Previous session overview The euro rose to a near nine-month high against the dollar in Asia Wednesday as soaring commodity prices spurred players’ risk appetite, increasing demand for the risk-sensitive unit. The euro, which usually benefits from higher crude oil and gold prices, rose to as high as USD1.4518, near USD1.4535 marked on Dec. 18 last year. Crude oil futures on the New York Mercantile Exchange stood around USD71 a barrel, close to its five-business day high. Gold on the spot market stayed above a six-month high of USD1000 an ounce in Asia. The common currency also briefly hit a 12-day high of JPY134.17 against the yen. The Euro as stated above the Euro broke higher against the dollar with the key USD1.4450 level giving way and USD1.4500 quickly following. Gold and Soaring Oil combined with strong global stocks to underpin the move higher. German July Industrial Output fell unexpectedly to -0.9% vs. 1.5% forecast. Similar to euro, cable started its rally in European morning in line with the greenback’s broad-based selloff and the release of stronger-than-expected U.K. industrial and manufacturing production data (industrial production in July came out as 0.5% and -9.3% respectively, beating the forecast of 0.2% and -10.1% while manufacturing data came out as 0.9% and -10.1%, better than 0.3% and -11.1% in forecast), price latter rose to as high as USD1.6590 at NY opening before a retreat occurred due to profit-taking. The Australian dollar ended higher on Wednesday, although well below its session peak, after weaker-than-expected retail sales dented expectations for an early rate hike. Interest rate futures rallied hard after retail sales for July fell 1.0% on month against an expected gain of 0.5%, indicating waning consumer demand as the government’s fiscal stimulus afterglow fades. Traders immediately wound back bets the Reserve Bank of Australia will hike rates in October, which were reinforced by an expected 2.0% fall in housing finance. Market expectation The European unit will likely strengthen against the dollar for now because players are worried that higher commodity prices will hurt the U.S. economy, dealers said. For EURUSD sell interest said to remain in place from USD1.4520, with further offers seen placed around the NY high at USD1.4535. Above here suggested option barrier at USD1.4550 moves into view. Bids seen placed from around USD1.4470, with interest extending to USD1.4450 with stops placed on a break of USD1.4440. USDJPY rising, but should be capped at JPY92.60-92.70 level as no reasons to support USDJPY gain, says dealers. Says some European players buying pair to settle accounts, but amount appears small, says USD1 million or so in total; impact being magnified as flows still thin. Europe’s major stock indexes are expected to open little changed Wednesday, after a shaky session in Asia and with investors struggling to determine direction following successive days of gains. Source: Dukascopy
-
Dukascopy Morning Forex Overview - Sept 09 09
September 9 2009, 4:14pm | Comments »
-
Dukascopy Afternoon Forex Overview - Sept 08 09
Previous session overview The euro and other higher-yielding currencies traded sharply higher against the dollar Tuesday as risk appetite returned to the foreign exchange market with vengeance. The euro broke above USD1.4500 early in New York, its highest level since Dec. 18. With the single currency having smashed through the summer’s ranges, its next ceiling is USD1.4720, the high it also reached in December last year. Investors rode a wave of confidence on positive euro- zone economic data, an overnight stock rally in Asia and Europe and support for continued economic stimulus from G20 ministers. Also putting pressure on the dollar is gold, which is above USD1, 000 an ounce Tuesday for the first time since February. Contrary to expectations, data Tuesday from the German Economics Ministry showed that industrial output fell 0.9% in July compared with June, mirroring a similar trend in Spain and in other European economies that are euro-zone trading partners. Market expectation Investors appeared to be still taking their cue into higher-yielding currencies from G20 assurance over the weekend that there is no hurry to bring an end to the extraordinarily easy monetary policy in most major economies. USDJPY eases lower for trade around JPY92.05/10 area as the pair remains a laggard to dollar slippage elsewhere, the dollar seeing an overnight low at JPY92.04 in European trading. Bids mentioned earlier at JPY92.00 area remain intact and demand was reported earlier in the JPY91.80/70 zone as well. Chatter from a couple of directions now adding stops in that lower area, suggesting trade there may turn choppy. Dollar last at JPY92.15. EURUSD saw a high print at USD1.4507 in recent trade but chops quickly lower for USD1.4485 prints, analysts said among the current buyers. Offers remain intact at USD1.4520/25 area. Pound is finding support around USD1.6550, after the last rally extended the topside to USD1.6590 from Asian lows at USD1.6322. A break of USD1.6550 may open a deeper move toward USD1.6525/20 ahead of USD1.6500, USD1.6485/80 with stronger interest at USD1.6460/50. Offers remain in place between USD1.6590/00 with stops in place on a move above the figure. The German data dampened hopes that the euro zone might be led out of recession by its largest economy and most prolific exporter. Economists said sustainable growth will require stronger domestic demand, which is unlikely given weak labor markets and jammed credit markets. Economists will be watching for more indications of a possible relapse in output this fall. European government and central bank officials have warned that rising unemployment, scarce access to credit and protectionism could stifle the recovery if policy makers are complacent. Source: Dukascopy
September 8 2009, 5:00pm | Comments »
-
Dukascopy Morning Forex Overview - Sept 08 09
