Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday September 23 2011

The dollar rallied broadly on Thursday as mounting concerns about the global economy pushed investors to embrace safety while shunning riskier assets, with the euro tumbling to an eight-month low. By yesterday’s close, the dollar rose against the EUR, pushing the oft-traded currency pair to 1.3440. The dollar experienced similar behaviour against the GBP and closed at 1.5350.

The U.S. Federal Reserve said Wednesday it will shift its portfolio toward longer-term debt to bolster the economy, and investors’ unwound leveraged positions funded in dollars in response. The Fed’s program was intended to put more downward pressure on long-term interest rates. One important dollar-positive by-product of the Fed’s program is higher short-term rates. The Fed’s not increasing the money supply supported the dollar.

As for today, the calendar is lacking any major economic data releases for today’s trading. As such, traders will want to follow the movements of the major equity indices as the dollar has recently been trading in an inverse relationship to equities. Weakness in stocks could propel the EUR/USD to its next support line which rests at 1.3200.

The euro fell to a fresh eight month low against the dollar on Thursday a day after the Federal Reserve pointed to significant downside risks for the U.S. economy and stopped short of bold monetary easing. By yesterday’s close, the EUR fell against the USD, pushing the oft-traded currency pair to 1.3440. The EUR experienced similar behaviour against the JPY and closed at 103.00. The 16 nation currency did see some bullishness as well as it gained over 30 points against the GBP and closed at 0.8770.

Analysts questioned whether the move the Fed did make — shifting its portfolio toward longer-term debt would bolster the economy and unwound leveraged positions funded in dollars in response.

Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.

The Yen experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The JPY extended gains versus the EUR during yesterday trading session and closed at 103.00. The Japanese yen also saw bullishness against the USD as it jumped around 50 pips and closed at 76.30.

The JPY’s trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

Crude oil prices fell more than 4% to 79.80 on Thursday as equity markets in Europe and Asia tumbled after the US Federal Reserve said the economic outlook remained grim, which overshadowed an unexpectedly steep drop in crude supplies in the world’s top oil consumer.

Oil prices had risen in earlier trade after government data showed US crude inventories last week dropped 7.3 million barrels, the biggest one-week drop since December, suggesting supplies were tighter than expected.

But the market turned bearish after the Fed said it would extend the maturity of its treasury holdings but didn’t unveil more aggressive measures to boost a US economy it said faces “significant downside risks”.

Jovi Overo

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday September 16 2011

The US dollar (USD) was seen moving lightly bearish late Thursday as investors sought the higher yielding assets from speculation on a minor market uptick following recent releases on inflation. A stronger-than-forecast uptick in US CPI data added to risk appetite for many investors, leading some to await today’s news before entering more strongly.

The downtick seen in the greenback was significantly milder than in other currencies, especially as its safe-haven appeal remains and the economy isn’t out of troubled water just yet. This may be partially due to the USD’s disconnection from some of the market turmoil, but it could also be from some optimistic data emerging from the economy lately.

Most significant on today’s calendar will be the US publication of its TIC Long-Term Purchases data and consumer confidence data. Should today’s news foreshadow a modest growth in the US investments, an assessment that does, however, seem less likely from data released these past few weeks, there is a possibility that more investment will get pushed towards the higher yielding abilities of the European currencies as investors seek to diversify their portfolios, which could also drop the USD in short-term trading.

The euro (EUR) was seen trading with largely mixed results yesterday as traders moved into and away from riskier assets across the region. Against the US dollar (USD) the euro was seen trading bullish in late trading as shifts away from the greenback, due to optimism about global inflation levels, caused several market participants to opt for other stores of value. The pair was last seen holding near 1.3500 in late trading Thursday.

The euro was recently seen dropping sharply against the USD following last week’s announcement regarding interest rates. Stuttering mildly ahead of the decision, there was an atmosphere of EUR avoidance in the market even prior to the statement by ECB President Jean-Claude Trichet. This week, however, the news appears to be favoring the EUR and today may not be much different, especially if the US TIC investment data beats forecasts.

With nearly every analyst failing to anticipate yesterday’s move, the market appeared set for some upheavals in value, with the EUR suddenly resurging and the greenback taking losses. For now, traders appear to be looking to a strengthening of the EUR through the remainder of the week.

