New York Session – March 31, 2011 4:02 PM

March 31, 2011

The dollar was weaker ahead of the release of tomorrow’s official employment report and the euro firmed following higher than expected inflation data and the release of the Irish banks stress test results. The release of the Irish stress tests showed that an additional 24 billion euro in capital would be required by 4 Irish banks. This was in line with the market expectations of a number around 25 billion euro. EUR/USD rose to current levels of around 1.4200 after trading as low as nearly 1.4115 earlier in the session. Fed speak continued to flow over the wires with Fed members Lacker, Tarullo, and Pianalto delivering speeches today. Of the 3, the only 2011 FOMC voting member is Tarullo whose speech on regulating systemic risk did not give any clues on the direction of monetary policy. Full text »

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Euro Higher, But Can’t Maintain Above 1.42

March 31, 2011

Euro gaining in forex trading

The euro is higher in forex trading against the U.S. dollar, but it can’t maintain above the 1.42 level. The euro touched above 1.42, but has pulled back below that. Forex traders are concerned about the Irish bank stress test results, showing that more capital is needed.

However, euro hasn’t sunk on the news due to other factors. Higher commodities, especially gold and oil, are weighing on the U.S. dollar and helping the euro in forex trading. Also, some optimism related to the lower unemployment claims is helping the euro maintain relative strength.

So far, other developments have been enough to support the euro, even though concerns about sovereign debt remain, and Irish banking solvency is in doubt.

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London Session – March 31, 2011 6:44 AM

March 31, 2011

Irish stress tests, Europe inflation and all before tomorrow’s payrolls… Full text »

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Asia Session – March 31, 2011 1:38 AM

March 31, 2011

The Japanese Yen continued to dominate the action for a second day here in Asia as the currency saw whipsaw moves not intended for the faint of heart. Early session sellers helped drop the yen to fresh three week lows near 83.20 against the dollar, while the crosses followed diligently behind. EUR/JPY pushed to a 10 month high just over 117.50, GBP/JPY capped its rise at 133.80, while AUD/JPY saw 85.95 for the first time since May of 2010. Just when it looked like the beginning of a bearish day for the Japanese currency, it seemingly woke from the dead and flew higher with talk of year end position squaring and exporter buying making the rounds. With tempting low prices, the bargain hunting gained momentum as the day progressed, pushing the yen through breakeven levels to session highs by the end of the lunch break. Full text »

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New York Session – March 30, 2011 4:02 PM

March 30, 2011

The dollar was softer as risk sentiment continued to improve and investors searched for yield. Fed speak continued as known hawk and Kansas City Fed President Thomas Hoenig was on the wires suggesting the Fed reduces its stimulus measures. We would note that Hoenig is not an FOMC voting member this year and that his views may not be shared by the majority of FOMC voters. The Aussie continued its march higher advancing to new post float highs against the greenback at nearly 1.0335/40. Full text »

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Aussie Continues to Surge in Forex Trading

March 30, 2011

Australian dollar gets support from prospect of global economic growth

The Aussie continues to surge in forex trading. An Australian dollar rally that started yesterday continues today as commodities — especially gold — show signs of strength.

One of the drivers right now is the prospect of global economic growth. The latest employment data out of the U.S., with the ADP report showing a gain of 200,000 jobs in February, is one of the big reasons that Aussie is gaining. The prospect of global economic pick up is favoring currencies like the Australian dollar.

It will be interesting to see whether the Aussie can maintain this pace, though. There are still concerns that could affect global economic growth, and there are issues with the Australian economy that could become a problem.

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London Session – March 30, 2011 7:02 AM

March 30, 2011

Portugal’s financial position weakens, but the euro remains immune Full text »

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Asia Session – March 30, 2011 1:27 AM

March 30, 2011

The Japanese yen saw a good deal of activity today in Asia as the currency saw a significant slide against the Dollar as well as in the crosses. The markets were expecting a good deal of yen repatriation flows for the end of the Japanese fiscal year that never seemed to materialize. With no such obstacle, the yen was sold aggressively based primarily on the differences in yields between the low yielding yen and more attractive yields of other currencies. The bottom line was that simple fundamentals took control of the markets with traders using the lower yielding yen as a funding currency for instruments with better returns. Full text »

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New York Session – March 29, 2011 4:02 PM

March 29, 2011

The U.S. dollar was softer and equities were higher despite hawkish rhetoric from Fed members and more ratings downgrades in the Euro zone periphery. Commodity currencies were stronger with AUD/USD trading near record highs and USD/CAD trading near session lows currently around 0.9745. EUR/USD rose on a weaker buck and currently trades around the 1.4100 level. Full text »

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Can the Aussie Maintain Its Rally on the FX Market?

March 29, 2011

Forex trading forecast for the Australian dollar

One of the big questions that many have about the forex trading forecast for the Australian dollar is whether or not the Aussie can keep up its current pace.

Indeed, the Aussie is rallying strongly on the FX market as forex traders look for high yields, and as speculation about China and its future economic growth boosts the Down Under currency. Also helping is the mining boom, which is benefiting from higher gold prices.

However, the gains made by the Aussie may not last. Concerns about global economic recovery remain, and there is a chance that a Chinese interest rate cut could affect the Australian dollar.

On top of that, recent flooding in Australia has yet to see its effects in economic releases. When those releases are made, it could be that the forex trading forecast for the Australian dollar suddenly looks a little less positive.

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