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Respond To The Euro ZoneTitle:
Dukascopy Morning Forex Overview : 19/10/2011
Fundamental market overview
EUR
"The French government now has less room for maneuver in terms of stretching its balance sheet than it had in 2008"
- Moody's Investors Service
USD
" confidence remains quite low"
- Bob Nielsen, NAHB Chairman
GBP
"The September figure should represent a peak in the rate of inflation"
- Chris Williamson, chief economist at Markit
CHF
"The market is still responding to what the Germans said yesterday"
- Michael Jorgensen, chief equity strategist at Nykredit Markets
JPY
"Right now, whatever happens in Europe determines what happens in the market"
- Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co.
Read more: FULL REPORT - Market expectations
Market expectations
EUR/USD
The bullish momentum of the currency pair has been exhausted and it ...
Title:
Retail sales rise as consumer sentiment slips
(Reuters) - Retail sales grew at the fastest pace in seven months in September as consumers shook off concerns about a weak stock market and political gridlock, giving a bit more momentum to the economic recovery.
Consumer sentiment, however, unexpectedly slipped in early October as worries about declining incomes drove a measure of expectations to the lowest level in more than 30 years.
Retail sales rose 1.1 percent in September, boosted by strong auto purchases, the Commerce Department said on Friday. The gain was stronger than economists had expected and sales for August and July were revised higher as well.
Consumer spending accounts for about two thirds of U.S. economic activity, and the report suggested the economy had more vigor over the past three months than previously believed, ...
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S&P downgraded Spain to AA- from AA and kept a negative outlook
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
Risk sentiment was mixed in Asia after Standard & Poor’s downgraded Spain and US stock markets closed lower. S&P downgraded Spain to AA- from AA and kept a negative outlook, citing high unemployment, tightening credit and high private-sector debt as the main reasons. As S&P’s decision only matched Fitch’s move to downgrade Spain and as there is no indication of a similar short-term move on Italy, the impact on the euro was muted. Given still subdued investor sentiment and hence extreme short positioning in pairs such as EURUSD and AUDUSD, any downside remains corrective, especially with scope for additional positive surprises and hence more position squaring over the coming weeks. Apart from the EU summit later this month, investors will ...
Title:
Euro falls after ECB warning on bond writedowns
(Reuters) - The euro fell broadly on Thursday, pulling back from a one-month high versus the dollar after the European Central Bank warned about the impact on the currency and the region's banks of involving private sector bondholders in euro zone bailouts.
The euro hit a session low of $1.3708 after an article in the ECB's monthly report said forcing private bondholders to accept losses on euro zone sovereign debt could damage the common currency's reputation, prompting traders to take profits on the previous day's short-covering rally.
The euro hit a one-month high of $1.3834 on Wednesday as investors pared back heavily short positions on cautious optimism that a solution to the euro zone's debt crisis could be close. A Franco/German statement on Sunday said a plan to solve the crisis ...
Title:
Euro slips, ECB stokes concerns about debt solution
(Reuters) - The euro fell broadly on Thursday, pulling back from a one-month high versus the dollar after the European Central Bank warned about the impact on the currency and the region's banks of involving bondholders in euro zone bailouts.
The euro hit a session low of $1.3711 after an article in the ECB's monthly report said forcing private bondholders to accept losses on euro zone sovereign debt could damage the euro's reputation, prompting traders to take profits on the euro's short-covering rally.
The euro had rallied earlier in the week, climbing to $1.3834 on Wednesday after German Chancellor Angela Merkel and French President Nicolas Sarkozy late last week said they would announce a plan to solve the euro zone debt crisis by the end of the month.
Their statement had prompted ...
Title:
Euro edges up, may stay firm on short-covering
(Reuters) - The euro edged higher on Thursday, hovering near a one-month high hit the previous day, with traders saying the single currency could eke out more gains in the near-term on short-covering, even if a sustained rally seems unlikely.
The Australian dollar hit a three-week high as strong jobs data prompted investors to scale back expectations for a cut in interest rates in the near term, but the currency's rise stalled right at resistance in the $1.0235 to $1.0239 area.
The yen inched higher as Japanese exporters sold dollars and cross/yen after the dollar and the euro both touched one-month peaks against the yen the previous day.
Market players said the euro and risky assets may have a little more room to rise due to the potential for further short-covering by investors that ...
Title:
Risk sentiment improved
Risk sentiment improved on continued hopes of a more targeted policymaker response to the Eurozone debt crisis
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
Risk sentiment improved in Asia on continued hopes of a more targeted policymaker response to the Eurozone debt crisis. Investors’ growth expectations have also started to improve after Friday’s better-than-expected US payrolls release. German Chancellor Merkel and French President Sarkozy met on Sunday to seek a compromise on a bank recapitalization plan and generally discuss a more efficient response to the European debt crisis. Both leaders indicated they are determined to do everything necessary to ensure the recapitalization of their banks, something Sarkozy had consistently opposed previously. Although no details were given, ...
Title:
Markets await U.S. payrolls to read recession runes
Friday's U.S. jobs data will be fresh grist to the mill of analysts hunting for signals that the world's biggest economy might, contrary to most evidence, be tipping into recession after months of sluggish growth.
Payrolls have signposted the last three recessions. Specifically, history shows that a recession has begun or is imminent when the six-month gain in payroll employment drops below 0.5 percent, according to Kevin Logan, HSBC's chief U.S. economist.
So far, the reading has stayed out of the danger zone. The six-month change in August was 0.7 percent, down from 1.0 percent in April.
"Recessions are about declines in production and the loss of jobs. There is no more reliable indicator of the onset of a recession than a downturn in the growth of employment," Logan said in a report. ...
Title:
Oil dips after ECB leaves rates on hold
Oil prices dipped on Thursday after the European Central Bank left interest rates unchanged, disappointing traders after the UK central bank's vote for a second round of money creation had raised hopes of further support.
Brent crude futures for November were down 29 cents at $102.44 by 1216 GMT, compared with a gain of 3 percent on Wednesday. U.S. crude, which jumped more than 5 percent on Wednesday, was up 34 cents at $80.02 a barrel, helped by Wednesday's bullish crude inventories data.
Brent sold off as the market struggled to digest the ECB's decision, which came hard on the heels of a supportive move by the Bank of England.
The UK central bank voted to buy 75 billion pounds more in assets to shield Britain's economy from the euro zone debt crisis and keep the faltering recovery ...
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