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Market Overview |
Written by ActionForex.com |
Jan 27 10 18:50 GMT |
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Dollar surges across the board as FOMC members lost unanimity on keeping borrowing costs low. Fed left rates unchanged at 0-0.25% today and in the accompanying statement, it still said that rate "are likely to warrant exceptionally low levels of the federal funds rate for an extended period." However, one member disagreed to this stance. Hoenig voted against the policy action as he believed that "economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted." |
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Market Overview |
Written by ActionForex.com |
Jan 27 10 14:08 GMT |
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While dollar continue to consolidate in range ahead of FOMC rate decision and statement today, Sterling was boosted by hawkish comments from BoE officials. BoE Sentance warned that it's hard to keep inflation on target if import and services price continue to go up and argued that the "MPC must be ready to adapt its policies to the changing economic situation over the course of the recovery." He said that he has seen, in the last six to nine months, "more positive trend emerging in both the UK economy as a whole and more specifically in the housing market".He is also confidence that there will be no "double dip" recession as long as " the international economy continues to grow healthily". The comments affirm market's view that BoE will pause the asset purchase program next week and will probably start discussion on timing for withdrawal of the stimulus. |
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Market Overview |
Written by ActionForex.com |
Jan 27 10 06:04 GMT |
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Yen strengthens broadly in Asia today as China's Securities Times reported that regulators have ordered banks to call back some of the loans they extended in January. Investors continue to be concerned with more tightening measures from China to cool inflation. Dollar is staying in tight range while crude oil and gold continue to consolidate above recent low of 73.82 and 1081.9. Markets are cautious on event risks including FOMC announcement, and US President Obama's speech. In particular, focus will be on any comments from Obama on the bank proposal which rocked the financial markets last week. |
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Market Overview |
Written by ActionForex.com |
Jan 26 10 12:48 GMT |
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Japanese yen had some jittery today but still managed to gain broadly on risk aversion. Sterling tumbled after release of worse than expected GDP data. Dollar continues to strengthen against major currencies except yen. The greenback is supported as crude oil fails to get hold of 75 level while gold is dropped back below 1090. |
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Market Overview |
Written by ActionForex.com |
Jan 26 10 05:16 GMT |
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Yen and dollar are sharply higher today as Asian stocks tumble broadly on concern of more tightening from China to guard against inflation and asset bubbles. There are talks in the market that PBoC will ask several domestic banks to raise their reserve ratio. Industrial & Commercial Bank of China is believed to have ordered its branches to stop issuing new loans for the rest of January while China Citic Bank has suspended new lending in Shanghai. Also, Bank of China's earlier than expected announcement of its fund-raising plans is viewed as a confirmation to view of regulator's determination to slow loan growth. There were also concern that US President Obama will have a three-year freeze on domestic spending in his 2011 budget that would save $250 billion by 2020. |
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Market Overview |
Written by ActionForex.com |
Jan 25 10 14:06 GMT |
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Dollar and yen continue to consolidate against major currencies as equities stabilize above last week's low. US stocks open mildly higher but so far the strength for rebound is weak. We'd like to point out that the retreat in dollar and yen today is so far very weak and the price actions remain corrective in nature. In other words, markets are merely consolidating recent gains in both currencies and further rise is still in favor after the current consolidations. Indeed, USD/CAD takes the lead today as crude oil fails to stage a meaningful rebound and and is still soft at around 74.5 level. |
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Market Overview |
Written by ActionForex.com |
Jan 25 10 06:05 GMT |
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Dollar and yen retreat mildly as the situation for Fed chairman Bernanke to win the vote for second term became more optimistic over the weekend. Senate Republican leader Mitch McConnell said in a interview that Bernanke will have "bipartisan support in the Senate". Intrade, a Web exchange for futures contracts based on political outcomes, today saw 95% odds Bernanke would be confirmed, up from 88% on Jan. 23. A senate vote on Bernanke's confirmation will be held this week and Bernanke will need to 60 votes to avoid procedural hurdle. |
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Market Overview |
Written by ActionForex.com |
Jan 23 10 18:17 GMT |
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Risk aversion was in the driving seat last week as investors rushed out from stocks and commodities on a couple of concerns. US stocks were shot down by President Obama's bank proposal to limit risk taking by banks and doubt on Bernanke's future as Fed chairman in the second term. European stocks were dragged down by US equities, deteriorating investor sentiments as well as continuous concern on Greece's fiscal health and deficit contagion spreading to other European nations. Asian stocks were pressured by worry of further tightening measures by China government to cool growth and inflation. Dollar benefited from safe haven flow and rose sharply against most major currencies. However, the Japanese yen was indeed the biggest winner last week and yen crosses were extremely heavy. |
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Market Overview |
Written by ActionForex.com |
Jan 22 10 12:37 GMT |
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Risk aversion is back after taking a brief breath in European session as major European stock indices dive. Sterling is taking the lead this time after disappointment from retail sales data. Meanwhile, Canadian dollar is following closely after crude oil fails to sustain above 76 level and weakens again. Also, Canadian retail sales is a disappointment. US president Obama's proposal to curb proprietary trading will remain the major theme in today's market. Yen crosses continue to be vulnerable to equity market weakness. Though, the greenback would probably continue to consolidate against Euro as both are pressured in yen crosses. |
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Market Overview |
Written by ActionForex.com |
Jan 22 10 06:01 GMT |
