Analitics
Dollar Falls on Improved Sentiment
* The dollar fell versus most other key currencies on Tuesday as risk appetite increased after Treasury Secretary Timothy Geithner said the “vast majority” of US banks are well capitalized. The yen fell as the Dow rose 128 points to 7,970. Sterling found support at the 1.45 handle ahead of tomorrow’s UK budget announcement. The Canadian dollar rose modestly despite the Bank of Canada’s unexpected 25 basis-point rate cut. The Australian dollar advanced on improved risk sentiment and comments by Reserve Bank of Australia Governor Glenn Stevens that Australia’s economy will “weather the storm better than most.”
Source: Hans Nilsson
21.04.2009
USD and JPY Rise As Risk Aversion Returns
* The dollar and yen rose against most other key currencies on Monday as risk aversion increased. The OECD stated that the global economic outlook is extremely uncertain and governments still have much work to do to combat the global recession despite huge packages already committed. The Conference Board US leading economic indicator declined slightly more than expected. The Dow fell 289.60 points to 7,841.73 on worries about the economy and the state and cost of banking-sector bailout. The euro fell below the 1.30 support pressured by possible policy difference within the European Central Bank and its slow response to the deepening eurozone recession. Sterling dropped ahead of Wednesday’s UK budget announcement, which may include a provision of ₤60 billion for the UK bank bailout. The Australian and Canadian dollars fell on increased risk aversion and falling commodity prices. The Bank of Canada is likely to maintain its key interest rate at 0.50% on Tuesday. The Australian dollar was pressured by an unexpected decline in PPI increasing speculation of a Reserve Bank of Australia rate cut.
Source: Hans Nilsson
20.04.2009
Euro Falls, Awaiting ECB Clarification
* The dollar and yen rose against most other key currencies on Friday. US April consumer sentiment rose more than expected, in another sign the US recession is abating. The Dow was up 5.90 points to 8,131.33. The USD/JPY fell slightly, still above the 0.99 support. Sterling declined for a second day consolidating earlier gains this week. The Canadian dollar fell as Canada’s consumer-price inflation rose less than expected increasing expectations of more aggressive Bank of Canada policy easing. The Australian dollar was little changed at the 0.72 support. The Swiss franc dropped on weak retail sales and the Swiss National Bank’s announcement it will continue its policy of foreign exchange intervention as long as deflation risk remains.
Source: Hans Nilsson
17.04.2009
AUD/USD Testing Support on China’s Sluggish Growth
* The dollar rose against most major currencies on Thursday. US economic data were mixed. Initial jobless claims fell to their lowest level since January 24 and the Philadelphia Fed manufacturing data improved; however, housing starts and building permits fell more than expected. The Dow rose 95.81 points to 8,125.43, led by gains at Hewlett-Packard Co. and better-than-expected earnings at JPMorgan Chase & Co. The yen was little changed against the dollar. The euro pared some overnight losses on a record year-on-year decline in eurozone industrial production and record-low inflation. Sterling was pressured by a 1.2% y/y decline in March BRC UK same-store sales. The Canadian dollar fell despite a better-than-expected rise in Canada’s manufacturing shipments.
Source: Hans Nilsson
16.04.2009
Decelerating Economic Contraction Increases Risk Appetite
* The dollar traded mixed on Wednesday after reports showed US industrial production declined more than expected and consumer prices posted their first annual decline since 1955. The Federal Reserve’s Beige Book showed that the US economic contraction continued through early-April but the pace of decline was decelerating in 5 of the 12 Fed districts. The Dow rose 109 points to 8030 on recovery optimism. The yen fell, unable to penetrate resistance after weak Japanese industrial production. Sterling rose, testing the 1.50 resistance after a report showed the slump in UK home prices eased. The Australian dollar rose modestly despite Westpac’s leading economic index falling to a 27-year low. The Canadian dollar rose for a third day on improved risk sentiment. The Swiss franc fell following a report of large losses by Swiss bank UBS.
Source: Hans Nilsson
15.04.2009
USD/JPY Testing Support
* The dollar and yen rose after government reports showed US retail sales and producer prices unexpectedly fell in March. The weak data increased risk aversion and concerns over a US economic recovery. The Dow fell 138 points to 7920. The euro was pressured by European Central Bank council member Athanasios Orphanides’ comment that deflation risks in the EMU may require further ECB policy easing beyond next month. Sterling rose on optimism the UK housing slump will end and falling LIBOR rates indicate UK and other global banks are on a recovery. The Australian dollar consolidated earlier gains as copper prices plunged. The Canadian dollar rose to the highest level in over 10 weeks.
Source: Hans Nilsson
14.04.2009
Better Bank Earnings May Benefit Sterling
* The dollar and yen fell as risk sentiment improved in light and technical trade on Monday. Europe still celebrated the Easter holiday and few economic reports were released. The yen rose against the dollar but declined versus most other key currencies on increased deflationary fears as wholesale prices fell. The greenback was pressured by concerns that China will reduce its purchase of US debts. The Dow fell 26 points to 8058. The euro rose to a 4-day high as risk appetite improved as China’s industrial output and lending rose. Despite Canada’s weak business outlook surveys, the Canadian dollar rose to important technical resistance. The Australian dollar climbed to the highest level since October 7.
Source: Hans Nilsson
13.04.2009
Yen Falls on Better Risk Sentiment
* The dollar was mixed in light pre-holiday trading. Investor risk sentiment improved, pushing global equity and commodity markets higher. The Dow surged 246 points to 8083. The US trade deficit narrowed dramatically as imports plunged and exports rose for the first month since July 2008. The narrowing trade deficit supported the greenback and will help US GDP growth in Q1 2009. The euro fell on weak German industrial production and increased speculation the European Central Bank will ease monetary policy. Sterling declined after the Bank of England kept its benchmark interest rate unchanged and said it will keep buying government bonds. The Australian and Canadian dollars rose on better risk appetite and rising commodity prices despite reports of worse-than-expected Australian and Canadian labor markets.
Source: Hans Nilsson
09.04.2009
USD Mixed on More Recovery Signs
* The dollar was mixed in light pre-Passover and Easter holidays trading. US wholesale inventories fell at the steepest rate since records started in 1992, indicating the recession is easing and companies will increase production. The Dow rose 48 points to 7837 despite downbeat minutes of the FOMC March 17-18 meeting. The Fed worried the US economy might enter a vicious cycle with rising unemployment and slumping business and consumer spending, making credit tighter and weakening the financial system. However, recent developments are more optimistic and our leading economic indicator signals a US recovery as early as July (see our March 9 report). The dollar fell versus the yen as Japan announced a ¥37 trillion stimulus plan but rose against other key currencies. The euro dropped after Germany’s factory orders posted a sixth consecutive decline and exports dropped for a fifth month. Sterling fell as the NIESR predicted the UK economy contracted 1.5% in Q1 2009. The Canadian dollar was little changed ahead of Thursday’s employment report.
Source: Hans Nilsson
08.04.2009
USD/JPY at Resistance
* The dollar and yen rose on Tuesday, benefiting from safe haven flows as US stocks declined for a second day. The Dow fell 186 points to 7790 ahead of the upcoming earnings season. The euro dropped versus the pound as eurozone Q4 2008 GDP was revised lower. Sterling declined modestly versus other key currencies on increased risk aversion and a record drop in UK industrial production. The Australian dollar fell after the Reserve Bank of Australia lowered the cash rate by 25 basis points to 3.00% and said the Australian economy is likely to contract further. The Canadian dollar was little changed as metal prices rose and oil prices fell.
Source: Hans Nilsson
07.04.2009
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