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Concern For The Global RecoveryTitle:
Dukascopy Afternoon Forex Overview : 01/05/2012
Fundamental Analysis
EUR
Anti-austerity protestors are likely to hold massive demonstrations in May Day. Demonstrations in Athens that involve private and public sector strikes have already disrupted the public transport. However, the traditional violence is not expected as Greeks are likely to show their protest against austerity measures on Sunday when the general elections are due.
USD
Crude and Brent oil dropped as lifted US energy inventories outweighed supply concerns caused by export disruptions in Yemen, Sudan and North Sea.
GBP
Manufacturing sector in the UK performed worse than initially expected in April, reported research group Markit. UK's manufacturing PMI declined to 50.5 last month on a seasonally adjusted basis as compared to a March reading of 52.1. Experts ...
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US Dollar Turns Higher
US dollar is moving higher today, gaining now, even as it lost some ground earlier. It’s true that US dollar has been somewhat flat today against other majors, but it was falling against the euro at one point. Now, though, the greenback has the upper hand again as uncertainty takes center stage and Forex traders begin looking for a little safety.
US dollar index is higher right now, off the day’s low at 78.603. The dollar index is gaining as the US dollar heads higher against the euro and pound, as well as the yen. Greenback has slipped somewhat against the loonie, but the US dollar is holding its ground against the Aussie — thanks to an unexpectedly deep rate cut from the RBA.
Helping the greenback find stability is the fact that the latest ISM data shows that manufacturing is expanding. ...
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US: Super Strong ISM
US: Super Strong ISM
- The US ISM index surprised on the upside rising to 54.8 in April from 53.4 and the details were strong. This comes despite negative seasonal distortions.
- Both the new orders and employment indexes rose while inventories declined. New orders are now at their highest level since April 2011. Furthermore, fundamentals are supportive for additional improvement in the ISM index in the coming months.
- Today's release combined with yesterday's positive Senior Loan Officer survey leaves us confident that the weakness in Q1's business investment was a one-off.
Details
The ISM increased to 54.8 from 53.4 suggesting manufacturing production growth staying around the hefty 7% AR seen over the past three months. We had expected a decline in the index given ...
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Growth worries mount, sending the dollar lower
(Reuters) - World shares eased and the dollar hit a two-month low against the Japanese yen on Tuesday, after signs of recovery in China's vast factory sector failed to offset worries over the health of the global economy and the euro zone crisis.
But activity was limited with many markets in Asia and Europe closed for the May Day holiday.
The MSCI's world equity index .MIWD00000PUS was down just 0.1 percent to 328.40, as it added to losses of about 1.5 percent in April. The stronger yen hit Japan's export-related equities, sending the Nikkei index .N225 to a 2-1/2 month closing low.
"In general, stock markets and risk assets seem to be extremely resilient in the face of the news flow which has undoubtedly been in the more negative nature," James Ferguson, strategist at Westhouse ...
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Dukascopy Morning Forex Overview : 01/05/2012
Fundamental Analysis
EUR
"We fear things are likely to get worse before they get better"
- Martin van Vliet, a senior euro-region economist at ING Bank
Spain sank into recession in the first quarter of 2012. The economy contracted 0.3 per cent, after shrinking by the same amount in the previous quarter, Madrid-based National Statistics Institute data showed on Monday.
USD
"What was encouraging was that the income numbers improved. Our expectation is that job growth does increase gradually"
- Peter Newland, an economist at Barclays Capital Inc.
U.S. consumer spending was boosted by higher than expected incomes, said the Bureau of Economic Analysis on Monday. Household purchases increased 0.3 per cent. Incomes gained 0.4 per cent, the most in three months.
GBP
"This is year three of a ...
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Euro posts worst month vs dollar since December
(Reuters) - The euro dropped against the dollar on Monday and notched its worst monthly performance since December, weighed down by news of Spain slipping back into recession and signs of weaker economic momentum in the United States.
Investors were also wary of buying euros before weekend elections in France and Greece and a European Central Bank meeting this week that could further knock down sentiment.
"Risk aversion was today's theme, with the economic outlook for the euro zone looking bleak," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
"In the U.S., overall deterioration in economic data has left the door squarely open for the Fed to add more stimulus."
Data on U.S. spending and business activity in the Midwest reinforced that view that the U.S. ...
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Euro on track for worst month vs dollar since December
(Reuters) - The euro dropped against the dollar on Monday and was on track for its worst month since December, weighed down by news of Spain slipping back into recession and signs of weaker economic momentum in the United States.
Investors were also wary of buying euros before weekend elections in France and Greece and a European Central Bank meeting this week that could further knock sentiment on the euro zone currency.
"All the news out of Europe is getting worse, although we're still in a range," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York. "I think the European news and the generally weak U.S. data are sort of feeding into this risk-aversion mode."
The euro failed to gain traction despite signs the U.S. economic recovery was losing momentum, ...
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Dukascopy Morning Forex Overview : 30/04/2012
Fundamental Analysis
EUR
"Once we hit the 6.5 per cent mark , the alarm bells will go off loudly in Brussels and more rhetoric will be coming from the European Central Bank"
- Adrian Miller, a global markets strategist at GMP
The rating agency Standard & Poor’s has downgraded Spain’s credit rating by two notches to BBB-plus with a negative outlook from A, citing expectations the government finances will deteriorate.
USD
"While the economy continued to grow in the first quarter, the expansion remains modest in pace and subpar from a historical perspective"
- Jim Baird, chief investment strategist at Plante Moran Financial Advisors
The U.S. economy grew at a slower pace than forecast in the first quarter as businesses cut on investment. Gross domestic product increased at a 2.2 per cent ...
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Worries to remain predominate in European markets, eyes on ECB rate decision
Another week is starting with mounting tensions in markets ahead as uncertainty prevails amid recession concerns, financial woes and political conflict in the euro area.
This week, investors will continue to focus on the latest developments in the European debt crisis on hopes to find any signs of recovery.
Regarding fundamentals, the spotlight will be on the euro area's main sectors, manufacturing and services, to track their development with the beginning of the second quarter.
The final readings of PMI manufacturing and services are expected to remain unrevised, where last week the manufacturing sector showed a widening contraction to 46.0 in April from 47.7 and services also showed a contraction of 47.9 from 49.2 in March. Accordingly, PMI composite slipped to 47.4 from a prior of ...
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