forex4you
Currency Roundup..
USD
The dollar traded sideways against most currencies as risk appetite improved reducing greenback safe haven demand. Some analysts also speculated that the low expectations for the Existing Home Sales data scheduled for today also pushed down the dollar, given they reinforced a more dovish outlook in contrast to the inflationary forces pushing speculation of other currencies such as the Euro. However, a different perspective might argue the opposite: that poor data in the world’s largest economy would increase safe haven demand pushing up the value of the dollar instead. When the data actually came out it proved even worse then expected with Sales down by -9.6% in February compared to the -4.5% estimated and the 3.4% increase in January. This was quite a large fall but the dollar continued going sideways and it may have been because both factors were cancelling each other out that this was so. In the end at midday GMT the dollar reached $1.4167 to the euro and ¥81.25 versus the yen.
EUR
The euro traded broadly sideways today. There was no economic data scheduled to be released so fundamental traders took their cues from the testimony of ECB governor Jean-Claude Trichet to the European parliament. In his statement he broadly reiterated the ECB’s established stance and the rhetoric on interest rates remained the same, with a hike in April now expected and almost inevitable. He was more forceful than before in his rejection of Eurobonds however and this might weigh on sentiment given the outlook for sovereign bonds is not very positive although markets will probably appreciate his sound reasoning, which is that Eurobonds risk a lack of fiscal accountability. Nevertheless, given the primary driver of buying has been interest rate speculation and this has probably now been priced in; and also given the poor trade figures released last week, probably because of the stronger euro hampering exports, from a fundamental perspective the euro may be ready for a correction. At midday GMT the euro traded at $1.4167 to the dollar and ¥115.11 to the yen.
GBP
The pound rose today as interest rate expectations were given a new boost from positive commentary from the chief BOE economist Dale, who said the UK recovery looked: “set to continue,” adding that bank funding looked solid going into 2011 and more importantly that the outlook remained hawkish adding that: "markets expected the pace of policy tightening, both in the UK and abroad, to be faster than at the time of the previous bulletin." This helped push up the pound which has been falling recently after a string of poor data releases began undermining earlier rate hike expectations. This week will be important for the pound with CPI on Tuesday and the minutes of the last BOE rate decision meeting and the Chancellor’s budget speech to Parliament on Wednesday. All three events could be very significant for the pound and so far the outlook looks positive. At midday GMT The pound traded at $1.6268 to the dollar and ¥132.17 to the yen.
JPY
The yen went broadly sideways after positive reports from the country’s stricken reactors and fears of further intervention kept yen bulls at bay. The outlook improved on the nuclear reactor front as electric cables were finally attached to reactors at Fukushima allowing cooling systems to be restarted. Also, recorded levels of radiation in the atmosphere fell in Tokyo and surrounding areas, helping to ease concerns and overall radiation levels were still quite far below what is considered harmful. Warren Buffet was reported as favouring Japanese stocks as possible buy candidates. Japan may be through the worst of it and demand may be balanced between investors seeing an opportunity and a steady fall in risk aversion diminishing yen demand. At midday GMT the yen traded at ¥81.25 versus the dollar and ¥115.11 to the yen.
Forex4you.my
Analysis by: Joaquin Monfort
Forex4you analyst
Disclaimer: Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
USD
The dollar traded sideways against most currencies as risk appetite improved reducing greenback safe haven demand. Some analysts also speculated that the low expectations for the Existing Home Sales data scheduled for today also pushed down the dollar, given they reinforced a more dovish outlook in contrast to the inflationary forces pushing speculation of other currencies such as the Euro. However, a different perspective might argue the opposite: that poor data in the world’s largest economy would increase safe haven demand pushing up the value of the dollar instead. When the data actually came out it proved even worse then expected with Sales down by -9.6% in February compared to the -4.5% estimated and the 3.4% increase in January. This was quite a large fall but the dollar continued going sideways and it may have been because both factors were cancelling each other out that this was so. In the end at midday GMT the dollar reached $1.4167 to the euro and ¥81.25 versus the yen.
EUR
The euro traded broadly sideways today. There was no economic data scheduled to be released so fundamental traders took their cues from the testimony of ECB governor Jean-Claude Trichet to the European parliament. In his statement he broadly reiterated the ECB’s established stance and the rhetoric on interest rates remained the same, with a hike in April now expected and almost inevitable. He was more forceful than before in his rejection of Eurobonds however and this might weigh on sentiment given the outlook for sovereign bonds is not very positive although markets will probably appreciate his sound reasoning, which is that Eurobonds risk a lack of fiscal accountability. Nevertheless, given the primary driver of buying has been interest rate speculation and this has probably now been priced in; and also given the poor trade figures released last week, probably because of the stronger euro hampering exports, from a fundamental perspective the euro may be ready for a correction. At midday GMT the euro traded at $1.4167 to the dollar and ¥115.11 to the yen.
GBP
The pound rose today as interest rate expectations were given a new boost from positive commentary from the chief BOE economist Dale, who said the UK recovery looked: “set to continue,” adding that bank funding looked solid going into 2011 and more importantly that the outlook remained hawkish adding that: "markets expected the pace of policy tightening, both in the UK and abroad, to be faster than at the time of the previous bulletin." This helped push up the pound which has been falling recently after a string of poor data releases began undermining earlier rate hike expectations. This week will be important for the pound with CPI on Tuesday and the minutes of the last BOE rate decision meeting and the Chancellor’s budget speech to Parliament on Wednesday. All three events could be very significant for the pound and so far the outlook looks positive. At midday GMT The pound traded at $1.6268 to the dollar and ¥132.17 to the yen.
JPY
The yen went broadly sideways after positive reports from the country’s stricken reactors and fears of further intervention kept yen bulls at bay. The outlook improved on the nuclear reactor front as electric cables were finally attached to reactors at Fukushima allowing cooling systems to be restarted. Also, recorded levels of radiation in the atmosphere fell in Tokyo and surrounding areas, helping to ease concerns and overall radiation levels were still quite far below what is considered harmful. Warren Buffet was reported as favouring Japanese stocks as possible buy candidates. Japan may be through the worst of it and demand may be balanced between investors seeing an opportunity and a steady fall in risk aversion diminishing yen demand. At midday GMT the yen traded at ¥81.25 versus the dollar and ¥115.11 to the yen.
Forex4you.my
Analysis by: Joaquin Monfort
Forex4you analyst
Disclaimer: Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.