (which in one sense they are) then they need to be more proactive in forcing this point home and keeping expectations anchored. For Sterling this should be positive, but probably not as important as market currently thinks.

The meeting Euro zone ministers failed to produce any agreement on an enlargement to the current bail-out fund or any more for further fiscal consolidation. The spreads on bonds between the periphery nations and Germany once again blew out, with the yield on the Spanish 10 year passing the key 7% level we have discussed before as being the level that signalled the beginning of the end for Ireland and Greece.

In terms of data for today we are very light, with only Euro Zone construction data on offer. The focus will remain on ministers coming to some agreement over the enlargement of the bail-out fund and also if there will be any changes in what the fund is used for, which may include buying Euro Zone debt.

The Dollar took a back seat yesterday and that will probably continue today with little on the horizon. Thursday sees the release of a big stock of figures including initial jobless claims to it is looking like a quiet end to the week for the Greenback.

Report by Alistair Cotton.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

7 Reasons to Start Trading On the Forex Currency Market


 

7 Reasons to Start Trading On the Forex Currency Market

Do you want to invest in a market where you can make big money? Want to take a piece of a 2 trillion dollar daily trade business? The Forex currency market is for you then. Read on to find even more reasons to start investing in Forex markets today.

The Forex currency market is huge. If you have time and money to invest in Forex, there’s no reason not to. The best part is that you don’t have to go anywhere to do it. You can use Forex from your home computer while you relax. You can check the market from virtually anywhere as long as you have a portable device and an Internet connection. This makes Forex not only very profitable but very hassle free.

If you’re not convinced yet that trading on Forex currency markets is for you, then you need to hear the seven reasons to start trading. Here are the most important reasons to start today:

1. With Forex you can have monetary leverage. You can invest ,000 to control a trade of 0,000. Depending on the brokerage firm, the amount you invest and the amount you control will fluctuate. Some firms will give you 200 times the leverage which is 0 investment controlling 0,000.

2. Trading Forex online has very small transaction fees. Even if you only invest small amounts you, won’t have to pay as much as you invest.

3. One of the great things about the Forex market is that there are no surprises. You don’t get slammed with some hidden figure. This makes offloading losses extremely easy and almost instant.

4. Forex trading is amazing in the fact that you can buy or sell whether it’s going up or down.

5. Being able to conduct business on Forex at any time is an amazing advantage it has over other markets. The flexibility you get from Forex can’t be found on most other markets. Since everything takes place on a global scale it has to operate 24 hours a day 7 days a week. The world doesn’t sleep nor does Forex.

6. Using analyzing tools, you can gain more money with more experience. These tools are designed to help you track online different trends in the market. This will mean more money for you the better you get at analyzing the charts.

7. With a daily trade volume of 2 trillion U.S. dollars, there is vast potential for making a profit. Such large amount of money up for grabs daily means your chances of getting more increases greatly.

The reasons listed in this article are the main reasons you’ll want to get into this type of market. There are plenty more reasons that aren’t listed which you might find out for yourself once you get started.

Personal or professional reasons could be too numerous to count. What is important is that you find the reason that draws you in the most. Your reasons, like the money you can make, are yours and yours alone. Take a dive into this market today and see the increase in money you make.

Video Rating: 4 / 5


 

What Moves The Currency Markets In The Short Term?


 

What Moves The Currency Markets In The Short Term?

Day trading is not easy. You must know this fact. Almost 90% who try day trading fail. However, those who succeed can make a lot of money. As a day trader, you must understand that there are certain times when the markets are expected to show a lot of volatility. These times are infact known in advance. So what are these time? These are the times when important economic reports are released.

There are many day trading strategies. Range trading is one of them. Most of the time, the markets are ranging meaning only moving sideways with no clear trend present. This is the time when day trader do scalping. Scalping means making a few pips quickly before the market has time to move. Now, as a range trader, you should stay away from trading when an important economic report is released like the Nonfarm Payrolls (NFP) report. On the other hand, if you are a breakout trader who waits for a breakout than this is the ideal time for you to trade in the currency market. When this NFP report is released, the market shoots up and down for a few minutes. If you are an experienced trader, you can make many pips at this time.

