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Yen Rose TodayTitle:
Aussie Drops After RBA Cuts Rates By 50 Basis Points
The euro (EUR) fell to 1.3207 from 1.3266 yesterday after data showed that Spain is slipping back into recession. Spain's Gross Domestic Product contracted -0.3% in the first quarter following a similar contraction in the fourth quarter of 2011. Credit rating agency Standard & Poor's downgraded the rating of 16 Spanish banks further weighing on risk sentiment. Investors are wafting the second round of presidential vote in France and elections in the Greek parliament this weekend.
The US dollar (USD) weakened against a basket of currencies during the US session after weaker than expected economic data from the US. Against the Japanese yen (JPY) the greenback slid to a two-month low at 79.67 from 80.36 on a heightened risk aversion in the market. Following last week's disappointing Gross ...
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Growth Concerns Weigh on Sentiment
The US dollar and the Japanese yen gained on demand for safe havens as growth concerns weighed on sentiment. Data released out of Europe confirmed that Spain fell back into a recession with two consecutive quarters of -0.3% q/q GDP contraction and Canada's monthly GDP change unexpectedly declined in Feb. by -0.2% from the prior +0.1% (cons. +0.2%). The Loonie underperformed today in the G10 space as the decline in economic activity offset the recent hawkish tone taken by Governor Carney and the Bank of Canada. U.S. equities followed European markets lower with the DJIA closing the day lower by -0.13% while the S&P 500 declined by -0.40% to finish the session. US Treasury yields were lower across the curve as investor demand for Treasuries pushed yields down and the dollar index rebounded ...
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Dukascopy Afternoon Forex Overview : 30/04/2012
Fundamental Analysis
EUR
Unemployment in Spain approached a new record of 5.64 million in March while the jobless rate topped 24.4%, reported the national statistics office. Analysts expect the Spain's officials to confirm that the country is falling into recession. Meanwhile, retail sales in the country declined by 3.7% in March on an annual basis.
USD
US consumer spending surged in March, adding to the previous gains as incomes increased. Household purchases that account about 70% of the US economy surged by 0.3%, following a 0.9% increase in February. Experts projected consumer spending to rise by 0.4%. Meanwhile, incomes eased up 0.4%, indicating the largest increase in the last three months.
GBP
UK home value accelerated in April, the second straight month, Hometrack Ltd said on ...
Title:
USD Rebounds as Sentiment Declines
USD reversed earlier losses and is now trading higher against all of its major counterparts except for the JPY. The dollar index rebounded after making new lows for April as sentiment deteriorated. Negative news continued to flow out of Spain, this time with more ratings downgrades and data that confirmed a recession in the Euro zone's fourth largest economy. Equities are mostly lower with much of Europe in the red while US stock futures are currently pointing to a slightly lower open. UST yields are down across the curve as investors seek safety in Treasuries. The 10-year Treasury yield has currently shed 2.1bp to around 1.914%. On the data front, March personal income and spending rose by 0.4% and 0.3% respectively. The PCE deflator slowed to 2.1% y/y (prior 2.3%) and PCE core ...
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Dukascopy Morning Forex Overview : 30/04/2012
Fundamental Analysis
EUR
"Once we hit the 6.5 per cent mark , the alarm bells will go off loudly in Brussels and more rhetoric will be coming from the European Central Bank"
- Adrian Miller, a global markets strategist at GMP
The rating agency Standard & Poor’s has downgraded Spain’s credit rating by two notches to BBB-plus with a negative outlook from A, citing expectations the government finances will deteriorate.
USD
"While the economy continued to grow in the first quarter, the expansion remains modest in pace and subpar from a historical perspective"
- Jim Baird, chief investment strategist at Plante Moran Financial Advisors
The U.S. economy grew at a slower pace than forecast in the first quarter as businesses cut on investment. Gross domestic product increased at a 2.2 per cent ...
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Dukascopy Afternoon Forex Overview : 27/04/2012
Fundamental Analysis
EUR
Spain's credit rating was lowered by Standard & Poor's for a second time in 2012 on enduring worries the nation will have to apply additional fiscal backing to lenders as the economy shrinks. S&P cut its long term grade for Spain from A to BBB+ adding a negative outlook. Country's short term rating was lowered from A-1 to A-2, S&P agency reported on Thursday.
USD
Crude oil price declined from almost 4-week high in New York trade after S&P ratings agency cut Spain's sovereign credit rating, boosting concerns that further recession in Europe may halt demand for crude. Oil to be delivered in June lost USD 0.61, reaching USD 103.94 a barrel. June Brent oil gave up USD 0.49 and traded at USD 119.43 a barrel.
GBP
Today the Great Britain Pound extended its gains ...
Title:
Spain Gets Reality Check From S&P
The last 24 hours have heaped even more pressure on Madrid. First there was Standard & Poor's two notch rating downgrade for Spain from A to BBB+ with a negative outlook.
Second, was a further deterioration in the unemployment rate in the first quarter. S&P's rationale for the downgrade was down to 1, the possibility that the government will need to provide further fiscal support to the banking sector and 2, the deterioration in the budget deficit trajectory for 2011-2015. S&P also mentioned the significant risks to Spain's economic growth, which could weigh on the country's creditworthiness.
Spain now has the same rating as Ireland after S&P affirmed Ireland's rating at BBB+ with a negative outlook. It sounded fairly impressed with the Irish government's 'proactive and substantive' ...
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Market Drivers - Currencies : 27/04/2012
Today's Comment
Already today we will see a positioning up to the next eventful week. PMIs from the UK, Sweden, Norway as well as ISMs and employment data from the US will be released. The ECB will hold a monetary-policy meeting, and on Sunday (6 May) a presidential election will be held in France and a parliamentary election in Greece. It will be an eventful week and next week will be the best bet for a week which will boost the markets slightly again. Volatility since new year has almost collapsed (see graph). Lower volatility leads to cheaper options, and currently options are at their lowest level since before the financial crisis - we do not anticipate that this will continue.
The focus of attention will today be on consumer confidence from Germany (at 08.00) as well as retail sales ...
Title:
Spain Downgraded, Eyes On US GDP
The euro (EUR) slid against its major counterparts yesterday after credit rating agency Standard & Poor's cut Spain's credit rating to BBB+ from A. Spain is now on a negative outlook as S%P is expecting the country's economy to contract during 2012 and 2013. Risk aversion in the market is heightened as investors fear that the downgrade is likely to push Spanish bond yields higher. Versus the dollar, the euro fell from a three-week high at 1.3262 to 1.3159.
The US dollar (USD) strengthened against a basket of currencies after US reports showed stronger than expected company earnings. Economic data from the US also supported the greenback following surprisingly strong home sales figures. Against the Japanese yen (JPY) the greenback jumped as high as 81.44 from 80.66 following the Bank of ...
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