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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 |
Jun 13 09 05:02 GMT
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There has been much talk about reserve diversifications and de-dollarization in the past few weeks leading to the first BRIC summit in Russia. Dollar has been under much pressure and lacked decisive buying for sustained rebound. The announcements from BRIC summit will probably clear out recent hesitations in the forex markets which either reinforces the current down trend in dollar or provides the needed fuel for a reversal. |
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Special Reports |
Written by ActionForex.com |
Jun 11 09 00:20 GMT
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The RBNZ decided to keep interest rate unchanged, for the first time in a year, at 2.5% after June's meeting as 'there are signs that international economic activity is stabilizing, and international financial conditions are improving'. That said, the central bank indicated that the monetary policy will remain expansionary for sometime by stating that the OCR will be kept 'at or below the current level through until the latter part of 2010'. |
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Special Reports |
Written by ActionForex.com |
Jun 09 09 13:19 GMT
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Market's speculation on Fed's rate hike has accelerated since the beginning of June. Yields on 2-year Treasury notes rose 44 bps on June 5 and June 8, the largest gain since September while CBOT's Fed Funds futures priced in 70% chance that the Fed will raise interest rate in November's meeting. Although the yield has fallen since then, it still represented about 60% probability. Also look at Eurodollar futures, the yield has picked up pronouncedly, implying the likelihood of tightening monetary policy in the US. |
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Special Reports |
Written by ActionForex.com |
Jun 06 09 10:28 GMT
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RBNZ will meet Thursday to discuss about interest rate. While the market has widely priced in a month of pause, it's still likely for the central bank to 'shock' the market by announcing a 25 bps reduction as policymakers have earlier expressed their disappointment about domestic banks' sluggishness in passing the cuts to the public. Australia's employment in May should have driven much interest after a surprising rise in the number of jobs in April. However, we still believe a pullback will be seen in May. |
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Special Reports |
Written by ActionForex.com |
Jun 04 09 12:01 GMT
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As widely anticipated, ECB decided to keep the main refinancing rate unchanged at 1%. According to the accompanying statement, the central bank stated that |
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Special Reports |
Written by ActionForex.com |
Jun 04 09 01:44 GMT
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Traditional financial theory told us that a country's bond yields have direct impact on the country's currency. For example, a rise in US yields should be supportive for USD because higher returns should attract foreign capital inflows. Charts below show that widening in US and European bond yield spread came in inline with USD's rise against the Euro until late-April/early-May while positive correlation between US treasury yield and USD/JPY broke down in the past 2 months. What's wrong with the US bond market or is the something abnormal in the currency market? |
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Special Reports |
Written by ActionForex.com |
Jun 02 09 02:33 GMT
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As widely anticipated by the market, RBA announced to keep interest rate unchanged at 3% for the second month. The most stunning comment by the central bank is that moderation in inflation pressure may trigger further easing in the future. |
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Special Reports |
Written by ActionForex.com |
Jun 01 09 07:11 GMT
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While the common currencies extends recent rise against dollar, it's clearly underperforming other majors. As noted in the regular technical outlook reports, EUR/GBP is still in its short term down trend while EUR/CHF is still bounded in sideway consolidation. While EUR/JPY did strengthen mildly, it's kept below recent high of 137.38 even in case of broad based yen weakness. A look at Euro-commodity currencies crosses revealed that the common currency is under tremendous pressure there. Such weakness is generally expected to extend further as risk appetite continues to improve and as commodity rally extends. So in short, Euro will continue to underperform in the broad based down trend in dollar and yen. |
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Special Reports |
Written by ActionForex.com |
May 30 09 05:00 GMT
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We are going to have a busy week as June starts. Four major central banks will meet to decide on monetary policies with the RBA meeting on June 2 and ECB, BOE, BOC meeting on June 4. However, pause on rate cuts is expected for all central banks and focus will be shifted to the progress of unconventional measures and economic outlook forecasts. In the US ISM surveys will be released on June 1 and June 3 while employment report will be released on June 5. |
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Special Reports |
Written by ActionForex.com |
May 26 09 03:53 GMT
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The change in UK's outlook has spurred speculations on the next candidate for the downgrade. Being the first large economy to be warned in the current financial crisis, UK's potential loss of top credit rating hinges on its huge debt burden and the market believes countries with massive fiscal expansion are also in danger. Among the G10 countries, both Japan and the US should have huge debt to GDP ratio. However, Japan has lost already lost its top rating in the 90s, so now the US bear the biggest risk as analysis showed that this world largest economy's debt to GDP ratio may surge above 100% in coming few years, similar to that of the UK. |
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Special Reports |
Written by ActionForex.com |
May 22 09 06:26 GMT
