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- Russian Ruble Advances from Gains in Crude Oil
- Euro Zone Industrial Demand Plummets
- German Business Climate Losing Support
- Price Action Suggests Players Expecting QE3
| Russian Ruble Advances from Gains in Crude Oil Posted: 24 Aug 2011 06:11 AM PDT
A sudden surge in crude oil values yesterday brought about resurgence in a recently-weakened Russian ruble (RUS). The value of the RUS was brought down by strong dips in global stocks last week as traders sought the safety of more stable currencies. The US dollar (USD) was making strides against the RUS, but this week has seen the pair turning back in favor of the ruble. Crude oil is the leading export earner for Russia, which makes its rise in price help lift the value of the ruble. The RUS, in turn, helps return investment interest to the Russian economy at a time when it needs to prove it can weather the financial storm of another global downturn. With the price of oil holding steady above $86 a barrel, the RUS also climbed significantly against its primary basket of currencies. The RUS moved up over 0.2% against the USD and EUR towards 29.03 per dollar and 41.76 per euro. Talk of another round of quantitative easing by the US Federal Reserve has also caused many investors to bet on a sudden spike in oil values should the greenback become weakened. That predicted spike is also feeding into the ruble's recent ascent. Read more forex trading news on our forex blog. |
| Euro Zone Industrial Demand Plummets Posted: 24 Aug 2011 06:08 AM PDT
This morning's report on new industrial orders across the euro zone gave some investors a fright. The data, released by Eurostat, revealed a sudden contraction in demand for new industrial orders throughout the region. With consumer and business confidence in decline, the euro (EUR) appears set to take heavy losses this week. Industrial demand figures in to a region's productivity. With yesterday's reports of positive growth in manufacturing PMI, the sudden downturn in industrial data seems to offset yesterday's optimistic gains. The confidence reports from ZEW and Ifo these past two days are also undermining the gains seen from the recent string of PMI reports. Look to a weakening euro this week. Read more forex trading news on our forex blog. |
| German Business Climate Losing Support Posted: 24 Aug 2011 06:06 AM PDT
Two reports delivered in daily succession have shown the business climate of Germany to be in deep decline this month. Yesterday's report from ZEW showed a deep plunge in economic sentiment and today's Ifo Business Climate report gave credibility to ZEW's findings. Today's Ifo report underscored the rising tension across the euro zone which appears to be sending traders elsewhere for the safety of their investments. As outlook declines, demand goes with it, as does the strength of the local currency. The euro (EUR) may get hit this week from the loss of standing among German businesses and investors. Read more forex trading news on our forex blog. |
| Price Action Suggests Players Expecting QE3 Posted: 24 Aug 2011 05:08 AM PDT
The price action from this morning's European trading session suggests market players are expecting the Federal Reserve to enact another round of quantitative easing as the USD traded lower despite bearish economic data from the euro zone. European data was significantly weaker this morning but it did not deter traders from bidding the EUR higher. The German Ifo Business Climate fell to 108.7 from 112.9 on expectations of 111.2. The euro zone industrial orders also fell sharply by 0.7& on consensus forecasts of a 0.6% increase. The data comes on the heels of yesterday's PMI data that was higher than forecasted but still signaled a weaker Q3 euro zone growth. Interesting price action was seen in the EUR/USD this morning. Despite the negative data releases the euro was bid for a healthy 100 pips following the news and the pair rose to a high of 1.4470. This signals something other than today's euro zone data releases are driving the forex trading markets. One could speculate that market players are expecting the dollar to be weaker after Friday's Fed speech in Jackson Hole. As readers of this forex trading blog will be aware of, the risks for Bernanke to disappoint traders are high. EUR/USD near-term gains have been capped at 1.4500 while support is found at 1.4350. Read more forex trading news on our forex blog. |
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