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Daily FX Market Outlook by AceTrader-28-12-2010

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Dec 27, 2010.

  1. acetraderfx

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

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    Market Review - 27/12/2010 21:42 GMT

    Euro rebounds against dollar after China's rate hike


    The single currency initially fell against dollar on Monday after weekend's quarter-point rate hike by PBOC in its key one-year lending and deposit rates on X'mas Day (its 2nd rise since mid-Oct) prompted traders to buy dollar and yen on risk aversion. Euro dropped to 1.3072 after the surprise rate hike but the single currency swiftly rebounded from said low as traders brushed aside the concerns about the rate hike and pushed the euro higher. The single currency later climbed to 1.3171 before stabilizing.

    The dollar fell to a three-week low against the yen as China raised interest rate to contain inflation. The dollar was also pressured after an auction of $35 billion auction in 2-year US Treasury notes was met with strong demand. The greenback briefly rose to 82.98 against the Japanese yen in Asian morning, however, the pair fell to 82.65 and then spent the rest of the day inside the aforesaid range.

    The British pound fell in tandem with euro initially and reached 1.5400 due to a drop in U.K. Hometrack Housing Survey which showed U.K. house asking prices fell 0.4% on the month in Dec and were down 1.6% on the year. Sterling then rebounded on short-covering and price climbed back to 1.5456 but cable dropped sharply to 1.5370 in part due to active cross-selling in sterling as eur/gbp jumped to 0.8558 from 0.8485.

    Tuesday will be holidays in New Zealand, Australia, U.K. and Canada.

    Economic indicators to be released on Tuesday include:

    Japan Household spending, National CPI Y/Y, National CPI (core) Y/Y, Tokyo CPI Y/Y, Unemployment rate, U.S. Consumer confidence and Richmond Fed Manuf.

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  2. acetraderfx

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

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    Market Review - 28/12/2010 21:40 GMT

    Dollar recovers against Japanese yen, hits record low against Swiss franc


    The greenback fell to a 3 1/2-week low of 81.81 against the Japanese yen as yen was supported by robust Japanese economic data. Japanese factory output rose by 1.0% m/m in November, the first time in six months while Japan's retail sales also rose by 1.3% m/m in November, much stronger than economists' forecast of a rise of 0.2%. The pair tumbled from Tokyo high of 82.81 to as low as 81.81 in NY morning, however, price staged a strong rebound as dollar was supported broadly after U.S. bond yields rose following a weak 5-year Treasury note auction. In addition, the dollar fell to a fresh record low of 0.9435 against the Swiss franc as Swiss corporate sold the pair for year-end repatriation.

    In other news, Japanese Finance Minister Yoshihiko Noda said foreign exchange moves had been one-sided over the past week and he would be ready to take decisive steps when needed.

    The single currency initially rallied on active buying from sovereign names in Asian morning and price extended intra-day rise to a high of 1.3275 in Europe after triggering heavy stops at 1.3200/10, however, euro fell sharply from there as certain big players unloaded euro in NY session. Euro extended its intra-day decline after the release of the S&P/Case-Shiller survey which showed price of American single-family homes fell by 1.0% m/m and 0.8% y/y versus the forecast of -0.6% and -0.1% respectively. Euro nose-dived to 1.3093 in NY session before stabilizing.

    The British pound initially rose in tandem with euro to 1.5489 before staging a pullback to 1.5412. Although cable briefly climbed to 1.5514 in Europe, price later nose-dived to 1.5345 in NY before stabilizing.

    Economic indicators to be released on Wednesday include:

    Germany CPI data and Swiss KOF indicators.
     
  3. acetraderfx

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

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    Market Review - 29/12/2010 21:37 GMT

    Dollar falls as strong Treasury demand hits bond yields


    The dollar fell to a 7-week low against the Japanese yen after the auction of 7-year Treasury notes was met with strong demand. The solid debt auction provided support to the price of Treasury securities and sent the yields lower, diminishing the appeal of the greenback.

    The $29 billion auction of 7-year notes was met with strong demand as indirect bidders, which typically include buying by foreign central banks, took 64.2% of the debt, the highest since June 2009.

    The greenback remained under pressure against the Japanese yen throughout Wednesday. The pair fell from 82.45 and penetrated Tuesday's low of 81.81 to as low as 81.61 in late NY trade before stabilizing.

    The single currency extended Tuesday's selloff from 1.3275 to 1.3083 at Asian opening before rebounding on short-covering and on talk of possible buying from Asian central banks. Euro ratcheted higher at NY opening after German preliminary Dec CPI M/M rose by 1.0% (forecast was +0.1%), being the highest monthly increase since Dec 2004 whilst Y/Y index rose by 1.9% (forecast was +1.6%) and was the highest since Oct 2008. Euro later rallied to 1.3240 in NY session on dollar's broad-based weakness.

    The British pound initially dipped to 1.5352 but cable managed to rebound from there. Price later rose sharply and rallied to 1.5518 in NY trade on dollar's broad-based weakness.

    Economic indicators to be released on Thursday include:

    US jobs data, Chicago PMI and pending home sales.
     
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