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Action Insight: Special Reports
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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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Special Reports |
Written by ActionForex.com |
Mar 21 12 11:05 GMT
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The BOE's minutes for the March meeting indicated that policymakers remained split in the asset buying program. Adam Posen and David Miles supported more stimulus (adding an additional 25 pound) as it was 'warranted to reduce the risk that persistently weak growth would damage the future supply capacity of the economy'. Yet, the proposal was overruled by the remaining 7 members to maintain the program as it was.
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Special Reports |
Written by ActionForex.com |
Mar 20 12 06:33 GMT
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The RBA unveiled in the March minutes a more optimistic outlook. The reason for leaving the policy rate unchanged was lessened downside risks in global economic outlook. Moreover, policymakers appeared to have weighed the gains from the mining investment boom again strength in Australian dollar. Overall, the central bank has moved to a neutral monetary bias from an easing one in previous meetings.
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Special Reports |
Written by ActionForex.com |
Mar 15 12 09:40 GMT
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As expected, the SNB left its monetary policy unchanged in March. The central bank maintained the 3-month Libor target range at 0-0.25% and pledged to maintain the minimum exchange rate of CHF 1.20 per euro 'with utmost determination'. While acknowledging the mixed macroeconomic outlook, policymakers warned once again of the strength in the Swiss franc.
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Special Reports |
Written by ActionForex.com |
Mar 14 12 03:58 GMT
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As expected, policymakers delivered a more hawkish statement after the March FOMC meeting. Changes in languages in several areas indicated that the central bank has turned more confident in the economic outlook. This has in turn lowered speculations for further QE later this year. The Fed decided to left the Fed funds rate unchanged at 0-0.25% at least until late 2014 and to continue operation twist announced in September. The 'most hawkish' member Richmond Fed President Lacker dissented the decision as he believes that economic conditions are unlikely to warrant exceptionally low levels of the Fed funds rate through late 2014.
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Special Reports |
Written by ActionForex.com |
Mar 13 12 07:17 GMT
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After the two-day BOJ meeting, policymakers announced to expand a loan scheme, by 2 trillion yen, to 5.5 trillion yen. A board member did propose further easing by increasing the central bank’s asset purchases by 5 trillion but failed to gain support from others. Indeed, the loan scheme extension can also be considered as monetary easing but the magnitude and the form are probably insufficient to boost the Japanese economy and inflation.
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Special Reports |
Written by ActionForex.com |
Mar 09 12 03:44 GMT
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BOE- The BOE maintained the official Bank rate at 0.5% and the asset purchase program at 325B pound. The asset purchase program is expected to take another two months to complete. While leaving the policy rate and the unconventional measure unchanged, the MPC Committee is facing internal debate of what the next step should be. Martin Weale indicated he might not vote for further purchases as there's a case for 'aggressively' loosening policy
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Special Reports |
Written by ActionForex.com |
Mar 06 12 07:43 GMT
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While we are just in the beginning of the annual National People's Congress in Beijing (started on March 5 and is expected to last for 10 days), several surprises have already been delivered. First, regarding the economic outlook, Premier Wen Jiabao announced moderate goals for economic growth, inflation and money supply. GDP growth for 2012 will be around 7.5%, faltering below the 8% target over the past 8 years. Inflation will stay at around 4% while M2 growth at 14%. The set of targets signals that the Chinese government accepts slower growth in the medium-term. Meanwhile, the PBOC governor Zhou Xiaochuan indicated that China is considering 'appropriately' widening the trading band for the RMB.
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Special Reports |
Written by ActionForex.com |
Mar 01 12 05:18 GMT
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In the testimony before the House Committee, Fed Chairman Ben Bernanke was less downbeat on the macroeconomic outlook. He stated that 'pace of the expansion has been uneven and modest by historical standard'. Yet, growth in the coming quarters is likely to be 'at a pace close to or somewhat above the pace that was registered during the second half of last year'. He also acknowledged positive developments in the job market including job gains that were 'relatively widespread across industries' and the 'more rapid than expected' decline in the unemployment rate over the past year.
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Special Reports |
Written by ActionForex.com |
Feb 29 12 15:02 GMT
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The ECB has allotted 529.5B euro of 3-year LTRO to 800 banks. Together with the first auction, the central bank has injected 1trillion of 3-year funds into the system. This amount equals to 131% total European bank bond maturities in 2012 and 72% for 2012 and 2013 combined. The average allotment is 0.66B euro, compared with 1B euro in December 2011 and 0.40B euro in June 2009. The total number of bidders is huge, suggesting participation of a lot of small banks. The ECB would probably view the result as positive as it's expected that the funds will be passed to the real economy.
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Special Reports |
Written by ActionForex.com |
Feb 22 12 10:54 GMT
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The BOE minutes for the February meeting unveiled that 2 (Adam Posen and David Miles) out of 9 members opted for more expansion in asset purchases than decided. The 2 dissenters to the current monetary policy saw a risk of a prolonged period of depressed demand which would cause inflation to fall materially below target in the medium-term. Also, the expected that further easing would alleviate the risks of increasing unemployment. The news raised speculations that the central may increase the amount of asset buying in May.