Now, suppose you use an automated trading system like a forex robot than knowing some fundamental analysis is good for you. Knowing when to turn on or off the automated system based on the incoming economic releases can have a big impact on the overall performance of the trading strategies.

There are two types of trader; Fundamental traders and technical traders. If you are a fundamental trader than these economic report release are an important part of your trading strategy. Now, you must be aware of the fact that over 90% of the currency transactions that take place in the global currency markets are US Dollar related. US Dollar can be either the base currency or the counter currency.

Not all economic report releases are created equal. Some economic report releases are considered more important by the markets while others are simply ignored by the markets.

So what economic report releases are the most market moving? Since, US Dollar is the most important currency in the global economy right now, the release of US economic reports are the most market moving. The most market moving right now is the Nonfarm Payrolls (NFP) report. This report gives the unemployment rate in the US economy. Unemployment rate has become very important since the start of the recession in the US economy. As you must be aware, right now the US economy is suffering with the highest unemployment rate in its history. So watch out for the release of NFP report.

So how does the market reacts when the NFP report is released every month? The initial reaction of the market is knee jerk. In the first 10-20 minutes the market, compares the actual report with what was being expected by the market. If there is no divergence, the market settles down after that time. However, if there is a surprise and the actual report is different from what has been expected, the market may start moving in a new direction so watch out for this important monthly report.

The second most important market moving report is the FOMC Meeting minutes release. FOMC ( Federal Open Market Committee) Meeting is the forum where the FED decides whether to increase or decrease the interest rate in the US economy. This is an important meeting and the whole market follows what is happening and what is expected days before the FOMC Meeting takes place.

Now, the market is always watching. Analysts are following what is happening behind the scenes in the FED that might result in a interest rate increase or decrease. What the market does not like is a surprise or the unexpected. So you need to be aware of the economic release calender if you are a day trader!

Mr. Ahmad Hassam is a graduate of Harvard University. Get these FREE Forex Scalping Cheatsheets! Watch these 4 FREE Flexible Forex Day Trading Risk Shield Videos by Bill that show how to reduce risk to zero and triple your profits safely. If you want a 5 figure monthly income part time than you should give Bill Poulos’s Forex Income Engine 2.0 Course a 60 days RISK FREE trial.This course comes with 8 weeks of personal FREE coaching by Bill.


Article from articlesbase.com

jimrogers1.blogspot.com http for more jimrogers1.blogspot.com http for more jimrogers1.blogspot.com http for more
Video Rating: 4 / 5

Find More Currency Market Watch Articles


 

Euro Currency Market Pdf – The Bull Trend is Dead and a Big Profit Opportunity 700 Pips Or More!


 

Euro Currency Market Pdf – The Bull Trend is Dead and a Big Profit Opportunity 700 Pips Or More!

Euro Currency Market Pdf

We may have one more rally but the highs are in and the euro will decline, as the dollar bearish fundamentals have peaked. You don’t need to be clever to see why and work out the potential. Here are all the facts and a potential 700 pip opportunity and that’s a lot of profit! Euro Currency Market Pdf

Many traders think markets some strange force but they don’t they move in line with the long term fundamentals but of course you can’t trade on these, you just know they are going to force the euro lower so we have included the technical levels as well and will indicate under valuation and over valuation for marketing timing purposes.

So why is the era of dollar selling over?

Here are the main reasons.

- Bearish sentiment of investors has peaked

- The market is not just focusing on problems with the dollar but in other countries

- There is a significant improvement in the current account deficit underway

- The Housing market is on the road to recovery and the excess supply should start to decline

- Employment numbers are still poor but coming in better than expected

- Higher yields are needed but the yield disadvantage will narrow as Fed looks to raise rates

The economy still has problems of course but the real key is rates the US has aggressively cut and many other economies have not this leaves plenty of upside potential. While rate rises may not occur in the short term the aggressive cutting is over and the bearish scenario is factored in and the dollar is hammering a base, while the storm clouds gather for the euro. Euro Currency Market Pdf

Euro

Here are the main reasons which point to euro weakness

- Current account balances no longer show the euro is under valued

- In terms of purchasing power parity the euro U.S Dollar rate should be around .20

- This shows that the euros rally has really been based on interest rate perceptions

- The ECB will be reluctant to raise rates with economic activity weak

- Labour markets remain tight but economic activity will dictate rate rises

Take the above and what do you have?

