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Buying The Japanese YenTitle:
USD recovers lost ground
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
WORLD
The dollar had a surprise recovery overnight, and quickly reclaimed all ground lost to the euro after Friday’s weak US payrolls. However, flows were light as New Zealand, Australia, and Hong Kong remained closed. A stronger-than-expected China CPI failed to generate much interest, and allowed AUDUSD to take the news largely in its stride. Our core bullish dollar view is unchanged; we still expect the Fed to gradually back away from QE3 as other major central banks maintain an easier bias, likely ensuring outperformance of the US dollar over other majors this year.
Our analysts stress that the soft 120k US nonfarm payrolls print for March reflected ‘payback’ due to weather effects rather than fundamental weakening, with the earlier weather- ...
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Dukascopy Morning Forex Overview : 04/04/2012
Fundamental Analysis
EUR
"It is very hard to see how Spain can have a sustainable recovery"
- Frances Hudson, global strategist at Standard Life Investments
European stocks closed lower on Tuesday hit by concerns over Spain’s ability to tackle its deficit.
USD
"As the economy continues to strengthen, more of the pent-up demand will be released"
- Don Johnson, U.S. sales chief for General Motors Co.
U.S. factory orders rose for the third month in February, boosted by desire for business equipment. Bookings increased 1.3 per cent, Commerce department data showed on Tuesday.
GBP
"The UK economy is still facing huge challenges"
- John Longworth, director general at the British Chambers of Commerce
U.K. construction activity jumped to a 21-month high in March, reinforcing hopes that the ...
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Dollar rises as Aussie falls on weak trade data
(Reuters) - The dollar hit a one-week high against a basket of currencies on Wednesday, getting a boost as the Australian dollar dropped to an 11-week low after Australia posted a surprise trade deficit.
Latest data showed Australia posted a trade deficit of A$480 million in February compared to market expectations for a surplus of A$1.0 billion, adding fuel to expectations for Australia's central bank to cut interest rates in May.
The Australian dollar, which had been under pressure after the Reserve Bank of Australia on Tuesday opened the door for a rate cut next month, fell to as low as $1.0263, its lowest level since mid-January.
The disappointing Australian trade data spurred broad selling of currencies that belong to the Asia-Pacific region, said Satoshi Okagawa, senior global ...
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Dollar jumps versus euro, yen as Fed softens stimulus talk
(Reuters) - The dollar rose 1 percent against the yen on Tuesday as minutes from the U.S. Federal Reserve's March meeting weakened expectations of more stimulus measures.
Fed policymakers appeared less keen to launch a new round of monetary stimulus through a third round of bond buying, or quantitative easing. QE is tantamount to printing money, and while diminished expectations of QE3 buoyed the dollar against the yen, the greenback remained in its weeks-long trading range against the euro.
"What the minutes have done was essentially take the market off guard because the members have indicated that there is no need for additional stimulus, unless the economy lost momentum or inflation was slower to pick up," said Alexander Chepurko, foreign exchange analyst at Forex Club in New York.
" ...
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Dollar dips versus euro ahead of Fed minutes, ECB
(Reuters) - The dollar slipped against the euro ahead of the release of U.S. Federal Reserve meeting minutes on Tuesday, though investors were reluctant to make big bets a day ahead of the European Central Bank meeting.
At least for the next few hours, the market focus in pre-Easter trade remains the Fed's meeting minutes from March which may provide clues on U.S. policymakers' inclination to take further steps to ease policy, which would weigh on the dollar.
For now, the minutes are expected to suggest a standby approach, with the Fed likely to warn that premature tightening would be risky, while keeping an open-minded, but uncommitted view on further easing.
Fed officials on Monday signaled little appetite for further monetary steps to stimulate U.S. growth in an economy that is ...
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Euro little changed versus dollar ahead of Fed minutes, ECB
(Reuters) - The dollar was little changed against the euro ahead of the release of central bank meeting minutes later on Tuesday, with investors reluctant to make big bets ahead of the European Central Bank meeting later in the week.
Trading was described as quiet in pre-Easter trade, with the market focus on the Federal Reserve minutes from March that could provide clues on policymakers' inclination to take further steps to ease policy, which would weigh on the dollar.
The ECB policy meeting is on Wednesday with analysts saying a hawkish message from the bank on the need to get back to concentrating on quelling inflation instead of helping Europe's economy and financial system out of crisis may give the euro a brief boost.
But many investors were still looking to sell the euro as ...
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Dollar index dips to 1-month low as euro, yen firm
(Reuters) - The dollar fell to a one-month low against a basket of currencies on Tuesday, hit by a recovery for the euro and investors backing off recent bets on a weaker yen.
In quiet pre-Easter trade, market focus centered on the release of the Federal Reserve minutes to its March meeting later on Tuesday. That could give clues on policymakers' inclination to take further steps to ease policy and may weigh on the dollar.
Investors were also looking ahead to a European Central Bank policy meeting on Wednesday. Analysts said a hawkish message from the bank on the need to get back to concentrating on quelling inflation instead of helping Europe's economy and financial system out of crisis may give the euro a brief boost.
However, many investors were still looking to sell the euro as ...
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Dollar index hits 1-month low as euro, yen gain
(Reuters) - The dollar fell to a one-month low against a basket of currencies on Tuesday, pressured by its fall to a three-week low versus the yen as investors reduced recent hefty short positions in the Japanese currency, and a recovery in the euro.
In quiet pre-Easter trade, market focus centered on the release of the U.S. Federal Reserve minutes to the March meeting later, which will give clues on how inclined policymakers are to take additional easing steps and could weigh on the dollar.
Investors were also looking ahead to a European Central Bank policy meeting on Wednesday. Analysts said this could give the euro a brief boost as inflation concerns prevent policymakers from announcing new steps to prop up the euro zone economy.
However, many investors were still looking to sell the ...
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Yen hits 3-week high vs dollar, euro edges up
(Reuters) - The yen hit a three-week high against the dollar on Tuesday, gaining as investors reduced large short positions built in recent weeks, although the trend for a weakening Japanese currency remained intact.
The euro edged higher, hovering near a one-month high versus the dollar but staying within its recent trading range, with investors still inclined to sell the currency as data showed euro zone economic weakness contrasting with improvement in the United States.
The market awaited direction from U.S. Federal Reserve minutes later in the day and from Wednesday's European Central Bank policy meeting, although traders and analysts said thin volumes before the Easter holiday may keep currencies within relatively tight ranges.
The dollar tumbled against the yen to a low of 81.55 ...
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