Ship accident spills oil, leaves one missing
One sailor went missing and some 8,000 liters of oil were spilled when a boat crashed into two others in the southern province of Dong Nai Friday.
According to rescuers, the Bien Nam No.17 met a whirl pool some 100 meters from the bank of the Dong Nai River at 4pm, making it crash into two other boats anchored nearby.
He also promised to salvage the Bien Nam Transport Company before it sank completely.
According to rescuers, the Bien Nam No.17 met a whirl pool some 100 meters from the bank of the Dong Nai River at 4pm, making it crash into two other boats anchored nearby.
The hit partially sunk the boat, which was carrying more than 3,000 tons of clinker from the northern province of Quang Ninh to Ho Chi Minh City.
Eleven of the boat's 12 crewmen were rescued from the water, but a 22-year-old was nowhere to be found.Meanwhile, some 8,000 liters of oil leaked from the sinking boat and quickly spread up and down the river.
Hoang Van Loc, director of Dai Minh Oil Spill Response and Rescue Company, said his company is cooperating with local agencies to look for the missing victim and handle the oil spill.
He also promised to salvage the Bien Nam Transport Company before it sank completely.
Central New Zealand Bank Looks Abroad
The Euro fell away from a two-month high today (February 10th) after forex traders reacted to the decision from European finance ministers to withhold a bailout package for Greece.
Europe's common currency dropped 0.1 per cent to $1.3271 this morning, paring its weekly advance to 0.8 per cent. It reached a two-month high of $1.3322 yesterday as optimism over the Greek finance deal reached its apex.
As stocks fell across Europe the dollar strengthened against all but one of its 16 peers, with market demand for safe assets rising, Bloomberg noted.
Geoffrey Kendrick, head of European currency strategy at Nomura International in London, told the news provider the fact that the Greek deal has not been finalized is spooking investors to a degree.
"We're seeing the euro paring its gains for the week and I would expect it to come off a bit further today, maybe to below $1.32," Mr Kendrick predicted.
The euro traded higher yesterday as the prospect to an end of the debate with Greece buoyed the market, Bloomberg noted.
Europe's common currency dropped 0.1 per cent to $1.3271 this morning, paring its weekly advance to 0.8 per cent. It reached a two-month high of $1.3322 yesterday as optimism over the Greek finance deal reached its apex.
As stocks fell across Europe the dollar strengthened against all but one of its 16 peers, with market demand for safe assets rising, Bloomberg noted.
Geoffrey Kendrick, head of European currency strategy at Nomura International in London, told the news provider the fact that the Greek deal has not been finalized is spooking investors to a degree.
"We're seeing the euro paring its gains for the week and I would expect it to come off a bit further today, maybe to below $1.32," Mr Kendrick predicted.
The euro traded higher yesterday as the prospect to an end of the debate with Greece buoyed the market, Bloomberg noted.
Speculators' Net Euro Shorts $23.3 Billion, Down 10% - CFTC
Speculative investors decreased their bets that the euro will decline against the dollar as of Feb. 7, wagering a net $23.3 billion against the common currency, down 10% from the prior week, government data showed Friday.
As the euro zone's political leaders continued to debate a bailout for Greece's fiscally-troubled government, speculators held a net 140,593 contracts betting against the euro, according to the Commodity Futures Trading Commission's weekly report on the commitments of traders. These traders, who do business on the Chicago Mercantile Exchange, form a small slice of the overall currencies market, but their flows are seen widely as representative of hedge fund flows as a whole.
"Overwhelmingly, market participants are still negative in their outlook for the currency," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
Traders were one-third less likely to bet in favor of the dollar this week. Speculators held a net $8.7 billion in dollar positions, down 33% from the previous week.
The market largely maintained its view on the yen, holding a net $9 billion in bets that the yen will appreciate against the dollar. That was down 4% to 55,171 net contracts.
For the Swiss franc, traders pulled back on their net position betting against the currency by 12%. The market held a net $1.3 billion in bets against the franc, or 9,795 contracts.
Traders switched their view on the Canadian dollar. The market is now betting that the Canadian dollar will appreciate, with a net $219 million wagered.
The U.K. pound saw the market's net bets against it grow by 27%. Traders also increased by 59% their net gambles that the New Zealand dollar will rise.
Speculators mainly held steady on the Australian dollar's prospects, with their net bets in favor of the currency up 2%.
The total amount of contracts speculators held on the CME stayed steady compared to the previous week.
The CFTC's weekly report shows speculative investors' positions in major currencies held against the dollar. It viewed the markets as of Tuesday.
