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 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 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 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 30/10/2012

Subsequent to a meeting in Berlin, France Finance Minister Moscovici and http://jobsmoney.blogspot.com/Minister Schaeuble declared that they are aiming for a solution to Greece by November. They both want to see Greece remains in the Euro-zone, and the solution will be discussed more in tomorrow’s Euro-group meeting. Schaeuble refused to comment on the size of the funding gap in Greece, but added that they can’t go in the opposite direction on debt reduction. Moscovici said he doesn’t want to reopen the discussion on Euro bonds.

The amount of people out of work in Germany now totals 2.94 million. The German economy has suffered because of the Euro debt crisis, and the GDP only rose 0.3% in the second quarter. Germany is the largest economy in the Euro and signs of economic suffering are Euro negative in forex markets.

Clearly, the largest story of the day is Hurricane Sandy and its impact on the East Coast of the US. It is appraised that the damages are coming up to 20 billion dollars from the hurricane and US stock markets will remain closed today, the US markets might reopen tomorrow.  

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 Afternoon Report 29/10/2012

UK mortgage approvals rose for the fourth straight month in September, possibly signalling the success of the BoE’s funding for lending scheme. Home loans were up to 50,024 in September, beating expectations for 48,700, and higher than August’s revised 47,921 mortgages.  

Net consumer credit was 1.2 billion Pounds in September, according to the Bank of England. Earlier today, housing prices were reported to have fallen 0.1% in the UK according to the Hometrack Housing Survey.

As Spain is expected to contract for the fifth consecutive quarter, the heightening threat for a prolonged recession will continue to dampen the appeal of the Euro, and the European Central Bank might come under additional pressure to expand monetary policy further as the governments functioning under the single-currency become increasingly dependent on monetary support.

The ECB may have little choice but to push the benchmark interest rate further to a fresh record-low amid the weakening outlook for growth and inflation, and we may see the Governing Council carry its easing cycle into the following year as European policy makers struggle to stem the threat for contagion. The EURUSD slipped as an 11% drop in Spanish retail sales dampened the outlook for the euro-area, and the single currency may face additional headwinds.

Daily Morning Report 25/10/2012

The Great Britain pound advanced on hopes that the United Kingdom will emerge from recession. Traders turned their attention to the GDP report, released today, which is expected to show growth of 0.6% in the Q3. BoE Governor Mervyn King appears to be softening the tone on monetary policy.

German and French manufacturing data disappointed markets with PMI reporting under forecast, followed by a slew of other German data all under forecast and the EU manufacturing PMI also under forecast.  Reports are surfacing that officials from the European Union, European Central Bank and the International Monetary Fund rejected Germany’s proposal to tighten Greece’s access to the established financial aid account. With this proposal out of the way, the market is pricing in the possibility that Greece will eventually get its next tranche of aid. 

Canadian Dollar strengthened against its U.S. counterpart boosted by a hawkish statement from the Bank of Canada on Tuesday that stands in stark contrast to most other developed economies. The central bank was expected to set the currency’s direction for a second straight session, with Bank of Canada Governor Mark Carney holding a news conference following the release of its Monetary Policy Report later on Wednesday.

US new Home Sales surprised markets with a strong upward report coming in above forecast at 389k against 385k supporting a US recovery

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