In what has been a typical Asian morning session, some of the overnight moves are being consolidated or retraced. Others would call it momentum killing. I’m not complaining, my USD/CHF hourly chart is starting to look like it might build a constructive base around 1.0770 although this might just be wishful thinking on my part. EUR/USD has slipped back to 1.4050 from a high at 75 and cable is at 1.6300, down 30 pips from it’s earlier session highs.
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USD making modest gains
June 10 2009, 2:51am | Comments »
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Dollar comes under renewed pressure as short end of US Yield curve sheds gains
The short end of the US Yield curve is shedding some of the gains seen since the Payroll report, with Dec Eurodollar futures rising by around 14 basis points so far this morning as the market moves away from expecting early US rate hikes. Some quite horrible weekly Redbook sales data, down 4.4% y/y isn’t helping matters, with Eur/Usd moving up through offers at 1.3980 to test sellers at 1.4000. The story is the same elsewhere with Cable breaking through 1.6200 to hit 1.6230 so far.
June 9 2009, 4:04pm | Comments »
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New York forex wrap; Dollar loses portion of gains
Turning point for global economy Sept/Oct this year: IMF’s Strauss-Kahn German bank West LB in spotlight; Dow Jones reports nearly failed over weekend Conference Board’s employment trends survey rises to 89.9 from 89.7; first rise in 16 mos World Bank head bullish on China; welcome moves to Yuan flexibility Fed’s Tarullo: Economy near bottom; recovery to be “painfully slow” Obama speeding stimulus spending IMF: Eurozone bank clean ups lacking; ECB should look at refi cut ECB’s Weber: Must quickly reverse accommodation as economy recovers ECB’s Stark echoes Weber; Exit strategy needed. Rates appropriate EU’s Almunia: Must consolidate budgets once growth returns US rates continue to rise in US; 2 year note reaches 1.42%, 10-year 3.90% US equities recover most losses, close down 0.1%
The dollar lost some of its overnight gains in US trade, as the pound rebounded sharply in afternoon trade. PM Brown survived his latest leadership challenge and emerged bruised but still in power today. That was not necessarily a surprise, so I am pinning the sterling recovery on the odds of a sale of BGI by Barclays to a US buyer. Cable broke above 1.6000 at midday and reached the 1.6100 level late in the session. Short-covering was the driving factor, as near as I could discern. EUR/USD rose as well, but the pace was about half that of the pound. Heavy EUR/USD offers between 1.3900 and 1.3925 were absorbed along the way but follow-through has been limited. Large speculative longs continue to liquidate positions on strength, traders relay.Weber and Stark, the German enforcers at the ECB took to the microphones to talk exit strategy, setting the stage for the ECB to withdraw their excess liquidity as (if?) the economy improves. USD/JPY dipped to 98.20 where it found support from the downtrend broken on Friday, now at the 98.20 level. That breakout was re-test and held and USD/JPY rose to 98.50 late as US yields continued to surge. Commodity currencies recovered some of their recent lost ground, helped in part by comments from the World bank’s Zoellick. He sees China’s rebound continuing. AUD retook the 0.7900 level on short-covering during PM trade.
June 8 2009, 11:17pm | Comments »
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FOREX-Dollar slips after gains made on US jobs data
By Kaori Kaneko TOKYO, June 8 (Reuters) - The dollar edged down against a basket of currencies on Monday after posting its largest one-day gain in more than ...
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June 8 2009, 7:44am | Comments »
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New York forex wrap-up; Dollar extends recent gains
US nonfarm payrolls fall 345,000 (far less than expected); unemployment rates rises to 9.4%, jobless rate at 27-year high Canada reports a loss of 42,000 jobs; unemployment rate 8.4%, highest in 11-years UK’s Brown shuffles cabinet; Darling and Madelson stay on Fed’s Lockhart: Fed should not wait too long to tighten, not there yet- Market News International US VP Biden: Obama to announced “ramped up” stimulus on Monday NY Fed’s Dudley: Fed could end bond buys if yield rise on economic optimism US Consumer credit falls again in April, -$15.7 bln; March down $16.6 bln Short end of US yield curve soars after employment report; 2-yr not jumps 36 bp to 1.31% Stocks mixed, commodities reverse gains; Oil down to $68.40 from $70.30 intraday
Nonfarm payrolls were much less dire than expected, initially setting off a scramble to add to all aspects of the reflation trade. Ten minutes after the figures were released, Reuters picked up a story that had run a few minutes before the data on the Market News International wire. The headline “Lockhart says Fed should not wait too long to tighten monetary policy” caught the market at a weak point. EUR, GBP, AUD all began to weaken dramatically and soon prices were tumbling. Technicals took over from fundamentals and macro players began to unload all aspects of the relation trade. The unwind continued through out the afternoon, aided by hawkish comments from NY Fed president Dudley who said that the yield back up could prompt the Fed to quit buying treasuries if it is rooted in economic optimism and not just fear of excessive deficits. US yields rocketed higher, especially in the shorter maturities. This made USD/JPY an attractive buy and sent prices up to 98.88 late in the US session, the highest in about a month. EUR/USD fell from 1.4265 to 1.3935 triggering untold numbers of trailing stop-loss sell orders on the way lower. Same in Cable, with a fall to 1.5943 from 1.6240 after the data. Commodity currencies rolled over and died. AUD fell to 0.7914 from 0.8122. Same story in CAD, with a kicker from the poor Canadian employment report. USD/CAD ramped to 1.1200 from 1.0960.
June 5 2009, 11:03pm | Comments »
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