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Dukascopy Morning Forex Overview : 23/05/2012
Fundamental Analysis
EUR
"The rally is mostly technically driven after we became quite oversold last week."
- Raimund Saxinger, a fund manager at Trust Investment GmbH
European stocks rose by the most in a month on Tuesday. The Stoxx Europe 600 Index gained 1.91 per cent to 244.76. Germany’s DAX Index edged higher 1.65 per cent and France’s CAC 40 Index added 1.88 per cent. The U.K.’s FTSE 100 Index rose 1.86 per cent to 5,403.28
USD
"People are becoming more confident about job prospects and about taking on mortgages."
- Millan Mulraine, a senior U.S. strategist at TD Securities Inc.
U.S. existing home sales rose in April to an annual rate of 4.62 million from 4.47 million in March, said the National Association of Realtors.
GBP
"These figures give the Monetary Policy Committee ...
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Japan Policy On Hold, Eyes On BoE Minutes
The euro (EUR) dropped near a 21-month low falling to 1.2645 from 1.2814 against the US dollar as risk aversion dominates the markets. Comments from former Greek Prime Minister Lucas Papademos raised concerns after he said that Greece has two options, stick to a painful austerity program or face a damaging default and a messy exit from the eurozone. Focus now turns to today’s informal EU summit where France is expected to push a proposal of joint eurozone bonds. The idea of joint bonds can help with funding difficulties for some heavily-indebted eurozone countries but that policy has been rejected by Germany before. EU leaders are also expected to focus more on growth and ways to help Greece stay in the euro.
The US dollar (USD) strengthened against a basket of currencies as fears of a ...
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Safe-Haven Dollar
Forex News and Events:
Friday’s trading session was mostly uneventful with all the focus shifted to Facebook’s IPO. Many markets that had been freefalling these last two weeks caught a breather, with gold, silver, and the EUR gaining 1.12%, 2.57% and 0.63% respectively against the USD. The reversal has been attributed to a weak Philly Fed reading on economic activity in a sign that the world’s reserve currency is riskier than panicked markets are pricing. The weak number raised speculation over a new round of interventions from the part of the Fed in order to boost its economy. WTI however, was not able to profit from this reversal as it dropped to a six-month low before closing at 91.33. A 22-year high in inventory levels for the US could explain the decoupling of oil from the rest of ...
Title:
Euro Succeeds Short Squeeze
Sunrise Market Commentary
- Fixed Income: Global core bonds take a breather
- Investors remained mostly sidelined in an uneventful session on Friday. The G-8 meeting stressed the need for growth, besides fiscal consolidation and sees Greece staying inside EMU. This shouldn’t surprise markets today. With a razor thin calendar, trading might start the week in a lackluster mode.
- Currencies: Euro succeeds short squeeze
- On Friday, the decline of the euro halted and EUR/USD succeeded a cautious rebound, even as uncertainty on the EMU debt crisis persisted. Technical considerations will also dominate trading today as the G8 meeting provided no high profile measures to address the debt crisis.
The Sunrise Headlines
- US Equities rose for a second consecutive session on ...
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Copper bounces; eyes third weekly loss
Copper bounced on Friday, helped by investors balancing positions ahead of the weekend's G8 meeting, but was set to decline for a third week on concerns that deepening debt problems in the euro zone could drag on China's economy and erode metals demand.
Three-month copper on the London Metal Exchange traded at $7,744.50 a metric ton (1.1023 tons) in official rings up 1.3 percent from Thursday's close of $7,649 a metric ton.
However the metal, used in power and construction, has dropped by 10 percent since late April, trimming the year's gains to just 2 percent.
"There is the combination of Europe and all that entails, and concerns about the extent of the slowdown in China weighing on prices," BNP Paribas metals strategist Stephen Briggs said
"But our view is that China is going to ...
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Greek And Spanish Woes Weigh On The Euro
Greek And Spanish Woes Weigh On The Euro
The euro (EUR) plummeted against the dollar sliding to a four-month low at 1.2655 from 1.2748 as risk aversion dominates the markets. World equities tumbled as investors fear that Greece may leave the euro after the second election in the country in June. Poor economic data from the US and concerns about the growing instability among Spanish banks further weighed on the single currency. Credit rating agency Moody’s downgraded 16 Spanish banks while shares in Bankia, the state-rescued lender plunged on news that clients have withdrawn 1 billion in the past week. Fitch downgraded Greece’s rating from BI to CCC, the lowest possible grade for a country not in default, citing the heightened risk that the country may leave the eurozone.
The US dollar ( ...
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Markets Hold Ground, Awaiting Central Banks to Move
Taking a general look at markets before the end of this week, we can see that the bearishness started to lose momentum as traders are speculating now what tools Central Banks might provide to revive the slowing pace of recovery, especially the European Central Bank amid the current political instability in Greece, the confirmed recession in Spain and Italy and the deepening debt crisis.
Moreover, investors are still worried and concerned regarding the general trend in markets, where after the Federal Reserve reassured that a slowing recovery in the U.S. might trigger another round of quantitative easing, volatility dominated markets as predicting the coming moves became highly uncertain as Politicians failed to calm markets and the fueled debt crisis, leaving policymakers with a difficult ...
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Consolidation Continues Post The Spanish Bond Auction
Consolidation Continues Post The Spanish Bond Auction
The big event of the morning was the Spanish bond auction, however it failed to generate anything more than an immediate ripple in the FX market. The auction raised just below the top of its target amount of EU2.5bn, at EU 2.49bn. Although demand was strong, Madrid had to pay up to attract investors to its debt. The yield on the 2015 debt it sold jumped to 4.375% vs. 2.89% at an auction in April, the 2016 debt sold with a yield of 4.876% vs. 4.037% at an auction earlier this month.
Will Germany soften its stance?
In the aftermath, EURUSD is down about 20 pips but it remains above 1.27, while Spanish bond yields have actually fallen. The consolidation period in the market may continue as we lead up to the G8 summit in the US this ...
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Greece Fears Pressure, BoE Cuts Growth Forecast
Greece Fears Pressure, BoE Cuts Growth Forecast
The euro (EUR) recovered a little yesterday against the dollar edging higher to 1.2758 from 1.2681 as risk sentiment in the market improved slightly. Investors remain worried about Greece's ability to avoid bankruptcy and stay in the euro ahead of Greece's second election. Greece put a senior judge Panagiotis Pikramenos to be the leader of the Greek caretaker government until election on June 17. The single currency may remain under pressure on fears that a Greek exit from the euro may have a serious impact on countries such as Spain, Italy and Portugal. Some Greek banks were moved to an emergency funding assistance program due to the deteriorating quality of their capital.
The US dollar (USD) strengthened against a basket of currencies ...
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