Pulse of the Market
· Greenback fell below 2010 Lows as EUR/USD and GBP/USD follow Rates and USD/JPY carried
· Euro faced the top event risk this week but it may anchor rather than catalyze
· British Pound speculators will look for CPI data to leverage the BoE’s rate war
· Japanese Yen faced heavy fundamental seas through intervention and economic uncertainty
The Greenback traded lower against all of the major currencies except for the Japanese Yen and Swiss Franc as safe haven flows continued to ease out of the U.S Dollar. With little market moving U.S economic data on the calendar this week, how the Yen responds to the intervention should remain a main focus. Housing market data, durable goods and the third release of GDP are the only U.S economic reports on the calendar to be released this week. The Single Currency reached fresh 4 month highs against the Cable, U.S and Canadian Dollars on Friday and strengthened against most of its major counterparts as the rally in risk continued for the second consecutive day. Euro’s rally was supported by the comments made by European Central Bank president Jean Claude Trichet, indicating that the central bank will likely go through with its plan to raise interest rates at its upcoming policy meeting next month as it tries to control excessive inflation and balance higher growth prospects. Inflation in the Euro Zone increased 2.4 percent last month, above the ECB’s limit of 2 percent. The European Central Bank reported that the Euro Zone’s Current Account figures beat forecasts, improving significantly in the month of January with a deficit of only 0.7 billion Euros, as compared to December’s deficit of 12.5 billion Euros. The British Pound ended the Friday’s trading session higher against the U.S Dollar as the improvement in risk appetite helped Cable investors to overlook a major disappointment in economic data. Consumer confidence plunged 10 points to a record low in the month of February. The minutes from this month’s monetary policy meeting will be published on this week. Price pressures in the U.K are even more significant than in the Euro Zone and for this reason it is believed that another U.K policymaker could have voted for higher interest rates. Back in February, three members voted to tighten monetary policy while six members voted to abstain from any changes. U.K retail sales are scheduled for release this week. The Japanese Yen traded sharply lower against all of the major currencies on Friday. For the first time in more than a decade, central banks around the world stepped into the foreign exchange market and jointly intervened to sell the Japanese Yen. Japan successfully convinced its G7 partners to jointly intervene in the foreign exchange market to sell the Japanese Yen. The Canadian Dollar ended the day unchanged against the U.S Dollar while the Australian Dollar rose strongly. Intervention by G7 central banks helped risk appetite to recover and the Aussie was among the biggest beneficiaries.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
00:01 | U.K Rightmove House Prices (MoM) (MAR) | Medium | 0.8% | 3.1% | |
02:00 | New Zealand Credit Card Spending (MoM) (FEB) | Medium | 3.4% | 3.8% | |
08:00 | Switzerland Money Supply M3 (YoY) (FEB) | Low | 6.7% | ||
12:30 | U.S Chicago Fed Nat Activity Index (FEB) | Medium | -0.16 | ||
14:00 | U.S Existing Home Sales (FEB) | High | 5.11M | 5.36M |
Euro
The Single Currency surged against the U.S Dollar and the Japanese Yen in the Friday’s session following the ECB involvement in co-ordinate intervention. Japanese Finance Minister Noda made specific mention throughout the trading day that the ECB may further intervene during the European Session on the EURJPY cross, pushing the pair from lows near 110.53 to as high as 115.58. Overall the EUR/USD traded with a low of 1.3979 and a high of 1.4183 before closing the day around 1.4168 in the New York session.
Yen
The Japanese Yen was the biggest mover on Friday and very much in spotlight. The USD/JPY traded at lowest levels since World War II, the Friday’s session of was well off historic lows following multi-lateral central bank intervention at the stroke to lift the pair from levels around 79.80 to session highs 82.00. Markets will remain on alert as an obscure of uncertainty that is a nuclear crisis continues to hover over currency markets. Overall the USD/JPY traded with a low of 78.82 and a high of 81.98 before closing the day around 80.70 in the New York session.
British Pound
British Pound
The British Pound was higher against the U.S Dollar but ended the Friday’s trading session lower against the Euro heading for the longest run of weekly declines since October, after a report showed U.K consumer confidence fell to a record low, fueling concern the economic recovery will slow. The Cable jumped against the yen as Group of Seven nations intervened to weaken the Japanese currency. Overall the GBP/USD traded with a low of 1.6059 and a high of 1.6254 before closing the day at 1.6221 in the New York session.
Canadian Dollar
Canadian Dollar
The Canadian Dollar ended the Friday’s trading session unchanged against the Greenback. Canada was the only commodity producing country to release any meaningful economic data on Friday and according to the Consumer Price Index report, inflationary pressures declined in the month of February. CPI rose 0.3 percent last month with core prices growing by a mere 0.2 percent. Overall the USD/CAD traded with a low of 0.9802 and a high of 0.9864 before closing the day at 0.9856 in the New York session.
Euro-Yen
EURJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The RSI is above 56 and lies above the neutral zone. Overall the cross has gained 3.38%.
Sterling-Yen
Currently GBPJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 47 reading and lies below the neutral zone. The pair has gained 2.86%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 44 reading and lies below the neutral region. The cross has gained 4.04%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 68 reading and lies above the neutral region. The pair has gained 0.51%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The RSI is above 36 and lies below the neutral region. The pair has gained 1.02%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.3833 | 1.3906 | 1.4037 | 1.4110 | 1.4241 | 1.4314 | 1.4445 |
USD/JPY | 75.86 | 77.34 | 79.02 | 80.50 | 82.18 | 83.66 | 85.34 |
GBP/USD | 1.5907 | 1.5983 | 1.6102 | 1.6178 | 1.6297 | 1.6373 | 1.6492 |
USD/CHF | 0.8833 | 0.8897 | 0.8962 | 0.9026 | 0.9091 | 0.9155 | 0.9220 |
USD/CAD | 0.9755 | 0.9779 | 0.9817 | 0.9841 | 0.9879 | 0.9903 | 0.9941 |
EUR/JPY | 106.36 | 108.43 | 111.39 | 113.46 | 116.42 | 118.49 | 121.45 |
GBP/JPY | 122.57 | 124.87 | 127.89 | 130.19 | 133.21 | 135.51 | 138.53 |
CHF/JPY | 85.00 | 86.38 | 87.88 | 89.26 | 90.76 | 92.14 | 93.64 |
AUD/JPY | 73.88 | 75.57 | 78.00 | 79.69 | 82.12 | 83.81 | 86.24 |
EUR/GBP | 0.8600 | 0.8638 | 0.8685 | 0.8723 | 0.8770 | 0.8808 | 0.8855 |
EUR/CHF | 1.2400 | 1.2482 | 1.2637 | 1.2719 | 1.2874 | 1.2956 | 1.3111 |
GBP/CHF | 1.4293 | 1.4376 | 1.4511 | 1.4594 | 1.4729 | 1.4812 | 1.4947 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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