FOREXYARD: Forex News Blog | |
- Italy Destined to Default?
- US Unemployment Claims Signal Improved Job Sector
- Germany Factory Orders See 1.8% Growth
- BoJ Intervention Weakens Yen Temporarily
- ECB and BOE Rate Decisions on the Heels of JPY Intervention
- Russian Ruble Pushed and Pulled by Market Forces
| Posted: 04 Aug 2011 06:37 AM PDT
European debt woes have flared up once more this week, with Italy coming strongly into view as a result of its burgeoning debt and sluggish growth. Defying pressure for his resignation amid the talk, Italian Prime Minister Silvio Berlusconi vowed Wednesday to remain in office until his mandate comes to a close in 2013 and promised to work tirelessly towards shoring up Italy's finances. Italy's debt, a staggering $2.2T, is viewed all the more ominously when lined up with the country's economic output. As a portion of GDP, Italy's debt poses a far greater challenge than that of even the United States, as debated these past few weeks by Congress. Being the seventh largest economy worldwide, Italy's default would likely ripple through financial markets, dragging the euro zone down with it. The question is whether Italy, and the broader region, will respond, or is capable of responding, to this crisis in the same way it had for Greece. Read more forex trading news on our forex blog. |
| US Unemployment Claims Signal Improved Job Sector Posted: 04 Aug 2011 06:31 AM PDT
Following suit from last week's surprise unemployment claims data, this week's report also beat out forecasts, revealing only 400,000 new claims for unemployment benefits this week. The numbers are not stellar by any means, but a slowdown in unemployment insurance claims signals a modest strengthening of the US job market. ADP's report on Wednesday regarding private sector job growth also revealed a major upswing in job creation. Forecasts had anticipated approximately 100,000 new jobs. The actual report came in at 118,000 new jobs. That also marks 14 consecutive months of job growth in the private sector. Some could hold this data up as a rebuke to criticism of President Obama's handling of the economy during the worst recession since 1929, but that is a matter for future historians to debate. Read more forex trading news on our forex blog. |
| Germany Factory Orders See 1.8% Growth Posted: 04 Aug 2011 06:28 AM PDT
Results for this month's reading on German factory orders surprised many investors this morning. Data released by Deutsche Bundesbank today at 11:00 GMT highlighted a solid 1.8% uptick in demand for factory goods. The news has been mixed for the euro zone's common currency, the euro (EUR), however, as the region struggles with debt woes in Italy and Spain. Expectations for today's report were for a contraction in demand as the euro zone continues to struggle with mired sluggishness. Analysts were anticipating a contraction ranging from 0.2% to 0.9%, making the sudden uptick of 1.8% all the more impactful on today's market. Should such numbers persist through the remaining months of summer, the region could be in a better position to better tackle the debt crisis affecting Germany's peripheral neighbors. Read more forex trading news on our forex blog. |
| BoJ Intervention Weakens Yen Temporarily Posted: 04 Aug 2011 05:59 AM PDT
The Bank of Japan made a ¥10 trillion splash in the markets to prevent speculators from driving the value of the Japanese currency higher. Most likely the BoJ was forced to act following yesterday's quasi-quantitative easing by the SNB to weaken the CHF. The Asian forex trading session was more volatile than normal with the yen soaring as high as 80.22 from 78.30 at 02:00 GMT when the selling began. In addition to the intervention in the forex trading markets the BoJ also committed to increasing its asset purchase fund and additional fixed rate loans. Both of these programs will be worth ¥5 trillion each. At first glance the BoJ looks to have succeeded in weakening the yen. Early gains are impressive with the major pairs triggering stops and inflicting pain on both hedge funds and retail forex traders that have been long the JPY. To keep the pressure on those that seek the JPY as a safe-haven currency the BoJ has been selling yen intermittently throughout the day. While not exposing the entirety of the intervention program the BoJ will keep the markets on their toes with the chance the BoJ could begin selling the JPY again to keep speculators at bay. The technicals show a bleaker picture for the BoJ, particularly in the EUR/JPY which rose as high as 114.16, a level that has significant technical implications. This price close to the pair's 200-day moving average (113.91), the bottom line of a previous bearish flag pattern stemming from the mid-July low (114.05,) and the 38% Fibonacci retracement (114.25) from the April high to this week's low. The falling trend line from the April and July highs will likely find willing JPY buyers at the 115.50 level if the pair manages to move higher. To the downside the EUR/JPY may find support at 112.20. Read more forex trading news on our forex blog. |
| ECB and BOE Rate Decisions on the Heels of JPY Intervention Posted: 04 Aug 2011 12:47 AM PDT
Increased bond yields and higher CDS rates for Spain and Italy are keeping the euro from making any significant inroads versus the USD. Yesterday Italian Prime Minister Silvio Berlusconi attempted to talk up the strength of Italian finances and the economy's solid fundamentals. Market players continue to trade in a difficult environment after yesterday's interest rate move by the SNB to lower the value of the CHF and today's intervention by the BoJ to weaken the yen. Today's Key Economic Events: JPY – BOJ Press Conference – 07:30 GMT GBP – Official Bank Rate – 11:00 GMT EUR – Minimum Bid and ECB Press Conference Read more forex trading news on our forex blog. |
| Russian Ruble Pushed and Pulled by Market Forces Posted: 03 Aug 2011 12:26 PM PDT
Two headline events are causing a tumultuous push and pull effect on the Russian ruble (RUS) this week. First and foremost is the rumor that Prime Minister Vladimir Putin may run for president in next year's election. Investors have begun to buy up the RUS as a response to the potential run by the sitting PM, citing future strength and continuity as a cause for purchasing domestic assets in Russia. According to the Russian central bank, an approximate $21.3B net outflow left the country in the first quarter due to uncertainties surrounding the upcoming elections, followed by another exit of $9.9B in Q2. The stability Putin brings to the election circuit has helped stifle much of this revenue outflow, supporting the stability of the RUS despite Putin's opposition to parts of the West's global agenda. The second factor pulling on RUS values is a lowering in price of oil due to recent warnings about ratings downgrades. Moody's Investors Service hinted that US debt may receive a ratings downgrade should indecision result from the debates taking place in Congress over a lifting of the debt ceiling. The impact has been a decline in oil values from over $100 a barrel to a current price near $93, which is weighing on the ruble in this week's trading. The RUS still appears to be inching higher against its primary euro-dollar currency basket, but dips caused by lower oil prices may slow this growth and generate temporary downturns. |
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