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Action Insight: Market Overview
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Action Insight is the most popular section of the site, read by traders around the world. Our team of analysts work around the clock, analyzing the markets from technical and fundamental perspectives in providing the reports in this section to you.
- Market overviews covers major happenings in the markets as well as their impacts.
- Technical analysis of specific currency pair will be found in the technical outlook section. Covered pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/CHF, EUR/GBP, GBP/JPY
- Special reports covers medium to longer term forecasts on exchange rates based on fundamentals, central bank meetings previews and reviews, plus any current issues that will have an impact on exchange rates.
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Market Overview |
Written by ActionForex.com |
Jun 23 11 07:18 GMT
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Asian equities follow US stocks lower today after Fed Bernanke provided no hint on QE3 overnight as QE2 ends in June. Fed offered a less optimistic view on the economy with downward revision in GDP projection and upward revision in unemployment projection. Also, sentiments are hurt a bit by poor HSBC China PMI reading today, which dropped to a 11-month low of 50.1 from May's final reading of 51.6. Overall mild risk aversion and lack of QE3 talk sends dollar higher against most major currencies Sterling remains the weakest currency this week and hovers around record low against Swiss Franc after BoE talked about the possibility of extending the quantitative easing program in the minutes released yesterday.
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Market Overview |
Written by ActionForex.com |
Jun 22 11 19:11 GMT
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Dollar is little changed after Fed left the fed funds rate unchanged at historical low of 0-0.25% today and offered a less optimistic outlook on the economy in the accompanying statement. Fed noted that recovery is continuing "somewhat more slowly than the Committee had expected." Rates will be held at an exceptionally low level for "an extended period." Nevertheless, Fed still "expects the pace of recovery to pick up over the coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate." Fed played down the significance of recent surge in inflation and "anticipates that inflation will subside to levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate." Also, as expected, Fed announced to complete the QE2 program at the end of June and "will complete purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings."
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Market Overview |
Written by ActionForex.com |
Jun 22 11 12:34 GMT
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Vote split of the June meeting changed from 6-3 to 7-1 in favor of no change after arch-hawk Sentance left the committee and was replaced by Broadbent, who joined the doves camp. Dale and Weale were the only hawk left, who voted for 25bps hike. The minutes were overall quite dovish as members focused moved away from inflation threat to the fragile economic recovery. The minutes suggested that a near term hike is highly unlikely and BoE would instead keep rates unchanged until next year. Indeed, the note that the risk of undershooting the 2% inflation target over the next few years has increased. Meanwhile, some members thought "it was possible that further asset purchases might become warranted if the downside risks to medium-term inflation materialized."
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Market Overview |
Written by ActionForex.com |
Jun 22 11 06:44 GMT
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Euro retreats mildly today after Greek Prime Minister George Papandreou finally won the confidence vote as a total of 155 lawmakers supported the motion, with only 143 voting against. The vote sealed the approval of the reshuffled cabinet, most notably with new Finance Minister Evangelos Venizelos to push through the new austerity plan. Next step for Papandreou is to push the EUR 78b of austerity plan through the parliament. Then Eurozone finance ministers will approve the next tranche of the bailout fund of EUR 12b on July 3 for Greece to satisfy rollover payments of maturing debts in mid July and ease the short term situation till September. Technically, Euro's rebound against dollar, yen and sterling are losing steam and we might see a near term reversal soon as EUR/USD and EUR/GBP turns to a falling leg inside recent triangle pattern.
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Market Overview |
Written by ActionForex.com |
Jun 21 11 13:11 GMT
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Euro stays firm in tight range today as traders are holding their bets ahead of Greece confidence vote. Must worse than expected German ZEW economic sentiment triggered some retreat but that was brief. Greek Prime Minister George Papandreou must survive today's confidence vote as to secure backing for the new austerity measures to be approved on June 28. The new measures would involve a five year EUR 28b program and related privatization plan. After that, Eurozone finance ministers will approve the next tranche of the bailout fund of EUR 12b on July 3 for Greece to satisfy rollover payments of maturing debts in mid July and ease the short term situation till September. So today's confidence vote is a key step is stabilization market sentiments towards Eurozone and Euro.
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Market Overview |
Written by ActionForex.com |
Jun 21 11 07:20 GMT
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Euro is a bit firmer today as markets focus is on confidence vote in Greece. After a three day parliamentary debate, Greek Prime Minister George Papandreou faces a vote in confidence in his government today. In order to secure political support, Papandreou reshuffled his cabinet last week and replaced finance minister George Papaconstantinou with heavy weight Evangelos Venizelos, once a rival within the ruling party. It today's vote is passed, the Greek parliament is expected to vote on the new austerity measures on June 28. And if everything's smooth, Eurozone finance ministers will approve the next tranche of the bailout fund of EUR 12b on July 3 for Greece to satisfy rollover payments of maturing debts in mid July and ease the short term situation till September.
