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Daily FX Market Outlook by AceTrader-1-4-2011

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Mar 31, 2011.

  1. acetraderfx

    acetraderfx Content Contributor <img src="http://www.einvestor

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    Market Review - 31/03/2011 20:14 GMT

    Euro pares gains after Fed's U.S. rate hike remarks


    The single currency pared some of the intra-day gains after Minneapolis Fed President Narayana Kocherlakota, a voting member of the Federal Open Market Committee, commented in Wall Street Journal that 'Fed could raise rates by end of 2011'.

    Earlier, the single currency rose above previous resistance at 1.4148/49 and price then rallied to 1.4233 in European morning after the higher-than-expected eurozone March inflation data, however, the euro tanked to 1.4164 in New York morning on Reuters news that the European Central Bank would not announce plans for a new liquidity facility to help Irish banks. Later, although the single currency managed to recover in New York midday after the Irish bank stress test results were released as most of the details had leaked out earlier, the euro retreated again after U.S. interest rate hike comments from Fed's Narayana Kocherlakota.

    Ireland said its four remaining banks require another 24 billion euros ($34.1 billion) to enable them to withstand potential losses from worsening economic situation. Ireland's central bank said under 'stress test' scenario, the banks would be required to maintain a minimum capital ratio of 6%. Allied Irish Banks, Bank of Ireland, Educational Building Society (EBS) and Irish Life and Permanent need 13.3, 5.2, 1.5 and 4 billion euros respectively.

    Eurozone March inflation estimated at 2.6% y/y versus the expectation of 2.3% and much higher than the reading of 2.4% in February.

    The European Commission, IMF and European Central Bank said in a joint statement that bank stress tests published are a major step toward restoring Ireland's banking system to health and can be comfortably funded under the country's IMF-EU bailout program.

    The British pound fell against the dollar due to active cross-selling in sterling especially versus the single currency. Although cable extended erratic upmove from this Monday's low of 1.5937 to 1.6152 in European morning, selling interest there capped intra-day rise and price later tumbled to 1.6117 on aggressive cross-selling in sterling following remarks from Bank of England policy maker David Miles. The eur/gbp cross pair extended recent ascent to a five-month high of 0.8853.

    In a speech to the Home Builders Federation, David Miles said requirements for larger mortgage deposits from first-time buyers were likely to lead to low transaction levels for several years. Monthly Mortgage approvals in Britain have hovered just below 50,000 since the financial crisis, compared to levels of 80,000-90,000 during the previous decade. Miles added BOE needs to recalibrate link between bank rate and mortgage rate.

    Earlier, the British pound was supported by the slightly better-than-expected U.K. Gfk consumer confidence and the unexpectedly increase in U.K. house prices. The latest GfK NOP Consumer Confidence Index showed UK consumer confidence remained unchanged at -28 in March, however, the reading is still 13 points lower compared to the same month in 2010. U.K. Nationwide house prices rose 0.5% M/M in March and 0.1% Y/Y versus economists' forecast of -0.1% M/M and -0.7% Y/Y respectively.

    Data to be released on Friday include:

    Japan's Tankan big manufacturing and capex; Swiss retail sales and PMI; German manufacturing PMI; EU manufacturing PMI and unemployment rate; U.S. non-farm payrolls, private payrolls, unemployment rate, construction spending and ISM manufacturing.

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  2. acetraderfx

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    Market Review - 01/04/2011 20:16 GMT

    Dollar falls broadly after dovish comments from the New York Fed President

    The greenback fell across the board in New York midday after Federal Reserve Bank of New York President William Dudley said in a speech in Pueto Rico that firming of economic activity is welcome and not a reason to reverse course. He also added that the Fed is still very far away from achieving its dual mandate of maximum sustainable employment and price stability.

    Earlier, the dollar rallied against the Japanese yen following the much better-than-expected U.S. jobs report and price eventually extended recent ascent from record low of 76.25 to as high as 84.74 in New York morning before retreating on Dudley's remarks.

    U.S. non-farm payrolls increased by 216,000 in March versus street forecast of 190,000, private payrolls posted 230,000 gain versus forecast of 200,000 and unemployment rate fell slightly to 8.8% from last month's reading of 8.9%. The unemployment rate has come down to its lowest level in 2 years.

    The euro rallied in New York trading and went through another roller-coaster session. The single currency tanked from European high of 1.4180 to an intra-day low of 1.4061 after the stronger-than-expected U.S. jobs data and later rallied back above 1.4200 level to a day's high of 1.4246 on active short-covering as Dudley's dovish comments clouded the Fed's rate hike prospect, which was in sharp contrast to ECB's certain rate hike next week. Cross-buying in euro also supported the single currency as eur/jpy and eur/chf rallied sharply from 117.74 to 119.80 and from 1.3012 to 1.3171 respectively.

    Similar to the euro, the British pound also went through an extremely volatile session. Although cable ratcheted lower from European high of 1.6083 and tumbled to 1.5972 in New York morning, cable later rallied to as high as 1.6134 in tandem with euro before trading sideways. Earlier, a lower-than-expected U.K manufacturing PMI data also pressured sterling. U.K. March manufacturing PMI fell sharply to a five-month low of 57.1, much weaker than economists' forecast of 60.6 and the downwardly revised reading of 60.9 in February. However, firms still ramped up prices at a record rate to cover rising costs. Markit said the slowdown in demand was most pronounced in the consumer goods sector, which was virtually stagnant and indicated a fall in domestic orders for such goods.

    The Australian dollar posted another fresh 29-year high of 1.0398, New Zealand dollar rose strongly from 0.7581 to 0.7683 while usd/cad pair tumbled to a 3-year low of 0.9626.

    Data to be released next week include:

    EU Sentix investor confidence; U.K. construction PMI; EU PPI on Monday.

    Australia trade balance and RBA rate decision; Germany services PMI; EU services PMI and retail sales ; U.K. service PMI; U.S. ISM non-manufacturing and FOMC meeting minutes on Tuesday.