As the euro zone's political leaders continued to debate a bailout for Greece's fiscally-troubled government, speculators held a net 140,593 contracts betting against the euro, according to the Commodity Futures Trading Commission's weekly report on the commitments of traders. These traders, who do business on the Chicago Mercantile Exchange, form a small slice of the overall currencies market, but their flows are seen widely as representative of hedge fund flows as a whole.
"Overwhelmingly, market participants are still negative in their outlook for the currency," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
Traders were one-third less likely to bet in favor of the dollar this week. Speculators held a net $8.7 billion in dollar positions, down 33% from the previous week.
The market largely maintained its view on the yen, holding a net $9 billion in bets that the yen will appreciate against the dollar. That was down 4% to 55,171 net contracts.
For the Swiss franc, traders pulled back on their net position betting against the currency by 12%. The market held a net $1.3 billion in bets against the franc, or 9,795 contracts.
Traders switched their view on the Canadian dollar. The market is now betting that the Canadian dollar will appreciate, with a net $219 million wagered.
The U.K. pound saw the market's net bets against it grow by 27%. Traders also increased by 59% their net gambles that the New Zealand dollar will rise.
Speculators mainly held steady on the Australian dollar's prospects, with their net bets in favor of the currency up 2%.
The total amount of contracts speculators held on the CME stayed steady compared to the previous week.
The CFTC's weekly report shows speculative investors' positions in major currencies held against the dollar. It viewed the markets as of Tuesday.
Gold and Silver Prices Ended the Week Falling
Precious metals prices continued to shift from gains to losses as gold and silver prices ended the week falling. Crude oil prices also shifted from greed to red during yesterday’s trading; natural gas prices nearly didn’t change and only moderately increased.
The Euro depreciated against the USD; other major currencies (AUD and YEN) also depreciated against the U.S dollar. Here is a summary of the developments of precious metals and energy commodities for February 10th, 2012:
Precious Metals:
Gold price fell on Friday by 0.91% to $1,725.3; Silver price also decreased by 0.92% and reached $33.60. During February, gold declined by 0.9% while silver rose by 1.03%.
The Euro/USD slightly decreased by 0.66% to 1.3197; the U.S Dollar appreciated against other exchange rates such as the AUD.
Oil and Gas:
WTI price fell by 1.17% to $98.67 per barrel; Brent oil also decreased by 0.99% to $117.47 per barrel;
Source : tradingnrg
Weekly Review and Outlook: Dollar Rebounded, Markets Just Nervous on Greece, or Risk Market Reversing?
Weekly Review and Outlook
Dollar Rebounded, Markets Just Nervous on Greece, or Risk Market Reversing?
It looked as if risk markets started to lose momentum as Greece headed closer to securing the EUR 130b second bailout from EU/IMF. Friday's selloff in stocks could be seen as position squaring ahead of the crucial austerity package vote in Greek parliament. It could also be seen as a sign that investors were indeed looking past and jumping ahead the Greek events and reversing their positions for short term. We'd like to point out that DOW has so far failed to sustain above prior high of 12876 made in 2011 and risk of reversal is starting to build up. CRB commodity index showed sharp fall on Friday and ended the week in red. In currency markets, Euro, Sterling, Swiss Franc and Canadian dollar showed sign of short term topping against dollar. Aussie was less weak but is also vulnerable to deeper fall. The initial reaction this week to the Greek vote should reveal whether markets were just nervous ahead of the weekend, or they're reversing the underlying trend.
After marathon negotiations, Greek political leaders agreed on the austerity deal finally. But even so, EU finance ministers delayed approval of the second bailout and instead requested three more things from Greece. That include firstly pass the austerity package in parliament on Sunday, secondly find extra EUR 325m in savings for 2012, and thirdly give "strong political assurances" for continuing the reform implementation after April's general election. At the time of writing, Greece's cabinet has unanimously approved the austerity measures, which include steep cuts in private sector wages, cutting 15,000 public service jobs and adding EUR 3b of spending cuts in 2012. Greek parliament will vote on the package on Sunday. It's believed that Prime Minister Papademos would easily secure more than half of the 300 vote in parliament considering that the main coalition partners, the Socialists and the conservative New Democracy party, have a combined 236 seat majority. Greece will then submit the whole package, including the PSI debt swap deal, to EU finance ministers on Wednesday.
ECB left the main refinancing rate unchanged at 1%. Policymakers appeared to be more optimistic about the economic outlook. In the policy statement, the term 'substantial' was removed when describing 'downside risks to the economic outlook'. At the press conference, President Draghi said that 'hard' data have provided support the improved economic prospect. He also stated that the central bank was less pessimistic than the IMF's latest projections. The BOE expanded the asset purchase program by +50B pound to 325B pound and left the Bank rate at 0.5%. As mentioned in the policy statement, 'the underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter. While policymakers noted that 'some recent business surveys have painted a more positive picture and asset prices have risen', the pace of expansion in the country's major exporters 'has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries'. More in As Expected, BOE Added More Stimulus while ECB Stood Aside.
RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers' confidence in China's demand and US' economic recovery. More in RBA Unexpectedly Paused After 2 Successive Rate Cuts. Later in the week, RBA lowered 2012 inflation forecast to 3.00%, down from prior projection of 3.25%. Underlying inflation are expected to be at 2.75%, unchanged from prior projection. However, average growth in 2012 are expected to be at 3.5%, sharply lower than prior projection of 4.00%. The forecasts are based on assumption of keeping interest rate on hold at 4.25%. Overall, RBA expect inflation to "remain around the midpoint of the target range for most of the next couple of years" and that provides “scope for easier monetary policy should demand conditions weaken materially."
Two pieces of data from China weighed down on investor's sentiments last week. CPI jumped back to 4.5% yoy. The data might reinforce officials' concern that inflation is not going away yet and could complicate the plan to add stimulus to revive growth, lowering the possibility of policy loosening. Trade surplus widened sharply to $27.3b in January. However, that's due to sharply decline in imports, by -15% to $122.7b. Export dropped -0.5% to $149.9b, continuing it's gradual down trend. Economists viewed steep decline in imports as a sign of extremely weak domestic demand.
Dollar Rebounded, Markets Just Nervous on Greece, or Risk Market Reversing?
It looked as if risk markets started to lose momentum as Greece headed closer to securing the EUR 130b second bailout from EU/IMF. Friday's selloff in stocks could be seen as position squaring ahead of the crucial austerity package vote in Greek parliament. It could also be seen as a sign that investors were indeed looking past and jumping ahead the Greek events and reversing their positions for short term. We'd like to point out that DOW has so far failed to sustain above prior high of 12876 made in 2011 and risk of reversal is starting to build up. CRB commodity index showed sharp fall on Friday and ended the week in red. In currency markets, Euro, Sterling, Swiss Franc and Canadian dollar showed sign of short term topping against dollar. Aussie was less weak but is also vulnerable to deeper fall. The initial reaction this week to the Greek vote should reveal whether markets were just nervous ahead of the weekend, or they're reversing the underlying trend.
After marathon negotiations, Greek political leaders agreed on the austerity deal finally. But even so, EU finance ministers delayed approval of the second bailout and instead requested three more things from Greece. That include firstly pass the austerity package in parliament on Sunday, secondly find extra EUR 325m in savings for 2012, and thirdly give "strong political assurances" for continuing the reform implementation after April's general election. At the time of writing, Greece's cabinet has unanimously approved the austerity measures, which include steep cuts in private sector wages, cutting 15,000 public service jobs and adding EUR 3b of spending cuts in 2012. Greek parliament will vote on the package on Sunday. It's believed that Prime Minister Papademos would easily secure more than half of the 300 vote in parliament considering that the main coalition partners, the Socialists and the conservative New Democracy party, have a combined 236 seat majority. Greece will then submit the whole package, including the PSI debt swap deal, to EU finance ministers on Wednesday.
ECB left the main refinancing rate unchanged at 1%. Policymakers appeared to be more optimistic about the economic outlook. In the policy statement, the term 'substantial' was removed when describing 'downside risks to the economic outlook'. At the press conference, President Draghi said that 'hard' data have provided support the improved economic prospect. He also stated that the central bank was less pessimistic than the IMF's latest projections. The BOE expanded the asset purchase program by +50B pound to 325B pound and left the Bank rate at 0.5%. As mentioned in the policy statement, 'the underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter. While policymakers noted that 'some recent business surveys have painted a more positive picture and asset prices have risen', the pace of expansion in the country's major exporters 'has also slowed and concerns remain about the indebtedness and competitiveness of some euro-area countries'. More in As Expected, BOE Added More Stimulus while ECB Stood Aside.
RBA unexpectedly left the cash rate unchanged at 4.25% in February, in contrast with consensus of a rate cut by -25 bps. The decision, in spite of growing uncertainty in the sovereign debt crisis in the Eurozone, indicated policymakers' confidence in China's demand and US' economic recovery. More in RBA Unexpectedly Paused After 2 Successive Rate Cuts. Later in the week, RBA lowered 2012 inflation forecast to 3.00%, down from prior projection of 3.25%. Underlying inflation are expected to be at 2.75%, unchanged from prior projection. However, average growth in 2012 are expected to be at 3.5%, sharply lower than prior projection of 4.00%. The forecasts are based on assumption of keeping interest rate on hold at 4.25%. Overall, RBA expect inflation to "remain around the midpoint of the target range for most of the next couple of years" and that provides “scope for easier monetary policy should demand conditions weaken materially."
