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Daily FX Market Outlook by AceTrader-4-7-2011

Discussion in 'Forex Daily News & Outlook' started by acetraderfx, Jul 3, 2011.

  1. acetraderfx

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

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    Market Review - 01/07/2011 20:07 GMT

    Euro ends higher against greenback after intra-day volatile movements


    The single currency ended higher against the greenback on Friday and climbed to a three-week high of 1.4553 in European morning before retreating as some investors unwound safe-haven positions in the aftermath of Greek votes on austerity measures earlier this week.

    Earlier in Asia, euro resumed recent gain against the greenback after meeting renewed buying at 1.4467 at Asian open, price briefly penetrated Thursday's high of 1.4538 to a 3-week high of 1.4553 in early European trading, however, profit-taking ahead of ECB rate decision next week limited intra-day gain and euro later dropped to a session low of 1.4437 before rebounding strongly, the pair closed near 1.4527 at New York closing.

    Versus other major currencies, the greenback jumped briefly but strongly agianst the yen and Swiss franc and rose to a sessions high of 81.15 and 0.8525 respectively after data showed business activity in the US manufacturing sector came in stronger than expected in June.

    U.S. reported manufacturing expanded at a faster pace in June with ISM manufacturing index rose to 53.3 from 53.5 in May, whilst US construction spending and University Michigan survey (Final) showed at a decrease of 0.6 percent in May and 71.5 in June respectively.

    Cable moved in a volatile manner on Friday with price initially rising to as high as 1.6096 at European opening and then tumbled to a session low of 1.5987 on speculation that Bank of England would keep interest rate at record lows in coming months after UK reported a weaker-than-expected manufacturing survey in June, however, cross-buying in sterling, especially versus euro emerged and price later rebounded strongly to around 1.6080/85 in New York before moving sideways. UK Manufacturing PMI in June came in at 51.3 versus 52.1 in last month.

    News quoted comments from Standard & Poor's (S&P) that 'S&P continues to hold view that there is 1 in 3 chance that ratings on Italy could be lowered within the next 24 months; far more substantial reforms will be needed in light of Italy's weak growth, and Italy austerity plans generally credible but government could be overly optimistic on its fight against tax evasion'.

    Economic data to be released next week include:

    Switzerland Retail sales, EU Sentix Investor Confidence and PPI, UK PMI construction, and Canada PPI on Monday (US market holiday);

    Australia Trade balance and RBA rate decision, German Services PMI, EU service PMI and retail sales, U.K. Services PMI and and US factory orders on Tuesday;

    Japan Leading indicators, EU GDP (rev.), German factory orders, Canada Building permits, U.S. ISM non-manufacturing and New Zealand GDP on Wednesday;

    Japan Machine orders, Australia Unemployment rate, Swiss CPI, UK Industrial production, manufacturing production and BOE rate decision, German Industrial production, EU rate decision, US ADP employment and Jobless claims, and Canada New housing price index and Ivey PMI on Thursday;

    Japan Current account and Economic watch DI, Germany Trade data, U.K. PPI data, Canada Unemployment rate and Employment change, and US non-farm payroll, private payrolls, average hourly earnings, unemployment rate and wholesale inventories on Friday.

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  2. acetraderfx

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    Market Review - 04/07/2011 16:19 GMT

    Euro pares gain after S&P says debt rollover may put Greece in ‘selective default’

    The single currency extended last week's rally to a fresh one-month high of 1.4580 in Australia on Monday after EU finance ministers promised to release the 5th tranche of 12-bln euro EU/IMF aid package to Greece at EU FinMins' teleconference on Saturday, however, euro pared most of the gains and retreated after Standard & Poor’s said a debt-rollover plan for Greece may prompt a 'selective default' rating for the country. The pair weakened to 1.4496 in relatively thin European session as U.S. Markets were closed for the Independence Day holiday.

    Bank of Japan Governor Masaaki Shirakawa said Japanese economy continues to face downward pressure, mainly on output, but showing signs of picking up; Japanese economy likely resume moderate recovery as output improves.' He also said 'global economy continues to recover, albeit at a slower pace; global financial markets remain unstable due to worries about Greek sovereign risk.' The greenback fell briefly from 80.94 to 80.54 versus Japanese yen before recovering on short-covering together with dollar's rebound against other major currencies.

    In other news, Bloomberg reported that Reed, which runs British's largest recruitment website, released a report showing that U.K. employment creation accelerated as demand for skilled, highly qualified staff has added fuel to this month's increase. Despite extending erratic rise from last week's near 3-month low of 1.5912 to 1.6140 in European morning, the British pound retreated after the release of slightly weaker-than-expected U.K. construction PMI which came in at 53.6 versus the economists' forecast of 53.7 and cable weakened to 1.6055 before rebounding to 1.6100 on short-covering.

    The Australian dollar dropped from last Friday's high of 1.0790 to 1.0712 due to a surprise fall in Australian retail sales which decreased by 0.6% versus economists' forecast of 0.3% increase. The Reserve Bank of Australia is expected to keep rates on hold for the eight straight month on Tuesday at 4.75%.

    Tuesday will see the release of Australia trade balance, German services PMI, eurozone service PMI and retail sales, U.K. Services PMI and US factory orders.

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  3. acetraderfx

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    Market Review - 05/07/2011 21:40 GMT

    Euro tumbles after Moody's cut Portugal's credit rating to junk


    The single currency declined sharply on Tuesday after Moody's Investors Service downgraded Portugal's credit rating to junk, igniting renewed fears over the Greek debt crisis, that could spread to other weaker members of the eurozone.

    Moody's cut Portugal's rating by 4 levels to BA2, 2 notches into junk territory, with a negative outlook saying there is great risk the country will need a second round of official financing before it can return to capital markets.

    Earlier in the day, renewed selling interest at 1.4554 in Australian session capped the euro's intra-day recovery and price then ratcheted lower to 1.4442 in New York morning. Later, despite staging a modest recovery in New York midday, the single currency fell swiftly and sharply from around 1.4485/88 to as low as 1.4395 in late New York session after Moody's cut Portugal's government bond rating to junk. Cross-selling in euro versus the Japanese yen, the Swiss franc and sterling also pressured the single currency in late New York trading as eur/jpy, euro/chf and eur/gbp tumbled to the day's lows of 116.69, 1.2100 and 0.8970 respectively.