    U.K. BRC shop price index, industrial production and manufacturing production; Japan leading indicators; Swiss CPI; EU GDP; Germany factory orders; U.S. Midwest manufacturing; Canada Ivey PMI on Wednesday.

    Australia Employment change; Japan BOJ rate decision; German industrial production; U.K. BOE rate decision and BOE asset purchase target; Canada building permits; U.S. jobless claims on Thursday.

    Japan current account and economic watch DI; German export and import; U.K. core, input and output PPI; Canada employment change, unemployment rate and housing starts; U.S. wholesale inventories on Friday.

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  3. acetraderfx

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    Market Review - 05/04/2011 19:47 GMT

    Euro strengths in U.S. session on weaker-than-expected U.S. ISM non-manufacturing index


    Euro rose strongly in U.S. session on active shorting covering on Tuesday as the lower-than-expected U.S. ISM non-manufacturing index raised concerns about the strength of the U.S. economy.

    U.S. non-manufacturing ISM index in March came in much lower than expected at 57.3 versus street forecast of 59.5.

    Earlier, although the single currency ratcheted lower from Asian high of 1.4233 following a rise to a 5-month high of 1.4269 in previous session and price fell to an intra-day low of 1.4151 after the surprised interest rates hike by the China's central bank in European midday, the euro then rebounded strongly in NY and the single currency hit a day's high of 1.4246 after Fed's minutes at March 15 meeting showed officials divided over tighter policy in 2011. Cross-buying in euro versus the Japanese yen and Swiss franc also supported the single currency, eur/jpy strengthened to a 11-month high of 120.73 while eur/chf rebounded strongly from 1.3055 to 1.3167.

    The China's central bank raised interest rates for the second time this year to curb inflation, which surged to a 28-month high of 5.1% in November. According to the People's Bank of China, benchmark one-year deposit rate will be lifted by 25 basis points to 3.25 percent, while one-year lending rate will be raised by 25 basis points to 6.31%.

    Minutes of the Fed's March 15 meeting showed that some Federal Reserve officials last month believed they would have to hold to an easy monetary policy course beyond this year while a few said the central bank should move to tighter conditions before year-end. 'Almost all' Fed officials saw no need to taper QE2 buying.

    Moody's downgraded Portugal's bond ratings to BAA1 from A3, still under review for possible downgrade, sending Portuguese bonds yields over 10-year German bunds to a post-euro era high and close to 10%.

    The British pound surged against the dollar and euro as the much stronger-than-expected U.K. Services PMI fueled speculation that the Bank of England would raise interest rates in coming months. Despite falling to a day's low of 1.6091 ahead of European opening, cable immediately jumped after the release of much stronger-than-expected UK March Services PMI, which came in at 57.1 versus forecast of 52.5. The data showed UK services grew at its fastest pace in over a year, a 13-month high, pointing towards a 0.8% expansion for the economy as a whole in the first quarter in 2011. The pound eventually climbed to an intra-day high of 1.6298 in NY midday before trading sideways. Eur/gbp tanked from 0.8819 to 0.8715.

    The dollar jumped against the Japanese yen to 84.49 in Tokyo morning after the inflation comments from Fed's Chairman Ben Bernanke who indicated recent spike in inflation to be 'transitory', adding speculation that the Federal will hike interest rate once or twice by the year end but not a sign of the start of the tightening cycle. The pair eventually rose above Friday's 84.73 high to as high as 84.88 after the release of Fed's minutes.

    Data to be released on Wednesday include:

    U.K. BRC shop price index, industrial production and manufacturing production; Japan leading indicators; Swiss CPI; EU GDP; Germany factory orders; U.S. Midwest manufacturing; Canada Ivey PMI.

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  4. acetraderfx

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    INTRADAY TRADING SIGNAL BY ACETRADER.COM: USD/JPY

    USD/JPY :
    85.43

    Last Update At 06 Apr 2011 02:10 GMT

    Dlr has rebounded after finding renewed buying
    at 84.95, suggesting recent erratic upmove fm last
    month's record low of 76.25 to retrace LT intermedi
    ate fall fm 94.99 has once again resumed n further
    gain twds 85.62 wud be seen but 85.94 res wud hold.
    Buy on dips with stop as indicated n only a
    breach of 84.73 (prev. res) wud risk fall to 84.49.

    Range Forecast
    85.20 / 85.62

    Resistance/Support
    R: 85.62 / 85.94 / 86.27
    S: 84.73 / 84.49 / 84.16

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  5. acetraderfx

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    Market Review - 06/04/2011 19:59 GMT

    Euro rallies to a 14-month high ahead of ECB rate decision


    Euro rose broadly on Wednesday as ECB's interest rate hike prospect continued to support the single currency. The European Central Bank is widely expected to raise its benchmark interest rates by 25 basis points from the record low of 1.0% on Thursday.

    Euro maintained a firm undertone throughout the day on Wednesday and price pierced through the previous resistances at 1.4269 and 1.4283 easily in European morning. Later, despite a brief dip from 1.4317 to 1.4274 in reaction to news that Moody's has downgraded certain Portuguese government related issuers in New York morning, renewed buying there pushed the single currency to a 14-month high of 1.4350 in New York midday on speculation that the ECB would signal more interest rate hikes to come. Cross-buying in euro also supported the single currency, eur/jpy strengthened to a fresh 11-month high of 122.62, while eur/gbp and eur/chf rebounded strongly from 0.8720 to 0.8798 and 1.3066 to 1.3180 respectively.

    Moody's cut ratings of five Portuguese regional and local governments and ratings remain on review for downgrade.

    In the other news, Portugal Finance Minister Frernando Teixeira dos Santos was quoted as saying that Portugal needs to resort to financial aid from the European Union.