Two pieces of data from China weighed down on investor's sentiments last week. CPI jumped back to 4.5% yoy. The data might reinforce officials' concern that inflation is not going away yet and could complicate the plan to add stimulus to revive growth, lowering the possibility of policy loosening. Trade surplus widened sharply to $27.3b in January. However, that's due to sharply decline in imports, by -15% to $122.7b. Export dropped -0.5% to $149.9b, continuing it's gradual down trend. Economists viewed steep decline in imports as a sign of extremely weak domestic demand.
Chile’s Finance Minister Worried About Strength of Peso
The Chilean peso rose today despite the negative influence that the deadlock in the talks about Greek bailout had on the currency markets. The peso may weaken in the future as Chile’s Finance Minister voiced concerns about impact of the strong currency on the nation’s economy.
The peso has gained 6.2 percent in the last month. Chile’s fruit producers’ federation asked the nation’s central bank to rein gains of the currency. Analysts said that the current exchange rate don’t warrant an intervention.
Chile’s Finance Minister Julio Dittborn certainly sided with those who though the peso is too strong, saying:
Obviously it’s a concern that the peso is strengthening so much. The central bank should evaluate whether it is appropriate to intervene again or not like it’s done in previous years.
Dittborn noted that the government isn’t going to influence the exchange rate directly, but rather will attempt to avoid actions that may cause appreciation of the Chilean currency.
USD/CLP closed at 478.8500 after opening at 480.8000. The currency pair dropped as low as 478.3500.
If you have any questions, comments or opinions regarding the Chilean Peso, feel free to post them using the commentary form below.
Source : topforexnews
The peso has gained 6.2 percent in the last month. Chile’s fruit producers’ federation asked the nation’s central bank to rein gains of the currency. Analysts said that the current exchange rate don’t warrant an intervention.
Chile’s Finance Minister Julio Dittborn certainly sided with those who though the peso is too strong, saying:
Obviously it’s a concern that the peso is strengthening so much. The central bank should evaluate whether it is appropriate to intervene again or not like it’s done in previous years.
Dittborn noted that the government isn’t going to influence the exchange rate directly, but rather will attempt to avoid actions that may cause appreciation of the Chilean currency.
USD/CLP closed at 478.8500 after opening at 480.8000. The currency pair dropped as low as 478.3500.
If you have any questions, comments or opinions regarding the Chilean Peso, feel free to post them using the commentary form below.
Source : topforexnews
Pakistan’s forex reserves fall to $16.69bn
KARACHI: Pakistan’s foreign exchange reserves fell to $16.69 billion in the week ending Feb 3, compared with $16.87 billion the previous week, the central bank said on Thursday.
Reserves held by the State Bank of Pakistan (SBP) fell to $12.32 billion from $12.52 billion a week earlier, while those held by commercial banks rose to $4.36 billion, compared with $4.35 billion the previous week.
Foreign exchange reserves hit a record $18.31 billion in July, but have since eased due to debt repayments. Islamabad has to start repaying an $8 billion International Monetary Fund loan in early 2012. Without additional sources of revenue, that will put further pressure on Pakistan’s foreign exchange reserves. Reserves were boosted in June last year by inflows of $411 million, including a $191.9 million loan from the World Bank, and a $196.8 million loan from the Asian Development Bank. Higher export proceeds and a record inflow of remittances have also helped support Pakistan’s foreign exchange reserves. According to official data, remittances rose 19.6 percent to $6.33 billion in the first half of the fiscal year (July-June), compared with $5.29 billion in the same period a year earlier. reuters
Source : DailyTimes
Reserves held by the State Bank of Pakistan (SBP) fell to $12.32 billion from $12.52 billion a week earlier, while those held by commercial banks rose to $4.36 billion, compared with $4.35 billion the previous week.
Foreign exchange reserves hit a record $18.31 billion in July, but have since eased due to debt repayments. Islamabad has to start repaying an $8 billion International Monetary Fund loan in early 2012. Without additional sources of revenue, that will put further pressure on Pakistan’s foreign exchange reserves. Reserves were boosted in June last year by inflows of $411 million, including a $191.9 million loan from the World Bank, and a $196.8 million loan from the Asian Development Bank. Higher export proceeds and a record inflow of remittances have also helped support Pakistan’s foreign exchange reserves. According to official data, remittances rose 19.6 percent to $6.33 billion in the first half of the fiscal year (July-June), compared with $5.29 billion in the same period a year earlier. reuters
Source : DailyTimes
U.S. stocks drop on Greek impasse; Dow down 0.69%
U.S. stocks fell on Friday after Greece failed to secure access to bailout money while Standard & Poor's downgraded Italian banks, news that sent investors selling stocks and stocking up on less risky assets like Treasuries.