The interest rate differential that has driven the euro higher has gone and we will now see a period where the dollar works its way higher.

The Charts

If you check out the weekly chart you will see a clear top in place and the up-sloping trend line which has supported the advance has been penetrated and 1.50 is the initial target. The weekly chart really lets you see the wood from the trees but you need to time off the daily chart.

On the daily chart the resistance is the same as the weekly and we are trading in a range which has been in existence since March. The target at present is the bottom of the range 1.54 and if this gives way 1.50.

We are a little oversold at present but any rallies will get to around 1.57, 1.58 at best and are a sell on falling momentum, if the euro does not rally a close under 1.54 cements the bull argument

Nothing complicated and so far our sale at the pop to the highs is 400 pips up but as with all trends there are more opportunities coming to take advantage of euro weakness and if you can get in then you could enjoy a ride that is very profitable and could see the euro below 1.50 by year end and that’s a lot of profit! Euro Currency Market Pdf

Always dream of being Rich? Never able to make a Consistent Profit through trading?

Get your Euro Currency Market Pdf and be Successful forever!

Try this Forex Auto Money and be Financial Free in 6 Months!


Article from articlesbase.com


 

Irish Bailout As Dollar Gains


 

Ireland counts the cost of the bailout as the USD reaches a two month high against the Euro.

29 N0vember 2010

So we now know the gory details. First, the main points: the Irish bailout of €85 billion will be made up of external support from the IMF and EFSF of €67.5 billion and domestic funds of €17.5 billion. The Irish contribution comes from the now decimated National Pension Reserve Fund with the UK making a bilateral loan of €3.8 billion as well as contributing to the IMF funds (and you thought the money saved in recent round of UK spending cuts was used for paying down our own debt…).

The effective interest rate that the Irish will pay on the loan is reported at 5.8% according to the official document, but private calculations have put the figure closer to 7.25% and this will lead to an astonishing 20 per cent of Irish tax revenues servicing the debt by 2014 according to calculations.

The main controversy is the news that senior bond holders in the Irish banks will received no haircut on their holdings – no doubt due to contagion fears as investors dump bank bonds in the event of any short back and sides – and the banks are estimated to need an extra €8bn to get core Tier One capital to at least 12 per cent.

And come up for breath. More than three quarters of Eurozone government debt is held by Eurozone members, mostly financial institutions so you can see why this package wants to protect senior debt holders, but politically there is huge pressure to make sure that tax payers do not shoulder the whole burden and write downs on bond holdings in the future cannot be ruled out. Inevitably the Euro continues to fall against the USD which continues to perform well in the face of heightened uncertainty.

Sterling has also opened the week on the back foot as UK institutions are reckoned to be the most financially exposed to the Irish, particularly RBS through Ulster Bank. UK House prices have continued to fall for the fifth month in row, but mortgage approvals came in slightly ahead of forecast. There will need to be a much larger turn around in approvals for it to have any significant impact on house prices in a falling market. This week is a light one for Sterling data which the only figures of note UK PMI on Wednesday and further house price figures on Friday.

The Dollar trades at a two month high against the Euro and is looking at its first monthly gain versus the Yen since April. In a week which will probably prove to be highly embarrassing for the US after 250,000 classified diplomatic cables are released by media around the world, we have ISM manufacturing, consumer confidence and non farm payrolls to look forward to. But not as much as those cables. According to reports, the cables will reveal disparaging remarks about Gordon Brown and David Cameron, my bet is that the UK public will probably agree with whatever is said

Report by Alistair Cotton

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

Korean Crisis Aids USD


 

USD has benefited from the Korean crisis while Ireland leads the PIGS to a weaker euro.