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Different measures have been showing remarkable increase in risk appetite of late as various indicators have shown signs of slowdown in economic contraction. The 3-month USD LIBOR, after breaking below 1% for the first time on record on May 5, has continued to sink lower. Apart from matching the unprecedentedly Fed Funds rate target, decline in the short-term borrowing rate implies the funding conditions have eased. |
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Special Reports |
Written by ActionForex.com |
May 19 09 10:21 GMT
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Despite recent rebound in GBP against the dollar and the euro, we continue believe that the pound remains undervalued. Recent macro data showed that the pace of contraction in the UK's economy has slowed down. There have been tentative signs indicating recovery will been in the nation earlier than in the Eurozone or the US. Moreover, liquidity of GBP has improved significantly in 2009 compared with 4Q08 but the trade-weighted value of the pound is still trading significantly below 5-year average. While the more popular argument for the pound's weakness was premised on its aggressive QE, we expect further measures will be coming out from the ECB and the Fed as driven by the tighter financial conditions in the Eurozone and the US. We anticipate the USD and the Euro will depreciate against the GNP in the medium term. |
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Special Reports |
Written by ActionForex.com |
May 15 09 04:55 GMT
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Earlier this week, USD was dragged down by an article by David Walker, the former US comptroller general, saying that US' Government bond's AAA credit rating is at risk as the effectiveness of the |
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Special Reports |
Written by ActionForex.com |
May 13 09 08:26 GMT
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The BOE quarterly inflation report in May turned out to be more dovish than market expected. Governor Mervyn King stated that recovery in the nation will be slow and protracted while inflation will remain significantly below target in 2-3 years' time. GDP was estimated to have dropped by -1.9% in 1Q09, worse than anticipated in February's report. The BOE said, however, that 'there were promising signs, both in the United Kingdom and globally, that the pace of decline had begun to moderate'. Stimulus plans in the US and other countries will help soothing credit tightness but the timing and strength of recovery in economic growth is highly uncertain. |
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Special Reports |
Written by ActionForex.com |
May 07 09 16:14 GMT
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Moderating pace of recession has been the talk in the financial markets recently and all investors are looking forward to Friday's Non-Farm Payroll report for affirming this view. Economists expect the US job market to contract by another -620k in the month of Apr with unemployment rate jumping from 8.5% to 8.9%. However, recent economic data mostly point to a better reading. We'll discuss these 'leading' indicators and the possible impact of NFP to dollar below. |
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Special Reports |
Written by ActionForex.com |
May 07 09 11:58 GMT
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The ECB reduced its main refinancing rate by 25 bps to 1%, narrowing the corridors to 75 bps on both sides as the deposit rate remained unchanged at 0.25% while the marginal lending rate was lowered by 50 bps to 1.75%. While President Trichet stated that the current key ECB interest rates are 'appropriate', he refused to confirm the new rate level is the floor. |
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Special Reports |
Written by ActionForex.com |
May 06 09 16:08 GMT
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While markets are awaiting another rate cut from ECB and announcement of non-standard measures on Thursday, let's take a look at how Euro is performing recently. Indeed, the common currency has been one of the worst performers among major currencies. YTD, Euro is down around -4.5% against dollar, -8% against Sterling, -8.5% against Canadian dollar and -9.3% against Australian dollar. Euro only managed to gain around 3.3% against yen since Jan 1. Since Apr 1, Euro is nearly flat against dollar, down -4.8% against Sterling and more than -6% against Canadian dollar and Australian dollar. |
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Special Reports |
Written by ActionForex.com |
May 05 09 13:05 GMT
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At the meeting this Thursday, we expect the ECB will reduce its refinancing rate by 25 bps to 1% and keep the deposit rate unchanged at 0.25%, hence narrowing the corridor to 75 bps. While the majority of council members regarded further monetary easing is necessary, many of them were reluctant to see interest rate below 1%. Therefore, 1% will possibly be the lower bound for the policy rate and further easing will be dependent on non-standard measures. |
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Special Reports |
Written by ActionForex.com |
May 05 09 02:52 GMT
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Consistent with market expectation, RBA decided to keep cash rate unchanged at 3% today after a 25 bps reduction 4 weeks ago. Since the last meeting, there have been signs of stabilization in several countries and financial markets have improved gradually. Policymakers believed that pickup in the Chinese economy, rebounds in commodity prices, together with the economic stimulus employed so far should help contain the downturn and 'provide significant support domestic demand over the period ahead'. Therefore, the central bank would like to take a pause and observe the impacts of the monetary and fiscal stimulus, which included 425 bps cut since September 2008 and AUD 90B government spending, on the economy. |
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Special Reports |
Written by ActionForex.com |
Apr 30 09 03:51 GMT
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The central bank of New Zealand slashed its OCR by 50 bps to 2.5%. While the reduction was inline with consensus, the tone from the accompanying statement and the notion that interest rates will stay at or lower than current level until the end of 2010 was more dovish that the market anticipated. |
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