Asia Session – March 30, 2010 1:42 AM

The Euro continued to cling to recent gains as the latest Greek bond auction met all funding requirements for the month of April, helping to solidify the belief that the worst may be behind for the European Union. The EUR/USD made a progressive move higher today in Asia as traders seemed to put the recent perils of Greece on a back burner now that a aid plan seems to be in place. The pair touched 1.3495, a 20 pip move from the days open, and a 60 pip hike from late NY trade. With a lack of data and news, markets prepared for end of the month and end of the quarter flows to stir up a languid market ahead of the holiday weekend as traders look to square up Euro shorts. Talk of a large 1.3500 option that expires Friday could try to keep a cap on those moves. Full text »

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New York Session – March 29, 2010 4:16 PM

The NY session witnessed some painfully light price action as traders await month-end later this week along with the all-important US nonfarm payrolls report on Friday. US equities managed a respectable rally, adding 0.6% in broad terms, and this coupled with the end to Japanese investor repatriation helped send the yen crosses higher. Full text »

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Sterling Sees Gains in Currency Trading

Forex trading with the U.K. pound

Sterling is seeing gains in currency trading on the FX market this morning, thanks to some favorable data, and the fact that there is a bit of a return to risk appetite today. 

Indeed, riskier currencies are heading higher, with the U.S. dollar pulling back a bit as forex traders look for higher yields. In forex trading, the U.K. pound is also getting some help from the fact that the fundamentals are improving, and traders are realizing that sterling might have been oversold.

GFT’s Boris Schlossberg reports in FX360 on the sterling in currency trading:

In UK the mortgage lending numbers printed at 2.1B versus 1.8 Billion eyed, the strongest increase since December of 2008. The news helped to boost cable above 1.5000 in early London trade but the pair could not hold that level as profit taking kicked in. Still, sterling is ripe for a short covering rally given the improved fundamental data over the past several weeks and the very bearish positioning skew in the currency.

See Also

• Forex Trading with the U.K. Pound
  Currency trading on the FX market

Australian Dollar Rallies in Forex Trading

Aussie in currency trading

The Australian dollar is rallying in forex trading on the currency market this morning, with a little help from the return of risk appetite. 

Investors are looking for some gains, and turning to currencies and other investments considered a little risky. The Aussie, a commodity currency, and a big trading partner with China, is finding support from higher gold prices and from hopes that China will be seeing economic growth.

Also helping the general mood of risk appetite is the fact that the U.S. stock market is higher today, rallying on hopes that economic recovery is really under way.

See Also

• Aussie in Currency Trading
  Forex trading on the currency market

Trading Block: Futures, Dollar & Oil

A look ahead to the trading day with Boris Schlossberg, of GFT Forex; Todd Colvin, of MF Global; and Peter Beutel, of Cameron Hanover.

London Session – March 29, 2010 7:00 AM

The Greek Debt Management Agency has announced a forthcoming 7 year bond sale, to be launched and priced in the near future.  The Greek government is probably hoping to tap into the positive reaction that followed last week’s announcement from the EU that a mechanism was in place to support EMU members suffering severe finance difficulties.  That said an announcement from the Debt Agency is not a surprise since the government is under pressure to issue an estimated EUR 10 bn this spring to enable it to rollover maturing debt.   Crucially the Greek government needs to rein in the cost of borrowing if it is to have any chance of fulfilling its pledge to reduce its budget deficit to 3% of GDP by the end of 2012.  This morning the 10 yr Greek-Bund spread has widened a touch suggesting that investors will continue to demand an expensive premium to hold Greek debt.  This suggests that even if this forthcoming debt sale is met with strong demand (like the recent 10 yr sale), the financing problems of the Greek government will not be over and a decision to resort to cheaper IMF financing could still be an attractive alternative for Greece later in the year.  The Greek bond sale will be an important hurdle for the EUR, but it is unlikely to prove to be the last suggesting that the present move higher in EUR/USD is likely to prove to be temporary. Full text »

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Asia Session – March 29, 2010 1:44 AM

The holiday shortened week began with the Euro opening firmer due to two news stories from different ends of the globe. First the EU helped lay out concrete plans in accord with the IMF to provide a safety net for the financially over burdened Greece. Secondly, an explosion on a South Korean naval vessel which exploded in a disputed area with North Korea was deemed to not be the results of any aggression from the North. Combined, the news helped traders shed their risk adverse skin and get back into riskier currency trades, most notably the Euro. Full text »

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Swiss National Bank Lets Franc Surge to Record High on the Currency Market

Is the SNB ready to back off a little in currency manipulation?

