The month of June could be one of the worst nightmares of Fundamental Traders. The market either moved in a different direction to the news release or in some cases short / beyond the normal forecasts. There are cases, the move is not within the expected timeframe.
If you did not perform well for last month be assured that you are still on the right track. There’s nothing wrong with your indicators, judgment or signal provider.
It was reported in WSJ that Soros admitted that he “realized his mistake”.
Sunday, June 29, 2008
Saturday, June 28, 2008
Bloomberg Forex News : The Yen vs Euro & Dollar
June 27 (Bloomberg) -- The yen strengthened from a record low against the euro and rose versus the dollar as a decline in stock markets around the world reduced demand for higher- yielding assets funded by loans in Japan.
Friday, June 27, 2008
Weak Dollar
Dollar Falls to Two-Week Low on Reduced Bets Fed to Raise Rates
June 26 (Bloomberg) -- The dollar declined to the weakest level against the euro in more than two weeks as investors reduced speculation that the Federal Reserve will increase borrowing costs in August.
June 26 (Bloomberg) -- The dollar declined to the weakest level against the euro in more than two weeks as investors reduced speculation that the Federal Reserve will increase borrowing costs in August.
Thursday, June 26, 2008
Forex News
FOMC Unchanged, Increased Risks to Inflation
by Korman Tam
6/25/2008 2:30:00 PM
The Federal Reserve, as expected, held monetary policy unchanged at 2% when it announced its decision shortly after 2:00pm. However, the vote to leave rates unchanged was not by unanimous decision with Dallas Fed President Fisher voting in favor of a rate hike. Although the dollar initially jumped higher following the announcement, it quickly relinquished those gains as traders digested the accompanying statement.
Dollar Little Changed Versus Euro Before Fed Decision on Rates
June 25 (Bloomberg) -- The dollar was little changed against the euro before the Federal Reserve ends a two-day meeting at which policy makers are forecast to keep the target lending rate at the lowest level in more than three years.
The dollar pared its decline as crude oil prices fell on an unexpected increase in inventories, reducing the need to sell the U.S. currency as a hedge against inflation. Fed Chairman Ben S. Bernanke said on June 9 the central bank would ``strongly resist'' a leap in inflation expectations.
by Korman Tam
6/25/2008 2:30:00 PM
The Federal Reserve, as expected, held monetary policy unchanged at 2% when it announced its decision shortly after 2:00pm. However, the vote to leave rates unchanged was not by unanimous decision with Dallas Fed President Fisher voting in favor of a rate hike. Although the dollar initially jumped higher following the announcement, it quickly relinquished those gains as traders digested the accompanying statement.
Dollar Little Changed Versus Euro Before Fed Decision on Rates
June 25 (Bloomberg) -- The dollar was little changed against the euro before the Federal Reserve ends a two-day meeting at which policy makers are forecast to keep the target lending rate at the lowest level in more than three years.
The dollar pared its decline as crude oil prices fell on an unexpected increase in inventories, reducing the need to sell the U.S. currency as a hedge against inflation. Fed Chairman Ben S. Bernanke said on June 9 the central bank would ``strongly resist'' a leap in inflation expectations.
Today's Forex News
U.S.
Fed Speech (Kohn) 11:30 19:30
Expected Forex Market reaction to the economic news: moderate U.S.
GDP, Revision for 1Q 08 12:30 20:30
Expected Forex Market reaction to the economic news: none U.S.
Jobless Claims 12:30 20:30 375K
Expected Forex Market reaction to the economic news: moderate U.S.
Existing Home Sales for May 08 14:00 22:00 4.95Ma.r. 1.2%MM
Fed Speech (Kohn) 11:30 19:30
Expected Forex Market reaction to the economic news: moderate U.S.
GDP, Revision for 1Q 08 12:30 20:30
Expected Forex Market reaction to the economic news: none U.S.
Jobless Claims 12:30 20:30 375K
Expected Forex Market reaction to the economic news: moderate U.S.
Existing Home Sales for May 08 14:00 22:00 4.95Ma.r. 1.2%MM
Wednesday, June 25, 2008
Forex News
US FOMC Interest Rate Statement.
It is unlikely that the Interest Rate will be cut further.
U.S. New Home Sales.
Forecasts : 511 K
Buy USDJPY if Higher than 511 K
Sell USDJPY if Lower than 511 K
It is unlikely that the Interest Rate will be cut further.
U.S. New Home Sales.
Forecasts : 511 K
Buy USDJPY if Higher than 511 K
Sell USDJPY if Lower than 511 K
Forex News : Dollar Falls
Dollar Falls Against Euro as Consumer Confidence Drops in June
June 24 (Bloomberg) -- The dollar fell against the euro as consumer confidence dropped this month to a 16-year low and housing prices plunged in April, reducing speculation that the Federal Reserve will increase borrowing costs later this year.
June 24 (Bloomberg) -- The dollar fell against the euro as consumer confidence dropped this month to a 16-year low and housing prices plunged in April, reducing speculation that the Federal Reserve will increase borrowing costs later this year.
Tuesday, June 24, 2008
Forex News: FOMC. Consumer Confidence. New Home Sales
Euro Slumps on Data
by Korman Tam
6/23/2008 3:00:00 PM
The dollar edged higher against the euro and sterling at the start of the week, benefiting from soft Eurozone and UK economic reports and rising to 1.5469 and 1.9588, respectively. The currency market continues to largely be driven by sentiment over global interest rate differentials as traders closely scrutinize economic reports and gauge the scope and direction of monetary policy moves by central banks.
In the coming week, the key highlight will be the FOMC's monetary policy announcement scheduled for Wednesday afternoon. The market is largely expecting the Fed to stand pat, while the accompanying policy statement will be closely assessed for clues as to when the FOMC will shift to a tightening bias in order to curb inflation. In light of the mixed views revealed in recent Fed speak, the statement will likely express caution over the inflationary outlook while simultaneously attempting to temper market expectations for aggressive policy tightening.
The US economic calendar consist of April consumer confidence, durable goods orders, May new home sales, Q1 GDP, Q1 core PCE, weekly jobless claims, personal income, consumption, personal spending, and the University of Michigan consumer sentiment survey. The data this week will highlight the current dilemma facing the Fed with consumer sentiment, housing and manufacturing likely to remain weak while inflation continues to tick higher. Despite some hawkish rhetoric from the Fed's Lacker, who last week suggested the FOMC needed to aggressively respond to persistent elevated inflation with additional vigilance, given the current soft economic outlook, we see the FOMC holding off until the fourth quarter with only a 25-basis point hike.
by Korman Tam
6/23/2008 3:00:00 PM
The dollar edged higher against the euro and sterling at the start of the week, benefiting from soft Eurozone and UK economic reports and rising to 1.5469 and 1.9588, respectively. The currency market continues to largely be driven by sentiment over global interest rate differentials as traders closely scrutinize economic reports and gauge the scope and direction of monetary policy moves by central banks.
In the coming week, the key highlight will be the FOMC's monetary policy announcement scheduled for Wednesday afternoon. The market is largely expecting the Fed to stand pat, while the accompanying policy statement will be closely assessed for clues as to when the FOMC will shift to a tightening bias in order to curb inflation. In light of the mixed views revealed in recent Fed speak, the statement will likely express caution over the inflationary outlook while simultaneously attempting to temper market expectations for aggressive policy tightening.
The US economic calendar consist of April consumer confidence, durable goods orders, May new home sales, Q1 GDP, Q1 core PCE, weekly jobless claims, personal income, consumption, personal spending, and the University of Michigan consumer sentiment survey. The data this week will highlight the current dilemma facing the Fed with consumer sentiment, housing and manufacturing likely to remain weak while inflation continues to tick higher. Despite some hawkish rhetoric from the Fed's Lacker, who last week suggested the FOMC needed to aggressively respond to persistent elevated inflation with additional vigilance, given the current soft economic outlook, we see the FOMC holding off until the fourth quarter with only a 25-basis point hike.
Forex News : Euro Drops
Euro Falls Most Versus Dollar in Week as German Sentiment Ebbs
June 23 (Bloomberg) -- The euro dropped the most versus the dollar in more than a week as German business confidence fell in June to the lowest level since 2005, reducing bets the European Central Bank will increase interest rates this year.
June 23 (Bloomberg) -- The euro dropped the most versus the dollar in more than a week as German business confidence fell in June to the lowest level since 2005, reducing bets the European Central Bank will increase interest rates this year.
Sunday, June 22, 2008
Interest Rate and the Dollar
NEW YORK (MarketWatch) -- Surging commodity prices and strident warnings from Federal Reserve officials about inflation have some in the market betting that the central bank will increase interest rates as early as this fall, according to closely watched federal funds futures contracts.
Yet, five other indicators flatly contradict that outlook, suggesting that the central bank will instead opt to keep borrowing at currently low levels to prevent the ailing U.S. economy from experiencing even more pain.
Analysts point to at least five reasons the Fed won't rush to raise rates: 1) lending rates show the credit crunch continues; 2) the banking system is still fragile; 3) rates hikes in election years are rare; 4) the economy, especially housing, still poses a threat; and 5) flattening the yield curve could pressure bank profits.
Yet, five other indicators flatly contradict that outlook, suggesting that the central bank will instead opt to keep borrowing at currently low levels to prevent the ailing U.S. economy from experiencing even more pain.
