FOREXYARD: Forex News Blog

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• Swiss Retail Sales Underperforms, Matches Region
• USD/CAD Rebounds as Election and Oil Price Dip Weigh on CAD
• Crude Oil Prices Dip, Silver Rebounds
• Osama bin Laden Killed, Dollar Receives Support as Silver Tumbles

Swiss Retail Sales Underperforms, Matches Region Posted: 02 May 2011 10:55 AM PDT With economic activity suppressed lately, this morning's retail sales figures out of Switzerland should be of no surprise for investors. The reading appears to have had little impact on the value of the Swiss franc, though, largely as European markets are illiquid from due to the observance of Labor Day by most cantons throughout the country and region. Though not every Swiss canton observes Labor Day, the market is largely devoid of Swiss liquidity. As such, traders have seen the value of the Swissie make very little movement significant enough to warrant any reevaluation. In fact, it appears likely that such a downturn was already priced in given the region's previously negative reports connected with retail sales. Regionally speaking for the past calendar month, French consumer spending contracted 0.7%; German retail sales fell by a surprising 2.1%; German consumer confidence was also in rapid decline with the recent GfK report being released at a reading of -31; industrial orders in Britain, the United States and the broader euro zone have all been faltering this past month; this morning's Swiss SVME PMI data also fell to a 58.4 reading; and atop it all was a widening trade deficit in Switzerland. Today's retail sales data, as a result, had little impact on traders since a downturn in spending is already assumed by most. The two leading headlines of the day appear to have a louder voice in the market, of which is the surge in optimism brought about by the announcement of Osama bin Laden's death in Pakistan at US military hands; the other is the continuation of sell-offs in USD as a result of last week's policy statements. The CHF, for the time being, remains a solid, high-yield, safe-haven investment.

USD/CAD Rebounds as Election and Oil Price Dip Weigh on CAD Posted: 02 May 2011 10:47 AM PDT The North American currency pair, USD/CAD, has rebounded from its recent three-and-a-half year high of 0.9445 to currently trade near the 0.9500 mark. Monday's elections in Canada have pushed and pulled investors and speculators into and out of the Loonie in this week's early trading sessions. The Canadian dollar has been steadily climbing against its southerly neighbor for the past several years, recently touching a 2007 high before traders reflexively pulled down on the CAD amid national elections. Not only are the elections creating political, and thus economic uncertainty in the hemisphere's northern giant, but a recent downturn in oil prices are also leaning against the Loonie's upside movement. The CAD is a commodity-linked currency, highly correlated with the price of Crude Oil. After this morning's dip in oil prices, brought on by an unexpected jump in US dollar values, the CAD felt downward pressure versus the greenback. Today's inflationary figures out of Canada will likely support the CAD's impending rebound, as both were released even with, or above, market expectations. The Canadian raw materials price index (RMPI) underwent a massive 5.7% monthly jump, obliterating expectations for a 1.9% growth. This data, coupled with similar inflationary reports, should put higher pressure on the Bank of Canada (BOC) to consider raising rates in the near future. This information should lead to a strong return to bullishness in the CAD for the days ahead.

Crude Oil Prices Dip, Silver Rebounds Posted: 02 May 2011 04:36 AM PDT A quiet European trading session has been highlighted by a decline in crude oil prices following the announcement of Osama bin Laden's death. Spot silver prices rebounded after the commodity sold off after an increase in margin requirement fueled profit taking. This afternoon US markets are open and liquidity should improve as traders eye the release of US manufacturing PMI. Spot crude oil was trading lower at $111.85 from an opening week price of $113.68. Support is found at $110 and short term resistance at last week's high of $113. Spot gold has recovered to $1,557 after trading as low as $1,540. Silver prices rebounded to $45.50 from a low of $42.51. Crude oil prices were down as markets perceived the death of bin Laden as a reduced security risk and traders sent prices lower. Since the beginning of the "Arab Spring", crude oil price have traded sharply higher as a risk premium has been priced into the market to value of crude oil with the perceived geopolitical risks in the Middle East. While bin Laden's death is not directly connected with the energy industry, his passing has been taken into account by crude oil traders. The landmark event is certainly a feather in the cap for President Obama, much as the capture of Saddam Hussein was for former President Bush. Spot silver has rebounded following a sharp decline at the opening of this week's trading. The cause for the sell-off was an increase in margin requirements for silver future contracts which spurred profit taking after the commodity traded near the $50 psychological resistance. Traders should continue to find opportunities to buy spot silver on a rebound in the price as the fundamentals for the commodity have gone unchanged. Initial resistance is found at $47.25 followed by last week's high of $49.78. The EUR/USD is gaining strength as the New York open nears with the release of the ISM Manufacturing PMI report. A strong data release should feed into dollar selling. Currently the EUR/USD is testing a short term consolidation pattern with resistance at 1.4850. A breach here will test last week's high at 1.4880, with an eventual target at the 2009 high of 1.5140.

Osama bin Laden Killed, Dollar Receives Support as Silver Tumbles Posted: 02 May 2011 01:31 AM PDT A media frenzy followed the report of the death of Osama bin Laden and traders supported the dollar in overnight trading. Silver prices slid 10% before the commodity recovered after futures margins were increased. UK and many European markets are closed today for banking holidays which will leave the FX markets with low levels of liquidity and exaggerate some of the price moves that accompany illiquid trading conditions. Spot silver sold off sharply following new margin requirements for futures contracts by the CME Group. The price declined to $42.50 and comes close to the short term trend line off of the January low which comes in this week at $41.20. Silver traders may be able to buy the commodity on a rebound as the fundamentals supporting silver prices (rising demand for the commodity and global inflationary pressures) have not changed. Further support is found at the $38 level. Today's Market Events: EUR – Final Manufacturing PMI – 08:00 GMT Expectations: 57.7. Previous: 57.7. An uptick in manufacturing data will support the euro as any increase in euro zone economic activity will add more influence for EU inflation hawks. EUR/USD support come in today at 1.4755 followed by 1.4650. Resistance is found at 1.4880 and the 2009 high of 1.5140. GBP – BOE Gov King Speaks – 13:00 GMT Governor Mervyn King is set to speak in Brussels today. Should he provide any hint of future British monetary policy the pound should react accordingly. The EUR/GBP is encroaching on the current rising trend line off of the February 18th low which comes in today at 0.8830. A breach of this level and the pair could fall to the support at 0.8715. USD – ISM Manufacturing PMI – 14:00 GMT Expectations: 59.9. Previous: 61.2. Recent positive US data releases have fed into USD selling. However, with the announcement of the death of Osama bin Laden, US traders may be compelled to buy dollars given the patriotic sentiment that often follows such news events.

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