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 2^nd 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 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.

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.

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.

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.

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.

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.

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. 

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.

Daily Morning Report 31/10/2012

The dollar softened against most major currencies on Wednesday as investors sold safe-haven dollars they acquired before Sandy, a hurricane that morphed into a post-tropical giant, and continues to dump snow and rain over the northeastern U.S.

While the country continues to assess the damage, investors sold safe-harbor USD and prepped to take up other positions to play clean up and recovery. Markets were closed in the U.S. earlier for a second day, though investors who bought dollars prior to the storm's landfall began to loosen up by Asian trading on Wednesday, selling
their dollars to play recovery, which weakened the USD against its Japanese counterpart.

Elsewhere, Australian building approvals have risen for a second consecutive month in September, putting the chances of an interest rate cut from the Reserve Bank of Australia next week further in doubt. According to the Australian Bureau of Statistics total dwelling units approved increased 7.8 per cent in September, following a 6.4 per cent jump in August. That is a modest recovery from precipitous falls in July, when approvals fell 17.3 per cent. The approvals data is a leading indicator of future construction work, suggesting a return of confidence in the interest-rate sensitive housing sector.

Later Wednesday in the U.S., payroll processing firm ADP is to release a report on nonfarm payrolls, a leading indicator of private-sector job creation while the Canadian Bureau of Statistics is to announce GDP data.

Daily Morning Report 30/10/2012

The dollar traded mixed against most major currencies on Tuesday as Sandy kept foreign-exchange trading subdued. Hurricane Sandy, now reclassified as a super storm, could have an impact on U.S economy. Preliminary estimates are that damage will range between US$10b and US$20b.

Spanish retail sales fell 10.9% in September from the same month a year ago, much worse than market expectations for a decline of 6.2%, which dampened appetite for risk and gave the dollar some support

German inflation data gave the euro and other higher-yielding currencies support.
The German Federal Statistics Bureau said consumer price inflation accelerated at an annualized rate of 2.0% in October, in line with expectations and unchanged from September.

Japan’s average household spending marked the first decline in eight months in September as lower tuitions and rents offset the effects of subsidy-backed car purchases, data from the Ministry of Internal Affairs and Communication Tuesday showed. Japan’s industrial production fell more than economists forecast, highlighting the risk of an economic contraction as the central bank decides whether to ease for the second time in two months.

Later today, ECB President Mario Draghi is due to deliver opening remarks at the Second Conference of the Macro-Prudential Research Network of the European System of Central Banks, in Frankfurt.

Daily Morning Report 29/10/2012

The dollar traded higher against most major currencies on Monday, as investors snapped up safe-haven USD positions to brace for U.S. unemployment data due out later this week as well as the Bank of Japan's latest decision on interest rates.

The USD was up against the GBP, CAD, NZD, AUD, JPY and CHF in Asian session.

 Fears Greece may run into hurdles securing its next tranche of bailout money sparked the risk-off session as well.

Japan, meanwhile, is to release data on unemployment, household spending and industrial production this week, though investors were keeping a close eye on the Bank of Japan, which will announce its latest decision with interest rates and monetary policy on Tuesday.

Later Monday, the U.S. government plans to issue data on personal income and spending for September on Monday even though the government has shut down to brace for Hurricane Sandy. The Federal Reserve, however, will postpone its regularly scheduled data. The Commerce Department will post the monthly report on consumer spending on its web site at 1230 GMT, as regularly scheduled. In contrast, the Fed said it would wait until the federal government reopens to release its data, including a weekly report on selected interest rates and figures on commercial paper issuance.

Daily Morning Report 26/10/2012

In Europe, the IMF dropped the Irish GDP forecast to 1.1% and the Bundesbank points to downside risks of the 1.8% growth forecast in Germany. The Euro has extended its weakening against the US Dollar after the US closing bell in the back of news from APPL missing dividends estimates and news from Europe on Greece needs an additional €30 billion thru 2016.

The Aussie dollar started a rally early Wednesday morning that instigated with the surprise showing from 3Q CPI figures. The 2.0 per cent pace it does remove some pressure for aggressive cuts.

The Chinese PMI figures which printed better than expected but were 12 months into a reductionary phase. The UK Q3 GDP came much stronger-than-expected at 1% versus 0.6%.

 AUD/JPY is set to print gains for a third straight week, with traders observing for the Bank of Japan to increase its current 90 trillion Yen QE program by another 10 trillion Yen next week, according to the latest Japanese press reports.