Analysts point to at least five reasons the Fed won't rush to raise rates: 1) lending rates show the credit crunch continues; 2) the banking system is still fragile; 3) rates hikes in election years are rare; 4) the economy, especially housing, still poses a threat; and 5) flattening the yield curve could pressure bank profits.
Saturday, June 21, 2008
Dollar Heads for Weekly Drop
Dollar Heads for Weekly Drop on Pared Bets Fed to Raise Rates
June 20 (Bloomberg) -- The dollar was headed for its biggest weekly drop against the euro in almost three months on speculation the Federal Reserve will delay increasing interest rates to protect the U.S. economy.
June 20 (Bloomberg) -- The dollar was headed for its biggest weekly drop against the euro in almost three months on speculation the Federal Reserve will delay increasing interest rates to protect the U.S. economy.
Friday, June 20, 2008
GBP Rallies, Oil Retreats
GBP Rallies, Oil Retreats
by Korman Tam
6/19/2008 3:20:00 PM
The greenback edged higher against the euro in the Thursday session rising to 1.5468 on the heels of a pullback in oil prices. Prompting the retreat in oil were reports that China would raise retail prices for gasoline by 17% -- sending contracts for WTI crude to $132.50 per barrel. Nonetheless, the major currency pairs have remained confined within ranges as traders continue to gauge the direction of global interest rate differentials.
With markets largely expecting the ECB to hike rates by 25-basis points in July to 4.25%, the focus will be on the timing of the FOMC's next move. Fed fund futures are currently pricing in a 50% probability for a 25-basis point rate hike by the August meeting. Meanwhile, the SNB left its monetary policy unchanged when it announced its decision overnight with Bank President Roth saying "there is enough reason to suggest the current inflationary trend is of a transitory nature".
US economic reports released in the Thursday session included weekly jobless claims, the June Philadelphia Fed survey and May leading indicators. The weekly jobless claims number fell to 381k versus 384k from the previous week while the May leading economic indicators held steady from a month prior at 0.1%. However, the Philadelphia Fed survey reflected continued weakness in manufacturing with the report deteriorating to minus 17.1 and missing estimates for an improvement to minus 12.0 from minus 15.6.
Dollar Rises as Traders Sell Euro Versus Greenback to Buy Pound
June 19 (Bloomberg) -- The dollar rose against the euro for the first time in four days after an unexpected surge in U.K. retail sales led traders to sell the 15-nation currency versus the greenback and buy the pound.
British sterling appreciated versus the euro and the dollar after a government report showed U.K. retail sales increased in May the most since records began in 1986. The Swiss franc retreated after the central bank left its target lending rate at 2.75 percent, one of the lowest among industrialized countries.
by Korman Tam
6/19/2008 3:20:00 PM
The greenback edged higher against the euro in the Thursday session rising to 1.5468 on the heels of a pullback in oil prices. Prompting the retreat in oil were reports that China would raise retail prices for gasoline by 17% -- sending contracts for WTI crude to $132.50 per barrel. Nonetheless, the major currency pairs have remained confined within ranges as traders continue to gauge the direction of global interest rate differentials.
With markets largely expecting the ECB to hike rates by 25-basis points in July to 4.25%, the focus will be on the timing of the FOMC's next move. Fed fund futures are currently pricing in a 50% probability for a 25-basis point rate hike by the August meeting. Meanwhile, the SNB left its monetary policy unchanged when it announced its decision overnight with Bank President Roth saying "there is enough reason to suggest the current inflationary trend is of a transitory nature".
US economic reports released in the Thursday session included weekly jobless claims, the June Philadelphia Fed survey and May leading indicators. The weekly jobless claims number fell to 381k versus 384k from the previous week while the May leading economic indicators held steady from a month prior at 0.1%. However, the Philadelphia Fed survey reflected continued weakness in manufacturing with the report deteriorating to minus 17.1 and missing estimates for an improvement to minus 12.0 from minus 15.6.
Dollar Rises as Traders Sell Euro Versus Greenback to Buy Pound
June 19 (Bloomberg) -- The dollar rose against the euro for the first time in four days after an unexpected surge in U.K. retail sales led traders to sell the 15-nation currency versus the greenback and buy the pound.
British sterling appreciated versus the euro and the dollar after a government report showed U.K. retail sales increased in May the most since records began in 1986. The Swiss franc retreated after the central bank left its target lending rate at 2.75 percent, one of the lowest among industrialized countries.
GBPJPY
GBPJPY
SHORT position at 213.00
STOP LOSS above 213.50 (- 50 pips).
THE TARGETS are 212.38 / 212.02 / 211.74
OP, SL & TP at your own risks
SHORT position at 213.00
STOP LOSS above 213.50 (- 50 pips).
THE TARGETS are 212.38 / 212.02 / 211.74
OP, SL & TP at your own risks
Thursday, June 19, 2008
The Dollar and the Yen
Dollar Trades Near Strongest Versus Yen Since February on Rates
June 18 (Bloomberg) -- The dollar traded near a four-month high against the yen on bets the Federal Reserve will increase borrowing costs later this year while the Bank of Japan holds its target at the lowest level among major economies.
Japan's currency weakened as Bank of Japan's policy meeting minutes from May indicated ``considerable downside risks.'' China's yuan advanced to the strongest since a dollar link ended in 2005 as the central bank's Governor Zhou Xiaochuan said the currency ``will have to rise'' because a weakening dollar will drive up commodity prices.
``There's still some room for the yen to weaken,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``The Fed is done easing. There's no interest-rate hike in the cards from the Bank of Japan.''
The dollar traded at 107.95 yen at 10:45 a.m. in New York, compared with 107.93 yesterday. It touched 108.58 on June 16, the strongest level since Feb. 14. Gladstein expects the dollar to rise as much as 110.50 yen. The yen was little changed at 167.31 per euro, compared with 167.41, after earlier touching 168.04, the highest since July 23. The dollar traded at $1.5497 per euro, compared with $1.5511.
June 18 (Bloomberg) -- The dollar traded near a four-month high against the yen on bets the Federal Reserve will increase borrowing costs later this year while the Bank of Japan holds its target at the lowest level among major economies.
Japan's currency weakened as Bank of Japan's policy meeting minutes from May indicated ``considerable downside risks.'' China's yuan advanced to the strongest since a dollar link ended in 2005 as the central bank's Governor Zhou Xiaochuan said the currency ``will have to rise'' because a weakening dollar will drive up commodity prices.
``There's still some room for the yen to weaken,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``The Fed is done easing. There's no interest-rate hike in the cards from the Bank of Japan.''
The dollar traded at 107.95 yen at 10:45 a.m. in New York, compared with 107.93 yesterday. It touched 108.58 on June 16, the strongest level since Feb. 14. Gladstein expects the dollar to rise as much as 110.50 yen. The yen was little changed at 167.31 per euro, compared with 167.41, after earlier touching 168.04, the highest since July 23. The dollar traded at $1.5497 per euro, compared with $1.5511.
Wednesday, June 18, 2008
Sterling Slumps on CPI
Sterling Slumps on CPI
by Korman Tam
6/17/2008 3:05:00 PM
The greenback was mixed in Tuesday trading, higher against the yen around the 108-level but giving back some of its gains versus the euro to relinquish the 1.55-level. The economic reports released included May PPI, housing starts, building permits, capacity utilization, and industrial output. May housing starts fell by more than expected to 969k units, versus 1.032 million units a month earlier. Meanwhile, producer prices rose by 1.4% versus 0.2% a month earlier and up to 7.2% compared with 6.5% in the previous year. Industrial output missed calls for an improvement to 0.1% falling by 0.2%, while capacity utilization fell to 79.4% from 79.7% a month earlier.
GBP Lower on Inflation
The sterling fell sharply overnight following the release of May CPI, which prompted a sell-off in the currency to 1.9467 against the dollar and 0.7954 versus the euro. The May CPI figures were slightly higher than forecast at 3.3%, compared with estimates for an increase to 3.2% from 3.0 in the previous year. The monthly figure was also higher than expected at 0.6% versus calls for a larger decline to 0.5% from 0.8% in April. The RPI readings also ticked higher, with the headline May RPI increasing to 4.3% versus 4.2% a year earlier, while easing off to 0.5% from 0.9% a month earlier. The May RPI-x fell to 0.7% from 0.9% in the previous month and climbing to 4.4% compared with 4.0% a year earlier.
by Korman Tam
6/17/2008 3:05:00 PM
The greenback was mixed in Tuesday trading, higher against the yen around the 108-level but giving back some of its gains versus the euro to relinquish the 1.55-level. The economic reports released included May PPI, housing starts, building permits, capacity utilization, and industrial output. May housing starts fell by more than expected to 969k units, versus 1.032 million units a month earlier. Meanwhile, producer prices rose by 1.4% versus 0.2% a month earlier and up to 7.2% compared with 6.5% in the previous year. Industrial output missed calls for an improvement to 0.1% falling by 0.2%, while capacity utilization fell to 79.4% from 79.7% a month earlier.
