Seeking Alpha

ForexNewsNow's  Instablog

ForexNewsNow
Send Message
Forex News Now is a Web-based news outlet dedicated to covering the global currency market. The site’s seasoned reporters cover key movements during the U.S. and Asian trading sessions, providing investors with essential, up-to-date information in a clear and almost entirely jargon-free... More
My company:
Prescience LLC
My blog:
ForexNewsNow
View ForexNewsNow's Instablogs on:
  • ForexNewsNow Daily Market Outlook for February 18th, 2011

    NEW YORK (Forex News Now) – Daily Market Overview – The U.S. Dollar lost considerable ground against all of the other major currencies on Thursday according to the daily forex news.

    The Greenback began Thursday’s session firm after word that two Iranian warships were heading towards the Suez Canal with the intention of navigating through the Egyptian controlled waterway. Nevertheless, the Suez Canal Authority was later notified of the “cancellation” of the crossing with no new date set.

    USD news showed the U.S. Dollar declined largely on risk appetite and despite positive economic numbers out of the United States. Higher commodity prices also contributed to the Greenback’s weakness, with the price of gold trading above key resistance at $1,375.00 to an intraday high of 1386.10.

    Furthermore, crude oil was still holding above $86 per barrel. That fact, combined with expectations of coming BOC rate hikes, supported the Canadian Dollar in making a three year high at 0.9815 against the Greenback in realtime forex trading on Thursday. Nevertheless, the Loonie then fell to end Thursday’s session almost unchanged.

    February 17th Important Economic Developments:

    1. EURUSD Gains Despite Wider Eurozone Current Account Deficit – EURUSD analysis showed the Euro gained somewhat against the Greenback despite the Eurozone Current Account showing a deficit of -13.3B, which was significantly wider than the -5.1B deficit the market anticipated. Nevertheless, the previous number was revised upward from -11.2B to -10.5B that slightly neutralized the headline number’s effect.
    2. U.S. Initial Jobless Claims and CPI Numbers – Initial Jobless Claims rose to 410K versus an expected rise to 401K from a revised number of claims last month of 385K, revised upward from 383K. Nevertheless, U.S. CPI rose by +0.4% month on month, edging the consensus of a +0.3% increase, while Core CPI rose by +0.2% month on month, versus +0.1% that was expected. Energy costs rose the most in January, gaining +2.1% month on month, while food prices increased by +0.5% month on month.
    1. Fed Chair Ben Bernanke Testifies – Fed Chairman Ben Bernanke testified on the implementation of the Dodd-Frank Act before the Senate’s Banking Committee. Bernanke noted that smaller banks currently exempt from new limits on interchange fees may have to lower their rates in order to compete, stating that, “It is possible that exemption may not be effective in the marketplace”. The rules proposed in December would limit banks to charging seven to 12 cents per transaction, compared to the current average of 44 cents per transaction.
    2. Philly Fed Manufacturing Index – This diffusion index was released by the Philadelphia Federal Reserve Bank based on a survey of manufacturers in the Philadelphia area and is considered an important leading indicator of economic health. The survey was surprisingly positive, coming out at 35.9 compared with the 20.8 level anticipated and the previous month’s 19.3 result. The Greenback initially improved to 1.3576 versus the Euro after the rate had traded as high as 1.3608 prior to the survey’s release.
    3. BOJ Monetary Policy Meeting MinutesThe Japanese central bank released the minutes from its Policy Board’s last interest rate decision meeting. This detailed record gave traders insight into the economic and financial conditions that influenced the Board’s last vote to keep the level of the BOJ’s benchmark Overnight Call Rate steady at <0.10%. The BOJ’s policymakers noted that “financial conditions had continued to ease further”, largely in response to “stimulative effects from low interest rates” and “improved corporate profits.” The Yen seemed to take these fairly neutral policy comments in stride.

