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Daily FX Market Outlook by AceTrader-3-5-2011

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, May 2, 2011.

  1. acetraderfx

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

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    Market Review - 2/05/2011 19:57 GMT

    Euro falls from a 17-month high in late New York as metal prices tumble


    Euro retreated sharply from a 17-month high in late New York trading on Monday due to profit-taking together with another wave of heavy selling in commodities especially in spot gold and silver.

    Earlier in Asian midday, the single currency fell sharply from 1.4864 to an intra-day low of 1.4762 after U.S. President Barack Obama said al-Qaeda leader Osama bin Laden had been killed by the U.S. military in Pakistan. However, the single currency rebounded in thin Europe session (London was closed for May Day holiday) due to the better-than-expected German and eurozone Manufacturing PMI data, fueling speculation that overall growth in the region would prompt the ECB to keep raising interest rates. Later, the euro climbed above last week's top of 1.4882 to a 17-month high of 1.4903 in New York moring due to hawkish remarks from Eurogroup chief Jean-Claude Juncker before retreating in late New York trading.

    Eurogroup head Jean-Claude Juncker was quoted as saying that strength of euro is not giving rise to concern and is mainly due to dollar's weakness. He added inflation developments in euro area are of some concern. Juncker also said euro area would give a full fledged answer to Portugal situation by mid-May and restructuring Greek debt was not an option.

    German manufacturing PMI rose to 62.0 in April versus economists' forecast of 61.7 and the previous reading of 61.7 in March. Eurozone Markit final manufacturing PMI also rose to 58.0, against the expectation of 57.7, suggesting factories continued to ramp up their prices.

    The British pound tracked euro's intra-day movement closely. Despite falling swiftly from an intra-day high of 1.6739 to 1.6644, cable then edged higher in European session, however, the pound's upside was limited to 1.6720/22 and price later declined to a day's low of 1.6642 in late New York session in tandem with the single currency. Cross-selling in sterling versus the euro also weighed on the pound as eur/gbp strengthened from 0.8857 to as high as 0.8920.

    The dollar resumed its recent decline against the Japanese yen to 81.00 in Asian morning, however, the pair then rebounded strongly to 81.68 after news of Bin Laden's death. Later, renewed selling interest capped intra-day rebound and price later ratcheted lower again in New York morning before staging another recovery.

    Spot gold price tumbled sharply from around 1575.00/oz to 1542.30/oz in late New York session after early resumption of LT uptrend to a fresh record high of 1575.70 in Australian session while spot silver price also tanked from 47.31 to 43.73 in late New York trading.

    Data to be released on Tuesday include:

    Tuesday will be a holiday in Japan.

    China Non-manufacturing PMI; U.K. Halifax hse prices, manufacturing PMI and CBI distribution trade; EU PPI; U.S. durable goods (revised) and factory orders.

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  2. acetraderfx

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    Market Review - 03/05/2011 20:02 GMT

    Euro little changed against the dollar after Portugal reached an agreement with EU and IMF


    Euro showed little reaction against the dollar on Tuesday after Portugal reached an agreement with European Union (EU) and International Monetary Fund (IMF) on a three-year bailout loan. Earlier in the day, the single currency was under selling pressure following the sharp retreat from Monday's 17-month high of 1.4903 and although renewed selling interest at 1.4845 pushed price to an intra-day low of 1.4755 in European morning, euro rallied from there and eventually climbed to 1.4890 in New York morning before retreating again.

    Portugal's Prime Minister Jose Socrates was quoted as saying that 'Portugal reached an agreement with EU/IMF on bailout loan; still need final talks on bailout with opposition parties; EU/IMF bailout is for 3 years; bailout plan gives more time to meet budget deficit targets'.

    The British pound tanked against the dollar and the euro as the worse-than-expected manufacturing data fueled speculation that the Bank of England would maintain its key lending rates at a record low later this week. Despite cable's brief recovery from 1.6585 to 1.6648, price then tumbled sharply to 1.6467 in European midday before staging a strong recovery in tandem with eur/usd to 1.6550. However, selling interest there limited the pound's upside and cable ratcheted lower to a day's low 1.6464 in late New York session. Eur/gbp rallied above 0.8942 (October 2010) to as high as 0.9007 in New York morning before trading sideways.

    U.K. April CIPS manufacturing PMI came in at 54.6, its slowest pace in 7 months, versus economists' expectation of 57.0 and downwardly revised reading of 56.7 in March.

    The Japanese yen and the Swiss franc strengthened against most of their counterparts as selloff in equities and commodity prices prompted investors to flock toward these 'safe haven' currencies. Despite the usd/chf pair's strong recovery to 0.8674 after resumption of recent descent to a low of 0.8619 in European morning, selling interest there pushed price lower again and the pair eventually dropped to a fresh lifetime low of 0.8595 in New York morning before trading sideways. Eur/chf also tumbled from 1.2839 to 1.2762. The dollar also extended recent decline against the Japanese yen to an intra-day low of 80.70 before staging a recovery while eur/jpy, aud/jpy and gbp/jpy tumbled from 120.59 to 119.21, from 88.95 to 87.58 and from 135.38 to 132.97 respectively.

    Data to be released on Wednesday include:

    U.K. Nationwide house prices; German services PMI; EU services PMI and retail sales; U.K. mortgage approval and PMI construction; U.S. ADP employment and ISM non-manufacturing.

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  3. acetraderfx

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    Market Review - 04/05/2011 20:16 GMT

    Euro falls from a 17-month high as metal prices tumble


    Euro retreated strongly from a fresh 17-month high in New York morning as the selloff in U.S. stocks, precious metals and commodity prices dented risk appetite.

    Earlier in the session, despite euro's brief but sharp fall to an intra-day low of 1.4775 in Asian morning, the single currency managed to ratchet higher in European morning. Although price rallied above Monday's top of 1.4903 easily in New York morning after release of lower-than-expected U.S. ADP Employment data and climbed to a fresh 17-month high of 1.4940 following the much weaker-than-expected U.S. ISM non-manufacturing PMI data, profit-taking offers there capped the single currency's upside and price later fell swiftly to 1.4806/10 in New York afternoon session.

    U.S. April ADP Employment came in at 179,000 versus economists' forecast of 198,000 with upwardly revised reading of 207,000 from 201,000 in March. U.S. April ISM non-manufacturing PMI came in at 52.8 versus economists' forecast of 57.4 and previous reading of 57.3.

