Dollar
So far throughout the US session and close to the closure of the U.S local stock market we watch the dollar remaining faintly strong and still rising against most major peers as Federal Reserve Chairman Ben S. Bernanke said that the central bank may taper monthly bond purchases at its next few meetings if it’s confident of sustained gains in the economy.
As a result the euro fell against the dollar and remains on plunging slightly to the downside on the four and one-hour charts as a result of the current technical movements and strengthened dollar sending in fact the EUR/USD pair to trade around $1.2856 while recording the highest level of $1.2996 and lowest level of $1.2832, knowing that the pair may start to rise as shown on the four-hour momentum indicators.
As for the British Pound, ...
The U.S. Federal Reserve published the minutes from its latest policy meeting at April 30 – May 1, which showed unanimity on the need to maintain the current pace of purchases until more economic progress in shown, however a “number” of members called for an exit as early as June.
Many of the members favored beginning a tapering of QE as early as June, but the committee as a whole decided more progress on the economy is needed first. A few participants expressed concern inflation is under target and say future price developments must be carefully watched. One member wanted to boost asset purchases, while one wanted tapering to begin immediately.
Members generally agreed on need for FOMC to communicate clearly that pace/size of purchases would depend on outlook for labor market and jobs, ...
Crude-oil futures slipped Wednesday after government data showed rising gasoline stockpiles and a smaller-than-anticipated decline in oil stocks.
Light sweet crude oil future for July delivery dropped to $94.66 per barrel, from an opening of $95.93, having earlier hit a high of $96.17 and a low of $94.36 per barrel. As of 12:52 New York Time
U.S. gasoline stockpiles rose by 3 million barrels last week, surprising analysts who had forecast a 100,000-barrel decline, as fuel imports surged ahead of the Memorial Day weekend. In addition, oil stockpiles fell 300,000 barrels. Analysts had called for a 600,000-barrel drop.
Oil futures dropped on the report, reversing direction after testimony from Federal Reserve Chairman Ben Bernanke nearly pushed prices into positive territory earlier in ...
Federal Reserve Chairman Ben S. Bernanke said that a premature exit for the Fed’s stimulus risks endangering or slowing down recovery, as the current monetary stance is providing significant benefits to the economy, with the job market yet to fully recover.
Bernanke speaks before the Joint Economic Committee of the Congress in Washington today in a prepared testimony.
“A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.” He said.
The Chairman added that the monetary policy is providing “significant benefits.”
Bernanke said the U.S. economy is still greatly affected by government spending cuts and high unemployment rates, which has ...
St Louis Fed President, James Bullard, a supposed hawk, has been bullying the 'single' currency bears into temporary submission ahead of today's FOMC meeting minutes or at least he should be held responsible for getting the ball rolling. Yesterday, he suggested that the most appropriate policy for the Fed is to continue the current QE3 policy. Dovish comments from the voting hawk has put the 'mighty' dollar under pressure when the market least expected it when he mentioned adjusting the pace of purchases in view of incoming data on economic performance, employment and inflation.
The only thing that Mr. Bullard purposely refused to acknowledge yesterday was when the Fed might be tapering off its purchases. Bullard went on to say that like Japan, Europe risks an "extended period of low ...
The Japanese yen dropped to a three-year low against the euro after Bank of Japan (BOJ) policy makers affirmed a plan to double the monetary base over two years and their statement made no reference to rising bond yields.
Board members of the BOJ decided during keep the nation’s interest rate unchanged for another round between zero and 0.10% to spur the world’s third largest economic growth, to ultimately meet the long-sought 2% inflation.
Japan`s Prime Minister Shinzo Abe pledged to reach the nation’s 2% inflation target within two years as he called for unlimited easing plans, which boosted Japanese economy during the previous period.
Japan’s currency declined after report showed the trade deficit swelled more in April than economists forecast and exports were lower than estimated. ...
Sunrise Market Commentary
- Rates: Core bonds rebound on technical levels and dovish Fed Bullard
- In a session devoid of key eco releases, core bonds initially continued to move South, approaching key support levels in the US session. Afterwards, dovish comments of Fed Bullard triggered short covering as investors also eyed today's testimony of Bernanke.
- Currencies: Soft Fed speak triggers USD profit taking
- EUR/USD initially drifted south in technical trading yesterday. At the end of the day, soft comments from Fed Bullard pushed EUR/USD north of the 1.29 mark. Sterling was hit as a sharper than expected decline in inflation made markets think that there is still room of maneuver for the incoming BoE governor. EUR/GBP is trading north of 0.8500.
The Sunrise Headlines
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Fundamental Analysis
EUR
"The financial markets appear to have survived the government debt crisis, but the leading economic indicators have recently declined."
- Joerg Kraemer, Chief Economist at Commerzbank AG
Producer prices in Europe’s largest economy slowed for the third consecutive month in April, suggesting weak domestic demand and raising concerns that the economy is far away from the recovery. The measure of producer prices for industrial products inched up only 0.1% from the corresponding month of the prior year.
Read more: FULL REPORT - Fundamental Analysis
Technical Analysis
EUR/USD
"Bernanke isn’t hawkish, so I think he’s more likely to continue monetary easing. The market will probably respond with dollar-selling to Bernanke’s remarks."
- Gaitame.com Research Institute ...
Crude oil may extend its losses on Wednesday ahead of Bernanke`s testimony later in the day, as concerns over demand from the world`s top oil consumer were triggered following the unexpected rise in crude stockpiles last week.
Besides the housing and retail sales data set for later in the day from the U.S. and UK, investors are awaiting the U.S. Federal Reserve chief Ben Bernanke`s testimony amid believes the bond-buying stimulus has further to run.
Adding to the downside pressures on oil was the report by the American Petroleum Institute released Tuesday and which showed that U.S. crude oil stockpiles rose by 532,000 barrels last week although inventories were expected to drop.
The U.S. Energy Information Agency (EIA) will release its data on inventories later on Wednesday. The report ...