    The British pound declined from 1.6100 in tandem with the euro in Asian session n despite falling to a session low of 1.5990 in European morning, cable then jumped after the release of slightly higher-than-expected UK CIPS services PMI which came in at 53.9 versus economists' forecast of 53.5. Later, price climbed to an intra-day high of 1.6128 b4 retreating to 1.6039/40 in late New York trading.

    The Swiss franc strengthened against the dollar and euro as investors flocked to the franc as a safe-haven asset. Usd/chf and eur/chf tanked from around 0.8456 to 0.8385 and 1.2238 to 1.2100 respectively in late New York session before staging a minor recovery.

    Data to be released on Wednesday include:

    BRC Shop Price Index, Japan Leading indicators, EU GDP (rev.), German factory orders, Canada Building permits, U.S. ISM non-manufacturing.

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  4. acetraderfx

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    Market Review - 06/07/2011 19:41 GMT

    Euro falls to one-week low due to persistent fears of European debt crisis


    Euro tumbled to a one-week low versus the dollar on Wednesday due to the escalating concerns on European debt crisis together with interest rates hike by the Chinese central bank, spurring demand for the greenback and the Swiss franc as safe-haven assets.

    Despite ratcheting higher on minor short-covering to 1.4467 in European morning following the selloff to 1.4395 in the previous session, the widening of periphery bond yields gave euro bears extra ammunition to give euro another bashing, price penetrated said support easily and intra-day decline accelerated after the People's Bank of China raised interest rate by 25 basis points in European midday, the single currency later tanked to a one-week low of 1.4286 in New York morning before staging a minor recovery. Cross selling in euro also pressured the single currency as eur/jpy, eur/gbp and eur/chf tumbled from 117.05 to 115.56, 0.9018 to 0.8943 and 1.2172 to 1.1966 respectively.

    The Portuguese 10-year government bond yields jumped to a record 12.55 percent after Moody's cut the country's credit rating to junk on Tuesday, while Irish, Italian, Spanish and Greek yields also surged on bets that more ratings cuts may follow.

    China raised benchmark interest rates for the third time this year after inflation accelerated to the fastest pace since July 2008. Benchmark one-year lending rates will be hiked by 25 basis points to 6.56% and benchmark one-year deposit rates will be raised by 25 basis points to 3.5%, effective on this Thursday.

    The British pound tracked euro's intra-day movement closely. Despite staging a modest recovery to 1.6090 at European open, cable also tumbled in European morning on active cross-selling in sterling versus the Japanese yen as the cross pair tumbled from 130.29 to 128.99. The pound eventually dropped briefly to a session low of 1.5947 in New York morning after triggering stops below recent good support at 1.5970.

    Elsewhere in the market, spot gold price jumped from $1510.70/oz to as high as $1533.40/oz as concerns over the European sovereign debt problems and the Chinese central bank's rate move increased a flight to safety.

    Data to be released on Thursday include:

    Japan Machine orders, Australia Unemployment rate n unemployment change, Swiss CPI, UK Industrial production, manufacturing production and BOE rate decision, German Industrial production, ECB rate decision, US ADP employment and Jobless claims, and Canada New housing price index and Ivey PMI.

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    Market Review - 07/07/2011 20:03 GMT

    Euro rallies broadly as ECB suspends collateral rules for Portugal


    The single currency rose strongly on Thursday across the board after European Central Bank President Jean-Claude Trichet said the central bank decided to suspend the application of the minimum credit rating threshold in the collateral requirements for Portugal until further notice at the ECB press conference following interest rate announcement. The ECB raised its widely expected lending rate to 1.50% from 1.25% to tame inflation pressure.

    ECB President Trichet also said that we did not decide that we would have a series of interest rate increases and the further adjustment of the current accommodative monetary policy stance is warranted in the light of upside risks to price stability.

    Earlier in the day, renewed selling interest at 1.4347 pressured the single currency lower in Asia. Later, despite falling below previous session low of 1.4286 to 1.4277 in European morning and then to a day's low of 1.4220 after Trichet started the press conference regarding data which showed some deceleration in growth, the euro then rallied across the board in New York morning and price eventually climbed to as high as 1.4375 before retreating on profit-taking. Eur/jpy, eur/gbp and eur/chf jumped from 115.54 to 116.80, 0.8905 to 0.8995 and 1.1977 to 1.2144 respectively.

    The British pound fell against the dollar on active cross selling in sterling versus the euro due to the widening interest rate differential prospect. Although cable staged a minor recovery from the day's low of 1.5944 in European morning, price then retreated after meeting renewed selling interest at 1.6018 and the pound was confined inside the aforesaid intra-day range for the rest of the day despite euro's rally in New York morning.

    The Bank of England kept key UK interest rate at a record low of 0.50% and maintained QE total at 200 billion sterling. Cable showed little reaction after the BoE rate decision.

    The dollar rallied against the Japanese yen and the Swiss franc after the release of much better-than-expected U.S. June ADP employment change which came in 157K vs economists' forecast of 70K and the upwardly revised 36K in May. Usd/jpy rose above last week's high of 81.27 to 81.41 from around 81.10/15 while usd/chf strengthened briefly from 0.8440/45 to as high as 0.8495 before retreating on profit-taking.

    Data to be released on Friday include:

    Japan Current account and Economic watch DI, Germany Trade data, U.K. PPI data, Canada Unemployment rate and Employment change, and US non-farm payroll, private payrolls, average hourly earnings, unemployment rate and wholesale inventories.

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  6. acetraderfx

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    Market Review - 09/07/2011 01:24 GMT

    Dollar tanks against the Japanese yen on disappointing U.S. jobs data


    The dollar tumbled versus the Japanese yen and the Swiss franc after the release of much worse-than-expected key U.S. jobs report, fueling speculation that the Federal Reserve will not raise interest rate anytime soon.

