Foreign Exchange

Daily Market FX News Wednesday 22nd February, 2012

admin — Wed, 22 Feb 2012 10:00:03 +0000

FX-Analysts have seen that even though the EU Officials have managed to reach the long awaited agreement on the second Greek bailout the markets have been very moderate.

After the negotiations that lasted over 13 hours we know that further cuts have been agreed in Health Care, minimum wage, military spending and private bondholders have been convinced to take on more losses whilst the ECB have decided to pass its profits from Greek bond purchases to EU national central banks contributing this way with a 5.5% debt reduction.

The market has reacted indifferently with the EUR/USD declining all the way to 1.3200 whilst European stocks fell.

The Pound Sterling is clinging to the 1.5800 mark this morning ahead of the release of the Bank of England minutes later on. The British Monetary Authority has left the lending benchmark unchanged at 0.5% in its last meeting but is raised its asses purchase programme by £50 billion.

The AUD seems to have recovered to print new session highs so far we have seen 1.0775 and it has been unaffected by the resignations of the Australian Foreign Minister K Rudd.

Japanese stocks fell on Tuesday even after the Euro area finance ministers agreed to a 130 billion euro Greek bailout.

The GBP/USD price tumbled just before hitting 1.5913 and it is now expected to get support at 1.5727.

In China the manufacturing sector contracted again in the fourth straight month as new export orders dropped sharply in the face of the Euro area debt crisis.

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Daily Market News Monday 20th February, 2012

admin — Mon, 20 Feb 2012 10:00:02 +0000

It look as though we are nearly at the point of saving Greece from declaring bankruptcy and will soon be able to provide the country with a fresh EUR 130 billion bailout . The finance ministers are meeting this morning.

It seems that with this in mind the financial markets in Asia opened with a “risk on” approach and helping to underpin the bid tone was the approval on Saturday evening b the Greek Cabinet of a final set of cuts requested by the Troika before the bailout money can be made available.

The EUR/USD bloc currency is trading above the 1.3200 as we write this morning after the PBoC has cut 50 bps its reserve requirements to 20.5 for large banks and 18.5% for smaller ones. The monetary authority would pump around 40 million yuan ($64 million) into the naming system. This measure that has been long awaited would come ahead of the critical economic date due in March.

In the UK unemployment seems to be on an upward trend and with credit conditions tightening real incomes is still being squeezed and it is still very tough. Mr. Mervyn King the Bank of England Governor has claimed that cooling inflation will continue to curb the consumption and ease the situation for customers. Many FX-Analysts believe that the high street sales are growing whilst employment is struggling and loan availability is shrinking.

As we write this morning the EUR/JPY is facing tough resistance at 105.44/106.80 and it is thought that this is unlikely to be breached at the first attempt. The boas is still bullish as the pair trades above key support at 101.67

In the US consumer prices rose by 0.2% in January and this was driven by the rising cost of clothes and petrol.

Date from China has shown that there has been a large slowdown in China’s housing market which prices either flatter or lower and it has been cited by a government report that no new homes were sold in Beijing during the recently week long Lunar New Year holiday.

FX-Foreign Exchange Market News Friday 17th February, 2012

admin — Fri, 17 Feb 2012 10:00:02 +0000

During the US Session overnight significant progress on securing a Greek bond –swap deal and a fresh bailout to the indebted country has produced an aggressive short covering. The EUR is short running to the exits as it realizes that the headlines carried enough substance to believe the finishing touches to a second bailout deal for Greece are now finally underway.

A Euro official was quoted as saying that “We are almost there” “Unless someone comes up with an idea to undermine the whole deal it should be approved on Monday by the European Financial Ministers” There is cautious optimisim and Greece has done what it had to do. Greece has to make €325 million in spending cuts and this has been agreed between the government and the Euro group. The cuts are coming from defense, public sector wages and other ministries.

The EUR/GBP is advancing for the first time this week ahead of the UK retail sales figures. As we write this morning the EUR/GBP is up 0.07% at 0.8311 with the first hurdle lying at 0.8319 ahead of 0.8359.

The EUR/USD has gone quieter this morning after finding a daily high yesterday by New York close at 1.3158. We saw the pair bounce strongly yesterday from 3 week lows at 1.2975 to finally stall at yesterdays high of 1.3158.

Daily Foreign Exchange News Wednesday 15th February, 2012

admin — Wed, 15 Feb 2012 10:00:03 +0000

The Eurogroup meeting that was scheduled for today to discuss the disbursement of bailout money for Greece has been cancelled due to further technical work with the Troika that is needed in a “number of areas”. It is though that a conference call will take place instead and that a Euro group meeting is scheduled for February 20th.