    February 18-19th Forex Events for Traders to Watch

    1. G20 Meetings – Attended by finance ministers and central bankers from twenty industrialized nations, the G20 is scheduled to meet in Paris on Friday and Saturday about a range of global economic issues. These include food prices, speculative capital flows and global trade imbalances. A possible highlight involves U.S. Treasury Secretary Geithner speaking at the Eurofi think tank’s G20 High Level Seminar 2011 in Paris on Friday, and he will also hold a press conference at the G20 gathering’s conclusion on Saturday. More hawkish comments from finance officials will tend to boost the value of the affected currency against others.
    2. German PPI Data – This important leading indicator of consumer inflation measures the change in the price of goods sold by German manufacturers over the month. The market consensus for German PPI is presently centered on +0.6% m/m — a slightly lower rise than last month’s +0.7% gain. A higher number will tend to see the Euro appreciate.
    3. U.K. Retail Sales – A closely watched indicator of U.K. consumer spending, Retail Sales data measures the change in the total value of inflation adjusted sales at the retail level. U.K. Retail Sales are currently expected to rise by +0.6% m/m compared with the previous month’s -0.8% drop. A higher number usually favorably affects Sterling.
    4. Canadian CPI Numbers – These important inflation indicators for the Canadian economy are closely watched by the forex market. The consensus for Core CPI is a rise of +0.2% m/m versus the former -0.3% result, and expectations for CPI currently center on +0.3% m/m compared with its previous 0.0% outcome. Higher inflation numbers than expected will usually favorably affect the Canadian Dollar. A limited risk strategy to profit from anticipated exchange rate swings could involve purchasing a binary forex option straddle or strangle on the USDCAD exchange rate ahead of the CPI numbers’ release.
    5. Fed Chair Bernanke and BOE Governor King Speak in Paris – Both U.S. Federal Reserve Chairman Ben Bernanke and Bank of England Governor Mervyn King will be taking part in a panel discussion entitled, “Global Imbalances and Financial Stability” to be held in Paris at the Banque de France Financial Stability Review. The text of King’s speech will be released before the event, and audience questions are anticipated that may result in forex market volatility.
    Feb 18 1:35 PM | Link | Comment!
  • ForexNewsNow Daily Market Outlook for February 17th, 2011

    NEW YORK (Forex News Now) – Daily Market Overview – The U.S. Dollar turned in a mixed performance against the other major currencies on Wednesday, according to the daily forex news. The Greenback gained against Sterling and the New Zealand Dollar, but declined versus the Euro, Yen, Loonie and Aussie.

    Sterling returned to the forex spotlight on Wednesday, as it gave back all of its gains made on Tuesday after the GBPUSD news reports focused on dovish comments and forecasts contained in the U.K. Inflation Report. The key quarterly report revised growth estimates for the U.K. economy downward in spite of higher anticipated inflation, which was expected to peak at 4.4% by mid 2012. Cable was trading as high as 1.6184 before the news, but lost two big figures after the release as it fell to a low of 1.5884.

    Conversely, a fundamental EURUSD analysis indicates that the rise seen in the Euro was due in part to positive results from a Portuguese Treasury Bill Auction. The auction of 12 month bills raised €1.0B. While the auction met with weaker demand than the previous auction, yields rose to only 3.987% that was significantly lower than the expected yield of 4.3%.

    In other forex news, the Kiwi weakened after a lower than expected PPI Output rise, while the Australian Dollar pared back its initial gains made Wednesday against the U.S. Dollar after Moody’s placed four of the country’s largest banks on review with the possibility of a downgrade. The four banks — Westpac, ANZ, NAB and Commonwealth — currently hold Moody’s second highest rating of Aa1.

    February 16th Important Economic Developments:

    1. U.K. Employment Report Disappoints – Britain released its monthly employment report, with the key Claimant Count Change unexpectedly rising by 2.4K versus the market call of a -3.2K fall and the previous -3.4K drop that was revised significantly downward from -4.1K. Nevertheless, the Unemployment Rate stayed steady at 7.9% and the Average Earnings Index rose by only 1.8% 3m/y compared with the expected 2.0% and with its former 2.1% gain. These important economic numbers disappointed the market, with the GBPUSD rate considerably upon its release, with a lower Claimant number usually favorably affecting Sterling. A limited risk strategy to profit from the anticipate rate swings could involve purchasing a binary forex option straddle or strangle on the GBPUSD exchange rate ahead of the numbers.
    2. BOE Inflation Report and Press Conference Dovish – The U.K. central bank released its key report containing its forecasts for inflation and economic growth for the upcoming two years that was interpreted as dovish on balance by the market. U.K. growth forecasts were revised lower due to a higher interest rate assumption based on continued excessive inflation numbers. BOE Governor King also held an associated press conference to comment upon the report’s contents.
    3. U.S. FOMC Meeting MinutesThe U.S. Fed’s policymaking committee released the minutes from its last interest rate decision meeting. This detailed record showed that U.S. monetary policymakers are expecting gains in economic growth, without much improvement in the ongoing employment crisis that the Fed is increasingly viewing as structural in nature.
    4. U.S. Building Permits and PPI Numbers – These important indicators of housing market health and inflation for the U.S. economy showed mixed results. Building Permits came out a touch lower at 0.56M versus the expected 0.57M result and the previous 0.63M outcome that went unrevised. Also, PPI was only up by +0.8% m/m versus the consensus of a rise of +0.9% and the former +0.9% result that was revised lower from +1.1%. Nevertheless, Core PPI was the big surprise, rising by +0.5% compared with the +0.2% result expected. The Greenback strengthened initially versus the Euro, as EURUSD hit a low of 1.3462 after these releases, but the r ate then made back all of its losses to trade as high as 1.3587 before the session’s close.
    5. New Zealand PPI Input Rise Steady but Output Gain Sharply Lower – The important PPI economic inflation indicator is released quarterly by New Zealand. The more significant PPI Input number came out in line with expectations at +0.9% that was a touch higher than the previous result of +0.7%. Nevertheless, the PPI Output indicator was only up by +0.2% compared with the expected +0.9% rise and the number’s former +1.2% gain. This result saw the Kiwi soften to a low of 0.7536 versus the Greenback after its release.