    Cable retreated after the much worse-than-expected U.K. economic data. Although the British pound extended recent ascent from last week's low of 1.5937 to as high as 1.6364 in European morning, price then fell sharply following the release of weaker-than-expected U.K industrial output and manufacturing output data. However, intra-day firmness in euro lifted the pound from 1.6257 to 1.6340/41 in New York midday.

    UK February industrial output came in at -1.2% m/m, weakest since August 2009, and 2.4% y/y, weakest since July 2010. The economists' expectations were 0.4% m/m and 4.3% y/y respectively. UK February manufacturing output came in at 0.0% m/m and 4.9% y/y, versus forecast of 0.6% m/m and 5.8% y/y respectively.

    The dollar also went through a roller-coaster session against the Swiss franc. Having strengthened to an intra-day high of 0.9297 in Asia, the usd/chf pair then tanked to a day's low of 0.9130 after the higher-than-expected Swiss inflation data. Swiss March consumer price index rose by 0.6% m/m and 1.0% y/y, compared to economists' forecast of 0.2% m/m and 0.6% y/y respectively. Eur/chf also tumbled from 1.3244 to 1.3066 before staging a strong recovery in New York session.

    The surge in commodity prices (spot gold price hit another record high of 1460.90/oz, spot silver price rose to a new 31-year high of 39.70) sent Australian dollar, New Zealand dollar and Canadian dollar (known as commodity currencies) higher. Aud/usd posted a fresh 29-year high of 1.0452, nzd/usd rallied from 0.7670 to 0.7809 while usd/cad slumped to a 3-year low of 0.9569.

    Data to be released on Thursday include:

    Australia Employment change and Unemployment rate; Japan BOJ rate decision; German industrial production; U.K. BOE rate decision and BOE asset purchase target; ECB rate decision; Canada building permits; U.S. jobless claims.

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  6. acetraderfx

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    Market Review - 07/04/2011 19:48 GMT

    Euro falls as ECB Trichet turns cautious on more rate hike


    Euro declined on Thursday after European Central Bank President Jean-Claude Trichet said in a press conference following interest rate announcement that 'we did not decide that it was the first of a series of interest-rate increases'. The ECB raised its lending rate to 1.25% from record low of 1.00% to tame inflation pressure, making ECB the first major central bank to hike rates since July 2008.

    Earlier, euro was under selling pressure in Asia trading after rising to a 14-month high of 1.4350 on Wednesday and despite the brief bounce from 1.4266 to 1.4327 after the rate decision, price then fell swiftly to an intra-day low of 1.4243 as Trichet's tone was less hawkish than some investors had anticipated, however, buying interest there limited the euro's downside and the single currency managed to rebound later in New York midday.

    In the other news, Fitch Ratings said Portugal's decision to seek financial assistance from the European Union will help financial stability in the economically struggling European nation and the firm will remove Portugal from downgrade watch if an agreement on help is reached.

    The British pound was little changed after Bank of England kept rate unchanged as widely expected. Although cable ratcheted lower in Asian session to a day's low of 1.6260 (5 pips above Wednesday's low), buying interest there in European morning lifted the pound up to as high as 1.6349, however, failing to re-test previous session's 1.6364 high prompted price to fall to 1.6279/80 after the Bank of England held its benchmark rate at 0.5% and maintained its asset-purchase program at 200 billion pounds.

    The Japanese yen strengthened across the board after a magnitude 7.1 aftershock and tsunami alert shook northeastern Japan. Usd/jpy pair ratcheted lower in Asian and European sessions after failing to penetrate previous session's 85.53 high, price then dropped briefly to a day's low of 84.60 after the news. Eur/jpy, aud/jpy and gbp/jpy also retreated from multi-month highs of 122.55 to 120.76, 89.59 to 88.11, 139.53 to 137.91 respectively.

    Data to be released on Friday include:

    Japan current account and economic watch DI; German export and import; U.K. core, input and output PPI; Canada employment change, unemployment rate and housing starts; U.S. wholesale inventories.

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    Market Review - 08/04/2011 19:41 GMT

    Dollar falls across the broad on worries of U.S. government shutdown


    The greenback declined against most of its counterparts on Friday as Democratic and Republican party leaders in Congress remain divided over a federal budget, resulting in potentially the first U.S. government shutdown in 15 years ahead of the Friday's midnight deadline. The US Dollar Index, which tracks the greenback against a basket of currencies, sank to as low as 75.02, the lowest since December 2009.

    Euro extended recent ascent to a fresh 15-month high due to prospect of widening interest rate differentials against other major currencies together with dollar's broad-based weakness. The single currency jumped above Wednesday's high of 1.4350 in Asian morning on concern of a U.S. government shutdown following the European Central Bank raised its lending rate to 1.25% on Thursday. Euro continued to ratchet higher in European and New York sessions and eventually climbed to a 15-month high of 1.4489 in thin late New York trading.

    German February exports came in at 2.7% m/m, strongest since September 2010 and versus forecast of 1.5%. German February imports came in at 3.7% m/m versus forecast of 0.8%. German February trade balance came in at 11.4 billion euro versus forecast of 12.5 billion euro.

    The British pound retreated from a fresh 15-month high on active cross-selling in sterling versus the euro. Although cable rose in tandem with the single currency in Asian session and price blipped up to as high as 1.6430 after the release of higher-than-expected U.K. PPI data, the pound then retreated to 1.6326 in New York midday on aggressive cross-selling in sterling especially against the euro and eur/gbp rose strongly from 0.8760 to 0.8845.

    U.K. March PPI input came in at 3.7% m/m and 14.6% y/y, higher than the forecast of 2.1% m/m and 12.5 y/y respectively. U.K. PPI output in March came in at 0.9% m/m and 5.4% y/y, the highest since October 2008, versus the expectations of 0.6% m/m and 5.1% y/y.

    The dollar gyrated inside near term range of 84.60-85.53 against the Japanese yen. Despite a brief bounce from 85.00 to 85.40 in New York morning, price then ratcheted lower to a day's low of 84.68 later in New York midday before staging another recovery.