GBP Lower on Inflation
The sterling fell sharply overnight following the release of May CPI, which prompted a sell-off in the currency to 1.9467 against the dollar and 0.7954 versus the euro. The May CPI figures were slightly higher than forecast at 3.3%, compared with estimates for an increase to 3.2% from 3.0 in the previous year. The monthly figure was also higher than expected at 0.6% versus calls for a larger decline to 0.5% from 0.8% in April. The RPI readings also ticked higher, with the headline May RPI increasing to 4.3% versus 4.2% a year earlier, while easing off to 0.5% from 0.9% a month earlier. The May RPI-x fell to 0.7% from 0.9% in the previous month and climbing to 4.4% compared with 4.0% a year earlier.
Housing Data : Dollar Falls
Dollar Falls Versus Euro as Housing Starts Reach 17-Year Low
June 17 (Bloomberg) -- The dollar fell against the euro after a government report showed housing starts dropped in May to a 17-year low, raising speculation the Federal Reserve will delay increasing borrowing costs this year.
The pound weakened versus the euro and the dollar after Bank of England Governor Mervyn King said the path to bringing inflation within the central bank's target is ``uncertain.'' South Korea's won rose the most against the dollar in almost three months after the government said it will use a stronger currency to help slow inflation.
``The reduced expectations for the Fed rate hike certainly will come back to bite the dollar,'' said Todd Elmer, currency strategist at Citigroup Global Markets Inc. in New York. ``The economy won't recover dramatically anytime soon.''
The dollar decreased 0.1 percent to $1.5499 per euro at 9:32 a.m. in New York, from $1.5477 yesterday. The U.S. currency traded at 108.18 yen, compared with 108.22. The yen fell 0.1 percent to 167.65 per euro, from 167.49.
South Korea's won was the biggest gainer versus the U.S. currency, climbing 1.5 percent to 1,023.30 Policy makers will take ``solid'' measures, including favoring a stronger currency, to cool inflation, said Choi Jong Ku, head of the finance ministry's international finance bureau.
Sterling dropped 0.7 percent to $1.9494 and 0.8 percent to 79.46 pence per euro as King predicted will British inflation will exceed 4 percent this year. The rate accelerated to 3.3 percent in May, the highest since at least 1997, the Office for National Statistics said in a report.
Housing Starts
U.S. housing starts dropped to an annual rate of 975,000 in May, from a revised 1.008 million the previous month, the Commerce Department said today in Washington. The median forecast of 72 economists surveyed by Bloomberg News was for a decrease to 980,000 from a previously reported 1.032 million.
Industrial production in the U.S. unexpectedly fell in May. Production in factories, mines and utilities declined 0.2 percent last month after dropping 0.7 percent in April, the Fed reported today in Washington. Economists had forecast industrial production would rise 0.1 percent, according to the median of 68 estimates in a Bloomberg News survey.
The dollar weakened against the euro earlier after the Wall Street Journal and the Financial Times reported the U.S. central bank would probably leave borrowing costs unchanged beyond its June policy meeting.
Futures on the Chicago Board of Trade showed a 54 percent chance the Fed will increase the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point at its August meeting, compared with 69 percent odds yesterday. There's a 16 percent chance policy makers will lift the rate to 3 percent by December.
German Confidence
The euro pared gains against the dollar after a report showed investor confidence in Germany fell to a more than 15- year low this month. The Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations fell to minus 52.4, from minus 41.4 in May. A negative reading means pessimists outnumber optimists.
European Central Bank President Jean-Claude Trichet said on June 5 policy makers may raise the 4 percent main refinancing rate next month to curb the fastest inflation in 16 years.
``The ZEW report could encourage euro selling,'' said Akio Shimizu, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's second- largest lender. ``Signs of a weakening economy mean the ECB could reverse course and switch to a monetary easing bias later this year.'' The euro may fall to $1.5430 today, he said.
Producer Prices
Prices paid to U.S. producers rose more than forecast in May as higher fuel and food costs heightened the threat of inflation. The 1.4 percent jump was the biggest gain since November and followed a 0.2 percent increase in April, the Labor Department said today in Washington. So-called core producer prices that exclude fuel and food increased 0.2 percent, matching economists' projections.
The Fed needs to prevent the public's expectation that inflation will accelerate from spurring demands for higher wages, William Poole, former St. Louis Fed President, said today in an interview on Bloomberg Television.
``You want to keep wages behaving,'' he said. Once the public's anticipation of rising prices begins to stoke demands for higher wages, ``the jig is up'' and inflation becomes harder to eradicate.
The public's outlook for annual inflation over five years stood at 3.4 percent in June, up from 2.9 percent the same month last year, according to the Reuters/University of Michigan Survey.
Poole also spoke out against Fed intervention with the value of the dollar. ``The Fed does not have the power to put a floor under the dollar,'' he said. ``I think the Fed should stay clear.''
June 17 (Bloomberg) -- The dollar fell against the euro after a government report showed housing starts dropped in May to a 17-year low, raising speculation the Federal Reserve will delay increasing borrowing costs this year.
The pound weakened versus the euro and the dollar after Bank of England Governor Mervyn King said the path to bringing inflation within the central bank's target is ``uncertain.'' South Korea's won rose the most against the dollar in almost three months after the government said it will use a stronger currency to help slow inflation.
``The reduced expectations for the Fed rate hike certainly will come back to bite the dollar,'' said Todd Elmer, currency strategist at Citigroup Global Markets Inc. in New York. ``The economy won't recover dramatically anytime soon.''
The dollar decreased 0.1 percent to $1.5499 per euro at 9:32 a.m. in New York, from $1.5477 yesterday. The U.S. currency traded at 108.18 yen, compared with 108.22. The yen fell 0.1 percent to 167.65 per euro, from 167.49.
South Korea's won was the biggest gainer versus the U.S. currency, climbing 1.5 percent to 1,023.30 Policy makers will take ``solid'' measures, including favoring a stronger currency, to cool inflation, said Choi Jong Ku, head of the finance ministry's international finance bureau.
Sterling dropped 0.7 percent to $1.9494 and 0.8 percent to 79.46 pence per euro as King predicted will British inflation will exceed 4 percent this year. The rate accelerated to 3.3 percent in May, the highest since at least 1997, the Office for National Statistics said in a report.
Housing Starts
U.S. housing starts dropped to an annual rate of 975,000 in May, from a revised 1.008 million the previous month, the Commerce Department said today in Washington. The median forecast of 72 economists surveyed by Bloomberg News was for a decrease to 980,000 from a previously reported 1.032 million.
Industrial production in the U.S. unexpectedly fell in May. Production in factories, mines and utilities declined 0.2 percent last month after dropping 0.7 percent in April, the Fed reported today in Washington. Economists had forecast industrial production would rise 0.1 percent, according to the median of 68 estimates in a Bloomberg News survey.
The dollar weakened against the euro earlier after the Wall Street Journal and the Financial Times reported the U.S. central bank would probably leave borrowing costs unchanged beyond its June policy meeting.
Futures on the Chicago Board of Trade showed a 54 percent chance the Fed will increase the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point at its August meeting, compared with 69 percent odds yesterday. There's a 16 percent chance policy makers will lift the rate to 3 percent by December.
German Confidence
The euro pared gains against the dollar after a report showed investor confidence in Germany fell to a more than 15- year low this month. The Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations fell to minus 52.4, from minus 41.4 in May. A negative reading means pessimists outnumber optimists.
European Central Bank President Jean-Claude Trichet said on June 5 policy makers may raise the 4 percent main refinancing rate next month to curb the fastest inflation in 16 years.
``The ZEW report could encourage euro selling,'' said Akio Shimizu, chief manager of foreign-exchange trading in Tokyo at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's second- largest lender. ``Signs of a weakening economy mean the ECB could reverse course and switch to a monetary easing bias later this year.'' The euro may fall to $1.5430 today, he said.
Producer Prices
Prices paid to U.S. producers rose more than forecast in May as higher fuel and food costs heightened the threat of inflation. The 1.4 percent jump was the biggest gain since November and followed a 0.2 percent increase in April, the Labor Department said today in Washington. So-called core producer prices that exclude fuel and food increased 0.2 percent, matching economists' projections.
The Fed needs to prevent the public's expectation that inflation will accelerate from spurring demands for higher wages, William Poole, former St. Louis Fed President, said today in an interview on Bloomberg Television.
``You want to keep wages behaving,'' he said. Once the public's anticipation of rising prices begins to stoke demands for higher wages, ``the jig is up'' and inflation becomes harder to eradicate.
The public's outlook for annual inflation over five years stood at 3.4 percent in June, up from 2.9 percent the same month last year, according to the Reuters/University of Michigan Survey.
Poole also spoke out against Fed intervention with the value of the dollar. ``The Fed does not have the power to put a floor under the dollar,'' he said. ``I think the Fed should stay clear.''
THE GREENBACK
USD Supported by Rate Hike Expectations
by Korman Tam
6/16/2008 2:30:00 PM
The greenback maintained its buoyant tone against the majors at the start of the week, rallying to a fresh 3 ½-month high versus the yen at 108.56 and 1.5348 against the euro. Despite US Treasury Secretary Hank Paulson continuing to talk up the dollar at the meeting, there was no official mention of currencies in the communiqué from the G8 Finance Ministers meeting. Further, there was also no discussion of possible coordinated intervention to prop up the dollar. The primary issue of concern at the meeting was tackling sharp rises in global inflation, particularly rapid increases in the prices for commodities and oil. Nonetheless, the dollar managed to shrug off the lack of mention at the meeting and continues to hold onto its gains.