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Yen surged across the board as Obama's proposal to curb excessive risk taking by banks sent US stocks broadly lower. DOW dropped -2.01% to close at 1.0389 while S&P 500 dropped -1.89% to close at 1116.48. Asia stocks followed, on additional pressure from speculation that China will raise interest rates by 27 basis point today to cool inflation and lending. Nikkei 225 is down -2.56% to 10590 level. USD/JPY dropped through 90 level overnight and is extending recent decline from 93.74 towards next near term support at 87.36. EUR/JPY breached 126.88 key support level and is struggling that and sustained trading below this support will confirm medium term reversal. After staying in tight range for some time, GBP/JPY also had a downside breakout overnight and dropped through 145.96 support to turn short term outlook bearish for 139/40 level. |
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Market Overview |
Written by ActionForex.com |
Jan 21 10 12:38 GMT |
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Sterling dropped sharply in European session today after data showed that M4 broad money supply had its sharpest monthly fall on record. M4 fell by -1.1% in December and rose 6.4% yoy, much worse than expectation of 0.9%mom and 8.9% yoy rise. The undesirably low money growth showed the lack of response in the market in spite of BoE's GBP 200b quantitative easing program. In addition, data also showed a net GBP 15.7b of public sector net borrowing in December, which is the higher on record in that month since 1993. |
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Market Overview |
Written by ActionForex.com |
Jan 21 10 05:31 GMT |
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Japanese yen is a touch softer in Asian session today after China released solid growth data. However, the reaction is so far mild as investors are still concerned that surging inflation and risk of asset bubbles would trigger more tightening measures from the Chinese government. Dollar index breached December's high of 78.45 overnight and remains firm. New Zealand dollar failed to react to stronger than expected retail sales data overnight and remains the weakest currency this week. Euro is the second weakest and remains broadly pressured and is vulnerable to PMI disappointment later today. |
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Market Overview |
Written by ActionForex.com |
Jan 20 10 12:36 GMT |
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Euro continues trade heavily across on concern of Greece's deficit. IMF Managing Director Strass-Kahn came out and said that it's a serious problem even though he doesn't expect "fragmentation of the Eurozone". Greek Finance Minister Papaconstantinou said speculation the country would leave the eurozone is "absolutely absurd". Papaconstantinou said that Greece had no plans to ask for a loan from IMF and reaffirmed the government's commitment to put its public finances in order. However, Euro has little reaction to Papa Constantinou and extends recent fall against dollar, yen and sterling. |
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Market Overview |
Written by ActionForex.com |
Jan 20 10 05:39 GMT |
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Risk aversion drives market in Asian today on news that China has told banks to limit lending to restrict overall credit growth. Weaker than expected CPI report from New Zealand also put some pressure on both Aussie and Kiwi. Meanwhile, Euro remains the weakest currency this week and dives through 1.4217 support against dollar and is now pressing 0.8700 level against Sterling. EUR/USD's break of 1.4217 serves as an early alert that dollar is staging a broad based rebound and we'd expect Euro's weakness to be spread over to broad based dollar rally in near term if dollar index breaks 78.19 resistance. |
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Market Overview |
Written by ActionForex.com |
Jan 19 10 13:14 GMT |
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Euro was sold off after much worse then expected German ZEW. The investor confidence index dropped for the fourth consecutive months in January, and deeper than expected to 47.2 versus 50.4 in December. Eurozone ZEW economic sentiment also unexpectedly dropped to 46.4. The data suggests that German economy is still struggling to maintain momentum for recovery . ZEW president Franz said that "the way out of the recession is burdensome and long." Dollar is helped by weakness in Euro and concern of more tightening measures from China, and much stronger TIC capital flow, and rebounds strongly against most major currencies |
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Market Overview |
Written by ActionForex.com |
Jan 19 10 05:23 GMT |
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Yen rises broadly in Asia today as China, once again, guided its one-year bill higher to curb lending growth. PBoC sold the 1 year bill at 1.9264% in open market operations, up +0.08% from last week. This is the second time in a month the PBoC guided the 1-year bill yield higher after raising yield on 3 month bills and raising reserve requirements earlier. USD/JPY dives through last week's low and is now set to take on 90 level while EUR/JPY also resumes recent fall. |
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Market Overview |
Written by ActionForex.com |
Jan 18 10 05:13 GMT |
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The forex markets are generally in range with dollar giving up some of last week's gain in spite of weakness in Asian stocks and commodities. Nikkei dropped over 200 points earlier today but pared some losses as the day goes. Crude oil also dipped to as low as 77.07 initially but recovered. Gold is trading steadily between 1130/40 level. Sterling is so far the stronger currency today, lifted so solid house price report. According to Rightmove's January survey, sellers raised UK house asking prices by 0.4% mom, 4.1% yoy. Rightmove said the data showed a buoyant start to the year with housing search activity at a record high. But higher interest rates and government spending cutbacks later in the year could sap the market's upward momentum. |
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Market Overview |
Written by ActionForex.com |
Jan 16 10 14:30 GMT |
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Euro was broadly pressured last week on growing concern of Greece's large deficits and doubts over its sovereign creditworthiness, in particular after ECB Trichet made it clear that there will not be any special treatment to a signal member of the Eurozone. Yen rose against most major currencies on risk aversion on as China stepped up its measures to cool lending. Sterling, on the other hand, was supported by speculations that BoE will let the asset purchase program expire in February. Dollar was initially pressured by risk appetite, but later rebounded strongly, with the help of weakness in Euro and crude oil. |
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Market Overview |
Written by ActionForex.com |
Jan 15 10 13:21 GMT |
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Euro remains broadly pressured in early US session as concern on Greece's fiscal health continue to weigh down the common currency. Yen was lifted up earlier today on risk aversion but pares some of its gain after release of stronger than expectation manufacturing data from US. Pound remains relatively steady as supported by buying in EUR/GBP cross. Dollar is a bit firmer against commodity currencies as crude oil and gold weaken mildly. |
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