24, November 2010

The Dollar continues to advance against the Pound and Euro this morning as the safe haven currencies benefit from the ongoing tensions on the Korean peninsular. A US aircraft carrier is on route to support the South Koreans in a spot of puffing the chest and attempting to look scary in a joint military exercise, with the Chinese also announcing they will look to work with the US to resolve the tensions. With all sides on edge, the Dollar and Swiss franc will continue to hold onto its gains in the coming days.

The release of the Federal Reserve minutes last night passed largely as expected, with most members agreed that the benefits of further QE still outweigh the costs and that a monthly purchase scheme was the best option available. The Fed also discussed specific term rate targeting – a departure from the current duel mandate of inflation and employment – and the uber QE option if pursued.

This will be worth following going forward since any change in the Feds mandate or stance will likely have large ramifications for the Dollar.

Ireland. That, in one word, is why the Euro continues to lose value against Sterling and the Dollar. After snaring its prey after what seems like one of the most drawn out pursuits in history, the market is now on the look out for its next victim. Portugal is currently in the crosshair, and will face almost certain death unless drastic fiscal action – which is not guaranteed to work – is implemented almost immediately.

The real worry continues to be Spain which, if it were to require EU cash, would almost certainly use up most if not all of the funds and probably need further money down the line. This story has much further to run and the big question is how will the Germans, who are bearing the brunt of the costs, react to a further wave of bail outs, and will this lead to political reforms in those countries led by Germany? Interesting times but Europe Isn’t Melting Down!

UK GDP was unchanged at 0.8% quarter on quarter this morning, with the annualised rate also unchanged at 2.8%. The market expected a revision downwards so an unchanged figure would, in normal market conditions, lend the Pound some strength. However, Sterling is being thrown around like a rag doll by the Dollar and Euro and with a raft of low key UK economic figures out today the theme of Strength against the Euro and weakness versus the Dollar is likely to continue.

Report by Alistair Cotton

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

Bernanke Starts Currency War


 

Oh yes, my non-Jewish friends. Looks like we got a fun currency war brewing. Whatever that is. THE MARKET TICKER: market-ticker.org REUTERS PIECE ON BERNANKE = CURRENCY WAR: blogs.reuters.com CURRENCY WARS BOOK: en.wikipedia.org GODLIKE CONSPIRACY THEORISTS ON THIS: www.godlikeproductions.com


 

G20 Meeting Turns Into Non-Event


 

Plenty of data out later this week as the G20 meeting fails to deliver anything concrete.

15, November 2010

The G20 meeting was the non event that everyone was predicting, with any firm commitment over currency reform off the table, the best we got was an agreement to agree – nothing concrete in terms of a path forward and certainly nothing of substance to make sure we avoid a trade war further down the line. (Nothing new for the G20 here then – see G20 – The Commitee That Cannot Commit )

The hope was for a commitment to restrict current account surpluses/ deficits to a percentage of GDP but surplus countries (Germany, China Etc) dug their heels in and even refused to accept such loose dialogue. Friday’s rumour that Ireland was about to go cap in hand to the EU gathered momentum over the weekend, Irish Prime Minister Bryan Cowen denied that a bail-out was needed. However, further comments this morning by Irish officials has left the door open for EU assistance.

German comments suggesting the Irish should accept the bail-out to avoid further contagion in debt markets (read Portugal and Spain) spooked the markets and undoubtedly made any market based resolution even less likely.

More poor data from Rightmove continues to show deterioration in the British Housing market, but this has not affected Sterling in the majors very much in light of the larger Eurozone story. The Bank of England minutes are released on Wednesday (not to be confused with the Quarterly Inflation report last week) showing MPC voting preferences from the last meeting.

We also have CPI and RPI inflation data out tomorrow which no doubt show inflation still running ahead of its target level of 2% plus or minus 1%. Finally we have jobless claims, retail sales and public sector debt levels also out this week in a busy one for Sterling.

