London Session – September 29, 2009 6:34 AM
September 29, 2009
European stocks markets failed to pick up the positive lead set by their Asian counterparts. Another wave of concerns that 2009 has been a ‘tough’ year stoked concerns about corporate performance and encouraged the USD to move higher vs the EUR and the JPY. Selling in the JPY had been triggered by comments from Japanese Finance Minister that the government may take action in the markets. These remarks have directly countered the rise in market opinion that Japan’s new government may not be willing to intervene in the fx market. The better tone in the USD also followed a reiteration by ECB President Trichet of support for the US government’s strong USD policy, though the impact of his remarks on EUR/USD will have been countered by his comments yesterday which referred to exit policies from the “exceptional measures” taken by the ECB. While the AUD has also moved lower vs the USD, the unit has fared relative well on the back of another bout of rate hike speculation and on comments from the RBA’s Richards that Australian house prices may surge too fast. The downward correction in AUD/USD ran into support above 0.8710.
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Asia Session – September 29, 2009 2:39 AM
September 29, 2009
The session in Asia was characterized by the yen as it continued to slip off of its highs it had visited only 24 hours ago in yesterday’s dynamic buying spree. Japan’s Finance Minister Fujii continued his one man show as he sparked yen selling with subtle hints at intervention and then pulled the rug out from under the move by stating that the current moves in the currency markets were within reason. The Bank of Japan last intervened in the FX markets in 2004, and many traders don’t think the BOJ will feel the heat until the 85.00 yen levels. Full text »
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New York Session – September 28, 2009 5:24 PM
September 28, 2009
Inter-market correlations broke down as quarter-end looms and the US dollar came back better bid. US equities added 1.8% in broad terms as volumes were ostensibly thin. The jump was despite ominous economic data. The Chicago Fed National Activity Index continued to flash below trend growth ahead, dipping to a much lower than anticipated -0.90 in August after a -0.56 print the prior month. The relapse in a month that was supposed to be propped up by “cash for clunkers” should give the bulls some pause. In any case, quarter-end looks to be wreaking havoc on volumes and price action. Full text »
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What’s Going on With the Japanese Yen in Forex Trading?
September 28, 2009
Yen heads higher in currency trading
The only currency that the U.S. dollar is having trouble with in currency trading this morning is the Japanese yen. The yen is heading higher in forex trading on the currency market as volatility on the FX market takes more defined shape. However, the Japanese government continues to display uncertainty on the issue of a strong yen.
For a long time, Japan has embraced a weak yen policy, since a weak yen has made Japanese exports competitive on the world market. However, with the recent elections resulting in a government overhaul, it appears that a weak yen may not remain on the agenda for much longer — sort of.
Even though Finance Minister Fuji says he opposes intervening in the markets to keep the yen weak in forex trading, he is already backpedaling as Japan’s Prime Minister points out that the recently stronger yen is hurting small businesses.
In the end, things look fairly interesting for the yen in currency trading. As the economic recovery moves forward, it might be a good idea to consider that a change may be coming.
See Also
- Japanese Yen in Currency Trading
Forex trading with world currencies
U.S. Dollar Rebounds This Morning in Currency Trading
September 28, 2009
Forex trading with the greenback
The U.S. dollar is rebounding this morning in currency trading on the FX market. While risk aversion was the name of the game earlier, as Asian stock markets plummeted, there is speculation that things might change soon.
Right now, even though Asian markets are closed, the U.S. stock market is heading much higher, thanks to M&A activity. The news is also turning around European stock markets. However, even so, the fact remains that gold is still below ,000 and ounce, and oil prices remain below a barrel. This relative weakness is providing some strength for the U.S. dollar.
It appears as though we will see an interesting dynamic to start the week off in forex trading for the greenback.
