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.

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 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 14^th.

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.

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. 

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.