The Japanese yen (JPY) was seen consolidating in an ascendant flat formation these past few days, as market reports showed modest declines across the boards. Despite recent reports on Japan’s shrinking housing sector, yesterday’s publication of Japanese bank lending and machinery orders showed a broadening contraction striking several sectors of the island economy.

 

Expectations for these reports were for modest growth from last month’s reading. The actual figures shrank below forecasts, however, leading to some odd downticks in JPY values amid an environment of risk aversion. National data on housing and manufacturing has somewhat halted the JPY’s ascent as many investors hesitate to move into the once-burgeoning JPY. This data, combined with the recent interventions by the BOJ, has so far caused the yen to weakly move bearish.

Crude Oil prices found support Thursday, moving towards $90 a barrel in late trading as sentiment appeared to shift in favour of a price increase following news that supply in the United States declined by 4 million barrels this week. With supply falling and manufacturing and industry in decline, the balance between supply and demand appear to be reaching agreement as the value of oil seems to be levelling out in recent trading, despite the recent swings in currency values.

As investors seek shelter from recent market uncertainty, the value of crude oil, which was seen holding steady all week, may see additional gains before today’s close. A sudden jump in dollar values due to a sudden return to risk aversion, as was expected following the recent interest rate announcements, could drive many investors into lower investments on physical assets; driving oil prices back downward by the middle of next week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Thursday September 15 2011

The US dollar (USD) was still seen trading bullish Wednesday after retail sales reports out of the United States disappointed many investors and drove trades towards safe haven assets. A sudden wave of risk aversion seems to have helped the greenback surge this week and data so far has only reinforced this momentum.

Additionally pessimistic data was released from several other economies as well. Switzerland inflation at the producer level appears to be in decline, industrial production across the euro zone and in Japan is stagnating, and the Australian housing market is contracting. The only optimistic piece of data out yesterday was the employment reports from Great Britain which saw, not necessarily job growth, but a not-as-bad-as-expected rate of unemployment growth.

With another unusually intense news day ahead, traders are anxiously awaiting the large string of reports out of the US which should clear up the picture somewhat in regards to inflation, manufacturing, and industrial production. The Current Account will also be published, though its impact is not expected to be as high as the manufacturing reports out of New York and Philadelphia. Traders should look towards another bullish day on the dollar should news continue to disappoint.

The direction of the Swiss franc (CHF) has been sharply pressured into one of distinct bearishness among investors as the Swiss National Bank (SNB) rate decision approaches. Against the US dollar (USD) the franc has actually been trending mildly flat despite the greenback’s bullish moves against its other currency rivals. But the Swissie has seen some setbacks brought about by poor regional fundamentals and a general atmosphere of risk flight, particularly following the SNB’s move to peg the CHF to the value of the EUR at 1.20.

A mood of deep pessimism is growing in regards to the investment in Europe at the moment. Market bears still seem to be gnawing on the EUR’s strength, sapping its value as its peripheral members struggle with bond auctions and other financial woes. Switzerland was formerly in a position to capitalize on the flight to safety, but saw its exporting capability deeply gouged by an unremitting currency appreciation. The SNB move to peg the currency has so far done its job by keeping the CHF’s rise in check.

Sentiment in Switzerland appears to have turned negative this week as well, with many analysts and economists expecting moves towards safety by traders following the SNB’s rate statements. An attitude of dovishness has gained traction and investors are worried that a continuation of low rates, coupled with the possibility of a rate reduction in Europe in 2012, could diminish currency values as we get deeper into the third quarter.

The Australian dollar (AUD) is expected to be weighed down this week as market reports continue to show contraction across the boards. Piling atop recent reports on Australia’s shrinking housing sector, recent publications of Australian consumer and business confidence is starting to show a broadening contraction striking several sectors of Australia’s economy, as well as its psyche.

Expectations for these recent reports have been for modest growth, and in some instance, at best, zero movement. The week’s reporting has so far led many investors to pull away from the Australian dollar (AUD) in recent trading. National data on housing and employment has also driven many investors away from the once-burgeoning AUD. This data, combined with dismal housing starts figures and building approvals reports, has so far dragged the Aussie lower and looks to continue doing so this week.