Importantly for the Dollar we also get to see US CPI data (out on Wed). The US has flirted much closer with deflation than the UK and it will be very interesting to see how the inflation rate has reacted to the spectre of further QE. The effects of the bond purchase program will take several months to filter through into the official inflation figure. Inflation expectations, which also play a role on the inflation rate should rise as more QE is announced. This will take a much shorter time period to be reflected in the CPI data. We also have US retail sales in the important build up to Christmas to digest.

Report by Alistair Cotton

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

Sterling Suffers And US Dollar Waits…


 

Tonight’s FOMC meeting leaves currencies hanging…

3 November 2010

In the UK yesterday, trading was fragmented at best, with Sterling suffering after the sharply weaker construction PMI in contrast to the slightly improved numbers from Germany, Italy and to a degree, France. The current overall reluctance to hold Dollars combined with a nagging doubt over the resilience of the Euro tempered any Sterling losses, and rates between the G4 nations look set for a short period of consolidation. Economic data today has proved positive for Sterling; longs have benefited this morning with UK PMI data coming in at 53.6 which has boosted cable to 1.6133 at the time of writing.

The majority of analysts predict the Fed to pump $500 billion in asset purchases stretched over the next 6 months. The effect on currency markets will be based on the movement from this figure. If the Fed produces a greater result, for example of $1 trillion plus, the greenback will face renewed pressure. On the other hand, a more vigilant measure of quantitative easing will be US dollar positive.

One must accept that the Fed will probably steer clear of one particular economic direction to keep their options open and maintain an open ended program based on future economic data which it will use to adjust its levels of QE. Despite the cable surge, the dollar will likely trade within a tight range before the announcement. However with so much in the price, it may be astute to be suspicious of a sell rumour and buy on the fact.

As it stands many currencies are at pivotal levels against the USD, with AUD/USD trading around parity following yesterday’s surprising Australian rate hike, EUR/USD maintaining above the 1.4000, GBP/USD resuming gains above key psychological 1.60 level in spite of weaker than expected construction data, whereas USD/JPY continues to aim for 80.00. In addition, both AUD and CAD are close to parity with the USD.

The Fed result will be influential in shaping if the USD continues to linger on the weaker side of these key levels. Ahead of the FOMC meeting the USD continues its downward pressure particularly against Asian currencies as a result of renewed appreciation in the ADXY (a weighted index of Asian currencies) against the USD this week.

Even though it looks like central banks in Asia have the go head to interfere at will following the recent G20 meeting the force of capital inflows into the region is a growing concern for politicians. One choice is placing restrictions on “hot money” inflows but up to now no central bank in the region has shown an enthusiasm to implement measures that are deemed as particularly aggressive.

Report by Philip Ryan

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

S&P Gives Sterling A Boost


 

Sterling got a boost from Standard and Poors yesterday while the US Dollar recovered amidst reviving consumer confidence. Further US economic data is due out this afternoon.

27, October 2010

The UK’s unexpectedly strong growth over the last quarter gave sterling a significant boost. The surprise rise in 3rd quarter GDP to 0.8% was led by the services and construction sector, prompting economists to up their growth forecasts for 2010 to around 1.8%. Sentiment was also helped by Standard & Poors affirmation of the UK’s AAA rating and restoring its outlook from ‘negative’ to stable as they stated “the coalition parties have shown a high degree of cohesion in putting the UK’s public finances onto what we view to be more sustainable footing”.

The S&P announcement was seen by George Osborne as a “vote of confidence” in the government in a “double-dose of good news” for the economy. However, markets need to be aware of the fact that the recent cuts announced in the UK have not fed through the economy yet. Above-trend growth coupled with above-target inflation will leave the Bank of England with little reason to return to quantitative easing and adds weight to Sentence’s hawkish stance that it is high time for a rate hike.

Preliminary German Consumer Price Index figures headline the economic calendar in European hours, with expectations calling for the annualised inflation rate to hold at a manageable 1.3 percent. The outcome may not prove particularly market-moving, reinforcing established expectations that the European Central Bank will remain on hold for the foreseeable future.