It will be interesting to see how long the market is willing to remain tolerant on this matter but according to many the investors are now better prepared both operationally and psychologically for destabilizing steps out of Greece should it become necessary.

The USD/CHF lost the 0.9200 handle during the Asian Session and after printing a daily low at 0.9155 in the European opening the cross is rebounding to 0.9175.

As we write this morning the Pound Sterling is closely following the Euro and has jumped from 1.5734 into the Asian trading hours and has been boosted by hopes of the Greek final bailout package and Chinese promises to help the Euro Zone.

Inflation in the UK has declined in January with the consumer price falling to 3.6 percent in January from 4.2 percent in December according to the Office for National Statistics. The Bank of England and other financial experts expect inflation to keep falling through this year providing additional relief.

In the US retail sales grew less than expected in January as vehicle purchases tumbled and the total of retail sales rose 0.4% the previous month from December, when sales stagnated.

The EUR/USD has dropped to 1.3067 and it is widely expected to trade near this level for some time with gains likely to be mild as the price is capped by a resistance at 1.3322. Below 1.3067 the air should target 1.2891/54.

Foreign Exchange Daily News Friday 10th February, 2012

admin — Fri, 10 Feb 2012 10:00:02 +0000

The Greek coalition government has reached common ground on the pension cut reforms which was the last sticking point. There is still however disbelief over the effectiveness of the new Greek austerity plan and this is making the Euro group reluctant to sign off on a fresh second bailout worth €130 billion. These are the most painful austerity measures that Greeks will witness in their life time.

The USD/CHF cross is trading in the positive territory on Friday ahead of the inflation data which is due later on today. The consensus expects a contraction of 0.3% MoM and a 0.7% print over the last year.

The Bank of England agreed on further easing measures and is going to inject 50 billion into the British economy. The Bank of England has decided to maintain interest rates at the current level 0.5% where they have stood since 2009.

The number of Americans claiming for unemployment insurance payment has fallen to 358 thousand from 373 thousand in the weekending 31st January. These levels should now be consistent with solid payroll gains.

The EUR/USD is trading lower this morning as risk appetite appears to wane. Greece is still the focus of attention as yesterdays deal seems to be insufficient and many market participants have started to questions its implementation. The cross is down 0.15% at 1.3255 at the time of writing.

Resistances at 1.5934 have repelled the GBP/USD which is expected to slowly slide down to 1.5730 first of all and then down to 1.5660.

Latest FX News Wednesday 8th February, 2012

admin — Wed, 08 Feb 2012 10:00:02 +0000

We have no news to report on the Greek deal that the Troika has delayed the presentation of the final draft until tomorrow. We will have to wait and see but it is thought that the Greek government is preparing a final version of n agreement on a budget and structural measures required for a 130 billion euro bailout.

Unemployment in Switzerland has risen to 3.4% in January although this was below the 3.5% that was expected and was slightly higher than the 3.3% of December. The USD/CHF was hammered on Tuesday as risk on trade sharpened. The USD/CHF is losing just 0.01% at 0.9123 and the next resistance levels are located at 0.9179 ahead of 0.9263.

The EUR/USD is hitting fresh highs above 1.3280 after bouncing off of a session low at 1.3240 following a quiet session in the Asian session. There have been reported large stops above 1.3270 and we have seen no rush to cover this so it suggests fresh selling interest.

Yesterday saw most of the British stocks tumble amid investors waiting a solution of the Greek sovereign debt crisis. UK investors were negatively surprised about the German industrial output data.

US stocks rose again yesterday as investors have been waiting for the outcome of discussion on a financial aid package for Greece.

The EUR/JPY is continuing to recover from 99.00/98.00. The immediate resistance is at 102.55/60, above which the pair should meet 107.85. Supports may be found at 101.12 and at 100.00.

FX-Foreign Exchange Daily News Monday 6th February, 2012

admin — Mon, 06 Feb 2012 10:00:02 +0000

As Greece gets ever closer to bankruptcy the talks to resolve the issue of restructuring the private held debt by Greece remains very slow and it appears it is no longer going ahead until there is enough guarantees that Athens can implement more severe austerity reforms. We understand that Athens is now pursuing the banks, insurers and ECB to take losses of about 70% so that Greece can ease its 100 BLN Euro debt burden with a 14.5 billion Euro deadline due to be paid by mid march.

This morning the EUR/USD is trading in the lower end of Monday’s range as the uncertainties in Greece are weighing hard in market sentiment.

The service sector of the UK has started 2012 on a positive note with business and activity expanding at a faster pace. The Business activity index hit the 10 month high pace of 56.0 last month compared t 54.0 in December’s reading. The sentiment also improved as business expectations soared to more than 15 year high.

