AceTrader-Daily Market Outlook -27-7-2011
Market Review - 26/07/2011 22:03 GMT
Dollar weakens broadly on debt limit deadlock
The greenback fell against all major currencies on Tuesday as U.S. lawmakers still could not reach a compromise on raising the U.S. debt limit and reducing the deficit. Usd/chf dropped below 0.8000 level to a fresh lifetime low of 0.7997.
U.S. President Barack Obama issued a warning that the U.S. may experience a 'deep economic crisis' if leaders failed to reach a compromise that would enable the U.S. to raise its debt ceiling and create a plan to reduce the government's borrowing, sparking selling of dollar and spurred demand for safe-haven currencies.
The single currency rallied from Asian low of 1.4358 to 1.4522 due to dollar's broad-based weakness on wrangling U.S. debt ceiling as U.S. President Barack Obama warned U.S. growing debt threatened to do 'serious' damage to its economy. Later, although euro pared some of its gain and retreated to 1.4456 after the release of U.S. house prices data (dropped by 4.51% y/y in May, the most in 18 months), the pair rebounded on cross buying of euro after the release of data on U.S. consumer confidence and new housing (59.5 in Jul and -1.0% in Jun vs forecast of 56.0 and -2.0% respectively) and climbed to 1.4526 in NY afternoon.
Earlier in Europe, euro was supported as ECB's Governing Council member Christian Noyer said 'ECB is in state of strong vigilance (after this month's interest rate increase) and ECB never pre-commits on monetary policy; we want to show that inflationary pressure from oil price won't lead to permanent price rises via second-round effect.'
Versus the Japanese yen, although the greenback fell to 77.89 in Asian morning, the pair later spiked to 78.75 in just less than one minute but the pair immediately gave up its gains and ratcheted lower to 77.97 in European morning. The usd/jpy pair then dropped again from 78.09 to a fresh 4-month low of 77.83 in NY afternoon before stabilising.
Despite cable's initial brief dip to 1.6266 near Asian open, the British pound surged due to dollar's weakness after U.S. President Obama's address and price rose to 1.6414 after the release of U.K. GDP data as UK preliminary Q2 GDP came in at +0.2% Q/Q and +0.7% Y/Y, the lowest Y/Y growth since Q1 2010. Later, although sterling retreated from 1.6422 to 1.6371 in NY morning on profit-taking, renewed buying lifted the pair again to 1.6429 in late NY session.
Data to be released on Wednesday include:
New Zealand Business Confidence, Australia CPI, China Leading Index, Industrial Profit, Germany Import price index, CPI prelim., HICP prelim., U.K. Nationwide house prices, U.K. CBI Orders, Swiss KOF indicator, U.S. Durable goods, ex. Defense, ex. Transport, Midwest manufacturing and Fed's Beige Book.
Questions and Answers
Article Tags:
www acetraderfx com
Dollar rebounds from a fresh eight-month low against yen on upbeat U.S. economic data
The single currency continued its descent this week and tumbled sharply to a 10 year-low against the yen and to a 6-month low against the greenback on speculation over the possibility of a Greece default and the resignation of European Central Bank executive board member and also its chief economist Jurgen Stark.
The single currency briefly rallied in European morning on Wednesday after German Constitutional Court rejected lawsuits aimed at blocking the country's participation in eurozone bailouts, easing worries about eurozone debt crisis.
Increasing worries about the Christian Democratic union's most beleaguered states sent the euro lower against the dollar on Monday for the fifth day straight to its lowest level since August 5.
Although dollar weakened broadly after release of worse-than-expected U.S. non-farm payrolls report as the gloomy data fuelled expectations of possible quantitative easing by the Federal Reserve at its next FOMC meeting later this month. The selloff in U.S. stocks triggered renewed risk-aversion activities and led to short-covering purchase of the greenback across the board in New York afternoon.
The Swiss franc rose against all its major counterparts on Wednesday as the Swiss National Bank has not recently signalled further intervention. Although the franc retreated as Swiss Economy Minister Johann Schneider-Ammann said it was still massively overvalued, the pair remained supportive as he also said Switzerland would have to keep living with the strong franc for some time.
The Forex currency market is a non-centralized exchange where banks, businesses, governments, investors and traders can trade currencies with one another. By "non-centralized" I mean there is no actual physical centralized exchange like the New York Stock Exchange or the Chicago Mercantile Exchange. Instead...
Forex quotes show the price of one currency evaluated in the price of the other one. The other name of the Forex quote is a currency rate at Forex market. It should also be noted that the quote is the measure for the value of other assets, such as goods and securities – bonds and stocks. Demand and supply make a strong impact on quotes formation.
The fully automated service sends an email confirmation in receipt of the amount and then processes the order. Among the reputed agencies to order foreign currency from is Pawnbroker.
Created by David Lambert, the CCI was first used as an indicator for determining reversal points in the Commodities Markets. It was then discovered to be very useful in the share and forex markets. It is based on the theory that all activities move under the influence of cycles. The Maxima (+100) and the Minima (-100) occurring at regular intervals. The CCI measures the speed of price fluxuations as determined by oscillators.
Credit card services are important to help your business increase sales. Consumers today are more comfortable than ever to pay in means other than cash. Plus, many customers don't keep a high volume of cash on hand. Credit cards allow people to pay back expenses over time.
The single currency continued its descent this week and tumbled sharply to a 10 year-low against the yen and to a 6-month low against the greenback on speculation over the possibility of a Greece default and the resignation of European Central Bank executive board member and also its chief economist Jurgen Stark.
The single currency continued its recent steep descent and tumbled on Thursday against all major currencies as ECB President Jean-Claude Trichet, whose 8-year term will end on October 31, said in ECB's monetary policy press conference that there is 'intensified downside risks' in European economy and inflation has remained elevated. Later in NY afternoon, euro extended its intra-day decline after Fed Chairman Ben Bernanke did not provide details of any new stimulus measures, however, he said 'Fe
The single currency briefly rallied in European morning on Wednesday after German Constitutional Court rejected lawsuits aimed at blocking the country's participation in eurozone bailouts, easing worries about eurozone debt crisis.
Increasing worries about the Christian Democratic union's most beleaguered states sent the euro lower against the dollar on Monday for the fifth day straight to its lowest level since August 5.
Although dollar weakened broadly after release of worse-than-expected U.S. non-farm payrolls report as the gloomy data fuelled expectations of possible quantitative easing by the Federal Reserve at its next FOMC meeting later this month. The selloff in U.S. stocks triggered renewed risk-aversion activities and led to short-covering purchase of the greenback across the board in New York afternoon.
Discuss this Article
