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Against The Dollar WouldTitle:
Inertia Will Sink The Euro Again
The G8 Summit achieved very little in public which was no real surprise, but there was also an apparent lack of urgency surrounding the Euro-zone situation which was a much greater surprise given a sharp deterioration in the financial sector last week. Where was the urgency for fresh action to help support the Euro banking sector? The absence must surely indicate that Euro-zone and G8 leaders, while paying lip-service to the current strategy, have effectively moved on and are actively planning the next stage of the crisis.
Fear is likely to dominate in the short term and this is likely to keep strong defensive demand for the dollar and yen. In these circumstances, there is no real chance of a sustained Euro rally with 2012 lows likely to be seen. Bond markets will be watched very closely ...
Title:
Gold eases after failing to breach $1,600 an ounce
(Reuters) - Gold prices slipped on Monday after early buying failed to lift prices past $1,600 an ounce, with investors still cautious about the precious metal as they awaited clearer signals on the euro-zone debt crisis.
Last week, gold slid to its lowest level since December, then rallied 4.5 percent late in the week. Buying resumed early on Monday but ran out of steam, as mild technical selling set in around the session high of $1,599 an ounce -- gold's priciest level in a week and a half.
Spot gold was down 0.08 percent at $1,590.80 an ounce at 3:43 p.m. EDT (1910 GMT), while U.S. gold futures for June delivery settled at $1,588.70 per ounce, down 0.2 percent from Friday.
A close above $1,605 an ounce would trigger significant buying, traders said, but after last week's tumultuous ...
Title:
Euro gets respite, but stays under pressure
(Reuters) - The euro traded firm above recent four-month low on Monday as some investors who had bet on the currency falling booked profits, but deep-seated concerns about financial turmoil in Greece and Spain will keep it under pressure.
The common currency earned respite from this month's relentless bout of selling, as speculators who had piled up a record amount of bets against it cut some of those positions.
The euro was steady at $1.2781, well above Friday's four-month low of $1.2642 struck on trading platform EBS. The euro has managed to stay above its 2012 low of $1.2624, a major support, a break of which would take the single currency back down to levels not seen since August 2010.
Traders cited sell-side stops above $1.2835 with plenty of offers ahead of that level, all of ...
Title:
Dukascopy Morning Forex Overview : 21/05/2012
Fundamental Analysis
EUR
"Fears of a Greek exit from the euro zone and the negative consequences from that are prevailing"
- Ben Kwong, KGI Asia
European stocks edged lower after Fitch downgraded Greece’s credit rating to ‘CCC’, implying that the country is vulnerable and highly dependent on favourable economic conditions to fulfill its financial obligations.
USD
"If there were scope to do another twist of some type it would be prudent to consider it, especially in the scenario where things are worse and the Fed feels like it needs to move"
- Nathan Sheets, Citigroup Inc.
Fed policymakers might potentially launch another round of Operation Twist rather than a direct asset purchases in case of increased risks or further weakening of the US economy.
GBP
"We must work together to give ...
Title:
Facebook IPO Fails to Make a Dent in the Marketplace
Following weeks of speculation regarding how Facebook's debut on the New York Stock Exchange would turn out, investors were mildly disappointed with the social media site's performance on Friday night. Facebook closed out the week at 37.96, slightly below its opening price. What direction Facebook takes from here is a hotly debated topic among market analysts. Some are warning that the site may be overvalued already, and Friday's disappointing performance could be a sign of things to come. That being said, any moves by Facebook to expand its already massive subscribership could generate excitement in the marketplace which could help boost the value of this site.
Economic News
USD - Dollar Comes off 4-Month High vs. Euro
The US dollar turned bearish against most of its main currency ...
Title:
Euro bounces off 4-month low, but remains under pressure
(Reuters) - The euro extended its rebound from last week's four-month low on Monday but investors remained concerned over financial turmoil in Greece and Spain, drawing little comfort from a broad G8 pledge to take steps to fight the euro zone's debt crisis.
The common currency rose on short-covering after speculators piled up a record amount of bets against it, according to data from a U.S. financial watchdog released late last week.
"We are entering a consolidation phase with regard to the euro. It will not be known for a while whether Greece will stay in the euro or not with a Greek election a few weeks away," said Minori Uchida, chief analyst at the Bank of Tokyo-Mitsubishi UFJ.
"The market may show some minor reaction to Greek opinion polls... but it is hard to sell the euro in ...
Title:
Gold gains on steady euro; Europe concerns stay
(Reuters) - Gold inched up on Monday to extend last week's rise, tracking a steady euro after world leaders pledged to combat financial turmoil, although worries about Greece and the euro zone debt crisis continued to feed caution in the financial markets.
A pledge by the world's leaders to keep Greece in the euro zone offered some relief to the euro, which rose to its highest level in nearly a week against the dollar, while the greenback slipped against a basket of currencies .DXY, lending support to dollar-priced commodities.
But investors remained skittish as the summit for G8 leaders offered no specific prescription for debt-crippled Greece which is headed for fresh elections next month.
"We suspect that any early gains will eventually be rolled back, as the markets refocus their ...
Title:
Bad Week for Loonie in Spite of Some Good News
The Canadian dollar had a pretty bad week as talks about the European debt crisis plagued the Forex market, driving traders away from riskier commodity currencies.
Fears that Greece would exit the eurozone and that the crisis is spreading to Spain hammered the loonie, as the Canadian currency is usually nicknamed. Domestic fundamentals were actually good for the currency. Manufacturing sales climbed 1.9 percent in March and consumer price inflation was 0.4 percent in April. Economists believe that Canada would the first country from the Group of Eight to raise its interest rates. The loonie is likely to strengthen then, but for now the currency remains depressed.
The Canadian dollar posted losses against the greenback each day of this week. The currency was flat one day against the yen, ...
Title:
Weekly Economic and Financial Commentary : 19/05/2012
U.S. Review
To QE3 or Not To QE3: That is the Question
- Some market participants are beginning to speculate about another round of quantitative easing. Although recent growth indicators have not been particularly stellar, the economy is still growing. Moreover, core CPI inflation in the neighborhood of 2 percent means that the threshold for more QE is relatively high.
- Overall, indicators were positive during the week. Housing starts increased by 2.6 percent in April, the Empire Manufacturing index improved to 17.09 in May from a 6.56 print in April and retail sales printed a 0.1 percent increase in April, in line with expectations.
To QE3 or Not To QE3: That is the Question
QE3 seems to have more lives that a cat; it comes back into the forefront of the U.S. economy discussion ...
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