Previous session overview The dollar and euro fell against the yen in Asia Tuesday on selling by Japanese exporters to settle their accounts, with trading direction for the rest of the day likely to depend on stock movements, dealers said. As of 0450 GMT, the dollar stood at JPY92.72 from JPY92.97 in London Monday, while the euro was at JPY132.90 from JPY133.54. The New York market was closed Monday for a holiday. Although the overall volume of trade in Asia was thin, some Japanese exporters and short-term hedge funds sold dollars and euros, dealers noted. The Euro continued to be buoyant as fresh gains in Asian stocks sent EURJPY higher and Economic data in Europe underpinned gains into the USD1.4300’s. July German Industrial Orders at 3.5% vs. 2% forecast. EURGBP was supported on GBP concerns ahead of the UK rate decision Thursday. GBP peaked at USD1.6378 around the same time, but underperformed thereafter to USD1.6327. The Pound had a large bounce going into Europe as news of a USD16bn takeover offer of Cadbury from Kraft led to speculation of substantial M&A buying. This enthusiasm waned as the offer was rejected and attention turned to the MPC rate announcement on Thursday which has the potential to create further GBP downside if the Asset Purchase program is increased again from the current 175bn pounds. The Australian dollar Tuesday continued to nudge higher while bond futures followed gains in Treasurys as dealers await a raft of top tier domestic data for the latest health check on the economy. Market expectation EURUSD breaks above Monday’s high at USD1.4363, with reported stops above USD1.4365 targeted and triggered to take rate on to USD1.4371. Traders note major German name buys behind the move up. Next offers seen placed from USD1.4380 through to USD1.4400, with larger stops noted above here, a break to expose much reported barrier at USD1.4450. Topping the list of releases Wednesday is housing finance, retail sales and consumer confidence, all of which will be crucial in feeding the debate on whether the Reserve Bank of Australia tightens policy as soon as next month. Economists expect retail sales to have grown 0.5% in July, but housing finance is forecast to drop 2.0%. Among the data Friday is China’s industrial output. Economists surveyed forecast on average that output may increase by 12.0% in August from a year earlier, faster than July’s 10.8% increase. If results are weaker than expected and spur a fall in Chinese stock prices, the dollar may target JPY90 and the euro may fall below JPY130.00, some dealers said. On the other hand, if results are positive, currency market reaction will likely be limited because players have already factored in such outcomes, dealers noted. Source: Dukascopy
September 8 2009, 4:56pm | Comments »
-
Dukascopy Afternoon Forex Overview - Sept 07 09
Previous session overview Renewed merger-and-acquisition activity and a weekend pledge by the world’s most powerful economies to push on with fiscal and monetary stimulus boosted equity markets and high-yielding currencies Monday, leaving the dollar on the defensive. Risk remained the driving force in foreign-exchange markets, with pro-risk plays getting a boost from the pledge by Group of 20 finance ministers and central bankers on Saturday to continue stimulus measures until an economic recovery is secured, strategists said. The U.S. dollar and the Japanese yen have tended to weaken on rising risk appetite, as investors shun perceived safe havens in favor of higher-yielding currencies and assets. Activity was expected to be light over the remainder of the day with U.S. markets closed for the Labor Day holiday. The euro traded at USD1.4339 versus the dollar, up from USD1.4303 in North American trade late Friday. The dollar changed hands at JPY92.94 versus the Japanese currency, off slightly from around JPY93.00. Market expectation The dollar seems poised to remain next week a favorite of investors seeking shelter from economic uncertainty as U.S. payrolls numbers failed to spark a return to trading on fundamentals. Investors are getting mixed signals on a global economic recovery, so they are employing a risk-based trading strategy, heading into the safe-haven dollar and yen when conditions cloud but seeking profits in high-yielding currencies, such as the euro, when the outlook brightens. EURUSD pulls back to retests strength of reported demand interest in the area between USD1.4325/20. Stops noted on a break of this area, which if triggered to open a deeper move toward USD1.4305/00 ahead of USD1.4290. Bids noted ahead of this latter level with larger stops below. Pound moves below USD1.6390, but seen meeting demand interest placed ahead of USD1.6380, which so far provides some cushioning. Below here and earlier Asian low at USD1.6365 (50% USD1.6288/1.6445) moves into view. A break here may allow for a deeper move toward USD1.6350 ahead of USD1.6325/20. Financial markets are closed Monday in the U.S. and Canada for Labor Day, which will tend to keep volumes low at the beginning of the week. As markets return to normal volumes later in September, increased liquidity will mean currencies could finally break out of their well-established ranges, said analysts. Analysts said they expected that no major surprises on the growth front are likely, though new yuan loans data will be the key risk factor, with concerns they may come even lower than July’s large drop-off. Source: Dukascopy
September 8 2009, 12:01am | Comments »
-
Dukascopy Morning Forex Overview - Sept 07 09
Previous session overview The euro rose modestly against the yen and dollar in Asia Monday, as stronger regional share markets encouraged short-term players to buy the risk-sensitive common currency. If global share markets remain firm this week, the euro could continue edging up, traders said. In Asia Monday, regional bourses strengthened, with China’s benchmark Shanghai Composite Index up 1.60% midday and Japan’s Nikkei 225 Stock Average up 1.0%. That came after the Dow Jones Industrial Average’s closed up 1.0% Friday, which boosted the euro against its rivals. But while the dollar fell against other rivals Monday, it gained slightly against the yen, trading hands at JPY93.15 at 0450 GMT compared to JPY93.03 late Friday in New York. Short-term players were buying the currency, prompted by the stronger regional equities and a rise in U.S. long-term interest rates, with the benchmark 10-year Treasury yield up to 3.43% Friday. Better than forecast US jobs data, along with an absence of talk about a coordinated withdrawal of stimulus measures at the weekend FinMin G20 meeting (with the US expected to lag others in this eventual move) allowed euro-dollar to edge to overnight highs at USD1.4337 with pressure remaining into early Europe, the rate extending the move to USD1.4339. The British pound remains steady vs. the dollar after the US jobs report for August. The pound’s steadiness can also be attributed to British construction Q2 output volume falling by 0.5% which is a vast improvement from the