    U.S. June non-farm payroll data came in 18K versus street forecast of 90K and the private payroll also added much lower-than-expected of 57K jobs compared to economists' estimate of 110K. U.S. unemployment rate rose to 9.2% in June from 9.1% in May.

    Versus the Japanese yen, although the dollar extended recent upmove marginally above Thursday’s high of 81.41 to 81.49 ahead of the release of U.S. jobs data, the usd/jpy pair then nose-dived to 80.51 immediately after the jobs data before trading sideways for rest of the session. Against the Swiss franc, the greenback also tumbled from 0.8523 to as low as 0.8360.

    The single currency went through a roller-coaster session on Friday, price tumbled broadly in European morning due to aggressive across selling in euro. After initial sideways trading in Asia, the single currency tumbled from 1.4363 to 1.4328 in European midday on news that shares of Italian bank Unicredit have been suspended from trading. Later, despite the initial brief but drop to session low of 1.4205 after the release of disappointing U.S. jobs report, price swiftly rallied to 1.4351 before coming back swiftly to 1.4210/13 in New York afternoon. Eur/jpy, eur/gbp, eur/chf tanked from 116.81 to 114.67, 0.9001 to 0.8865 and 1.2170 to 1.1908 respectively.

    In total stark contrast to its weak undertone in previous session, the British pound rallied against the greenback and the euro on active unwinding in eur/gbp cross pair. Despite cable's brief fall from 1.5987 to 1.5931 in European midday, the pound then rose strongly to as high as 1.6078 in New York morning before retreating on profit-taking.

    In other currency, the New Zealand dollar strengthened against the greenback to as high as 0.8384, the strongest since it was freely floated in 1985. In the precious metal market, spot gold price also jumped from $1525.30/oz to 1545.20/oz.

    In the other news, the IMF approved a 3.2 billion-euro payment to Greece under a joint bailout package with the European Union, the Washington based agency said in an e-mailed statement reported by Bloomberg news.

    Data to be released in the weekend:

    China Purchasing Price Index (Y/Y) and Consumer Price Index (Y/Y) on Saturday;

    China Exports Y/Y, Imports Y/Y and Trade Balance on Sunday;

    Data to be released next week include:

    Japan Consumer confidence, Machine tools orders, Canada Housing starts, EU FINMINs meeting in Brussels on Monday;

    U.K. BRC retail sales, RICS house prices, Japan Domestic CGPI M/M n Y/Y, Tertiary Industry Index, Japan BoJ 2-day meeting start, Australia NAB business confidence, German CPI final M/M and Y/Y, HICP final M/M and Y/Y, EU FINMINs meeting in Brussels, U.K. BoE Deputy Governor Bean Speaks, U.K. CPI M/M and Y/Y, RPI M/M and Y/Y, Trade balance, DCLG house prices Y/Y, U.S. Trade balance, FOMC meeting minutes, Canada Trade balance, Imports and Exports on Tuesday;

    Australia Westpac consumer confidence, China GDP Year-to-Date (Y/Y), Industrial Production YTD (Y/Y), Industrial Production YTD (Y/Y), Retail Sales YTD (Y/Y) and Retail Sales (Y/Y), Japan Industrial production, Capacity utilisation, Japan BOJ Monthly economic report, German WPI M/M and Y/Y, Swiss Combined PPI and Y/Y, U.K. Claimant count, ILO unemployment rate, Avg. earnings EU Industrial production M/M and Y/Y, EU Quarterly report on euro area, U.S. Export price index, Import price index, Fed's Bernanke delivers semi-annual monetary policy report to house, Fed budget on Wednesday;

    New Zealand GDP Q/Q Q1 and Y/Y, Japan Tankan Manufacturing, Machinery orders Y/Y, EU ECB publishes July monthly report, HICP final M/M and Y/Y, U.S. Jobless claims, PPI M/M and Y/Y, PPI core M/M and Y/Y, Retail sales, Retail sales less auto M/M, Business inventories, Fed's Bernanke delivers semi-annual monetary policy report to senate on Thursday

    EU Trade balance, U.S. CPI M/M and Y/Y, CPI core M/M and Y/Y, Real earnings, Capacity utilisation, Industrial production M/M and University of Michigan consumer confidence survey Prel. on Friday.

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  7. acetraderfx

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    Market Review - 12/07/2011 21:32 GMT

    Euro rebounds on short covering after the European officials' supportive comments


    Despite initial selloff below 1.4000 to a 4-month low at 1.3838 in Europe on fears that eurozone leaders were not able to limit risks of European debt crisis, the single currency rebounded on short-covering after positive comments from the European officials. However, euro retreated from 1.4054 in NY afternoon after Moody's downgraded Ireland's rating to junk status. Euro also tumbled to a fresh lifetime low at 1.1555 against the Swiss franc.

    Germany's FINMIN Wolfgang Schaeuble said it was inevitable that the private sector would participate in reducing Greece's debt burden. Luxembourg's FINMIN Frieden said that there will be no country defaulting in the eurozone.

    Earlier, euro edged lower from Australian high at 1.4063 after comments by the newly-elected IMF Chief Christine Lagarde who said in Washington that IMF is not yet ready to discuss conditions or terms of a 2nd Greek bailout and price dropped below 1.4000 lvl to 1.3933 in Asian morning. Later, although the pair tanked to 1.3838 in European morning, the single currency rebounded on short-covering and rose further after the comments from European officials. The pair climbed to 1.4054 in NY afternoon after the release of U.S. June FOMC minutes before retreating as Moody's downgraded Ireland's rating by one notch to Ba1 fm Baa3 and said Ireland's credit outlook remained negative.

    The FOMC minutes stated that 'Fed officials divided on further stimulus if economy stays weak; FOMC agreed on sequence of steps for exiting monetary stimulus; Fed concerned about Greece and spreading European debt woes could cause significant strains in US; Fed expected inflation to subside to levels at or below those consistent with dual mandate.'

    Earlier in Europe, a Bank of Italy source denied market rumours of problems with Tue's bond auctions.