Economic data released earlier in the session saw the June NY Fed manufacturing survey contract by more than anticipated at minus 8.68, versus expectations for an improvement to minus 2 from minus 3.23 in May. Meanwhile, the April TICS data revealed net capital inflows increasing to $60.6 billion, a sharp reversal from net sales of $48.2 billion in the previous month. The NAHB housing market index fell to 18 in June, down slightly from a reading of 19 in May.
The coming week will see several key economic reports from the US including May PPI, Q1 current account balance, May housing starts, industrial production, capacity utilization, June Philadelphia Fed manufacturing survey, and May leading economic indicators. Inflation is seen creeping higher with PPI expected to edge up to 0.8% in May from .2% a month earlier, while the excluding food and energy PPI is expected to ease to 0.2% from 0.4%. Housing starts are expected to remain weak, at 980k in May and down from 1.03million units from April.
by Korman Tam
6/16/2008 2:30:00 PM
The greenback maintained its buoyant tone against the majors at the start of the week, rallying to a fresh 3 ½-month high versus the yen at 108.56 and 1.5348 against the euro. Despite US Treasury Secretary Hank Paulson continuing to talk up the dollar at the meeting, there was no official mention of currencies in the communiqué from the G8 Finance Ministers meeting. Further, there was also no discussion of possible coordinated intervention to prop up the dollar. The primary issue of concern at the meeting was tackling sharp rises in global inflation, particularly rapid increases in the prices for commodities and oil. Nonetheless, the dollar managed to shrug off the lack of mention at the meeting and continues to hold onto its gains.
Economic data released earlier in the session saw the June NY Fed manufacturing survey contract by more than anticipated at minus 8.68, versus expectations for an improvement to minus 2 from minus 3.23 in May. Meanwhile, the April TICS data revealed net capital inflows increasing to $60.6 billion, a sharp reversal from net sales of $48.2 billion in the previous month. The NAHB housing market index fell to 18 in June, down slightly from a reading of 19 in May.
The coming week will see several key economic reports from the US including May PPI, Q1 current account balance, May housing starts, industrial production, capacity utilization, June Philadelphia Fed manufacturing survey, and May leading economic indicators. Inflation is seen creeping higher with PPI expected to edge up to 0.8% in May from .2% a month earlier, while the excluding food and energy PPI is expected to ease to 0.2% from 0.4%. Housing starts are expected to remain weak, at 980k in May and down from 1.03million units from April.
Monday, June 16, 2008
UPDATED SIGNALS : GBPJPY
GBPJPY
LONG position at 211.50
STOP LOSS below 210.50 (-100 pips).
THE TARGETS are 212.10/ 212.38 / 212.74
LONG position at 211.50
STOP LOSS below 210.50 (-100 pips).
THE TARGETS are 212.10/ 212.38 / 212.74
GBPJPY
GBPJPY
LONG position at 211.08
STOP LOSS below 210.58 (-50 pips).
THE TARGETS are 211.28/ 211.58
OP, SL & TP at your own risks
LONG position at 211.08
STOP LOSS below 210.58 (-50 pips).
THE TARGETS are 211.28/ 211.58
OP, SL & TP at your own risks
Saturday, June 14, 2008
Forex News : Dollar Heads for Biggest Weekly Gain in Three Years
Dollar Heads for Biggest Weekly Gain in Three Years on Fed View
June 13 (Bloomberg) -- The dollar headed for its biggest weekly gain versus the euro as traders speculated the Federal Reserve will increase borrowing costs this year and Irish voters may have rejected a treaty promoting European Union unity.
The U.S. currency rose to a one-month high against the euro on bets Group of Eight finance ministers meeting this weekend will signal they favor a stronger dollar. The yen was poised for a fifth weekly drop against the euro after the Bank of Japan left its target lending rate at 0.5 percent, the lowest among industrialized nations.
``People will likely keep pricing in Fed rate hikes,'' said David Powell, a currency strategist at Bank of America Corp. in New York. ``That will help the dollar.''
The dollar increased 0.6 percent to $1.5344 euro at 10:31 a.m. in New York, from $1.5439 yesterday. It touched $1.5303, the strongest level since May 8. The U.S. currency was little changed at 108.04 yen, compared with 107.96. The euro fell 0.6 percent to 165.76 yen, from 166.68.
The U.S. currency climbed 2.8 percent this week against the euro, the biggest increase since January 2005. The dollar rose 3 percent versus the yen, the most since December 2004. The yen decreased 0.1 percent versus the euro in its longest stretch of losses since October.
The 15-nation euro weakened as Irish opponents of a new European Union treaty led as counting got under way in a referendum that may decide whether the 27-nation bloc moves toward political unity.
`Public Legitimacy'
``The rejection of the treaty undermines the EU's public legitimacy and may influence public sentiment in countries contemplating joining the euro zone,'' wrote Geoffrey Yu, a currency analyst at UBS AG, in a note to clients today. ``This change may undermine the ECB's price stability mandate in favor of a growth mandate.''
The Australian dollar was headed for a 2.8 percent drop against its U.S. counterpart, the biggest decline in almost three months, and the New Zealand currency was poised for a 2.8 percent decline, its third consecutive decrease. Traders speculated the Fed will raise borrowing costs, narrowing the yield advantage of Australian and New Zealand debt.
Today, the Aussie rose 0.1 percent to 93.56 U.S. cents, while the kiwi dropped 0.6 percent to 74.55 U.S. cents.
Before meeting with her G-8 counterparts today and tomorrow, French Finance Minister Christine Lagarde told reporters in Osaka, Japan, that the U.S. dollar's gains are ``very satisfying.''
Bank of Japan
Foreign-exchange rates should reflect the state of each economy, Bank of Japan Governor Masaaki Shirakawa said at a press conference in Tokyo. It isn't appropriate to focus solely on currencies when setting policy, he added. Shirakawa and his six colleagues left the overnight lending rate unchanged in a unanimous vote in Tokyo.
The U.S. currency strengthened versus the euro on June 9 after U.S. Treasury Secretary Henry Paulson said in an interview with CNBC that he would ``never'' rule out currency intervention. Japan's Finance Minister Fukushiro Nukaga told reporters he and Paulson may discuss currencies outside the G-8 gathering. The group comprises the U.S., Japan, Germany, the U.K., France, Italy, Canada and Russia.
``Sentiment is in favor of a continued dollar recovery,'' said Paul Milton, chief foreign-exchange dealer at Societe Generale SA in Sydney. ``There are suggestions left, right and center that there will be intervention.''
Currency Intervention
The last time the major industrialized countries intervened was on Sept. 22, 2000, when they bought the euro after it tumbled 27 percent from its 1999 debut. They last propped up the dollar in 1995, when it sank almost 20 percent in four months against the Japanese yen to a post-World War II low of 79.95. Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.
The economic outlook has improved from a month ago, and central bankers will combat any increase in inflation expectations, Fed Chairman Ben S. Bernanke said this week. He said on June 3 he's aware of the impact a falling currency can have on price expectations.
Consumer prices rose 0.6 percent in May after a 0.2 percent increase the prior month, the Labor Department reported today in Washington. The median forecast of 84 economists surveyed by Bloomberg News was for a 0.5 percent advance.
Fed funds futures on the Chicago Board of Trade show a 60 percent chance the central bank will increase the 2 percent target lending rate by at least a quarter-percentage point at its August meeting, compared with 9 percent odds a week ago. The European Central Bank has kept its main refinancing rate at a six-year high of 4 percent since last June.
June 13 (Bloomberg) -- The dollar headed for its biggest weekly gain versus the euro as traders speculated the Federal Reserve will increase borrowing costs this year and Irish voters may have rejected a treaty promoting European Union unity.
The U.S. currency rose to a one-month high against the euro on bets Group of Eight finance ministers meeting this weekend will signal they favor a stronger dollar. The yen was poised for a fifth weekly drop against the euro after the Bank of Japan left its target lending rate at 0.5 percent, the lowest among industrialized nations.
``People will likely keep pricing in Fed rate hikes,'' said David Powell, a currency strategist at Bank of America Corp. in New York. ``That will help the dollar.''
The dollar increased 0.6 percent to $1.5344 euro at 10:31 a.m. in New York, from $1.5439 yesterday. It touched $1.5303, the strongest level since May 8. The U.S. currency was little changed at 108.04 yen, compared with 107.96. The euro fell 0.6 percent to 165.76 yen, from 166.68.
The U.S. currency climbed 2.8 percent this week against the euro, the biggest increase since January 2005. The dollar rose 3 percent versus the yen, the most since December 2004. The yen decreased 0.1 percent versus the euro in its longest stretch of losses since October.
The 15-nation euro weakened as Irish opponents of a new European Union treaty led as counting got under way in a referendum that may decide whether the 27-nation bloc moves toward political unity.
`Public Legitimacy'
``The rejection of the treaty undermines the EU's public legitimacy and may influence public sentiment in countries contemplating joining the euro zone,'' wrote Geoffrey Yu, a currency analyst at UBS AG, in a note to clients today. ``This change may undermine the ECB's price stability mandate in favor of a growth mandate.''