Crude Oil prices gained mild support Wednesday as sentiment appeared to favour an uptick brought about by a sharp reduction in US stockpiles. The weekly report revealed yesterday that the US has shed roughly 6.7 million barrels from its reserves. This news has so far countered the notion of a sinking price of oil brought about by higher USD values and pushed oil into a bullish posture from supply shortfall speculations.

An expected dip in oil values due to this week’s risk sensitive environment, which saw the greenback climbing sharply, has so far not affected the price of physical assets in any clearly visible way. The stockpile report out Wednesday surprised many investors who had priced in a far milder decline in reserves. With this sentiment grabbing hold among many traders, oil prices could see resurgence above $90 a barrel in the near future.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday September 7 2011

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 stability led to some losses on the USD’s value as traders sought higher yields.

Data from the American manufacturing sector yesterday also signalled an uptick in output from the previous month. The news has done little to the forex market, however, though it could ripple through longer-term analyses on US capital markets. Manufacturing was forecast to slump moderately going into the third quarter as most indicators revealed decreased demand.

As for today, there will be few US economic releases, with most news focused on the Bank of Canada’s (BOC) impending interest rate decision. Liquidity will likely be higher in today’s early trading as 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.

The Great Britain pound (GBP) is expected to be seen trading with bullish results this week ahead of a slew of reports on the country’s manufacturing, housing, and service sectors. Against the US dollar (USD) the pound has actually been trending upwards despite the greenback’s bullish moves against its other currency rivals.

Traders are looking for a way to balance a renewal of risk aversion with continued shakiness in global markets. A mildly pessimistic sentiment towards investing in the US dollar at the moment has many investors on edge. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, also looks to be losing ground in financial markets as safe haven assets such as the Swiss franc (CHF) and Japanese yen (JPY) make gains; though the recent pegging of the Swissie to the euro at 1.20 may affect this attitude in days ahead.

Sentiment across the euro zone has turned negative, with many analysts and economists expecting moves towards safety by traders this week. Great Britain, however, appears positioned for a relatively better quarter than its southerly neighbours. With major interest rate decisions expected all week, the nation’s most poised for gains are those whose monetary policies are more stable, like Britain’s. The pound could see some bullish movement this week as a result.

The Japanese yen (JPY) was seen trading mildly lower versus most other currencies this morning as its value as an international safe haven was being challenged by an air of impending intervention by the Bank of Japan (BOJ). Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. The JPY has been experiencing several long strides lately from the various shifts into riskier assets.

 

The latest moves of the yen are causing some concerns, however, as many speculators are anticipating another round of intervention by the BOJ. With interest rate decisions out this morning, traders are waiting to see what the BOJ will do. A strengthening yen has benefits for the buying power of the island economy, though its dependence on exports makes a strong yen unfavourable for longer-term growth in Japan’s current financial model. As the island currency remains bullish, the pressure begins to mount for the expected bank move to lower its currency strength.

Crude Oil prices held steady Tuesday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected dip in dollar values due to this week’s risk sensitive environment has helped many investors ram up their long-taking positions on physical assets, but with the USD’s losses not materializing in large enough numbers, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Jovi Overo

Beta Forex News, Jovi Overo Beta 2 Ltd, Monday September 5 2011

The disappointing data from the US economy continues to roll in. Friday’s NFP report showed the US failed to add new jobs in the month of August. Average hourly earnings fell to -0.1% from a gain of 0.5% which takes a bit of the bite out of last week’s strong personal spending data. The number of aggregate hours worked also declined.

In contrast to Europe the US economy is stalling but not contacting. This will likely bring policy responses from both the fiscal side as well as the monetary policy side. With pressure from Republicans, President Obama has moved his economic speech to September 7th where the ideas being kicked around range from extending US unemployment benefits, an extension of the payroll tax break, and a potential jobs program that may fall short of such previous ambitious programs of the Works Progress Administration from the mid-1930s.

A monetary policy response may come from the2-day Fed meeting in September. The potential exists for the Fed to increase the length of maturities of the debt it holds on its balance sheet or perhaps a pledge to target inflation at a particular rate, similar to the Fed’s commitment to hold interest rates until mid-2013. Additional bond buying seems unlikely at this time given the uptick in US inflationary pressures.