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Market Overview |
Written by ActionForex.com |
Jun 20 11 13:31 GMT
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Euro dipped earlier today as EU Finance Ministers delayed approval of the next tranche of bailout fund for Greece. But loss was limited and the common currency is trying to stage a rebound in early US session. Eurogroup Chairman Jean-Claude Juncker said that Greece's debt is clearly "sustainable" but "the debt will only remain sustainable if Greece fulfils all its commitments which it agreed with the (ECB/EU/IMF) troika." The investigation team will visit Greece on Tuesday and Wednesday and would discuss changes with the Greece government "at a technical levels". That would include a spending cuts, tax hikes and propitiations. EU/IMF will verify whether the committed conditions have be met on July 3 and approve the payment then. EU Economic and Monetary Affairs Commissioner Olli Rehen also emphasized that "the key condition is that the Greek parliament needs to endorse the medium term... and the privatization programme before the end of June. Once this is done the disbursement will be done in time..."
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Market Overview |
Written by ActionForex.com |
Jun 20 11 06:30 GMT
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Euro weakens as the week starts as the approval for the next tranche of EUR 12b of the EUR 110b of Greece bailout fund was delayed till July. While the approval is still widely expected as Eurozone leaders just simply won't let Greece default, they'd now like to see passing of the austerity measures first. Luxembourg Prime Minister Jean-Claude Juncker "forcefully reminded the Greek government that by the end of this month they have to see to it that we are all convinced that all the commitments they made are fulfilled". The fund is needed by Greece to rollover maturing debts to September so as to buy time for getting the second bailout from EU.
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Market Overview |
Written by ActionForex.com |
Jun 18 11 17:44 GMT
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As the Greek drama developed, EUR/USD managed to hold on to 1.4 psychological level and staged an impressive rebound towards the end of the week. Fundamentally, there seems to finally reachable resolutions in the immediate and longer term Greece debt problems. European Union Economics Commissioner Olli Rehn pledged that Greece would receive the next tranche of payment from the EUR 110b EU/IMF bailout fund in early July to rollover maturing debts through September. . IMF has also agreed to release the payment should Greece pass the new austerity measures. Greek Prime Minister George Papandreou announced a reshuffled cabinet on Friday with political heavyweight Evangelos Venizelos replacing George Papaconstantinou as Finance minister. The reshuffling should help Papandreou secure party backing for approving the austerity measures. So the near term problem should be eased for the moment.
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Market Overview |
Written by ActionForex.com |
Jun 17 11 14:09 GMT
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Euro rebounds strongly today after German Chancellor Angela Merkel compromised and announced with French President Nicholas Sarkozy that they will support a new bailout package for Greece that includes "fully voluntary" participation of private Greek bond holders. The new package will be modeled on Vienna Initiative, which tens of billions dollars were lent to struggling Eastern European nations in 2009, on condition that foreign banks maintained their lending. Merkel said that they do "everything together" with ECB, IMF and EC Commission and they didn't want to "create a credit event". IMF has agreed to release funds for Greece to satisfy debt payments through September. Merkel said they'll work on the new package and the time line isn't September, but "as soon as possible". German Finance Ministry spokesman said that ideally, a solution and an agreement to "key elements of the program" would be found on Monday. Looking ahead, EU finance minister meeting on Sunday and Monday should approve the next tranche of emergency loans to Greece and possibly agree on the framework of the second bailout for Greece. Also, the reshuffled cabinet of Greece will face a confidence vote by Tuesday night.
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Market Overview |
Written by ActionForex.com |
Jun 17 11 07:19 GMT
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Euro recovered mildly but remains soft against dollar, yen and swissy. Meeting between German Chancellor Angela Merkel and French President Sarkozy will be a major focus today. The two Eurozone leaders are expected to resolve their differences on how private bond holders are to be involved in the second bailout for Greece. A German spokesman emphasized that Finance Minister Wolfgang Schaeuble's proposal to extend Greece bond maturities by seven years is still the core aspect of German's plan. France, on the other hand, opposed to involuntary involvement of private sectors, which position is similar to ECB. EU finance ministers will meet again on June 19-20 in Luxembourg as the June 14 meeting yielded no agreement. However, it's doubtful whether a plan would be completed before July 11.
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Market Overview |
Written by ActionForex.com |
Jun 16 11 14:56 GMT
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Uncertainty over the Greece situation continue to weigh on risk markets today and sends EUR/CHF to new record low. Pressure on the common currency seems to be increasing as some view the Greece problem is now farther away from resolutions. On the one hand, Greece PM Papandreous is forced to reshuffle his cabinet to salvage his governments as violent protests against the austerity plan highlighted the political obstacles Greece is facing to seek a second bailout. On the other hand, the disagreement among European leaders on how private investors should be involved in the second bailout remains unresolved too. And it's doubtful if the meeting between German Chancellor Merkel and French President Sarkozy tomorrow would yield any breakthrough.