estimated 2.2% decline, prompting speculation about a possible upward revision to GDP in the quarter. The Australian dollar continue to break loose from its recent trading range Monday, breaching its highest levels in a year as firmer equities and investor appetite pushed the commodity currency into new terrain. Market expectation The euro is gaining against the U.S. dollar, UK pound and yen in rising along with stocks, though major pairs were still confined to their well-established summer ranges. For EURUSD offers seen placed toward USD1.4350, and traders suggesting a fading toward this level on any extended rally. Above here and further offers seen placed toward USD1.4380. Traders remind that the USD1.3950/1.4450 dnt structure remains in place (matures Sep17) and expected to draw protection if either side threatened. Bids USD1.4290/85, a break of USD1.4280 to open a deeper move toward USD1.4250 ahead of USD1.4220 with stronger interest remaining in place around USD1.4190 (Friday low USD1.4191). Dealers are focused on a raft of top tier domestic data due later this week, including retail sales and employment numbers, which could make or break a case for an October rate hike by the Reserve Bank of Australia. Players will be watching U.S. Treasury auctions totaling USD70 billion this week for cues on interest rate moves, dealers said. European stocks are expected to open higher Monday, following a solid finish on Wall Street Friday and an upbeat session in Asia Monday, after Friday’s U.S. employment data pleased the market. Source: Dukascopy
September 7 2009, 10:40am | Comments »
-
Dukascopy Afternoon Forex Overview - Sept 04 09
Previous session overview The dollar gained ground versus the Japanese yen and the euro in choppy trade Friday after the U.S. Labor Department said the unemployment rate jumped in August to its highest level since 1983. The dollar traded at JPY92.97 versus the Japanese currency, up from around JPY92.71 just ahead of the figures and JPY92.75 in North American activity late Friday. The dollar initially dipped below JPY92.20 versus the Japanese unit after data showed the unemployment rate jumped to 9.7% from 9.4% in July. Economists had forecast a rise to 9.5%. At first, the market traded on the unemployment rate, which rose to its highest level since June 1983. As a result, traders pared back riskier positions in higher-yielding assets like the euro and shed dollar holdings on fears for the U.S. economy. They drove the safe-haven yen to session highs. Nonfarm payrolls, meanwhile, contracted by 216,000, less than the 233,000 decline projected by economists. The euro initially dipped versus the dollar, regained its footing and then slipped again to change hands at USD1.4237 in recent action, down from USD1.4252 ahead of the data and down from USD1.4249 late Thursday. Market expectation EURUSD chatter mentioning that solid bids appeared in the euro in the USD1.4190’s, consistent with our report earlier, chatter linking the interest to both semi-official demand and Asian sovereign. As noted, talk earlier in the week cited that latter name as a euro buyer off lows with traders still focusing on a broad USD1.4200is/1.4400ish range, some saying downside doesn’t open up until USD1.4150 gives way. Pound recovered off pullback lows around USD1.6288, the rate edging back to USD1.6318. Offers now seen placed between USD1.6320/25, with bids remaining in place between USD1.6285/80. Below here and retail interest seen positioned between USD1.6270/50. EURJPY sharp swings continue in thin trade as the cross come back to test the downside after failing to break into the Ichimoku Cloud. Initial lows placed at JPY131.69 so far holding, ahead of trend line support from the July lows at JPY131.25. G20 ministers set to gather in London Friday night and Saturday are expected to broadly discuss a framework for a coordinated withdrawal of massive stimulus measures once the economic crisis has passed. No immediate withdrawal of government support is foreseen, however, in light of the still-fragile nature of the recovery despite signs of an earlier-than-expected recovery in some areas. Source: Dukascopy
September 4 2009, 5:30pm | Comments »
-
Dukascopy Morning Forex Overview - Sept 04 09
Previous session overview The euro and dollar edged down against the yen Friday as sluggish regional share markets led some short-term players to buy the safe-haven Japanese unit. But the three major currencies will likely hug narrow bands against each other for the rest of Asian trade as investors bunker down before the U.S. non-farm payrolls report for August due at 1230 GMT. U.S. employment reports over the past two days have led many players to see a greater risk of a negative surprise in Friday’s report. The Euro traded above USD1.4300 to touch USD1.4350 before easing after lackluster ECB President Trichet comments post rate meeting. The ECB held at 1.0% but Trichet noted that the recovery will be bumpy and uneven. July retail sales also weighed falling -0.2% vs. 0.1% forecast. Cable rallied to USD1.6415 in European morning in part due to cross buying in sterling together with the slightly better-than-expected U.K. services PMI (August figure was 54.1 versus 53.9 forecast) but price later retreated in tandem with euro on profit taking after Trichet’s comments. However, cross-buying on sterling gave support to the currency and price remained relatively firm. The Australian dollar ended stronger Friday, supported by continued improvement in global equities and commodities prices but still in recent ranges ahead of U.S. employment numbers. Market expectation Major currency pairs are little changed in continuing the recent cautious patterns in tight ranges. The specter of the August U.S. employment report, scheduled for release Friday, may be adding to the cautious mood as investors reassess the timeline for global recovery. For EURUSD offers seen placed to USD1.4280 (38.2% USD1.4350/1.4235-earlier high at USD1.4263 was 23.6%), a break to open a move toward USD1.4300/10. Through here and rate can edge on toward USD1.4320/25 ahead of USD1.4350. Support remains in place back at USD1.4235/30, a break below to allow for a deeper move toward USD1.4200, with bid interest noted from here and extending to USD1.4170. Stops noted on a break below. The U.S. Department of Labor releases August non-farm payrolls data later Friday with economists expecting 233,000 U.S. jobs lost in August from 247,000 lost in July while the unemployment rate is expected to have risen to 9.5% from 9.4%. While currency and bond reaction is expected on the U.S. employment release, thin liquidity leading into the U.S. Labor Day long weekend may limit price action. Any worse-than-expected outcome could benefit the yen, by prompting investors worried about a slow global economic recovery to buy the unit, traders said. European stocks are expected to open higher Friday, benefiting from Thursday’s positive finish on Wall Street and a mixed session in Asia overnight that saw Chinese stocks higher on gains in gold and base metal prices. Source: Dukascopy
