Archive for May, 2010
Forex Market Remains Studious After Tumbling Of Stock Market
As we have seen that there is a strong fall in Global stock market in past week where as the Forex market is remains studious. In last week the Japan’s economic data results in GDP growth of 3.9 percent which is less than expected from the last year’s Q4 growth rate.
In US session a steady growth is seen in the Yen currency although the Japan’s economy growth is merely unsatisfied. After a solid economic growth a Canadian dollar is also grew steady. CPI rises to 0.3 percent and in April month it was 1.8 percent yoy.
Core CPI and retail sales results also impressed the economic growth rate and seems to be rises to 0.3 percent and retail sales rose to beyond expectations that is 2.1 percent.
In euro zone data it is noticed that a drop-down of 0.1 percent is shown in the German info business rate. In the month of May PMI also drops to 55.9 level but the services of PMI manufacturing roses to 56 level.
The GBP growth rate in UK public sector was only 10b in April month. It seems to be lower than anticipated rate of GBP that is 10.9 percent.
Forex market is now waiting for the emergency budget plan that will be announced in June. Although the BoJ has announced that the interest rate will remain unchanged from 0.1 percent until the next session after seeing the economic growth rate of Japan.
To strengthen the base of economic growth, the bank has passed the loan scheme that will be helpful for the growth industries. BoJ has decided to provide loan to the lending companies of 0.1 percent that helps the banks to encourage companies for taking loan.
The currency pair USD/JPY is at 90.92 resistance on the downside after the USD fall in last week and YEN steady growth. The USD/JPY will remain in the bullish trend this week as anticipated in the currency market.
Asian markets decline with Euro dropped to multi-year lows
On Wednesday, most of the Asian markets have undergone a decline more than 10% .It was followed by a negative session in Asian Wall Street and the Euro fell to fresh lows . This was on account of the Germany’s increasing control over Trading of Government’s debts and financial shares.
South Korean and Australian benchmark index dropped by 1.6% and Hong Kong’s Hang Seng dropped 1%.Japanese Nikkei Index also lost 1.0%.But there were gainers too like China’s Shanghai composite index with other metal companies.
Recently Germany banned the short sales of euro dominated government bonds, credit default swaps based on those bonds and shares in Germany’s 10 leading financial institutions.
This weakened the optimism of the investors in the first two days of the week. After the announcement of the ban, risk aversion start spreading in the Asian market and the Euro dropped to multi-year lows in Forex market.
Euro/USD was at 12230-Monday’s low. On Tuesday it reached a week high at 12445 in US session opening. On the news of German ban it reached a four year low of 12145 on US and Asian sessions.
Despite the measures taken by Greece,there is much uncertainty about the debt problems in Europe. This has been a big cause of fall of the zone’s currency.
There are a lot of uncertainties prevailing in the Asian market and the future of the Euro is still uncertain. Still there lies one hope in the market about the Euro’s improvement in the coming days.
If Greece is able to pay its first big debt payment on Wednesday as expected on May 19 which is the deadline, then the conditions may improve a bit. Presently this has been a big concern for the worry of the investors.
Euro Backslides to 18 Months Subside
Since the European financial situation stimulated the need for safer investments Gold prices reached an all-? ?time.? ?The Gold prices lowered later in the week but ended two percent higher.
Safer investments boosted the prices of the U.S dollar? ?to? ?the highest level against a number of currencies.
U.S crude oil prices collapsed by? ?nearly? ?4%? ?and the Nasdaq and? ?S& ?500? ?fell by nearly? ?2%.? ?Stock prices? ?.? ?Despite the fact that U.S retail sales and industrial production rose in? ?April? ?,? ?the stock prices
and oil prices fell significantly.
A rescue plan of nearly? ?$1Trillion was announced this week by the European authorities for Greece and other Euro zone countries in debt.? ?But even the investors doubted about the poor public finances.
Just day after when the Senate voted for limiting? ?the fees charged on credit and debit card transactions,the shares of credit card companies came down?.
?MasterCard Inc lost? ?8.5? ?%? ?to? ?$212.45? ?and Visa Inc lost? ?9.9%? ?to? ?$77.26. The same trend followed? ?with the banks? ?.? ?The Spanish banks Santander? (?SAN.MC?) ?and BBVA(BBVA.MC?) ?fell? ?9.0? ?and? ?7.6? ?%? ?respectively.? ?The STOXX Europe? ?600? ?banking index?. SX7P fell by? ?5.2? ?percent.
Also the Price of the U.S crude oil fell by? ?3.75%? ?to? ?71.61%? ?a barrel.? ?This was recorded as? ?the lowest since February? ?5 in Forex market.
Gold recorded a record high of? ?$1248.95? ?but when the gold failed to cross the psychological level of? ?$1250,? ?the investors started to sell it.? ?Some sold it to recover their losses in stock market also.? ?Later Gold sold practically flat at? ?1230.05? ?per ounce.
Equity funds in emerging markets? ?attracted less money while risky-high-yield bond funds attracted high money,? ?a five-? ?year high.?
?As the investors moved back to cash the money market funds attracted new money this week for the first time since January.