The Dow Jones Industrial Average closed down 0.69%, the S&P 500 index was also down 0.69% while the Nasdaq Composite index finished down 0.80% on Friday.
Greece is seeking EUR130 billion in assistance funding to avoid a messy default in March.
To obtain those funds, the country must agree to austerity measures from multilateral entities, which include the European Union, the European Central Bank and the International Monetary Fund.
Greece presented a game plan to European officials, who said Greece failed to slash spending enough and rejected the country's appeal for aid.
While Greece still has a few days to come back and meet bailout terms, nerves were seriously on edge Friday.
Members of interim Prime Minister Lucas Papademos's coalition said they were fed up with appeasing European Union officials with tough austerity and threatened to vote against such measures in Parliament, although the party in question has too little representation to thwart approval.
Still, eroding political support coupled with violent protests roiling the streets of Athens sent investors ditching risky assets and rushing to the greenback to ride out the volatility.
Nerves rattled further when the Standard & Poor's ratings agency slapped downgrades on Italian financial institutions, fueling fears that the Italy, much larger than Greece, faces major economic headwinds.
Furthermore, the U.S. trade deficit widened more than expected in December thanks to pricier oil but also due to increased demand for imported cars and other goods from abroad, which further fueled the dollar's appeal over stocks in the global risk-off session.
Weaker than expected consumer confidence figures also fueled selling.
Leading Dow Jones Industrial Average performers included Home Depot, up 0.09%, Coca-Cola, down 0.06%, and Wal-Mart Stores, down 0.11%.
Leading index losers included Alcoa, down 3.48%, DuPont, down 1.73%, and Hewlett-Packard, down 1.44%.
European indices fell as well.
After the close of European trade, the EURO STOXX 50 fell 1.65%, France's CAC 40 fell 1.51%, while Germany's DAX 30 finished down 1.41%. Meanwhile, in the U.K. the FTSE 100 closed down 0.73%.
On Sunday, Japanese gross domestic product figures are due out, while on Monday, French inflation figures will publish.
Markets will keep an eye on a German bond auction on Monday to gauge how immune Europe's largest economy is to the Greek debt crisis.
Source : forexpros
The Dow Jones Industrial Average closed down 0.69%, the S&P 500 index was also down 0.69% while the Nasdaq Composite index finished down 0.80% on Friday.
Greece is seeking EUR130 billion in assistance funding to avoid a messy default in March.
To obtain those funds, the country must agree to austerity measures from multilateral entities, which include the European Union, the European Central Bank and the International Monetary Fund.
Greece presented a game plan to European officials, who said Greece failed to slash spending enough and rejected the country's appeal for aid.
While Greece still has a few days to come back and meet bailout terms, nerves were seriously on edge Friday.
Members of interim Prime Minister Lucas Papademos's coalition said they were fed up with appeasing European Union officials with tough austerity and threatened to vote against such measures in Parliament, although the party in question has too little representation to thwart approval.
Still, eroding political support coupled with violent protests roiling the streets of Athens sent investors ditching risky assets and rushing to the greenback to ride out the volatility.
Nerves rattled further when the Standard & Poor's ratings agency slapped downgrades on Italian financial institutions, fueling fears that the Italy, much larger than Greece, faces major economic headwinds.
Furthermore, the U.S. trade deficit widened more than expected in December thanks to pricier oil but also due to increased demand for imported cars and other goods from abroad, which further fueled the dollar's appeal over stocks in the global risk-off session.
Weaker than expected consumer confidence figures also fueled selling.
Leading Dow Jones Industrial Average performers included Home Depot, up 0.09%, Coca-Cola, down 0.06%, and Wal-Mart Stores, down 0.11%.
Leading index losers included Alcoa, down 3.48%, DuPont, down 1.73%, and Hewlett-Packard, down 1.44%.
European indices fell as well.
After the close of European trade, the EURO STOXX 50 fell 1.65%, France's CAC 40 fell 1.51%, while Germany's DAX 30 finished down 1.41%. Meanwhile, in the U.K. the FTSE 100 closed down 0.73%.
On Sunday, Japanese gross domestic product figures are due out, while on Monday, French inflation figures will publish.
Markets will keep an eye on a German bond auction on Monday to gauge how immune Europe's largest economy is to the Greek debt crisis.
