|
Weekly Forex Fundamentals |
Written by Forex.com |
Jul 03 09 20:25 GMT |
|
|
We got some mixed news out of China this past week with regards to the US dollar's reserve status and the potential for it to be discussed at the upcoming G-8 Summit on July 8-10. On Wednesday we saw headlines that China has asked the group of eight to discuss potential reserve alternatives to the USD. China and Russia have been the most outspoken in terms of calling for an IMF-backed super-sovereign reserve currency. These comments were promptly denied one day later when China announced that they do not plan any near-term adjustments to their reserve portfolio. The comments sent the buck for a ride, mainly through EUR/USD - the most liquid vehicle when one wants to voice an opinion about the greenback. EUR/USD promptly squeezed up to the week's highs just above the 1.42 mark only to dip back towards the 1.40 area one day later. Thus making it clear that the market's sensitivity to any commentary regarding the USD losing its prominent reserve status remains at an all-time high. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Danske Bank |
Jul 03 09 20:23 GMT |
|
|
The data picture over the past week was a bit of a mixed bag and overall disappointed markets. Equity markets slipped and bond yields fell further. Although there were no very negative numbers and the trend is still for improvement, most data were slightly below consensus expectations and market doubts about the sustainability of the recovery have been reinforced. US non-farm payrolls fell 467k in June vs. expectations of a decline of 365k. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Wachovia Corporation |
Jul 03 09 20:11 GMT |
|
|
This week's economic numbers may have finally brought an end to the green shoot rally. There is only so far “less bad” economic news can take us. A sustainable recovery will require things to actually get better. This week's big disappointment was the weaker employment data. Nonfarm payrolls declined by a larger than expected 467,000 jobs and the unemployment rate rose 0.1 percentage point to 9.5 percent. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Jul 03 09 20:01 GMT |
|
|
In this holiday shortened week where barbeques and fireworks will no doubt light up the American landscape come Saturday, the economic data refused to take any part in festive preparations. This is despite an understandably eager media and public who continue to await signs of real recovery, akin to kids in the back seat of the car on a road trip continually querying if we’ve arrived. As we enter the second half of 2009, a time during which many economists expect a muted recovery to start taking hold, the question has become a focal point of discussions. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Westpac Institutional Bank |
Jul 03 09 18:33 GMT |
|
|
The Reserve Bank board next meets next Tuesday. There is little chance the Board will decide to change rates next week. In our note last week we pointed out that the two key factors (apart from an unexpected global meltdown) that will influence the Board from this point will be the unemployment rate and the need to support business lending. The Bank is unlikely to watch a sharp increase in the unemployment rate (we expect our forecast move from 5.7% to 7.5% will be enough) without action particularly given the relative level of our rates. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jul 03 09 18:17 GMT |
|
|
Range-trading continues to be the dominant theme in foreign exchange, with volatility gradually falling further in G-10 currencies. GBP/EUR is closing today at €1.1670, firmly within the 3-week range of €1.16-€1.19. Weaker economic data (Q1 GDP growth and current account reports) had helped to trigger a move below €1.16 earlier in the week, however this was short-lived with the euro unable to sustain the gain. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jul 03 09 18:11 GMT |
|
|
The prevailing mood in the equity markets was favourable, and against this backdrop, EUR-USD strengthened somewhat up until the middle of the week. The single currency was mostly above 1.40, and even touched 1.42 temporarily. The movement was volatile, however. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Mizuho Corporate Bank |
Jul 03 09 18:07 GMT |
|
|
Interbank and Treasury yields are mostly lower again as we ponder what comes next. Spreads between Libor and Official Interest rates are at their narrowest since the crisis erupted on our radars, pushing some money market futures contracts to new record highs (Eurodollar 99.4625 and Euribor 99.050). This dragged two-year benchmark yields down, German ones dropped 60 basis points to 1.215% over the last four weeks, US ones -50 bp to 0.9775%, and Japanese to 0.250% their lowest since December 2005. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 30 09 11:11 GMT |
|
|