    The continued rise in commodity prices (U.S. crude oil futures climbed to a near 2-1/2 year high, spot gold price hit another fresh record high of $1473.40/oz and spot silver price rose to a new 31-year high of 40.65/oz) sent Australian dollar, New Zealand dollar and Canadian dollar (known as commodity currencies) higher. Aud/usd posted another fresh 29-year high of 1.0585, nzd/usd rallied from 0.7763 to 0.7835 while usd/cad slumped to a 3-1/2 year low of 0.9526.

    Data to be released next week include:

    Japan machinery orders; Germany wholesale price index; U.K. Nationwide Consumer Confidence on Monday.

    U.K. RICS house prices, BRC retail sales, CPI, RPI, trade balance and DCLG house prices; Japan machine tools orders; Germany CPI final, HICP final, ZEW index and current situation; Canada new housing price index, trade balance, exports and imports and BOC rate decision; U.S. export and import price index and Fed budget on Tuesday.

    Japan domestic CGPI; Swiss combined PPI; U.K. claimant count, ILO unemployment and average earnings; EU Industrial production; U.S. retail sales and business inventories on Wednesday.

    Swiss ZEW index; U.S. jobless claims and PCE index on Thursday.

    Japan industrial production; EU trade balance and HICP final; U.S. CPI, real earnings, foreign treasury buys, net LT TIC flows, capacity utilisation and industrial production on Friday.

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    Market Review - 11/04/2011 20:14 GMT

    Euro retreats from 15-month high on long liquidation


    Euro retreated on Monday on long liquidation after recent ascent following a strong rise to a 15-month high of 1.4489 last Friday due to worries over possible U.S. federal government shutdown. However, the single currency failed to penetrate 1.4489 and retreated after meeting selling interest at 1.4485 in Asian morning as President Barack Obama signed a short-term spending bill on Saturday and averted such shutdown. Price later dipped to 1.4421 in New York morning before trading sideways on quiet U.S. afternoon session.

    The British pound was little changed on volatile Monday trading. Despite ratcheting lower from Asian high of 1.6392 to 1.6314, cross-buying in sterling versus euro lifted the pound in New York morning to an intra-day high of 1.6427. However, failing to penetrate Friday's 15-month high of 1.6430 prompted cable to retreat in New York midday. Eur/gbp fell sharply from 0.8860 to as low as 0.8793 before rebounding on short-covering.

    Bank of England's Monetary Policy Committee member Andrew Sentance was quoted on Reuters Sunday as saying that Bank of England should raise interest rate gradually to help stave off the threat of future inflation.

    Reuters also reported on Sunday that voters in Iceland rejected a second plan to repay debts to Britain and the Netherlands from a bank crash, Prime Minister Johanna Sigurdardottir told state television that economic and political chaos could follow.

    The Japanese yen strengthened across the broad. Despite the dollar's cross-inspired rise to 85.16 in Australia against the Japanese yen (eur/yen climbed to an 11-month peak of 123.33), sellers quickly emerged at Tokyo opening with price continued to edge lower in Europe and dropped to a day's low of 84.51 in late New York before trading sideways. Eur/jpy, aud/jpy and gbp/jpy retreated sharply from multi-month highs of 123.33 to 122.03, from 90.04 to 88.74 and from 139.63 to 138.04 respectively.

    In the other news, International Monetary Fund lifted European area's 2011 GDP growth forecast to 1.6% from 1.5% in January and raised 2012's forecast to 1.8% from 1.7%. IMF saw gradual and uneven expansion with 1.7% in 2011's growth in advanced Europe and 3.7% growth in emerging Europe. IMF cut UK's 2011 GDP growth forecast to 1.7% from 2.0% in January and kept 2012's growth forecast at 2.3%. IMF also lowered U.S.'s growth forecast to 2.8% in 2011 from 3% in January and raised 2012's growth forecast to 2.9% from 2.7%. IMF trimmed Japan's 2011 GDP growth forecast to 1.4% from January estimate of 1.6% and raised Japan's 2012 GDP growth forecast to 2.1% from January's 1.8%.

    Data to be released on Tuesday include:

    U.K. RICS house prices, BRC retail sales, CPI, RPI, trade balance and DCLG house prices; Japan machine tools orders; Germany CPI final, HICP final, ZEW index and current situation; Canada new housing price index, trade balance, exports and imports and BOC rate decision; U.S. export and import price index and Fed budget.

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    Market Review - 12/04/2011 20:26 GMT

    Euro retreats from 15-month high as commodity prices tumble


    Euro retreated from a fresh 15-month high on Tuesday as the selloff in commodity prices together with the worsening of Japanese nuclear leakage situation dampened risk appetite.

    Japan’s Nuclear and Industrial Safety Agency raised the severity rating of the Fukushima Daiichi crisis to 7, on par with Chernobyl, in early Asian session.

    Despite euro's initial fall to a day's low of 1.4377 in Asian morning as Japan upgraded the severity of its nuclear crisis, buying interest there lifted price and cross-buying in the single currency lifted euro higher in European session. Later, the pair penetrated Monday's high of 1.4489 to a fresh 15-month peak of 1.4520 in New York morning, however, the single currency then fell sharply in tandem with commodity prices before staging a recovery from 1.4437 to 1.4496 in late New York trading.

    The euro was also supported by news that China, the world's second largest economy, was willing to purchase more Spanish debt.

    The British pound tumbled as the surprise drop in U.K. CPI data dented speculation that the Bank of England would be under pressure to raise its lending rates in near term. Cable ratcheted lower in Asian session following early rise to 15-month high of 1.6430 last Friday and price then fell briefly to an intra-day low of 1.6227 after UK Consumer Prices Index (CPI) rate of inflation came in at 4.0% in March, sharply lower from 4.4% in February and back to the level seen in January, the Office for National Statistics (ONS) said. Street forecast was for CPI rate to hold at 4.4%. Later, despite staging a euro-led rebound to 1.6330 in New York morning, renewed selling interest there pushed the pound lower again in New York midday before trading sideways. Eur/gbp also strengthened to a near six-month high of 0.8916.

