InvestMacro FX

Source: ForexYard

The US dollar has continued to plummet against most of its currency rivals this past week, with some now saying that a round of quantitative easing has already been priced in by speculators. The Canadian dollar has also been falling versus many of its currency counterparts, but interestingly it is reaching towards a 6-month high mark against the greenback.

In the chart below we can see that the USD/CAD pair has been falling for the past few months, but trading somewhat flat for the past half-year between 0.9960 and 1.0600. As the price approaches the 23.6% support level on the Fibonacci, traders should be able to determine the direction of the pair by its trading behavior over the next few days.

Other technical indicators seem to suggest an impending upward correction to the pair. The RSI on the chart below has the price just entering the over-sold region, suggesting a build-up in upward pressure. The Stochastic (slow) also appears moments away from a bullish cross, which supports the notion of an upward move.

So long as no major fundamental news causes a shift in value for either currency, the pair may likely see an upward correction after bouncing off the 0.9960 price level. Long-term buy positions appear to be beneficial for USD/CAD traders.

USD/CAD – Weekly Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

Yesterday we saw riskier currencies tumble following the latest news to come out of the Euro-Zone. Should European news continue to be negative, traders can expect safe havens like the US Dollar and Yen to continue to make gains in the marketplace. Here is a roundup of the main economic indicators set to impact the market today.

08:30 GMT: GBP – Revised GDP Report

There are three versions of the UK GDP report. The first, also called the Preliminary, tends to have the most market impact. That being said, the Revised – the second release – also tends to create market volatility among GBP pairs. Analysts are forecasting a slight increase in the UK GDP reading which, if true, could lead to significant gains for the Sterling against its major counterparts.

14:00 GMT: USD – CB Consumer Confidence Report

The Consumer Confidence report is seen as a leading economic indicator, and as such, consistently creates heavy market volatility. The report is the result of a monthly survey of 5,000 American households. Respondents are asked to rate the economic climate in the US today.

Consumer confidence has steadily increased over the last several months, which has tended to create favorable conditions for the greenback. This month, analysts are forecasting another increase. Should the report be released in-line with, or above, the forecasted level of 59.1, traders can expect the Dollar to continue making gains throughout the rest of the day.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

President-elect Barack Obama is set to take office as America’s next president on January 20, 2009. Surrounding his inauguration in 2 weeks there seems to be a large amount of optimism as he unveils his ambitions for America’s future. This comes about as the outgoing U.S. President, George W. Bush, has become increasingly unpopular. 
 
Obama has raised many people’s hopes since his landslide election victory 2 months ago, as he unveiled one of the largest stimulus plans in U.S. history. He plans to spend nearly $800 billion over a 2 year period in order to create millions of new jobs and stimulate the U.S. out of recession.
 
On one hand, leaders in Europe and the around the world are optimistic as they see that Obama’s approach to economics and politics is closer to theirs than Bush’s. On the other hand, Obama’s reforms can only be judged as economic events unfold throughout his presidency.
 
The recent economic stimulus program that has been predominantly injected into banks has temporarily stabilized the Dollar and helped lead to rallies in the U.S. stock market. However, Obama will need to be more creative than Bush, because only a social revolution like Franklin Roosevelt’s may restore America as the undisputed economic superpower.
 
Obama continues his rhetoric that things will get worse before they get better. The question therefore is can Obama shorten the recession and help the U.S. economy rebound by the 3rd quarter of 2009?

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By TraderVox.com

Tradervox (Dublin) – The Swiss National Bank held its interest rate at zero as it had been forecasted by many analysts. The SNB governor indicated that they took this decision as they try to keep the Franc from strengthening further against the euro. The Franc increased by 37 percent against the euro before a cap of 1.20 was introduced in September. Thomas Jordan, the Swiss National Bank interim governor, have sworn to defend the franc ceiling of 1.20 by any means possible if the situation call for it.

After this announcement the franc rose 0.3 percent to settle at 1.20999 per euro while it increased by 0.2 percent against the dollar to settle at 92.84 centimes. There has been gradual improvement in the Swiss economy which is expected to bring pose some challenges in the efforts of the SNB to maintain the franc cap.

The central bank reported that the Swiss GDP and the country’s investor confidence unexpectedly grew in the fourth quarter. This has resulted to change of economic growth forecast by the bank for 2012. However, Jordan was keen to mention that the euro region remains a considerable risk but stressed that he would do everything to defend the EURCHF cap.

In this statement, SNB also lowered inflation forecast, indicating that last years appreciation of the franc had dampened the prices than expected. The banks estimates that inflation will be lower in the long term due to the worsening euro region growth as well as the over valued franc. SNB further suggested that the economy may grow moderately by 1 percent in 2012 shifting from its previous forecast of 0.5 percent. However, it noted that there is a risk to financial stability posed by the imbalances in residential real estate market.

