Oct 31, 2011

Forex Crunch ECB Set to Reverse Policy? Preview

Forex Crunch ECB Set to Reverse Policy? Preview

ECB Set to Reverse Policy? Preview

Posted: 31 Oct 2011 03:00 AM PDT

The first euro-zone rate decision under the new ECB president Mario Draghi comes at a bad timing of a slowdown in the zones’ economies. There’s a significant chance that Draghi will reverse the last rate hike of his predecessor. ECB Preview.

Jean-Claude Trichet held the helm for 8 years and proved to be very tough with the interest rate. In July 2011, Trichet raised the rate for the second time since the 2008 financial crisis erupted to 1.50%, in a decision that was heavily criticized. Draghi will likely take one step backwards.

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EUR/USD Oct. 31 – Falls On Japanese Intervention, Doubts About Debt Deal

Posted: 31 Oct 2011 03:04 AM PDT

Euro dollar is set for an exciting close to the month. The strong intervention to weaken the Japanese yen against the dollar was clearly felt in EUR/USD, which was already in doubt about the EU Summit deal. Also the unexpected rise in European unemployment  and the stubbornly high inflation estimate is complicating matters for the common currency.  

Here's a quick update on technicals, fundamentals and what's going on in the markets.

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Japan losing the battle

Posted: 31 Oct 2011 01:47 AM PDT

The overnight intervention by Japan to weaken the yen is not wholly surprising given the recent moves we've seen on the USD/JPY.  But it's not a situation of yen strength by any stretch of the imagination. Ahead of the currency selling by the BoJ this morning, the yen was the weakest performer on the majors so far this month. 

More the issue is dollar weakness, which the Japanese economy is not currently in a fit state to deal with.  This is the third intervention of the year to weaken the yen, but the impact on the wider view has been limited.  Japanese finance minister Azumi is talking tough, blaming speculators and adding that he would continue to intervene "until I am satisfied".

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Yen Intervention Sends EUR/USD Below 1.40

Posted: 30 Oct 2011 10:18 PM PDT

The Japanese authorities did it again: for the third time this year, they intervened in the markets and sent USD/JPY 400 pips higher. EUR/USD wasn’t immune to this massive dollar buying and lost the 1.40 line, and more importantly below support at 1.4030.

This is a unilateral intervention by the Japanese authorities, without any external coordination. It came after USD/JPY ticked even lower once again, and touched 75.31. This is what triggered the Japanese officials to act, that will not stop until “satisfied”. Are they following the Swiss footsteps?

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Forex Daily Outlook – October 31 2011

Posted: 30 Oct 2011 03:00 PM PDT

We start the week with some interesting events such as Chicago PMI in the US and GDP  in Canada as the main highlight on today’s outlook. Let’s see what awaits us today.

In the US, Chicago Purchasing Managers’ Index (PMI); monthly managers in Chicago survey to value the business conditions for employment, new orders etc. is due to reduce down to 59.2 points from 60.4 points.

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Will Bernanke Raise Forecasts? FOMC Preview

Posted: 30 Oct 2011 09:40 AM PDT

The Federal Reserve took action in the past two meetings, pledging low rates and announcing “Operation Twist. It is likely to take a break now, as conditions improve. 

For the first time since June, the statement will be followed by a press conference by Ben Bernanke. A lack of big announcements in the statement can be complemented with a press conference that can trigger high volatility.

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NZD/USD Outlook – Oct. 31-Nov. 4

Posted: 30 Oct 2011 07:00 AM PDT

The kiwi made a sharp move higher and managed to climb to levels last seen at the beginning of September. Employment and housing data are the major events this week. Here’s an outlook for the events in New Zealand, and an updated technical analysis for NZD/USD

Last week inflation figures disappointed with 0.4% rise while 0.7% increase was predicted and New Zealand Business Confidence index dropped to 26.1 from35.4 in September. These lukewarm readings left no hope for and RBNZ rate hike. However the hopeful note of the EU summit could have a positive influence in NZ economy.

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USD/CHF Outlook – Oct. 31 – Nov. 4

Posted: 30 Oct 2011 06:15 AM PDT

The Swiss franc traded through turbulent waters in the past week. The upcoming week has two important indicators, and naturally more news from Europe. Here is an outlook for the Swiss events, and an updated technical analysis for USD/CHF.

Switzerland, in the heart of Europe, moved together with the euro, and enjoyed the success of the EU Summit. Will it reverse its gains if the doubts return?

Read the rest of the article USD/CHF Outlook – Oct. 31 – Nov. 4

USD/JPY Outlook – Oct. 31-Nov. 4

Posted: 30 Oct 2011 06:03 AM PDT

Dollar/yen tested lower ground and marked a new bottom. Will the BOJ intervene? Monetary Policy Meeting Minutes and Average Cash Earnings are the major events this week.  Here's an outlook for the Japanese events and an updated technical analysis for USD/JPY.

Last week trade balance deficit narrowed nicely to 0.02T following 0.27T shortage  but retail sales dropped more than expected by 1.2% and household spending improved with 1.9% drop after decreasing 4.1% in August. These mixed readings reflect the concerns Japan over the global financial markets situation. Will we see an improvement following the positive EU summit in Brussels?

Read the rest of the article USD/JPY Outlook – Oct. 31-Nov. 4
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