September 4 2009, 10:32am | Comments »
-
Dukascopy Afternoon Forex Overview - Sept 03 09
Previous session overview The euro and dollar rebounded against the yen in overnight trading, as an uptick in Chinese equities sent traders back toward riskier currencies. The European Central Bank takes center stage Thursday morning. Its governing council kept the key refinancing rate at 1.0% for the fourth successive month, so most attention will be focused on the accompanying press conference with ECB President Jean-Claude Trichet for clues to the euro zone’s economic health and whether it will announce a timeline for ending its quantitative easing programs. While the Labor Department released a report on Thursday showing a modest decrease in first-time claims for unemployment benefits in the week ended August 29th, the decrease followed an upward revision to previous week’s initial jobless claims. The report showed that jobless claims edged down to 570,000 from the previous week’s revised figure of 574,000. Economists had been expecting jobless claims to slip to 564,000 from the 570,000 originally reported for the previous week. Market expectation Analysts said the thinly traded summer currency markets remain unsure of whether to trust a global economic turnaround. Mixed economic signals have led investors to trade on risk - heading toward higher-yielding currencies when stock market’s rally, and seeking the safe-haven dollar and yen when stock markets sink. EURUSD skidding lower again as earlier noted semi-official demand gets filled, along with bids to USD1.4280 or so. Stops warned of sub USD1.4270 as intra-day longs rethink positions in still skittish markets. USDJPY despite more vigorous action elsewhere, dollar-yen continues to underperform most other pairs, has orbited a narrow range around JPY92.40 since the start of the US session, a recent pop higher stalling at JPY92.50 area just shy of the overnight high. Flows light, an Asian hours dip to JPY91.95 sufficient to gun reported barrier strike and some nearby stops but leaving intact better stops sub JPY91.90. Offers up at JPY93.00. Dollar last at JPY92.50. Currency investors will be paying attention to several U.S. economic reports released Thursday, including the 8:30 a.m. EDT release of weekly jobless claims, which are expected to improve, and the 10 a.m. EDT release of the Institute of Supply Management survey for non-manufacturing industry. Looming over the market also is this weekend’s meeting in London of finance ministers from the Group of 20 industrial and developing nations. Although they aren’t expected to discuss currencies in particular, the market could be affected by any shifts in sentiment on the state of the global economy or any talk of strategies for exiting quantitative easing. Source: Dukascopy
September 4 2009, 12:28am | Comments »
-
Dukascopy Morning Forex Overview - Sept 03 09
Previous session overview The dollar rebounded against the yen after hitting another seven-week low in Asia Thursday as strong Shanghai share markets prompted speculators to buy back the U.S. currency in exchange for the safe-haven yen. During early Asian hours, the greenback slipped to JPY91.94, its lowest level since July 13, as grim Japanese stocks and weaker-than-expected U.S. private-sector jobs data overnight spawned views that global economic recovery may be slower than previously thought, dealers said. Weak Japanese share markets also dented demand for risk-sensitive currencies like the euro and dollar. Tokyo’s benchmark Nikkei 225 Stock Average index was down 0.4% in the early Asian session. But later, the dollar recovered to as high as JPY92.38 - higher than JPY92.13 in New York late Wednesday - as solid Shanghai share markets boosted speculators’ risk appetite, dealers said. The single currency traded sideways in Asian session and fell to around USD1.4190 in U.S. morning due to active cross selling versus sterling and yen, however, buying interest lifted euro from there on short-covering and greenback’s weakness and price rebounded to session high at USD1.4295 later in the day. The British pound fell to a near 6-week low yesterday against the dollar, and hit it’s lowest since mid-July for the third straight day against the yen. The pound came under pressure vs. most major currencies as falling equity markets raised risk aversion, and on lingering concerns over the health of UK’s economy. The Australian dollar was stronger late in the Asian session Thursday, buoyed by a run higher in the price of gold and strong economic growth data but capped ahead of the release of U.S. employment data. Market expectation The euro’s movements are narrow so far Thursday, ahead of the European Central Bank’s meeting, although RBS sees scope for a bit more weakness against the yen. The UK pound is also barely changed against major rivals. Economists are expecting the European Central Bank to keep interest rates, as well as its additional policy measures, unchanged yet again at its meeting in the week ahead, staying in wait-and-see mode amid growing signs that the euro-zone economy is emerging from recession. A positive open in Asian equities, led by the Shanghai Index, reversed this early tone, the snap back in yen crosses lifting euro-dollar to an overnight high of USD1.4283. Traders noted decent Asian sell interest above USD1.4280 overnight, but not linking interest to the most active Asian sovereign. Positive tone remained into early Europe, which has taken rate on to USD1.4288, but upside progress seen sticky with sell interest said to extend toward USD1.4320, with talk of stops building above USD1.4330. Demand remains in place to USD1.4250, a break here to allow for a deeper pullback toward USD1.4210, with bids said to be building here, interest extending to USD1.4190 (Wednesday low USD1.4193). European stocks are expected to open lower Thursday, weighed down by a negative close on Wall Street overnight, as investors adopt a cautious stance ahead of the European Central Bank’s monthly news conference and Friday’s key U.S. employment report. The U.S. Department of Labor issues its non-farm payrolls data for August Friday with economists expecting the unemployment rate to rise to 9.5% from 9.4% in July and 233,000 jobs lost in the month. Source: Dukascopy
