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According to the latest Forex update again on Friday the Euro (EUR/USD) went up, gaining more than 100 pips and closing just below the 1.4000. Before moving back the pair busted above the 1.4000 and reached 1.4050.The pair gained more than 500 pips for the week as USD weakened across the board. Concerns about the U.S. creditworthiness add another reason for traders to move away from the greenback, moving forward the majors higher.
On Friday the Pound (GBP/USD) moved higher gaining another 85 pips and closing above the 1.5900 level. The U.K. revised GDP figures showed that the economy shrank by 1.9% as the preliminary released projected.
The Aussie (AUD/USD) gained approximately 50 pips as USD continues to take a beating. On Friday Gold prices posted a silent gain closing above $957 an ounce. The Aussie closed the week trading higher than the 0.7800 level and moving forward over all of the daily simple moving averages.
Latest Forex updates say that on Thursday, the Euro (EUR/USD) was not able to build up a clear way throughout the overnight session, although the pair had a 90-pip range. In the second part of the European session, the Pound (GBP/USD) saw very little movement when the pair’s volume improved considerably.
The only pairs that did not trade side-ways during the overnight session on Thursday was the Aussie (AUD/USD), showing a 70-pip drop.
The Cad (USD/CAD) did business in a 60-pip range throughout the Thursday trading hours, but ultimately broke the range’s support level during the late U.S. session. The Swissy (USD/CHF) dealt similar with the Euro in the earlier day of trading, on Thursday.
On Thursday the Yen (USD/YEN) increases in the last five days of trading, for the first time. The 100-day average moving facilitated the pair going forward, performing as a powerful support area, in addition to the positive U.S. equity market.
Forex updates: The USD hit 4 month low of 81.871 against basket of currencies and 7 week trough versus the Euro on Wednesday, facing changed selling in the middle a recovery in risk appetite that has restricted safe-haven buying of Dollars.
The Euro hit a 7-week high of $1.3722 on trading platform EBS, and now struggling at levels near its March peak of $1.3739. The Euro would go to its highest level in 4 months through break above that March high.
On Tuesday after detaching some gains, the Euro was 0.3% higher from late U.S. trading at $1.3690.
Last week, the Dollar index violated support at the 200-day moving average while the Euro broke above a similar moving average against the dollar.
The Dollar may figure out a head and shoulder pattern in opposition to the Yen on technical charts and looked weak; although it could show some support from the 90-day moving average around 95.45 Yen, market players said.
On Friday the USD closed much weaker against all of the other major currencies, better than expected NFP reports. The recent optimistic global economic news has assured traders that the most terrible of the recession possibly will be over. Traders are moving away from the greenback in favor of riskier, higher yielding assets making market sentiment dollar negative. Equity markets moved higher up with the DOW gaining triple digits and the S&P adding 20 points. The Euro rushed on Friday, it broke all the records of 200 day simple moving average, and closing above the 1.3600.
Since January 2009 the pound closed at the highest level, it hiked at 230 pips on Friday. The pound strengthened against the dollar as the greenback weakened across the board after the employment figures was released and after traders’ worries were calmed with the release of the stress test results.
The Australian Dollar (Aud/Usd) strongly gains all the benefits on Friday after positive news about the stress tests and global equity markets. The pair gained approximately 150 pips, closing above 0.7650 and added 365 pips for the week.
EUR/USD has been facing hard times since early week and the pair held 1.2930 support level and has appreciated more than 250 points since then. The pair found some momentum that was extended towards 1.3270 which gives more strength. As long as 1.3060 holds for now we expect further improvement in the next week. However, for now 1.330 is the next level that euro bulls should be aware.
GBP/USD has been trading choppily since UK budget released in Wednesday. After the news we witness a big slide in the pair, the pound manages to reverse all losses and continue to rise towards 1.4750. The risk appetite returned and traders were happy to trade both pound and euro. As long as the pair continues to trade above 1.45 we might witness some range forex trading in the coming days, as investors are still deciding which way to go.
The currency is now trading in the aftermath of the news, with euro still being strong and pound weakening as the day progress. Later on, we have very important number in the US with durable goods and new home sales. It will be interesting to see some improvement in numbers but more interestingly, I would be awesome to see the reaction of the investors if better numbers are printed.
Regarding the economic future markets is still under pressure. So far, future and equities, managed to sustain the upside and it will be interesting to see how DOW JONES will close the week.
With the G7 meeting starting today and forwarding in the weekend, let’s see what the 7 world leaders say about the current position and we are definitely going to hear something new about the way to solve the deepening global recession.
On Friday, the yen fell down against the dollar and other major currencies as short-term traders pushed it down, but improbability about economic improvement scenario left the market stressed for momentum as it also expected result from Citigroup.
On Thursday, the yen had rose against the commodity currencies and greenback after China's 6.1% economic growth rate let down many who had expected on a quick step. Bit it failed to uphold the gains into Friday, quickly short-term traders to push the dollar ahead instead, prompting dollar buy orders at upper levels and taking the like of the NZD and AUD ahead with it.
