Acetrader-Daily Market Outlook 29-7-2010
Market Review - 28/07/2010 22:52 GMT
Dollar drops versus yen on weaker-than-expected U.S. durable goods orders
Dollar retreated to 87.63 versus the Japanese yen in Asia on Wednesday due to profit-taking after Tuesday's rally from 86.83 to 87.98 but renewed risk appetite on the back of rising Asian stock markets lifted price again and the pair rose briefly to an intra-day high of 88.12 in European morning before selling interest there from Japanese exporters capped its upside, price then dropped to 87.43 in NY morning after the release of weaker-than-expected U.S. durable goods orders, which added worries over U.S. economic outlook and later to as low as 87.25 in late NY trading session as U.S. Fed's Beige book stated that U.S. economic activity continued to increase but not robustly and some districts reported slowing economy.
U.S. new orders for durable goods fell for a straight month in June, recording their largest decline since August 2009. Durable goods orders dropped by 1.0%, much worse than the estimate of 1.0% increase.
In other news, BOJ's policy board member Hidetoshi Kamezaki expressed a cautious view and said Japan is not yet in a strong recovery led by domestic demand. He added he will not decide policy with current forex level in mind and yen rise will push down exports for short term.
The single currency rebounded from 1.2967 in Asian morning after Tuesday's sharp fall from a 10-week high of 1.3047 to 1.2952 and although euro ratcheted higher to an intra-day high of 1.3043 in European morning, it traded with volatility in U.S. session, having rebounded from 1.2974 to 1.3029 before dropping again to as low as 1.2969 in NY afternoon after the release of Fed's Beige book before staging a recovery.
Although the British pound rose from 1.5563 in Asia after Tuesday's rally from 1.5441 to 1.5600 and climbed to 1.5627 in European morning, sterling then fell briefly and sharply to an intra-day low of 1.5545 on dovish comments by BoE Governor Mervyn King, however, renewed buying interest there (especially versus the euro) limited the pair's downside somewhat and cable rose to a five-month high of 1.5638 in NY morning before easing on long liquidation, traded around 1.5580/90 in late NY session.
BoE Governor Mervyn King said in his testimony that Q2 GDP growth was encouraging but must be careful not to read too much into one number and he is not certain that U.K. recovery will be sustained. He added the central bank was focusing on the appropriate degree of stimulus, not applying brake on it.
The Australian dollar tumbled against US dollar from 0.9025 to 0.8908 after the release of Australian Q2 CPI, which came in at 0.6% q/q and 3.1% y/y, lower than the expectations of 1.0% and 3.4% respectively and raised speculation that RBA would keep its interest rate unchanged.
On Thursday, the Reserve Bank of New Zealand lifted the official cash rate by 25 basis points to 3.0%, in line with market expectations but the official statements came with a distinctly dovish tone, making the size and the timing of future rate hikes uncertain. Nzd/usd fell sharply to as low as 0.7202 after RBNZ's rate decision and statements.
Economic data to be released on Thursday include: New Zealand Trade balance (nzd), Imports, Exports, Japan Retail sales, U.K. Nationwide hse price, Germany Unemployment change, Unemployment rate, EU Economic sentiment , Consumer Confidence , Business climate, U.S. Jobless claims and Canada PPI.
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
