FOREXYARD: Forex News Blog | |
- EUR Rally Stalls as Greek Bond Yields Rise
- Norway Heralded as Bastion of Economic Growth
- Canadian Core Retail Sales in Decline
- Euro Zone PMI Largely Bullish
| EUR Rally Stalls as Greek Bond Yields Rise Posted: 23 Aug 2011 06:57 AM PDT
The EUR rose as high as 1.45 following a strong PMI surveys but the gains failed to hold after a disappointing ZEW survey and a rise in Greek bond yields reminds investors the European debt crisis is not going anywhere. PMI surveys for both Germany and the euro zone were above expectations. German manufacturing PMI came in at 52.0 on consensus forecasts of 50.9 and EZ manufacturing dropped to 49.7 from 50.4 on expectations of 49.6. German ZEW sentiment came in on the downside of expectations, falling to -37.6 from -15.1. The EUR rally ran out of steam at the 1.45 level the same time the ZEW survey was released and willing offers stood at the big round number. Also weighing on the EUR was a rise in Greek 2-year yields to almost 38%, hovering near the all-time high of 40.4%. This highlights the tension that remains in the euro zone given the requests for collateral from some European nations in return for approval of the July 21st amendment to the Greek bailout. The issue could continue to weigh on the euro given Eurobonds are a non-starter according to both Merkel and Sarkozy. This EUR/USD surged as high as 1.4500 before encountering selling interest and the release of the disappointing German ZEW economic sentiment where the EUR/USD fell back to 1.4440. Initial support is located at 1.4400. Additional support is found at 1.4350 followed by the rising trend line from the July lows at 1.4200. To the upside the pair could be capped between 1.4500 and 1.4540 leading up to Bernanke's Jackson Hole speech on Friday. Read more forex trading news on our forex blog. |
| Norway Heralded as Bastion of Economic Growth Posted: 23 Aug 2011 06:49 AM PDT
Several analyses reported on over the past week have generated a buzz around the Norwegian economy. One of the leading summations came from John Hydeskov, a leading analyst at Danske Bank A/S in London, who commented in an interview on Bloomberg TV, on his bank's expectation to see double-digit growth in Norwegian trade. The analysis included the recent rebound traders have witnessed in global stocks these past two trading days, highlighting a return to higher yielding assets while traders seek out stores of value to offset potential losses seen on Europe's regional currencies. With a sudden uptick in stocks Monday, the Swiss franc (CHF) in particular was dropping fast against the Scandinavian kroner, which jumped near 4% on the day. Other reports from forex analysts have noted the Norwegian krone's (NOK) ability to act as a hedge against volatility, a relatively safer investment than traditionally high yielding assets when risk appetite is on the rise, and its traditional tracking value against Crude Oil makes its movements somewhat more stable. Coupled with the forecasts of double-digit trade growth and a solid pace of economic expansion, the Norwegian economy seems to be positioned for serious gains in the months ahead. Forex traders have begun to shift assets in the direction of the NOK and it will be interesting to watch if the currency will shake off its mimicking behavior of oil as the price of crude continues to plummet. Read more forex trading news on our forex blog. |
| Canadian Core Retail Sales in Decline Posted: 23 Aug 2011 06:44 AM PDT
Data released early Tuesday afternoon from the Canadian economy may prove bearish for the Canadian dollar (CAD) in the days ahead. Though the nominal reading on total retail sales underscored a 0.7% growth for the previous month, the core data, which excludes volatile items such as transportation sales, revealed a 0.1% decline. The core data tends to have higher impact as it factors out those sales which tend to generate wild swings. The core figures measure the primary factors of consumer spending at the typical retail level and thus impact currency values much more due to their more direct correlation. Read more forex trading news on our forex blog. |
| Posted: 23 Aug 2011 06:39 AM PDT
The string of reports out this morning on the flash manufacturing and services PMI from Germany, France and the broader euro zone came in largely better than forecast, with only minor exceptions. Only two reports from the series disappointed onlookers, but the majority of data proved bullish for the euro (EUR). Traders saw a balanced outcome across the euro zone from these reports, with German services falling short and manufacturing beating expectations and with France's reports flipped in value. The bullish PMI figures have so far helped the EUR make gains in today's trading despite a dismal ZEW reading on Germany's economic outlook. Read more forex trading news on our forex blog. |
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