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Cross Traded SubTitle:
Risk Aversion Continues to Weigh on Higher-Yielding Currencies
Following multiple failures by Greek politicians to form a new government, investors are now concerned about what impact a possible new election will have on Greece's status in the euro-zone. The news weighed down on riskier currencies, particularly the euro, throughout Friday's trading session. The EUR/USD dropped to a fresh 3 ˝ month low at 1.2903 before staging a slight correction to close out the week at 1.2917. Turning to this week, euro-zone news is once again forecasted to dictate the direction the market takes. Any additional negative announcements out of Greece could drive the euro even lower against its main currency rivals.
Economic News
USD - US Consumer Sentiment Gives Dollar a Boost vs. JPY
News that consumer sentiment in the US reached a more than four-year high gave the ...
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Euro near 3-1/2-month low vs dollar on Greek uncertainty
The euro slid to a 3-1/2-month low in volatile trade on Friday as political uncertainty in Greece and hefty losses disclosed by U.S. bank JPMorgan Chase spurred risk aversion.
The euro has dropped against the dollar in eight of 10 sessions for a cumulative 2.4 percent decline, hit by the turmoil in Greece. Inconclusive election results last Sunday threw the country into political disarray and raised the risk that it could exit the euro zone and the European Union.
Greek Socialist party leader Evangelos Venizelos on Friday said he was unable to form a government, sending the country hurtling toward a new vote.
"If the same thing happens in the second round and you do not get a government in Greece, we think that will weigh on the euro," said Tom Higgins, global macro strategist at ...
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All Eyes on BoE
Forex News and Events:
Bank of England stands to make a crucial decision today as turmoil hinders most of its peer Euro Zone economies. UK’s GDP contracted in the last quarter of 2011 by a revised 0.3%, and inflation remained higher than the 2% average target set by the BoE. During the last weeks, economic data in services and manufacturing were mainly affected by rising petroleum prices and austerity budget cuts biting deep into consumer / household spending. But MPC member Adam Posen, hitherto a fervent supporter of QE stated: “My own personal view is that I think the economy is stronger than what data is going to show”. The central bank last increased its asset purchase program target by 18% in February to GBP325bn as the money supply gauge M4 dipped heavily, suggesting a tightening of ...
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Dukascopy Morning Forex Overview : 07/05/2012
Fundamental Analysis
EUR
"The U.S. labor-market report will further erode investor confidence"
- Markus Allenspach, head of bond research at Julius Baer Group Ltd.
European stocks extended weekly losses, after a report showed U.S. companies added fewer jobs than expected in April. The Stoxx Europe 600 Index erased 1.76 per cent to 253.00. Germany’s DAX Index tumbled 1.99 per cent and France’s CAC 40 Index contracted 1.90 per cent. The U.K.’s FTSE 100 Index lost 1.93 per cent to 5,655.06.
USD
"We’re still very much on the recovery path, but we’ve got a huge amount of ground to make up in the labor market"
- Scott Brown, chief economist at Raymond James & Associates Inc.
The number of Americans, who have found a job in the private sector in April, tumbled to 115,000 from 154,000 the ...
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Major Currency Cross Rates Little Changed Ahead Of The Payrolls
Sunrise Market Commentary
- Fixed Income ECB can't move global bonds
- Global core bonds ended the session unchanged, as initial disappointment that the ECB wasn't more dovish dissipated fast. Today's payrolls are key and might decide whether the 6-week rally is over or has one more leg.
Currencies: Major currency cross rates little changed ahead of the payrolls
- EUR/USD gained temporarily during the ECB press conference as Draghi was less dovish than some in the market had expected. However, the move was technically insignificant as sentiment on risk remained fragile. Today, the payrolls are the key factor for (currency) trading. Investors might stay cautions on the euro to avoid this weekend's political event risk.
The Sunrise Headlines
- US Equities dropped for a ...
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Dukascopy Morning Forex Overview : 03/05/2012
Fundamental Analysis
EUR
"The grim unemployment figures for March will likely encourage talk about a long overdue ‘growth pact’ for the euro zone"
- Martin van Vliet, an economist at ING Group
Euro area unemployment rose to the highest level since 1997 in March and manufacturing contracted in April, adding to signs the economy is still far from out of the woods.
USD
"Employment growth is slowing"
- David Sloan, an economist at 4Cast Inc.
The number of Americans, who have found a job in the private sector fell to 119,000 in April from a revised 201,000 in March, the ADP Employer Services said on Wednesday.
GBP
" points to clear, decent construction expansion in April"
- Howard Archer, chief UK economist at IHS Global Insight
U.K. construction sector expanded slower in April, compared ...
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Awful EMU PMI Data Hit The Euro
Sunrise Market Commentary
- Fixed Income: German yields set record lows
- Depressing April PMI's and unemployment data in the EMU set the tone for a risk off session. Core bonds surged higher and the German Bund future reached a new record high. In the US session, US equities rebounded and triggered profit taking in US treasuries. German bonds stayed near the highs however.
- Currencies: Awful EMU PMI data hit the euro
- The focus in currency trading shifted from the US to Europe. On Tuesday, EUR/USD declined due to dollar strength in the wake of the ISM release. On Wednesday, an awful set of EMU data triggered a next selling wave. EUR/GBP continues to set new lows, too. We doubt that the Draghi press conference will be able to change the course of events
The Sunrise ...
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Market Drivers - Currencies : 03/05/2012
Today's Comment
Yesterday, the PMI data from the euro zone showed signs of weakness as practically all data surprised by showing declines. The indicators showed that unemployment in Europe has worsened relative to the preceding month. Even the otherwise strong German labour market showed signs of weakness. Overnight China added to risk aversion as PMI data (service) showed a steeper fall than feared. Given all the negative events over the past 24 hours, it is not strange that the safe havens, USD, JPY and GBP, were among the investors' favourites.
Today will see two very important economic events: the ECB has its interest-rate meeting and ISM service will be released in the US. ISM offers a status for about 88% of the US economy, and therefore a weak figure in this respect will be a hard ...
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SunBirdFX Daily Market Analysis : 05/02/2012
www.sunbirdfx.com
The US stock markets closed yesterday on the green territory as the investors were encouraged by the better-than expected ISM manufacturing data. Dow Jones crossed above the annual highs, but eventually closed under 13300 points after weak finish by NASDAQ that pulled the markets lower.
NZD/USD
The Kiwi has been moving in a triangle against the USD and its looks like it is about to chose the direction soon. Two weeks ago, the NZD broke through the upper hedge, in what looked like the final battle between the buyers and the sellers. However, it ended as a false-break and the pair resumed trading between the triangle's boundaries. However, the angle of this pattern is getting sharper, which means that the pressure of the buyers will soon meet with the pressure of the ...
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