FOREX Newsletter
Pulse of the Market
· Greenback advanced apprehensively strong through Friday’s fundamentally active markets
· Euro fell 3.45 percent in the final two days of last week, the biggest back to back loss since 2008
· Cable investors will look to gauge the BoE’s commitment with this week’s quarterly report
· Japanese Yen continues its climb as the market speculates on the intervention tipping point
The U.S Dollar traded mixed in Friday’s trading session after a particularly volatile session as commodities recouped some of their steep losses. The Greenback also gained significant support against "safe haven" currencies like Japanese Yen and Swiss Franc after Non Farm Payrolls report far exceeded expectations. The NFP report showed that the U.S added 244K jobs last month, better than the 185K expected, and up from last month's 221K. The gains were led by an addition of 268K private sector jobs with strong growth in most categories other than construction. However, the unemployment rate unexpectedly ticked up to 9.0% from 8.8% last month after a steady increase in weekly claims throughout April. The Euro traded sharply lower against the Greenback as investors gauge the ECB's policy stance. The Bank left interest rates on hold, as was widely anticipated, but ECB President Trichet disappointed Euro bulls when he refrained from using the "strong vigilance" catch phrase when referring to rising inflation. The less hawkish stance has most expecting the ECB will remain on hold until July at the earliest, but it also appears that attention is clearly being paid to the Single Currency's recent strength against the Dollar. British Pound recovered some of its recent declines against the Dollar on Friday after a report showed that British inflation remains worrisome. U.K PPI rose more than forecast in April, registering 5.3%, down from last month's 5.6%, but higher than the 5.1% expected. With commodity prices surging, producers will likely have no choice but to pass on rising prices to consumers. However, the BoE left rates unchanged, opting to support the struggling U.K economy with accommodative policies rather than combat inflation with higher interest rates. Investors will have to wait another two weeks to see the voting record of the BoE's policy setting committee. The Japanese Yen traded lower on Friday against the U.S Dollar and higher yielding currencies as investors assume riskier positions. An encouraging NFP report in the U.S prompted investors to reduce "safe haven" Yen positions and cautiously seek higher yields. After yesterday's push below 80.00, speculation that the BoJ may again intervene to weaken the Yen has also kept the Japanese Yen under pressure. Steep gains in the Aussie also weighed on the currency.
| Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| 01:30 | AUD NAB Business Confidence (APR) | Medium | 7 | | 9 |
| 06:00 | EUR German Current Account (Euros) (MAR) | Medium | | 13.3B | 8.9B |
| 06:00 | EUR German Trade Balance (Euros) (MAR) | Medium | | 11.8B | 12.1B |
| 07:00 | GBP Halifax House Prices 3Months/Year (APR) | Medium | | -3.0% | -2.9% |
| 08:30 | EUR Euro-Zone Sentix Investor Confidence (MAY) | Medium | | 13.8 | 14.2 |
| 12:15 | CAD Housing Starts (APR) | Medium | | 184.0K | 185.1K |
| 23:01 | GBP RICS House Price Balance (APR) | Medium | | -23.0% | -23.0% |
Euro
The Single Currency slumped heavily against the U.S Dollar as the U.S non-farm payrolls were better than anticipated. The performance of the Euro against the Yen was somewhat better, but still the Euro erased its gains and ended the day lower against the Japanese Yen. ECB decided to keep its interest rate unchanged, also pressured the Euro. Overall, the EUR/USD traded with a low of 1.4314 and a high of 1.4587 before closing the day around 1.4356 in the New York session.
Yen
The Japanese Yen retreated in Friday’s session, after it reached the highest level in seven week against the U.S Dollar on Thursday, on speculation that Japan will intervene to curb recent gains. Japan with other members of the Group of seven, intervened last time on March 11 to weaken the currency as it surged after the earthquake. Overall, the USD/JPY traded with a low of 80.05 and a high of 80.93 before closing the day around 80.55 in the New York session.
British Pound
The British Pound ended the session almost unchanged after the Bank of England left its target rate unchanged, suggesting that the U.K economy is still unprepared to leave accommodative monetary policy. Sterling attempts to rebound, but without any significant success so far. The BoE maintained its official Bank Rate at 0.5 percent. Overall, the GBP/USD traded with a low of 1.6354 and a high of 1.6463 before closing the day at 1.6397 in the U.S session.
Canadian Dollar
The Canadian Dollar gained on higher oil prices and strong labor reports in both Canada and the U.S. The Canadian economy added 58.3K jobs last month, better than the 1.5K decline in March and better than the addition of 20K that was expected. The unemployment rate also dropped to 7.6% from 7.7% last month. Overall, the USD/CAD traded with a low of 0.9571 and a high of 0.9700 before closing the day at 0.9667 in the New York session.
Australian Dollar
The Australian Dollar gained in Friday’s session after the central bank raised its inflation forecast and signaled that it may perform an interest rates hike “at some point” in the future. The RBA increased its forecast for growth of consumer prices in 2011 to 3.25 percent from previously predicted 3 percent. Overall, the AUD/USD traded with a low of 1.0579 and a high of 1.0801 before closing the day at 1.0692 in the New York session.
Euro-Yen
EUR/JPY is trading below 14, 50 and above 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The RSI is above 39 and lies below the neutral zone. Overall, the cross has lost 0.65%.
Sterling-Yen
Currently GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is also indicating a bearish stance. The RSI is above 39 reading and lies below the neutral zone. The pair has gained 0.66%.
Aussie-Yen
Currently, the cross is trading below 14 and above 50, 100 days moving average. Fast stochastic gives bearish and MACD is also indicating a bearish stance. The RSI is above 48 reading and lies below the neutral region. The pair has gained 1.74%.
Euro-Sterling
This cross is trading below 14, 50 and above 100 days moving average. Fast stochastic is indicating a bearish and MACD is also issuing a bearish signal. The RSI is above 46 reading and lies below the neutral region. The pair has lost 1.30%.
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 40 and lies below the neutral region. The pair has gained 0.77%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.4164 | 1.4246 | 1.4383 | 1.4465 | 1.4602 | 1.4684 | 1.4821 |
| USD/JPY | 81.32 | 81.78 | 82.17 | 82.63 | 83.02 | 83.48 | 83.87 |
| GBP/USD | 1.6212 | 1.6259 | 1.6331 | 1.6378 | 1.6450 | 1.6497 | 1.6569 |
| USD/CHF | 0.8707 | 0.8791 | 0.8834 | 0.8918 | 0.8961 | 0.9045 | 0.9088 |
| USD/CAD | 0.9424 | 0.9460 | 0.9491 | 0.9527 | 0.9558 | 0.9594 | 0.9625 |
| EUR/JPY | 116.52 | 117.38 | 118.64 | 119.50 | 120.76 | 121.62 | 122.88 |
| GBP/JPY | 133.64 | 134.15 | 134.79 | 135.30 | 135.94 | 136.45 | 137.09 |
| CHF/JPY | 90.87 | 91.29 | 92.13 | 92.55 | 93.39 | 93.81 | 94.65 |
| AUD/JPY | 85.68 | 86.24 | 87.34 | 87.90 | 89.00 | 89.56 | 90.66 |
| EUR/GBP | 0.8696 | 0.8737 | 0.8794 | 0.8835 | 0.8892 | 0.8933 | 0.8990 |
| EUR/CHF | 1.2776 | 1.2831 | 1.2862 | 1.2917 | 1.2948 | 1.3003 | 1.3034 |
| GBP/CHF | 1.4386 | 1.4472 | 1.4518 | 1.4604 | 1.4650 | 1.4736 | 1.4782 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
No comments:
Post a Comment