Thursday, 29 November 2012

Daily Afternoon Report 29/11/2012 | Forex Trading Analysis

The U.S. dollar was broadly lower against the other major currencies on Thursday, as hopes for headway in tackling the U.S. fiscal cliff dampened safe haven demand for the greenback ahead of U.S. data on third quarter growth later in the session.
Meanwhile, the euro hit fresh session highs against the U.S. Click Here! dollar on Thursday, after official data showed that the U.S. economy grew at a faster rate than initially estimated during the third quarter of 2012, as export figures were revised up.
As the Commerce Department said, gross domestic product expanded by 2.7% in the three months to September, up from a preliminary estimate of 2.0%, but below expectations for growth of 2.8%.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell 393,000 from 416,000 the previous week, slightly less than expectations for a decline to 390,000.
Elsewhere Europe, Italy saw borrowing costs fall sharply at an auction of five and 10-year government bonds on Thursday, with the yield on 10-year bonds down to 4.45%, a two year low and the yield on five-year bonds falling to 3.23%, also a two-year low.
In addition to that, official data showed that the German unemployment rate remained unchanged at 6.9% in November as the number of unemployed people rose by 5,000, better than expectations for an increase of 15,000.
In other news, the Bank of England warned earlier that U.K. banks may not have enough capital put aside to insulate them from future financial market shocks.
Finally, the yen remained under pressure amid expectations that upcoming elections on December 16 will result in growing political pressure on the Bank of Japan to implement more aggressive monetary easing measures.
Later Thursday, German Bundesbank President is due to speak at the Christian Democratic Union Economics Council in Berlin.

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Daily Morning Report 29/11/2012 | Forex Trading Analysis

The dollar fell against the major currencies on Thursday. President Obama told the world that “something will be done” to steer the country away from the fiscal cliff, which boosted the euro on sentiment U.S. policymakers will put politics aside and make tough tax and spending reforms needed to avoid the cliff. U.S., the Commerce Department reported earlier that new home sales fell by 0.3% to a seasonally adjusted 368,000 units in October, confounding expectations for an increase to 390,000.
Later Thursday, the U.S. is to produce revised data on third quarter gross domestic product, as well as data on pending home sales and initial jobless claims.

Wednesday, 28 November 2012

Daily Afternoon Report 28/11/2012 | Forex Trading Analysis

Greece bailout agreement, most of the responding chatter has already been exhausted, and we have been left in today’s European session without a major fundamental story to guide trading. Data showing U.S. consumer confidence at a four-year high also provided a modest boost for the dollar, though a looming budget crisis tempered optimism about the American economy and kept dollar gains in check.
The agreement to provide aid for Greece did not help the market sentiment. In fact, that agreement may fail as the International Monetary Fund did not accept its terms. The inability of the US politicians to find a compromise and avoid the fiscal cliff did not help traders’ confidence either.
The Australian dollar fell against the Japanese yen and the US dollar yesterday and remained soft today. Like its Canadian counterpart, the Aussie managed to strengthen versus the euro.

Tuesday, 27 November 2012

Daily Morning Report 28/11/2012 | Forex Trading Analysis

 In Asian trading on Wednesday dollar traded mixed to lower against the world's major global currencies on growing fears regarding actions US policymakers need to take to steer the American economy away of the ‘’fiscal cliff’’ as time is running out. EURUSD was down on fears that despite a recent deal that will free up aid to Greece, the broader European debt crisis won't abate anytime soon. Many investors seeking safe haven opted for the yen.
Yesterday Conference Board, a market research group, reported that its index of consumer confidence rose to 73.7 in November from a reading of 73.1 in October, whose figure was revised up from 72.2. In other announcement the U.S. Census Bureau reported that core durable goods orders, which exclude volatile transportation items, rose by a seasonally adjusted 1.5% in October. Total orders for durable goods were unchanged last month compared to expectations for a 0.6% decline. Standard & Poor's/Case-Shiller home price index rose at an annualized rate of 3.0% in September from a year earlier, beating expectations for a 2.9% increase.
Later, the US is to release official data on new home sales, a leading indicator of economic health, as well as government data on crude oil inventories. Also the Fed is to publish its Beige Book.

Daily Afternoon Report 27/11/2012 | Forex Trading Analysis

The Europe we saw at the beginning of today’s session was very different than the Europe of yesterday, at least from a trader’s perspective. Euro-zone leaders came to an agreement on Greece that lowered interest rates, returned some of the money made off of previous loans, and setup the release of the next 34.4 billion Euro aid tranche in December. The Euro has now erased all of the gains following the Greece announcement and is trading slight above 1.2950 against the US Dollar in currency markets.
UK gross domestic product for Q3 confirmed 1.0% economic expansion over the quarter, as the Olympics and previous quarter’s Jubilee holiday gave the UK a one-time spike in growth. Office for National Statistics’ release, output in production industries rose by only 0.9%, down from a previously estimated 1.1%. Service industry was confirmed to have seen a 1.3% rise in output.
The US Dollar rose a bit when Fed member Fisher said during a speech in Berlin that he advocates setting limits to QE as soon as the next meeting. Fisher said that the US’s biggest problem is unemployment and that inflation is under control in the US. 

Monday, 26 November 2012

Daily Morning Report 27/11/2012

 The dollar weakened against the world's major global currencies on Tuesday after IMF and EU policymakers agreed to reduce Greece's debt-reduction target by EUR40 billion to 124% of gross domestic product by 2020, an accord needed by IMF to free up aid. Greece will cut debt burdens down further to 110% by 2022, while EU and IMF policymakers agreed to trim interest rates on Greek loans, extend their maturity by 15-30 years, and grant the country a 10-year interest repayment deferral. Greece is set to avoid default.
 In Spain’s Catalonia region separatist parties won the majority of the public vote in elections held over the weekend, which tempered the euro's rally. Catalonia accounts for nearly a fifth of Spain's economic activity and provides the most tax revenue to the central government.
 Later US are to release official data on durable goods orders, a leading indicator of production, as well as industry data on house price inflation. US consumer confidence data will also be published and FED chairman is to deliver brief remarks at the National College Fed Challenge Finals, in Washington DC.