Source : forexpros
US Dollar Eyes Further Lows as Forex Volatility Tumbles
US Dollar volatility trades near its lowest levels since the onset of the financial crisis in 2008; we favor further USD losses against the Australian Dollar and other forex counterparts.
DailyFX Individual Currency Pair Conditions and Trading Strategy Bias
DailyFX PLUS System Trading Signals –Sharp declines in FX market volatility and options market volatility expectations have made for especially quiet trading, and we have positioned ourselves in favor of further range trading going forward.
The especially low US Dollar volatility favors further losses. Why? The US Dollar has been one of the foremost safe-haven currencies for some time now.
If markets are suddenly scared and risky assets such as the US S&P 500 tumble, the USD most often strengthens. Given that the S&P trades near multi-near highs and markets have grown incredibly complacent, we wouldn’t look to fade the recent US Dollar downtrend.
We favor USD weakness against the Australian Dollar, Canadian Dollar, and New Zealand Dollar especially. These currencies will tend to do well in such times of market complacency.
Market Conditions:
Volatility expectations trade near their lowest levels since the onset of the financial crisis in 2008. Such extremely low levels favor slow trends and tight currency trading ranges until further notice.
Source : DailyFX
DailyFX Individual Currency Pair Conditions and Trading Strategy Bias
DailyFX PLUS System Trading Signals –Sharp declines in FX market volatility and options market volatility expectations have made for especially quiet trading, and we have positioned ourselves in favor of further range trading going forward.
The especially low US Dollar volatility favors further losses. Why? The US Dollar has been one of the foremost safe-haven currencies for some time now.
If markets are suddenly scared and risky assets such as the US S&P 500 tumble, the USD most often strengthens. Given that the S&P trades near multi-near highs and markets have grown incredibly complacent, we wouldn’t look to fade the recent US Dollar downtrend.
We favor USD weakness against the Australian Dollar, Canadian Dollar, and New Zealand Dollar especially. These currencies will tend to do well in such times of market complacency.
Market Conditions:
Volatility expectations trade near their lowest levels since the onset of the financial crisis in 2008. Such extremely low levels favor slow trends and tight currency trading ranges until further notice.
Source : DailyFX
Long Live the Dollar! Break of Key RSI Trendline Sends Index Soaring
The greenback advanced for a third consecutive day in North America trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) climbing 0.5
5% on the session. The move marks the first three day advance on the index since December 14th when the dollar hit a six-week high at 10,089. Faltering Greek debt-talks coupled with softer economic data out of the US and China weighed heavily on broader market sentiment with US stock indices off by 0.60%-0.90% across the board. The dollar has remained well supported as risk aversion flows gathered pace with investors jettisoning higher yielding assets in favor of the relative safety of US Treasuries, the dollar, and the Japanese yen.
The dollar broke back above the 38.2% Fibonacci extension taken from the August 1st and October 27thtroughs at 9755 before losing steam just ahead of the 9800 mark. The advance marks the largest single day advance for the greenback since January 5th and the dollar may now be poised for further advances next week as conditions in Europe continue to deteriorate. As noted in yesterday’s USD Trading report, the daily relative strength index broke back above former RSI trendline support dating back to the May 2nd low, providing further conviction on our medium-term bullish bias.
An hourly chart shows the dollar’s advance gathering pace after breaking above channel resistance dating back to January 15th with the index holding above soft support at 9775. Subsequent support targets rest lower at the 38.2% extension at 9756, 9730, and 9700. A breach above soft resistance at 9800 eyes topside targets at 9825, the 50% extension at 9850 and 9900. Note that RSI looks to close the session above overbought territory with the dollar likely to come under some pressure at the start of the week.
The greenback advanced against three of the four component currencies highlighted by a 1.01% advance against the Australian dollar. Risk-aversion flows, which often way heavily on the high yielder, were exacerbated by dovish remarks out of the RBA with the monetary policy statement released overnight noting further downside risks to the economy as the central bank lowered growth and inflation forecasts for 2012. The yen was the strongest performer of the lot with an advance of just 0.05% against a stronger dollar. Look for the yen to remain well supported so long as risk sentiment remains heavy with advances in both the yen and the greenback likely keep the exchange rate rather subdued. For complete scalp targets on the aussie and the yen refer to this morning’s Winners/Losers report.
With no data on the US economic docket until Tuesday, look for the dollar to continue to take cues off broader market sentiment with the dollar likely to remain well supported ahead of key parliament votes in Greece on Monday and Germany on Wednesday/Thursday. That said, it’s important to note that should Greece come up with a credible plan to reduce structural deficits to the satisfaction of the Troika, risk appetite could reverse sharply with such a scenario likely to weigh heavily on the greenback as traders jettison the reserve currency in favor of yields.