    Although the greenback recovered briefly to 80.38 just ahead of Tokyo open, renewed selling sent the pair lower and price pierced through support at 79.57 to 79.18 in European morning due to active cross buying in yen vs euro (eur/jpy tanked from 112.95 to 109.58). Later, usd/jpy fell again from 79.86 due to dollar's broad-based weakness and dropped to 79.23 ahead of NY closing.

    Cable ratcheted lower in tandem with euro in Asian session and then tanked to a near 6-month low of 1.5781 in European morning after the release of U.K. CPI and trade balance as U.K. CPI came in at -0.1% m/m and 4.2% y/y versus the economists' forecast of 0.2% and 4.5% respectively whilst U.K. May trade balance was -8.478 bln pounds, the biggest deficit since Dec. 2010, against consensus forecast of -7.37 bln pounds. However, cable rebounded strongly on dollar's broad-based weakness and climbed to as high as 1.5949 in NY afternoon.

    Data to be released on Wednesday include:

    Australia W'pac consumer confi., China GDP, Industrial Production, Retail Sales, Japan Industrial prod'n, Capacity utilisation, Germany WPI, Swiss Combined PPI , U.K. Claimant count, ILO unemployment rate, Avg. earnings 3m, EU Industrial prod'n, U.S. Export price index, Import price index, Fed budget.

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    Market Review - 13/07/2011 21:26 GMT

    Dollar tanks as Bernanke says Fed will provide additional stimulus if needed


    The greenback fell sharply against its major counterparts as U.S. Federal Reserve Chief Ben Bernanke said the Fed would offer more stimulus measures if economic conditions deteriorate further. Dollar dropped further at NY closing after Moody's placed U.S. AAA government bond rating n related ratings on review for possible downgrade. Usd/chf tumbled below previous record low of 0.8276 to a fresh lifetime low at 0.8174.

    Fed Chairman Bernanke said in his testimony before the House Financial Services Committee that 'the possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support.' However, Dallas Federal Reserve Bank President Richard Fisher opposed further monetary policy easing and said 'does not personally see the benefit of more accommodation even if economy were to weaken further.'

    Breaking news came after New York close that Moody's Investor Service warned U.S. may lose its AAA rating if lawmakers fail to increase its debt ceiling.

    Despite euro's brief retreat to 1.3951 in Australia yesterday, renewed buying lifted the single currency and the pair ratcheted higher to 1.4111 in European morning due to active cross buying of euro vs sterling. Later, euro rose again from 1.4036 to 1.4193 in NY morning due to Bernanke's dovish comments before stabilising.

    Although the greenback edged higher to 79.57 against the Japanese yen in Asian midday after early brief but steep fall to a near 4-month low at 78.49 in thin market conditions in Australia, renewed selling emerged and the pair ratcheted lower to 78.89 due to dollar's weakness in NY morning.

    Earlier in Asia, when asked about the yen's rise above 80, Japan's FINMIN Yoshihiko Noda told reporters 'I think the movement has been a little one-sided and I will closely watch markets today as well.' Japanese Chief Cabinet Secretary Yukio Edano said 'rapid yen moves undesirable; closely watching yen moves.' These comments gave support to usd/jpy.

    Despite cable's brief rise to 1.5990 in European morning, the British pound pared its gain and fell to 1.5907 after the release of U.K. jobs data as U.K. claimant count came in worse than expected at 24.5K vs expectation of 15K whilst U.K. unemployment rate and average earning were 7.7% in May and 2.1% respectively against an economist's forecast of 7.7% and 2.0%. however, the pair rose strongly in NY morning due to Bernanke's comments and rallied to 1.6121 in NY midday on dollar's broad-based weakness.

    The commodity currencies also rallied against the greenback as aud/usd and nzd/usd rose sharply from 1.0579 to 1.0779 and from 0.8170 to 0.8386 respectively. Usd/cad tanked from 0.9668 to 0.9545. Spot gold also pierced through 1575.70 to a fresh record high at 1586.80 whilst silver rallied to 38.27.

    Data to be released on Thursday include:

    New Zealand GDP, Japan Tankan Manufacturing, Machine tools orders, EU HICP final, U.S. Jobless claims, PPI, PPI core, Retail sales, Retail sales less auto, Business inventories .

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    Market Review - 14/07/2011 21:40 GMT

    Dollar gains as Fed's Bernanke rejects immediate stimulus


    The greenback pared previous sessions' losses and recovered against its major counterparts on Thursday as Fed Reserve Chairman Ben Bernanke said Fed was not ready to add more stimulus measures, dampening market expectations of another round of monetary easing.

    Fed Reserve Chairman Ben Bernanke said in his second day of testimony before the Congress that 'situation somewhat different than when QE2 was launched, policy still very accommodative; inflation is higher now than late last year, not yet ready to take action.'

    Although the single currency rose briefly but sharply to 1.4282 in Australia after Moody's placed the U.S. Aaa rating on review for a possible downgrade in Wednesday's thin Australian morning session, euro pared its intra-day gain in Asia and fell to 1.4168 in European morning, the pair rebounded to 1.4258 before retreating after the Italian auction. Later, euro dropped again from 1.4249 on Bernanke's dollar-positive comments and weakened to an intra-day low at 1.4115 in NY afternoon.

    Italy sold 4.94 billion euros of the bonds vs its maximum target of 5 billion euros. The treasury needed to pay gross yields of 4.93%, the highest since June 2008 and up from 3.9% in the last auction a month again, and 5.9% respectively to issue new 5-yr and 15-yr debt. Later, in NY morning, Italy's Senate approved austerity measure in confidence vote.


    Versus the Japanese yen, the dollar fell to 78.45 against the Japanese yen in Tokyo morning on dollar's broad-based selling after Moody's warning on U.S. debt rating. However, price jumped briefly but sharply to 79.60 ahead of European opening due to strong bids from a U.S. bank but dropped swiftly to 78.88 on renewed cross buying in yen especially vs euro. The pair then edged higher to 79.27 in NY morning after Bernanke's dollar-positive comments before stabilising.

