Thursday, October 13, 2011

FOREXYARD: Forex News Blog

FOREXYARD: Forex News Blog

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Russian Ruble Advances from Gains in Crude Oil

Posted: 12 Oct 2011 08:53 AM PDT

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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.

Euro Zone Industrial Demand Plummets

Posted: 12 Oct 2011 08:50 AM PDT

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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 this past month are also undermining the gains seen from the recent string of PMI reports. Look to a weakening euro this week.

German Business Climate Losing Support

Posted: 12 Oct 2011 08:47 AM PDT

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Two reports delivered in daily succession have shown the business climate of Germany to be in deep decline this month. Yesterday's reports showed a deep plunge in economic sentiment and today's reports are expected to give credibility to those findings.

Today's reports underscore 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.
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