{"id":8487,"date":"2010-04-12T09:29:03","date_gmt":"2010-04-12T13:29:03","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=8487"},"modified":"2010-04-12T09:29:03","modified_gmt":"2010-04-12T13:29:03","slug":"forex-market-review-12042010","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/04\/12\/forex-market-review-12042010\/","title":{"rendered":"Forex Market Review 12\/04\/2010"},"content":{"rendered":"

<\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong>Forex Market Review by Finexo.com<\/strong><\/a><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/strong><\/p>\n

Past events:
\n\u2022\u00a0GBP PPI Input m\/m out at 3.6% versus expected 1.3%, prior 0.6% \t\t\t(revised)
\n\u2022\u00a0GBP PPI Output m\/m out at 0.9%, versus expected 0.4%, prior 0.3%
\n\u2022\u00a0CAD Employment Change out at 17.9K versus expected 25.9K, prior 20.9K
\n\u2022\u00a0CAD Unemployment Rate out at 8.2% versus expected 8.1%, prior 8.2%
\n\u2022\u00a0AUD Home Loans m\/m out at -1\/8% versus expected -0.9%, prior -7.3% \t\t\t(revised)<\/p>\n

Upcoming Events:
\n\u2022\u00a0CAD Housing Starts (1215GMT)
\n\u2022\u00a0CAD BOC Business Outlook Survey (1430GMT)<\/p>\n

Tomorrow:
\n\u2022\u00a0USD Trade Balance (1230GMT)
\n\u2022\u00a0CAD Trade Balance (1230GMT)<\/p>\n

Market \t\t\tCommentary:<\/strong>
\nThe Euro surged to the highest level in more than three weeks against the U.S \t\t\tDollar after European governments offered Greece a rescue package worth as \t\t\tmuch as \u20ac45Bn ($61bn) at below-market interest rates.
\nFinance Ministers of the 16-nation single currency bloc have agreed to offer \t\t\tas much as \u20ac30bn in three year loans, at around 5% interest. This is much \t\t\tlower than current borrowing costs facing the debt-stricken nation, with the \t\t\t yield on Greek government debt rising to a record high of 7.5% last Thursday. \t\t\tThe aid package also involves the International Monetary Fund, which will \t\t\tprovide an additional \u20ac15bn.\u00a0 “The Eurogroup is confident that the \t\t\tdetermined efforts of the Greek authorities and of its European partners will \t\t\tallow to overcome the fiscal and structural challenges of the Greek \t\t\teconomy,” an E.U. statement said.<\/p>\n

Following the release of the news, the EUR rose 1.2% to strike a high of \t\t\t$1.36906, the highest price for the single currency since March 18th.\u00a0 \t\t\tThis unexpected jump comes a few days after the single European currency \t\t\tdropped to within one cent of an 11-month low against the greenback, last \t\t\tThursday. It rose 1.1%, the most since March 31, to 127.19 yen. The Euro also \t\t\tmanaged to regain all of last week\u2019s losses against the British Pound. \t\t\tFollowing the news of a \u201cGreek Bailout\u201d, the EUR\/GBP appreciated 0.50%- \t\t\tjumping from last Friday\u2019s closing price of 0.87802 to a high of 0.88241, \t\t\tthis morning.<\/p>\n

\"\"
\nThe E.U. decision follows a nightmare week for the Greek administration, \t\t\twhich saw borrowing costs soaring to a record high, while international \t\t\tratings agency Fitch lowered the country’s credit rating on Friday to ‘BBB-‘ \t\t \tfrom ‘BBB+’ with a negative outlook.<\/p>\n

For a second straight week, the British Pound climbed against the U.S dollar, \t\t\tas U.K producer prices jumped in March by more than the market has predicted, \t\t\tin the largest increase for since November 2008. PPI Input soared a record \t\t\t 3.6% between February and March, versus an expected increase of 0.6%, boosted \t\t\tby the rising cost of petroleum products. Britain\u2019s Office of National \t\t\tStatistics also reported that the PPI Output increased above expectations, \t\t\trising 0.9% for the previous month, and 5% from a year earlier. This monthly \t\t\trise was more than double the market forecasted increase of 0.4%, adding \t\t\tsigns that Britain\u2019s economic recovery is gathering speed. The GBP closed on \t\t\tFriday at $1.53692, up 0.598% from the day\u2019s opening price of 1.52778, and up \t\t\t0.68% from the week\u2019s opening price of $1.52654. In this morning Asian \t\t\tsession, the GBP\/USD extended above the 1.54000 mark, to hit a 7-week high of \t\t\t \"\"<\/a>1.54833, before pulling back to the 1.5435 area.<\/p>\n

