Archive for December, 2009
Rise in USD buyers, EUR/GBP indicating positive trade opportunity
As we, all know that new year is near and there are prospects of greater trade opportunities in the coming year.
Thus, it’s the right time to have a look at the market recap as if there would not be major twists in these last two days of the year.
Initially USD traded weak in the European session but sudden reverse in the trades returned the buyers of USD back.
The stocks traded more than then the expectation and performed well at the global market and this assisted the currency pairs at risk to overcome from the market ups and down.
The consumer confidence of the December jumped to 52.9 better that the previous report of 49.5. DJIA -1 points and closed at 10545, S&P with -1 points closed at 1126 and NASDAQ with -2 points closed at 2288.
Looking forward, there are reports like December Chicago PMI projecting at 55 against 56.1 of the previous data.
The weekly crude oil inventories forecasted to have -1.7 as compared to -4.9 of previous data.
Due to UK debt and election uncertainty the currency pair of EUR/GBP possibly gain some rise in the trades.
ECB has initiated it’s a slow but sure departure from its alternative course of actions and its 12-month lending program will come to an end in December.
Because of uncertainty, undergoing amid EU economic situation ECB delayed its decision to increase rates.
The risk of sovereign debts in the EU countries is another factor that makes the trades under pressure.
ECB higher officials expect that the EU economy to place a modest and restrained recovery in 2010.
The present downgrade in the sovereign debts in Greece and Spain created tensions among the traders concerning the extension of the debt emergency in the EU.
If the financial problems extends further it would bound the ECB to make the policies strict.
While BOE elected in December to hold interest rate policy and asset purchase program remained as it is.
It is not yet clear that whether BOE is ready for a break in the asset purchase plan to exit out of this.
In the last BOE meeting, it was decided that they would keep the interest rates low at the rate of 0.5% and the level of asset purchase program at £200 billion.
For now, BOE is in the wait, watch situation, and will take time to observe the changes at the Forex trading platform.
The two banks ECB and BOE are having different perspective regarding the policies. BOE will expand the stimulus plans in February and ECB is thinking about the ways of exiting from the stimulus assistance.
These few updates from the Forex trading may bring some changes in the next year trade sessions.
Turning points in various currency pair’s trade
On this Thursday morning, there is much stuff from Forex trading platform signifying that there are fluctuations in every currency pair like EUR/USD showing recovered movement in the market.
Yet the USD dropped down at the market from its firm position ever since September as compared to the EUR because of the surprising decline in home sales dropped down last month, indicating that the US economic recovery become weak.
US housing market are still under pressure and striving hard to get back the stability in the home sales. The USD traded in this month at its 200-day moving average of around $1.4198 and it rallied down against EUR at 5.1%.
The currency pair EUR/USD is trending towards stability and the pair is returning back on its trading track with initiating sell-off from the level of 1.5139/43.
On Wednesday, the pair traded at the level of 1.4233, if the pair started following this trend and moves upward then the trading position of the pair will move on the track of stability.
If this level is not attained then the further upward moving trend and gains will move to the level of 1.4625 and will give the trading a strength by attaining the level of 1.4799.
While at the downside, the pair is trading at the low level of 1.4216 and with further weakness in the trading, the target level set as 1.4176 but on seeing the market weak trading situation it is difficult to attain that level and support reached to 1.4044 levels.
However, now the situation are getting under control as the pair is trending towards correction until it is trading within the level of 1.4625/1.4799 levels and its close trade is expected to trend downside.
These are the Forex analysis reports about the EUR/USD currency pair trade at the market implying that in spite of weak trades, expectations are high with respect to the recovery in the Forex spreads of the pair.
Bunch of issues from Forex news desk today
BOJ meeting assorted some financial matters that might possibly bring big changes at the Forex trading platform, US equities closed at low returns, German IFO business index enhanced further, Canadian wholesales reached to the peak while the UK consumer confidence dropped extremely.
BOJ meeting outputs related to the financial policy. BOJ tackled the financial setbacks firmly and sustained the interest rates of at 0.1% and the three-month extension of loan sanction is same at 10 trillion JPY.
Along with such maintenance, Board also affirmed about the possible changes in the policy-making structure and clarified that the bank is well aware of the price action and the financial instability situation but still the bank will not bear deflation in whatever be the market inflow situation.
Explicitly, the board does not put up with an annual rate of change in the CPI one and the same to or below the zero percent.
This is a difficult price rise mark than the earlier subsisted. Besides, they have departed as outlying as to sheer that the accrual of monetary inequity will now turn out to be a recognized facet of their threat estimation.
US equities closed with low returns in hand and commodity prices were trading higher. UK Sunday times reports asserted that the European banks may have to elevate €450 billion in the coming two years to meet up strict rules. On the other hand, British banks require around £50 billion extra capital to support national economy. These statements hardly did anything to pull up the trades of EUR and GBP at Forex market.
At the same side, German IFO business index moved up from 93.9 to 94.7 n the month of December and it’s the ninth time uninterrupted profitable returns. Against this, Belgian consumer confidence dropped from the level of -10 to -15, possibly forewarning that the current upswing in the next survey of the European confidence may prove to be untenable for the Forex spreads at the market.