FOREXYARD: Forex News Blog | |
- Russian Ruble Not Preferred by Russian Business Leaders
- Scandinavian Currencies Weighted by Euro Zone Woes
- British Employment Confirms Downturn
- US Trade Deficit Widens to Level Not Seen Since 2008
- China Expands New Loans, Domestic Money Supply
- British Inflation Woes Rout Positive Sentiment; Gouge GBP
| Russian Ruble Not Preferred by Russian Business Leaders Posted: 13 Jul 2011 06:29 AM PDT
A recent survey taken by UBS AG, in collaboration with Campden Research, asked Russian business leaders and investors about their portfolio activity and found interesting results regarding the level of trust they have in their domestic currency. According to the results, approximately 88% of respondents said they do not keep a significant portion of their assets in rubles (RUS). Between 2009 and 2011 the percentage of Russian business leaders who viewed international real estate as a safe haven grew from 32% to 89%. In the same period, trust in the security of domestic cash holdings declined to 5% from 40%, according to the Wall Street Journal's summary of the findings. Over half of the survey's respondents rated the UK and Switzerland as primary stores of value, whereas 72% had rated Cyprus as such in 2009. The data, while indicative of a sign of distrust in domestic value, could be skewed somewhat considering that only those leaders with a personal net worth over $50 million were surveyed. It cannot be correlated with how smaller firms, start-ups, and young entrepreneurs feel about the RUS and has only a minor connection to the views held by the Russian central bank. Read more forex trading news on our forex blog. |
| Scandinavian Currencies Weighted by Euro Zone Woes Posted: 13 Jul 2011 06:24 AM PDT
The fear of debt contagion spreading across the more fragile nations within the euro zone has begun to affect its regional neighbors to the north. The economies of Sweden, Norway and Denmark have all been bulwarks of stability during the economic crisis of the past several years. While this sentiment does not appear changed, the short-term impact of a debt fear and lowered consumer confidence has been to place an added weight to the value of the rising kroner of Scandinavia. The Norwegian krone (NOK), as the first example, has been affected by stock prices seen in decline for several of its major companies, particularly in the telecommunications and technology fields. Climbing oil prices these past few days have also dragged on the NOK as it is commonly tied with the value of oil; Norway being a heavy exporter of crude oil. Sweden's currency woes are perhaps less severe, given a recent hike in interest rates by the Riksbank to 2% from 1.75%, but this week's modest downtick has Swedish ministers noting the impact euro zone debt fears are having on regional growth at a more macro level. Bank governor Anders Borg has cemented his role as a fiscal conservative, however, taking lessons from Sweden's financial crisis of the early 1990s to implement steps aimed at shoring up Sweden's growth potential through 2015. Denmark, too, has had its currency (DKK) affected by regional woes, but appears a formidable stalwart in a region relatively shaken by Greece's debt concerns. The Scandinavian kroner may be in a mild downturn this week, but sentiment remains optimistic for the northerly region. Traders may want to anticipate the price shifts as risk sentiment is priced in, but take heed of the notion that Scandinavia is significantly more stable than its southerly counterparts. Read more forex trading news on our forex blog. |
| British Employment Confirms Downturn Posted: 13 Jul 2011 06:21 AM PDT
This morning's publication of the British Claimant Count Change report further revealed a growing weakness in the British economy. As risk aversion prevails in this week's trading environment, the GBP finds itself at the mercy of a bearish sentiment. While it does not appear to be as negatively affected as the euro zone, the UK pound has indeed been wounded by recent reports. Yesterday's inflationary reports sparked a concern that a sluggish period was impending and many investors had begun to look to today's employment data to determine if the downturn would be confirmed. With 24,500 British citizens filing for unemployment benefits for the first time in June, a structural deficit appears to be persistently nagging the UK. Read more forex trading news on our forex blog. |
| US Trade Deficit Widens to Level Not Seen Since 2008 Posted: 12 Jul 2011 12:03 PM PDT
For the first time since December of 2008, the US trade balance has moved beyond the psychological barrier of -$50B. The news has so far only added to pessimistic concerns that the August 2 deadline for an expansion of the debt limit will not be met in time; a sentiment that adds strength to investment shifts to safety and lower yielding assets. The first time this level of trade imbalance was seen in the US was in 2004 as the nation began to depend more heavily on imports as it undertook two significant military campaigns in the Middle East. The over-exposure to foreign markets, some say, weakened the US financial system to hasten the collapse of the housing market, and Wall Street along with it. The ability of Congress and President Barack Obama to reach a compromise on taxes and budgetary adjustments appears to have reached a nadir as both fight to define their boundaries. As the trade deficit widens, several analysts have begun to wonder whether this is a sign of worse to come as the US gets muddied in yet more economic stagnation alongside the rest of the world. |
| China Expands New Loans, Domestic Money Supply Posted: 12 Jul 2011 12:03 PM PDT
Reports from the People's Bank of China this morning revealed optimistic signs of consumer demand and economic growth in the Asian giant. New loans in China moved beyond the expected 623B to a level of 634B in June. Additionally, the M2 money supply in China, which measures the percent change in local currency in circulation, and held in domestic banks, in an annualized format. The M2 report showed China's level of domestic currency in supply to be 15.9% higher than its June 2010 level, suggesting an expansion of local and foreign demand for Chinese goods and services. |
| British Inflation Woes Rout Positive Sentiment; Gouge GBP Posted: 12 Jul 2011 12:02 PM PDT
Inflationary data out of the British Office of National Statistics this morning put a negative slant on what some had assumed was a beacon of light in Western Europe. British housing has seen positive gains alongside steady increases to manufacturing production. Today's inflationary data, however, appears to have turned the tide, dragging Britain into the quagmire of risk averse assets alongside its euro zone neighbors. The UK consumer price index (CPI) revealed sluggish growth in one of the nation's broadest measures of inflation. Expectations were for growth of 4.5%, but the actual 4.2% had some traders hesitant. The addition of sluggish RPI data and a negative HPI reading from Britain's Department for Communities and Local Government (DCLG) added to the bearish sentiment, as did significant growth in the island economy's trade deficit. Sentiment appears to have shifted bearish for the British pound (GBP) and may not turn back for the remainder of the week as a result. |
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