Markets will be watching this week's economic releases closely for signs that a nascent recovery is taking hold. After last week's relatively light economic calendar, the pace picks up with a number of key releases and events, culminating in the ECB council meeting and the US Employment Report on Thursday. Before then, various forward-looking business surveys are due for release, along with Eurozone inflation and money supply figures, and the US consumer confidence report. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by FX Solutions |
Jun 29 09 15:21 GMT |
|
|
In the past three weeks there have been several indications that the Federal Reserve is reconsidering the extent and perhaps necessity of its extraordinary liquidity provisions to the Treasury market. How far have the chairman and governors pulled back from their quantitative easing policy? |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by eToro |
Jun 29 09 12:17 GMT |
|
|
News headlines flooded the markets last week with a series of events, releasing a closely watched interest rate decision and housing data, among other market movers. The major event of the week was the Fed's interest rate decision, presenting a no-change status, barely affecting the major currency pairs and the stock indices. The S&P500 closed the week barely unchanged, with a loss of 0.25%, presenting a doji like candlestick. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 29 09 09:50 GMT |
|
|
Non-farm payrolls fell by 345k in May - still historically high, but much better than in the first four months, when the decline averaged 645k. As the graph shows, temporary job losses were significantly lower in May, which indicates that the pace of job cuts could have slowed again. We predict that non-farm payrolls will have fallen by 325k in June. The unemployment rate is likely to have increased to at least 9.6%, and average hourly earnings might only have gone up by 0.1% mom again. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 29 09 09:44 GMT |
|
|
The ECB Council will hold its regular monthly meeting on Thursday. The interest rate decision will be announced at 13:45hrs, the press conference is scheduled for 14:30hrs. We expect the refinancing rate to be left unchanged at 1.0%. The statement is unlikely to differ much from the one in June. The ECB is expected to reiterate that risks to the economic outlook are balanced, thus signaling that it has no intention of changing its policy stance at the moment. However, it will be interesting to learn how the ECB evaluates the results of the one year repo operation. We would expect it to downplay the significance of the massive liquidity injection as being only temporary. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Forex.com |
Jun 27 09 16:33 GMT |
|
|
The month of June has been characterized by a seemingly endless consolidation in both USD-currency pairs and in many cross-currency pairs as well, not to mention stocks and other major asset markets. Looking back, it's perhaps easiest to view the consolidation in terms of investor risk appetites and the stabilization in the global downturn. Since March, generally less-worse data has seen risk appetites improve, leading to substantial gains in risky assets like stocks, commodities, and, in FX, higher JPY-crosses and a weaker USD. In June, the optimism over the near-term outlook gave way to the realism that major economies were simply stabilizing at extremely low levels and that any recovery or outright growth was months away and likely to be anemic at best. And it was that tug-of-war between optimists and realists that played out in the form of the choppy consolidating price action we have experienced. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Wachovia Corporation |
Jun 27 09 16:27 GMT |
|
|
We have often noted the road to recovery would be long and arduous. The most recent batch of economic data supports that notion. Better news in one area continues to be tempered by setbacks elsewhere. This week's pleasant surprise was durable goods orders, which showed more strength and breadth than expected. That gain was offset by mixed data on home sales and a rebound in unemployment claims. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Jun 27 09 16:13 GMT |
|
|
U.S. economic data continued to show signs of tentative stabilization this week; but, with debate now focusing on the future exit strategy, markets should heed that whatever current buoyancy exists owes strongly to fiscal and monetary intervention. The training wheels, provided by monetary pump priming, ultimately need to come off, and markets have upped pressure on central banks to deliver coherent strategies for withdrawal of monetary stimulus. However, risks of a renewed period of weakness are ignored one's at peril. Prudence requires a careful balance between "not too soon nor too late". With the World Bank's economic outlook on Monday observing significant weakness in emerging markets, markets got some cold water poured on their hopes of a quicker-than-expected global recovery (though, as we point out in a commentary, the estimates are not that different from the IMF's earlier view when calculated with comparable weights). |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Danske Bank |
Jun 27 09 16:05 GMT |
