Analitics
Will dollar find support?
* The dollar was mixed on Friday, sharply lower versus the yen but modestly higher against the commodity currencies. US consumer confidence rose more than expected, boosted by the recent rally on Wall Street. Wholesale inventories fell for a record eleventh straight month while wholesale sales gained, indicating a US economic recovery in on track. The S&P 500 fell 1.41 points to 1,042.73, the first decline in six days. The USD/JPY plunged following the penetration of the 91.50 support. The euro was flat. Sterling rose modestly, supported by higher UK producer-price inflation. The Australian and Canadian dollars declined as commodity prices fell despite China’s better-than-expected industrial production.
Source: Hans Nilsson
11.09.2009
USD Falls as Stocks Reach New Yearly High
* The dollar traded lower on Thursday as US stocks hit a new yearly high. The US trade deficit widened more than expected and initial jobless claims declined more than anticipated. The dollar index fell for a fifth consecutive day to 76.80, approaching the 76-area support. The S&P 500 rose 10.77 points to 1,044.14, the highest closing since October 6, 2008. The USD/JPY was lower, testing the 91.50-area support for a second day. The euro rose. European Central Bank Governing Council members Axel Weber and Yves Mersch signaled that the ECB will not remove any stimulus for the foreseeable future. The commodity currencies appreciated marginally on concerns over the Chinese economic outlook. Premier Wen said China’s economic recovery is “unstable, unbalanced and not yet solid.” Australia’s employment declined more than expected. The Bank of Canada left its benchmark interest rate unchanged at 0.25%, as expected, and said “persistent strength in the Canadian dollar remains a risk to growth.” We are buying the EUR/USD and also buying the USD/CHF on speculation the Swiss National bank will intervene to lower the franc value.
Source: Hans Nilsson
10.09.2009
Greenback Remains Under Pressure
* The dollar fell versus most major currencies on Wednesday but pared losses after the Federal Reserve said eleven of its twelve regional banks reported signs of a stable or improving economy. US mortgage applications rose the most since March in another sign the economy is recovering. The S&P 500 was up 7.98 points to 1,033.37. The USD/JPY fell. The euro rose for a fourth day. European Central Bank council member Erkki Liikanen suggested the ECB may start to unwind its emergency lending measures before raising interest rates. Sterling gained as UK consumer confidence climbed to the highest level since May 2008. The Bank of England is expected to keep its benchmark interest rate unchanged at 0.50% on Thursday. The Australian dollar was little changed.
Source: Hans Nilsson
09.09.2009
USD Plunges as Stocks and Commodities Gain
* The dollar plunged in NY trading Tuesday, breaking several important support levels in the dollar index and in the crosses against the euro and Swiss franc. The greenback fell as risk appetite rose and investors financed equity and commodity purchases by low interest dollar loans. The 3-month dollar Libor fell to a record-low 0.30%. Over the weekend, the G-20 finance ministers promised to continue stimulating the global economy. Gold rose above $1,000 an ounce, just marginally below its all-time high in March 2008. The S&P 500 rose 8.99 points to 1,025.39. Concerns over the dollar’s long-term status as the world’s reserve currency also weighted on the greenback after a UN report called for a new world currency. The USD/JPY fell but stayed above the 91-92 support. The GBP/USD rose but failed to break the 1.66 resistance. The USD/CHF plunged and closed well below 1.06 which is the new resistance. The AUD/USD continued its rally, supported by Australia’s improving business confidence. The USD/CAD reversed earlier losses despite surging oil prices.
Source: Hans Nilsson
08.09.2009
USD/CAD May Test Downtrend
* The dollar rose against the euro and yen but fell versus the Australian dollar and sterling ahead of Friday’s US employment data. US jobless and continuing claims disappointed the markets, but most other economic data showed improving economic conditions. The S&P 500 rose 8.49 points to 1,003.24, supported by better earnings from US retailers. The yen fell for the first day in four. The euro reversed earlier gains. The European Central Bank maintained its benchmark interest rate at 1.00% and signaled that it is in no hurry to tightening its monetary stance even though the central bank raised its growth and inflation forecasts. Sterling rose on economic recovery hopes. The UK services PMI rose to a near 2-year high and LIBOR rates made a new low. The Australian dollar was up, approaching the important resistance.
