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. 

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.

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.