Gbp/usd Parity On September

Talk of a Greek exit from the EMU may have gone overboard. The new Greek Prime Minister Lucas Papademos has promised to carry out all of Greece's obligations to receive European bailout funds. This may help to restore fragile investor confidence in the EUR. Economic News EUR - Greek Exit from EMU Not Likely The present coalition in Greece has confirmed its intention to implement the most recent EUR 130 Bn European bailout for the country. This will be done prior to new elections. This is the type of promise investors need to help add stability to the EUR. From all the market events that have occurred over the past week, two important developments have occurred; Greece could default on its bonds and the indebted country could theoretically leave the EMU. However, with the new ...

Morning Briefing : Commodity-linked currencies supported by improved risk appetite What's new: Forex: Commodity currencies higher, Swiss franc under pressure Global Markets: Equity markets higher on better US consumer spending data United States: FOMC minutes due at 20:00 CET United States: Consumer spending posts largest rise in 5 months Euro zone: ECB President hawkish in speech before European parliament Forex rates in Asia and Indices: EUR/USD: 1.4533 - 1.4478 USD/CHF: 0.8188 – 0.8151 GBP/USD: 1.6423 - 1.6375 USD/JPY: 76.98 – 76.66 EUR/CHF: 1.1897 – 1.1818 EUR/JPY: 111.81 – 111.04 DowJones: 11'539.25 +2.26% NASDAQ: 2'562.11 +3.32% S & P 500: 1'210.08 +2.83% Nikkei: 8’953.90 +1.16% Shanghai: 2’573.28 -0.12% Gold: $ 1'799.80 Crude Oil: $ 87.37 Comments: Commodity-linked currencies ...

A news heavy trading day saw sharp rallies in the pound while the Aussie dollar traded lower. Economic News USD - Dollar Shrugs Off Poor Retail Sales Traders overlooked disappointing January retail sales numbers as the dollar was mixed versus the major currencies. Retail sales for the previous month failed to meet economists' expectations, positing a 0.3% increase on expectations of a 0.5% jump. December's sales numbers were revised lower to 0.5% from 0.6%, underscoring the negative tone of the report. Other US economic data showed investors continued to increase their purchases of long term US securities as the TICS capital flow report released results showing 69.5B USD in purchases. Expectations were for purchases to total 91.3B. When discussing the President's Federal budget plan, ...

Crude futures hit a two-year high Thursday, reaching above $91 a barrel as several economic data releases from the U.S offered a brighter economic outlook for the world's largest oil consumer. Economic News USD - Dollar Lower in Light, Volatile Trading The U.S. dollar fell versus most of its counterparts as data released from the U.S. signaled that the American economic recovery is strengthening, raising demand for higher yielding currencies. Weekly U.S. jobless claims fell by 3,000 to 420,000 last week, a larger drop than expected. Core Durable Goods Orders rose in December while New Home sales showed some recovery in November, despite coming out lower than expected. The greenback weakened 1% against the New Zealand dollar to 74.72 U.S. cents from 74.02 cents yesterday. The U.S. ...

Yesterday’s weaker than expected US CPI has once again injected a shot of US-bearishness into the FX markets, allowing EURUSD to recover back above 1.3600 and USDJPY to retreat towards the lower 83-levels. Headline CPI in October disappointed at 0.2% MoM, 1.2% YoY (vs. 0.3% MoM, 1.3% YoY expected), but more disturbingly, core CPI was flat MoM for the third consecutive month (exp: 0.1%), dragging the annualized figure down to 0.6% YoY. Notably, this is the slowest pace of growth in the history of the survey (since its inception in 1957), and will almost certainly add credence to the idea that the Fed will need to use their full allocation of $600bn QE. Across the pond, a delegation of EU, ECB and IMF officials are due to arrive in Dublin today, a prospect that is sure to keep ...

The main economic release of the day was the BoE Minutes which were broadly in line with expectations, if a little more hawkish on inflation expectations. Seven members of the nine-strong committee were happy to keep both rates and the asset purchase target unchanged (at 0.50% and GBP200bn respectively), but once again there was dissent from member Sentence who voted for a hike of 25bps and Posen who pushed for the asset purchase target to be increased to 250bn. Whilst the two dissenters clearly have opposing views on the economy, the minutes suggest that for some of the remaining members, the upside risks to CPI had increased – especially with regards to inflation expectations in the face of above target CPI. Nevertheless, the majority believed that it was premature to be tightening ...

FX Strategy Weekly Market Outlook => Pro-risk currencies unfazed by EU periphery troubles; focus on G20 => BoE QIR to test sterling resilience A quiet data and event calendar means the dust should settle somewhat over global asset markets over the coming week, allowing investors to catch their breath and consider what will influence financial markets over the closing weeks of 2010. Risk appetite received a shot in the arm from the $600bln Fed Treasury purchase programme and this largely managed to neutralise escalating fears over the euro zone periphery where bond and CDS spreads hit new record highs. Though long high yield and commodity currency positions already look stretched technically, attractive yield differentials and QE flows from US into non-US assets are likely to spur ...

It’s been a relatively quiet morning through Asia & into European session. Asia regional indexes were broadly lower and European is having a hard time staying green – the market definitely has a negative bias heading into the US session. There is a slew of US data coming out this afternoon. After the last of the US data comes out today, the Forex market should find itself range bound going into the weekend. A UK Telegraph article cited that traders will risk significant losses on EU debt under a German proposal which is believed to win support from the EU. The program, if passed, could push investors away from the troubled peripheral bonds which trigger today EUR selloff. Yesterday’s news cycle was once again all about speculation surrounding the absolute size & strategy of the Fed’s ...

During this morning’s Asian session, the RBNZ held rates at 3.00% as was generally expected. The accompanying statement was slightly dovish but not enough to really move NZD. The Central Bank seems to feel comfortable with the current level stating "while it is appropriate to keep the OCR on hold today, it remains likely that further removal of monetary policy support will be required at some stage." The AUDNZD’s recent pullback looks to have run into a horizontal support and without a surprise interest rate story, watch for a bounce off the 1.3000 level. In Japan, the BoJ outlined further easing measures stating it would purchase lower-rated corporate bonds than it announced in the compensative package release in September. Regarding FX intervention, the BoJ sounded unhurried to move ...