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Market Overview |
Written by ActionForex.com |
Jun 16 11 08:34 GMT
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EUR/CHF made another record low below 1.2 psychological level earlier today but recovers mildly after SNB kept rates unchanged as widely expected. The three month Libor range was held at 0-0.75% with the lower part of the target range at 0.25%. SNB noted that the Swiss economy continues to benefit from "robust" global demand in spite of Franc's strength. GDP growth projection was maintained at 2% in 2011. Nevertheless, the bank also noted "downside risks predominate", including Eurozone peripheral debt programs, fiscal consolidations and surge in commodity prices. Though, appreciation of Franc was highlighted as the main threat to Swiss economy. There is practically no change in EUR/CHF's bearish outlook after SNB's release and we'd expect the cross to continue to make new record lows ahead.
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Market Overview |
Written by ActionForex.com |
Jun 15 11 13:06 GMT
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Dollar extends rebound in early US session after data showed inflation exceeded forecasts in May. Headline CPI accelerated to 3.6% yoy versus expectation of 3.4%, higher number since October 2008. Core CPI also beat expectation of rose 1.5% yoy, highest number since January 2010. However, Empire state manufacturing index unexpectedly turned negative to -7.8, the worst number since November, suggesting contraction. Dollar index managed to break above 75 level to resume recent rebound from 73.50 and is set to target 76.36 resistance next.
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Market Overview |
Written by ActionForex.com |
Jun 15 11 06:48 GMT
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Euro is a touch softer as the emergency meeting between Eurozone finance ministers in Brussels produced no result and failed in agreeing on the way to involve private investors in Greece's second bailout. France is know to be on the side of ECB, which opposes to any action that constitutes a "credit event". Meanwhile, Germany continues to insists on participation of the private sector. Finance ministers will meet again on June 19, a day earlier than planned. Focus will also be on the meeting between German Chancellor Merkel and French President Sarkozy, on June 17. Markets are worried that the debate will drag on into July, as Luxembourg's Finance Minister Freiden said. Greek 10 year bond yields jumped to new record of 1746 bps yesterday on the uncertainties and would continue to march on and take other peripheral yields higher.
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Market Overview |
Written by ActionForex.com |
Jun 14 11 14:37 GMT
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Dollar is trading mixed in early US session, up against yen and swissy but soft against other major currencies. Headline retail sales in US dropped for the first time in eleven months by -0.2% in May but was slightly better than expectation of 0.4%. Ex-auto sales, on the other hand, rose 0.3%. PPI also rose more than expected to 7.3% yoy while core PPI was unchanged at 2.1% yoy. US stocks open higher, following strength in global equities as boosted by solid China economic data earlier today. Yen and Swissy will somewhat remains pressured but the question is whether dollar would follow and weakens against Euro, Sterling, Canadian and Australian dollars.
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Market Overview |
Written by ActionForex.com |
Jun 14 11 06:36 GMT
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Dollar and yen are both mildly lower against other major currencies today as risk appetite is given a mild lift by positive China data. CPI rose to 5.5% yoy in May, inline with expectation. While further tightening is still widely expected, today's data wasn't anything drastic that would trigger even more aggressive measures from China. There were whispers in the markets that the number could be as bad as 6% yoy. PPI was unchanged at 6.8% yoy in May. Growth data were solid with retail sales up 16.9% yoy in May while industrial production slowed slightly to 13.3% yoy.
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Market Overview |
Written by ActionForex.com |
Jun 13 11 14:58 GMT
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EUR/CHF dives to new record low today as the common currency continues to be weighed down by uncertainty over the Greece situation. It's doubtful on ECB and Germany could reach a compromise at the summit in Brussels on June 23/24 on the way to handle private bond holders on second bailout for Greece. Greek 5 years CDS jumped to record high above 1600 bps today, taking CDS of other peripherals higher. Portuguese CDS rose above 770bps, Irish up above 740bps, also at record high. Spain CDS is eyeing 300bps. Markets are also looking at whether Spanish 10 years yield would reach 5.6% which will then be taking as a "convincing" indicator of contagion. Markets will also closely watch bond auctions in Italy, Spain, Greece and Portugal.
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Market Overview |
Written by ActionForex.com |
Jun 13 11 07:16 GMT
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New Zealand dollar drops sharply today after a series of earthquakes struck Christchurch, the second-largest city in the country. The city was devastated by the historical earthquake in February which killed 180 people. A 5.5 magnitude quake hit around 10km east of the city at 0100 GMT, followed by a 4.4 magnitude quake in less than 10 minutes. Then there was a further 6.0 magnitude aftershock at around 0220 GMT. There is no reports of substantial injuries even though there are renewed "liquefaction, flooding, power lines down, falling debris, and burst sewer and water pipes." Kiwi was the strongest currency last week after RBNZ signaled gradual rate hike over the next two years but today's quakes remind investors that the hike could indeed be very "gradual".
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Market Overview |
Written by ActionForex.com |
Jun 12 11 04:53 GMT
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Dollar and yen were broadly higher last week as boosted bby reversal in Euro as well as deterioration in risk sentiments. The common currency was pressured by uncertainty over the Greece situation as well as adjustments in rate expectations after ECB's latest inflation projection failed to satisfy Euro bulls. Global equities extended recent decline on concern of slowing global recovery. Meanwhile, New Zealand dollar was indeed the strongest currency as RBNZ signaled gradual tightening ahead.
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