FOREXYARD: Forex News Blog | |
- ECB’s President Trichet Declares Financial Reforms only Half Done
- French and German GDP Surge, Italian GDP Sluggish
- UoM Consumer Confidence Reading on the Rise
- German GDP Supports Euro while Sterling Struggles
- EUR/USD – Potential Head and Shoulders Pattern?
- Euro and Silver Comes Off of Lows as Markets Look Towards US Inflation Numbers
- CAD Lower as Canadian Economic Data Flat this Week
- Australia Loses 22,100 Jobs in April
- American Inflationary Growth above Expectations
- Euro Bounces Higher in New York Trading Session
| ECB’s President Trichet Declares Financial Reforms only Half Done Posted: 13 May 2011 09:19 AM PDT
Today's speech delivered by the European Central Bank (ECB) President Jean-Claude Trichet was a reminder to many that Europe still faces hardship, regardless of the progress which has already been made. The speech was part of a full-day conference in Madrid, Spain, titled Reform of the Financial System. Trichet's remarks served primarily as a warning not to become complacent with recent growth figures and estimates. He stated that many were returning to a business-as-usual mentality given the recent confirmations of stable economic recovery. Trichet argued that reforming the European financial system was necessary to ensure against a repeat of the weakness experienced in 2007/08, which is still ongoing. Many analysts have taken his remarks as a warning that further weakness is ahead and that the current reform process, which he noted was only half done, has still not resolved the issue of economic fragility throughout the region. Policymakers across the euro zone have been able to work together to bring the financial system under review and make necessary changes, but much more work lies ahead, according to Trichet. He pointed a finger at Greece by remarking on her continued debt woes and fragile system. But he highlighted the plan which Greece had devised for herself and urged its leaders to stick to that plan and continue implementing these reforms. All in all, Trichet's speech was taken as optimistically cautious. His remarks were positive, though he appeared reluctant to express hubris at the progress already made. Trichet's speech, delivered in English, was filled with hawkish statements which so far appear to have supported the EUR going into next week's trading. But long-term growth for the euro zone, he argued, would depend on Europe's willingness to finish what it started regarding these financial reforms. |
| French and German GDP Surge, Italian GDP Sluggish Posted: 13 May 2011 08:53 AM PDT
Today's major headline news has been the surge in preliminary gross domestic product (GDP) numbers out of France and Germany. Both of these euro zone giants released data which helped the region's currency partially shore up recent losses, though similar data out of Italy was disappointing for regional investors. France led the day with an early 6:15 GMT release of its GDP data, highlighting the solid 1.0% growth in the first half of the second quarter, beating expectations for only a 0.4% gain. Germany was not far behind at 7:00 GMT, publishing an even higher 1.5% growth, well above the forecast of 0.9% growth. These figures have so far helped the EUR regain a solid portion of its losses from earlier this week against the US dollar (USD) and British pound (GBP). But data from Italy put a temporary halt to the region's currency gains with a faltering 0.1% growth coming in below an anticipated 0.3% reading. Overall, the euro zone's flash GDP data revealed 0.8% growth for the first half of this quarter; not bad considering recent fundamentals. Forex traders were looking to the inflationary data out of the United States in order to better assess their risk exposure ahead of the weekend. With solid CPI data published by the US Bureau of Labor Statistics in line with expectations at 13:30 GMT today, traders felt comfortable with moving additional funds into their EUR long positions. The University of Michigan's (UoM) inflation expectations report also revealed anticipation for solid growth in the American market this quarter. As a result, some profit taking was seen on the USD, pushing the EUR/USD pair back towards 1.4230 by late afternoon trading. Market optimism surged Friday, with expectations appearing to favor a return to risk by early next week if data continues to get published in line with recent growth figures. |
| UoM Consumer Confidence Reading on the Rise Posted: 13 May 2011 08:46 AM PDT
The University of Michigan (UoM) released its preliminary monthly consumer confidence report this afternoon revealing solid growth in outlook among consumers. This report is a composite index based on surveyed consumers which asks respondents to rate the relative level of present and future economic conditions. The news agency Reuters wrote that this month's higher than expected reading was likely due to a jump in non-farm job growth, as reported last Friday. Though other articles have disputed the validity of the NFP data due to its variant internals, consumers across the United States do appear to favor a more optimistic stance as jobs are reported to be on the rise. The US dollar continued to find support today as the American consumer price index (CPI) was released commensurate with market expectations and as European GDP figures were largely bullish. The EUR bounced back in earlier trading, but this afternoon's CPI and outlook data helped the greenback get back on course for stable growth. Despite high food and gas prices, consumers have historically rated their financials through a lens of job growth. An expanding jobs market eases tensions among those seeking work or advancement. Today's preliminary UoM consumer confidence reading was largely a reflection of the job growth revealed in last week's NFP, according to analysts. |