In Sydney, the senior currency strategist at RBC Capital Market Sue Trinh said that it is investors and intraday trading which is running the market action. The dollar which has risen increasingly against the yen as hitting a 13-year low in January rose 0.3% to 99.65 yen on Friday, after breaking support from its 200 day moving average at 98.88 on Thursday but after that not settling below it.
Unemployment in the U.S. is on the rise. According to the recent reports from the Labor Department the number of U.S. workers seeking unemployment benefits has hit a new record.
In forex trading the U.S. dollar plunged for a second straight session. Unemployment rate has skyrocketed in the recession mired U.S.
Figures underscore the difficulty of finding a new job:
5.47 million People staying on the jobless rolls or the unemployment social security benefit.
That makes the number of people filing new claims for jobless benefits rise to 646,000 from 658,000 the previous week.
Over 4 million jobs lost in the country since the recession began 15 months back
Jobless rate has hit 25-year high of 8.1 percent.
Percentage of insured workers receiving jobless benefits jumps to the highest since 1983 to 4.1%
According to market analysts U.S. is likely to lose more than 700,000 jobs this month. The pressure on employment in the U.S. is building without any signs of it easing in sight. Analysts are not predicting a strong growth for the American economy until 2010.
The euro rose from near a three- month low against the dollar since yesterday on speculation German Chancellor Angela Merkel will signal Europe’s largest economy plans to take action to help avert the financial turmoil in the region. Optimism about the stabilization of the European financial system is being seen as helpful to halt the recent steep decline of the euro.
The euro climbed to $1.2589 as of 12:57 p.m. in Tokyo from $1.2530 late in New York yesterday, when it touched $1.2513, the lowest level since Nov. 21.
Europe’s single currency advanced to 117.94 yen from 117.50 yen. The dollar traded at 93.69 yen from 93.79 yen yesterday, when it reached 93.96, the highest level since Jan. 7. The Bank of Japan may today unveil details of a plan to buy corporate debt and extend lending programs in place to prevent a shortage of credit from deepening the nation’s recession, according to a Bloomberg survey.
Bank Results can affect Euro adversely:
Gains in the euro may be tempered by concern European companies will report steeper-than-expected losses stemming from the global financial turmoil.
USD near Peak Versus Canada’s Currency:
Demand for the dollar was tempered by speculation the U.S.’s largest automakers will fail unless they get increased government aid. General Motors Corp. and Chrysler have a 70 percent likelihood of filing for bankruptcy.They are seeking as much as $21.6 billion in additional federal assistance.The Canadian dollar is being seen as emerging with a cyclical growth profile that is as good as or better than that of the U.S. dollar.
U.S. Data:
The Labor Department’s report on producer prices, scheduled for today, may show wholesale prices fell 2.5 percent last month from a year earlier, according to a Bloomberg survey, signaling the world’s largest economy may be heading for a period of sustained deflation. Federal Reserve policy makers lowered their projections for economic growth this year, with most seeing a contraction of 0.5 percent to 1.3 percent, according to minutes of the Federal Open Market Committee meeting Jan. 27-28 released yesterday.
US dollar The dollar edged up against a basket of currencies in cautious trade on Wednesday before jobs data in the United States and interest rates decisions by central banks in Europe. The U.S. currency made up for some of its losses the previous day, when an unexpected rebound in housing data and hopes for fresh stimulative economic packages in the United States sapped investor demand for the dollar as a safe haven. "Investors are basically looking to buy the less-risky yen against other currencies because they are still avoiding risks, though the dollar is the next beneficiary currency, underpinned by prospects for economic stimulus plans," said an analyst at Shinkin Central Bank. The dollar edged up 0.1 percent to 89.53 yen from late U.S. trading on Tuesday, but Japanese exporters selling of the U.S. currency capped its gains, dealers said. The euro slipped 0.3 percent to $1.2999 and was little changed at 116.34 yen, reported Reuters.
AUD & NZD Bloomberg reported the Australian and New Zealand dollars rose for a second day as regional stocks gained and government spending worldwide boosted investor appetite for higher-yielding assets. Australia’s currency climbed the most in seven days after a government report showed December retail sales posted the biggest gain in more than eight years. The government yesterday announced a A$42 billion ($27.2 billion) spending package and the central bank cut interest rates to the lowest since 1964 to help the economy avoid a recession.
EURO The euro fell toward an eight-week low against the dollar before a report that may show retail sales slid for a seventh month, supporting the case for the European Central Bank to cut interest rates.
POUND The British pound weakened versus the greenback on concern an industry report will show U.K. services shrank at close to the fastest pace in 12 years. The yen may gain for a fifth day versus the dollar on speculation widening credit-market losses will erode corporate earnings, prompting investors to sell higher-yielding assets financed in Japan.
