New York Session – April 30, 2009 5:15 PM

April 30, 2009

The month-end mayhem continued into the NY session and the buck managed to recover some of its overnight losses. US equities went on a rollercoaster ride as better economic data was offset by the news of the Chrysler bankruptcy and some poor earnings reports. Economic reports improved at the margin with jobless claims falling to 631K from 645K while the Chicago PMI jumped to 40.1 from 31.4 – the highest read since September. This helped stocks rally to about +1.7% on the day. The news that the Chrysler bankruptcy is now official, as senior debt holders look for a better deal, weighed on sentiment into the latter part of the session and equities eventually closed flat. Full text » | Technorati | Stumble It!

Nordic Currencies Gain on the FX Market

April 30, 2009

Norwegian krone, Swedish krona rise in currency trading

Nordic currencies are making gains on the FX market today as risk appetite returns and oil prices rise. Nordic currencies like the Norwegian krone and the Swedish krona are considered "less tradeable" than the major currencies. They are a little exotic, and the economies that back them aren’t seen as major players.

However, as the euro heads higher in forex trading and risk appetite in general improves, Nordic currencies have been seeing gains on the FX market. Oil prices are also helping support Nordic currencies, since Norway especially is involved in oil export.

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Greenback Down Against Euro in Forex Trading

April 30, 2009

U.S. dollar drops as risk appetite rises

Earlier today, the euro pulled back a bit in forex trading on the currency market. Now, however, that brief drop appears to coming to an end and it is the dollar that is falling in currency trading.

Indeed, dollar weakness is starting to show in currency trading on the FX market as hopes of an economic recovery take center stage. It has long been assumed that when the economy starts to recover, the U.S. dollar would begin to drop.

Because the greenback has been used as a safe haven investment, it has been expected that as the need for safety diminishes and risk appetite returns, dollar weakness would prevail in forex trading. The fundamentals of the U.S. economy — with the massive debt that has been incurred since the end of 2007 — are in question, and those fundamentals are likely to undermine the greenback as focus shifts to risk and global economic growth.

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U.S. Dollar Gains Against Yen in FX Trading

April 30, 2009

Greenback bid against yen in currency trading

The U.S. dollar is making gains against the yen in FX trading on the currency market. The gains, however, are slight. In reality, the greenback is mostly rangebound against the yen in currency trading right now.

A little bit of uncertainty is creeping into the currency market, and that is restricting the dollar’s gains against the yen right now. FX Street reports on the state of USD/JPY right now:

“All of Asian and early European trading saw an undecided dollar market against the yen, caught in a narrow trading range between 97.90 and 97.30, currently at 97.70. We do not expect a decisive move out of this range, although a slight bid tone for the dollar to be kept.”

As global economic recovery becomes more prevalent, however, it is likely that the dollar will continue to gain against the yen in currency trading.

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U.K. Pound Forex Trading Forecast

April 30, 2009

Sterling ready to rise in currency trading?

The U.K. pound forex trading forecast may be signaling a likelihood of rising in the coming days. One of the main indicators that the worst may be over for the British economy — and the sterling in currency trading — is the fact that U.K. housing may be bottoming.

With home prices rather low, Britons are beginning to buy again, and this is helping the housing market. Inklings that a bottom might be near are providing some hope, in spite of a decline in housing prices. However, the decline was smaller than expected, and that is also fueling hopes.

Another helpful factor for the U.K. pound forex trading forecast is risk appetite. With the euro rising, and the stock market rallying, forex traders are trying their hands at high yielding currencies. Sterling normally benefits in currency trading from risk appetite, and the return of risk taking to the FX market may help.

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Euro Pulls Back in Forex Trading

April 30, 2009

Profit taking kicks in, gives dollar a boost in currency trading

The euro has pulled back a bit in forex trading, taking a breather on the currency market. After a rather remarkable rally from the euro yesterday in currency trading, things are slowing down as profit taking kicks in and forex traders make some quick cash on the euro’s dash for ascendancy. 