Daily Morning Report 26/11/2012 | Forex Trading Analysis

  The dollar gains against the major global currencies on Monday as investors parked in the safe-haven greenback waiting to see if Eurozone and IMF will work out a deal to help Greece. The IMF, EU finance ministers and officials from the European Central Bank are due to meet on Monday to discuss freeing up pending aid for Greece. European governments support giving Greece a two-year extension to cut the country's debt to 120% of GDP by 2022, a proposal at which the IMF has balked. Investors hope that all sides strike a deal and free up aid earmarked for Athens, though until such an announcement becomes public, the dollar will be the safe-heaven.

Thursday, 22 November 2012

Daily Morning Report 23/11/2012 | Forex Trading Analysis

EU leaders just finished first round of negotiations to agree on a budget for next year, still with not a final decision over it, as Germany PM Angela Merkel has said at the end of the meetings, a few hours ago: "I believe that the positions are quite far apart, in certain respects," Merkel told journalists, as Reuters reported earlier.
The Euro traded lower against the British Pound on Friday. Meanwhile, the Euro was up against the U.S. Dollar and down against the Japanese Yen.
The Asian market session was a very quiet one to end the week, since USD traded modestly lower.
Later Friday, Destatis is expected to release the quarterly German GDP report, while the Ifo Institute for Economic Research is expected to release the monthly German Ifo Business Climate report.
The EU Economic Summit is on its 2nd day as the Heads of state are due to meet in Brussels about Spain, Greece, and plan for deeper economic and monetary integration.
Elsewhere, the Statistics Canada is expected to release its monthly Consumer Price Index data.

Daily Afternoon Report 22/11/2012

  The euro was trading close to a three-week high against the U.S. dollar on Thursday, as improved manufacturing data from China and the euro zone and hopes for a deal on an aid payment for Greece supported demand for the single currency.
  After the data of German Flash Manufacturing PMI were released the single currency found support. Germany’s manufacturing purchasing managers’ index rose to 46.8 in November, up from 46.0 in October and better than forecasts for a reading of 45.9. Germany’s services PMI came in at 48.0, below expectations for a reading of 48.5. The euro zone’s manufacturing PMI rose to 46.2 this month from 45.4 in October, above expectations for a reading of 45.6. The euro zone’s services PMI declined to 45.7, from 46.0 in October, compared to expectations for a reading of 46.1.

  The euro was also supported after German Chancellor Angela Merkel said an agreement to unlock a delayed bailout installment for Greece was still possible when euro zone finance ministers resume talks on Monday. Today Spain successful auctioned EUR3.38 billion of three and five-year bonds at lower yields than previously, easing pressure on Madrid to seek a bailout.
The data came after a report earlier showed that China’s preliminary HSBC manufacturing PMI rose to 50.4 in November, up from a final reading of 49.5 in October. The data eased concerns over a slowdown in the world’s largest economy.
  Trade volumes are expected to remain low on Thursday, with US markets closed for the Thanksgiving holiday.

Daily Morning Report 22/11/2012 | Forex Trading

In latest news, the China HSBC Flash Manufacturing Purchasing Managers Index hit 50.4 for November, a 13-month high and up from a final October reading of 49.5. As a result, the dollar was sent dipping as investors sold the unit to invest in stocks and higher-yielding asset classes. Renewed hopes that Greece will soon tap bailout funds sent the U.S. Dollar falling as well.

In Brussels, Eurozone finance ministers and representatives from the International Monetary Fund failed to agree to disburse aid to Greece earlier this week. European governments support giving Greece a two-year extension to trim the country's debt burdens to 120% of GDP, though the IMF did not agree.

Meanwhile, the IMF opposed the two-year extension and says policymakers should stick with plans for Greece to bring debt burdens down to 120% by 2020 — and not 2022 — but has said European countries should take a hit on Greek loans, which has run into opposition in Europe.

Still, the euro gained on hopes that all sides will strike a deal at a follow-up meeting on Monday and free EUR31.5 billion earmarked for the crisis-ridden country.
Later Thursday, European Union leaders will hold the first day of a two-day summit in Brussels to discuss the debt crisis and plans for greater fiscal and monetary integration across the region, while, the Eurozone is to release preliminary data on manufacturing and service-sector activity, leading indicators of economic strength. Germany and France are also to release individual reports.
U.S. markets will be closed on Thursday for the Thanksgiving holidays.

Wednesday, 21 November 2012

Daily Afternoon Report 21/11/2012 | Forex Trading Analysis

The euro was unchanged against the U.S. dollar on Wednesday, as optimism that an agreement on a delayed bailout payment for Greece is close. The euro fell against the greenback earlier after talks between euro zone finance ministers and the International Monetary Fund concluded on Tuesday without reaching a deal on unlocking Greece’s bailout package, amid disagreements on how best to reduce the country’s debt to sustainable levels. Jean-Claude Juncker said that a deal was close, but he didn’t know when Athens would receive its next aid installment. The talks are set to continue next Monday. The pair showed reaction after the US Department of Labor announced the number of individuals filing for initial jobless benefits last week declined to a seasonally adjusted 410,000, in line with expectations. Jobless claims for the preceding week were revised up to 451,000 from a previously reported 439,000. Volumes are falling lower due to US Thanksgiving holiday on Thursday.