The Australian dollar was headed for a 2.8 percent drop against its U.S. counterpart, the biggest decline in almost three months, and the New Zealand currency was poised for a 2.8 percent decline, its third consecutive decrease. Traders speculated the Fed will raise borrowing costs, narrowing the yield advantage of Australian and New Zealand debt.
Today, the Aussie rose 0.1 percent to 93.56 U.S. cents, while the kiwi dropped 0.6 percent to 74.55 U.S. cents.
Before meeting with her G-8 counterparts today and tomorrow, French Finance Minister Christine Lagarde told reporters in Osaka, Japan, that the U.S. dollar's gains are ``very satisfying.''
Bank of Japan
Foreign-exchange rates should reflect the state of each economy, Bank of Japan Governor Masaaki Shirakawa said at a press conference in Tokyo. It isn't appropriate to focus solely on currencies when setting policy, he added. Shirakawa and his six colleagues left the overnight lending rate unchanged in a unanimous vote in Tokyo.
The U.S. currency strengthened versus the euro on June 9 after U.S. Treasury Secretary Henry Paulson said in an interview with CNBC that he would ``never'' rule out currency intervention. Japan's Finance Minister Fukushiro Nukaga told reporters he and Paulson may discuss currencies outside the G-8 gathering. The group comprises the U.S., Japan, Germany, the U.K., France, Italy, Canada and Russia.
``Sentiment is in favor of a continued dollar recovery,'' said Paul Milton, chief foreign-exchange dealer at Societe Generale SA in Sydney. ``There are suggestions left, right and center that there will be intervention.''
Currency Intervention
The last time the major industrialized countries intervened was on Sept. 22, 2000, when they bought the euro after it tumbled 27 percent from its 1999 debut. They last propped up the dollar in 1995, when it sank almost 20 percent in four months against the Japanese yen to a post-World War II low of 79.95. Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.
The economic outlook has improved from a month ago, and central bankers will combat any increase in inflation expectations, Fed Chairman Ben S. Bernanke said this week. He said on June 3 he's aware of the impact a falling currency can have on price expectations.
Consumer prices rose 0.6 percent in May after a 0.2 percent increase the prior month, the Labor Department reported today in Washington. The median forecast of 84 economists surveyed by Bloomberg News was for a 0.5 percent advance.
Fed funds futures on the Chicago Board of Trade show a 60 percent chance the central bank will increase the 2 percent target lending rate by at least a quarter-percentage point at its August meeting, compared with 9 percent odds a week ago. The European Central Bank has kept its main refinancing rate at a six-year high of 4 percent since last June.
Thursday, June 12, 2008
Greenback Relinquishes Gains
Greenback Relinquishes Gains
by Korman Tam
6/11/2008 2:00:00 PM
The greenback relinquished some of yesterday's gains versus the euro and yen in the Wednesday session amid a dearth of US economic data. The calendar picks up on Thursday with several key reports including CPI, retail sales, weekly jobless claims and business inventories. The markets remain focused on sentiment over central bank rate decisions as comments from ECB officials continue to point toward at least one more rate hike.
GBP Recovers from Data Triggered Losses
The sterling has clawed back above the 1.96-handle against the dollar and back toward the 0.79-level versus the euro in early New York trading. The pound whipsawed lower overnight following lackluster economic data from the UK, which included the May claimant count, April ILO unemployment rate, and April trade balance. The unemployment claimant count rose to 9.0k in May, exceeding forecasts for 8.0k from 7.2k in April - marking its fourth monthly consecutive rise. The quarterly average earnings report fell to 3.8%, down from 4.0% from the previous year. Meanwhile, the trade deficit in April expanded to 7.594 billion pounds compared with forecasts for the deficit to shrink to 7.35 billion from 7.44 billion pounds in March.
by Korman Tam
6/11/2008 2:00:00 PM
The greenback relinquished some of yesterday's gains versus the euro and yen in the Wednesday session amid a dearth of US economic data. The calendar picks up on Thursday with several key reports including CPI, retail sales, weekly jobless claims and business inventories. The markets remain focused on sentiment over central bank rate decisions as comments from ECB officials continue to point toward at least one more rate hike.
GBP Recovers from Data Triggered Losses
The sterling has clawed back above the 1.96-handle against the dollar and back toward the 0.79-level versus the euro in early New York trading. The pound whipsawed lower overnight following lackluster economic data from the UK, which included the May claimant count, April ILO unemployment rate, and April trade balance. The unemployment claimant count rose to 9.0k in May, exceeding forecasts for 8.0k from 7.2k in April - marking its fourth monthly consecutive rise. The quarterly average earnings report fell to 3.8%, down from 4.0% from the previous year. Meanwhile, the trade deficit in April expanded to 7.594 billion pounds compared with forecasts for the deficit to shrink to 7.35 billion from 7.44 billion pounds in March.
Wednesday, June 11, 2008
Dollar Rallies Again
Dollar Rallies on Bernanke
by Korman Tam
6/10/2008 2:50:00 PM
Jawboning in recent sessions has propped the greenback sharply higher across the board, with the currency hovering near 107.40 against the yen and 1.5450 versus the euro. The verbal intervention of late consisted of commentary from Fed officials and US Treasury Secretary Paulson, which strongly benefited the dollar in tempering expectations for a continued policy of benign neglect in the currency's steep declines.
With the G8 Finance Ministers meeting looming, traders will focus closely on any comments hinting at the possibility of concerted intervention by the global central banks. Although intervention remains highly improbable, US Treasury Secretary Paulson yesterday kept that option open if necessary. Paulson addressed the issue of China's currency today, saying although he believes China needs to allow its currency to strengthen more rapidly, it was not ready for a market determined currency. He also said the dollar should not be the scapegoat for record level oil prices. Meanwhile, US Under Secretary of International Affairs McCormick said no formal discussion of currencies is expected at the G8 meeting this upcoming weekend, but it will likely be mentioned at the meeting. He said that currencies have played a "minor role" in the recent spike in oil prices. McCormick expects it to take some time to work through housing market and capital markets issues, but sees growth to accelerate in the US before year-end.
Fed Chairman Bernanke, in a speech given late Monday evening, all but confirmed that the FOMC will leave policy unchanged barring any unexpected shocks to the financial system with the dangers to a "substantial downturn" in the economy having subsided somewhat and burgeoning upside risks to inflation. Bernanke said "the FOMC will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as inflation". Dallas Fed President Fisher echoed a similar tone today, saying the downside risks facing the US are not as severe as initially feared but will need time to recover. Fisher said the Fed is cognizant of the negative currency feedback loop and that a weaker dollar can lead to further inflationary pressures, which weaken the dollar further. He said that recent survey signals on inflation expectations have not been positive and will not tolerate fuelling inflationary expectations.
by Korman Tam
6/10/2008 2:50:00 PM
Jawboning in recent sessions has propped the greenback sharply higher across the board, with the currency hovering near 107.40 against the yen and 1.5450 versus the euro. The verbal intervention of late consisted of commentary from Fed officials and US Treasury Secretary Paulson, which strongly benefited the dollar in tempering expectations for a continued policy of benign neglect in the currency's steep declines.
With the G8 Finance Ministers meeting looming, traders will focus closely on any comments hinting at the possibility of concerted intervention by the global central banks. Although intervention remains highly improbable, US Treasury Secretary Paulson yesterday kept that option open if necessary. Paulson addressed the issue of China's currency today, saying although he believes China needs to allow its currency to strengthen more rapidly, it was not ready for a market determined currency. He also said the dollar should not be the scapegoat for record level oil prices. Meanwhile, US Under Secretary of International Affairs McCormick said no formal discussion of currencies is expected at the G8 meeting this upcoming weekend, but it will likely be mentioned at the meeting. He said that currencies have played a "minor role" in the recent spike in oil prices. McCormick expects it to take some time to work through housing market and capital markets issues, but sees growth to accelerate in the US before year-end.
Fed Chairman Bernanke, in a speech given late Monday evening, all but confirmed that the FOMC will leave policy unchanged barring any unexpected shocks to the financial system with the dangers to a "substantial downturn" in the economy having subsided somewhat and burgeoning upside risks to inflation. Bernanke said "the FOMC will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as inflation". Dallas Fed President Fisher echoed a similar tone today, saying the downside risks facing the US are not as severe as initially feared but will need time to recover. Fisher said the Fed is cognizant of the negative currency feedback loop and that a weaker dollar can lead to further inflationary pressures, which weaken the dollar further. He said that recent survey signals on inflation expectations have not been positive and will not tolerate fuelling inflationary expectations.
Tuesday, June 10, 2008
GBPJPY
GBPJPY
SHORT position at 209.50
STOP LOSS above 210.50 (-100 pips).
THE TARGETS are 209.16 / 208.80 / 208.40
OP, SL & TP at your own risks
SHORT position at 209.50
STOP LOSS above 210.50 (-100 pips).
THE TARGETS are 209.16 / 208.80 / 208.40
OP, SL & TP at your own risks
Dollar UP Crude Oil DOWN
Dollar Rises Against Euro as Stocks Increase, Crude Oil Falls
June 9 (Bloomberg) -- The dollar rose against the euro for the first time in three days as U.S. stock indexes advanced and crude oil prices fell.
The U.S. currency strengthened from a six-week low as the yield advantage of German government debt over comparable- maturity Treasuries narrowed. The dollar fell last week the most against the euro in two months. The yen dropped versus all of the major currencies today after a government report indicated Japan's longest postwar expansion may be over.