    Despite cable's brief breach of Wednesday's NY high of 1.6121 to 1.6195 in Australia on dollar's weakness, the British pound ratcheted lower in tandem with euro and weakened to 1.6095 in European morning. Later, sterling fell from 1.6159 to 1.6105 after Bernanke's comments before staging a recovery to 1.6161 in NY afternoon on active cross buying of gbp vs euro.

    Spot gold breached $1586.80 to a fresh record high of $1593.00 whilst the New Zealand dollar climbed to 0.8507, the highest since it was freely floated in 1985 after the release of GDP data (0.8% m/m and 1.4% y/y vs forecasts of 0.3% m/m and 0.5% y/y).

    On the data front, U.S. jobless claims fell to 405,000, less than economists' forecast of 415,000 from upwardly revised 427,000 prior week. U.S. retail sales rose by 0.1% in June against the consensus forecast of a decrease of 0.1% prev. upwardly revised reading of -0.1 (prev. -0.2%).

    Data to be released on Friday include:

    EU Trade balance (euro), U.S. CPI, CPI core, Real earnings, Empire state mfg , Capacity utilisation, Industrial prod'n, U. Michigan survey Prel.

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    Market Review - 15/07/2011 21:34 GMT

    Euro little changed against dollar despite better-than-expected stress-test results


    The single currency hovered around 1.4157 against dollar near New York close after a choppy session on Friday. Although the European Banking Authority (EBA) released its stress-test results and showed that only 8 banks out of 90 had insufficient reserves in the event of an economic slowdown.

    The EBA released its stress-test results and stated that '5 Spanish banks, 2 Greek banks, 1 Austrian bank failed the test; 16 of 90 banks had core capital of 5-6% and will have to take action to improve capital buffers.'

    Earlier, despite euro's brief rise to 1.4199 in Australia after rating agency S&P, following Moody's credit warning on Thursday, placed U.S. 'AAA/A-1+' ratings on credit watch negative, the pair dropped to 1.4095 in European morning on risk aversion due to renewed concerns over eurozone debt problems before recovering. The single currency later weakened marginally to 1.4192 after the release of weaker-than-expected University of Michigan consumer sentiment (63.8 in July vs forecast of 72.5), however, price rebounded to 1.4189 in NY midday after the eurozone bank stress-test results were released and then traded sideways in NY afternoon session.

    Verus the Japanese yen, although the greenback fell briefly to 78.89 on dollar's broad-based weakness in Australia when S&P issued a credit warning on U.S. debt rating, buying interest quickly lifted the buck ahead of Tokyo open, the pair edged higher to 79.27 in European morning before retreating. Later, despite dollar's rebound to 79.25 after the release of weaker-than-expected University of Michigan consumer sentiment, price traded narrowly for rest of New York session as market focus was on the euro and other major currencies.

    The British pound rose to 1.6177 in Australian morning initially in tandem with euro, however, cable then came under selling pressure at European open and briefly penetrated Thursday's low at 1.6096 to 1.6086, price later weakened marginally to 1.6077 in NY morning but rebounded on short-covering to 1.6165 after the release of stress-test results and traded around 1.6142 near New York close.

    In early news, S&P said "at least a 1 in 2 chance it could cut rating; political debate on debt ceiling a significant uncertainty; sees increasing risk of policy stalemate; believes risk of payment default small but increasing."

    On the data front, U.S. Jun CPI came in at -0.2% m/m and 0.3% y/y versus the economists' forecast of -0.1% m/m and 0.3% y/y. U.S. New York Fed's empire state manufacturing activity index rose from previous reading of -7.79 in June to -3.76 in July, much weaker than the consensus forecast of 4.5.

    Economic data to be released next week include:

    New Zealand CPI, U.K. Rightmove house prices, U.S. Foreign treasury buys, Net LT TIC flows, NAHB housing mrkt index on Monday (Japan Market Holiday);

    Germany ZEW Economic Sentiment, ZEW Current Situation, EU ZEW Economic Sentiment, U.S. Housing starts, Building permits, Canada Leading indicators, BOC rate decision on Tuesday;

    Australia Westpac leading economic index, Japan Leading indicators, Germany PPI, Canada Wholesale sales, EU Consumer Sentiment, U.S. Existing home sales on Wednesday;

    Japan Trade balance (jpy), Import, Export, All industry index, Swiss Trade balance (chf), Germany Manufacturing PMI, Services PMI, EU Manufacturing PMI, Services PMI, Current account (euro), U.K. N'wide Consumer Confi., PSNCR, PS net borrowing, Retail sales, Swiss ZEW investor sentiment, U.S. Jobless claims, Leading indicators, Monthly home price, Philadelphia Fed survey on Thursday;

    Australia Import price index, Export price index, Germany Ifo business climate, Ifo current assessment, EU Industrial orders, Canada CPI, CPI core, Retail sales on Friday.

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  11. acetraderfx

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

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    Market Review - 19/07/2011 21:55 GMT

    Euro rises on optimism over EU summit


    The single currency edged higher on Tuesday due to optimism that a deal will be reached to provide further aid for Greece at the eurozone summit on Thursday. However, euro retreated sharply lower in NY session on dollar's strength on the basis of U.S. President Barack Obama's comments as he said he supported a deficit-reduction plan proposed by the bipartisan 'Group of Six' senators and urged Senate leaders to start discussion about it.

    Although euro fell to an intra-day low of 1.4069 at European open after extending previous gain in Monday's New York session, the single currency rebounded strongly due to active cross buying of euro versus the Swiss franc (eur/chf rallied from 1.1516 to 1.1688) together with the sharp gain in European stock markets (FTSE-100, CAC-40 and DAX closed the day up by 0.65%, 1.21% and 1.19% respectively) and climbed to 1.4217 in European morning before retreating. Later, despite euro's rise to 1.4213 in NY morning, selling interest around 1.4217 sent the pair lower and price tanked to 1.4108 in NY afternoon due to dollar's strength after U.S President Obama's debt-ceiling comments.

    In NY morning, the single currency was pressured as Germany's Chancellor Angela Merkel said that 'euro meeting on Thursday will not be one big step or spectacular solution that solves all problems.'