YEN The yen fell, ending three days of gains versus the dollar and euro, after the Bank of Japan said it will buy 1 trillion yen ($11.1 billion) of shares held by financial companies, reviving demand for higher-yielding assets. Japan’s currency dropped from near a one-week high versus the greenback after the central bank said in a statement it will purchase the equities through April 2010 to boost the capital of financial institutions.
AUD The Australian and New Zealand dollars also ended a three-day losing streak against the yen after the Australian government said it will spend 42 billion AUD ($26.8 billion) to help prevent the economy entering a recession. The Australian dollar gained after the central bank cut interest rates to the lowest since 1964 and the government announced a stimulus package to avoid a recession. New Zealand’s currency rose from near a six-year low.
RUPEE India’s rupee strengthened the most in a week even as Asian stock gains tempered speculation overseas funds will increase equity sales. The rupee climbed as much as 0.4 percent to 48.7325 a dollar, the strongest intraday since Jan. 19, before trading at 48.775 as of 10:16 a.m. in Mumbai, according to data compiled by Bloomberg. All 10 most-active Asian currencies outside Japan strengthened. OPEC Crude oil rose in New York on speculation that OPEC, led by Saudi Arabia, cut its output in January to avoid a supply glut and bolster prices. Production from the Organization of Petroleum Exporting Countries averaged 28.565 million barrels a day last month, down 3.5 percent from December, according to a Bloomberg News survey of oil companies, producers and analysts. A government report yesterday showed U.S. consumer spending fell in December for a record sixth consecutive month, cutting fuel consumption.
The above is compiled news excerpts from Bloomberg.com.
Somber figures from Japan,the US and other parts indicate World crisis are deepening. While Japan sank deeper into recession with industrial output tumbling and inflation slipping to almost zero, key U.S. data later on Friday is also expected to mirror the worsening global financial crisis.Here are news excerpts from Forexpros.com.
Japanese economy worsening: Japan's industrial production fell a record 9.6 percent in December, while annual core inflation slowed to a mere 0.2 percent. Rising unemployment, slowing household spending and no improvement in the industrial outlook added to fears that Japan was flirting with deflation and would post a horror GDP figure in February if exports do not bail it out. Wider Asian stocks were down 1.1 percent, the first daily drop in a week. Those falls followed similar declines on Wall Street after record monthly U.S. unemployment figures.Japanese companies including the Toyota Motor Corp, Sony Corp along with rival Nintendo Co, Ford Motor Co and Eastman Kodak Co, provided daily evidence of how deeply the global crisis was biting, costing governments trillions of dollars and threatening millions of jobs in the company.
More bad news is expected in the United States on Friday: Economists think the U.S. Commerce Department will say gross domestic product, the broadest measure of U.S. economic activity, shrank at an annualized 5.4 percent in the fourth quarter even as the recession in the US is getting hold. As more jobs and company wealth were lost, Obama railed against "shameful" Wall St bonuses paid to executives at a time when taxpayer money was being used to shore up the crumbling financial system. Four U.S. airlines, led by Continental Airlines Inc, also posted losses, while Boeing Co shares fell 5.9 percent after it said it planned 10,000 job cuts
The picture in Europe is hardly any sunnier: German unemployment rose almost twice as much as expected in January, euro zone economic sentiment hit a new low, while hundreds of thousands of French workers staged a nationwide strike demanding more was done to protect jobs and wages.
Little appetite: Australian private sector credit shrank in December for the first time since 1992 as foreign banks cut lending to local companies. Reserve Bank of Australia figures showed that total credit fell 0.3 percent in December, well below a forecast 0.5 percent rise, fuelling expectations the RBA would announce another hefty interest rate cut next week. Across the Tasman Sea, the once-favored New Zealand dollar fell to another six-year low after the central bank said interest rates would likely have to be cut further, a day after the benchmark rate was slashed by 150 basis points.
Investors will have a tougher time assessing Federal Reserve policy when officials today replace interest rates with emergency credit programs as their main tool for steering the economy. That means analysts can’t base their predictions for Fed decisions on a simple interest rate benchmark for the first time since the FOMC began releasing policy statements in 1994.The FOMC will release a statement at about 2:15 p.m (GMT) on in Washington at the conclusion of a two-day meeting.
The FOMC statement in recent years has followed a clear structure: After a decision on the main interest rate came a paragraph on the economy, one on inflation and another one on the policy stance. The release usually ran about 100 words, fitting on a single page. Since October, US interest rates have been reduced from 2% to 0.25%. With the FOMC meeting starting on January 28th and Obama finally in office, investors’ attention is turning to policy decisions and the Fed’s response to the crisis.s According to Reuters FEDWATCH, there is a 75% chance that interest rates will stay at 0.25% and a 25% chance that the rates will drop to 0% for the first time in USA history! In this scenario, the USD is expected, by some analysts, to decline substantially against all other currencies. Crude oil inventories will also dominate the calendar on the 28th, as the market will watch how big the slide in demand becomes (all eyes turn to China). The combined two events are expected to have a significant impact on price action on Wednesday, and might provide big market movements and excellent profit opportunities!
A concise chief currencies pair abstract