``We're seeing a correction to what have been some pretty dramatic advances of the euro,'' said Nick Bennenbroek, head of currency research in New York at Wells Fargo & Co. ``The market is pausing for breath.''
The dollar increased 0.6 to $1.5683 per euro at 10:30 a.m. in New York, from $1.5778 on June 6. It touched $1.5843, the weakest level since April 24. The yen dropped 1.3 percent to 106.26 versus the dollar, from 104.93. Japan's currency decreased 0.7 percent to 166.67 per euro, from 165.54. It touched 167.14, the weakest since Nov. 7.
The British pound appreciated 0.4 percent to 1.9794 against the dollar and 0.6 percent to 1.2562 against the euro after a government report showed producer-price inflation accelerated to the fastest pace in two decades in May. The Bank of England held the target lending rate at 5 percent last week.
Weaker Yen
The yen fell 1.2 percent to 209.28 against the pound and 0.9 percent to 64.79 versus the Brazilian real as Japan's Cabinet Office said the economy may be reaching a ``turning point.'' The government hasn't described the world's second- largest economy in such terms since the most recent recession in 2001. The coincident index, a measure of current economic activity, fell to 101.7 in April, from a revised 102.4 the previous month.
The dollar remained higher versus the euro as an industry report showed an unexpected increased Americans signing contracts to buy existing homes in April. The index of pending home resales rose 6.3 percent to 88.2, the highest level in six months, following a 1 percent drop in March, the National Association of Realtors said today in Washington. The median forecast of 32 economists was for a 0.4 percent drop.
The U.S. currency got a boost against the yen as Lehman Brothers Holdings Inc. said it will raise $6 billion in capital in a public offering. The New York-based firm reported a record $2.8 billion second-quarter loss.
Trichet and Dollar
The dollar dropped 1.4 percent against the euro last week after European Central Bank President Jean-Claude Trichet said in Frankfurt that policy makers may raise borrowing costs in July to contain inflation and the U.S. Labor Department reported that the unemployment rate increased the most in May in more than two decades. It was the euro's biggest weekly gain versus the dollar since late March.
Markets have understood the ECB's position on inflation ``quite well,'' council member Nout Wellink, who also heads the Dutch central bank, was quoted as saying in a June 6 interview with Market News International published today.
The ECB will lift the main refinancing rate twice this year as inflation exceeds the central bank's target, taking it to 4.5 percent by year-end, according to interest-rate futures trading. The implied yield on the December Euribor futures contract rose to 5.47 percent, from 5.39 percent on June 6. European two-year notes had their biggest decline in 4 1/2 months.
European policy makers last week kept their main refinancing rate at a six-year high of 4 percent, unchanged since last June. Trichet will speak at a forum in Paris at 6:30 p.m. local time. Federal Reserve Chairman Ben S. Bernanke, who said on June 3 that he's aware of the impact a falling currency can have on price expectations, will speak at a Boston Fed conference at 8:15 p.m. local time.
The dollar has fallen 11 percent against the euro and 9 percent versus the yen since September, when the Fed began to lower borrowing costs. Futures on the Chicago Board of Trade show a 77 percent chance the Fed will increase its 2 percent target rate by at least a quarter-percentage point by December, compared with 48 percent odds a month ago.
UBS AG, the second-biggest currency trader, cut its one-and three-month dollar forecasts against the euro to $1.60 and $1.53, from $1.50 and $1.47, previously.
June 9 (Bloomberg) -- The dollar rose against the euro for the first time in three days as U.S. stock indexes advanced and crude oil prices fell.
The U.S. currency strengthened from a six-week low as the yield advantage of German government debt over comparable- maturity Treasuries narrowed. The dollar fell last week the most against the euro in two months. The yen dropped versus all of the major currencies today after a government report indicated Japan's longest postwar expansion may be over.
``We're seeing a correction to what have been some pretty dramatic advances of the euro,'' said Nick Bennenbroek, head of currency research in New York at Wells Fargo & Co. ``The market is pausing for breath.''
The dollar increased 0.6 to $1.5683 per euro at 10:30 a.m. in New York, from $1.5778 on June 6. It touched $1.5843, the weakest level since April 24. The yen dropped 1.3 percent to 106.26 versus the dollar, from 104.93. Japan's currency decreased 0.7 percent to 166.67 per euro, from 165.54. It touched 167.14, the weakest since Nov. 7.
The British pound appreciated 0.4 percent to 1.9794 against the dollar and 0.6 percent to 1.2562 against the euro after a government report showed producer-price inflation accelerated to the fastest pace in two decades in May. The Bank of England held the target lending rate at 5 percent last week.
Weaker Yen
The yen fell 1.2 percent to 209.28 against the pound and 0.9 percent to 64.79 versus the Brazilian real as Japan's Cabinet Office said the economy may be reaching a ``turning point.'' The government hasn't described the world's second- largest economy in such terms since the most recent recession in 2001. The coincident index, a measure of current economic activity, fell to 101.7 in April, from a revised 102.4 the previous month.
The dollar remained higher versus the euro as an industry report showed an unexpected increased Americans signing contracts to buy existing homes in April. The index of pending home resales rose 6.3 percent to 88.2, the highest level in six months, following a 1 percent drop in March, the National Association of Realtors said today in Washington. The median forecast of 32 economists was for a 0.4 percent drop.
The U.S. currency got a boost against the yen as Lehman Brothers Holdings Inc. said it will raise $6 billion in capital in a public offering. The New York-based firm reported a record $2.8 billion second-quarter loss.
Trichet and Dollar
The dollar dropped 1.4 percent against the euro last week after European Central Bank President Jean-Claude Trichet said in Frankfurt that policy makers may raise borrowing costs in July to contain inflation and the U.S. Labor Department reported that the unemployment rate increased the most in May in more than two decades. It was the euro's biggest weekly gain versus the dollar since late March.
Markets have understood the ECB's position on inflation ``quite well,'' council member Nout Wellink, who also heads the Dutch central bank, was quoted as saying in a June 6 interview with Market News International published today.
The ECB will lift the main refinancing rate twice this year as inflation exceeds the central bank's target, taking it to 4.5 percent by year-end, according to interest-rate futures trading. The implied yield on the December Euribor futures contract rose to 5.47 percent, from 5.39 percent on June 6. European two-year notes had their biggest decline in 4 1/2 months.
European policy makers last week kept their main refinancing rate at a six-year high of 4 percent, unchanged since last June. Trichet will speak at a forum in Paris at 6:30 p.m. local time. Federal Reserve Chairman Ben S. Bernanke, who said on June 3 that he's aware of the impact a falling currency can have on price expectations, will speak at a Boston Fed conference at 8:15 p.m. local time.
The dollar has fallen 11 percent against the euro and 9 percent versus the yen since September, when the Fed began to lower borrowing costs. Futures on the Chicago Board of Trade show a 77 percent chance the Fed will increase its 2 percent target rate by at least a quarter-percentage point by December, compared with 48 percent odds a month ago.
UBS AG, the second-biggest currency trader, cut its one-and three-month dollar forecasts against the euro to $1.60 and $1.53, from $1.50 and $1.47, previously.
Housing Data - USD Rallies
USD Rallies on Jawboning, Housing Data
by Korman Tam
6/9/2008 3:20:00 PM
The dollar rallied sharply against the majors at the start of the week as traders focused on US economic reports released in the morning, breaking through the 106-level versus the yen. Propping the greenback higher today was an unexpectedly stronger report on pending home sales, prompting speculation that the struggling US housing market may be bottoming. Pending home sales for April surged to 6.3%, far exceeding estimates for an improvement to -0.5% from -1.0% a month earlier.
Key highlights from the US economic calendar include the April trade balance, June consumer sentiment, the Fed's Beige Book, retail sales, business inventories, and May CPI. Markets will focus closely on the US trade deficit and gauge the impact of soaring energy prices in recent months. Consensus estimates anticipate the deficit to expand to $60.0 billion, up from $58.21 billion from March. Retail sales are seen reversing the 0.2% decline in April, rising by 0.4%. Meanwhile, core retail sales are expected to remain unchanged at 0.5%.
The greenback also found support from US Treasury Secretary Paulson and NY Fed President Geithner, who both left open the option for central bank intervention. Nonetheless, we interpret the risk for government intervention in the currency market to prop up the dollar to be minimal, particularly given its staunch criticism of China's currency regime.
by Korman Tam
6/9/2008 3:20:00 PM
The dollar rallied sharply against the majors at the start of the week as traders focused on US economic reports released in the morning, breaking through the 106-level versus the yen. Propping the greenback higher today was an unexpectedly stronger report on pending home sales, prompting speculation that the struggling US housing market may be bottoming. Pending home sales for April surged to 6.3%, far exceeding estimates for an improvement to -0.5% from -1.0% a month earlier.
Key highlights from the US economic calendar include the April trade balance, June consumer sentiment, the Fed's Beige Book, retail sales, business inventories, and May CPI. Markets will focus closely on the US trade deficit and gauge the impact of soaring energy prices in recent months. Consensus estimates anticipate the deficit to expand to $60.0 billion, up from $58.21 billion from March. Retail sales are seen reversing the 0.2% decline in April, rising by 0.4%. Meanwhile, core retail sales are expected to remain unchanged at 0.5%.