    February 17th Forex Events for Traders to Watch

    1. Eurozone Current Account – The ECB will release its monthly EZ Current Account data that measures the difference between the value of imported and exported goods, services, unilateral transfers and income flows seen during the month. The important indicator is expected to narrow significantly to -5.2B versus its previous -11.2B result. A narrower deficit tends to affect the EURUSD rate positively.
    2. U.S. Initial Jobless Claims and CPI Numbers – These are important indicators of job market health and inflation for the U.S. economy. Weekly Initial Jobless Claims are currently expected to rise to 403K from the previous 383K outcome. Also, the consensus for Core CPI is a rise of +0.1% m/m versus the former +0.1% result, and expectations for CPI currently center on +0.3% m/m compared with its previous +0.5% outcome. Higher inflation numbers than expected will usually favorably affect the U.S. Dollar, while higher than anticipated jobless claims will tend to put pressure on the Greenback. A limited risk strategy to profit from the anticipate exchange rate swings could involve purchasing a binary forex option straddle or strangle on the often more volatile USDCHF exchange rate ahead of the numbers’ release.
    3. Fed Chair Ben Bernanke Due to Testify – The Chairman of the U.S. Federal Reserve Bank will testify in Washington D.C. on the implementation of the Dodd-Frank Act before the Senate’s Banking Committee. Bernanke’s testimony generally includes a prepared statement that can be reviewed on the Fed’s website, in addition to an unscripted question and answer session. Hawkish comments will tend to boost the value of the U.S. Dollar versus other currencies.
    4. Philly Fed Manufacturing Index – This diffusion index released by the Philadelphia Federal Reserve Bank is based on a survey of manufacturers in the Philadelphia area and is considered an important leading indicator of economic health. The market forecast is currently centered on a small rise to the 20.8 level compared with the previous month’s 19.3 result. A higher than expected result is usually good for the U.S. Dollar.
    5. BOJ Monetary Policy Meeting Minutes – The Japanese central bank will release the minutes from its Policy Board’s last interest rate decision meeting. This detailed record provides traders with insight into the economic and financial conditions that influenced the Board’s last vote on the level of the BOJ’s benchmark Overnight Call Rate. More hawkish comments in the closely watched minutes will tend to boost the value of the Yen against other currencies.
    Feb 18 1:36 AM | Link | Comment!
  • ForexNewsNow Daily Market Outlook for February 16th, 2011

    NEW YORK (Forex News Now) – Daily Market Overview – The U.S. Dollar continued trading mostly higher against other major currencies Tuesday, according to the daily forex news. With the exception of Sterling that shot up after the release of U.K. CPI, the Greenback rose against the commodity dollars, while ending Tuesday’s session largely unchanged against the Euro.

    Sterling was Tuesday’s stellar performer against the U.S. Dollar as the GBPUSD news was deemed generally favorable for the rate. Intraday analysis showed that Cable rose from the 1.6005 level before the release of U.K. CPI to a high of 1.6149 seen after the number. While U.K. CPI came out as expected, the number was double the BOE’s target inflation level, leading to a relatively hawkish Inflation Letter from the BOE’s Governor to the U.K. Chancellor of the Exchequer.

