Quantities Of Foreign Currency

The Swiss franc rose today against the US dollar, following gains of the euro. The currency fluctuated against the euro, staying near the cap, but not breaking it. The Swiss National Bank capped the franc at 1.20 per euro last year and the currency has breached the ceiling only once on April 5. Central bank’s interim chief Thomas Jordan assured that the SNB is ready to buy foreign currency in unlimited quantities to maintain the ceiling. Analysts say that the bank won’t pursue aggressive weakening of the currency, but will rather keep the franc near the cap without breaching it. So far, the SNB was successful with this policy. USD/CHF was down from 0.9172 to 0.9124 as of 14:22 GMT today. EUR/CHF traded at 1.2019, following the rise from 1.2024 to 1.2034.

Forex News and Events: There is plenty of speculation about the EURCHF spike around 20.00est yesterday. The sudden move to 1.2035 from 1.2015 has fueled speculation that the SNB was active once again in the FX markets. At this point there is little supporting evidence that what we saw was an official intervention rather than panicky traders hearing footsteps. The SNB, so far, has been very transparent regarding their FX policy. Last Thursday’s trading action had the SNB wholly entering the market on EBS in their own name. In addition, SNBs Jordon quickly issued a discussion memo (see below) outlining in very lucid details the events of the day. The SNB saw no advantage of hiding being classics convoluted Central bank language. There are some significant credibility issues and policy ...

Forex News and Events: In the UK, Fitch revised the UK's ratings outlook to negative, putting them in line with Moody’s. The ratings agency reaffirmed that the government’s fiscal plan was creditable, but stated “The revision of the rating outlook to negative from stable reflects the very limited fiscal space to absorb further adverse economic shocks in light of such elevated debt levels and a potentially weaker than currently forecast economic recovery.” In the US, the domestic data continued to show signs of improvement. Empire State manufacturing index rose to a 21-month high of 20.2 in March (other components were slightly less optimistic) while initial jobless claims dropped back to 355k. Given the recent price action the FX markets are not focused on the US economic data as a ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Currency markets were mostly indecisive during the Asia session despite the brief episode of dollar buying when Richmond Fed President Lacker explained why he dissented again at Tuesday’s FOMC. Even before this, Lacker had revealed his preference for a rate hike in 2013, but this time the FX reaction was more apparent. We see this as a sign that Fed policymaking has overtaken Greece-related issues, and now occupies centre stage in the minds of investors. As a result, the behaviour of US yields seems likely to become an increasingly important driver of FX markets. Oil continues to exert a secondary influence. Newswires reported that discussions are underway to release crude from the strategic oil reserves of developed economies, but that ...

Forex News and Events: There weren't any real developments which supported risk accumulation however, markets were well bid all day. Global stock markets had rose particularly on the back of the US bank stress test which gave the US banking sector a boost, but the optimism spilt over other sectors rather than across the ocean. US treasuries continued their upward trajectory giving broad support to the USD. But the big story in FX remains the JPY. USDJPY climbed to 83.32 from 82.87 post meeting. The JPY was not helped by comments from Yasushi Kinoshita that ‘Japans fiscal situation is worse than Greece" which still linger in our minds. With both the BoJ and Fed delivering their expectations for policy path, it seems that interest rate divergence will support USD. The accompanying ...

Forex News and Events: The global risky rally sustained its earlier gains in Asian session and continued to push higher. Rejuvenated confidence on a the ability of Greece to secure the Troika second bailout package buoyed risk sentiment yesterday, pushing equities higher and pushed Treasury prices and USD lower. EURUSD climbed to 1.3287 from 1.3100 yesterday while AUDUSD jumped to 1.0844. Asian equities kept the optimism going led by a rally in Shanghai up 2.43% and Hang Seng up 1.47%. Weak Japanese trade numbers keep JPY under selling pressure as USDJPY rose to 77.16. In late NY session risk got a big boost from the headlines that the ECB was willing to make a concession and contribute to Greece debt reduction by exchanging Greek bonds with EFSF. And once again Greek government ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The euro is trading on a firm note as markets are somewhat more optimistic that several outstanding issues on Greece are close to resolution. Firstly, late into the session on Tuesday a Greek government spokesperson finally announced that political leaders would meet on Wednesday to respond to the bailout proposals by noon. It appears that a tentative deal has been secured with the troika, though some individual points on how the cuts are going to be achieved remain outstanding. More importantly, press reports suggest that the ECB is close to agreeing terms on participating in the Greek debt swap. The Wall Street Journal reported that the central bank will swap its holdings at purchase cost with the EFSF, so it won’t take a loose. Crucially, ...

(Reuters) - The euro rallied across the board on Tuesday, hitting an eight-week high against the dollar on optimism that Greece is about to agree on a bailout deal that will enable it to avoid a messy default. A Greek official's statement suggested that the Greek government has completed negotiations with lenders on its 130 billion-euro rescue package, although agreeing to the painful austerity measures that come with the bailout could be a challenge. Greek political leaders had balked at the austerity plan required to receive the rescue funds. But a firm deal appears to be in the works even though Greek political leaders postponed a meeting on a bailout package until Wednesday. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt ...

(Reuters) - The euro gained across the board, hitting eight-week highs against the dollar on Tuesday, after a Greek official said the government is drafting an agreement on a bailout deal that will be put before political leaders for approval later in the day. The official's statement suggested that the Greek government has completed negotiations with lenders on its 130 billion-euro rescue package, although agreeing to the painful austerity measures that come with the bailout could be a challenge. Greek political leaders had balked at the austerity plan required to receive the rescue funds. "The market is expecting a Greek deal, so there's greater optimism overall. That drove the euro to several key technical levels," said Greg Moore, currency strategist, at TD Securities in Toronto. " ...