    The Japanese yen and the Swiss franc rose across the board on safe-haven demands. Usd/jpy tumbled from 84.78 to 83.41 in Asian morning and despite staging a strong rebound to 84.43 in European morning, the pair then retreated sharply again in New York morning. Eur/jpy, aud/jpy, gbp/jpy tanked from 122.41 to 120.16, from 89.11 to 86.89 and from 138.64 to 135.79 before staging a recovery. Usd/chf also fell sharply from 0.9077 to 0.8942 while eur/chf tumbled from 1.3096 to 1.2960.

    Oil prices dropped sharply for a second day following Goldman Sachs 's call for a fall of almost $20 in Brent crude oil in May. Spot gold and silver prices tanked from 1466.40 to 1444.00 and from 40.81 to 39.72 respectively.

    Data to be released on Wednesday include:

    Japan domestic CGPI; Swiss combined PPI; U.K. claimant count, ILO unemployment and average earnings; EU Industrial production; U.S. retail sales and business inventories on Wednesday.

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    Market Review - 13/04/2011 20:40 GMT

    Euro retreats from 15-month high as President Barack Obama plans to cut U.S. budget deficit


    The single currency retreated from a fresh 15-month high on Wednesday due to lingering concerns over Greek debt together with Obama's deficit cut.

    Obama set a time-frame of 12 years or less to reach the goal of cutting the U.S. budget deficit by $4 trillion and called for talks with Democratic and Republican lawmakers to lay out a detailed blueprint. He also warned that steadily rising debt could cost jobs and harm the economy and force the country to borrow more and more from other countries such as China.

    Although the euro extended recent ascent to a fresh 15-month high of 1.4521 in European midday after ECB Governing Council member Luc Coene's hawkish remarks, price then retreated following German newspaper report that Greece must wipe away 40-50% of its debt burden in order to return to a sustainable economic path. The single currency then dropped briefly to a day's low of 1.4414 in late New York trading after Obama's dollar-positive budget deficit cut plan. Cross-selling in the single currency also weighed on the euro as eur/jpy, eur/gbp and eur/chf fell sharply from 122.16 to 120.78, from 0.8924 to 0.8871 and from 1.3044 to 1.2917 respectively.

    In the other news, German Finance Minister Wolfgang Schaeuble said in an interview with Die Welt newspaper that any Greek debt restructuring would have to happen on a voluntary basis if done before 2013. His remarks also pressured the euro in late New York trading.

    ECB Governing Council member Luc Coene was quoted as saying that the European Central Bank's increase of interest rates last week should not be considered as an isolated decision and the ECB president has signalled that it was not a one-off.

    The British pound was little changed as price was confined inside previous session's 1.6227-1.6330 range. Despite ratcheting higher to 1.6302 in European morning, cable later retreated sharply to a day's low of 1.6236 but buying interest there lifted price to 1.6310 in New York morning before retreating in tandem with the euro in late New York trading.

    Fed's beige book stated that U.S. economy continued to improve since last report in early March. Many districts described improvements as only moderate, but gains were widespread across sectors. It also stated that wage pressures are mostly seen as weak or subdued, but higher commodity costs put increasing pressures on prices. Consumer spending also picked up modestly, but some districts reported weaker retail sales.

    U.K. February unemployment rate came in at 7.8%, better than the forecast of 8.0%. U.K. March claimant count rose by 700, versus the expectations of a fall of 4,200 and the revised 8,500 fall in February.

    Data to be released on Thursday include:

    Swiss ZEW index; U.K. Nationwide Consumer Confidence; U.S. jobless claims and PPI.

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    Market Review - 15/04/2011 19:57 GMT

    Euro falls on renewed fears over European periphery debt defaults


    Euro fell against the dollar and the Japanese yen on Friday as fears over European periphery debt defaults increased after Moody's cut Ireland's rating to just above 'junk' status.

    Moody's downgraded Ireland to BAA3 from BAA1 and outlook remained negative.

    Euro ratcheted lower from Asian morning high of 1.4504 following an extremely volatile trading session on the previous day and despite staging a brief but strong rebound following a dip to 1.4451 after Moody's downgraded Ireland's debt rating, selling interest quickly emerged below said intra-day resistance and price then retreated swiftly. Later, the single currency fell sharply to the day's low of 1.4390 in New York morning after German Deputy Foreign Minister Werner Hoyer said in an interview that 'a Greek debt restructuring would not be a disaster', however, euro managed to recover following remarks from European Central Bank Governing Council member Athanasios Orphanides. Orphanides said in an event held in New York that a Greek debt restructuring would be undesirable as well as unnecessary, adding that 'the whole of Europe' is supporting the country.

    The British pound fell from Asian high of 1.6373 after failure to penetrate previous session's 1.6385 high and despite staging a recovery from 1.6317, selling interest below said resistance capped intra-day rebound. Later, cable declined to a day's low of 1.6294 in tandem with the euro in New York morning.

    The continued surge in commodity prices underpinned the Australian dollar, the New Zealand dollar and the Canadian dollar. Aud/usd rebounded strongly from 1.0511 to 1.0579 (shy of Monday's 29-year high of 1.0585), nzd/usd rose above previous top of 0.7976 to a 3-year high of 0.8000 while usd/cad fell from 0.9650 to 0.9591. Spot gold price posted another record high of 1486.90/oz and spot silver price strengthened to a fresh 31-year high of 42.82/oz.

    On the data front, eurozone February trade balance came in at -1.5 billion euros versus economists' forecast of 2.2 billion. Eurozone March inflation rose by 1.4% m/m and 2.7% y/y, slightly higher than the expectations of 1.3% m/m and 2.6% y/y. Eurozone March inflation excluding energy and unprocessed food increased by 1.3% m/m and 1.5% y/y against consensus forecast of 1.0% m/m and 1.1% y/y respectively. U.S. March CPI rose by 0.5% m/m and 2.7% y/y versus the economists' forecast of 0.5% m/m and 2.6% y/y respectively.