Tuesday, 20 November 2012

Daily Morning Report 21/11/2012 | Forex Trading Analysis

The dollar strengthened against the world's major global currencies on Wednesday as investors remained camped out in the safe-haven currency awaiting word of progress over the U.S. fiscal cliff.
Investors were on edge due to uncertainty over the U.S. fiscal cliff, a combination of expiring tax breaks and inbound spending cuts converging at the same time after the end of this year. Earlier, Federal Reserve Chairman Ben Bernanke urged the White House and Congress to find a way to steer the U.S. economy away from the cliff, which fueled demand for the dollar.
The euro continued to weaken on reaction to a Moody's decision to downgrade France's sovereign ratings to Aa1 from Aaa. Meanwhile, in Europe, eurozone policymakers opened a meeting to discuss Greece's finances, with a EUR31.5 billion tranche of aid pending approval.
Eurozone finance ministers and senior International Monetary Fund officials ended a nearly 12-hour meeting with no agreement on how to bring Greece’s debt down to a sustainable level, and they failed to approve an overdue tranche of bailout loan money for the country despite a looming threat of bankruptcy.  The failure to approve immediate payment of a long-overdue E31.5 billion loan tranche to Greece came despite official acknowledgement from Jean-Claude Juncker, who chairs the Eurozone finance ministers’ group, that Greece had met all the conditions demanded of it. The 17 Eurozone finance ministers, together with the heads of the European Central Bank, International Monetary Fund and the EU’s Economic and Monetary Affairs Commissioner, Olli Rehn, discussed a package of options to reduce Greece’s national debt to 120% of GDP by 2020 – the benchmark for sustainability upheld by the IMF.

Elsewhere in the U.S., housing starts rose 3.6% in October to a seasonally adjusted annual rate of 894,000, the biggest gain in four years. The number of building permits issued in October fell 2.7% to a seasonally adjusted 866,000. Both figures beat expectations.
In other news, the Bank of Japan met earlier and left benchmark interest rates unchanged at 0.10%. The monetary authority also made no changes to the country's JPY91 trillion asset purchasing plan, though the yen weakened to a 7-month low against the greenback on Wednesday amid building market sentiment that looser policies are on the way after December's elections.

Japanese opposition leader Shinzo Abe may become the country's next prime minister during Dec. 16 elections. Abe has said he favors more aggressive monetary stimulus measures to jolt the Japanese economy.
Later Wednesday, the U.S. will release weekly government reports on initial jobless claims and crude oil inventories.  In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.

Daily Afternoon Report 20/11/2012 | Forex Trading Analysis

After another rally spiking to 1.2830 as the NY session opened, the EURUSD eased back to the 1.2800 psychological level. Fed's Lacker is in favour that the US Congress limits the central bank's credit policy and is against linking the policy to the unemployment rate. Also, Reuters reported that Italy may veto the EU budget if it goes against the country’s interests. The pair is currently trading sideways at 1.2800 after the release of weaker US building permits and better than expected housing starts.
Later Bernanke (FED) will speak and might 

Daily Morning Report 20/11/2012 | Forex Trading Analysis

The dollar strengthened against the world's major global currencies on Tuesday after Moody's stripped France of its triple-A rating, which wiped out appetite for risk.

Moody's Investors Service earlier said it had cut French sovereign ratings to Aaa1 from Aaa, which sent investors ditching the EUR/USD and commodities to digest the news, which made the dollar the perfect safe haven.
As Moody’s published earlier, “France's long-term economic growth outlook is negatively affected by multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labour, goods and service markets.” Furthermore,  “France's fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand, and in the longer term due to the structural rigidities noted above.”
The market kept an eye on the Bank of Japan, which was holding a monetary policy meeting later Tuesday.
The Bank of Japan may hold benchmark interest rates unchanged, though upcoming elections could see opposition leader Shinzo Abe become the next Prime Minister. Abe has called for more aggressive policy action and stimulus from the Bank of Japan.
In other news, foreign direct investment in China fell for the 11th time in 12 months as labour costs rose, a slowdown threatened to drag growth to a 13-year low and a territorial dispute with Japan weighed on trade.
Later Tuesday, the U.S. is to publish official data on building permits as well as data on housing starts, while, the U.S. Fed Chairman is due to deliver a speech titled "The Economic Recovery and Economic Policy" at the Economic Club of New York. Finally today, the Eurozone of finance ministers will hold talks in Brussels to discuss financial issues in the bloc.

Monday, 19 November 2012

Daily Afternoon Report 19/11/2012 | Forex Trading Analysis

  The U.S. dollar was lower against the other major currencies on Monday, as optimism over signs of progress in resolving the U.S. fiscal cliff and hopes that Greece will soon receive its next aid installment dampened demand for the greenback. Traders were looking ahead of a meeting of the eurogroup of euro zone finance ministers on Tuesday to discuss whether Greece will receive its next tranche of financial aid. A decision on unlocking Greece’s next bailout aid has been delayed by disagreements between officials from the International Monetary Fund and Europe on how best to reduce the country’s debt to manageable levels. Concerns over the economic outlook for the euro zone persisted after Germany's central bank warned earlier that economic growth in the bloc’s largest economy is weakening as a result of the crisis in the region, as well as problems in the global economy.
  On Monday, the National Association of Realtors said that U.S. existing home sales rose by 2.1% to a seasonally adjusted 4.79 million units in October from September’s revised total of 4.69 million. September existing home sales were initially reported at 4.75 million units. Analysts had expected U.S. existing home sales to rise to 4.75 million units in October.