Since March of 2009, the Swiss National Bank has been fairly straightforward regarding its methods of buying foreign currencies in order to limit currency appreciation by the franc. And, according to the Forex Blog, it has worked:

[B]y all accounts, the interventionist policy has been a smashing success. The forex markets were cowed into submission for almost a year, which prevented the Swiss economy from contracting more and probably paved the way for recovery. 2009 GDP growth is estimated at -1.5% with 2010 growth projected at 1.5%.

However, earlier today the Swiss franc hit a new high against the euro in forex trading, and the SNB did nothing to prevent it. Does this mean the interventionist policy may be coming to an end? The bank has warned the Swiss that it is moving toward more normal currency market participation, so this could signal the beginning of the end.

It will be interesting going forward to see how things go. The rally against the U.S. dollar has stalled, with the franc consolidating gains, and what happens against the euro will depend largely on how the Greek issue plays out.

See Also

• World Currencies in Forex Trading
  Forex trading on the currency market

U.S. Sees GDP Revision from 2009 Quarter 4

U.S. dollar down slightly in forex trading

The U.S. government revised the GDP numbers from Quarter 4 of 2009 down to 5.6% from 5.9%. However, that change isn’t enough to affect the largely positive sentiment out there that is offering some risk appetite. 

Indeed, with gold prices higher, and with euro zone members coming to an agreement on how to proceed with a Greek bailout, it is little surprise that the euro is seeing some gains against the U.S. dollar in forex trading.

The gains, however, are not that big, since forex traders are waiting to see how the Greek drama plays out. The circumstances for helping Greece are very specific, and it remains to be seen how things will play out if the situation worsens.

See Also

• Economic Data and the U.S. Dollar in Forex Trading
  Information for forex traders

Лондонская Сессия – March 26, 2010 9:39 AM

ЕС дала согласие, что страна-участница, имеющая серьезные фискальные трудности, сможет получить двухстороннюю поддержку от партнеров по Еврозоне, также как и получить поддержку от МВФ. Следуя за неделями разногласий, стало важным моментом с политической стороны, что ЕС показывает единство по вопросу, как действовать со странами-участницами ЕМС, имеющими фискальные нарушения. В этом свете объявление прошлой ночью о том, что теперь установлен механизм, который могут использовать страны-участницы ЕМС по финансированию, – стало важным шагом в правильном направлении. Тот факт, что председатель ЕЦБ Trichet проигнорировал свои предыдущие опасения по вовлечению МВФ в этот вопрос и добавил свою поддержку к основному пакету (и к позитивному направлению, последовавшему затем) – является последующим подтверждением, что он опытный политик. Однако, доказательство в пудинге – в его поедании. Греция все ещё должна продать значительную сумму задолженности на открытом рынке этой весной и ЕС будет надеяться, что Греция, или будь то Португалия или Испания, не будет вынуждена выколачивать ссуду у партнеров по ЕМС. Спреды по государственным облигациям Греции ужесточились этим утром в ответ на данную активность, хотя движение к более длинной стороне было нерешительным, где 10летние ценные бумаги имеют доходность свыше 300 основных пунктов над государственными облигациями. Аналогично, в то время как EUR торговал удачно сегодня утром, EUR/USD не смогла обратно достигнуть уровня 1.3400.   Служба долгов Греции, вероятно, объявит очередную продажу облигаций в ближайшие недели.  Данная продажа не только будет решающим испытанием для Греции, но это установит тон для последовательных действий в ЕВС.  Слабая реакция на продажу облигаций повысит вероятность того, что Греция будет вынуждена обратиться за финансовой помощью и Германия, несмотря на свои недавние протесты, скорее всего, будет самым крупным донором в рамках нового плана поддержки.  Отрицательные результаты следующей продажи облигаций в Греции также могут повысить риск распространения финансового кризиса в Португалию, и это может повысить давление на новые механизмы поддержки, на ЕВС и на EUR.  EUR еще не прошла стадию колебаний.  Full text »

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