    Spot silver price tumbled sharply from 42.25/oz to 39.01/oz, suffering the worst one-day drop in three decades after Wall Street Journal (WSJ) reported that George Soros's big hedge fund and some other leading firms have been selling gold and silver according to people close to the matter. Spot gold price also tumbled from 1541.30/oz to as low as 1506.10/oz.

    The British pound tracked euro's intra-day movement closely. Despite cable's brief breach of previous session's low of 1.6464 after meeting renewed selling at 1.6494 in Australian trading session, buying interest at 1.6453 limited downside and intra-day firmness in euro lifted price to as high as 1.6575 in New York session before falling sharply back to 1.6480/82.

    The Japanese yen and the Swiss franc strengthened across the board on safe-haven demands. Despite the dollar's recovery against the Japanese yen from Asian low of 80.82 to 81.19 in European midday, price then tanked to 80.51 after the release of a slew of worse-than-expected U.S. economic data, usd/jpy eventually fell to 80.44, the lowest level since the Group of Seven jointly intervened in the foreign exchange markets to weaken the Japanese yen on March 18. Eur/jpy, aud/jpy, gbp/jpy also fell sharply from 120.83 to 119.27, from 88.15 to 86.44 and from 134.24 to 132.79 respectively. The usd/chf pair posted another fresh all-time low of 0.8554 before staging a recovery on short-covering. Eur/chf tumbled from 1.2830 to as low as 1.2730.

    Federal Reserve Bank of Boston President Eric Rosengren said that current accommodative policy stance was appropriate given the state of economy and impact of current oil, food supply shocks on inflation should be transitory.

    European Commission stated that press conference on Portugal bailout was scheduled for Thursday at 10:00 GMT.

    Data to be released on Thursday include:

    New Zealand unemployment rate and employment change; Australian retail sales and building approvals; U.K. services PMI, BOE rate decision and BOE asset purchase target; German factory orders ; ECB rate decision and press conference; Canadian building permits and Ivey PMI; U.S. jobless claims, productivity and labour cost.

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    #3 acetraderfx, May 4, 2011
    Last edited: May 4, 2011
  4. acetraderfx

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    Market Review - 05/05/2011 20:26 GMT

    Euro tumbles sharply as ECB's Trichet signals ECB will not raise rates in June

    The single currency tanked broadly on Thursday after European Central Bank President Jean-Claude Trichet surprised the market by stating clearly at the press conference after the central bank kept its benchmark interest rates unchanged at 1.25% that the European Central Bank would not raise interest rates at the June meeting.

    Trichet was also quoted as saying that 'current monetary policy is very accommodative; underlying pace of monetary expansion remains moderate; rates remain low; inflation likely to stay clearly above 2% on coming months; inflation expectations must remain firmly anchored; can hike rates as appropriate'.

    Despite staging a strong rebound from Asian low of 1.4807 to an intra-day high of 1.4900 in European morning following the selloff from a 17-month high of 1.4940 in the previous session, the euro fell sharply to 1.4818 after the release of much worse-than-expected German industrial order data. Later, the single currency plunged sharply to 1.4577 in New York morning as Trichet's comments were less hawkish than the market had anticipated and price remained under heavy selling pressure in New York afternoon session, the single currency eventually dropped to an intra-day low of 1.4510 before stabilising in late New York trading. Eur/jpy, eur/gbp, and eur/chf tumbled from 119.76 to 116.15, from 0.9043 to 0.8865 and from 1.2796 to 1.2630 respectively.

    German industrial order fell unexpectedly by -4.0% in March versus the economists' forecast of 0.1% with downwardly revised reading of 1.9% in February.

    The British pound also weakened against the dollar in another volatile trading session. Despite falling sharply from Asian high of 1.6544 to 1.6446 after the release of much weaker-than-expected U.K. CIPS services PMI data which came in at 54.3 versus economists' forecast of 55.7, cable managed to recover in European midday. However, intra-day selloff in euro dragged the pound lower and price pierced through said support easily in New York morning to as low as 1.6405 in New York midday. Later, another wave of selling interest emerged in late New York session and cable eventually fell to an intra-day low of 1.6357 before staging a recovery.

    Bank of England (BOE) kept key interest rates unchanged at 0.5% as expected and maintained its asset purchase target at 200 billion pounds.

    The Australian dollar, the New Zealand dollar and the Canadian dollar, known as three commodity-linked currencies, tumbled against the greenback as oil and precious metal prices sank. U.S. crude oil price tanked 8.6% and closed below $100 per barrel as U.S. weekly jobless claims last week jumped to an eight-month high, fanning worries about the strength of the global economic recovery. Spot gold price tumbled from $1521.30/oz to $1464.30/oz while spot silver price continued to nose dive from $39.77/oz to as low as $34.37/oz. Aud/usd and nzd/usd tanked from 1.0771 to 1.0537 and from 0.7943 to 0.7816 respectively while usd/cad rallied from 0.9568 to 0.9713.

    U.S. weekly jobless claims came in at 474,000 versus the economists' forecast of 410,000.

    Data to be released on Friday include:

    Swiss unemployment rate; U.K. input and output PPI; German industrial production; Canadian employment change and unemployment rate; U.S. average hourly earnings, non-farm payrolls, private payrolls and unemployment rate.

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  5. acetraderfx

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    Market Review - 06/05/2011 20:13 GMT

    Euro tumbles after German magazine reports that Greece may exit eurozone

    Euro tanked broadly again on Friday in New York midday after German Der Spiegel magazine reported that Greece Government raised the possibility of leaving eurozone and was considering to reintroduce its own currency. Later, eurozone officials including Eurogroup Chairman Jean-Claude Juncker, Austrian Finance Minister spokesman, French Finance Ministry official and Slovak Finance Minister Miklos came out and tried to comfort market by saying that the report was not valid. A Greek official also denied that Greece was considering the idea of leaving the eurozone.

    Reuters news report citing source from German coalition source confirmed 'there is crisis meeting in Luxembourg with German Finance Minister Wolfgang Schaeuble and Deputy Finance Minister Joerg Asmussen taking part.'

    Latest news from Reuters at 21:40 GMT quoted comments from Eurogroup chairman Jean-Claude Juncker who said that 'Luxembourg didn't discuss Greece leaving Eurozone or Greek debt restructuring; Luxembourg meeting was attended by Germany, France, Italy and Spain.'