Daily Morning Report 19/11/2012

The dollar weakened against the world's major global currencies on Monday on budding hopes U.S. policymakers will steer the economy away from a fast-approaching fiscal cliff. If untreated, the fiscal cliff could siphon over USD600 billion out of the U.S. economy next year alone in the form of rising taxes and cuts to government spending.
Last Friday, Democratic and Republican congressional leaders met with President Barack Obama earlier to discuss ways to avoid the cliff, and both sides emerged afterwards expressing optimism for a deal, which continued to draw investors out of the safe-harbor dollar on Monday.
In other news, the euro traded steady to higher against the dollar on Monday as investors went long ahead of a Tuesday meeting of Eurozone finance ministers that could lead to fresh bailout money flowing into Greek coffers.
On Tuesday, Eurozone finance ministers will meet to discuss unlocking Greece’s next tranche of aid. Expectations that European Union policymakers and the International Monetary Fund will disburse aid to crisis-weary Athens began to build early in the session and stoked demand for higher-yielding currencies, which came at the dollar's expense.
In latest news, as released by Rightmove House Price Index, “This month sees a drop of 2.6% (-£6,407) in the asking prices of properties coming to market, following the now familiar post-credit-crunch pattern of falls in November. However, this is the least severe November fall since 2009 and still leaves prices 2% (+£4,617) ahead of where they were this time last year – the highest annual rate of increase achieved in November for five years”.
Later Monday, the U.S. is to release industry data on existing home sales, a leading indicator of economic health.

Friday, 16 November 2012

Daily Afternoon Report 16/11/2012 | Forex Trading Analysis

The U.S. dollar was broadly higher against the other major currencies on Friday, as markets were jittery ahead of highly anticipated talks between U.S. President Barack Obama and Republican lawmakers on how to tackle the "fiscal cliff", while euro zone debt concerns remained.
The EUR/USD came under pressure after the European Central Bank said in a report that the euro zone's current account surplus narrowed more-than-expected in August, declining to EUR0.8 billion from an upwardly revised EUR10.9 billion the previous month,
Earlier this morning, Bundesbank’s Weidmann said that a banking union itself can be stabilizing, yet a banking union as a solution to the crisis is wrong. Weidmann also cautioned against an over-hasty banking union.
Also this morning, Swiss National Bank’s Thomas Jordan said that the central bank will continue to apply the Franc ceiling, as a stronger currency hurts the local Swiss economy. He also said that the SNB’s FX reserves expose the bank to substantial FX risk.
Meanwhile, investors remained concerned over the looming "fiscal cliff" in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before then.
In latest news, the industrial production in the U.S. has declined in October as superstorm Sandy knocked out power in the Northeast. Output at factories, mines and utilities dropped 0.4 percent last month after a revised 0.2 percent increase in September that was smaller than previously estimated, Federal Reserve data showed today in Washington.
Furthermore, foreign investment in Canadian securities advanced to $13.9 billion in September on the strength of purchases of government bonds and corporate equities. Canadian investment in foreign securities reached a six-month high of $6.0 billion, led by the acquisition of US equities. Foreign investment in Canadian debt securities focuses on government bonds Foreign investors acquired $10.6 billion of Canadian debt securities in September, the largest such investment since May.

Thursday, 15 November 2012

Daily Afternoon Report 15/11/2012 | Forex Trading Analysis

The U.S. dollar trimmed losses against the other major currencies on Thursday, after official data showed the number of people who filed for unemployment assistance in the U.S. last week surged to the highest level since April 2011.

As the U.S. Department of Labor said, the number of individuals filing for initial jobless benefits in the week ending November 10 rose by 78,000 to a seasonally adjusted 439,000, compared to expectations for an increase of 14,000 to 375,000.
Whereas, the euro held gains against the U.S. dollar on Thursday, after the release of mixed U.S. economic data, although concerns over the euro zone debt crisis and U.S. fiscal policy remained.
In the euro zone, official data released earlier showed that the region’s economy shrank 0.1% in the third quarter, following a contraction of 0.2% in the preceding quarter.
Year-on-year, euro zone gross domestic product fell 0.6% compared to a year earlier after contracting at a rate of 0.5% in the previous quarter.

Data also showed that Spain's economy contracted by 0.3%, while Italy’s economy shrank 0.2% in the third quarter.
Furthermore, concerns over the health of triple-AAA Austria and the Netherlands intensified after data showed Austria’s economy shrank 0.1% in the three months to September, while the Dutch economy contracted by an alarming 1.1%. Economists had only expected a decline of 0.2%.
A separate report showed that consumer price inflation in the euro zone held steady at 2.5% in October, unchanged from an initial estimate and in line with expectations.

Core CPI, which excludes food, energy, alcohol, and tobacco costs held steady at 1.5%, unchanged from a preliminary estimate and matching forecasts.
In other news, the pound came under pressure after official data showed that retail sales in the U.K. fell by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% fall.
The yen also came under selling pressure after Shinzo Abe, the head of Japan's main opposition party and frontrunner in next month's election, called for aggressive monetary easing by the Bank of Japan to support growth.
In latest news, the Federal Reserve Bank of Philadelphia’s general economic index decreased to minus 10.7 in November from 5.7 a month earlier. A reading of zero is the dividing line between expansion and contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Later in the day, the speech by Federal Reserve Chairman Ben Bernanke is to be closely watched for any indications on the future possible direction of monetary policy.

