Asia Session – October 1, 2010 12:52 AM

September 30, 2010

The end of the long quiet week in Asia brought yet another long and quiet session only disrupted by Chinese data. Although China was out for the National Day holiday, Manufacturing PMI data was still released and came in at 53.8, better than the forecast of 52.5 and last month’s 51.7 results. The net effect of the data was an instant surge in risk across the board, most notably in the Australian currency, used by China’s biggest trading partner in the region. With data showing that the monstrous Asian economy was looking unscathed after a bout with poorer numbers in the second quarter, the AUD/USD shot 65 pips to session highs at 0.9700. As well, the EUR/USD enjoyed a boost from 1.3620 to highs at 1.3665 for the day, and the GBP/USD was able to pull itself up from an almost 250 pip drop from yesterday’s highs of 1.5920 to levels closer to 1.5730. It would seem that the data was just what the US Dollar didn’t need in its fragile state and worked well as a nice rebuttal from China after yesterday’s Senate vote to label the nation a currency manipulator. Full text »

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New York Session – September 30, 2010 4:14 PM

September 30, 2010

The U.S. dollar traded mixed as the month and quarter came to a close and while the economic data stream came in stronger than expectations. Final 2Q GDP was revised to +1.7% from the prior +1.6% while the market was expecting it to remain at +1.6%. 2Q final personal consumption came in higher than the expected +2.0% with a print of +2.2% (prev. +2.0%). Weekly initial jobless claims were released this morning with a better than expected reading of 453K (cons. 460K). Though the prior week’s number was revised slightly higher to 469K from the previous 465K, the 4-week moving average experienced its fifth straight decline to 458K. Later on, September Chicago PMI posted a strong 60.4 reading, up from the August print of 56.7 and much better than the expected decline to 55.5. On balance, the data was positive and equities came off as expectations of further Fed stimulus eased. Full text »

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Japanese Yen Continues to Show Strength in Forex Trading

September 30, 2010

USD/JPY in currency trading

The Japanese yen continues to strengthen in forex trading on the currency market. Indeed, the USD/JPY currency pair continues to lose ground, even though the Japanese have intervened to try and weaken the yen.

U.S. government debt concerns, paired with a stagnating economy, are keeping the U.S. dollar weak against most major currencies right now — including the Japanese yen.

There is a good chance that the Japanese will take further measures to curb gains for the yen. Quantitative easing is likely, and another intervention could be possible as well. The Japanese like a weak currency because it gives their exports an edge.

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U.S. Dollar Drops Against Euro in Forex Trading

September 30, 2010

Greenback down in currency trading

Earlier, it looked as though the U.S. dollar was ready to make solid gains against the euro in forex trading. News out of Spain and Ireland sent the euro lower against the U.S. dollar, and forex traders contemplated sovereign debt.

However, it has not taken long for the concerns over Ireland and Spain to be dismissed. Indeed, positive jobless data in the U.S. has helped the euro regain the upper hand in forex trading, oversetting earlier gains.

Now the U.S. dollar is down against the euro in forex trading, heading lower as risk appetite sets in.

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London Session – September 30, 2010 6:27 AM

September 30, 2010

The pound and the euro have been the strongest performers out of the major currencies this morning, while the dollar remains on the back foot. The single currency’s rally this week has been impressive, and it looks set to continue after the markets shrugged off news that Spain had been downgraded by a major credit rating agency and more Irish banks need capital injections. Full text »

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Asia Session – September 30, 2010 2:01 AM

September 30, 2010

The dollar was finally given a chance to come up for air today in Asia after the currency has spent the earlier part of the week against the ropes. With the markets still in the dark as to whether the US central bank will introduce any new form of quantitative easing in the near future, the dollar has had its back foot planted in the dirt as it tries to prevent a further slide lower. Today’s session saw the EUR/USD give the greenback a break with a slide from 1.3635 to lows near 1.3590 albeit mostly due to the collapse of EUR/GBP through 0.85750. Markets looked more risk adverse today with flows favoring the yen and dollar as a myriad of factors descended on the markets. Full text »

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New York Session – September 29, 2010 4:09 PM

September 29, 2010

With no major economic data out of the U.S. today, the dollar continued to trade softer on the back of QE speculation. The dollar index fell to and eight month lows as the prospect of additional easing measures kept pressure on the buck. EUR/USD broke above 1.3600 rising to nearly 1.3645. USD/CHF made new record lows of around 0.9735 and is currently trading around 0.9765. Full text »

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London Session – September 29, 2010 9:56 AM

September 29, 2010

After quiet Asian markets overnight, the euro had a strong start to the session, hitting a high against the dollar of 1.3660/70 – its highest level since March. The move was fuelled by a speech given by the ECB’s Bini Smaghi, who said the side effects of the new Basel 3 rules would may include increased demand from banks for government bonds. Although he said that current ECB rates are appropriate for the fundamentals, he added that increased demand for ECB cash would push up interest rates charged in refinancing operations. The markets immediately jumped on the back of this sending the euro higher, as it was the first time in recent memory that a major central bank has suggested anything other than currency debasement. Although the single currency has given up some of its early gains, it remains tantalizingly close to the 1.36 level in EUR/USD and 0.86 in EUR/GBP. Full text »

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U.S. Dollar Weakens as Euro Hits 5-Month High

September 29, 2010

Dollar down across the board in forex trading

The U.S. dollar is weakening again, quite dramatically, as the euro hits a 5-month high. The euro smashed through the 1.3600 level in forex trading, sending the U.S. dollar lower.

Greenback is struggling in currency trading as focus turns away from European sovereign debt and unrest over austerity measures. Indeed, many investors and forex traders are looking at the U.S. economy, and considering the effects of stagnation as the deficit grows.

As a result, it is little surprise that the euro is gaining in forex trading against the U.S. dollar, especially as it is being supported by record gold prices, which are also pressuring the greenback in currency trading.

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European Strikes Today Draw Further Attention to Situation

September 29, 2010

Euro higher in forex trading, even with strikes

Europeans are going on strike in large numbers today to protest austerity measures. Euro zone countries are trying to cut back on their spending in order to reduce deficits. However, such measures often fall heaviest on the people — who are not happy about it.

However, even with these concerns about sovereign debt and unrest from strikes, the euro is gaining in forex trading. The euro is higher against the U.S. dollar, which can’t seem to find its way now that focus is shifting toward mounting U.S. debt and a stagnating economy.

There are some expectations that the euro will not be able to hold above its recent high of 1.36, and that eventually it will have to drop as the situation in the euro zone become increasingly dire.

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