September 3 2009, 2:03pm | Comments »
-
Dukascopy Afternoon Forex Overview - Sept 02 09
Previous session overview The euro is down against the yen and dollar after Wednesday morning’s ADP payrolls report showed a greater loss of U.S. private-sector jobs than had been expected. The disappointing jobs numbers sent a new wave of risk aversion through the market, though the knee-jerk reaction to the numbers still had currencies trading within their well-worn ranges. Automatic Data Processing released its private sector jobs report Wednesday, showing 298,000 jobs were lost in August, a worse-than-expected number. A stream of positive economic data, including Tuesday’s release of a report showing an uptick in U.S. manufacturing, had not been enough for investors to be sure of a full economic turnaround, analysts said. Wednesday’s jobs report will only add uncertainty to the outlook for recovery. In European mid-day trading, improving stocks stopped the risk currencies slippage. The euro settled above 1.42 and the pound held above its overnight low of USD1.6113. The dollar recovered from its 7-week low of JPY92.68. European bourses were around 0.5% lower after dropping 1% earlier in the session. Market expectation Currency markets continue to follow the lead of equity markets, which analysts said remain unsure of a global economic recovery. EURUSD eases to USD1.4200 area again having dipped to, and bounced from, this area around earlier US data releases. Talk of sovereign demand sub USD1.4200 continues to circulate, was attached to the recent bounce that stalled at USD1.4210. EURJPY stops in the cross noted on a break of JPY131.00 as lows are extended under JPY131.10. Techs paint an increasingly bearish picture after last night’s close under the Ichimoku Cloud and 100-day moving average, seeing little to support ahead of the 76.4% retrace of the July-August rally at JPY129.77. Pound eases back under USD1.6200, having earlier posted recovery highs at USD1.6253 on a reported UK clearer buy order. Bids seen placed at USD1.6185/80 (USD1.6183 50% USD1.6113/1.6253) a break below to open a deeper move toward USD1.6165 with bid interest noted from here and extending toward USD1.6145. Offers now noted from USD1.6253 through to USD1.6268 (post ISM recovery highs before Tuesday’s drop to USD1.6113). Markets continue to wait for Friday’s U.S. non-farm payrolls report, which some analysts said could break currencies from their recent well-worn ranges, though most expect currencies to remain range bound until after the U.S. Labor day holiday. Whether Friday’s numbers improve, jobs are still being shed, which puts a crimp on consumption, something economists said is key to a full recovery from the recession.
September 2 2009, 5:27pm | Comments »
-
Dukascopy Morning Forex Overview - Sept 02 09
Previous session overview The euro and dollar fell to fresh seven-week lows against the yen in Asia Wednesday as investors wary of further falls in global share prices bought the safe-haven Japanese unit. In morning trade, Japanese institutional investors reacted to an overnight slide in the Dow Jones Industrial Average, which closed down 2.0%, by selling risk-sensitive currencies like the euro for the yen. That drove the euro to JPY 131.47, its lowest level since July 15. The selling also weighed on the dollar, which fell to JPY92.51, its lowest since July 13. The Euro bank rumors swirled in New York and the market tumbled from the relatively high levels of the recent range to test support at USD1.4200. EURJPY is poised at key levels and could pull the major lower although a break of the lower end of the range is also unlikely with solid support expected from USD1.4000-1.4100. The British pound weakened against the euro and dollar after a surprisingly weak reading of UK manufacturing and lending. British manufacturing activity fell to 49.7 in August, lower than forecasts at 51.5. The Australian dollar was weaker late Wednesday due to a fall in equity and commodity prices, which have failed to continue their recent rallies. But stronger-than-expected Australian economic data and resurgent expectations for tighter monetary policy supported the currency throughout the day and resistance levels are expected to remain intact heading into the offshore session. Market expectation Dealers expect the yen to continue benefiting for the rest of the week amid growing concern that any more pullback in equities could be a further drag on a global economic recovery. Release of stronger than forecast Australian GDP data provided a boost for risk, the recovery in Aussie-yen lifting euro-yen and in turn allowed euro-dollar to edge back above USD1.42 to retest earlier opening highs ahead of the European open. Further demand extended the recovery to USD1.4227, with rate currently holding around USD1.4220. Offers now seen placed from around USD1.4240 with interest extending to USD1.4255. Support seen placed around the overnight low at USD1.4190, with further interest extending to the NY low at USD1.4177 with that continued talk of sovereign demand in this area. Strong demand for sterling-yen lifted cable off lows, the rate pushing up to USD1.6180 ahead of the European open, with continued demand into early Europe extending the move to USD1.6193 (USD1.6191 50% USD1.6268/1.6113). Rate currently trades around USD1.6180. Offers seen placed between USD1.6190/00, a break to open a move toward USD1.6205/15 with stops placed on a break of USD1.6220. Support now seen placed at USD1.6135/30 ahead of USD1.6115/00. European stocks are expected to open modestly lower Wednesday, weighed down by negative sessions on Wall Street and in Asia, as investors question the sustainability of the summer rally and book profits on concerns that the equity markets have moved too far ahead. Ahead of the U.S. jobs data later in the day, traders said players were anxious about any negative surprises. The August employment report by payroll giant Automatic Data Processing is due at 1215 GMT. Economists surveyed forecast the data to show 213,000 jobs lost in the month, compared to July’s contraction of 371,000.