    Earlier in the session, although the euro managed to stage a recovery in Asian morning following the sharp selloff in the previous session due to mildly dovish comments from European Central Bank President Jean-Claude Trichet, renewed selling at 1.4588 capped the euro's upside and price ratcheted lower in European trading session. Despite the single currency's knee-jerk reaction after the release of mixed U.S. jobs data, price fell to a low of 1.4457 before staging a rebound in New York morning. However, the euro tumbled to as low as 1.4310 in late New York session on speculation that Greece may stop using the shared currency. Eur/jpy, eur/gbp, eur/chf also tanked from 117.60 to 115.23, from 0.8899 to 0.8745 and from 1.2748 to 1.2575 respectively.

    The British pound was little changed against the dollar but rallied against the euro. Despite cable's brief breach of previous session's low of 1.6357 after meeting renewed selling at 1.6434 in Asian morning, price then rebounded strongly from 1.6355 after the release of higher-than-expected U.K. core PPI data which came in at 0.6% m/m and 3.4% y/y versus economists' forecast of 0.3% m/m and 3.0% y/y respectively and despite rising to an intra-day high of 1.6464 in New York morning, the pound then retreated in tandem with the single currency in late New York session but cable's downside was limited due to active cross-buying in sterling versus the euro.

    U.S. jobs report showed 244,000 jobs were created in the U.S. economy in April, the figure was higher than market's forecast of 186,000, however, unemployment rate rose to 9.0% versus forecast of 8.8%. Private payrolls number, however, climbed to 268,000 versus forecast of 200,000, this was the largest increase since February 2006.

    Data to be released next week include:

    Germany export and import and trade balance; EU Sentix investor confidence; Canadian housing starts on Monday.

    U.K. BRC retail sales and RICS house prices; Australian trade balance and NAB business confidence; China trade balance and imports and exports; Swiss CPI; U.S. export and import price indicies and wholesale inventories on Tuesday.

    China consumer price index, industrial production, retail sales and fixed assets investment urban YTD; Japan leading indicators; Germany CPI and HICP final; U.K. trade balance; Canadian exports and imports and trade balance; U.S. Fed budget on Wednesday.

    Japan current account and economic watch DI; German wholesale price index; U.K. industrial and manufacturing production; EU industrial production; Canadian new housing price index; U.S. jobless claims, PPI, retail sales and business inventories on Thursday.

    German GDP; Swiss combined PPI; EU GDP; U.S. CPI, real earnings and University of Michigan survey final on Friday.

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  6. acetraderfx

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    Market Review - 10/05/2011 20:36 GMT

    Euro posts moderate gains on Greece's potential new financial aid


    Euro swung between gains and losses on Tuesday driven by conflicting reports about a potential new deal for Greece and lots of remarks from European Union officials.

    Although renewed selling at 1.4378 in Australian session capped Monday's strong rebound from 1.4254, the euro retreated briefly after comments from European Central Bank Governing Council member Ewald Nowotny who said that international community had underestimated Greece's problems and price then fell further to a day's low of 1.4270 in European morning following the euro-bearish comments from European Central Bank Executive Board member Lorenzo Bini Smaghi. However, the single currency later rebounded strongly due to a Dow Jones report which quoted comments from a senior Greek official that Greece could clinch a new financial aid totaling 60 billion euros as soon as in June, which was later denied by Greek Finance Minister George Papaconstantinou. Euro eventually climbed to an intra-day high of 1.4412 in late New York trading.

    European Central Bank Executive Board member Lorenzo Bini Smaghi said that 'restructuring of Greek debt would bring banking system to its knees; Greek disaster would be contagious for whole eurozone; Greek exit from eurozone would damage Greece but also other countries'.

    Another European Central Bank Governing Council member Yves Mersch said that 'Europe must take strong steps to ensure confidence that it respects the basic principles of market economy, which ruled out any question of not repaying debt; debt restructuring for Greece not an option'.

    The British pound fell against the dollar and the euro on speculation that the Bank of England will lower its economic growth forecasts in its inflation report on Wednesday. Cable ratcheted lower from 1.6422 in Asian and European sessions before staging an euro-led rebound from an intra-day low of 1.6317 in New York midday. Eur/gbp rebounded from 0.8721 to 0.8808.

    U.K. Chancellor George Osborne made a statement in a question and answer session in the Parliament that fiscal strategy gave Bank of England freedom to keep rates lower for longer and his comments pressured sterling in New York morning.

    Elsewhere in the market, the Swiss franc fell sharply versus the greenback and the euro after the release of lower-than-expected Swiss inflation data. Usd/chf rose briefly above last week's high of 0.8800 to a high of 0.8806 in European morning and although usd/chf traded sideways in European midday, buying interest around 0.8755 limited downside and price then extended upmove from last week's lifetime of 0.8554 to an intra-day high of 0.8824 in New York midday. Eur/chf also rallied from 1.2490 to 1.2687.

    Data to be released on Wednesday include:

    China consumer price index, industrial production, retail sales and fixed assets investment urban YTD; Japan leading indicators; Germany CPI and HICP final; U.K. trade balance; Canadian exports and imports and trade balance; U.S. trade balance and Fed budget.

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  7. acetraderfx

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    Market Review - 11/05/2011 20:37 GMT

    The euro tumbles broadly on renewed concerns over financial aid to Greece

    The single currency tanked on Wednesday due to uncertainty over European leader's willingness to offer more financial aid to Greece, fueling speculation that the country will eventually need to restructure its debt. In addition, the sharp selloff in commodity prices also weighed on the euro.

    The euro traded sideways in Asian session and despite a brief rise to an intra-day high of 1.4423 in European morning, price then ratcheted lower in European session. Later, the selloff in U.S. stocks and commodities pressured the single currency even lower in New York morning and intra-day decline accelerated after the breach of Monday's 1.4254 support. The euro eventually extended recent fall from last week's 17-month high of 1.4940 to as low as 1.4172 in New York midday before staging a moderate recovery.

    The British pound was little changed against the dollar but tumbled against the euro after the Bank of England raised its inflation forecasts, boosting speculation that the Bank of England will raise interest rates from the present record low of 0.5% by the end of this year. Cable jumped from European low of 1.6345 to as high as 1.6518 following the hawkish Bank of England inflation report. However, intra-day selloff in the euro dragged the pound lower and price fell sharply to a day's low of 1.6322 in New York midday. Active cross-buying in sterling versus the euro cushioned cable's downside, as eur/gbp tanked from 0.8812 to 0.8679.

    Bank of England Governor Mervyn King said at the press conference after the release of Bank of England quarterly inflation report that 'we are very likely to raise bank rate rather than sell assets as our first tightening move'. His comments also supported the British pound earlier.

    The Japanese yen also benefited from its safe-haven appeal and rose against most of its counterparts. Eur/jpy, aud/jpy, gbp/jpy tumbled from 116.88 to 114.57, from 88.10 to 86.13 and from 134.05 to 131.84 respectively.