    Data to be released next week:

    New Zealand CPI; U.K. Rightmove house prices; EU consumer sentiment; U.S. NAHB housing market index on Monday.

    Reserve Bank of Australia's board April minutes; Japan Consumer confidence and machine tools orders; Germany manufacturing and service PMI; EU manufacturing and service PMI and current account; Canada CPI, leading indicators and wholesale sales; U.S. housing starts and building permits on Tuesday.

    Japan import / export, trade balance and tertiary industry index; Australia Westpac consumer confidence and import / export price index; Germany PPI; Bank of England minutes of the MPC's meeting; U.S. existing home sales on Wednesday.

    Australia PPI; Japan Leading indicators; Germany Ifo business climate and current assessment; U.K. retail sales, public sector net cash requirement (PSNCR) and public sector net borrowing; U.S. jobless claims, leading indicators and Philadelphia Fed survey; Canada retail sales on Thursday.

    New Zealand, Australia, U.K., EU, Germany, Swiss, Canada and U.S. markets will be closed on Friday (Good Friday holiday).

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    Market Review - 18/04/2011 19:50 GMT

    Euro tumbles as European sovereign debt fears mount

    Euro tanked on Monday with increasing fear of a possible Greek debt restructuring and the yield on Greece's 2-year bonds surged to a record high of 19.4%. In addition, Standard & Poor's U.S. debt outlook downgrade from stable to negative dampened risk appetite, increasing safe-haven demand for the dollar, the Japanese yen and the Swiss franc.

    Standard & Poor's revised its outlook on the United States' long-term rating from stable to negative but affirmed its AAA sovereign credit rating.

    Investors ignored Greece's claims that it will not need to restructure its debt. The government denied a Greek newspaper report that it wanted to extend maturities on its outstanding debt.

    The single currency came under heavy selling pressure at Asian opening after bearish news on Sunday that the anti-euro True Finns party in Finland had made huge gains in the parliamentary election and price continued to ratchet lower in Asian and European sessions. Despite staging a brief but strong rebound from 1.4262 to 1.4350 after Standard & Poor's lowered its U.S. credit-rating outlook in New York morning, aggressive cross-selling in euro pushed the single currency sharply lower to a day's low of 1.4156 before rebounding on short-covering. Eur/jpy, eur/gbp and eur/chf tanked from 120.04 to 116.49, from 0.8843 to 0.8746 and from 1.2887 to 1.2730 respectively.

    The British pound tracked intra-day movement of euro closely and ratcheted lower from Asian high of 1.6325 to 1.6244 in European morning. Later, although cable staged a strong rebound to as high as 1.6329 in New York morning, price then tumbled to a day's low of 1.6166 before staging another strong correction in New York midday.

    The Japanese Yen rose across the board on safe-haven demands. Usd/jpy fell sharply from Asian high of 83.27 to as low as 82.19 in New York morning due partly to 50 basis points increase in the required reserve ratio by China's central bank on Sunday before staging a rebound. Aud/jpy and gbp/jpy also tumbled from 87.90 to 86.01 and from 135.86 to 133.01 respectively.

    Data to be released on Tuesday include:

    Reserve Bank of Australia's board April minutes; Japan Consumer confidence and machine tools orders; Germany manufacturing and service PMI; EU manufacturing and service PMI and current account; Canada CPI, leading indicators and wholesale sales; U.S. housing starts and building permits.

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  13. acetraderfx

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    Market Review - 19/04/2011 20:02 GMT

    Euro rebounds on short-covering even sovereign debt fears remain


    Euro staged a short-covering rebound on Tuesday even fears over a possible Greek debt restructuring still lingered on. The single currency moved relatively narrowly in subdued Asian trading after the sharp fall in previous European and U.S. sessions on broad-based unwinding of long euro positions versus the usd, yen, gbp and chf. Despite a brief dip to an intra-day low of 1.4206 in European morning after Greek newspapers reported that an European Commission source was quoted that Greece had accepted mild restructuring as unavoidable, buying interest there lifted price and euro ratcheted higher across the board in Europe and New York session and eventually climbed to a day's high of 1.4353 before easing. Eur/jpy, eur/gbp, and eur/chf rebounded strongly from 117.09 to 118.45, from 0.8743 to 0.8794 and from 1.2730 to 1.2915 respectively.

    The higher-than-expected German and eurozone manufacturing Purchasing Managers Index (PMI) also supported the euro. German April PMI manufacturing came in at 61.7 versus the previous reading of 60.9 while eurozone April PMI manufacturing came in at 57.7 versus economist's forecast of 57.0.

    No U.K. economic data were due out on Tuesday and the British pound tracked euro's intra-day movement closely. Despite initial sideways trading after a brief retreat from Asian high of 1.6274, buying interest at 1.6232 lifted cable in European morning and the pound eventually climbed to as high as 1.6339 in New York morning before easing.

    Spot gold and silver prices extended recent ascent to a fresh record high of $1498.60/oz and a new 31-year high of $44.09/oz respectively amid sovereign debt problems in the U.S. and Europe.

    Canadian dollar rallied against the greenback after Statistics Canada reported that the consumer price index advanced to a two-year high of 3.3% in March from a year earlier, compared with 2.2% increase in previous month. Usd/cad tumbled from 0.9666 to 0.9548.

    U.S. housing starts rose by 7.2% to 549,000 versus economists' forecast of 520,000 whilst building permits increased by 11.2% to 594,000 versus the expectation of 540,000.

    Data to be released on Wednesday include:

    Japan import / export, trade balance and tertiary industry index; Australia Westpac consumer confidence and import / export price index; Germany PPI; Bank of England minutes of the MPC's meeting; U.S. existing home sales.