    Versus the Japanese yen, the greenback eased in Asian morning after an initial minor bounce from 78.97 to 79.15 and dropped to 78.97 at NY opening, however, the pair jumped to 79.09 after the release of stronger-than-expected U.S. housing data as U.S. June housing starts rose by 14.6% m/m to 629,000 unit rate (forecast was 575,000) and U.S. building permits rose by 2.5% to 624,000 unit rate in June. Later, the pair rebounded from 78.82 and rose to 79.28 in NY afternoon on dollar's strength due to U.S. President Obama's comments.

    Although the British pound traded sideways in Asian morning and dropped briefly to 1.6055 at Asian midday, cable rose strongly to 1.6160 in tandem with euro in European morning and then climbed to session high 1.6178 in NY morning before retreating.

    In other markets, U.S. stocks rallied on Tuesday as the DJI eventually closed the day at 12587.42, up by 1.63% or 202.26 points.

    Spot gold tumbled from a fresh lifetime high at $1609.50/oz to $1582.40/oz due to U.S. President Obama's comments.

    On the data front, the German ZEW economic sentiment index fell to -15.1 in July, its lowest level since Jan. 2009, versus economists' forecast of -12.4 from -9.0 in June. However, the German ZEW economic sentiment survey showed current conditions were holding up much better than expected at 90.6 versus the expectation of 85.0.

    Data to be released on Wednesday include:

    Australia Westpac leading economic index, Japan Leading indicators, Germany PPI, , Canada Wholesale sales, EU Consumer Sentiment, U.S. Existing home sales.

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  12. acetraderfx

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

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    Market Review - 20/07/2011 22:03 GMT

    Euro edges higher ahead of eurozone summit


    The single currency rose on Wednesday on optimism that EU leaders will conclude a successful rescue deal to ease Greece's debt level at the eurozone summit on Thursday.

    Although the single currency ratcheted lower to 1.4133 in Asian midday, the pair rebounded strongly due to active cross buying of euro vs sterling and climbed to 1.4239. Despite euro's retreat to 1.4166 in NY morning, renewed buying lifted the pair to 1.4234 in NY afternoon.

    Earlier in European session, euro was supported as French Finance Minister Francois Baroin said 'a "strong message" is needed from EU summit, greater flexibility on Greek debt.'

    In other news, the eurozone summit will start at 11:00GMT on Thursday, an hour later than initially planned, as the eurozone leaders allow time to reach a deal on private-sector involvement.

    Despite the British pound's sharp fall to 1.6069 in European morning due to active cross selling of sterling vs euro, cable rebounded strongly after the release of BoE policy minutes and the pair rose in tandem with euro to 1.6167 in late NY trading session.

    BoE minutes for July meeting were slightly less dovish than expected as it showed that MPC voted 7-2 to keep rates at 0.5% in July and MPC voted 8-1 to keep QE at 200 bln pound. BoE reported that 'recent developments had reduced chance that policy tightening warranted in nr term; balance of risks to med-term CPI little changed over month, substantial in both directions; data suggests modest underlying GDP growth continued in Q2, some softening of Q3 outlook; no clear evidence that higher inflation expectations feeding through wages; likely that current weakness of activity will last for longer than previously thought.'

    Although the greenback climbed above Tuesday's NY high at 79.28 versus the Japanese yen due to Tokyo morning fixing demand to 79.32, sellers quickly emerged and price then fell to 78.72 in European morning and then dropped again to 78.71 in NY session before trading sideways.

    On the data front, eurozone consumer confidence falls to -11.4 in July fm a downwardly revised -10.3 in June. U.S. June existing home sales dropped by 0.8% to an annual rate of 4.77mln units, the lowest since November, vs 4.81mln in May.

    Data to be released on Thursday include:

    Japan Trade balance (jpy), Import, Export, All industry index, Australia NAB business confidence, China HSBC Manufacturing PMI, Swiss Trade balance (chf), ZEW investor sentiment, Germany Manufacturing PMI, Services PMI, EU Manufacturing PMI, Services PMI, Current account (euro), U.K. N'wide Consumer Confi, PSNCR, PS net borrowing, Retail sales, U.S. Jobless claims, Leading indicators, Monthly home price, Philadelphia Fed survey.

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  13. acetraderfx

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

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    Market Review - 21/07/2011 22:27 GMT

    Euro surges after EU leader reached an aid package for Greece


    The single currency rallied to a two-week high on Thursday as the euro zone leaders finally agreed on a second bailout package for Greece, easing fears of the crisis spreading.

    The statement following the euro zone summit showed that net contributions of the private sector to the second Greek bailout will be 37 billion euros and the total official financing for the assistance package will be around 109 billion euros. The European Financial Stability Facility (EFSF) will lend to Greece at interest rates between 3.5% and 4.0% as well as allowing the EFSF to intervene in primary and secondary bond markets when the ECB permits.

    Although the single currency traded narrowly in Asian session and fell from 1.4295 to a low of 1.4138 in European morning after Eurogroup president Jean-Claude Juncker and Dutch Finance Minister Jan Kees de Jager said a selective Greek default was possible, euro later surged to a two week high after the release of draft summit conclusions. The pair climbed further when French President Nicolas Sarkozy said the EU leaders have agreed to create the beginnings of a European monetary fund and euro eventually climbed to a two-week high of 1.4435 near NY closing. Active cross buying of euro also gave support to the euro cross pairs, eur/jpy, eur/gbp and eur/chf rebounded strongly from 111.45 to 113.15, from 0.8763 to 0.8839 and from 1.1609 to 1.1802 respectively.

    Earlier in Australia, Reuters reported that Germany and France had reached a joint position late on Wednesday on a new bailout plan for Greece. This news sent the single currency higher from 1.4210 to 1.4275 ahead of Asian open.

    The British pound edged higher in Asian session and rose above Wednesday's NY high of 1.6167 to 1.6200 in European morning. Later, although cable dropped in tandem with euro to 1.6121, renewed buying lifted the pair and price rallied on dollar's broad-based weakness after the release of conclusion of the eurozone summit. Sterling eventually climbed to 1.6333 near NY closing.