Source : DailyFX.com
US Dollar Aims for Broad-Based Recovery in the Week Ahead
Major Currencies vs. US Dollar
(week-to-date % change)
Talking Points
- Euro at Risk as Recession Worries Replace Greece Fiasco in the Spotlight
- Japanese Yen Tracking Treasury Yields, Focus on Fed Minutes and US CPI
- British Pound to Face Selling Pressure as Data Bolsters Case for QE Boost
- Commodity Dollars May Lose Support as Global Slowdown Fears Return
After weeks of preoccupation with Greece and its second bailout package, the Euro appears all but ready to move on. Indeed, traders seemed to resign to the inevitable as early as Wednesday, realizing the ECB had lent banks enough capital via December’s LTRO to ensure a credit squeeze would be averted even if Greece defaulted. The next hurdle was to convince investors that similar provisions would be in place if stress were to emerge in a larger country (specifically, Italy). The ECB rate decision saw policymakers make headway on this front as well, with the bank relaxing collateral requirements for its next LTRO due later this month. This opens the door for more capital to be injected into a wider swath of the banking sector, reinforcing lenders’ war chest and soothing jittery investors.
Importantly, this hardly guarantees a favorable outlook for the single currency. With the credit crunch time-bomb defused for now, the focus turns to growth, where the picture is far from pretty. Economists’ forecasts suggest the Euro zone will be the only G10 economy to sink into recession this year. This beckons further monetary easing. Indeed, considering the goal of LTRO operations is an easing of credit, its impact on the exchange rate can be expected to be essentially the same as the affect of the Fed’s QE efforts on the US Dollar. Needless to say, this bodes ill for the single currency. With that in mind, the spotlight is on fourth-quarter Euro Zone Gross Domestic Product figures next week, where expectations are for output to drop 0.4 percent to mark the first contraction since the region emerged from the Great Recession in mid-2009. The German ZEW gauge of investor confidence is also on tap.
The Japanese Yen is beginning to regain its correlation with the spread between domestic and US 10-year bond yields (see below). With Japanese monetary policy effectively locked in place, traders will be looking to the US for direction cues. Minutes from January’s Federal Reserve policy meeting will be in focus as markets size up the outlook for a third round of quantitative easing. Friday’s Consumer Price Index report will be judged in the same light. A perception that more stimulus may not be as assured as it appeared in the announcement’s immediate aftermath likely pressure Treasury yields and USDJPY higher. Alternatively, signs bolstering the case for QE3 are expected to have the opposite effect, although the downside remains broadly capped by Japan’s “stealth” intervention efforts.
The British Pound appears vulnerable in the week ahead as economic data reinforces the case for the latest expansion of quantitative easing by the Bank of England. Inflation is expected to slow to the weakest in 14 months while the Claimant Count – a proxy for the unemployment rate – is forecast to hit 5.1 percent, the highest since mid-1997. While the Pound rose immediately the BOE announcement as the asset purchase target increased in line with expectations, putting to rest rumors of a larger expansion, the longer-term implications of further sterling dilution appear negative.
The Australian, Canadian and New Zealand Dollars continue to show strong links with stock prices (although the strength of correlation readings has weakened somewhat), meaning risk appetite remains in control. On balance, this does not seem supportive. With Eurozone-triggered credit crisis fears unwinding and the global growth outlook creeping back into focus, the cycle-sensitive currencies may come under increasing pressure as traders are reminded that economists’ median world GDP expectations for 2012 have been sinking precipitously since early August.
EURO
Source: BloombergBRITISH POUND
Source: BloombergJAPANESE YEN
Source: BloombergCANADIAN DOLLAR
Source: BloombergAUSTRALIAN DOLLAR
Source: BloombergNEW ZEALAND DOLLAR
Source: Bloomberg
Market Outlook for February 1, 2012
Yet again markets were gripped by ‘europhoria’ surrounding the latest EU summit and more announcements surrounding plans to save Europe. European Union leaders meeting in Brussels have agreed on a fiscal treaty that will allow for action against high deficit states and calls for members to introduce legislation to limit budget deficits.
Markets rallied on the news even though these reforms actually do nothing to resolve the current debt crisis. Britain and the Czech Republic have declined to sign the pact. After having rallied to above 1.3200 yesterday, the Euro gains evaporated before once again rising in Europe today.
USDJPY
Markets rallied on the news even though these reforms actually do nothing to resolve the current debt crisis. Britain and the Czech Republic have declined to sign the pact. After having rallied to above 1.3200 yesterday, the Euro gains evaporated before once again rising in Europe today.