    On the data front, German April final CPI came in at 0.2% m/m n 2.4% y/y as expected. U.K. March trade deficit came in at 7.66 billion pounds versus economists' forecast of 7.25 billion. U.S. March trade balance came in at - US$48.18 billion versus economists' forecast of - US$47.00 billion. U.S. April Fed budget came in at - US$40.49 billion versus economists' forecast of - US$62.00 billion.

    Data to be released on Thursday include:

    Japan current account and economic watch DI; German wholesale price index; U.K. industrial and manufacturing production; EU industrial production; Canadian new housing price index; U.S. jobless claims, PPI, retail sales and business inventories.

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  8. acetraderfx

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    Market Review - 12/05/2011 20:51 GMT

    Euro pares early losses in New York as commodity prices rebound strongly


    Euro rebounded strongly from a near six-week low on Thursday as commodity prices recouped initial sharp losses. In addition, the single currency was also supported by widening interest rate differentials as the European Central Bank is expected to raise interest rates further later this year after European Central Bank policymaker Luc Coene was quoted as saying that April's interest rate hike was 'certainly' not a one-off.

    Earlier in the session, despite euro's initial sideways trading in Asian session following the sharp selloff from 1.4423 to 1.4172 in the previous session, price then pierced through said support easily and extended recent descent to a near six-week low of 1.4123 in European morning. However, the single currency later managed to rebound in tandem with commodity prices in New York morning due to the hawkish remarks from ECB policymaker Luc Coene and euro eventually rose to an intra-day high of 1.4277 before easing. Cross-buying in euro versus the Japanese yen and sterling also lifted the single currency as eur/jpy and eur/gbp rebounded strongly from 114.18 to 115.56 and from 0.8674 to 0.8753 respectively.

    Sterling tanked broadly in European morning after the release of worse-than-expected U.K. industrial production data and although cable extended its recent decline to a day's low of 1.6235 in European morning, price also staged a recovery to 1.6322 in New York midday on dollar's broad-based weakness.

    Elsewhere in the market, the Australian dollar, the New Zealand dollar and the Canadian dollar, known as three commodity-linked currencies, also benefited from the rise in commodity prices. Aud/usd and nzd/usd rebounded from 1.0567 to 1.0698 and from 0.7841 to 0.7991 respectively whilst usd/cad retreated from 0.9695 to 0.9611. Spot gold and silver prices rebounded strongly from 1479.10 to 1507.80 and from 32.38 to 35.88 respectively.

    China's central bank increased the reserve requirement ratio for its commercial banks by another 50 basis point to a record high of 21%.

    U.K. March M/M industrial production came in at 0.3% versus street forecast of 0.8%.

    Data to be released on Friday include:

    German GDP; Swiss combined PPI; EU GDP; U.S. CPI, real earnings and University of Michigan survey final.

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  9. acetraderfx

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    Market Review - 13/05/2011 20:12 GMT

    U.S. dollar rallies on broad-based risk aversion on Friday


    The single currency went through a roller-coaster session in volatile trading on Friday. Although euro weakened in Asian morning to 1.4185 as crude oil price retreated by 1%, buying interest by sovereign names at 1.4180-90 lifted price and euro rallied broadly versus usd, Japanese yen, sterling and Swiss franc at European opening after the release of stronger-than-expected German GDP data, however, the pair eased from 1.4340 on reports of heavy offers by a major Swiss name and retreated in European midday.

    Despite staging a brief bounce back to 1.4307 in New York morning on short-covering after release of U.S. CPI data, renewed selling quickly emerged and pushed the pair lower partly due to the Standard & Poor's report which said the ratings agency believed most Portuguese banks would need to take decisive actions to be able to comply with the new minimum core capital requirements by the Bank of Portugal. Euro's decline accelerated and later tumbled near European closing, price easily penetrated Thursday's near 6-month low of 1.4123 to as low as 1.4065 in New York midday on renewed concern that Greece would need to restructure its debts, intra-day decline U.S. stocks and commodity prices triggered a wave of risk aversion.

    Cable rebounded initially from Asian morning low of 1.6240 to 1.6308 in Europe but sterling then fell broadly versus usd, yen and euro. Sterling was under pressure after the Institute for Fiscal Studies said U.K. living standards would fall as inflation outstripped income growth and government spending cuts crimped welfare payments. The pound later tanked in tandem with euro in NY trading and pierced through Thursday's low of 1.6235 to 1.6147 before staging a minor recovery in New York afternoon.

    The yen strengthened against most of its major counterparts, boosted by speculation that Tokyo Electric Power Co. was repatriating overseas funds to pay for damages and compensation in the wake of this year's nuclear power-plant disaster. The eur/jpy, aud/jpy, and gbp/jpy fell sharply from 115.47 to 113.51, from 86.47 to 84.90 and from 131.59 to 130.30 respectively in New York midday after the release of U.S. CPI data and Standard & Poor's report in New York morning.

    The 3 commodity currencies aud/usd, nzd/usd and usd/cad also tumbled from 1.0708 to 1.0520, from 0.7945 to 0.7836 and 0.9605 to 0.9745 respectively whilst usd/cad rallied from 0.9610 to 0.9745 in New York midday due to broad-based dollar's strength. Risk reduction on Friday also pressured gold and silver prices. Spot gold price tumbled from intra-day high of 1516.40 to as low as 1483.20 and spot silver price tumbled from as high as 36.43 to intra-day low of 33.96 in New York midday.

    On the data front, German 2011 Q1 GDP came in at 1.5% q/q and 5.2% y/y versus economists' expectations of 0.9% q/q and 4.2% y/y and previous reading of 0.4% q/q and seasonal adjusted of 3.8% y/y in Q4 2010. Eurozone 2011 Q1 GDP came in at 0.8% q/q and 2.5% y/y versus economists' forecast of 0.6% q/q and 2.2% y/y and previous reading of 0.3% q/q and 2.0% y/y. U.S. consumer prices rose in April in line with economists' forecasts. The M/M CPI excluding food and energy came in at 0.2% versus forecast of 0.2% whilst CPI M/M came in at 0.4%, exactly same as street forecast. University of Michigan (Sentiment) May survey Final came in at 72.4 versus economists' forecast of 70.0 with previous reading of 69.8.

    Data to be released next week include:

    Japan domestic CGPI, machinery orders, consumer confidence; EU HICP final and trade balance; U.S. foreign treasury buys, net LT TIC flows and NAHB housing market index on Monday.