    Versus the Japanese yen, although the greenback bounced briefly and swiftly from Asian low of 78.62 to 79.03 on short-covering ahead of European open, renewed selling pressured price and the pair tanked to 78.34 in NY morning. Later, despite dollar's recovery to 78.66 in NY midday as New York Times reported that U.S. President Obama and Republican Boehner were close to a deal on the debt ceiling, price retreated immediately after White house denied this news and then fell to a four-month low of 78.28 at NY closing.

    The U.S. and European stock markets rose strongly on Thursday. DJI rallied by 1.21% or 153 points to 12724 while FTSE-100, CAC-40 and DAX rose strongly by 0.79%, 1.66% and 0.95% respectively.

    Data to be released on Friday include:

    Australia Import price index, Export price index, Germany Ifo business climate, Ifo current accessment, EU Industrial orders, Canada CPI, CPI core, Retail sales.

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  14. acetraderfx

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

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    Market Review - 22/07/2011 22:05 GMT

    Euro falls on concerns over Greek bailout package


    The single currency weakened on Friday as initial optimism was dampened on uncertainty how the aid package for Greece will be implemented to contain the spreading of the European debt crisis.

    Although the single currency climbed marginally above Thursday's NY high of 1.4435 to 1.4440 in Australia, euro eased to 1.4382 in Asia. Later, despite euro's rebound to 1.4437 in European morning, renewed selling below 1.4440 sent the pair lower to 1.4324 in NY morning due to active cross-selling of euro versus other currencies (eur/jpy, eur/gbp and eur/chf tanked from 113.57 to 112.25, from 0.8854 to 0.8798 and from 1.1994 to 1.1693 respectively) before recovering.

    In NY morning, the ratings agency Fitch said parts of the plan would result in a restricted default, which would cause a downgrade of the bonds to a low speculative grade.

    Versus the Japanese yen, the greenback rebounded from a four-month low at 78.22 made in early Australian trading and rose to 78.73 in Tokyo. However, renewed selling emerged at 78.71 in European morning and price retreated to 78.28 in NY morning due to active cross buying of yen versus euro but price staged a recovery after failure to re-test said 78.22 support in late NY session.

    Although the British pound extended its upmove from last week's low of 1.5781 to 1.6341 in Australian morning, lack of follow-through buying pressured cable lower to 1.6264 in NY morning before recovering to 1.6326.

    In other news, uncertainty remains about the U.S. government's debt-ceiling as President Barack Obama and Republican Speaker of the House John Boehner both said they were not close to a deal, although it is widely believed it will be lifted in time.

    Economic data to be released next week include:

    Australia PPI, China Leading Index, Germany Retail sales,U.K. BBA Mortgage Approvals, U.K. Nationwide hse prices, U.K. Hometrack Housing survey on Monday;

    New Zealand Exports, Imports, Trade balance (nzd), Japan CSPI, Germany Import price index, Germany Gfk consumer confidence, U.K. GDP, U.S. SnP/CS home price, Consumer confidence, Richmond Fed Manuf., New home sales on Tuesday;

    New Zealand NBNZ Business Confidence, Australia CPI, China Industrial Profit, Germany CPI prelim, HICP prelim, Swiss KOF indicator, U.K. CBI Orders, U.S. Durable goods , ex. Defense, ex. Transport on Wednesday;

    Japan Retail sales, Germany Unemployment change, Unemployment rate, EU Business climate, Economic sentiment, Industrial sentiment, Consumer sentiment, U.K. CBI distribution trade, U.S. Jobless claims, Pending home sales on Thursday;

    New Zealand Building Permits, Japan PMI manufacturing, Unemployment rate, Household spending, National CPI, National CPI (core), Tokyo CPI , Industrial prod'n, Construction orders, Housing starts, U.K. Gfk Consumer Confidence, Mortgage Approval, Canada GDP, PPI, U.S. GDP annualised, GDP deflator, PCE core, Chicago PMI, U. Michigan survey Final on Friday.

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  15. acetraderfx

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

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    Market Review - 25/07/2011 21:59 GMT

    Dollar falls on U.S. debt ceiling impasse


    The greenback tanked to a fresh lifetime low against the Swiss franc and hit a 4-month low versus the Japanese yen on Monday due to an impasse on raising the U.S. debt ceiling, spurring demand for the safe-haven currencies.

    The greenback opened sharply lower against the Swiss franc and nose-dived to 0.8100 on dollar's broad-based weakness together with active cross buying in chf (eur/chf tumbled from 1.1715 to 1.1518) due to worries over the U.S. debt ceiling . Despite dollar's brief recovery to 0.8156 in Asian morning, renewed selling there pressured the pair and price tumbled below previous low of 0.8034 to a fresh lifetime low of 0.8021 in European session before stabilising.

    Versus the Japanese yen, although the greenback recovered fm 78.12 (NZ) to 78.56 in Asian morning on short-covering, renewed selling sent the pair to a new 4-month low of 78.06 in European morning but price later rebounded to 78.42 in NY morning due to cross selling of yen vs other currencies before retreating again.

    Although the single currency opened higher and climbed briefly to an intra-day high of 1.4417 (NZ) on dollar's broad-based weakness due to continuing wrangling over U.S. debt ceiling, price edged lower to 1.4329 in European morning. Later, despite euro's retreat from 1.4407 to 1.4325, buying interest above 1.4324 support lifted the single currency to 1.4394 in NY afternoon.

    Earlier in Asian midday, the single currency was pressured as Moody's downgraded Greece to Ca from Caa1 with a developing outlook and Moody's said the country still faced serious medium term solvency challenges.

    The British pound rose marginally above last Friday's high of 1.6341 to 1.6345 in NZ due to dollar's weakness. However, cable edged lower in tandem with euro and then weakened to 1.6262 in European morning before recovering to 1.6315 in NY afternoon.

    Data to be released on Tuesday include:

    New Zealand Exports, Imports , Trade balance (nzd) , Japan CSPI, China Leading Index, Germany Gfk consumer confidence, U.K. Nationwide hse prices, GDP, U.S. SnP/CS home price, Consumer confidence, Richmond Fed Manuf., New home sales.