Across the Atlantic, Canada added 17,900 jobs in March, fewer than the 25,900 \t\t\t economists had predicted, as construction and natural resources companies \t\t\thired while the service industry shrank. Statistics Canada reported last \t\t\tFriday that the unemployment rate remained unchanged at 8.2%, despite a \t\t\tpredicted decrease of 0.1%.\u00a0 While not as strong as expected, this \t\t\tsmaller than predicted increase represents the third straight gain in \t\t\tCanada\u2019s employment level, further adding evidence of a rebound in the early \t\t\tpart of the year.<\/p>\n

The Canadian dollar fell as low as C$1.0084, or 99.17 U.S. cents following \t\t\tthe release of the report, before partially retracing its steps to close at \t\t\tC$1.00139. It was near parity with the U.S. dollar just before the data. \t\t\tWhile over the course the day, the Loonie fell 0.113% from its opening price \t\t\tof C$1.00252, the CAD managed to hold on to its prior week gains- closing the \t\t\tweek up 0.567% from Monday\u2019s opening price.<\/p>\n

However, this weaker than expected employment data may grant the Bank of \t\t\tCanada some extra time as it ponders when to withdraw the extraordinary \t\t\tstimulus measures from the economy. The central bank has signaled that it \t\t\twon\u2019t raise its benchmark interest rate from a record low level of 0.25% \t\t\tbefore July, unless inflation becomes a threat. With inflation already \t\t\thovering near the bank’s 2% target and stronger than expected data pointing \t\t\tto a second straight quarter of 5% annualized growth, markets had begun to \t\t\tprice in a chance of monetary tightening in June. But most analysts believe \t\t\tthe central bank will keep its pledge to hold rates at least until the end of \t\t\tthe second quarter.
\nLater today (1215GMT), the CMHC will release the number of Housing Starts for \t\t\tthe month of March. The data is expected to report 201K new residential \t\t\tbuildings that began construction during the previous month, up from 197K \t\t\treported in February. Also out today (230GMT) is the Bank of Canada\u2019s \t\t\tBusiness Outlook Survey – this report is highly respected given its source \t\t\tand timing in relation to interest rate decisions.<\/p>\n

Tomorrow, both the US and Canada will simultaneously announce their trade \t\t\tbalances. Last month, Canada reported a 0.8B surplus; however, the Canadian \t\t\t positive economic data was outshone by an unexpected decrease in the US trade \t\t\tdeficit \u2013 which narrowed to 37.3B. This time around, the US expects its trade \t\t\tdeficit to widen to 38.4B, which north of the border, Canada predicts that \t\t\ttheir trade surplus will remain consistent at 0.8B. This double hitter usual \t\t\tcauses much volatility movement in the USD\/CAD pair.<\/p>\n

Down under in Australia, home-loan approvals fell in February for the fifth \t\t\tstraight month following Governor Glenn Stevens continuous rate hikes along \t\t\twith the government decision cut grants top first time buyers. Waning demand \t\t\t for approvals adds to evidence that Governor Stevens\u2019 decision to boost the \t\t\tbenchmark interest rate five times in six meetings is cooling domestic \t\t\tdemand. Just last week (April 6th), the RBA increased Australia\u2019s overnight \t\t\tcash rate target by a quarter percentage point to 4.25%, adding to similar \t\t\tmoves in March, December, November and October amid a rebound in consumer and \t\t\tbusiness confidence, plus surging house prices. The Australian dollar traded \t\t\tat 93.41 U.S. cents as of 12:17 p.m. in Sydney from 93.45 cents just before \t\t\tthe report was released.<\/p>\n

Forex Market Review & Analysis by Finexo.com<\/strong><\/a><\/p>\n

Disclaimer: Trading the foreign exchange (Forex) carries a high level of risk, and may not be suitable for all investors. All information and opinions contained on this website are to be used for general informational purposes only and do not consitute investment advice.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Finexo – The Euro surged to the highest level in more than three weeks against the U.S Dollar after European governments offered Greece a rescue package worth as much as \u20ac45Bn ($61bn)…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-8487","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=8487"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/8487\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=8487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=8487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=8487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}