    Australia RBA's board May minutes; Japan machine tools orders; U.K. CPI, RPI and DCLG house prices; Germany ZEW index and ZEW current situation; U.S. housing starts, building permits, capacity utilisation and industrial production on Tuesday.

    Japan Tankan manufacturing; U.K. claimant count, ILO unemployment rate, average earnings 3m and MPC vote; Canada leading indicators and wholesale sales on Wednesday.

    Japan GDP, capacity utilisation and industrial production; U.K. retail sales; Swiss ZEW index; U.S. jobless claims, existing home sales, leading indicators and Philadelphia Fed survey on Thursday.

    Japan BOJ rate decision; Germany PPI; EU current account; Canada CPI and retail sales; EU consumer sentiment on Friday.

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  10. acetraderfx

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    Market Review - 16/05/2011 20:47 GMT

    Euro pares gains in New York afternoon on Greek debt concern

    Although the single currency opened lower in Australia and extended last Friday's selloff to a fresh 6-week low of 1.4049 after the weekend's news that Dominique Strauss-Kahn, head of the International Monetary Fund, was arrested in New York on Saturday over accusation of a ***ual attack on his hotel room maid, euro later ratcheted higher in Asian midday partly due to hawkish remarks from European Central Bank Council member Ewald Nowotny who said it would be economic nonsense for Greece to leave Eurozone. Euro later rallied to as high as 1.4245 after ECOFIN Ministers attending the Eurogroup's meeting unanimously agreed to grant financial assistance in response to the Portuguese authority's request of 7 April 2011.

    The single currency jumped up in New York morning after the release of U.S. March foreign treasury buys (came in at US$26.78 billion versus revised reading of US$30.58 billion in February) and net long term TIC flows data (came in at US$24.0 billion versus revised reading of US$27.2 billion in February) which showed that global demand for U.S. long-term financial assets such as government bonds slowed in March as investors shifted into shorter-term securities and China trimmed its portfolio of Treasuries.

    U.K. Rightmove said U.K. house prices rose by 1.3% m/m and 0.7% y/y in May, comparing to the 1.7% m/m and 0.1% y/y in April. Rightmove said U.K. house price, adjusted for inflation, were still 10% below their 2008 peak and they were being artificially supported by the Bank of England's record low 0.5% base rate which has staved off repossessions. Despite euro-led brief drop to 1.6166 in Asian morning, the British pound found buying interest above last Friday's low of 1.6147 and ratcheted higher to 1.6222 in Asian afternoon before retreating to intra-day low of 1.6160. Sterling later staged a rebound in New York morning to as high as 1.6255 before declining to near 1.6200 in New York afternoon partly due to cross-selling of sterling versus euro as market pushed back expectations for increase in the U.K.'s benchmark rate.

    Although the greenback bounced briefly from intra-day low of 80.63 to 81.07 in Asia, renewed selling interest emerged and cap dollar's upside. Usd/jpy moved within the above tight range in European and New York sessions. Eur/jpy, gbp/jpy and aud/jpy reached intra-day highs in New York morning before retreating and moved within daily range of 113.41 and 115.23, 130.42 and 131.49, and 84.95 and 86.09 respectively.

    Aud/usd staged a rebound from intra-low of 1.0513 to as high as 1.0642 in New York morning and Nzd/usd rebounded from intra-day low of 0.7755 in European session to as high as 0.7868 in New York midday whilst usd/cad went through a roller-coaster session which rose from 0.9683 to as high as 0.9771 in European session and pared intra-day gains to 0.9690/92 in New York midday before recovery in New York afternoon. Spot gold and silver prices tumbled from intra-day highs of 1504.40 and 35.42 in New York morning as stock markets dropped sharply in New York afternoon.

    Data to be released on Tuesday include:

    Australia RBA's board May minutes; Japan machine tools orders; U.K. CPI, RPI and DCLG house prices; Germany ZEW index and ZEW current situation; U.S. housing starts, building permits, capacity utilisation and industrial production.

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  11. acetraderfx

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    Market Review - 17/05/2011 21:05 GMT

    Euro recovers in New York afternoon on improved risk appetite


    The single currency weakened to 1.4131 in Asia due to the selloff in aussie after the release of Reserve Bank of Australia minutes and despite euro's early retreat from 1.4193 in Asian afternoon, buying interest emerged above 1.4129 and the single currency continued to ratchet higher after the release of mixed German Zew data in European morning and later euro rose to as high as 1.4225 before retreating swiftly after Eurogroup President Jean-Claude Juncker said a soft restructuring of Greek debt was needed and Greek debt level was totally unsustainable together with report of fairly good selling interest by European names which triggered broad-based long liquidations of euro.

    Germany May ZEW current situation and economic sentiment index came in at 91.5 and 3.1 respectively versus economists' forecast of 87.5 and 4.5 and previous reading of 87.1 and 7.6 in April.

    Euro staged a rebound after the release of weaker-than-expected U.S. April industrial production data (April data came in at 0.0% versus economists' forecast of 0.4%) before falling sharply again and price fell to 1.4120. However, as U.S. stocks and commodities trimmed intra-day losses, the single currency rose sharply again in New York midday and breached European high of 1.4225 to 1.4239 in New York afternoon on improved risk appetite.

    Despite early brief drop to 1.6175 in Asia, the British pound rebounded strongly to as high as 1.6305 in London trading shortly after the release of higher(worse)-than-expected UK inflation data (April annual CPI came in at 4.5% versus forecast of 4.1% and previous reading of 4.0% whilst CPI M/M came in at 1.0% versus economists' forecast of 0.7%), fueling market speculation that Bank of England may not keep its present rate unchanged until the end of the year. However, sterling dropped in European midday and fell to as low as 1.6175 before staging a recovery.

    The Japanese yen dropped the most in almost three weeks versus the dollar after Bank of Japan Governor Masaaki Shirakawa said the economy is in a 'very severe' state, fueling bets monetary policy may be eased further. Usd/jpy edged higher from Australian low of 80.74 to as high as 81.77 in European session and the pair then retreated to 81.27 in New York morning before stabilising. Eur/jpy, gbp/jpy and aud/jpy formed their lows (114.29, 130.86 and 85.29 respectively) in Australian session and reached their highs (116.23, 133.17 and 86.71 respectively) in European morning. The yen crosses then dropped in New York morning before staging rebounds in New York afternoon.