The Dollar Index rose yesterday by 0.2% yesterday as the USD gained across the majors. USDJPY continues to hover dangerously close to post war lows but is still managing to hold above 76.00. The inevitable sabre rattling and war cries from the Bank of Japan will intensify over the next few trading sessions but the question will be is “anyone listening and does anyone care?” In Europe, the dollar is falling as equity markets rise.
Yesterday, equity markets were soft. The S&P 500 closed 0.05% lower for its fourth consecutive loss, albeit small, as economic data failed to meet expectations. Consumer confidence came in lower than expected while the ISM business activity index came in lower than even the most pessimistic forecasts. Exxon Mobil fell more than 2% after reported sales trailed estimates and Amazon will open significantly lower today after profits fell more than 50%. European bourses are higher by almost 2% as manufacturing data from the US to China looks positive.
Equity markets have recovered from a soft start to the week with Asian shares rising on optimism surrounding the latest EU summit. After falling yesterday over Greek resistance to outside influence in its budgetary affairs, rising bond yields and the collapse of Spanair, European bourses are now higher by 1% mid session today. After losing ground yesterday for the third day as European leaders lectured to Greece over the nation’s second rescue package, S&P 500 futures are signalling a rise in trade today.
Commodities News
Commodity prices moved lower yesterday with the CRB index losing 1.6 points to 312.31 with initial gains over Euro-optimism evaporating as US economic data disappointed. In Europe, prices are making a comeback with WTI Crude gaining 0.75% to $99.20 0.35% to $98.45. Precious metals gained with with gold rising 0.5% to $1,749 while silver has gained 1.8% to $33.85. Soft commodities are broadly stronger while copper has gained 0.8%.
GOLD
GOLD continues to show strong price consol-idation to gain slightly to hold around $1,740. The range overnight was $1,724 to $1,747. The price action played perfectly within our support and resistance levels. In what is certainly a good sign for the metal, it managed to hold onto gains even as the USD rose and equity markets fell. The strong bounce off support at $1,725 has gold maintaining its short term bullish trend and we expect another retest of $1,750 imminently. We believe that gold’s status as a store of value and as a safe haven will come to a fore this year as prices ac-celerate towards $2000 by mid year. We remain strongly bullish. Last year we saw both the USD and gold perform better than mpst other asset classes and we continue to see the same trend this year. Look for support at $1,720 to be tested today. If this level holds, our short term bullish call on the metal will be confirmed.
FX News
EURUSD
EUR/USD found support at 1.3025 (day low) in early London time perhaps in response to no firm progress being made in the debt restructuring negotiations between Greece and private bond holders. On the other hand, with US interest rates near zero until 2014 it isn’t that attractive to buy USD either in terms of yields. Hence EUR/USD may be trapped between 1.3050 – 1.3150 until the market finds new information to trade with. This may come from today’s data out of Europe (Germany PMI, EMU PMI and CPI) and the US (ADP employment change and ISM manufacturing). We think we may have seen the low for the day but for the topside we like 1.3244 revisited.
USDJPY
USD/JPY continued its five-day losing streak in early London time as it tests the 76.00 big figure. At the time of writing USD/JPY is 76.05 which is today’s low so far. We hear there are stop losses (large) below this figure but margin traders are holding the support line at the moment in the hope of grabbing a bargain. Since the US announced last week that it would keep interest rates near zero at least until late 2014, long term traders are slowly pricing in this factor by selling dollars across the board including selling dollars and buying the yen. Specifically for today, Japanese exporters and model funds were doing most of the selling. Again 75.76 wasn’t tested yesterday but the chances are extremely high today, then 75.55 (Oct low). Watch out for the 75.35 post war low and also watch out for BOJ intervention – real or rumoured. If that happens expect to see 77.12 in a hurry otherwise the trend is strongly bearish.
AUDUSD
AUD/USD like the majors and other risk currencies preformed well during the late Asia and European session as the market grabbed at the idea of a fiscal treaty of 25 European na-tions as a positive step for the current crisis and reports that the ECB was about to release a large chunk of cheap liquidity to European Banks also helped. AUD topped out again ahead of 1.0700 selling with Fund names noted sellers. Weaker US data and a change in stance on the risk asset move saw the Euro sharply decline during the US session and AUD has followed the course. However, at this stage the slide has been limited by the recovering US equity market during the afternoon with the price closing now at 1.0615. HPI q/q and Commodity Price data are the only medium level releases today and we can’t see these hav-ing a major effect on the price action. A fall in the commodities may have an outside effect if the number is large enough only because of our two speed economy at present.
Compass Global Markets
DISCLOSURE AND DISCLAIMER
we do not owe his info. we simple take ifno from multiple web site and gather at one place.
we do not owe his info. we simple take ifno from multiple web site and gather at one place.