September 2 2009, 11:02am | Comments »
-
Dukascopy Morning Forex Overview - Sept 01 09
Previous session overview EURUSD has ended the month of August at high levels above 1.4330. This morning in Asia the Euro remained bid, climbing up to 1.4370 before the European open. This year’s high seen in July is not far away at 1.4440. Cable, which has underperformed in late August has also gained in the Asian session this morning, rising up to 1.6373 from the day’s opening level at 1.6280. With the rally the pair has breached a 3-week bearish trend-line. USDJPY had closed the month of August on a low note at 92.80 - losing more than 4 Yen over the course of the past 2 weeks. This morning the Dollar held its ground and rose to 93.30. GBPJPY and EURJPY both faired very strongly rising more than 100 pips each: EURJPY opened the day at 133.10 and climbed to 134.15 while GBPJPY opened at 151.20 to rise as high as 152.72. Market expectation The Dollar suffered from the strong performance of the Dow on Monday and market watchers expect this trend to continue into the early parts of September. With this the Euro is likely to rise in search of the July 1.4440 top over the course of the next few trading days. With Cable breeching the 3-week bearish trend-line from the August spike above 1.70 there is lots of space for a correction up. 1.6360 is first strong resistance, Fibonacci retracement levels lie at 1.6490 and 1.6600 and are likely targets over coming weeks. It has yet to been seen whether USDJPY can extend its sharp fall towards beyond strong support at the 92.00 level. If the pair can stabilize around 93.00 we are likely to see a return towards 94.40 first. With a stronger Euro and stronger Pound, the Yen-crosses may find some good support and correct some of their losses seen in August. EURJPY has plenty of space up towards 136 and GBPJPY may head back above 155 - to the downside strong support is seen at 131.50 and 149.00 respectively.
September 1 2009, 2:45pm | Comments »
-
Dukascopy Afternoon Forex Overview - Aug 28 09
Previous session overview The dollar advanced marginally on a broadly lower Japanese yen Friday but traded mixed against other major currencies as European equities gained ground and stocks opened higher on Wall Street. The euro and Australian dollar advanced to session highs against the U.S. unit, with renewed appetite for riskier assets. The market momentum was set motion late Thursday and continues into Friday with strong equities. The Dow Jones Industrial Average recently opened up on the day. The euro gained as high as USD1.4388, shy of Thursday’s sharp rally to a three-week high of USD1.4407. The Aussie gained to USD0.8470. The currency is finding additional support on reports that a rate increase could occur next month, if not next week. The dollar is also under pressure against the yen, near an intraday low, extending its broad sell-off from a day earlier against not just riskier rivals, but also traditionally safe haven assets. Currency markets are very thin, though, as summer wears down and ahead of a bank holiday in the U.K., which could lead to exaggerated and jumpy movements. Market expectation Risk appetite remains the dominant theme in otherwise choppy, range-bound currency markets, analysts said. The yen bore the brunt of the exit from perceived safe havens, they said. EURUSD retreats to USD1.4365 area as Dow backs off into negative territory, euro-dollar continuing to struggle to hold gains but market remaining lackluster ahead of the long UK weekend and month-end. Focus turning to the London fixing at the top of the hour, expectations are for dollar sales related to strong US equity gains this month but, as always, the event remains difficult to predict. Pound extends the pullback from the early US highs, dropping back with stocks and looking set to test light demand into USD1.6300. Order board in general said to look thin ahead of a public holiday in the UK Monday. A break below the figure may find light demand at USD1.6260/50. Offers back at USD1.6380/00 and USD1.6440. Tracking slippage in stocks and moving back towards a reported pocket of demand of EURJPY in the JPY134.40 area. Underlying tone remains positive after the strong bounce back from the brief dip into the Ichimoku Cloud yesterday. Offers eyed into JPY135.00, techs also seeing trend line resistance here, ahead of Ichimoku resistance at JPY135.46.