    Aud/usd and nzd/usd rose sharply from intra-day lows of 1.0505 and 0.7765 respectively in New York morning to as high as 1.0628 and 0.7848 respectively in New York afternoon whilst usd/cad tumbled sharply from 0.9794 to 0.9716 in New York session. Spot gold and silver prices tumbled from $1497.60/oz and $34.37/oz respectively in European session to as low as $1472.50/oz and $33.05/oz respectively in New York morning before recovery in New York afternoon.

    On the data front, U.S. housing starts fell 10.6% in April M/M versus expectation of an increase of 3.6%. U.S. building permits April M/M also dropped by 4.0% compared to street forecast of 0.9% increase. U.S. April capacity utilisation came in at 76.9% versus economists' forecast of 77.6%.

    Data to be released on Wednesday include:

    Japan Tankan manufacturing and tertiary industry index; U.K. claimant count, ILO unemployment rate, average earnings 3m and MPC vote; Canada leading indicators and wholesale sales.

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  12. acetraderfx

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    Market Review - 24/05/2011 20:21 GMT

    The single currency strengthens against the greenback on Tuesday on rate hike expectations

    The single currency rebounded on Tuesday as German business confidence stayed near a record high in May, fueling speculation that the European Central Bank would boost borrowing costs. Despite intra-day's brief drop to as low as 1.4002 in Australian morning just ahead of Tokyo opening, euro ratcheted higher throughout the day to as high as 1.4133 in New York trading.

    German Ifo business climate index in May came in at 114.2 versus the forecast of 110.2 and revised 114.2 in April whilst German Ifo current condition index in May came in at 121.4 versus forecast of 117.0 and revised 121.0 in April.

    European Central Bank Executive Board member Lorenzo Bini Smaghi told Austrian Radio that 'ECB will do whatever it takes to maintain price stability in the medium term; in mid-term must consider possibility oil, food prices may rise faster than thought'. Smaghi also said ECB has instrument of monetary policy so ECB would use it to ensure inflation would return below 2 percent.

    Despite cable's initial weakness to a fresh 7-week low of 1.6055 in Australian trading on Tuesday, the British pound also ratcheted higher in tandem with euro and due to cross-buying in sterling and pound touched a session high of 1.6210 in New York morning session. Moody’s Investors Service said it might lower the credit ratings of 14 British lenders has once pressured pound to as low as 1.6069 in European session. During the day, eur/gbp dropped from 0.8753 to 0.8706 while gbp/jpy surged from 131.45 to as high as 133.13.

    The greenback extended Monday's gain against the Japanese yen on Tuesday as the Japanese government maintained its overall economic assessment and modestly improving risk-appetites encouraged cross-buying of euro versus yen. The usd/jpy rose from Asian low of 81.62 to 82.21 near European closing before retreating on profit taking, trading around 81.90 near New York closing.

    Commodities rebounded strongly after Goldman Sachs raised its year-end target for Brent to $120/barrel from $105/barrel and its 2012 forecast to $140/barrel from $120/barrel, citing strong fuel demand growth. Spot gold price and silver price also rose strongly in tandem with oil prices. Spot gold price rallied from $1514.00/oz to as high as $1527.40/oz while spot silver price jumped from $34.94/oz to $36.68/oz.

    On the data front, U.K. April Public Sector Net Cash Requirement (PSNCR) came in at 3.259 billion pound versus -5.834 billion pound in April in 2010. Eurozone March industrial production (non seasonal adjusted) came in better-than-expected at 14.1% versus street forecast of 12.9% and eurozone March industrial production (seasonal adjusted) fell to 1.8% decrease from the previous reading of 0.9% increase. U.S. April new home sales m/m came in at 7.3% increase to 323,000 versus economists' forecast of no change at 300,000 and revised reading of 8.3% increase to 301,000 in March. Richmond Fed May manufacturing index slid to -6 versus 10 in April.

    Data to be released on Wednesday include:

    Japan import and export, trade balance, Bank of Japan Monetary Policy Meeting minutes; German Gfk consumer confidence; U.K. GDP and BBA mortgage approvals; U.S. durable goods.

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  13. acetraderfx

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    Market Review - 25/05/2011 20:46 GMT

    Euro pares intra-day losses on hawkish comments from ECB members


    The single currency pared intra-day losses against the dollar on Wednesday after hawkish comments from European Central Bank (ECB) Executive Board member and Governing Council members. ECB Executive Board member Juergen Stark said 'ready to raise rates again if needed; there is less need for fiscal and monetary policy accommodation; we assume that the underlying momentum of the economic growth will continue'. Stark also said 'Europe has learned its lesson from the past: under no circumstances will there be monetization of government debt in the euro area.' ECB Governing Council member Yves Mersch said 'amid the rules of the treaty, the clear mandate of the ECB, and its institutional independence, the monetization of public debt in the euro area is out of question.' ECB Governing Council member Jens Weidmann said 'worried that higher commodity prices can lead to second-round effects; we are concerned about inflation expectations; ECB monetary policy is still expansionary, have to normalise interest rates, non-standard measures.'

    During the day, despite euro's initial selloff from Australian high of 1.4106 to 1.4011 in European morning, speculation on interest rate hike limited intra-day losses there and price later ratcheted higher in New York trading to a session high of 1.4118 before easing briefly to around 1.4080 near New York closing.

    The British pound strengthened across the board on Wednesday after data showed that U.K. exports helped the economy resume growth in the first quarter (exports rose 3.7% in the first quarter and net trade added a record 1.7% to GDP growth). Cable extended rise from Tuesday's low of 1.6055 to as high as 1.6294 near European closing, while eur/gbp tumbled from intra-day high of 0.8716 to as low as 0.8632 and gbp/jpy rallied from intra-day low of 132.11 to as high as 133.70.

    The greenback traded sideways versus the Japanese yen on Wednesday and gyrated inside intra-day range of 81.80 - 82.17, closed around 81.95 near New York closing. Earlier in the day, Bank of Japan released minutes for April 28 meeting and stated that members agreed in the meeting that needed to focus on downside economic risks. Bank of Japan Governor Masaaki Shirakawa said 'need to watch for demand-driven downside risks to economy; Bank of Japan focusing on downside risks to economy in guiding policy for time being.'

    The Swiss franc strengthened against the greenback and euro on Greece’s debt crisis concern. Usd/chf dropped from intra-day high of 0.8814 to as low as 0.8710 while eur/chf extended long-term downtrend to a fresh lifetime low of 1.2270 in New York morning before stabilising.

    On the data front, U.K. Q1 preliminary GDP came in at 0.5% q/q and 1.8% y/y which met economists' estimate and same as the figure on last release. U.S. April durable goods orders decreased 3.6% versus economists' forecast of -2.2% and 4.4% rise in March. U.S. April durable goods orders excluding transportation decreased 1.5% and defense fell 3.6%. U.S. March monthly home price m/m came in at -0.3% versus -1.5% in February. U.S. March monthly home price y/y came in at -5.8% versus -5.7% in February.