The Euro zone retail sales declined unexpectedly in December. Retail sales fell 0.4 per cent from November after declining by the same amount in October.

The EUR/JPY is attempting to base around 99.00/98.90 and in the meantime rallies are unlikely to extend above 55 day ma at 1.1.21 and additional resistance at 102.55/60. Below 99.00/98.90 the pair will target 97.04.

The AUD/USD is trading in a tight range around 1.710-30 due to weak inflation report and the retail sales in Australia which after a stronger European opening, the pair has revolved to the downside to test the 1.0700 level.

Foreign Exchange News Tuesday 31st January, 2012

admin — Wed, 01 Feb 2012 10:00:02 +0000

According to sources this morning the Fiscal Compact has been ratified by 25 of 27countries across the European Union in the first economic summit of the year that was held yesterday in Brussels. This treaty will enforce countries that don’t have a bigger debt ratio than 60% of GDP and to fix their budget balance. Any countries that do not ratify the Treaty will not have access to the bailout fund.

It is thought that the long awaited agreement with regard to the debt swap between Greece and its private creditors may come into fruition shortly. We understand that there are some minor loose ends but the parties have been closing the differences for a debt swap that would see 100 billion taken off of Greece’s debt burden.

House prices in the UK stalled in January and this was mainly caused by the nationwide lack of purchasing power. On a year to year basis prices have fallen by 1.6% last month. The UK economy contracted by 0.2% in Q4, 2011.

The EUR/USD followed the upside during the European session on Monday into the Asian trading sessions climbing upto 1.3199 so far and with the expectation of 1.3200.

Swiss stocks lost ground on Monday after Greece and its private bondholders failed to finalise a debt swap agreement last week.

It is expected by FX analysts that the GBP/USD is attempting to break through a tough resistance situated at 1.5770/80. In case the currency pairs are successful, it will target 1.5810 and 1.5964 next. Supports at 1.5645 and 1.5570 should cover losses if any occur.

Daily FX News Monday 20th January, 2012

admin — Mon, 30 Jan 2012 10:00:03 +0000

The weekend has passed and as we understand no agreement has been made in the Greek PSI talks. We understand that its private creditors may come in to fruition shortly ad this is according to representatives dealing with the negotiations. It is thought that despite come minor loose ends that parties have been closing in differences for a debt swap that would see 100 billion Euro wiped off Greece’s debt burden.

With this agreement private investors would receive new bonds with face values half of the existing bonds and with a longer maturity and they would pay an average interest rate of slightly less than 4%. It is thought that the final deal will be put together and announced that a new 130 billion Euro loan programme for Greece which is being pieced together by the “Troika” and this is largely hoped that it will assist Greece in it’s loan borrowing through to 2015.

The Australian dollar has accelerated its downside on Monday after Fitch has placed four of the major banks on rating watch negative. The commodity currency was trimming some of the last weeks gains in Asian Sessions as disappointment circling the Greek front has triggered risk aversion.

The EUR/JPY has been in steady decline since the weekly opening and slipped to a low of 100.97 from an earlier session high of 101.43as an increase in global risk aversion stimulated broad demand for JPY safety. The pair saw an early boost from the reports that the Greek government are close to a new debt swap agreement.

New home sales declined in the US by 2.2% in December. The sales declined to 307,000 units on a seasonally adjusted basis while analysts expected the sales to rise by 2% to 320,000 units. On a positive note the gross domestic product in the US rose 2.8% and ended the economy for 2011 on a positive note.

Spain’s unemployment has increased to 22.8 percent in the last period of 2011 from 21.5 percent in the previous quarter and has surpassed the 5 million mark.

Friday 27th January, 2012 Fx News

admin — Fri, 27 Jan 2012 10:00:03 +0000

As we write this morning there are hopes of some progress and this has in turn spurred market optimism. There are rumors circulating that the meeting between the head of the institute of International Finance and senior bankers in Paris resulted in a new private sector creditors offer an interest rate of 3.75%.

The EUR.USD is clinging to 1.3100 after the close in the Asian session where it has traded in 1 1.3080-3115 range. Risk related assets were still well demanded on Thursday although the bid pressure did wane towards the end of trading in America as the PSI failed to deliver positive announcements along the day.

In the US the number of people seeking unemployment benefit rose to a seasonally adjusted 377,000 which was up from a four year low the previous week. In the long term all signals are pointing to a healthier job market.

UK retail sales fell in January according to the confederation of British Industry. Sales declined to -22 from 9 in December with above 0 indicating higher sales volumes and below 0 indicate lower.

GBP/USD The Cable is expected to move unto 1.5770/80 after it breaks through 1.5680 resistance. Initial support may be found at 1.5618 while subsequent lines are located at 1.5579 and 1.5544.