August 28 2009, 10:17pm | Comments »
-
Dukascopy Morning Forex Overview - Aug 28 09
Previous session overview The dollar and euro rose against the yen in Asia Friday as Japanese importers bought the two currencies ahead of their month-end book-closing. Dealers said Japanese players had bought vigorously in early Asian trading, sending the dollar as high as JPY93.86 and the euro to JPY134.94. But the two currencies shed some of their gains in the afternoon as weak Asian share markets encouraged short-term investors to buy the safe-haven yen, dealers said. EURUSD made a brief show above USD1.4400 in the US session, topping out at USD1.4405 after seeing earlier lows at USD14222, closing the day in the USD1.4350 area. Brief lows were hit into the Asian session at USD1.4343 before momentum accounts stepped in to buy euros, pressing the pair back up to USD1.4377. Further impetus was lacking with flows described as muted, slippage in Shanghai stocks denting sentiment, with euro-dollar subsequently easing back to USD1.4350 and remaining contained ahead of the European open. The British pound was knocked lower after both weaker than expected business investment and consumer spending provided evidence the UK is still in recession mode. Thus, UK interest rates will stay low to restore the economy. The Australian dollar rocketed higher on Friday while shorter dated interest rate futures spun into freefall as traders ramped up expectations Australia’s central bank could tighten policy much sooner than expected, possibly by October. Market expectation The euro, U.K. pound and dollar are recovering just a bit against the yen on Friday as traders square up positions. Earlier, traders said Japanese importers were buying both the U.S. dollar and the euro against the yen. European and U.S. stock markets shifted little yesterday, and if they remain stagnant Friday, the dollar could tick down to JPY93.00 and the euro to JPY133.00, dealers said. But economists say the long-term impact on foreign-exchange markets is unclear as players watch for how the DPJ will be actually carried out its policies. EURUSD still trading around the USD1.4350 area at writing, some stops noted through USD1.4410, with offers then noted into the August highs just ahead of USD1.4450. Barrier interest said to reside there, more into USD1.4500. Bids are at USD1.4345/40 and USD1.4300 in small, a break below there set to find little in the way of support ahead of USD1.4220. Views, ahead of the RBA’s monthly policy meeting next week, drove a bid tone in the local currency and caused strong selling in the front end of the yield curve. Analysts are now awaiting the statement accompanying next week’s board meeting outcome to see if an October rate hike is indeed on the cards, and will also examine second quarter gross domestic product, buildings approvals and the trade balance - all scheduled for release next week.
August 28 2009, 11:22am | Comments »
-
Dukascopy Afternoon Forex Overview - Aug 27 09
Previous session overview The euro is little changed Thursday against the dollar, and its ongoing intraday volatility inside this narrow range signals growing market uncertainty. U.S. data released early Thursday has had minimal effect on exchange rates. The dollar garnered some support against the euro and yen on positive signs for growth in the U.S. second-quarter gross domestic product report and weekly jobless claims. However, the euro remains slightly up on the day, recovering some from day earlier profit-taking and overnight anxiety tied to China’s recovery, which has become a major theme driving market direction. The dollar’s response to morning data was the latest suggestion that the U.S. unit could begin to gain on positive U.S. data. It advanced some against the euro and yen after the GDP and jobless claims release, although the euro is still up on the day. This fundamental trading strategy, as opposed to risk-driven, is an emerging trend in currency markets, after nearly two years of flows being dictated by a flight to safety. The yen may be finding additional support due to month-end factors and changes in Japan’s tax schedule that could encourage corporations to repatriate foreign investments back into yen. Market expectation EURUSD pair has been locked in a narrow trading range since early June. With the European Central Bank and the U.S. Federal Reserve both likely to maintain easy monetary policy conditions for some time to come, interest-rate expectations - often a key driver of currency market moves - are unlikely to play a major role any time soon. EURUSD second run above USD1.4270 sees rate extend recovery to USD1.4282, the earlier reported semi official supply not around on this move, trader’s reports. Rate currently trades around earlier stall highs at USD1.4276. If rate will push higher expected meet offers placed between USD1.4285/90 ahead of USSD1.4300/10. Main support remains in place from around USD1.4220 through to USD1.4200. Pound recovery off extended lows of USD1.6170 extends to USD1.6221, with rate remaining buoyed above USD1.6200 into early NY trade. A break and clear above USD1.6220 to allow for a move back up toward USD1.6230/35. Bids now seen placed back at USD1.6195/90, stronger toward USD1.6170. EURGBP stretched recent gains to stg0.8819, but momentum quickly faded as move ran into willing sellers on approach to stg0.8820 (61.8% stg0.9082/0.8400). A break here may open a move on toward stg0.8830/35 (stg0.8832 1.618% swing of pullback from stg0.88075 to stg0.8769).
August 27 2009, 5:57pm | Comments »
-
Dukascopy Morning Forex Overview - Aug 27 09
Previous session overview The euro and dollar fell against the yen in Asia Thursday as weak regional share markets prompted players to sell those currencies for the safe-haven yen. In early afternoon trading, Japan’s benchmark Nikkei 225 Stock Average was down 1.82%, while China’s benchmark Shanghai Composite was off 0.42%. Those falls were large enough to encourage short-term investors to trim holdings of riskier assets such as the euro in favor of the yen, traders said. The dollar stood at JPY93.70 compared to JPY94.13 late Wednesday in Tokyo. The euro traded at JPY133.47 compared to JPY134.09, having tripped stop-loss selling orders around JPY133.80 in the morning session, dealers said. Other higher-yielding, riskier currencies also fell against the Japanese unit. The British pound was at JPY152.08 at compared to JPY152.98 late Wednesday in New York. In the morning the currency touched an intraday low of JPY151.72, its lowest level since July 14. Though higher-yielding currencies like the euro usually benefit from strong U.S. data, the dollar gained against the euro in New York Wednesday after reports showed sales of new single-family homes in July increased by 9.6%, well above projections for a 1.6% gain. The British pound fell sharply against the dollar as traders bet that the UK’s economic recovery will lag behind that of the 16-nation Euro zone. Another round of China jitters and cheaper commodity prices crimped the Australian dollar Thursday before further signs of the economy’s resilience added good support in anticipation of robust growth numbers next week. Market expectation Foreign exchange markets are shying away from the risk-sensitive euro as the Japanese stock market weakens Thursday. Dealers said that into next week, the yen may continue gaining against its rivals if global share markets remain sluggish. Pound jumps from around USD1.6210 to USD1.6239 ahead of nationwide house price data. Offers noted at USD1.6240/45, a break of USD1.4250 to open a move toward USD1.6280/85. EURUSD recovered to retest earlier highs before settling between USD1.4235/50 ahead of Europe. Further sales have squeezed rate to USD1.4230 but seen meeting willing buyers on the dip. Bids remain in place from around USD1.4220 through to USD1.4200, with stops seen placed on a break below. A break may open a deeper move toward USD1.4175/70. Offers now seen placed between USD1.4250/60. Dealers suggest that speculative selling pressure could hit the pound across the board if the technical outlook crumbles.