Source: Hans Nilsson
04.09.2009
Euro Finds Support Again
* The dollar fell against most major currencies on Wednesday. ADP forecast a larger-than-consensus 298K decline in US private payrolls for August. US factory orders, although rising less than expected in July, posted a fourth consecutive gain. Meanwhile, US unit labor costs posted their biggest decline since 2000 and nonfarm labor productivity climbed the most since 2003. US stocks stabilized; the indexes hardly moved ahead of Friday’s unemployment report. The S&P 500 declined 3.29 points to 994.76 in light pre Labor Day Holiday trading. The yen rose to a 7-week high, supported by indication from Japan’s new government that it does not worry about an appreciating yen. Sterling recovered most of yesterday’s losses on less anxiety over banks and the improving UK construction PMI. The Australian dollar was supported by a strong GDP report, which indicated that Australia has avoided a technical recession. The Canadian dollar was little changed against the dollar, pressured by political uncertainty in Canada.
Source: Hans Nilsson
02.09.2009
Greenback Turns Bullish
* The dollar and yen gained on Tuesday as risk aversion rose and US stocks fell. The S&P 500 dropped 22.58 points to 998.04. US economic data indicate the US economy is recovering. US pending home sales rose more than expected in July and manufacturing expanded in August. Chinese and Australian manufacturing PMI numbers were also strong. However, stocks are overbought, requiring a correction. The euro, at critical support from the long-term uptrend, fell on increased risk aversion. Eurozone economic figures were mixed with the unemployment rate climbing to a 10-year-high 9.5% and the manufacturing PMI rising more than expected. Sterling fell, pressured by the weaker-than-expected UK manufacturing PMI and outstanding loans to companies and individuals falling at a record pace. The Canadian dollar declined as crude oil and commodity prices fell. We are buying the USD/CHF with stop at 1.0475.
Source: Hans Nilsson
01.09.2009
Dollar Testing Support as Stocks Rally
* The dollar and yen fell on Friday as stronger European purchasing managers’ indexes and a jump in US existing home sales boosted risk appetite. Federal Reserve Chairman Ben Bernanke said “economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good.” However, he did not give any indications of any tightening moves. The S&P 500 rose 18.76 points to 1,026.13. The yen was pressured by rising equity markets. The euro advanced as European stocks rose to a 10-month high and the eurozone manufacturing and services PMI climbed more than expected. Sterling fell modestly on the UK’s economic fundamentals despite better risk sentiment. The Australian and Canadian dollars gained on the stronger global economic outlook. Commodity prices rose and oil prices reached a 2009 high.
Source: Hans Nilsson
21.08.2009
Canadian Dollar Will Follow Crude Oil
* The dollar traded mostly lower against its counterparts on Thursday. The dollar index fell for a third day as US stocks rose for a third day. The Conference Board US leading economic indicators index rose in July for a fourth straight month and manufacturing in the Philadelphia region expanded in August for the first time in almost a year, adding to signs the US recession is ending. The S&P 500 rose 10.91 points to 1,007.37. The USD/JPY, rising modestly, was unable to break the 94-area support. The euro rose for a third day on improving risk appetite. Sterling was pressured by a report that the UK had its largest budget deficit in July since records began in 1993. The Australian dollar rose; the Reserve Bank of Australia continued its aggressive intervention to slow the aussie’s appreciation. The Swiss franc gained as reports showed Switzerland’s trade surplus widened in July and the ZEW Swiss investor sentiment index rose sharply in August.
Source: Hans Nilsson
20.08.2009
Greenback Testing Resistance
* The dollar reversed overnight gains as risk appetite improved and US stocks reversed morning softness and closed higher in New York Wednesday. Overnight the Shanghai composite index fell over 4%, leading other Asian stock markets lower and supporting the safe haven currencies. The dollar index failed to penetrate the resistance from the long-term downtrend for a third consecutive day. The S&P 500 rose 6.79 points to 996.46. The USD/JPY declined, testing the 94-area support. Sterling fell after the release of Bank of England minutes, which showed that 3 Monetary Policy Committee members wanted to boost the quantitative easing program by more than £50 billion. Dissenters including BOE Governor Mervyn King wanted a £75 billion expansion. The pound later pared losses as US stocks rose and risk appetite returned, while the euro advanced. The Australian and Canadian dollars reversed earlier losses as commodity prices climbed. Crude oil rose after US inventories fell the most in more than a year.
Source: Hans Nilsson
19.08.2009
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