The bank had previously used 17.8 billions francs to curb the Franc’s overvaluation. It indicated that it is willing to do anything to keep the currency at its current level against the euro. The Swiss currency is still about 6 percent higher against the euro than it was last year despite the measure being taken by the Bank.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Source: ForexYard

After tumbling against its main currency rivals during yesterday’s trading session, the Norwegian krone began to correct itself during the overnight session. Following the surprise decision from Governor Oeystein Olsen to cut the overnight deposit rate in Norway, the EUR/NOK shot up over 1200 pips reaching as high as 7.5919. Against the US dollar, the krone went up over 1100 pips, reaching as high as 5.8368. That being said, in a sign that the effect of the interest rate cut would be short lived, both currency pairs began showing signs of bearish momentum during the Asian trading session.

The decision to cut the interest rate was made after the krone rose to a 9-year high vs. the euro. While the Norwegian central bank said that it would not tolerate the continued strengthening of the krone, analysts were quick to warn that the cutting of interest rates may not be a viable way to depreciate the currency.

Historically, the krone’s value is much more dependent on the global price of oil rather than any decision made by Norway’s central bank. The combination of increased demand in the US for crude oil and recent tensions in the Middle East, have kept the price of oil well above $100 a barrel in recent weeks. It would appear that before any viable depreciation in the krone is to take place, the price of oil may need to fall.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

This is what’s in the news for Thursday, March 15, 2012. Bloomberg reports Goldman Sachs Group (NYSE:GS) saw $2.15B of its market value wiped out after an employee assailed CEO Lloyd Blankfein’s management and the firm’s treatment of clients. Reuters reports President Obama and British PM David Cameron discussed possibly releasing emergency oil reserves during, sources say, a sign Obama is starting to test global support to lower fuel prices. Reuters also reports Canada’s government said it would loosen curbs on foreign investment in the telecom sector, allowing non-Canadians to take control of carriers with a market share of 10% or less. Finally, Reuters also reports the Treasury said it plans to sell its preferred stock position in six community banks as part of the Obama administration’s effort to unwind bailout programs from the financial crisis.

By TraderVox.com

Tradervox (Dublin) – Some analysts are very skeptical about the continued decline of the yen against the dollar, and they are indication that a correction might be on the horizon. The current downside trend of the yen was sparked by the positive US job market report and the favorable retail sales report. In addition, the situation was compounded by the Fed’s indication that it would not make another round of bond buying; this situation has been aggravated by the BOJ governor’s comments that another round of asset purchases.

Some analysts have warned that the overbought dollar/yen market should not fool investors into thinking that the pair has taken a longer-longer term structural shift. However, there are risks that the pair will push towards 100.00 level in the months to come, but it will pullback to 80.00-82.00, which is expected to be the pair’s long-term base. There are those analysts who claim that the pair has had a one way price action, which is not healthy, and the market should trend in an orderly manner.

The USDJPY pair was at 83.79 at 9:34 GMT after it had gone up to 84.14 earlier in the day. The different stances taken by the two countries’ central banks have elicited this surge, but this is not supported by fundamental and will eventually fall back to 80.00-82.00 level. In the coming months, the dollar might increase to 100.00 level as Japan deals with the effects of the eurozone crisis effects.

Positive economic reports in the US have pushed the currencies stronger against most major currencies. The dollar has surged against the sterling pound which has been hit by the unexpected increase in the unemployment claims. The country has also reported some negative economic reports despite the strong measures taken by the BOE to avert a possible economic crisis. The AAA status of the country is also under threat if the current crisis continues.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Here's today's Central Bank News link list, click through if you missed the previous link list.  Remember, if you want to submit links for inclusion in the daily central banking news link list, just email them through to us or post them in the comments section below.

The Federal Reserve released the stress test result at the end of Tuesday and concluded that 15 of the 19 biggest financial institutions in America would be able to handle an extreme financial circumstance. The circumstance is defined as 13% unemployment rate, 50% drop in the stock market and 21% further decline in the housing market. From the report card this time, regional banks have the weakest real estate portfolio while two of the national banks fell short on the business loan segment. Others passed with flying colors. The Fed usually considers any bank with a tier 1 common equity ratio above 5% to be healthy. Tier 1 capital consists of the most liquid assets and when comparing this number against the total risk-weighted assets, it gives us a key measure of a bank’s overall condition. The Fed wants to emphasize the stress test is only an extreme negative scenario and doesn’t portray the outlook of our economy. And yes, it’s about time for another round of examination like this because it has been a few years since the last release of banks’ health diagnosis.

The Reserve Bank of India [RBI] held its repo rate at 8.50% and reverse repo rate at 7.50%, Bank Rate at 9.50% and Cash Reserve Ratio (CRR) at 4.75%.  The RBI said: “Recent growth-inflation dynamics have prompted the Reserve Bank to indicate that no further tightening is required and that future actions will be towards lowering the rates. However, notwithstanding the deceleration in growth, inflation risks remain, which will influence both the timing and magnitude of future rate actions.”