    In his letter, Governor King downplayed the excessive CPI inflation as temporarily resulting from the recent VAT rise and fall in Sterling, as well as gains in commodity prices. The letter also reiterated the MPC’s intention to take steps to ensure price stability in the medium term, including adjusting monetary policy when the inflation risk warrants such action.

    EURUSD analysis showed the Euro finished Tuesday’s session with little change, despite worse than expected economic data. Nevertheless, the rate rose initially after EU finance ministers came to an agreement at the ECOFIN meetings in Brussels on the amount that will be allocated to the European Stability Mechanism. The program, to go into effect by 2013 will increase the effective lending capacity from €250B to €500B of the funds available in the European Financial Stability Facility or EFSF.

    February 15th Important Economic Developments:

    1. Australian Monetary Policy Meeting Minutes Released – The RBA’s minutes from its February meeting primarily reiterated former comments by Governor Glenn Stevens. The gist of the minutes was that Australian monetary policymakers felt comfortable deciding to keep rates steady at 4.75%, with no rate changes foreseen in the near future despite the economic impact of flooding in Queensland. This news sent AUDUSD lower overall during the session.
    2. BOJ Leaves Rates Steady – The BOJ released its decision to maintain its benchmark Overnight Call Rate at the expected <0.10% level. The Japanese central bank also released an associated Monetary Policy Statement to explain how its latest rate decision was made.  The Yen weakened to a session low of 83.90 after this news came out.
    3. U.K. CPI Rises and Prompts Another Inflation Letter – This important measure of inflation in the U.K. has been of particular concern lately. The Consumer Price Index for January increased by +4.0% year on year versus last month’s +3.7% result. While in line with the market’s forecast, this result was double the BOE’s 2.0% target and sent Cable higher on the session. Furthermore, since the CPI was over 3%, BOE Governor King needed to write an open letter to the U.K. Chancellor of the Exchequer George Osborne explaining the excessive inflation.
    4. U.S. Retail Sales Rise Less Than Expected – An important indicator of U.S. consumer spending, Retail Sales data measures the change in the total value of sales at the retail level, with the core data excluding the large but volatile automobile sector. Core Retail Sales was expected to rise by +0.6% but only rose by +0.3% compared with the previous +0.5% increase, while the consensus for Retail Sales was +0.5% but the result was only +0.3% versus the former +0.6% outcome. These lower than expected numbers sent the U.S. Dollar to test its session lows versus the Euro, Sterling, Swissie and Loonie.
    5. German GDP and ZEW Survey Results DisappointThese important economic indicators were expected to come out at +0.5% and 20.1 respectively, but instead disappointed the market by printing at +0.4% and 15.7 compared with the previous results of +0.7% and 15.4.

    February 16th Forex Events for Traders to Watch

    1. U.K. Employment Report – Britain will release its monthly employment report, with the key Claimant Count Change expected to fall by -3.2K versus the previous -4.1K and the Average Earnings Index expected to rise by 2.0% 3m/y compared with its former 2.1% gain. This important economic number tends to affect the GBPUSD rate considerably upon its release, with a lower Claimant number usually favorably affecting Sterling. A limited risk strategy to profit from the anticipate rate swings could involve purchasing a binary forex option straddle or strangle on the GBPUSD exchange rate ahead of the numbers.
    2. BOE Inflation Report and Press Conference – The U.K. central bank will release a key report containing its forecasts for inflation and economic growth for the upcoming two years. BOE Governor King will also hold an associated press conference to comment upon the report’s contents.
    3. U.S. FOMC Meeting MinutesThe U.S. Fed’s policymaking committee will release the minutes from its last interest rate decision meeting. This detailed record provides traders with insight into the economic and financial conditions that influenced the FOMC’s last vote on the level of U.S. interest rates. More hawkish comments in the closely watched minutes will tend to boost the value of the U.S. Dollar against other currencies.
    4. U.S. Building Permits and PPI Numbers – These are important indicators of housing market health and inflation for the U.S. economy. Building Permits are currently expected to show a 0.57M result, down from the previous 0.63M outcome, and the consensus for PPI is a rise of +0.9% m/m versus the former +1.1% result. Higher numbers will usually favorably affect the U.S. Dollar.
    5. New Zealand PPI Input – This important economic indicator is released quarterly and is presently expected to come out at +0.4% q/q, compared with the previous result of +0.7%. A level greater than the forecast will tend to boost the Kiwi’s value relative to other currencies.
    Feb 16 10:11 AM | Link | Comment!
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.