|
|
After two years of constant downward revisions, OECD this week delivered its first upward revision of global growth in its Economic Outlook (see table). For the US, China and Japan, growth was revised up by around one percentage point, while Euroland growth was on balance unchanged as growth was seen as being weaker in 2009 but slightly stronger in 2010. The revision comes after several months in which data have been stronger than expected and the financial crisis has eased. OECD also changed its risk assessment as it now sees risks as balanced in contrast with the previous risk assessment where risks were seen to be strongly on the downside. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 27 09 15:37 GMT |
|
|
Momentum in the pound has faded somewhat this week amid mixed economic data and Bank of England Governor King's concerns over the magnitude of the UK fiscal deficit. After recording a high on Monday (€1.1904), £/€ pulled back to close the week at 1.1738. £/$ traded the week in the 1.6210-1.6602 range, closing today at 1.6505. Volatility levels continue to gradually fall in foreign exchange as the USD remains stable and range-bound. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Westpac Institutional Bank |
Jun 27 09 15:31 GMT |
|
|
We have revised our forecast for the employment profile and accordingly slightly adjusted our interest rate view. While we still expect that the RBA will keep rates on hold through 2010 we no longer expect that 2% will be the low point in the cycle for the cash rate. We have raised that low point to 2.5%, now expecting the RBA to limit its rate cuts to 2 x 25 bp's cuts over the course of the remainder of 2009. These cuts are likely to be spaced with 2/3 month gaps. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 27 09 15:16 GMT |
|
|
During the course of the week, the dollar has retreated somewhat. EUR-USD rose to about 1.41, whereas, towards the end of the week, USD-JPY was around 95.50. The Swiss franc did not follow this movement, however, nor did some commodity-linked currencies such as the Norwegian krone, the Canadian and Australian dollar. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Mizuho Corporate Bank |
Jun 27 09 15:13 GMT |
|
|
Investors and fund managers will be wondering where to allocate assets as we enter Q3 and H2 2009. Because of Friday's US holiday, so US Non-farm Payrolls are released Thursday, and a numbers-packed week might trigger some sharp moves over the next fortnight. We still feel that top-quality long-dated fixed income real yields are generous and might have a lot further to drop over the long term, flattening yield curves. Stock markets are likely to drift slowly. Generalised US dollar weakness will continue led by AUD and GBP, possibly with a big spurt at the start of the month. Commodities will follow. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Trade The News |
Jun 26 09 21:41 GMT |
|
|
In currency trading, the reserve currency issue continued to be the main factor in the USD price action. The dollar tried to establish a stable, consolidating tone early in the week, but took a softer tone as word of reserve management adjustments circulated among dealing desks. Assistant Treasury Secretary Karthik Ramanathan addressed the topic of higher bond yields, noting that the Treasury "did not read much" into rising yields given that issuance was "completely blind" to quantitative easing and that higher yields might not only be due to greater supply. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by FX Solutions |
Jun 22 09 14:18 GMT |
|
|
After a few months out of the currency spotlight the Federal Reserve will once again be the focus for traders when the Federal Reserve Open Market Committee (FOMC) meets this coming Wednesday and Thursday. This time it will not be the Fed Funds target rate, the central bank's chief historical policy tool, that will be the locus of interest but the several special programs that the Fed has used to stem the financial crisis, in particular the quantitative easing attempt to cap Treasury interest rates. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 22 09 10:16 GMT |
|
|
The improvement in economic activity data in recent weeks has raised market speculation about the potential 'exit strategies' central banks may employ from the various initiatives undertaken to tackle the financial crisis. However, with considerable uncertainty still overshadowing prospects for future economic growth and inflation, we believe such considerations may be premature at this time. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 22 09 10:13 GMT |
|
|
Recent developments have raised concerns that the UK could be facing an upsurge in price inflation over the coming years. Since early March, oil prices have doubled; the economy has found a firmer footing; and broad measures of inflation expectations have shifted higher. The rise in some of the forward-looking inflation indicators has occurred as the Bank of England has embarked on an unprecedented loosening in UK monetary policy. Having cut interest rates to a record low, the Bank has turned to the unorthodox policy of quantitative easing (QE) in an effort to stimulate lending and demand through expanding money supply. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 22 09 10:05 GMT |