The US dollar also regained some ground as confidence amongst US consumers rose from a 7-month low. Although households turned less pessimistic on the outlook for the economic recovery, American’s views on job availability and wage prospects soured, highlighting the risk that unemployment hovering around 10% in the US will limit future spending. In addition, concern over deteriorating property values may also be weighing on American psyche.

Dollar sellers now appear to be in the process of locking in some profit as investors hold steady ahead of Friday’s US Q3 GDP figures and the Federal Reserve’s policy meeting next week. An element of caution is now starting to infiltrate the markets as thoughts turn to what steps the Fed might take to assist recovery in the States and the form of any further stimulus packages.

The Australian Dollar sank against the spectrum of major currencies after third-quarter Consumer Price Index figures fell short of expectations, weighing heavily on the outlook for future interest rate hikes. The report showed the annual inflation rate cooled to 2.8 percent, the lowest yet this year while the quarterly increase amounted to a smaller-than-expected 0.7 percent.

US economic data out today includes durable goods for September with expectations of a rise of 2%, after last months 1.5% decline. New home sales for September are also out slightly later on, and a rise of 4.2% expected.

Report by Tim Lewis

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

USD Fights Back


 

18 October 2010

The USD made ground over night after better-than-expected manufacturing data and an unexpected rise in retail sales. This  has reduced concerns that falling consumer spending may weigh heavy on the economic recovery. The US Treasury’s budget shortfall remained in the trillions and the University of Michigan consumer confidence index fell to 67.9 points. Consistent high levels of unemployment (unchanged at 9.6% in September) and increasing initial job claims numbers are contributing to downside pressure.

Overall, the Dollar has spent the last 6 weeks sliding lower on the opinion that QE2 is required in order to firm up the declining US economy. Ben Bernanke’s explanation on Friday indicated that additional monetary stimulus may be necessary, stating “there would appear… all else being equal… to be a case for further action” in order to “promote our dual objectives of maximum employment and price stability” yet gave no indication on how much, or when.

The USD pared losses and finished the day higher, which suggests the contrast between expectation and reality that can exist in currency markets and questions how much easing is already factored into the price. This in turn could make the Dollar susceptible to sharp rebounds. The market will now seek direction from the FOMC meeting on Nov 3rd.

The pound will be in centre stage this week, with markets watching to see what areas of the economy will be most affected by Osborne unveiling the details of the largest budget cuts in UK history and the release of the minutes from the Bank of England meeting (6-7 Oct) both on Wednesday. We’ve already seen reports from the Centre for Economics and Business (CEBR) suggesting the Bank of England will expand its stimulus program by £100bn to boost the economy as growth begins to contract and austerity measures begin to curb spending. They also stated that the central bank will keep its benchmark interest rate at a record low of 0.5% until at least “late” 2012

In Europe, the Euro set a fresh 9 month high against the dollar after Bernanke’s announcement but then late on Friday it reversed and couldn’t hold the gains against the Dollar, finishing the day below the open & implying the recent rally is over and it was time for a correction. Trichet distanced himself from Weber comments over the weekend saying that the majority of the ECB council is still in favour of keeping the sovereign bond purchasing program in place. We now look to Tuesday when Trichet is expected to speak with regards to the European economy.

Expect some significant volatility in currency markets over the week as central banks look to talk their recovery prospects up and their currencies down.

Report by Philip Ryan

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

US Dollar Slides Against Yen and Euro


 

Expect a quiet start to the week before a busy few days in terms of key economic releases. Friday’s release of US retail sales  follows the slide of the US dollar against Yen and Euro.

11, October 2010

On Friday, the US dollar fell towards an eight month low against the Euro on further speculation that Federal Reserve policy makers will shortly signal their willingness to buy more government debt to support economic growth. The Dollar also touched a 15-year low versus the Japanese Yen ahead of tomorrow’s release of the Fed’s September 21st policy meeting minutes. The moves on Friday were primarily driven by the release of the US payrolls report for September.

Both the headline print and the private payrolls component disappointed expectations. US employers cut payrolls by 95,000 workers in September after a revised 57,000 decrease in August. Average expectations had been for a 5,000 drop. Markets are now expecting the FOMC will formally announce renewed balance sheet expansion on November 3rd.

