New York Session – February 28, 2011 4:00 PM

February 28, 2011

The U.S. dollar was weaker amid mixed U.S. economic data and Fed speak. NY Fed President spoke this morning and noted that while the economic outlook was ‘considerably brighter’ it is ‘not a reason to reverse course’ on the asset purchase program. The market viewed this as dovish and increased speculation that the Fed will lag behind other major central banks in taking a more hawkish stance in the face of rising global inflation. Full text »

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Could We Really See QE 3?

February 28, 2011

Focus returns to Ben Bernanke and Fed policy

Focus is returning to Ben Bernanke and the Federal Reserve. Tomorrow, Bernanke is expected to provide testimony before Congress on monetary policy and his expectations for the economy. However, there are indications that QE 3 could be a very real possibility.

Even with indications that economic recovery is picking up in the U.S., it appears that some members of the Fed are not so sure that it is time to end quantitative easing. GFT’s Kathy Lien addresses the possibility of QE 3 in FX360:

The most important questioned that investors want answered this week is whether the Federal Reserve is moving in a completely different direction from other central banks.  Recent comments from Fed officials including Fed President Bullard who appeared on CNBC this morning suggests that asset purchases could continue beyond June.

Of course, Lien continues, if the Fed announces that it will gradually wind down purchases, the U.S. dollar is likely to move even lower against the euro. The only way the dollar is likely to see a surge of strength is if Bernanke places emphasis on ending economic stimulus.

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Euro Gets a Boost as Risk Appetite Improves

February 28, 2011

Euro in forex trading

The euro is getting a boost in forex trading on the currency market, thanks to improved risk appetite. Indeed, equities around the world are heading higher, and that is helping high beta currencies like the euro.

Euro is getting help from economic data showing that personal income and personal spending is on the rise in the U.S. Also helping is the growth in the Chicago PMI data. Economic growth in the U.S. and other countries is prompting some optimism in forex traders, providing them with the confidence to take some risk.

There are still some issues with the U.S. economy, though. Pending home sales declined, and the labor market remains rather slow in terms of growth. Things could change quickly, but for now the focus is on the positives of the euro in forex trading. U.K. pound and Aussie are also higher in currency trading.

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The Street : February 28, 2011 : Canadian Rate Decision & Currencies [02-28-11 7:50 AM]

February 28, 2011

BNN looks at the currency markets ahead of the Bank of Canada’s rate decision and ongoing events in North Africa with Kathy Lien, Director of Currency Research, GFT Forex.

Copy and paste this link in to your browser to view video:

http://watch.bnn.ca/the-street/february-2011/the-street-february-28-2011/#clip424838

Fear of Supply Disruptions Grow

February 28, 2011

Unrest in the Middle East have currencies and commodities in full swing, with Matt Smith, Summit Energy; Michael Dudas, Jefferies; Boris Schlossberg, GFT Forex.

London Session – February 28, 2011 7:21 AM

February 28, 2011

The U.S. dollar was lower against most of the majors on views that the Fed’s accommodative stance is likely to persist while other central banks take a more hawkish tone in the face of higher global inflation. Euro zone CPI was released and while it saw a slight unexpected drop to 2.3% from the prior 2.4% (cons. 2.4%), the figure is still above the ECB’s 2% target. This fuelled speculation that the bank will take a more hawkish stance ahead of the European Central Bank’s meeting later this week. EUR/USD climbed to session highs of nearly 1.3845/50 after trading as low as around 1.3710 earlier in the session. The pair is currently around 1.3830. New Zealand’s Jan. trade balance came in better than expected with a surplus of 11M while the market was anticipating a deficit of -25M from the prior month’s -264M. This gave a slight boost to the kiwi, however the rally was short lived as NZ Finance Minister English said that economic growth will be slower in H1 as a result of last week’s tragic earthquake. He went on to note that the gov’t will bear the cost of rebuilding and will take on more short term debt. NZD/USD is currently trading around 0.7520, down from earlier highs of around 0.7550. Full text »

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Asia Session – February 28, 2011 2:02 AM

February 28, 2011

The US Dollar opened the new week with a little bit of muscle, however, as the day wore on all gains by the Greenback eroded back to unchanged for the day. Continued unrest in the nation of Libya and new rioting flare ups in the nation of Oman saw early bids in the dollar and yen. Adding to the risk adverse atmosphere early on was talk from the new government of Ireland that they wish to less some of the unpopular austerity measures imposed on their people and would like to renegotiate the terms of their EU/IMF bailout loans. This bit of news did not bode well for the EUR/USD, which slide from opening levels near 1.3760 to lows of 1.3710 on the day. The yen crosses followed the move as traders looked for the perceived safety of the Japanese yen. Full text »

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アジアセッション – February 27, 2011 7:27 PM

February 27, 2011

金曜日のマーケットですが、東京市場は小動きに終始し海外市場の動きを待つ展開で欧州市場入りとなりました。英国のGDP改定値が予想を外して下方修正となったことをきっかけにポンド売りの動きとなり、史上最高値近辺でもみあいを続けていたスイスフランでも週末前の調整が入りドルが買い戻されました。結局その流れがNYの引けまで続くこと Full text »

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So Much for Support: U.K. Pound Plunges in Forex Trading

February 25, 2011

Sterling lower in currency trading

The sterling is heading lower in currency trading on the FX market today as various issues raise concerns about the British economy. The U.K. pound has broken below recent support levels in forex trading, and that is not a good sign.

Continued mixed data about the economic recovery in Britain weighs on the U.K. pound. Additionally, the U.S. dollar is getting support from its better economic data. Consumer sentiment is improved, and there are other signs of growth.

Unless the Bank of England starts getting serious about inflation, and until the economy makes more visible improvements, sterling is likely to continue to struggle. Euro is also down in forex trading.

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Where is the Euro Headed Next in Forex Trading?

February 25, 2011

Euro forex trading forecast

Concerns of where the euro is headed next in forex trading are surfacing again. Euro is losing ground to the U.S. dollar in currency trading as concerns about the euro zone economy are balanced against improved data out of the U.S.

Right now, the U.S. economy is showing improvement, with consumer sentiment on the rise and an improve Q4 GDP. Even though the economy didn’t expand as much as expected, it still expanded, and there are signs that economic recovery is ready to pick up.

Wheat happens next to the euro in forex trading may well depend on what the ECB says and does about inflation next week. It should be an interesting week on the currency market.

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