|
|
Although the FOMC said in its previous two statements that economic conditions were likely to warrant exceptionally low levels of the federal funds rate for an extended period, market participants are currently seeing about a 50% chance of a preemptive rate hike before the end of the year. The improvement in several indicators and the slowdown in job cuts combined with the very expansive monetary policy stance appear to have raised inflation fears. But the FOMC will probably try to dampen these expectations by stating that rising unemployment and a record amount of idle production capacity will keep the recovery muted and inflation low. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 22 09 09:49 GMT |
|
|
The preliminary results for national German CPI for June are due to be released on Friday at the latest. We expect German consumer prices to have gone up by 0.3 % month-on-month; the annual rate would then increase slightly to 0.1 %. The monthly inflation will have been mainly due to significant price increases for gasoline and heating oil. These products are likely to have pushed inflation up by about 0.3 percentage points. Increasing gas prices and decreasing electricity prices could have more or less cancelled each other out. Prices for package tours and accommodation services could have had a slightly positive impact on monthly inflation. On the other hand, clothing is likely to have had a dampening effect and food prices could have fallen further. As from July, year-on-year inflation is expected to fall into negative territory for some months. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Forex.com |
Jun 20 09 17:21 GMT |
|
|
Major financial markets spent another week knocking around in seemingly impenetrable ranges, and FX was no exception. EUR/USD opened the week by testing the pivotal 1.3750 level, only to spend the rest of the week recovering higher, but importantly failed to sustain a break of 1.4000 on several occasions. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Wachovia Corporation |
Jun 20 09 17:18 GMT |
|
|
Worries about inflation have clearly gotten ahead of themselves. While we believe inflation is a monetary phenomenon over the long run, lags between stronger money growth and rising inflation are long and variable. The Fed still has plenty of time to drain the liquidity it provided in the aftermath of the financial crisis before a troublesome inflation takes hold. Bond investors will likely remain edgy until such a plan materializes, as they should. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Danske Bank |
Jun 20 09 17:08 GMT |
|
|
During the past week we have seen a correction to the recent trend in most financial markets: after rising for some time, we saw declines in equity prices, bond yields and commodity prices. Credit spreads have widened somewhat. A general decline in risk appetite set in. One interpretation is that doubts are setting in over the strength of the recovery. This is probably due to the recent new headwinds of rising oil prices and bond yields which, as we wrote last week, could make it difficult for the recovery to continue into next year when all the stimuli fade and the inventory correction is over. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Jun 20 09 16:55 GMT |
|
|
With economic data continuing to support the case that the worst of the economic recession is in the rear-view mirror, attention has turned increasingly to the shape of recovery and lessons learned from the economic crisis. Perhaps one of the hardest lessons learned by investors and governments alike is that blind faith in the assumption that markets are self-regulating can have devastating results. While actions taken since the height of the crisis in late 2008 have helped move us away from the abyss, policy makers have now turned their attention to adding supports to the guard rails and avoiding the plunge in the future. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 20 09 16:45 GMT |
|
|
The pound has made limited further headway this week following mixed UK economic data. After strengthening to a fresh high (of €1.1873) for 2009, £/€ has pulled back to close at 1.1810. £/$ has failed to push significantly higher this week, instead consolidating last week's gains, closing today at 1.6450. Volatility levels have gradually fallen over the course of the week, which is reflected in narrower trading ranges observed in £/$ and £/€. AUD/USD and NZD/USD are relatively unchanged on the week, reflecting the small movement in commodity prices over the same period. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Westpac Institutional Bank |
Jun 20 09 16:39 GMT |
|
|
