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YouTradeFX Daily Market Analysis : 07/09/2011
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EUR/USD
Following four consecutive days during which the markets reported continuing price drops, this morning the financial markets opened trading with price rises. Trading on Wall Street closed in negative territory but it is important to be aware of the fact that the falling prices shown at the start of trade levelled out to some extent towards closure. This can be attributed, in part, to the surprisingly good and unexpected results shown when the publication of the Service Sector's purchasing managers index
On the short graph (4 hours) for the euro – United States dollar pair we can see that the wave of price drops was stopped exactly at the support level of 1.3980. It is still to early to state with any degree of certainty if the euro – dollar pair has established ...
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Investors still evaluating implications of SNB’s decision
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
In the absence of any major news risk sentiment was more stable in Asia. Investors still seem to evaluate implications of the SNB’s decision to introduce a price floor in EURCHF. Although the SNB’s decision must be respected such a move should be temporary in nature as the SNB still has to stick to its mandate which is to ensure price stability. Although the move may help domestic business sectors it may ultimately spark more volatility in global markets as safe haven demand will be redirected to alternative safe havens, including the greenback. With the greenback more sensitive to risk aversion this may drive inflation and liquidity expectations abroad lower and hence be another factor keeping global risk sentiment unstable.
As EURCHF has ...
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Dukascopy Morning Forex Overview : 07/09/2011
Fundamental market overview
EUR
European stocks tumbled on Tuesday for third consecutive day amid worries over the sovereign debt crisis and the Eurozone economic recovery. Yields on 2 and 10 year Greece's government bonds rose to records the same day.
USD
U.S. non manufacturing index expanded to 53.3 in August, up from 52.7 in July, the Institute for Supply Management said on Tuesday, easing concern the largest economy in the world may enter into recession. Reading above 50.0 indicates industry expansion.
GBP
The U.K. retail sector contracted in August 2011, compared to the same period last year. Retails sales declined 0.6%, down from 0.6% increase the previous year, the British Retail Consortium announced on Tuesday.
CHF
The Swiss National Bank set a ceiling on the franc to curb ...
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Global Interest Rates Come into Focus this Week
With most traders focused on the Bank of Canada's (BOC) impending interest rate decision, liquidity will likely be higher in today's early trading. The Bank of Japan (BOJ) is also publishing its latest interest rate move, both of which are expected to make no change in monetary policies. Interest rates are in focus this week and traders would do well to follow their releases and subsequent bank statements.
Economic News
USD - US Dollar Mixed as Week of Rate Decisions Gets Underway
The US dollar (USD) was seen trading mildly bearish early Tuesday as investors returned to trading following Monday's holiday break. A sudden wave of risk appetite seemed to have dropped the greenback following a move by the Swiss National Bank (SNB) to peg the CHF to the value of the EUR at 1.20. Heightened ...
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Swiss draw line in the sand to cap runaway franc
(Reuters) - The Swiss National Bank shocked markets on Tuesday by setting an exchange rate cap on the soaring franc to stave off a recession, discouraging investors anxious about flagging global growth from using the currency as a safe haven.
Using some of the strongest language from a central bank in the modern era, the SNB said it would no longer tolerate an exchange rate below 1.20 francs to the euro and would defend the target by buying other currencies in unlimited quantities.
The move immediately knocked about 8 percent off the value of the franc, which had soared by a third since the collapse of Lehman Brothers in 2008 as investors used it as a safe haven from the euro zone's debt crisis and stock market turmoil.
Analysts said the SNB should be able to defend 1.20 as it can print ...
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Brent up on N.Sea, Libya; US oil down with equities
(Reuters) - Brent crude rose on Tuesday after three straight declines as tight North Sea supply and continuing uncertainty in Libya boosted prices.
U.S. oil fell on pressure from slumping equities, especially on Wall Street as markets resumed trading after the U.S. Labor Day holiday on Monday, and on worries about a global economic slowdown and euro zone debt problems.
Brent's premium to U.S. crude reached a record peak above $27 a barrel intraday, eclipsing Friday's record $26.98.
"Libya's crude is still not in play and North Sea problems remain supportive for Brent, and U.S. markets are still playing catch-up after being shut," said Phil Flynn, analyst at PFGBest Research in Chicago.
ICE Brent crude for October delivery rose $1.12 to $111.20 a barrel by 12:58 p.m. EDT, after ending $ ...
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Pound Falls as Retail Sales Decline. More Stimulus Ahead?
The Great Britain pound fell today, dropping to the lowest level in almost two months against the US dollar, after the report showed that UK retail sales declined in August, spurring speculation that Britain’s central bank will be required to stimulate the nation’s economy.
British Retail Consortium reported today that UK retail sales values were 0.6 percent lower on a like-for-like basis from August 2010. The previous reading showed a 0.6 percent growth. Helen Dickinson, Head of Retail at KPMG, commented on the negative data:
The weaker sectors are really struggling. For non-food, the picture is disheartening with one of the worst monthly results of the year thus far — toiletries, cosmetics, and menswear the only sectors showing growth.
This week’s unfavorable macroeconomic reports ...
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U.S services activities surprisingly expand further this past month
Unlike gloomy services reports released from major economies such as China, the Euro area and the United Kingdom, we watch the world's leading economy services activities expand at a faster pace this past month, which was absolutely not predicted throughout this toughened period and overall weakened economic conditions of the country, a sign of hope.
In fact the ISM services of last month; a composite diffusion index regarding the services sector conditions across the United States, which was highly forecasted to come out at around 51.0; which would have been the slowest pace witnessed by the country's services industry since January of 2010, came out cheerfully instead at 53.3 above the previous reading of 52.7 of the month of July.
Accordingly throughout all of the pessimism spread so ...
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U.S services activities growth have most probably narrowed last month
After yesterday's celebration of the "labor Day" more gloomy data is highly forecasted to be released from the world's leading economy as the current economical conjuncture remains weak and the revival that is taking place gradually has unfortunately slowed down as we know throughout this past period with unending high crucial jobless levels still weighing down on overall activities along with a depressed housing sector, corroded confidence and weaker global demand and conditions.
Accordingly later on today the ISM services of last month; a composite diffusion index regarding the services sector conditions across the United States, will most probably come out gloomy around 51.0 from a prior reading of 52.7, which will actually be the slowest pace witnessed by the country's services ...
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