FOREXYARD: Forex News Blog | |
- NOK Could Rise on Interest Rate Differentials
- EUR Slapped as Greece Bailout Discussion Hit Road-Block
- New Zealand Manufacturing Sales Climbs 2.9%
- Japanese Trade Deficit Holding Steady
- Euro Zone Current Account Deficit Widens
| NOK Could Rise on Interest Rate Differentials Posted: 21 Jun 2011 03:53 AM PDT
Tomorrow the Norges Bank will release its key policy rate decision and Monetary Policy Report. Expectations are for the Norwegian central bank to hold rates steady but to signal its intention to continue on its current path of monetary policy tightening in the future which would be a catalyst for the Norwegian krona. Consensus estimates are for the Norwegian central bank to remain on hold in its current cycle of rate tightening while most expectations are for an additional interest rate increase in the near term. The current rate stands at 2.25%. However, according to most economists' forecasts the timing for the next 25 bps interest rake hike could come sometime between August and October. An increase to the Norwegian interest rate will be needed as unemployment in Norway has dropped to 3.3%. Norway has an unemployment rate most industrialized nations can only dream of but the strong macroeconomic fundamentals may spill over into future inflationary pressures as rising wages could feed into further price increases. While the Norges bank continues to raise rates following its first increase in May, this may keep the NOK well bid versus the majority of G7 currencies that are striving to maintain interest rates at record low levels in order to aid their economic recoveries, particularly in the US. Given the Greek debt crisis is coming to a head, this may present an opportunity in the EUR/NOK. Turning to the charts, the EUR/NOK is encroaching on resistance at 7.950-80, a level the pair has not traded above since early December. Significant support comes in at 7.7850 and 7.7165. These defined support and resistance levels may offer traders an opportunity to short the EUR/NOK with a strong profit to risk ratio of at least 3:1. Read more forex trading news on our forex blog. |
| EUR Slapped as Greece Bailout Discussion Hit Road-Block Posted: 20 Jun 2011 11:02 PM PDT
Forex traders had been anticipating an announcement from this morning's ECOFIN meetings which may signal an impending second round of financing for the ailing Greek economy. Initial agreements had the bailout in approval stages, conditioned upon Greece imposing a severe $40B austerity package that had sparked riots and a governmental cabinet shuffle. As the government of Greece meets further pressure from its populace, the debate over a bailout for the regime has apparently reached an impasse. Several speculative reports have hinted that an emergency rescue deal would be passed shortly to stave off a default by Greece, but the delay in the approval process has shifted many traders into a bearish posture on their EUR/USD positions. The pair is likely to see further downside throughout the week if bailout talks stall any longer. Read more forex trading news on our forex blog. |
| New Zealand Manufacturing Sales Climbs 2.9% Posted: 20 Jun 2011 10:59 PM PDT
The agency Statistics New Zealand published figures very early this morning which highlighted one optimistic tone in the static filled room of global manufacturing. Sales for manufactured goods in New Zealand climbed 2.9% this past month, down only 0.1% from the previous reading. As many traders have witnessed these past two months, manufacturing and industrial data have shown a stark slowdown in output and demand from the United States, Britain, China, Switzerland and the broader euro zone. The healthy growth in manufacturing demand in New Zealand gives weight to notions of speedy growth among the Asian and Pacific nations lasting through the second quarter, likely outpacing its Western hemisphere rivals. Read more forex trading news on our forex blog. |
| Japanese Trade Deficit Holding Steady Posted: 20 Jun 2011 10:56 PM PDT
A report from the Bank of Japan (BOJ) this morning gave several investors reason for optimism in regards to Japan's exporting capabilities. Given the surging strength of the yen for the past few years, many had anticipated a slowdown in Japan's ability to boost exports, which it depends on for growth. The trade balance figure released less than an hour after market opening today revealed the island economy's trade deficit holding steady at 0.47T yen. Expectations were for a widening trade gap to 0.54T, but today's steady figures could prove a solid gauge of the country's impending bounce back in the months ahead. Read more forex trading news on our forex blog. |
| Euro Zone Current Account Deficit Widens Posted: 20 Jun 2011 10:53 PM PDT
As the Economic and Financial Affairs Council (ECOFIN) kicks off another round of talks, the euro zone published today a report which showed the region's current account deficit widening. The news has only added to recent fears that the Greece bailout plans may falter. The EUR was seen holding uneasily against its currency rivals this morning. Many investors have been awaiting comments to emerge from the ECOFIN conference. So far, news has been largely pessimistic, with an impasse forming in the last several hours. Traders may see the EUR plummeting as the day wears on if nothing is done to address investor concerns soon. Read more forex trading news on our forex blog. |
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