FOREXYARD: Forex News Blog | |
- PMI Data Shows Slowing Manufacturing across the Globe
- Australian GDP Contracts 1.2%; AUD Shrugs, Continues Climb
- Moody’s Places Japan in Path of Bond Downgrade
- US Economic Data Disappoints
- Bank of Canada Holds Rates Steady at 1%
- Deteriorating US Economic Data
| PMI Data Shows Slowing Manufacturing across the Globe Posted: 01 Jun 2011 05:10 AM PDT
Weak PMI numbers were reported from China, the UK and the euro zone while Switzerland was stronger. Traders are anticipating US PMI and payrolls data later this afternoon that could disappoint to the downside. China reported better than expected numbers at 52 on forecasts of 51.6, but the data from May is the lowest over the past 9-months. This highlights the slowdown in the Chinese economy after a series of interest rate hikes and other tightening measures Chinese officials have taken to slow the pace of economic growth and inflation rates. The euro is consolidating its recent gains following a disappointing manufacturing PMI reading of 54.6 on expectations of 54.8. Earlier the EUR/USD failed to move above 1.4450, the 50% retracement from the slide in May. A breach above 1.4450 could tack on another $0.015 to the pair. To the downside 1.4345 is the first support. Further brinkmanship is being played out in negotiations between the IMF, the EU, and Greece. The IMF refuses to release the next tranche of aid before funding guarantees are made by the EU, while the EU will not pledge funding until the IMF commits. As the two parties negotiate an agreement the market appears to have priced in a new loan package for Greece that at least buys additional time to work out a final settlement. Risks remain in the afternoon session of an off the cuff remark by an EU official that could send the euro lower, albeit temporarily. Sterling is lower following weak UK PMI data (52.1 on expectations of 54.2) with the GBP/USD falling briefly below 1.6400 before recovering to 1.6420. A previous attempt to establish a beachhead above 1.6500 failed and risks remain for further declines. The support at 1.6300 may be a likely target. The Swiss franc rebounded from yesterday's weaker than expected GDP numbers after strong PMI data were released this morning. The USD/CHF traded at a new low of 0.8442 while the EUR/CHF fell back to 1.2180. The next support for the pair stands at Friday's low of 1.2100. This afternoon risks run high for disappointing US ISM data as well as the ADP jobs report. Based on the stagnant GDP growth in the US as well as a slowdown in global manufacturing (see the above Chinese, EU, and UK PMI numbers above) the USD could receive a bid in the afternoon trading session. Read more forex trading news on our forex blog. |
| Australian GDP Contracts 1.2%; AUD Shrugs, Continues Climb Posted: 01 Jun 2011 04:04 AM PDT
The Australian Bureau of Statistics released its gross domestic product (GDP) report this morning, revealing a 1.2% contraction in its national economic growth. The figure has so far had little effect on the value of the Australian dollar (AUD) considering the news happening elsewhere. With concerns about employment and manufacturing growth in the United States, the potential for Greece to dodge a debt restructuring, and a possible downgrade of Japan's bond rating by Moody's, a downtick in Australia's GDP was hardly significant enough to shift investors away from the higher yielding Aussie. For now, the AUD appears to have simply shrugged off the news and continued its bullish hike. Read more forex trading news on our forex blog. |
| Moody’s Places Japan in Path of Bond Downgrade Posted: 01 Jun 2011 04:00 AM PDT
Moody's Investor Services may end up placing Japan's Aa2 local and foreign currency bond rating up for review this month; a move which has placed significant strain on the value of the Japanese yen. The move by Moody's comes just days after the Fitch ratings agency downgraded its debt outlook for Japan. The JPY was recently seen plummeting against several of its currency rivals as traders anticipate a shift in value for their yen holdings. A Moody's report noted that faltering industrial data and a dovish response by the Bank of Japan (BOJ) to address debt has instigated a review of Japan's bond rating in lieu of its ability to effectively tackle a deficit reduction. Read more forex trading news on our forex blog. |
| Posted: 01 Jun 2011 03:57 AM PDT
A series of disparaging economic reports out of the US economy yesterday has offered an ill foreboding for today's employment and manufacturing data. Although the US dollar has posted gains since yesterday afternoon against all but the euro, the market data paints a different picture altogether. The S&P's composite housing index revealed a 3.6% decline in home prices, tracked on a year-on-year basis, and some have said that home values have recently touched another all-time low. The Conference Board's (CB) consumer sentiment report also highlighted a sharp drop in confidence among American consumers. It may not be far off to assume a growth forecast restructuring taking place in the near future. Read more forex trading news on our forex blog. |
| Bank of Canada Holds Rates Steady at 1% Posted: 01 Jun 2011 03:47 AM PDT
The Bank of Canada (BOC) held its short-term interest rates steady at 1.00% yesterday, confirming market forecasts. As the BOC stands firm on its inflationary growth targets, the Canadian dollar (CAD) has also been posting solid gains. Yesterday, the Loonie pushed bullish against several of its currency rivals as it tracked the rise in commodity values. With crude oil ending the day over $103 a barrel, the value of the commodity-linked Canadian dollar also ended moderately higher in the forex market. Read more forex trading news on our forex blog. |
| Deteriorating US Economic Data Posted: 01 Jun 2011 12:00 AM PDT
Yesterday's US consumer confidence survey, manufacturing numbers, and housing data all showed sharp drop offs from their previous readings. However, the negative economic data was largely ignored in the FX markets as traders chose to focus on events in the euro zone and gains in equity markets. Today's ISM data may indicate a slowdown in US economic growth with further evidence coming on Friday from the monthly jobs report. Today's Economic Data Releases: GBP – Manufacturing PMI – 08:30 GMT USD – ADP Non-Farm Employment Change – 12:15 GMT USD – ISM Manufacturing PMI – 14:00 GMT Read more forex trading news on our forex blog. |
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