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European Economies Are On CourseTitle:
USD Moves Up vs. JPY Following Japanese Credit Downgrade
The JPY took losses against the US dollar during European trading yesterday, following a downgrade of Japan's credit rating. The USD/JPY advanced close to 60 pips over the course of the day, eventually peaking at 79.93. Today, dollar traders will want to pay attention to US New Home Sales figure, set to be released at 14:00 GMT. Analysts are forecasting the figure to show improvements in the US real estate sector, which if true, could help the greenback extend yesterday's gains. In addition to the news out of the US, traders will want to pay attention to any announcements out of the euro-zone. An informal meeting of euro-zone leaders is set to conclude today. Any signs of a new strategy to combat the region's debt crisis could lead to market volatility.
Economic News
USD - Dollar Sees ...
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OECD fears euro woe to snap brittle world recovery
(Reuters) - The United States and Japan are leading a fragile developed world recovery that could be blown off course if Europe fails to contain the damage from its problem debtor states, the OECD said on Tuesday.
It urged euro zone leaders to embrace all options for tackling the crisis, potentially including common bonds to go with the common currency.
In its twice-yearly economic outlook, the Paris-based Organisation for Economic Co-operation and Development forecast that global growth would ease to 3.4 percent this year from 3.6 percent in 2011, before accelerating to 4.2 percent in 2013, in line with its last estimates from late November.
"The global economic outlook is still cloudy," OECD Secretary General Angel Gurria told reporters.
"At first sight the prospects for the global ...
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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 ...
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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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Euro slides to 4-month low as Greek woes weigh
The euro dropped to a four-month low against the U.S. dollar on Wednesday, sliding for a fourth consecutive session and likely to face more losses on fears about a Greek exit from the euro zone.
The European Central Bank stopped providing liquidity to some Greek banks as they are severely undercapitalized, further weighing on the euro. These banks have now been moved to the ECB's emergency liquidity assistance program.
The development briefly sent the euro below $1.27. It was on track to test the January trough of $1.2623, below which would mark the euro's lowest mark since August 2010.
"I think the ECB is playing hardball," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "I doubt they want to get too involved in EU politics, but I think they're trying ...
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Euro hovers near 4-month low on Greece fears
The euro hovered near a fourth-month low against the U.S. dollar on Wednesday and more losses could be in store as investors feared a Greek exit from the euro zone that could result in other peripheral countries following suit.
Adding to the bearish sentiment, euro zone central bank sources said the European Central Bank has stopped monetary policy operations with some Greek banks as they have not been successfully recapitalized.
The news briefly sent the euro below $1.27, approaching its session low of $1.2679, according to Reuters data. It was on track to test the January low of $1.2623, below which would mark the euro's lowest level since August 2010.
"The move was short-lived but it highlights the general distrust out there right now. For most people, there's no good reason to buy ...
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Euro higher, investors debate outlook for Greece
The euro recovered from a four-month low against the dollar on Wednesday on expectations that Germany and France will act together to keep Greece in the euro zone, though the single currency remained pressured with investors not convinced Greece won't chart its own course.
Germany's Chancellor Angela Merkel and the new French President Francois Hollande had their first official meeting on Tuesday and stressed that they both wanted Greece to remain in the euro zone.
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Greece worries send euro to 4-month low vs. dollar
The euro fell to a four-month low against the dollar on Wednesday and was poised for more losses after Greece announced it would hold new elections, boosting the risk the country could exit the euro.
The prospect of prolonged political instability and worries about the knock-on effects of a Greek euro exit for struggling economies like Spain and Italy caused investors to flee the euro and seek the safety of the dollar and the yen.
The euro also hit a three-month low against the yen, while the dollar rose to its highest in four months against a basket of currencies.
"The uncertainty around the political situation in Greece continues to undermine risk appetite, which is affecting a range of currencies," said Paul Robson, currency strategist at RBS.
"There is uncertainty around the ...
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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 ½ 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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