FOREXYARD: Forex News Blog | |
- EUR Straining Under Renewed Debt Concerns
- Yen Jumps to a 15-year High vs. the Dollar
- European Woes Weigh on Euro
| EUR Straining Under Renewed Debt Concerns Posted: 08 Sep 2010 05:11 AM PDT
The euro dropped against the majority of its currency counterparts today as sovereign debt concerns returned. The bank stress tests performed over the past few months showed data favorable to the region, but new reports have highlighted the inherent weakness of the tests to apply ample strain to the banks, which led to misleading reports. Weak German industrial figures lately have also weighed on the 16-nation single currency. It appears that the euro zone’s strongest economy may be experiencing the start of a slow-down in recovery and this is having a direct impact on the strength of the EUR. This has combined with more speculation that European banks may yet have to seek more capital. However, even if depressed risk sentiment is likely to prevail, there could be some relief later in the day if the Bank of Canada (BOC) surprises the market with a rate hike, or if the latest U.S. Beige Book gives a more upbeat assessment of the U.S. economy than analysts have been anticipating. Either event could bring traders back into riskier assets, boosting the euro. |
| Yen Jumps to a 15-year High vs. the Dollar Posted: 08 Sep 2010 04:41 AM PDT
The USD/JPY cross fell to a fresh low of 83.34 as risk-averse investors piled into the “safe-haven” currency Wednesday pushing it to a new 15-year high against the greenback. The dollar also slid on speculation the Federal Reserve's Beige Book business survey will add to evidence the U.S. economic recovery is stalling. There are lingering worries the U.S. economic recovery may be tepid, analysts said, and that has a negative effect on the dollar. The yen is being bought, partly because Japan has a Current Account surplus (the difference between a nation’s exports of goods, services and transfers, and its imports). Japan's surplus expanded 26% from a year earlier to 1.68 trillion yen ($20 billion), the Ministry of Finance said, surpassing the 1.53 trillion yen surplus forecast by economists. Gains in the yen were tempered, however, after Japan's Finance Minister said he is prepared to take bold steps on currencies if necessary. But there was still skepticism among market players as to whether intervention would actually happen. Japan has not intervened in the currency market since March 2004, after spending 35 trillion yen ($420 billion) over a 15-month period to support an economic recovery. Since the euro looks unstable again, and the dollar might weaken further ahead of the mid-term election, it leaves the Japanese yen as the only currency to buy. And especially after the Bank of Japan's (BOJ) governor made only vague comments about the yen, the USD/JPY should face a further weakness with 83.3 and 83.05 targets in sight. |
| Posted: 07 Sep 2010 07:39 PM PDT
A stack of negative fundamentals rose to the surface in unison to pressure the euro; Irish fiscal woes, a drop in German manufacturing data, and European banking system concerns. Today's Economic Data Releases: GBP – Halifax HPI m/m Support and resistance levels for the GBP/USD are found at 1.5320 and 1.5490. EUR – German Industrial Production m/m – 10:00 GMT The EUR/USD has declined for the past two days, pulling back into the symmetrical triangle pattern that had formed. Support is found at the rising lower leg of the triangle pattern at a price of 1.2660 followed by 1.2580. CAD – Overnight Rate – 13:00 GMT USD – Beige Book – 18:00 GMT The USD/CHF should target last week's low of 1.0064. |
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