The 191st Westpac-ACCI Survey of Industrial Trends was closed in the week ending 12 June, amidst a backdrop of encouraging 'green shoots' of a global recovery, relative resilience in the Australian economy with significant fiscal policy support, improved housing indicators and a reduction in the perceived difficulty of obtaining finance. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Trade The News |
Jun 20 09 07:22 GMT |
|
|
In currencies, the price action was choppy but muted as EUR/USD bounced around in a narrow 250-pip range. Persistent reserve currency comments aimed at the dollar made USD forex trading a game of "headline roulette" as government officials continued to express their opinions on the topic. There were plenty of cautious comments on economic conditions from officials and central bankers throughout the week, but their impact paled in comparison to the EU Summit draft statement on Friday stating the Euro Zone economy was on course for a "sustainable recovery" and reports that the IMF would raise its 2010 global growth forecast to +2.4% from +1.7% prior. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 19 09 21:31 GMT |
|
|
In the course of the last two weeks, the US currency has firmed somewhat. EUR-USD was still around 1.42 in the first week in June. After having fallen below 1.38 for a time, the euro is now back at around 1.39 again. Like the euro, most major currencies lost ground against the dollar, particularly the Swedish krona, the zloty and the Canadian dollar. USD-JPY climbed over 98 temporarily, but relinquished its gains at the beginning of the week. It is currently around 96, as it was in the first week in June. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Mizuho Corporate Bank |
Jun 19 09 21:28 GMT |
|
|
Thin summer markets coinciding with the end of Q2 2009 could lead to some liquidation and sharper intra-day price swings. We also feel that many will be in no hurry to allocate assets as there is still massive uncertainty and not especially attractive prices in many instruments. We still feel that top-quality long-dated fixed income real yields are generous and should eventually drop, so that yield curves flatten. Stock markets look tired if not precarious and are therefore likely to drift slowly. Generalised US dollar weakness will continue led by AUD and GBP, if not next week then next month. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by FX Solutions |
Jun 16 09 14:47 GMT |
|
|
In a normal world these two charts would be complementary. As interest rates on the 10-year Treasuries rise one could reasonably expect the Dollar Index to follow. But ever since March18th when the Federal Reserve announced its $300 billion quantitative easing policy, the divergence has been pronounced.—the higher Treasury rates climb the lower the Dollar Index sinks. Has the natural order of the currency markets been upended? |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 15 09 18:27 GMT |
|
|
The sharp fall in energy prices since last year will be reflected in a marked improvement in inflation data in the UK, US and euro zone this week. Although crude oil prices have surged above $70 recently, they still remain well below last year's heady levels. We forecast the UK headline consumer price measure eased below the 2% official target in May for the first time since September 2007, while its US counterpart dropped further into negative territory. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 15 09 18:24 GMT |
|
|
Whilst the focus in global financial markets is, rightly, on when the recession will end, and on speculating on whether the proliferating signs of economic recovery are sustainable or not, there is another less observable trend that has not been changed by the recession: this is the higher share of global economic output taken by the emerging markets. Chart a highlights this trend. We have calculated the share of world economic output accounted for by the top ten developed economies (ranked according to their share of gdp) over the last 28 years and compared that group with the top ten emerging economies, also ranked by gdp. The results are clear: the share of the developed economies has fallen sharply, whilst the share of the emerging economies has, not surprisingly, risen equally sharply. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by MG Financial Group |
Jun 15 09 18:16 GMT |
|
|
Global markets are waiting for the Federal Reserve meeting of next week. Rates should remain on hold for the coming months and eventually rise along with the economic growth. In the mean time, the U.S. dollar's rebound might continue over the short term. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 15 09 09:54 GMT |
|
|
Despite the global recession, oil prices have been rising markedly since February. They were about 18% mom higher in mid-May, and we thus predict that producer prices will have increased by 0.7% mom in May. However, as oil prices went up even more sharply in the previous year, the yearly rate will probably drop from -3.7% to -4.3%. Core producer prices barely rose in the previous two months, and they could have increased again in May by a mere 0.1% mom. The ISM prices component rose from 32.0 to 43.5, but is still indicating falling prices. Core PPI's yearly rate is likely to have remained elevated at +3.2%, but the 3- month annualised change would only amount to about 1.0%. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by BHF-BANK |
