Dollar firms ahead of key events

The U.S. dollar is trading firmer across the board ahead of the ECB meeting and Trichet press conference in addition to speeches by Fed Chairman Bernanke and President Obama. The euro is weaker against all of the G10 currencies with the exception of the Swiss franc as the EUR/CHF floor is maintained with the pair currently trading around 1.2130/35 (there is no sign of SNB intervention today). While no change in rates is expected, markets reduced EUR longs ahead of the ECB’s economic outlook and Trichet’s commentary as uncertainties remain high, risks remain to the downside, and a more dovish statement is expected.

Greece 10-year bond yields continued to ascend to fresh highs of around 20.13% and the spread over their German equivalents widened to record levels also which added pressure to the common currency. Data releases out of Europe’s largest economy showed that Germany’s trade surplus fell by more than expected in July with a reading of 10.4B from the prior 12.7B (cons. 11.5B). Both exports and imports surprisingly fell with -1.8% m/m (exp +0.5%) and -0.3% m/m (exp +0.3%) prints respectively. EUR/USD is currently trading around 1.4050 and approaches the 200-day SMA which comes in around 1.4020/25.

In the U.K., The Bank of England kept rates steady at 0.50% and held asset purchases at 200B pounds as anticipated which saw a rally in cable with GBP/USD moving above the key 1.6000 figure.

The Organization for Economic Cooperation and Development (OECD) cut its growth forecasts for the U.S. and Japan and said more easing may be needed from central banks around the world if economies weaken further. This highlighted the growing concerns of a global slowdown and saw risk come off.

The yen was mostly firmer as the July trade surplus unexpectedly fell to 123.2B yen from the prior month’s 131.5B yen (cons. 149.1B yen). July machine orders fell by more than forecast with a m/m decline of -8.2% (exp -4.2%) and weaker y/y growth of +4.0% (exp +8.0%). The yen was strongest against the CHF as CHF/JPY fell below the 90.00 figure as traders bought yen in search of a haven.

On the data front for the upcoming NY session are U.S. weekly initial and continuing jobless claims as well as July trade balance figures. Canada is set to release the July new housing price index, building permits and international merchandise trade data. All of the above data is scheduled for release at 0830ET. ECB President Trichet will also give comments at a press briefing beginning 0830ET and Fed Chairman Bernanke is scheduled to speak at 1300ET. President Obama will give a speech addressing the labor market and outline a plan in which he is expected to announce $300bn job creation package that includes tax cuts, infrastructure spending and aid to state and local governments. For more on today’s key events Click here to read Research Note: BOE/ECB Rate Decisions and Speeches by Bernanke and Obama.

Источник: Forex.com

08.09.2011