See Also
- Forex Trading with the Greenback
Currency trading on the FX market
London Session – September 28, 2009 6:33 AM
September 28, 2009
Evidence of corrective activity became clear across many currency pairs at the start of the European session in reaction to strong moves registered last week and in Asia overnight. Cable is off its lowest levels and EUR/GBP has steered away from breaking above the 0.93 level. Even so, sterling is far from out of the woods. Germany’s weekend election looks set to out a pro-business CDU/CSU coalition in power with Merkel at the helm. The positive implications for the Dax, however, were countered by the negative pressure stemming from overnight losses in equities indices. Persistent concerns about the strength of the global economic recovery have also pushed EUR/USD lower, the release of weak German CPI numbers this morning were also EUR negative. That said, the EUR and the Dax are shaking off some of its losses at the US open nears. The JPY has reversed some of its aggressive overnight gains. Full text »
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Asia Session – September 28, 2009 1:53 AM
September 28, 2009
The new week in Asia started with an interesting series of events that pushed the dollar and yen higher in moves that were reminiscent of Friday. USD/JPY began the day at highs of 89.65 and began to slide as Asian stocks collapsed out of the gate, following the lead of Wall Street on Friday. As the Yen gained strength across the board with Japanese exporters repatriating funds for the fiscal year end, the new government in Japan upheld its mantra that they would not stop the rise in Yen unless the move was “abnormal”. The cycle had begun, with the higher Yen pushing stocks lower and in turn pulling risk lower with it. With the Japanese Nikkei down almost 2.5%, the moves were quite dramatic. Full text »
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09/20/2009 – Increasing signs the risk rally is stalling
September 25, 2009
* Increasing signs the risk rally is stalling
* Mixed signals from Japan’s MOF
* Still a troubling trend in US economic data
* GBP gets thumped by the BOE
* Key data and events to watch next week
The greenback remains under pressure as the global risk rally continues. Concerns over the US fiscal deficit, the status of the US dollar as the primary global reserve currency, and near zero US interest rates all provide background noise to encourage USD selling, but the real source of USD weakness is the ongoing improvement in risk appetites globally. While we strongly believe that current risk asset market gains are overdone and ripe for a correction, solid indications of a pullback are tenuous at the moment. However, we would note that the ratio of the S&P 500 to its 200-day moving average is at historic extremes last seen in May of 1983, which was followed by a 2.5% decline in the following week. Full text »
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09/27/2009 – Increasing signs the risk rally is stalling
September 25, 2009
Increasing signs the risk rally is stalling
Mixed signals from Japan’s MOF
Still a troubling trend in US economic data
GBP gets thumped by the BOE
Key data and events to watch next week
Following last week’s preliminary signals that risk assets may be stalling, this past week saw stock markets lose ground, key commodities reverse gains, and the USD bounce after testing key support levels. To be sure volatility remained high during the week, with new risk highs being made, but weekly closing indications increasingly suggest a peak in key risk markets has been seen. There were a number of data disappointments (see below) that worked to soften risk appetites, but attempts to extend the rally ultimately failed out of exhaustion. This was most evident following the FOMC’s largely as expected statement, which noted that economic activity ‘picked up’ and that the Fed would maintain extremely low rate levels for an extended period. Those comments should have and did lead to a rally in risky assets, but, importantly, those gains could not be sustained and most finished down on the day. Full text »
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London Session – September 25, 2009 4:46 AM
September 25, 2009
Sterling has taken another hammering with the break through the USD1.6110 technical support yesterday focusing the market’s attention on the 1.550 area. That said some support has been seen this morning with cable clawing its way back above the 1.600 level and EUR/GBP finding sellers ahead of the 0.9190. There release of UK business investment data (-21.8% y/y) this morning has served to highlight the poor economic backdrop, but the pound continues to reel from yesterday’s comments from Governor King that suggested he is unconcerned about sterling weakness. Pressure is also stemming from the horrible budget deficit and continued speculation that the BoE may yet loosen monetary policy further. While the BoE has left the door open for further easing there are some signs that the tone may be altering. Remarks from the BoE’s Chief economist Dale that pumping too much money into the system could create an asset bubble hint that the BoE may becoming more conscience of inflation potential. The minutes of the Sep MPC also make note that the risk that CPI will fall below 1% had fallen from the publication of the Aug Inflation Report. Sterling would find support from a change in tone from the BoE. However, for now it seems likely that sterling will remain under pressure in the run up to the Oct MPC.
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