Jun 14 09 09:32 GMT |
|
|
The German ZEW economic sentiment will probably have risen again in June, but not as sharply as the previous month. The ifo business expectations and the US ISM manufacturing index have both improved. German yield spreads have widened somewhat, as short-term interest rates have stabilised and long-term rates have gone up. The DAX has continued to recover too. On the other hand, the euro has appreciated and crude oil prices have increased. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Forex.com |
Jun 12 09 22:29 GMT |
|
|
The greenback largely consolidated this past week in a highly volatile fashion as optimism over the prospects of an imminent economic recovery wavered. Stocks remained elevated, but could not make any significant upside progress, while commodities also gained, but showed signs of stalling late in the week. In a paradox, the very optimism that led speculators to ramp up commodity purchases may end up hampering the recovery, as higher food and energy prices are seen to be a major headwind for any consumer-led recovery. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Wachovia Corporation |
Jun 12 09 22:27 GMT |
|
|
Financial markets are acting as if the recession is ending and recent economic data tend to support that notion. We are now projecting that the recession will end this summer. The strength and durability of the recovery remain very much in question, however, and the economy is expected to have a tough time gaining momentum. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Danske Bank |
Jun 12 09 22:02 GMT |
|
|
The US retail sales figures surprised on the upside in May, easing consumer concerns a bit after disappointing April sales. The underlying trend is not strong, though, but at least we continue to see signs of stabilisation in demand (See Flash Comment). This should continue in the coming months as tax cuts will have a further positive effect on consumer demand. Jobless claims also improved further during the past week adding support to the thesis that the labour market is slowly starting to improve. Jobless claims fell further to 601k from 625k last week after having peaked at 674k in late March. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Jun 12 09 21:47 GMT |
|
|
U.S. data this week continued to support the story of a slowing pace of contraction. The Beige Book, the Fed's anecdotal survey of economic conditions, qualitatively confirmed this picture – even noting some actual improvements in certain districts. Eyes are now turning to the shape of recovery and the appropriate exit strategies. In a speech Wednesday, Richmond Fed President Lackner noted “inflation risks that are quite legitimate” and admitted the danger of not shrinking the Fed balance sheet enough when recovery emerges to stave off the inflation threat. However, the U.S. economy is still losing ground and this week's news on retail sales and international trade show the fragility of the positive “second derivative”. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Trade The News |
Jun 12 09 21:35 GMT |
|
|
The reserve currency issue has become a primary focus ahead of the G8 finance ministers' meeting this weekend in Italy and the BRIC (Brazil, Russia, India and China) summit next Tuesday. The four BRIC nations are expected to discuss alternatives to holding dollars in reserves, a theme that Russia hammered away at on numerous occasions this week. Russian Central Bank First Deputy Ulyukayev commented that Russia was mulling plans to reduce its share of reserves held in US Treasuries in exchange for IMF bonds. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Lloyds TSB |
Jun 12 09 21:32 GMT |
|
|
The pound was buoyed by data this week suggesting the UK could emerge from recession as early as the current quarter. This saw £/$ briefly rally though 1.66, before ending the week 3% higher at 1.6492. The pound also rose to a six-month high against the euro, £/€ gaining 2.8% to 1.1769 at the close of the week. The US$ had another volatile week, but the dollar index rallied on Friday to close above 80. It still ended the week modestly weaker against the euro and yen, at 1.4014 and 98.30 respectively. |
|
Read more...
|
|
|
Weekly Forex Fundamentals |
Written by Westpac Institutional Bank |
Jun 12 09 21:27 GMT |
|
|
Probably the most important message was the almost unanimous conviction of the hedge funds (those that have survived of course) that 'risk seeking' trades were the way to go for the foreseeable future. The dominant catalyst is the strong conviction that the recent growth recovery in China is sustainable and will build. The view on the US was that the data had turned and was either improving or at least deteriorating at a slower pace and that steady progress could be expected, while the problems with the US financial sector had been essentially fixed. |
|
Read more...
|
|
