FOREXYARD: Forex News Blog | |
- Australian Data Continues to Disappoint
- US Job Cuts Hit 16-Month Peak
- Euro Higher on Economic Data and SNB Intervention
- SNB Acts and CHF Tumbles
| Australian Data Continues to Disappoint Posted: 03 Aug 2011 06:52 AM PDT
Piling atop recent articles on Australia's shrinking housing sector, today's publication of Australian retail sales and its national trade balance show a broadening contraction striking several sectors of Australia's economy. The retail sales figure, perhaps most shocking, witnessed contraction in June. Expectations for the retail sales report was for a modest growth of 0.4% from last month's contraction of 0.6%. The actual report of 0.1% shrinkage has led many investors to pull away from the Australian dollar (AUD) in recent trading. The nation's trade balance also revealed sluggish growth of only A$2.05B as opposed to the expected A$2.22B, down from last month's A$2.70B. Read more forex trading news on our forex blog. |
| Posted: 03 Aug 2011 06:50 AM PDT
Though Automatic Data Processing, Inc.'s (ADP) employment change figures gave cause for optimism today, the Challenger Job Cuts report furrowed some eyebrows. A near-60% increase in reported job cuts, year-on-year, was published earlier today by Challenger, Gray and Christmas, Inc., hitting a 16-month peak. The report supports the dismal outlook shared by many investors on Wall Street that the US economy is once more approaching recession. The Dow Jones has been trading consecutively lower these past few days and risk appetite appears to be waning. Moreover, yesterday's consumer spending reports revealed a decline in American consumption. All of which point to an economic downturn in the months ahead. Read more forex trading news on our forex blog. |
| Euro Higher on Economic Data and SNB Intervention Posted: 03 Aug 2011 06:00 AM PDT
The euro was stronger across the board as a combination of strong retail sales numbers and SNB intervention to ease the CHF has helped boost the EUR. A recovery was seen in the euro this morning after strong retail sales of 0.9% on expectations of 0.5%. The May numbers were revised lower to -1.3% from -1.1% but the contraction failed to overshadow the positive headline number. Pressure remains in the euro zone with Italian and Spanish CDS trading at inflated levels along with increased yields in the nations' 10-year bonds trading at 6.28% a 6.16% respectively. However yields have fallen from these highs since the SNB intervention. Bond vigilantes will likely continue to prey on Italy and Spain as the EU summit from July 21st has essentially failed restore investor confidence in the two nations' sovereign debt. This will likely continue to weigh on the euro intermittently but at present dollar weakness looks to continue. EUR/USD resistance is found at 1.4440 with support at 1.4280 and 1.4120. The move to weaken the CHF by the Swiss National Bank (SNB) has provided a shot of adrenaline to deflated markets after yesterday's equity selling. The SNB cut its Libor target to 0.00-0.25% from 0.00-0.75%. Previous 3-month rates were already below this target so the announcement may be more symbolic. Additional measures were taken to weaken the CHF by increasing liquidity supplies to Swiss banks. Nevertheless the impact was felt in the forex trading markets with the EUR/CHF and the USD/CHF rising from their lows. But given the risk off environment the pause in the appreciation of the CHF may only prove to be temporary as there is currently a lack of safe-have assets available. The euro is facing a sovereign debt crisis while the US economy continues to underperform. This leaves the Japanese yen as a possible currency but the risk is increasing for the Japanese Ministry of Finance to step in to ease the JPY. Thus the relief the CHF has been dealt today may prove to be temporary until the next flare up in global risk metrics. Read more forex trading news on our forex blog. |
| Posted: 03 Aug 2011 12:50 AM PDT
Early this morning the Swiss National Bank said the CHF is "massively overvalued at present," and began flooding the market with liquidity to get the 3-month Libor rate as close to zero as possible. The CHF weakened sharply versus both the USD and the EUR. Yesterday the agreement to raise the debt ceiling was met by markets with a fall out in global equities with the major bourses down over 2% and the safe-haven currencies JPY and USD bid. Today's Key Economic Events: GBP – Services PMI – 08:30 GMT USD – ADP Non-Farm Employment Change – 12:15 GMT Read more forex trading news on our forex blog. |
| 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 | |
No comments:
Post a Comment