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18/1/2009 - The Current Market Sentiment

Discussion in 'Current Market Sentiments' started by fx-recommends, May 18, 2009.

  1. fx-recommends

    fx-recommends Content Contributor

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    The risk apatite has improved today with the beginning of this week after last week correction which supported the greenback. The key driving of the forex market is still the equity market change. The stock market has been underpinned by the market believe of the banking sectors abilities to recover pushing the banks stocks higher bringing back the confidence to the business investment.
    The Japanese yen has suffered from taking risk back again after a strong opening this week reaching 94.5 versus the greenback. Both of the Japanese yen and the greenback are well-used as funding currencies of the carry trades transactions because of their very low yielding across the broad. The currencies market focusing on this property is still controlling of the changes of it from the beginning of the credit crisis until now ignoring the suffering of the other economies which are still lagged behind US. Last week we have seen EU GDP Flash release reaching 4.6% which weighed on the single currency with beginning of this week too but with current improving of the market risk apatite the market shrugged off these data selling the greenback versus it.

    The Cable has found strong support last week from the improving of UK RICS house price index of April which came at -59.9 from -72.1 in March and the market was just waiting for -70 also the trade balance deficit has shrunk in March to 6.8 Billion pound from 7.3 Billon pound in Feb. March UK manufacturing productions output have shrank by just .1% m/m and they were expected to be by -.9% m/m and UK industrial productions of March were expected to come down by .8 but they have shrank by slower pace by. -.6%.these data come after U.K. retail sales figure of British Retail Consortium survey of April which have surged by 4.6% in April y/y from declining in March by 1.2% and God Willing, it is important to watch tomorrow, the release of US retails sales prices index of April which is expected to get up to .2% from a flat reading in March and also the release of UK CPI of April which is expected to go up to .4% m/m from .2% in March and get down y/y to 2.4% from 2.9% in March but the core excluding the food and the energy is expected to be as the same as March at 1.7%m/m. the cable could be traded above 1.53 currently on the current pressure on the greenback too. The breaking of 1.57 is technically important for getting further momentum and the next resistance is at 1.5375 which is the high of this year.

    Best wishes

    FX Consultant
    Walid Salah El Din
    E-Mail: mail@fx-recommends.com
    http://www.fx-recommends.com
     
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