| German GDP Supports Euro while Sterling Struggles Posted: 13 May 2011 05:12 AM PDT
On the back of stronger than expected German GDP data the euro found support as did commodities and European Equities prior to the US CPI release. German Preliminary GDP q/q rose 1.5% from 0.4%, on consensus expectations of 0.9%. The strong output from Germany, the engine of the EU economy helped to increase risk appetite for commodities and stocks as well as supporting the euro. Global equities are higher with the Hang Seng up 0.88% and the FTSE 100 up 0.79%. Silver reached as high as $36.44 before trading back to $35.50. Gold is higher as well at $1510. The story remains the same with the German economy continuing to grow while the peripheral Europe continues to stumble amid sluggish growth and high unemployment. Spanish GDP rose a measured 0.3% as unemployment remains staggeringly high above 21%. The EUR/USD traded as high as 1.4340 before falling back to 1.4280. The EUR/GBP rose to 0.8799 before trading back to 0.8778. However, the initial strength of the euro may fade as the day progresses with the ongoing euro zone crisis. EUR/USD support comes in at 1.4120. A breach here would test 1.4020. To the upside, a move above 1.4420 would be constructive and target this week's high at 1.4480. Sterling continues to struggle despite Wednesday's MPC announcement for the tightening of monetary policy. Yesterday's paltry manufacturing production data continues to weigh on Sterling. The BOE walks a tightrope as it attempts to balance inflationary pressures without stifling the fragile UK economic recovery. Judging from Sterling's price action, traders are not of the opinion that the BOE will be increasing rates in the near term, thus keeping Sterling on its back foot versus the dollar and the euro. Cable traded as high as 1.6307 before falling to 1.6265. GBP/USD support comes in at 1.4250 from the trend line up from the January low. Resistance is found at 1.6520 off of Wednesday's high. US Core CPI is due shortly and stronger inflationary pressures could feed into USD selling. A disappointment from the inflation data or the US consumer sentiment report would extend the two week correction in the dollar most likely into the New York open. |
| EUR/USD – Potential Head and Shoulders Pattern? Posted: 13 May 2011 03:08 AM PDT
The daily chart for the EUR/USD shows a potential head and shoulders reversal pattern forming. Following last week's close below the January to May trend line the formation of a bearish head and shoulders pattern is beginning to develop The downward sloping neckline comes in today at 1.4120 near yesterday's low which coincides with a 38.2% Fibonacci retracement (1.4150). Judging from the chart pattern, a move following a breach below the neckline would take the pair lower by roughly 8 cents. However, a more likely target is the 1.3430 level. This price has technical significance as it has shown in the past to be both resistive in early January and supportive in mid-February. 1.3330 off of the August 2010 pivot (not shown) could also come into play. Should the EUR/USD head and shoulders chart pattern fail to materialize, resistance to the upside is found at 1.4450, followed by the May high at 1.4940.
|
| Euro and Silver Comes Off of Lows as Markets Look Towards US Inflation Numbers Posted: 12 May 2011 11:47 PM PDT
Yesterday's late bounce in the euro and silver continued this morning after German and French GDP numbers showed strong growth in the two largest EU economies. All eyes will now turn to US inflationary data that could show increased food and energy costs in the US economy. EUR – German Preliminary GDP q/q – 6:00 GMT USD – Core CPI m/m – 12:30 USD – Preliminary UoM Consumer Sentiment |
| CAD Lower as Canadian Economic Data Flat this Week Posted: 12 May 2011 04:00 PM PDT
The Canadian dollar (CAD) has been stagnating this week with much of the economic news out of Canada appearing flat. Today's New House Price Index (NHPI) released by Statistics Canada, as an example, revealed 0% growth in the price of new homes purchased this past month by Canadians. The data did not represent market contraction, per se, but rather a slowing down, or stagnation. The CAD was hard-pressed to make gains following this week's reports, with the USD/CAD moving from its recent low of 0.9440 to its current price near 0.9650. Safe haven currencies like the Japanese yen (JPY) also made gains this past week, with the CAD/JPY moving to 83.80 from a recent high of 89.50. Monday's housing starts figure was below expectations, but not enough to warrant a rapid sell-off for Canada's currency. Yesterday's trade balance figures out of Canada also revealed not shrinkage, but stability. The C$0.6B growth in the northern giant's surplus was not enough to awe investors and generate a buy-in for the Loonie. Overall, Canada is not in a bad spot economically. It has undergone a wave of growth unmatched in most other countries and its job sector is in good shape. This past week's short period of stagnation represents either a slow-down in line with a global faltering among industry and manufacturing, or a sluggish period as many provinces adjust from winter to summer schedules. Either way, traders reading this forex blog should note the CAD's recent weakness brought on by this sluggish data. Such weakness does not appear systemic, though, and such bearishness will likely not last. |