August 27 2009, 12:43pm | Comments »
-
Dukascopy Afternoon Forex Overview - Aug 26 09
Previous session overview The dollar gained ground against the euro and the British pound Wednesday, bid higher after Commerce Department data showed that orders for new U.S.-made durable goods jumped more than expected in July. For many months, the U.S. currency has largely traded in the opposite direction of equities as traders gauge investors’ willingness to take on risk. It has lately returned to a more traditional correlation with economic news, with positive data considered positive for the currency. Strategists noted that the dollar, which has typically weakened in response to favorable economic data and any corresponding rise in investors’ appetite for equities and risky assets, didn’t succumb to pressure following Tuesday’s stronger-than-expected jump in U.S. consumer confidence. The euro had a similar reaction against the dollar, also a funding currency. And along with a drop in crude oil prices, the euro fell to an intraday low of USD1.4254. The U.K. pound also tumbled, extending an overnight sell-off as global stocks came off highs, to a six-week low of USD1.6233. The traditionally higher-yielding currencies, particularly the euro, have turned highly susceptible to profit-taking, along with other riskier assets, as market confidence turns cautious after weeks of building risk appetite. This is helping the safe-haven dollar. Market expectation EURUSD mints fresh lows for the session sub USD1.4250 as cable offers a directional signal even as euro-sterling retains a bid tone above stg0.8800. Euro skidding to USD1.4235 as earlier mentioned stops sub USD1.4250 get taken to the woodshed but some demand interest expected in the USD1.4200/20 zone, with further stops mentioned below there. Pound hits USD1.6200, passing through the mentioned short term swing target at USD1.6210 (23.6% USD1.3500/1.7045). Below the figure and rate can sink toward USD1.6180/75. Euro-sterling made a show above stg0.8800, touched stg0.88035. Next resistance seen at stg0.8820 though offers said to begin from around stg0.8810. U.S. data still eyed Wednesday includes July new home sales at (1400 GMT)
August 26 2009, 10:06pm | Comments »
-
Dukascopy Morning Forex Overview - Aug 26 09
Previous session overview The dollar and euro edged up against the yen in Asia Wednesday as firm regional share markets caused speculators to buy riskier units such as the euro. Japan’s benchmark Nikkei 225 Stock Average was up 1.4% at 0500 GMT, compared with its closing price of 10,497.36 Tuesday. Meanwhile, the Shanghai Composite Index, commonly seen as a gauge of the state of the Chinese economy, was 1.5% higher. But Japanese exporters sold the dollar and euro for their month-end settlement, limiting the two currencies’ rise against the yen, dealers said. At 0450 GMT, the U.S. unit stood at JPY94.18, up from its level overnight in New York at JPY94.14. The euro climbed to a high of JPY134.79, compared with JPY134.77. Euro fell to USD1.4252 in European morning yesterday against the greenback although data showed that Germany GDP grew 0.3% in Q2. The single currency rebounded strongly to USD1.4364 following the release of U.S. consumer confidence, with the index rising to 54.1 compared to economists’ forecast of 47.5. However, euro pared all of its intra-day gains in New York afternoon. The British pound fell against the dollar with uncertainty remaining in the economy. Bank of England policy makers said this month that the recession is deeper than anticipated, calming expectations that they will raise interest rates later this year. The Australian dollar nudged higher in Asia Wednesday on the back of gains in regional equities and could gain further if U.S. and European data due later add to growing optimism for the global economy. Market expectation Dealers said the dollar and euro will likely push higher in the near term if European and U.S. stocks rise later the global day. The U.S. unit and the euro could rise slightly further in the near term, to JPY94.80 and JPY135.00 respectively, as buoyant global share markets add to optimism over riskier currencies, traders said. However, it may be difficult for the two majors to keep rising in the coming weeks because of a lack of market consensus over their direction in the mid-term, dealers said. Most of them expect the dollar-yen to stay between JPY92 and JPY96, with the euro expected to remain between JPY132 and JPY136. EURUSD offers seen placed between USD1.4320/25, a break to open a move toward USD1.4330/35 ahead of USD1.4345/50. Above here and rate can retest Tuesday’s highs at USD1.4364, a break to open a move toward USD1.4375/80. Support remains at USD1.4280, a break to open a deeper move toward USD1.4255/50 (USD1.4250 38.2% USD1.4045/1.4377). Germany Ifo data at 0830GMT this morning’s highlight with traders forecasting an improved number following recent release of German GDP and yesterday’s Belgian BNB business survey, seen as decent indicator. European stocks are expected to open a touch lower Wednesday, despite good economic data from the U.S. in the previous session and positive trading in Asia.
August 26 2009, 4:18pm | Comments »