The weekend’s G7/IMF/World Bank meetings ended without any specific agreement on FX matters, despite Eurodollar trading close to 1.40. However, the issue will likely resurface at the G20 meeting of finance ministers and central bankers which begins on October 22nd. Overnight was a relatively quiet Asian session with Japan on holiday.

This calmness likely to continue throughout the day with US markets also closed due to the Columbus Day holiday.

After a quiet start to the week, we have a busy few days towards the tail end in terms of key economic releases. Of note, Friday’s release of US retail sales plus preliminary Michigan sentiment survey for October being some of the highlights. This should help provide some insights into how the US consumer is holding up in the face of ongoing weakness in the labour market.

As sterling continues to be weighed down by the prospect of further action from the Bank of England and the pending budgetary cuts, this week’s round of data which includes the BRC retail sales survey and UK CPI for September should provide further clues for future BoE decisions.

Report by Tim Lewis

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 

Currency Market Updates: Dollar Index Hits Low


 

4, October, 2010

We look at an interesting week ahead as 4 major banks announce their monetary policies and we await the US employment figures on Friday. This, with the low Dollar index and the the EU-Asia summit taking place, will keep the EUR ready for a test of 1.3840.

Risk appetite remained at the fore last week, with markets failing to be deterred by concerns over Ireland’s banking sector and mounting resistance to austerity methods across Europe. The biggest loser remained the USD, with the Dollar index touching a low of almost 78.00 and speculative positioning (as indicated by the CFTC IMM data) identifying an additional sharp drop in sentiment to its lowest since Dec 2007.

It is a significant week for central bank meetings, with four major central banks announcing their monetary policy including Bank of Japan (BoJ), Reserve Bank of Australia (RBA), European Central Bank (ECB) and Bank of England (BoE). However, the main news for the markets to digest is the job number in the US on Friday afternoon. The RBA is rumoured to be interested in a rate rise by 25bps, the BoJ could announce additional asset purchasing despite both the ECB and BoE unlikely to adjust their fiscal strategies.

Despite the reality that the BoJ is by and large expected to hold its policy rate untouched at 0.1%, it might state additional measures aligned with the backdrop of relentless JPY muscle, a deterioration in economic attitude as reflected in last week’s Tankan survey and fall in exports. Newspapers in Japan indicate that the BoJ could add to borrowing of fixed rate 3 to 6 month loans to financial institutions in addition to buying further short-term government debt.

The methods along with risks of further JPY interference may thwart USD/JPY receding further, however as seen in the boost in speculative net long JPY positions last week, the market is trying to determine the resolve of the Japanese authorities. Strong support is seen around USD/JPY 82.80, with the authorities not likely to permit a split beneath this technical point in the short-term.

Even if we only see specifics of the voting in two weeks in the release of the UK BoE Monetary Policy Commitee (MPC) minutes it is possible that there was a three-way divide within the MPC as evident in latest remarks, with MPC member Posen appearing to favour more quantitative easing whereas the MPC’s Sentance is set to maintain his inclination for higher rates. The pound was a straggler over September as investors continued to worry over potential QE from the BoE. This doubt is unlikely to fade swiftly, signifying restricted gains against the USD and potentially more difficulty against the EUR. Sterling speculative attitude has enhanced but particularly positioning remains short.

Contrary to GBP, the EUR has benefit from USD weakness and looks set to expand on its gains. Even though there is a risk that speculative positioning will before long turn out to be too stretched, it is worth noting that positioning is well below previous highs against the IMM data. EUR possibly will have some support from Chinese Premier Wen’s assurances to support Greece, and a steady EUR. Whereas there seems to be risks associated with the EUR from ongoing peripheral arrears concerns such remarks are expected to be recurring at the EU-Asia summit over the next couple of days, will keep the EUR ready for a test of 1.3840.

Report by Philip Ryan

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. The Currencies Direct head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only.

Currency Market Updates

BlogCatalog – Finance

All Finance Sites


 
« Older Entries