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European Situation Is The PossibilityTitle:
Greek Debt Crisis: Answers to Frequently Asked Questions
Highlights
- An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone.
- Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated.
- However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment.
- If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...
Title:
Investors driven by rumors as they wait for concrete solutions
MORNING BRIEFING: Investors driven by rumors as they wait for concrete solutions
What’s new:
Equity: Asian and US equities down on fears of a Greek euro exit
JPY: Fitch downgrade Japan’s long term rating to “A+” with a negative outlook
Forex: USD/JPY lower after BoJ stated it would keep its interest rate unchanged and made no changes to its QE.
Forex: EUR/USD was sold-off in the US session after some rumors of a Greece’s contingency plan
Rates in Asia and Indices:
EUR/USD 1.2645 1.2689 -0.03 %
USD/CHF 0.9466 0.9498 -0.02 %
GBP/USD 1.5743 1.5772 -0.01 %
USD/JPY 79.45 80.08 0.50 %
EUR/CHF 1.2009 1.20135 0.02 %
EUR/JPY 100.61 101.48 0.54 %
Dow Jones 12447.33 12575.96 -0.01 %
Nasdaq 2524.11 ...
Title:
Chile’s Central Bank Holds Main Interest Rate, Peso Advances
The Chilean peso rose even after Chile’s central bank refrained from increasing interest rates. Good prospects for the nation’s economy and possibility of an interest rate hike in the future may be responsible for the currency’s gains.
The Central Bank of Chile decided to maintain its main interest rate at 5 percent. Analysts had different view on future monetary policy of the central bank. Some said that the bank would boost the rate in the second half of this year. Such outlook is justified by positive fundamentals in Chile. Chile’s central bank said in its statement that “domestically, economic activity grew faster in the first quarter than had been projected in the last Monetary Policy Report”.
Others, though, insist that the bank would not raise borrowing costs in the foreseeable ...
Title:
Copper steadies; Spain threatened by Greece's troubles
Copper prices steadied on Thursday after sliding for four straight days and touching four-month lows, but traders remained wary about the metal's prospects amid fears of more fallout from Europe should Greece exit the euro.
For the first time since Friday, copper futures in London and New York inched toward positive territory as support returned to commodities deemed oversold in the risk flight of the past week.
Still, worries about how Europe -- particularly Spain -- would manage Greece's exit from the euro hung heavily on markets, including copper.
A bond sale by Spain came at a markedly higher cost for the government than before, signaling investors' growing concern about the possibility of a contagion impact should Athens default on its own sovereign debt.
"Copper's still seeing ...
Title:
Gold jumps 2.6 percent after slump; dead-cat bounce?
Gold rallied more than 2.6 percent on Thursday, its largest one-day gain since late January, as technical buy signals and new signs of a sluggish U.S. economy more than offset deepening despair over the euro zone.
After flirting with a bear market on Wednesday, down more than 20 percent from its September record, bullion rallied early after Philadelphia Federal Reserve data showed a contraction in factory activity in the U.S. mid-Atlantic region that rekindled some hope the Fed would plough more money into the system to stimulate the economy, traders said.
Technical buying also fueled gains after gold had nearly hit a key December low, trading just shy of key technical long-term support at the 100-week moving average of $1,515 per oz.
But with the euro and U.S. stocks in decline and ...
Title:
Gold off 4-1/2 month low on increased physical buying
Gold rose more than 1 percent on Thursday, bouncing off a 4-1/2 month low, as weaker prices attracted new physical buyers, but gains were likely to be limited as the euro was undermined by fears of a deepening debt crisis in Greece.
Spot gold rose 1 percent to $1,553.80 an ounce by 09.07 a.m. EDT, from $1,538.30 late in New York on Wednesday, when it plunged to $1,527 - its weakest since December 29.
The precious metal rose to a high of $1,557.56 earlier, helped by the approaching expiry of gold options in the COMEX futures market.
U.S. gold futures hit a high of $1,557.90 an ounce and were at $1,554.30, up 1.1 percent. The contract had plunged to a multi-month low of $1,526.70 on Wednesday.
Gold, traditionally a safe-haven asset, has been moving in tandem with riskier assets such as ...
Title:
US Data Set to Impact Markets Today
The euro spent most of the day slightly above recent three-month lows hit against the US dollar and Japanese yen. Greece's inability to form a new government has raised the prospects that a new election will be held in the coming weeks, which has resulted in additional risk aversion in the marketplace. Turning to today, traders will want to pay attention to a batch of US data, including the PPI figure and the Prelim UoM Consumer Sentiment. Both indicators are considered valid indicators of overall economic health and have the potential to create market volatility before markets close for the week. Should any of the data come in above expectations, the USD may be able to see some upward movement against the yen today.
Economic News
USD - Dollar Turns Bearish vs. GBP
The dollar turned ...
Title:
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 ...
Title:
Slow News Day May Lead to Further Euro Losses
The euro remained relatively unchanged vs. its main rivals throughout the European session yesterday, as political uncertainty in the euro-zone kept the currency near its recent lows. After dropping as low as 1.3000 during early morning trading, the EUR/USD spent most of the day trading around 1.3010. Turning to today, a slow news day may lead to low liquidity in the marketplace. Traders will want to note that a low liquidity environment can often lead to unexpected price shifts for seemingly no reason. Given the euro's recent bearish trend, the possibility for further downward movement for the common currency exists.
Economic News
USD - Dollar Remains Bearish vs. JPY
The US dollar remained below the psychologically significant 80.00 level vs. the Japanese yen throughout yesterday's ...
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