Daily Morning Report 15/11/2012 | Forex Trading Analysis

In Asian trading on Thursday US dollar fell against the major currencies on weak data release earlier on Europe and the US.
In the eurozone data revealed that industrial production declined 2.5% in September, well beyond expectations for a more modest 1.9% decline. This sparked fears that the eurozone's preliminary gross domestic product rate for the third quarter will disappoint later Thursday. France, Germany and Italy are also to release individual GDP reports.
In the US, Commerce Department reported earlier that retail sales fell by a seasonally adjusted 0.3% in October, weaker than expectations for a 0.2% decline. Core retail sales, which exclude automobile sales, came in flat last month. Analysts were expecting core retail sales to rise 0.2% in October, after rising by an upwardly revised 1.2% in September. Also the Labor Department reported that producer prices fell by a seasonally adjusted 0.2% in October, compared to expectations for a 0.2% increase, after rising 1.1% in September. The core producer price index declined 0.2% in October, defying expectations for a 0.1% increase, after coming in September.
Later today the U.S. is to release reports on initial jobless claims, consumer price inflation, crude oil stockpiles and data on manufacturing activity in New York and Philadelphia.

Wednesday, 14 November 2012

Daily Afternoon Report 14/11/2012 | Forex Trading Analysis

The U.S. dollar rallied against the broadly weaker yen on Wednesday, but turned lower against the euro, as speculation that aid payments for Greece could be bundled into one large lump sum supported the single currency.
The euro remained supported after German newspaper Bild reported Tuesday that Greece could receive three bailout installments in one single payment of EUR44 billion, citing German government sources.
The euro hit session highs against the greenback earlier after Italy saw borrowing costs fall to the lowest level since October 2010 at an auction of three-year government bonds. In addition to that, the Italian 10-year government bonds advanced for a second day as borrowing costs fell as the nation sold 5 billion euros ($6.4 billion) of debt. Italy auctioned 3.5 billion euros of notes due in 2015 and a total of 1.5 billion euros of 2023 and 2029 bonds, the latter being the longest maturity the nation has sold this year.

But concerns that the economic outlook for the euro zone is worsening were underlined after official data showed that industrial production in the bloc tumbled 2.5% in September, compared to expectations for a 1.9% decline.
Meanwhile, the Bank of England’s quarterly inflation report said that it will take until the third quarter of 2014 before inflation will fall below the bank’s 2% target, nine months longer than the bank forecast in August and added that growth looked likely to remain sluggish.
As the Bank of England Governor Mervyn King said, the U.K. economy may shrink in the current quarter and its recovery will be subdued, prompting officials to keep open the option of further asset purchases to aid growth.

Earlier Wednesday, official data showed that the number of people in the U.K. claiming unemployment benefits rose by 10,100 in October, the largest increase since September 2011, but the unemployment rate ticked down to 7.8% from 7.9% in September.
In the U.S., retail sales fell in October for the first time in four months, influenced by the effects of superstorm Sandy, which hurt receipts for some and helped for others. The 0.3 percent drop followed a 1.3 percent increase in September that was larger than previously reported, Commerce Department figures showed today in Washington.
Furthermore, wholesale prices in the U.S. unexpectedly fell in October for the first time in five months as energy and vehicle costs dropped. The 0.2 percent decline in the producer price index came after a 1.1 percent increase the prior month, Labor Department figures showed today in Washington.
Later Wednesday, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.

Daily Morning Report 14/11/2012 | Forex Trading Analysis

  The dollar fell against most major global currencies on Wednesday after expectations that Greece may see bailout money flowing into the country soon. German newspaper Bild reported that Greece could receive EUR44 billion in various financial aid packages. Eurozone policymakers are scheduled to meet again to discuss Greece's finances on 20/11/2012, with a EUR31.5 billion of aid pending approval. Greece placed EUR4.06 billion in short-term government debt earlier, money that will help Athens to repay EUR5 billion in debt maturing on Friday.
  Later Wednesday, the Eurozone will release official data on industrial production, a leading indicator of economic health and the U.S. will unveil data on retail sales, producer price inflation and business inventories, and the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.

Tuesday, 13 November 2012

Daily Afternoon Report 13/11/2012 | Forex Trading Analysis

The U.S. dollar was steady against the other major currencies on Tuesday, as amid ongoing uncertainty over aid payments to Greece and concerns over the U.S. fiscal cliff.
The euro came off two-month lows against the greenback after German newspaper Bild reported that Greece could receive EUR44 billion of financial aid in one payment, citing German government sources.

Sentiment on the single currency was also boosted after Greece sold EUR4.06 billion of short term government bonds, which should help Athens to repay EUR5 billion of debts maturing on Friday.

But investors remained jittery amid concerns over a delayed bailout payment for Greece as officials from the International Monetary Fund and Europe disagreed on how best to reduce the country’s debt to manageable levels.

A decision on unlocking Greece’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.
The dollar traded slightly lower against the pound, since the pound found some support after official data showed that U.K. consumer prices rose sharply in October, as a result of increases in the cost of food, transport and university fees.
In other U.S. news, the IBD/TIPP Economic Optimism Index declined by 5.4 points, or 10%, in November, posting 48.6 vs. 54 in October. The index is 0.4 points above its 12-month average of 48.2, 4.2 points above its reading of 44.4 in December 2007 when the economy entered into the recession, and 1.3 points below its all-time average of 49.9.
Later on, the U.S. is to release official data on the federal budget balance.

Daily Morning Report 13/11/2012

The dollar rose against most major global currencies on Tuesday Asian session.
Mondays Eurogroup meeting ended with Eurozone finance ministers agreeing to extend Greece’s fiscal adjustment period by two years but deciding to put off until next week final decisions on the disbursement of the next Greek bailout tranche and the method to make the country’s debt sustainable. Once approved, the next shot of financial aid will end shorter-term solvency issues for Greece, but the country and creditors must still agree on ways to lower longer-term debt burdens, which dampened spirits.
The dollar also saw support on growing fears the U.S. risks falling into an avoidable recession in 2013. If untreated, the ‘’fiscal cliff’’ could siphon over USD600 billion out of the U.S. economy next year alone in the form of rising taxes and cuts to government spending.
Later Tuesday, the U.S. is to release official data on the federal budget balance. In Europe, the ZEW Centre for Economic Research will release its closely watched report on German economic sentiment, as well as data on sentiment in the wider Eurozone.