The greenback also found support from US Treasury Secretary Paulson and NY Fed President Geithner, who both left open the option for central bank intervention. Nonetheless, we interpret the risk for government intervention in the currency market to prop up the dollar to be minimal, particularly given its staunch criticism of China's currency regime.
Sunday, June 8, 2008
Saturday, June 7, 2008
Forex News : Oil Price Increase
Dollar Falls to One-Week Low Versus Euro as Jobless Rate Rises
June 6 (Bloomberg) -- The dollar fell to a one-week low against the euro after a government report showed the U.S. unemployment rate increased the most in more than two decades, adding to evidence the economy may not be rebounding.
The currency dropped on increased speculation the Federal Reserve may refrain from raising borrowing costs this year.
June 6 (Bloomberg) -- The dollar fell to a one-week low against the euro after a government report showed the U.S. unemployment rate increased the most in more than two decades, adding to evidence the economy may not be rebounding.
The currency dropped on increased speculation the Federal Reserve may refrain from raising borrowing costs this year.
Friday, June 6, 2008
Forex News - The Non-Farm Payroll
The Non-Farm Payroll
Of all the world monthly economic reports, the monthly US NFP report is the most highly anticipated and has the most dramatic impact on the currency market.
The report, which is released on the first Friday of each month and states the previous month's numbers, provides detailed industry data on employment, hours and earnings of workers on nonfarm payrolls. These numbers are the best way to gauge the current state of the US market as well as the direction that the economy is heading.
What's more, the employment numbers provided by the report are used by the Fed to shape their interest rate policies. The health of the US economy and interest rates translate to the strength or weakness of the US dollar.
Of all the world monthly economic reports, the monthly US NFP report is the most highly anticipated and has the most dramatic impact on the currency market.
The report, which is released on the first Friday of each month and states the previous month's numbers, provides detailed industry data on employment, hours and earnings of workers on nonfarm payrolls. These numbers are the best way to gauge the current state of the US market as well as the direction that the economy is heading.
What's more, the employment numbers provided by the report are used by the Fed to shape their interest rate policies. The health of the US economy and interest rates translate to the strength or weakness of the US dollar.
Forex News- Interest Rate :Euro Rallied on Trichet Comments
Euro Rallied on Trichet Comments
by Yan Xu
6/5/2008 2:20:00 PM
The euro rallied broadly after ECB President Trichet delivered surprisingly hawkish comments following a widely expected unchanged rate decision.
Trichet indicated that some ECB officials argued for rate hike later this year, and the central bank is in a state of "heightened" alertness" over inflation. His comments added to expectations for a rate move on its July meeting. The euro rose sharply from around 1.54 to as high as1.5562 versus the dollar, and gained more than half a cent to a 9-day high at 0.7956 versus the sterling. Also the euro advanced against the yen to test a key resistance at 165.
As Trichet's statements dominated the market, other data released today were largely ignored. The Bank of England also left its interest rates unchanged at 5.0%. US weekly jobless claims fell 15k to 357k and continuing jobless claims fell slightly to 3.093m. The dollar edged up initially after the data but the following Trichet's talk erased its gains quickly.
by Yan Xu
6/5/2008 2:20:00 PM
The euro rallied broadly after ECB President Trichet delivered surprisingly hawkish comments following a widely expected unchanged rate decision.
Trichet indicated that some ECB officials argued for rate hike later this year, and the central bank is in a state of "heightened" alertness" over inflation. His comments added to expectations for a rate move on its July meeting. The euro rose sharply from around 1.54 to as high as1.5562 versus the dollar, and gained more than half a cent to a 9-day high at 0.7956 versus the sterling. Also the euro advanced against the yen to test a key resistance at 165.
As Trichet's statements dominated the market, other data released today were largely ignored. The Bank of England also left its interest rates unchanged at 5.0%. US weekly jobless claims fell 15k to 357k and continuing jobless claims fell slightly to 3.093m. The dollar edged up initially after the data but the following Trichet's talk erased its gains quickly.
Thursday, June 5, 2008
Forex News - Interest Rate Statement. Halifax House Price Index
The Halifax House Price Index UK.
BUY GBPUSD
If it comes out at 0 or higher, BUY GBP/USD for 20 to 30 pips.
SELL GBPUSD
If it comes out at -2.0, SELL GBP/USD for 20 to 30 pips.
UK Interest Rate statement.
It is expected they will hold the rates at 5.00%.
BUY GBPUSD
Rate increased to 5.25%, BUY GBP/USD for 70 pips.
SELL GBPUSD
If the rate is cut, SELL GBP/USD for 70 pips..
BUY GBPUSD
If it comes out at 0 or higher, BUY GBP/USD for 20 to 30 pips.
SELL GBPUSD
If it comes out at -2.0, SELL GBP/USD for 20 to 30 pips.
UK Interest Rate statement.
It is expected they will hold the rates at 5.00%.
BUY GBPUSD
Rate increased to 5.25%, BUY GBP/USD for 70 pips.
SELL GBPUSD
If the rate is cut, SELL GBP/USD for 70 pips..
Forex News - Halifax House Price Index .UK Interest Rate statement
The Halifax House Price Index UK.
BUY GBPUSD
If it comes out at 0 or higher, BUY GBP/USD for 20 to 30 pips.
SELL GBPUSD
If it comes out at -2.0, SELL GBP/USD for 20 to 30 pips.
UK Interest Rate statement.
It is expected they will hold the rates at 5.00%.
BUY GBPUSD
Rate increased to 5.25%, BUY GBP/USD for 70 pips.
SELL GBPUSD
If the rate is cut, SELL GBP/USD for 70 pips..
BUY GBPUSD
If it comes out at 0 or higher, BUY GBP/USD for 20 to 30 pips.
SELL GBPUSD
If it comes out at -2.0, SELL GBP/USD for 20 to 30 pips.
UK Interest Rate statement.
It is expected they will hold the rates at 5.00%.
BUY GBPUSD
Rate increased to 5.25%, BUY GBP/USD for 70 pips.
SELL GBPUSD
If the rate is cut, SELL GBP/USD for 70 pips..
SHORT GBPUSD
GBPUSD
SHORT position at 1.9510
STOP LOSS above 1.9560 (-50 pips).
THE TARGETS are 1.9450/ 1.9400
OP, SL & TP at your own risks
SHORT position at 1.9510
STOP LOSS above 1.9560 (-50 pips).
THE TARGETS are 1.9450/ 1.9400
OP, SL & TP at your own risks
Dollar Firms
Dollar Firm on Data
by Yan Xu
6/4/2008 4:00:00 PM
The dollar remained firm after a sharp rally yesterday in reaction to Fed Chairman Bernanke's warning on inflation.
The currency extended its gains today as several economic reports came out better than expected. US ADP job report showed 40 jobs were added in private sector in May, beating the estimate of a 30k fall. We are awaiting the non-farm payrolls report from the Labor Department due this Friday to take the pluse of the nation's whole job market.
Other US data released today include the first quarter productivity, which rose 2.6% versus the estimate of 2.5%, and May non-manufacturing ISM, which came out at 51.7 above the estimate of 51.0.
by Yan Xu
6/4/2008 4:00:00 PM
The dollar remained firm after a sharp rally yesterday in reaction to Fed Chairman Bernanke's warning on inflation.
The currency extended its gains today as several economic reports came out better than expected. US ADP job report showed 40 jobs were added in private sector in May, beating the estimate of a 30k fall. We are awaiting the non-farm payrolls report from the Labor Department due this Friday to take the pluse of the nation's whole job market.
Other US data released today include the first quarter productivity, which rose 2.6% versus the estimate of 2.5%, and May non-manufacturing ISM, which came out at 51.7 above the estimate of 51.0.
Wednesday, June 4, 2008
Bernanke and the Dollar
Dollar Rises to Two-Week High Versus Euro on Bernanke's Remarks
June 3 (Bloomberg) -- The dollar rose to a two-week high against the euro and increased versus the yen as Federal Reserve Chairman Ben S. Bernanke said the central bank is ``attentive'' to the implications of the U.S. currency's decline.
Traders interpreted the remarks as a sign that policy makers are done cutting interest rates as the weakened dollar causes the price of imports including crude oil to rise, sparking inflation. Oil and gold dropped today. The U.S. currency has tumbled 9 percent against the euro and the yen since the Fed began cutting the target lending rate on Sept. 18.
``It could be a turning point for the dollar,'' said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon, the world's largest custodial bank, with more than $20 trillion in assets under administration. ``It's very unusual for a sitting Fed chairman to talk about the dollar explicitly.''
The U.S. currency rose 0.5 percent to $1.5458 per euro at 4:05 p.m. in New York, from $1.5537 yesterday. It touched $1.5411, the strongest level since May 14. The dollar increased 0.7 percent to 105.13 yen, from 104.43. The euro was up 0.2 percent to 162.53 yen, from 162.26.
Sweden's krona gained the most in almost four months versus the euro after the central bank said the country's lenders have weathered the credit-market crisis. The currency rose 0.5 percent to 9.3326 per euro after Riksbank Governor Stefan Ingves said Sweden's banks have ``so far succeeded in resisting the financial turmoil relatively well.''