| Australia Loses 22,100 Jobs in April Posted: 12 May 2011 03:53 PM PDT
The Australian unemployment rate held steady at 4.9% this past month, though April's employment change report revealed a contraction of 22.1K jobs. The Australian dollar (AUD) took a loss this morning as expectations for an interest rate hike later this month faded with today's job report. Many analysts do not expect this month's reading to have a major impact overall, given the Australian economy's ability to add over 300K jobs over the past year. The Wall Street Journal noted Australia's announced plan to ambitiously add another 500K jobs in the 2011-2012 fiscal year. The fact that unemployment held steady amid this job loss gives impetus to these plans and a possibility for interest rate hikes if other fundamentals come in line with current expectations. The Reserve Bank of Australia (RBA) signaled its willingness last week to raise rates in its impending meetings, but speculation took hold this morning with the severely depressed jobs report. Tuesday's trade balance figures out of the Australian economy, as noted in a previous article, also revealed solid growth in the nation's surplus, with the mining industry's export boost lending a helping hand. With jobs being the only factor holding an interest rate hike in check, the AUD may gain support if other data can induce such a move by the RBA. |
| American Inflationary Growth above Expectations Posted: 12 May 2011 03:47 PM PDT
Today's producer price index (PPI) data released by the US Bureau of Labor Statistics brought to light the solid growth in inflation across the United States. Last month's 0.7% growth was one-upped today with April's reading coming out at 0.8%, above the forecast 0.6%. Though US retail sales came out slightly below expectations this past month, the inflationary figures grant support to those arguing for an interest rate hike by the Federal Reserve this quarter. While a tightening of monetary policy is not likely, the continual rise in inflationary pressure could generate an adjustment to outlook portfolios, which will likely help the US dollar regain much of the strength it lost since 2010. Supporting the USD's recent surge, moreover, is systemic weakness coming from Europe's manufacturing and industrial sectors. In line with what forex traders have witnessed in much of Europe these past several weeks, today's manufacturing reports out of the United Kingdom and industrial production figures from the euro zone all revealed sluggishness. The impact on the British pound (GBP) and EUR have been felt, with both currencies pulling lower in today's early sessions against the USD. The dollar has been higher against most of its counterparts due to heightened risk aversion, but also since a significant portion of forex market participants are bailing out of the euro in exchange for safety from the region's debt woes. |
| Euro Bounces Higher in New York Trading Session Posted: 12 May 2011 10:25 AM PDT
During the New York trading session the dollar failed to hold most of its earlier gains versus the euro and the dollar bloc. The exception to this price action was the pound which was stagnant versus the dollar. US retail sales numbers were released but did not meet market expectations and were largely brushed off by traders. Today the US advanced retail sales m/m in April numbers rose 0.5%, up from a revised report in March of 0.9%. Market expectations were for an increase of 0.6%. While the numbers failed to meet market forecasts, the tone of the markets noticeably changed with the euro coming off of its daily lows. The EUR/USD received a bounce today in afternoon trading, rising as high as 1.4268 from the overnight lows at 1.4123. The dollar bloc was stronger as the AUD/USD fell as low as 1.0566 only to climb higher to trade at 1.0660. The NZD/USD dropped to 0.7840 before rising as high as 0.7986. Sterling was weaker across the board with the USD/GBP coming off of its low of 1.6233 to 1.6290. However, the new low made by Sterling is telling. Despite yesterday's pledge by the Bank of England to raise interest rates in the third quarter, the market's reaction to the news is indicative of traders' expectations for a slower than announced schedule of interest rate hikes. An increase in margin requirements by the CME initially spurred the selling of silver and the commodity continues to be sold off from its high of $47.83 by 28%. Silver prices today found a bounce at the rising trend line off of the late August low, though the price is still down for the day at $34.15. |
| You are subscribed to email updates from Forex Trading Education : Forex Trading Blog by FOREXYARD To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
Bullion Exchanges is a well known Bullion Seller located in New York City's Diamond District.
ReplyDeleteThey have a wide inventory of products including but not limited to, precious metals that range from the popular gold and silver to the newly emerging platinum and palladium.
They are offering a wide range of products appealing to 1st time shoppers and for established collectors.