After a stellar Q1 where the German economy grew by 1.5%, Q2 stands in stark contrast with growth sputtering to 0.1%. Expectations are not rising with euro zone manufacturing PMIs falling below the 50 boom/bust level in August. The French economy has also stalled with zero growth in Q2. Additional pressures are being felt in both Italy and Spain with PMIs falling to new lows.

Europe has been engulfed in a debt crisis and in contrast to the US will not allow for a fiscal policy response. The opposite approach has been taken to implement additional austerity measures in Italy and Spain which may intensify the stagnant growth just as the global economy begins to slow. The options for the ECB remain limited in its upcoming policy meeting. Last week Trichet hinted at a slowing of inflationary pressures and a reduced inflation forecast will likely be formally made on Thursday. It is unlikely the ECB will back away from its two interest rate increases earlier this year as to do this would be the admission of a failure to correctly implement monetary policy. Note that in 2008 the ECB continued to raise interest rates as the world crept towards the financial crisis, only to backtrack in light of the Lehman Brothers collapse.

Additional pressures are being felt in Greece. The Troika has packed up and left Athens early after failing to complete their review of Greece’s finances. The Greek government has admitted that GDP will likely contract further than expected and therefore the country will likely fail to reach its previously outlined budget deficit reductions. Greek 2-year yields have been trading at their highest levels prior to the July 21st agreement.

As such the EUR/USD has fallen from 1.45 to below 1.42 this morning in Asian trading. The pair has broken its rising trend line from the July low and is moving towards the 1.4100 level where the August 11th low coincides with the 61% Fib retracement from the July to August move. The EUR/USD could remain range bound unless the pair moves below the 1.4050 level. The EUR/CHF also looks vulnerable after closing the August 15th gap. The EUR/CHF dropped a dramatic 1000 pips in only a week.

The Reserve Bank of Australia will be meeting tomorrow and the forex trading blogs have been widely speculating of an impending RBA rate cut, similar to that of Turkey and Brazil. However, growth in Australia is not slowing as it is in other parts of the global economy. Retail sales continue to post strong returns and commodity prices remain well supported. The speculation of an RBA rate cut may be premature and could leave some upside potential for the Aussie dollar.

This morning the AUD/USD gapped lower and this level of 1.0625 followed by 1.0800 should serve as the first two resistance levels. To the downside, movement may be capped at 1.0310. The AUD/NZD is showing a bullish head and shoulders reversal pattern with the neckline providing resistance at 1.2750 with a measured move of roughly 400 pips.

Spot crude oil prices continue to struggle to maintain their gains. Last Friday’s disappointing NFP report did little to bolster expectations for increased global economic growth or demand for the commodity. Stagnant US unemployment continues to weigh on the US economic recovery but hopes of additional policy easing by the Fed may allow a test of the $90 resistance level. Support may be found at $84.50, $83.00, and $79.40.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday August 31 2011

The US dollar (USD) was seen trading mildly bearish on Tuesday as traders viewed comments by the Fed as a sign of potentially impending hawkish moves on the policy front. The sudden jolt to risk appetite generated by such movement pushed down on the greenback, but seems to have lifted following fears of another bank interventions in Japan and a string of reports out of the euro zone today which could reverse much of the markets recently acquired short-term stability.

Data from the American housing market Monday also signalled a downtick in housing demand from the previous month, contradicting yesterday’s news that housing prices were decreasing at a slower pace. The news has done little to the forex market, however, though it could ripple through longer-term analyses on US capital markets.

As for today, the US economic releases will focus mostly on employment and manufacturing. Today’s leading publication of ADP’s Non-Farm Employment Change will likely lead the day’s volatility. Liquidity will likely be higher in today’s mid-day trading as several European events are being published in rapid succession alongside the release of a handful of American events. Look for wide swings in currency values today.

The euro (EUR) has been seen trading with largely bullish results so far this week as traders assess risk appetite across the region. Against the US dollar (USD) the euro was seen trading mildly bullish in late trading as shifts away from the greenback, due to uncertainty about the US employment and housing sectors, caused a stir in the foreign exchange market.