    Data to be released on Thursday include:

    Japan Corporate Service Price Index (CSPI); German import price index; Swiss trade balance and payroll; U.S. GDP, GDP deflator, PCE core and jobless claims.

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  14. acetraderfx

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    Market Review - 26/05/2011 21:16 GMT

    Euro ends higher against the greenback after intra-day volatile movements

    The single currency traded in a volatile manner on Thursday, having staged initial rally from Asian morning low of 1.4068 to a session high of 1.4206 in New York morning on speculation that China would increase its purchases of European bonds together with greenback's broad-based weakness after the release of weaker-than-expected U.S. GDP data before nose-dived to as low as 1.4067 due to comments from Eurogroup head Jean-Claude Juncker, who said 'International Monetary Fund may not release next tranche to Greece next month' before recovery was seen later. Euro also weakened against the British pound and Swiss franc as eur/gbp and eur/chf dropped sharply to a two-month low of 0.8611 and a fresh record low of 1.2205 respectively.

    Although cable was under pressure and dropped from Asian morning high of 1.6336 to 1.6273 after the release of index of sales volumes at U.K. consumer-services companies (including hotels and restaurants) which fell to the lowest since November 2009, renewed active cross-buying in sterling supported the British pound and cable extended the upmove from Tuesday's low of 1.6055 to a session high of 1.6405.

    Greenback's broad-based weakness due to weaker-than-expected U.S. economic growth in the first quarter pressured the U.S. dollar against the Japanese yen and Swiss franc. Usd/jpy dropped sharply from 81.87 to a session low of 81.15 while usd/chf ratcheted lower to as low as 0.8650 before stabilising.

    On the data front, U.S. Q1 annualised GDP came in at 1.8% versus economists' forecast of 2.1% and 1.8% in the prior quarter. U.S. Q1 GDP deflator came in at 1.9% versus economists' forecast of 1.9% and 1.9% in the prior quarter. U.S. Q1 core personal consumption expenditures (PCE) q/q came in at 1.4% versus economists' expectation of 1.5% and previous reading of 1.5%. U.S. Jobless claims came in at 424,000 versus economists' expectation of 400,000 and revised previous reading of 414,000.

    Data to be released on Friday include:

    U.K. Gfk survey and nationwide house prices; Japan national and Tokyo CPI and retail sales; German CPI and HICP preliminary; Eurozone business climate, economic sentiment, industrial sentiment and consumer Sentiment; Swiss KOF indicator; U.S. personal spending, personal income, PCE index and PCE core, University of Michigan survey final and pending home sales.

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  15. acetraderfx

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

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    Re: Daily FX Market Outlook by AceTrader-30-5-2011

    Market Review - 27/05/2011 21:11 GMT

    Euro rallies on easing of euro zone debt concerns and broad-based dollar weakness

    Euro rallied on Friday as euro zone debt concerns eased and the greenback weakened against its major counterparts after the release of much weaker-than-expected U.S. pending home sales.

    The single currency initially jumped ahead of Asian opening and then climbed to 1.4278 in Tokyo lunch session due to active short-covering on speculation that U.S. economic growth was slowing before retreating strongly to 1.4184 in European morning on concerns over the Greek government's ability to win support for severe austerity measures, however, active cross-buying in euro helped price stage a rebound and euro later ratcheted higher to a one-week high of 1.4325 near New York closing as comments out of Europe suggested Greece should be able to handle its heavy debt load, while the greenback's broad-based weakness after the release of much weaker-than-expected U.S. April pending home sales (April figure plunged 11.6% versus economists' forecast of a 1% drop) also supported the single currency.

    The British pound continued to rally on Friday on speculation of rate hike after Bank of England Deputy Governor Paul Tucker expressed worries about inflation on Thursday, cable ratcheted higher to 1.6461 in European morning before easing on profit taking. The pound then ratcheted higher to two-week high of 1.6515 near New York closing after realease of much weaker-than-expected U.S. economic data.

    The greenback and euro fell against the Swiss franc on Friday from 0.8662 and 1.2255 to a fresh record low of 0.8462 and 1.2100 respectively as strong reading of Swiss KOF indicator (May figure came in at 2.30 versus market's forecast of 2.20) boosted speculation that Swiss interest rates would rise in the coming months.

    Versus the Japanese yen, the greenback extended recent decline and tounched a session low of 80.70 in New York due to growing pessimism over U.S. economic outlook following the release of weaker-than-expected U.S. data.

    European Central Bank Governing Council member George Provopoulos said 'Greece will be able to repay debt in full without reprofiling if sticks to EU/IMF programme'. European Central Bank governing council member Nout Wellink said 'he's fully confident Greece will meet conditions to get IMF payment next month'. International Monetary Fund's acting chief John Lipsky said 'Greek loan program doesn't contemplate debt restructuring'. At an emergency meeting, party sources said Greek political leaders failed to reach consensus on new, harsher austerity measures to pull the country out of its debt crisis and convinced skeptical investors could avoid default.

    In other news, the group of eight leader agreed in G8 meeting held in France that the global economic recovery was becoming more self-sustained, but rising commodity prices was still a concern which was hampering further growth. The G8 communique stated Europe, U.S. and Japan all aimed for sustainable public finances. Italy Prime Minister Silvio Berlusconi also said G8 did not discuss issue of replacing Bini Smaghi on ECB board. And Obama said he wanted a strong euro but eurozone did not because it hurts exports.

    On the data front, U.K. May GfK Consumer confidence came in at -21 versus economists' expectation of -31. Japanese April national CPI and core national CPI came in at 0.3% and 0.6% respectively, same at economists' forecasts. Eurozone May business climate, economic, industrial and consumer sentiment came in at 0.99, 105.5, 3.9 and -9.8 versus expectations of 1.20, 105.7, 5.1 and -12.0 respectively. U.S. April personal spending rose 0.4% after a revised 0.5% in March that was smaller than previously estimated. U.S. April personal income came in at 0.4% versus forecasts of 0.4%. U.S. April PCE index m/m and y/y came in at 0.3% and 2.2% repectively with April core PCE index m/m and y/y came in at 0.2% and 1.0% respectively. U.S. May University of Michigan survey final came in at 74.3 versus forecast of 72.4.

    Data to be released next week include:

    New Zealand April exports and imports and trade blaances; German retail sales; Canadian current account and GDP on Monday. U.K and U.S. markets will be closed on Monday.