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Special Reports |
Written by ActionForex.com |
Feb 21 12 06:59 GMT
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The latest news is that EU finance ministers have eventually reached an agreement on the second Greek bailout package. The deal requires Greece to bring its debt down to 120.5% of GDP by 2020 from over 164% currently. The agreed reduction was similar to what was requested by the IMF. Moreover, according to Jean-Claude Juncker, the prime minister of Luxembourg, private sector bondholders were expected to incur losses of 53.5% of nominal face value of their Greek bond holdings, up from the previously expected 50.0% nominal write-down. Investors welcomed the news and the euro jumped against the US dollar after the announcement.
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Special Reports |
Written by ActionForex.com |
Feb 21 12 04:35 GMT
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The RBA released minutes for the February meeting, explaining reasons for its decision to leave the policy rate unchanged at 4.25%, instead of a reduction of -25 bps as expected by the market. The central banks appeared comfortable with the domestic economic developments though these might also be affected by the sovereign debt crisis in the Eurozone. It appears that the central bank will stand on the sideline in coming months but we are still of the view that a rate cut will materialize later this year especially if he AUD continues its recent advance.
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Special Reports |
Written by ActionForex.com |
Feb 16 12 04:20 GMT
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The FOMC minutes for the January meeting were as dovish as the policy statement suggested. Yet, the change in wordings suggested that there were fewer members demanding further easing. Policymakers noted that “strains in global financial markets continued to pose significant downside risks to the economic outlook” and “a few members” observed that elevated unemployment and subdued inflation pressure could “warrant the initiation of additional securities purchases before long”. In December, it’s stated that “a number of members” judged additional purchases are warranted. In our opinion, QE3 remains possible for 2H12 despite recent improvements in economic indicators.
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Special Reports |
Written by ActionForex.com |
Feb 15 12 12:44 GMT
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As the sovereign debt crisis in the Eurozone continues to deteriorate, EU financial ministers have been traveling abroad to seek assistance besides pulling funds among member nations. After German Chancellor's visit to Beijing earlier this month, Mr. Herman Van Rompuy, President of the European Council, and Mr. Jose Manuel Barroso, President of the European Commission, discuss with Chinese Premier Wen Jiabao at a China-EU summit on possible Chinese investment in the EU bailout fund. China's response sounded once positive with Premier Wen stated that it's in China's interest to see the Eurozone "maintain stability and prosperity" and "China is firm in supporting the EU side in dealing with the debt problems. We match our words with actions". His comments were echoed by PBOC's governor Zhou Xiaochuan who stated that "our state leaders promised European leaders that, amid the global financial crisis and the Europe sovereign debt crisis, China will not cut the proportion of euro exposure" and China "has always been confident in the euro and its future". Despite the reiterations, China has so far failed to commit an amount or a time of the investment. What are hindering China's move?
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Special Reports |
Written by ActionForex.com |
Feb 14 12 07:27 GMT
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The BOJ surprisingly expanded its asset purchase program by +10 trillion yen today, sending the total fund size to around 65 trillion yen. At the same time, policymakers unanimously voted to keep the uncollateralized overnight call rate at 0.-0.1%. The unexpected move aimed to stimulate the country's economy which contracted an annualized -2.3% in 4Q11. Japanese yen will likely be little affected by the move.
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Special Reports |
Written by ActionForex.com |
Feb 09 12 16:39 GMT
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The BOE expanded the asset purchase program by +50B pound to 325B pound and left the Bank rate at 0.5%. As mentioned in the policy statement, "the underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter. While policymakers noted that "some recent business surveys have painted a more positive picture and asset prices have risen", the pace of expansion in the country's major exporters "has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries".
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Special Reports |
Written by ActionForex.com |
Feb 08 12 07:02 GMT
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Although Greece's PSI and its access to the new tranche of bailout fund dragged on, market sentiment appeared to have improved since the last ECB meeting. Moreover, reaction to the 3-year LTRO was positive while economic data over the past few weeks showed improvement. These should allow the ECB to keep the main refinancing rate unchanged at 1% and leave the unconventional monetary measures unchanged.
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Special Reports |
Written by ActionForex.com |
Feb 07 12 05:17 GMT
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The RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers' confidence in China's demand and US' economic recovery. The Australian dollar soared after the announcement.
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Special Reports |
Written by ActionForex.com |
Feb 06 12 09:00 GMT
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It's likely that the RBNZ will stand on the sideline for most of this year. Without much change in monetary policy, the movement of New Zealand dollar will be more dependent on external factors including the US fiscal consolidation and sovereign debt problems in the Eurozone. Should the RBNZ adjust its monetary policy, it would likely be a rate hike as policymakers have to normalize its 'emergency' policy setting. This compares with a potential rate cut from the RBA. Against this backdrop, we expect NZD to outperform AUD this year.
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Special Reports |
Written by ActionForex.com |
Feb 06 12 06:07 GMT
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We expect the RBA will reduce its cash rate by -25 bps to 4.0% at the February meeting. This third consecutive rate cut since November would bring the country's monetary policy to mildly accommodative from neutral. Given high uncertainty in global economic outlook and weaker tone in recent domestic developments (rising unemployment, benign inflation and appreciation in AUD), we believe a rate cut is justified. The RBA will release its quarterly Statement on Monetary Policy and policymakers should use this opportunity to communicate more about its rationale of the new policy settings.
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