Monday, 12 November 2012

Daily Afternoon Report 12/11/2012

The U.S. dollar was trading in tight ranges against the other major currencies on Monday, ahead of a meeting of euro zone finance ministers in Brussels to discuss whether to release Greece’s next tranche of financial aid.
During European afternoon trade, the dollar eased back from a two-month high against the euro, since the euro found support after Greece’s government approved a budget of spending cuts and tax increases for 2013 late Sunday, just days after the parliament narrowly approved a EUR13.5 billion austerity package required to secure the country’s next installment of financial aid.
The eurogroup of finance ministers was to hold talks in Brussels later Monday, but no decision was expected to be taken ahead of an economic progress report from the troika. Speaking in Brussels ahead of the meeting, Mr. Juncker said he doesn't expect any "definitive" decisions on Greece on Monday, but he said Greece is in the process of meeting its commitments and he hopes the next tranche of financial aid will be agreed "as soon as possible."

Without the next aid installment, Greece risks default on November 16, when Athens must repay EUR5 billion of debts.
In other news, general strikes were called in Greece, Portugal, Spain and Italy on November 14th.

Meanwhile, ongoing concerns over the U.S. fiscal cliff continued to underpin demand for the dollar.
The dollar was little changed against the yen earlier in the session after official data showed that Japan’s economy contracted by 3.5% in the third quarter compared to a year earlier as exports, consumption and business investment tumbled.

The report was offset by official data from China over the weekend showing that exports increased by 11.6% from a year earlier in October, while the trade surplus widened to the largest in almost four years.

In Australia, official data showed that home loan demand rose less-than-expected in September, increasing 0.9% slightly below expectations for a 1.0% rise.
Later Monday, German Chancellor Angela Merkel was to travel to Lisbon to hold talks with Portuguese political leaders, amid public opposition to the country’s austerity cuts.

Sunday, 11 November 2012

Daily Morning Report 12/11/2012 | Forex Trading Analysis

  The dollar fell against most major global currencies on Monday amid growing concerns regarding the US ‘’fiscal cliff’’ that could send the country into a recession next year. At the end of this year, tax breaks are set to expire and at the same time cuts to government spending are scheduled.
  In Europe Greek parliament approved a budget for next year, days after approving EUR13.5 billion in spending cuts and tax hikes needed to appease creditors. European and multilateral creditors required a new budget in order for Athens to tap fresh bailout money. European finance ministers are due to meet later in Brussels on Monday, though they may spend time reviewing Greece's commitment to austerity. Market participants, however, are not expecting European Union officials to disburse immediately the EUR31.5 billion fresh rescue funding to Greece.
  In Japan, official data revealed the economy contracted by annualized 3.5% in the third quarter of this year, which weakened the yen against the USD.
  Markets in the U.S. and Canada will be closed on Monday for national holidays.

Friday, 9 November 2012

Daily Afternoon Report 09/11/2012

The U.S. dollar was broadly higher against most of its major counterparts on Friday, concerns over the handling of Greece's financial woes continued to weigh, while worries over U.S. fiscal policy also persisted.

The euro came under pressure after German Finance Minister Wolfgang Schaeuble on Thursday said next week may still be too early to make a decision on granting further aid to Athens, despite a successful vote on new austerity measures. But later on EUR/USD bounced ahead of U.S. data.

Official data showed that industrial production in France dropped 2.7% in September, more than the expected 1% decline, after a 1.9% rise the previous month, while, in Italy, industrial production tumbled 1.5% in September, compared with expectations for a 1.4% drop, after a 1.7% increase the previous month.

The dollar was also higher against the pound, since earlier in the day, the official data showed that the U.K. trade deficit narrowed more-than-expected in September, hitting GBP8.4 billion from a deficit of GBP10 billion the previous month.

The Aussie came under pressure after the Reserve Bank of Australia reduced its 2013 growth outlook to 2.75%, earlier in the day.

On the other hand, the export-linked currencies found some support after data showed that industrial production in China rose by 9.6% last month, more than the expected 9.4% increase and following a 9.2% rise in September.

Concluding, the overall market sentiment continues to be weighed by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, which could threaten U.S. and global growth.

In recent U.S. news, consumer sentiment rose to its highest level in more than five years in November as consumers felt more optimistic about employment prospects and the outlook for the overall economy, a survey released on Friday showed. The Thomson Reuters/University of Michigan preliminary reading on the overall index on consumer sentiment came in at 84.9, up from 82.6 the month before. It was above the median forecast of 83 among economists polled by Reuters.

Daily Morning Report 09/11/2012 | Forex Trading Analysis

The Australian Dollar is trying a comeback after China's CPI print came at 1.7%, when a 1.9% was the consensus, and 5.5% was the number for Oct last year. Local share markets and SP500 futures are correspondingly having some relief rally after heavy losses in last 2 days.
The Bank of England decided not to increase the asset purchase target in November, although the spending on the stimulus measure is expected to be finished by the end of the month. The asset purchase target was kept at 375 billion Pounds; the interest rate was also kept at 0.50%.
The U.S. trade deficit unexpectedly narrowed in September to its smallest gap since December 2010, as exports rose to a record high. The U.S. Department of Commerce reported that the trade deficit shrank by 5.1 percent to $41.5 billion in September from $43.8 billion in August.

French Finance Minister Moscovici said he expects France to maintain a 0.8% growth target for 2013. He also said that it’s crucial to reach an accord on the Greek debt deal. Greek PM Samaras just accomplished to pass the austerity measure in the Greek parliament; the austerity measure is meant to win the approval for the next round of bailout funds. 