The euro is tentatively rising again this morning in forex trading, though. Yesterday’s rally, and the gains by the stock market, have given forex traders a taste of risk — and they like it. With risk appetite on the rise again, the euro is gaining the upper hand, although it is moving at a slower pace today than it did yesterday.

As long as global economic recovery appears to be on the horizon, the euro should continue to receive help in forex trading on the currency market.

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London Session – April 30, 2009 6:48 AM

April 30, 2009

The AUD saw a surge of buying interest in early European hours reflecting a general increase in optimism about the global economic backdrop.  The better tone was reflected in all the usual cross rates with EUR/USD rising USD/JPY falling and EUR/JPY mimicking the early up move in the AUD.  Some of the strength in the EUR and the AUD petered out as the London morning drew out with AUD/USD failed to break above 0.7380 and EUR/JPY finding sellers above 130.50.  However, with equity indices remaining positive on the day and the market appearing to be content to take the view that the worse may be over for the global economy a better tone looks set to persist through the US open.  Full text » | Technorati | Stumble It!

Asia Session – April 30, 2009 1:33 AM

April 30, 2009

With the surge in US equities carrying over into Asian trading and a sudden burst of optimism over the US economic outlook, the yen crosses came roaring back as risk was back in the marketplace despite the looming specter of the flu pandemic. However, late in Asia, the news leaked that American automaker Chrysler’s talks with the Treasury Department in order to avoid bankruptcy had broken down, thus sending traders scampering to buy Dollars and Yen. USD/JPY opened near the 97.60 area and climbed to 97.85 highs on the weaker Yen, however, as the Chrysler story was leaked, the Yen strengthened, dropping USD/JPY to lows in the 97.15 ballpark before leveling out near 97.30. Using the EUR/JPY pair as an example of the crosses, it had similar moves, hitting early session highs of 130.27 early, and then collapsing to 128.93 lows on the back of the news. All yen crosses followed the same pattern today. Of note is that the Bank of Japan kept its key interest rate unchanged as expected at 0.10% with little to no market reaction. Going forward, the action in Asia will be subdued as many traders in Japan go on holiday for Golden Week. Japanese markets will be closed from Monday to Wednesday next week. In Europe, the single currency gained some early real estate on Dollar weakness, climbing from early lows of 1.2350ish to just under 1.3340 highs before the subsequent drop to the 1.3270 arena. Down under, in New Zealand, the NZD/USD fell a big figure from near .5734 to 0.5634 as the RBNZ cut its interest rate by 50 basis points as expected, to a record low of 2.50% and commented that rates will remain low until 2010 to fight off recession. Full text » | Technorati | Stumble It!

New York Session – April 29, 2009 5:14 PM

April 29, 2009

The price action in the NY session was choppy to say the least, but ultimately the “risk” trades won out as the Fed statement suggested the worst of the declines in the US economy are behind us. The communiqué noted that “the economy has continued to contract, though the pace of contraction appears to be somewhat slower” and that “household spending has shown signs of stabilizing” to boot. Earlier in the session, the 1Q GDP report showed some “green shoots” despite the headline dropping a sharper than expected -6.1%. The 2.2% jump in personal consumption and the fact that nearly half of the headline decline was due to the continued inventory correction was enough to see the markets brush off the initial disappointment. Full text » | Technorati | Stumble It!

Mexican Peso Pares Losses in Currency Trading

April 29, 2009

With swine flu worries receding, the Mexican peso shows signs of life

The Mexican peso has been paring losses in currency trading today. When news about the swine flu broke over last weekend, the peso started the week markedly lower in forex trading. Now, though, as concerns over swine flu ease, a measure of recovery is being seen.

Not only does swine flu appear to be on the way to containment, but there is also no clear indication that worries over swine flu are enough to halt global trade. With such news the Mexican peso — along with other emerging market currencies — are starting to gain on confidence.

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