Fed on Currencies
Bernanke raised his biggest concerns yet about the effects of the weakened dollar via satellite to the International Monetary Conference in Barcelona, Spain. The Fed is working with the U.S. Treasury Department to ``carefully monitor developments in foreign exchange markets'' and is aware of the effect of the dollar's decline on inflation and price expectations, he said.
U.S. import prices rose 15.4 percent in April, the biggest increase since the Labor Department's index began in 1982. Crude oil reached a record $135.09 a barrel on May 22.
When asked for their opinions on the dollar, Bernanke and other Fed officials tend to defer to the Treasury, which is responsible for currency policy. The Fed chief meets weekly with Treasury Secretary Henry Paulson, who yesterday repeated his backing for a strong U.S. currency.
``Bernanke is now saying that he also has an interest in the level of the currency,'' said Torsten Slok, a U.S. economist in New York at Deutsche Bank AG, the biggest currency trader. ``If the last bastion of dollar weakness -- U.S. indifference -- is falling away, the dollar may rally.''
ECB's Trichet
European Central Bank President Jean-Claude Trichet also spoke at the Barcelona event, reiterating that ``monetary policy stays firmly focused on delivering price stability.''
The dollar has increased 3.5 percent since touching the all-time low of $1.6019 per euro on April 22, as the Fed signaled it will stop cutting interest rates. Since the central bank's decision in mid-March to arrange $39 billion of financing to facilitate the takeover of Bear Stearns Cos. by JPMorgan Chase & Co., the yield on the 10-year U.S. Treasury note has increased 0.50 percentage point to 3.90 percent, making dollar- denominated assets more attractive.
Futures on the Chicago Board of Trade show a 62 percent chance the Fed will raise the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point in December, compared with 50 percent odds a month ago. The central bank has made seven reductions totaling 3.25 percentage points since September.
`New Reality'
``The threshold for further Fed easing is now higher,'' Jens Nordvig, a strategist at Goldman Sachs Group Inc. in New York, wrote in a research note today. ``We would not be surprised to see the dollar trade stronger versus major currencies in coming weeks as the market fully incorporates this potentially important new reality.''
The U.S. Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six major trading partners, increased for a second day, touching 73.501, the highest since May 15.
The dollar's gains against the euro may erode before the ECB's meeting on June 5 and the U.S. Labor Department's payroll report the next day, according to Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.
`Ahead of Itself'
``We are suspicious that the sharp dollar rally today is getting ahead of itself,'' Chandler wrote in a research note today. ``It's all the more true given that the two key sources of event risk still lie ahead.''
The ECB will keep its main refinancing rate at a six-year high of 4 percent, according to all 59 economists surveyed by Bloomberg News. The U.S. probably lost 60,000 jobs in May, after a decrease of 20,000 the prior month, according to the median forecast of 78 economists in a separate Bloomberg survey.
The dollar will strengthen to $1.49 against the euro and 105 yen by the end of the year, according to the median forecast of 44 economists surveyed by Bloomberg News.
June 3 (Bloomberg) -- The dollar rose to a two-week high against the euro and increased versus the yen as Federal Reserve Chairman Ben S. Bernanke said the central bank is ``attentive'' to the implications of the U.S. currency's decline.
Traders interpreted the remarks as a sign that policy makers are done cutting interest rates as the weakened dollar causes the price of imports including crude oil to rise, sparking inflation. Oil and gold dropped today. The U.S. currency has tumbled 9 percent against the euro and the yen since the Fed began cutting the target lending rate on Sept. 18.
``It could be a turning point for the dollar,'' said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon, the world's largest custodial bank, with more than $20 trillion in assets under administration. ``It's very unusual for a sitting Fed chairman to talk about the dollar explicitly.''
The U.S. currency rose 0.5 percent to $1.5458 per euro at 4:05 p.m. in New York, from $1.5537 yesterday. It touched $1.5411, the strongest level since May 14. The dollar increased 0.7 percent to 105.13 yen, from 104.43. The euro was up 0.2 percent to 162.53 yen, from 162.26.
Sweden's krona gained the most in almost four months versus the euro after the central bank said the country's lenders have weathered the credit-market crisis. The currency rose 0.5 percent to 9.3326 per euro after Riksbank Governor Stefan Ingves said Sweden's banks have ``so far succeeded in resisting the financial turmoil relatively well.''
Fed on Currencies
Bernanke raised his biggest concerns yet about the effects of the weakened dollar via satellite to the International Monetary Conference in Barcelona, Spain. The Fed is working with the U.S. Treasury Department to ``carefully monitor developments in foreign exchange markets'' and is aware of the effect of the dollar's decline on inflation and price expectations, he said.
U.S. import prices rose 15.4 percent in April, the biggest increase since the Labor Department's index began in 1982. Crude oil reached a record $135.09 a barrel on May 22.
When asked for their opinions on the dollar, Bernanke and other Fed officials tend to defer to the Treasury, which is responsible for currency policy. The Fed chief meets weekly with Treasury Secretary Henry Paulson, who yesterday repeated his backing for a strong U.S. currency.
``Bernanke is now saying that he also has an interest in the level of the currency,'' said Torsten Slok, a U.S. economist in New York at Deutsche Bank AG, the biggest currency trader. ``If the last bastion of dollar weakness -- U.S. indifference -- is falling away, the dollar may rally.''
ECB's Trichet
European Central Bank President Jean-Claude Trichet also spoke at the Barcelona event, reiterating that ``monetary policy stays firmly focused on delivering price stability.''
The dollar has increased 3.5 percent since touching the all-time low of $1.6019 per euro on April 22, as the Fed signaled it will stop cutting interest rates. Since the central bank's decision in mid-March to arrange $39 billion of financing to facilitate the takeover of Bear Stearns Cos. by JPMorgan Chase & Co., the yield on the 10-year U.S. Treasury note has increased 0.50 percentage point to 3.90 percent, making dollar- denominated assets more attractive.
Futures on the Chicago Board of Trade show a 62 percent chance the Fed will raise the 2 percent target rate for overnight lending between banks by at least a quarter-percentage point in December, compared with 50 percent odds a month ago. The central bank has made seven reductions totaling 3.25 percentage points since September.
`New Reality'
``The threshold for further Fed easing is now higher,'' Jens Nordvig, a strategist at Goldman Sachs Group Inc. in New York, wrote in a research note today. ``We would not be surprised to see the dollar trade stronger versus major currencies in coming weeks as the market fully incorporates this potentially important new reality.''
The U.S. Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six major trading partners, increased for a second day, touching 73.501, the highest since May 15.
The dollar's gains against the euro may erode before the ECB's meeting on June 5 and the U.S. Labor Department's payroll report the next day, according to Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.
`Ahead of Itself'
``We are suspicious that the sharp dollar rally today is getting ahead of itself,'' Chandler wrote in a research note today. ``It's all the more true given that the two key sources of event risk still lie ahead.''
The ECB will keep its main refinancing rate at a six-year high of 4 percent, according to all 59 economists surveyed by Bloomberg News. The U.S. probably lost 60,000 jobs in May, after a decrease of 20,000 the prior month, according to the median forecast of 78 economists in a separate Bloomberg survey.
The dollar will strengthen to $1.49 against the euro and 105 yen by the end of the year, according to the median forecast of 44 economists surveyed by Bloomberg News.
Tuesday, June 3, 2008
Dollar Tumbled
Dollar Tumbled after S&P Financial Downgrade
by Yan Xu
6/2/2008 4:00:00 PM
The dollar tumbled after rating agency Standard & Poor's downgraded various US financial sector firms. The euro hit session high at 1.5588 versus the dollar following the news.
US data released earlier in the session were slightly above the expectations, but had little impact on the market. Manufacturing ISM rose from 48.6 to 49.6 in May, versus the estimate of 49.0. Construction spending slipped 0.4% in April after a 1.1% contraction in the previous month.
Te sterling lost more than 2 cents against the dollar after a UK mortgage lender announcement raised concern on financial sector problems. Britain's biggest lender of buy-to-let mortgages, Bradford & Bingley, revealed rising bad debts and lower lending had reduced its profit in four months to April by half. Also, an official report showed UK new home loan approvals hit a record low in April. ( More.. )
by Yan Xu
6/2/2008 4:00:00 PM
The dollar tumbled after rating agency Standard & Poor's downgraded various US financial sector firms. The euro hit session high at 1.5588 versus the dollar following the news.
US data released earlier in the session were slightly above the expectations, but had little impact on the market. Manufacturing ISM rose from 48.6 to 49.6 in May, versus the estimate of 49.0. Construction spending slipped 0.4% in April after a 1.1% contraction in the previous month.
Te sterling lost more than 2 cents against the dollar after a UK mortgage lender announcement raised concern on financial sector problems. Britain's biggest lender of buy-to-let mortgages, Bradford & Bingley, revealed rising bad debts and lower lending had reduced its profit in four months to April by half. Also, an official report showed UK new home loan approvals hit a record low in April. ( More.. )
Monday, June 2, 2008
US ISM MANUFACTURING INDEX
U.S. ISM Manufacturing Index
BUY
If it comes out at 49.5, buy USD/JPY and target for 30 pips.
SELL
If it comes out at 47.5 or lower, sell USD/JPY and target for 30 pips.
BUY
If it comes out at 49.5, buy USD/JPY and target for 30 pips.
SELL
If it comes out at 47.5 or lower, sell USD/JPY and target for 30 pips.
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