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  16. acetraderfx

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

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    Market Review - 27/07/2011 22:01 GMT

    Dollar rebounds on short-covering despite continued debt limit impasse


    The greenback recovered against most of its counterparts on Wednesday but remained under pressure versus the Japanese yen as politicians were no closer to reaching a compromise to raise the debt ceiling. The single currency tumbled due to the comments from German Finance Minister Wolfgang Schaeuble.

    The single currency extended its recent upmove to 1.4537 in Asian morning. However, euro retreated sharply from 1.4530 after comments from German Finance Minister Wolfgang Schaeuble who said he rejects carte blanche secondary bond market purchases by EFSF/ESM and that it would be wrong to think the eurozone crisis could be permanently solved by one-off summit. Euro eventually tanked to 1.4340 in NY midday before recovering.

    In other news, S&P cut Greece's rating to CC from CCC with a negative outlook and viewed EU's Greek debt restructuring proposal as a 'distressed exchange' which would amount to a selective default.

    ECB President Jean-Claude Trichet said speculating on Greek default 'would be a sure-fire way of losing money given the decisions taken last Thursday.'

    Versus the Japanese yen, although the greenback fell below Tuesday's low of 77.83 due to heavy selling from Japanese exporters and dropped to a fresh four-month low of 77.57 in European morning, the pair rebounded strongly on short-covering due to dollar's broad-based recovery and climbed to 78.17 in NY midday before retreating.

    Earlier, usd/jpy was pressured after the release of U.S. durable orders as U.S. June durable goods orders reported at -2.1% vs forecast of 0.3%. June ex-transportation and ex-defense came in at 0.1% n -1.8% vs forecast of 0.5% n 0.3%

    Despite cable's rise to a six-week high of 1.6440 in Asian morning, the British pound retreated in tandem with euro and tanked to 1.6355 after the release of UK CBI manufacturing order book balance which was -10 in July, the lowest since April, vs forecast of -2 and +1 in June. Sterling then dropped again from 1.6395 to 1.6313 in NY afternoon on dollar's strength.

    The Australian dollar surged above its previous high of 1.1012 (May) after the release of higher-than-expected Q2 CPI data (0.9% Q/Q and 3.6% Y/Y versus street forecast of 0.7% and 3.4% respectively). Aud/usd eventually rallied to a fresh lifetime high of 1.1081 in European morning before retreating in NY session on dlr's broad-based rebound.

    The U.S. and European stock markets tumbled on Wednesday as the DJI tanked by 198.75 points or -1.59% to 123.2.55. FTSE-100, CAC-40 and DAX fell sharply by 1.23%, 1.42% and 1.32% respectively.

    On the data front, German July prelim CPI rose by 0.4% m/m and 2.4% y/y versus forecast of 0.3% m/m and 2.3% y/y whilst German July prelim HICP increased 0.5% m/m and 2.6% y/y versus forecast of 0.3% m/m and 2.4% y/y. RBNZ kept its official interest rate unchanged at 2.5% but said 'little need to keep current rate much longer'.

    Data to be released on Thursday include:

    Japan Retail sales, China Leading Index , Germany Retail sales, Unemployment change, Unemployment rate, EU Business climate, Economic sentiment, Industrial sentiment, Consumer sentiment , U.K. CBI distribution trade, U.S. Jobless claims, Pending home sales.

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  17. acetraderfx

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

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    Market Review - 28/07/2011 22:00 GMT

    Euro weakens on lingering debt crisis concerns


    The single currency fell on Thursday as weak economic data from the euro zone and a jump in Italian bond yields at auction heightened worries that the euro zone sovereign debt crisis would spread to other countries.

    The single currency briefly breached Wednesday's low at 1.4340 to 1.4330 in Asia after China's SAFE said China did not pursue large holdings of FX reserves, implying it may not diversify its holdings of usd into euro. Later, despite a brief recovery to 1.4401 in European morning, renewed selling there sent the pair sharply lower after Italy sold 8 billion euros of 3-year and 10-year bonds with yields of 4.80%, the highest since July 2008, and 5.77%, the highest since February 2000, respectively. Euro later tumbled to an intra-day low of 1.4253 at NY open before staging a recovery to 1.4335 near NY closing. Active cross selling of euro also pressured the single currency as eur/jpy, eur/gbp and eur/chf tanked from 112.09 to 110.84, from 0.8804 to 0.8737 and from 1.1536 to 1.1422 respectively.

    Earlier in European session, the single currency was pressured after the release of worse-than-expected EU July economic sentiment which came in at 103.2, the lowest reading since August 2010, versus street forecast of 104.0 and 105.4 in June. The industrial sentiment and the business climate also fell to 1.1 and 0.45 in July respectively, compared with the previous reading of 3.5 and 0.95.

    Versus the Japanese yen, despite dollar's brief rise to 78.03 in Asian morning, renewed selling emerged and price ratcheted lower to 77.63 in European morning on active cross buying of yen versus other currencies. However, buying interest above Wednesday's 4-month low at 77.57 limited downside and the pair managed to recover to 77.90 in NY morning before retreating again to 77.64 at NY closing.

    In NY morning, the greenback was supported as U.S. weekly jobless claims were released at 398,000, less than the forecast of 415,000 and the previous figures which were revised up from 418,000 to 422,000.

    Although the British pound traded sideways in Asia and rose to 1.6365 in European morning, cable fell in tandem with euro and hit a session low of 1.6295 after the release of worse-than-expected U.K. CBI retail sales balance which came in at -5 in July, the lowest since June 2010 versus -2 in June. However, sterling edged higher in tandem with euro and climbed above said 1.6365 resistance to 1.6383 near NY closing.

    Data to be released on Friday include:

    New Zealand Building Permits, Japan PMI manufacturing, Unemployment rate, Household spending, National CPI, National CPI (core), Tokyo CPI, Industrial prod'n, Construction orders, Housing starts, China Leading Index, Germany Retail sales, U.K. Gfk Consumer Confidence, Nationwide hse prices, Mortgage Approval, EU HICP flash, Canada GDP, PPI, U.S. GDP annualised, GDP deflator, PCE core, Chicago PMI, U. Michigan survey Final.

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