    Japan manufacturing PMI, household spending, unemployment rate, industrial production, construction orders and housing starts; Swiss GDP; German unemployment change and unemployment rate; Eurozone HICP flash and unemployment rate; U.S. Midwest manufacturing, SnP/CS home price, Chicago PMI and consumer confidence on Tuesday.

    Swiss retail sales and PMI; German manufacturing PMI; Eurozone manufacturing PMI; U.K. manufacturing PMI, mortgage approval; U.S ADP employment, construction spending and ISM manufacturing on Wednesday.

    U.K. PMI construction; U.S. jobless claims and durable goods (revised) on Thursday.

    German services PMI; Eurozone services PMI; U.K. services PMI; U.S. average hourly earnings, non-farm payrolls, private payrolls, unemployment rate and ISM manufacturing on Friday.

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  16. acetraderfx

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    Market Review - 30/05/2011 19:43 GMT

    The single currency eases on Monday due to worries over next IMF/EU aid payment for Greece


    Euro traded with a soft bias in thin market condition on Monday due to holiday in the United Kingdom and United States, however, uncertainty over next aid payment by IMF/EU to Greece after weekly German magazine Der Spiegel reported that Greece might not receive the next tranches of its EU/IMF bailout aid and Athens might have missed all fiscal targets set by IMF/EU weighted on the the single currency. The pair retreated after rising marginally above Friday's New York high of 1.4325 to 1.4335 in New Zealand to a session low of 1.4257 in European morning before trading sideways for rest of the day, the British pound moved lower to an intra-day low of 1.6451 in European afternoon trading after failure to penetrate Friday's 1.6515 high earlier, the 2 currency pairs traded around 1.4275 and 1.6475 respectively near European closing.

    Versus the Japanese yen, the greenback moved sideways while usd/chf also traded sideways after staging a recovery from a fresh record low of 0.8457 in New Zealand to 0.8531.

    The dollar index, which measured the strength of US dollar against a basket of six other currencies, subdued near two-week lows of 74.752, after a recent run of weak U.S. economic data which showed growth in US was losing momentum, together with a drop in U.S. treasury yields. The dollar index traded between gain and lost on Monday, last seen slightly higher by 0.01 percent to 74.964 at European closing.

    New Zealand dollar penetrated 2008 high of 0.8215 to a fresh 26-year peak of 0.8218 since the pair floated in March 1985 in Australian trading on Monday due to rumours of solid demand for New Zealand assets such as government bonds from Asian investors and rate hike expectation before the end of the year after the recent strong economic data. New Zealand trade balance in April came in at a surplus of 1113 millions compared to the consensus forecast of 600 millions and 578 millions in previous month, with export and import in April reported at 4.65 and 3.54 billion NZD against 4.53 and 4.07 billion NZD in March.

    On the data front, U.K. Hometrack housing survey in May reported a drop of 0.1 percent month/month and 3.7 percent year/year versus 0.0% and -3.3 percent in previous month. Canada showed a 0.3 percent month/month and 2.8 percent year/year economic growth in March against a drop of 0.2 percent and an increase of 2.9 percent in previous readings.

    Data to be release on Tuesday includes:

    Japan Manufacturing PMI, Household spending, Unemployment rate, Industrial production, Construction orders and Housing starts; Australia Current account and Building approvals; Switzerland GDP; German Retail sales and Unemployment data; Eurozone Unemployment rate and HICP; Bank of Canada rate decision and Canada PPI; US Midwest manufacturing, S&P Home price, Chicago PMI and Consumer Confidence.

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  17. acetraderfx

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    Market Review - 31/05/2011 19:41 GMT

    The single currency rises as Greece may avoid debt restructuring


    The single currency rose to a three-week high of 1.4424 on Tuesday after news report that Germany was considering dropping its push for an early Greek debt restucturing.

    Euro jumped from 1.4279 in Australia as Wall Street Journal reported that Berlin has made concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece's funding needs before the indebted country ran out of cash in mid-July.

    The single currency maintained a firm undertone in Asian and European sessions, price extended gain to 1.4424 in European morning on active cross-buying in euro before retreating to around 1.4360 after Free Democrat Parliament member Frank Schaeffler told business paper that
    "Greence should leave Eurozone' in New York morning.

    Earlier in the day, eur/jpy jumped from 115.63 to as high as 117.80 in European morning before retreating sharply to 116.74 whilst eur/gbp rose from 0.8675 and rallied to 0.8754 in New York.

    Versus the Japanese yen, the greenback quickly jumped fm 80.71 to 81.39 in Asian morning as Reuters news reported that Moody's had put Japan's sovereign ratings including the 'Aa2' local and foreign currency bond ratings on review for possible downgrade, four days after a similar move by Fitch Ratings. The pair later rose sharply to as high as 81.77 in European session after Moody's also took actions on rated Japanese banks further to sovereign rating review, however, the greenback retreated strongly after the release of much weaker-than-expected U.S. economic data. Earlier in the day, aud/jpy rose sharply from 86.47 to 87.43 in European morning before retreating sharply to 86.46/48 in New York morning.

    The British pound also jumped in tandem with eur/usd in Australia and price climbed to 1.6547 in Asian morning, however, cross-selling in sterling versus euro and jpy in European and New York session pushed price lower and cable reached intra-day low of 1.6423 in New York midday. Earlier in the day, gbp/jpy rose sharply from 133.33 to as high as 135.12 in European morning before retreating sharply to 133.48/50 in New York morning.

    In other news, Moody's senior Vice President and regional credit officer Tom Byrne said 'we didn't see any progress on whether government and Liberal Democratic Party (LDP) could reach consensus on fiscal policy; Japan macroeconomic outlook also weaker than expected.'

    On the data front, German retail sales rose by 0.6% in April versus the economists' forecast of 1.8% increase whilst German unemployment change in May was -8,000 against consensus forecast of -30,000.
    U.S. Chicago PMI dropped to 56.6 in May versus economists forecast of 63.0 and previous reading of 67.6. U.S consumer confidence in May also came in at 60.8, much weaker than the expectation of 66.5. Bank of Canada rate decision in May remained unchanged at 1.00% as expected.

    Data to be released on Wednesday include:

    U.K. Halifax house prices, manufacturing PMI and mortgage approval; China PMI Manufacturing and HSBC Manufacturing PMI; Australia GDP; Swiss retail sales and PMI; German manufacturing PMI; Eurozone manufacturing PMI; U.S ADP employment, construction spending and ISM manufacturing.

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