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  14. acetraderfx

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    Market Review - 21/04/2011 19:18 GMT

    Euro retreats from16-month high of 1.4649 on profit-taking ahead of Good Friday holiday


    The single currency extended Wednesday's rally to a fresh 16-month high of 1.4649 in European morning on Thursday due to dollar's broad-based selling and then pared most of the gains after the comments from European Central Bank President Jean-Claude Trichet who said that there is no decision on a series of rate rises together with active long liquidations ahead of the Easter holiday. Euro retreated to a low of 1.4532 in late U.S. session.

    German April IFO business climate came in at 110.4 versus forecast of 110.5 with previous reading of 111.1. European Central Bank President Jean-Claude Trichet also said that the global economic recovery appeared to be self-sustaining and he believed that the United States would successfully tackle its budgetary situation. Referring to the ongoing negotiations for a European Union-International Monetary Fund bailout deal for Portugal, Trichet said that talks were based on the understanding that an agreement could be reached ahead of upcoming Portuguese elections.

    China ambassador Song Zhe told the European Union that it is possible China will buy more euro zone sovereign debts. He added that China is investing in Euro zone bonds to diversify its reserve portfolio.

    The British pound jumped up after the release of much better-than-expected U.K. March retail sales data which came in at a rise of 0.2% m/m and 1.3% y/y versus the economists' expectation of -0.5% m/m and 0.9% y/y respectively. U.K. March public sector net cash requirement (PSNCR) came in at 24.831 billion pound versus forecast of 14.5 billion pound. U.K. March public sector net borrowing came in at 16.393 billion pound versus forecast of 18.55 billion pound. U.K. March mortgage approval came in at 44,000 versus economists' expectation of 48,000. Cable rose to a fresh 16-month high of 1.6600 before retreating to 1.6509 in late U.S. session on active profit-taking. U.S. dollar also weakened to a fresh lifetime low of 0.8782 against the Swiss Franc before recovering.

    On the data front, U.S. initial jobless claims came in at 403,000 which was higher than economists' forecast of 392,000. U.S. leading indicator rose for ninth straight month in March by 0.4% versus forecast of 0.2%. Philadelphia Fed survey of manufacturers in April fell from 43.4 to 18.5 versus forecast of 37.0.

    All major markets except Japan's market will be closed for Good Friday holiday. Data to be released next week include:

    New Zealand, Australia, H.K., U.K., EU, Germany, France and Swiss markets will be closed on Monday (Easter Monday holiday). U.S. new home sales on Monday.

    Swiss trade balance; Germany import price index and retail sales; U.K. Confederation of British Industry (CBI) orders, S&P/Case-Shiller home price, consumer confidence and Richmond Fed manufacturing on Tuesday.

    U.K. Nationwide house prices and GDP; Japan retail sales; Australia CPI; Germany Gfk consumer confidence survey, CPI and HICP; EU industrial orders; U.S. durable goods, Midwest manufacturing, Fed April rate decision and policy statement on Wednesday.

    New Zealand RBNZ rate decision; Japan household spending, CPI, unemployment rate, BOJ April rate decision, construction orders and housing starts; U.K. Gfk survey; Germany unemployment rate; U.S. GDP, GDP deflator, personal consumption expenditures (PCE) core Q/Q, jobless claims and pending home sales on Thursday.

    New Zealand import and export and trade balance; EU business climate, economic, industrial and consumer sentiment, HICP flash and unemployment rate; Swiss KOF indicator; U.S. personal spending, personal income, PCE index M/M, Chicago PMI and U. Michigan survey Preliminary; Canada GDP on Friday.

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  15. acetraderfx

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    Market Review - 26/04/2011 18:50 GMT

    Euro rises to fresh16-month high on speculation that Fed will maintain its loose monetary policy


    Euro hit a fresh 16-month high on Tuesday on speculation that the U.S. Federal Reserve would keep its loose monetary policy to support the U.S. economy. In addition, the euro was also supported by improved risk appetite as the three major U.S. stock markets rose to 2011 highs after upbeat earnings results from Ford Motor Co. together with United Parcel Service Inc. and 3M Co., all 3 companies raised their 2011 earnings forecasts.

    Despite the initial brief but sharp fall below Monday's low of 1.4526 to an intra-day low of 1.4494 at Asian opening after European Central Bank President Jean-Claude Trichet's euro-bearish remarks, buying interest emerged and lifted the single currency, price then rebounded strongly to 1.4653 in European midday. Later, euro climbed to a marginal high of 1.4658 in New York midday on dollar's broad-based weakness.

    Earlier, Trichet was quoted as saying that he shared the view that a strong dollar was in the interests of U.S. and he did not see any significant effects of second-round inflation.

    The British pound was little changed against the dollar but fell versus the euro. Despite staging a strong rebound from 1.6437 to 1.6533, cross-selling in sterling versus euro pressured cable to as low as 1.6432 in New York morning, however, intra-day firmness in the single currency lifted the pound to around 1.6495/97 in New York midday. Eur/gbp rallied from 0.8808 to 0.8904 on prospect of widening interest rate differentials.

    The Federal Open Market Committee (FOMC) started its two-day policy meeting on Tuesday and the Fed was widely expected to keep its interest rate at record low of 0-0.25% range on Wednesday. The market's focus will be on the first regularly scheduled policy decision press conference by the Fed's Chairman Ben Bernanke in Federal Reserve's 97-year history.

    The Swiss franc strengthened to its all-time high against the greenback on dollar's broad-based weakness. Usd/chf tumbled from 0.8852 to 0.8745 before staging a recovery.

    In other news, German government spokesman Steffen Seibert said that decision on Trichet successor would be taken at next EU Summit in June.

    U.S. April consumer confidence came in at 65.4 versus the economists' forecast of 64.5 and well above previous reading of 63.4 in March.