Thursday, 8 November 2012

Daily Afternoon Report 08/11/2012

The U.S. dollar remained broadly higher against the other major currencies on Thursday, as concerns over U.S. fiscal policy supported dollar demand, while investors awaited the European Central Bank’s post-policy meeting press conference later in the day.

Overall market sentiment continued to be weighed by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, which could threaten U.S. and global growth, while the applications for jobless benefits fell by 8,000 to 355,000 in the week ended Nov. 3, as the Labour Department announced today.

The euro remained under pressure after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to request a bailout before the end of this year.
Later on, the euro turned even lower against the U.S. dollar on Thursday, trading close to a two-month low after European Central Bank President Mario Draghi said that economic activity in the euro area is expected to remain weak in the near future.

Speaking at a press conference following the ECB's November policy meeting, Draghi said that the bank expects the euro zone economy to remain weak "in the near term", but financial market confidence "has visibly improved on the back of our decisions as regards Outright Monetary Transactions," he added, referring to the bank's bond buying program unveiled in September.

Elsewhere, Sterling found support after the Bank of England said it was maintaining the benchmark interest rate at 0.50% and the size of its asset purchase program unchanged at GBP375 billion, following its policy-setting meeting.

In other news, official data earlier showed that the Australian economy added 10,700 jobs in October, far more than the expected 200 increase, while the unemployment rate remained unchanged at 5.4%, beating expectations for a rise to 5.5%. Finally, the New Zealand, government data showed that the unemployment rate jumped to 7.3% in the third quarter, up from 6.8% in the previous quarter and a 13-year high.

Wednesday, 7 November 2012

Daily Morning Report 08/11/2012

The New Zealand Dollar traded sharply lower versus its major counterparts as disappointing employment data came across the newswires prompting Forex traders to unwind their high yielding positions in the kiwi on speculation the RBNZ may issue a rate reduction effectively diminishing the currencies most attractive feature. The unemployment rate in New Zealand increased to 7.3 percent in the third quarter up from 6.8 percent in the second quarter while the participation rate remained at 68.4 percent.
Greek lawmakers approved a multibillion-euro austerity package early Thursday in an effort to win more bailout funds, but the measures also threaten to deepen the country's brutal recession and destabilize the country's fragile three-party coalition government. Greece's parliament must also approve a troika-approved 2013 national budget in a separate vote set for Sunday.
in Japan machine orders fell by 4.3 percent in September marking the second consecutive month of fading industrial activity while the trade deficit narrowed to -471.3 billion yen in September down from -644.5 billion the prior month.
The Australian Dollar found support as the Aussie economy added 10,700 new jobs in October, but failed to drag the unemployment rate down from 5.4 percent. 18,700 workers found full time work where 8,000 part timers lost their pay.

Tuesday, 6 November 2012

Daily Morning Report 07/11/2012 | Forex Trading Analysis

The EUR/USD rallied back above the 1.2800 as the market trades back and forth in a extensive range today ahead of the US Presidential election results due and the Greek austerity bill that goes for a vote at Parliament. 
The British pound strengthened on early Wednesday and rose to fresh highs above 1.6000 versus the dollar as investors sentiment improved. The National Institute of Economic and Social Research in the UK released the October estimate of the country's GDP taking in account the last three months, pointing at 0.5% growth. The September figure was revised higher, from 0.8% to 1.0%.
Obama wining the overall election for US presidency has become a bit clearer as he's currently taking over the lead. The Obama re-election as US President means that Bernanke would stay as visible head for the FED, and markets are interpreting this is good news for bonds and gold, as the FED will continue the easing programs, and inflation will keep afloat.

Daily Afternoon Report 06/11/2012 | Forex Trading Analysis

The U.S. dollar was trading in a narrow range against most of the other major currencies on Tuesday, as investors remained cautious ahead of the start of voting in the U.S. presidential elections, with opinion polls pointing to a tight race between incumbent President Barack Obama and Republican contender Mitt Romney.

The single currency remained under pressure ahead of Wednesday’s parliamentary vote in Greece on new austerity measures needed for Athens to secure its next instalment of international aid.

In the U.K., official data showed that manufacturing production inched up by 0.1% in September, missing expectations for a 0.3% increase, while industrial production declined 1.7%, compared to expectations for a 0.6% drop. Furthermore, hopes the economy is on the road to recovery have been dampened by figures showing retail sales stalled last month and growth in Britain's services sector almost ground to a standstill.

The weak data reinforced concerns that the U.K. economic recovery will falter towards the end of the year, after data last month showed that the economy exited a recession in the third quarter.
Earlier Tuesday, German factory orders fell the most in a year in September as Europe’s sovereign debt crisis and slowing economic growth prompted companies to reduce investment. Orders, adjusted for seasonal swings and inflation, slumped 3.3 percent from August, when they dropped a revised 0.8 percent, the Economy Ministry in Berlin said today. That’s the second straight drop and the biggest since September 2011.

Daily Morning Report 06/11/2012

The United Kingdom services activity increased at the slowest pace since a temporary decline in activity nearly two years ago according to forex news.
The UK economy expanded 1.0% in the third quarter following three quarters of decline. Employment in the services industry decreased for the second month in a row in October. Expansion of new orders slowed a bit during the month, but still remained solid.
The United States will go to the polls today in the big Election Day between two big contenders. Barack Obama leads with a small difference, and Mitt Romney, who three months ago had no chance to victory. Market is trading in coma right now waiting for results. The non-manufacturing PMI released by ISM fell from 55.1 to 54.2 in October, declining more than expected.
The Australian dollar jumped more than half a cent after the RBA announced it would leave official interest rates unchanged at 3.25 per cent. Despite the RBA didn't cut today, the monetary statement still retains a mild dovish rhetoric, suggesting that the easing campaign is not yet over. 

Sunday, 4 November 2012

Daily Morning Report 05/11/2012

The Australian Dollar traded slightly higher as Australia’s trade deficit widened for the fifth consecutive month highlighted by flagging exports to all three of its largest trading partners: China, Japan and the U.S.
The Australian Bureau of Statistics reported the flow of goods declined to China by -4 %, Japan by -13% and the U.S. by -21% in September which should continue to be cause for concern by central bankers as an elevated exchange rate and global slowing were recently noted as the biggest headwinds facing the Aussie economy.
US non-farm payrolls on Friday night surpassed pundits expectations of 125,000 with an increase of 171,000 in October US stocks closed lower having been in the red for most of the day. Crude oil and Gold also were sharply lower as the US dollars strength reinforced the selling pressure on them and in turn on US equities tied to energy.

Friday, 2 November 2012

Daily Afternoon Report 02/11/2012

The October US labour market added impressive 171k non-farm jobs versus an expected 125k in the final employment report before the November elections. The US dollar gained sharply against all major counterparts, especially the Japanese Yen and gold as signs of an improving economy start to erode expectations for more incentives from the Federal Reserve. 
October’s PMI for manufacturing in the Euro-zone marked the fifteenth consecutive month of decline in sector activity. However, the 45.4 PMI outcomes were better than a previous estimate of 45.3, but that did not prevent the Euro from falling on the report.
The only other news in the session was out of China, where the PBOC released its quarterly monetary report. The PBOC said the economy is likely to keep stable with relatively fast growth, despite the fact that they see a slowing pace of global economic recovery.

Daily Morning Report 02/11/2012

The Dollar traded slightly higher across the board during Asia-Pacific session as it touched 3-day highs in USD index at 80.14 in an intraday double high, last at 80.09, just where it was 2 months ago. USD has been stronger since previous Asia-Pacific open yesterday against Pound, Euro, Swiss Franc, and specially Yen, while it's been weaker against the commodity currencies such as Aussie or Kiwi.
The U.S. economic damages inflicted by Hurricane Sandy could reach $50 billion, according to new estimates that are more than double a previous forecast. Some economists warned on Thursday that the storm could shave a half percentage point off the nation’s economic growth in the current quarter.
In other news, there have been no surprises in the Bank of Japan Monetary policy minutes from Oct4/5, with members insisting that Japan's economy faces the critical challenge of overcoming deflation.

As the statement reads, "this challenge will be met through efforts by a wide range of economic agents to strengthen the economy's growth potential and support from the financial side. It will proceed with the monetary easing in a continuous manner by steadily increasing the amount outstanding of the Asset Purchase Program." "The Bank continues to conduct monetary policy in an appropriate manner. The Bank will also do its utmost to ensure the stability of Japan's financial system, while giving particular attention to developments in global financial market" the statement adds.
Elsewhere, Australia’s Producer Price Index remains at 1.1% in 3Q, while New Zealand’s commodity prices rose for the third straight month in October, led by gains in wool and dairy products while aluminium fell. The ANZ Commodity Price Index increased 1.3% last month, with 12 commodity prices gaining two declining and three unchanged.

Thursday, 1 November 2012

Daily Afternoon Report 01/11/2012

Euro remains uncertain with doubts still looming about the future of Greece and Spain, the British Pound has still managed to find its way higher following positive statements and releases about the UK. The Euro has dropped over the course of the European session, possibly because of a report that Spain will continue its ban on short selling or maybe because of general pessimism felt in forex news about the Euro over the past few days.
Euro-zone unemployment was also reported today at 11.6% in September, slightly higher than expectations for 11.5% and higher than August’s revised 11.5% unemployment rate. The unemployment is significantly higher than the 10.3% rate in September of 2011, as the Euro debt crisis has placed immense pressure on the Euro-zone economy. The total amount of people looking for work in the Euro-zone now stands at 18.49 million. Germany reported a 5.4% unemployment rate, while Spain had the worst rate of unemployment at 25.8%.
A drop in UK manufacturing has accelerated at a faster pace according to the Purchasing Managers’ Index by Markit Economics. The PMI for manufacturing for October was reported at 47.5, lower than the expected 48 index result and lower than September’s revised 48.1 PMI. A PMI below 50 indicates a drop in manufacturing activity, and October marks the sixth straight month of negative activity.

Daily Morning Report 01/11/2012

The dollar traded steady to lower against most major currencies after Chinese factory data beat expectations.
China’s manufacturing expanded for the first time in three months in October, adding to signs growth in the world’s second-biggest economy is rebounding after a seven-quarter slowdown. The Purchasing Managers’ Index rose to 50.2 in October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing.
China's economy is finally regaining traction, official and private sector factory surveys showed on Thursday, although the recovery remains sluggish with the latter recording its 12th straight month of slowing growth. Evidence is mounting that the economy revived in October after domestic credit curbs and poor demand from overseas markets pushed economic growth in the third quarter to its weakest rate since the depths of the global financial crisis.
Elsewhere, Eurozone finance ministers are mulling giving Greece more time to meet deficit-reduction targets, and hopes Greece will be granted an extension sent the euro and other higher-yielding assets rising against the dollar earlier. The euro also saw support from Spanish Prime Minister Mariano Rajoy, who said he would not rule out asking for a bailout.
Later Thursday, the U.S. will release its weekly government report on initial jobless claims, as well as official data on nonfarm productivity and labor costs, important inflationary indicators, while the Institute of Supply Management is to publish data on U.S. manufacturing activity.
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