    Data to be released on Wednesday include:

    U.K. Nationwide house prices, GDP and BBA mortgage Approvals; Japan retail sales; Australia CPI; Germany Gfk consumer confidence survey, CPI, HICP and retail sales; EU industrial orders; U.S. durable goods, Midwest manufacturing, Fed April rate decision and policy statement.

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  16. acetraderfx

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    Market Review - 27/04/2011 20:53 GMT

    Dollar tumbles as the Fed has no timetable when tightening of monetary policy will begin


    The U.S. dollar fell across the broad on Wednesday as Federal Reserve Chairman Ben Bernanke said in his first ever post-Federal Open Market Committee (FOMC) press conference that he was unsure when the Fed would tighten its monetary policy. The dollar index, which tracks the greenback against a basket of currencies, sank to as low as 73.261, the lowest since August 2008.

    Euro rose to a fresh 16-month high after Fed's Chairman Bernanke's dovish comments. Despite ratcheting lower from Asian high of 1.4715 to an intra-day low of 1.4631, the single currency then rebounded strongly following Fed's rate decision and price rallied to as high as 1.4796 in late New York trading on dollar's broad-based selloff.

    Ben Bernanke was quoted as saying in the press conference that 'economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually; increases in the prices of energy and other commodities have pushed up inflation in recent months but these effects to be transitory.'

    The FOMC kept the Fed Fund rate in 0-0.25% range and reiterated that it would keep rates exceptionally low for an extended period. The Fed also stated that it 'will complete purchases of US$600 billion of longer term treasuries by end of current quarter.'

    The British pound also strengthened to a new 16-month high. Cable jumped from Asian low of 1.6435 to 1.6582 in European morning after the release of U.K. GDP data for the first quarter which came in at 0.5% q/q and 1.8% y/y as expected, hindering by a sharp drop in construction which fell by 4.7% on the quarter, its biggest drop since the first quarter of 2009. Despite ratcheting lower in New York morning, the pound than rallied to 1.6637 in tandem with the single currency in late New York session. Eur/gbp tanked from 0.8923 to 0.8846 before staging a strong rebound on short-covering.

    Despite dollar's initial resumption of recent decline versus the Japanese yen to 81.27 in Australia morning session, price then rebounded strongly after Standard & Poor's downgraded Japan's sovereign rating outlook to negative. The usd/jpy pair's intra-day rally accelerated in European morning after triggering stops above 81.95/82.00 and price eventually climbed to as high as 82.82 in New York midday before falling back to 82.02/05 on dollar's broad-based weakness.

    Credit rating agency Standard & Poor's cut Japan's outlook to negative, affirming Japan's sovereign rating at AA-. Another credit rating agency Moody's also said that it maintained a negative outlook on Japan's debt rating.

    On the data front, U.S. durable goods rose by 2.5% in March versus economists' forecast of 2.0% and previous reading of -0.6% in Feb. The durable goods excluding transportation and excluding defense were 1.3% and 2.3% respectively.

    Data to be released on Thursday include:

    New Zealand RBNZ rate decision; Japan manufacturing PMI, household spending, CPI, unemployment rate, industrial production, BOJ April rate decision and press conference, construction orders and housing starts; U.K. Gfk consumer confidence; Germany import price index and unemployment rate; U.S. GDP, GDP deflator, personal consumption expenditures (PCE) core Q/Q, jobless claims, personal consumption and pending home sales.

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  17. acetraderfx

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    Market Review - 28/04/2011 20:10 GMT

    Euro retreats from fresh 16-month high on profit-taking


    The euro initially extended recent sharp ascent to a fresh 16-month high of 1.4882 in Asian trading session on Thursday following comments by Federal Reserve President Ben Bernanke who signaled that the central bank was unsure when it would tighten its monetary policy. However, price then ratcheted lower from aforesaid Asian high in European trading session and despite staging brief rebound after the release of weaker-than-expected U.S. economic data in New York morning, the single currency later fell marginally to an intra-day low of 1.4773 before staging another rebound in New York midday.

    U.S. Q1 GDP came in at 1.8% versus economists' forecast of 2.0%. U.S. weekly jobless claims rose to 429,000 (forecast was 392,000) from previous reading of upwardly revised 404,000.

    In the other news, Eurogroup chief Jean-Claude Juncker was quoted as saying that 'confident deal will be found on Portugal aid by mid-May; a Greek debt restructuring is not an option; shares French President Nicolas Sarkozy's position regarding Bank of Italy Governor Mario Draghi is contender for European Central Bank job.'

    The British pound tracked euro's intra-day movement closely. Despite extending recent upmove to a new 16-month high of 1.6747 in Asian trading, the pound ratcheted lower in European and New York sessions and eventually fell to an intra-day low of 1.6622 in New York midday before trading sideways.

    The US Dollar Index, which tracks the greenback against a basket of currencies, sank to a 3-year low of 72.871 on speculation that the Fed will lag behind other developed economies in raising its interest rate.

    The usd/jpy pair declined again after meeting renewed selling interest at 82.28 in Asian morning after the sharp selloff from 82.82 on Wednesday and price then dropped swiftly to 81.48 in European morning. Later, despite staging a brief recovery in European midday, the pair weakened to an intra-day low of 81.40 before trading sideways in late New York session.

    Earlier, the Bank of Japan kept overnight call rate target unchanged at 0-0.1% by unanimous vote. Bank of Japan Deputy Governor Kiyohiko Nishimura proposed increase of asset buying fund by 5 trillion yen but the proposal was turned down by vote of 1 to 8. Bank of Japan said it would accept application for loans under new scheme for quake-hit banks until end-Oct 2011.

    Data to be released on Friday include:

    New Zealand import and export and trade balance; EU business climate, economic, industrial and consumer sentiment, HICP flash and unemployment rate; Swiss KOF indicator; U.S. personal spending, personal income, PCE index M/M, Chicago PMI and U. Michigan survey Preliminary; Canada GDP on Friday.

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