The economic calendar this week has been mostly bearish for the region, however, with housing and manufacturing reports disappointing traders. The manufacturing data across the euro zone and Britain has also shown little change. Italian retail sales contracted this past month, as revealed in yesterday’s data releases, and British news turned almost exclusively bearish.

On tap today, traders will witness the release of regional retail sales reports and employment data, though few consider them to be highly impactful given the series of significant releases out of the US economy a bit later in the day. Focus will undoubtedly be on the US employment and manufacturing sector today as both will be publishing highly relevant reports later in the afternoon. Should news produce bearish results there is a chance that traders will move away from the EUR and back into safe-haven assets.

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday after data releases have begun to shift traders into higher yields with solid capital markets. The Aussie has been losing momentum these past few weeks as risk sentiment flutters in the global market. Overriding these concerns, moreover, is a sudden dip in the Australian housing market which saw building permits and new home sales decline.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the US dollar (USD) and Japanese yen (JPY). Being tied to commodity prices could help lift the AUD in the near future, however, as oil prices hold above $86 a barrel, but general risk aversion is likely to push the currency lower as traders flee risk. On tap today, forex traders will see the release of Australia’s private sector credit figure measuring consumer demand of private loans. If negative news arrives, traders may see a heavier move towards risk aversion in early trading today.

Crude Oil prices held steady Tuesday as sentiment appeared to favour a downturn in global stocks ahead of a speculated double-dip recession. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and manufacturing demand.

An expected jump in dollar values due to this week’s risk averse environment has helped many investors ram up their short-taking positions on physical assets, but with the USD’s gains not materializing, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday August 24 2011

The US dollar (USD) was experiencing mild downswings yesterday as investors took recent signs of decent manufacturing growth in Europe to mean a ramp up in the intensity of risk appetite. Recent speculation of a move by the Federal Reserve to ease capital markets in the US was felt yesterday, as well, with large firms betting on a move to weaken the greenback.

With a report from the American housing market being released yesterday, traders have begun to see a sudden loss of strength in the core assets of the American economy. Though housing comprises only a portion of US economic strength, it does impact the value of much else by way of home furnishings, retail sales, loans, lending, consumer sentiment and economic outlook. As such, yesterday’s downtick caused the greenback to take losses in late trading.

With a heavy news day expected today, traders are sure to see a growth of portfolio adjustment as volatility becomes elevated. The US economy will be publishing reports on crude oil inventories and another report on housing, admittedly more minor than yesterday’s news. Should today’s news disappoint, there is a possibility that some investment will get pushed towards the safety of the USD.

The euro (EUR) has been seen trading with largely bullish results so far this week as traders continue to assess risk sentiment across the region, with a renewal of favourability for alternate stores of value. The EUR was seen trading bullish in late trading as shifts away from the greenback, due to a mild swing back into global stocks and higher yielding assets helped drop the value of traditional safe havens.

With yesterday’s reports on PMI and economic sentiment showing disparate results, traders are wondering whether the uptick in manufacturing and services will be enough to offset consumer worries about future growth. Indications point to a mild recovery since last week, but the reading on outlook from ZEW showed increasing pessimism which could stifle such advances.

On tap today, traders will witness the release of a correlated report on consumer confidence from the Ifo institute. The euro zone will also be releasing its regional finding on industrial new orders for the month of July, revealing the level of demand for industrial goods from the euro zone region. Should the Ifo report reveal even more pessimism than yesterday’s ZEW finding for Germany, then the euro may get dragged down from yesterday’s highs. Decreases in industrial orders could behave in similar fashion.

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday despite data releases showing a return to heightened risk appetite. The Aussie has been losing momentum these past few weeks as risk aversion becomes predominant in the global market. Fears emanating from the current market environment have led many to seek safety.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the Swiss franc (CHF) and Japanese yen (JPY). With significant reports being released this morning, forex traders are likely to see heavy movement by the Aussie in today’s trading hours. News out of New Zealand later in the trading day is also expected to hike volatility throughout the Pacific countries of China, Japan and Australia. Pacific traders should be cautious in this week’s trading, similar to last week’s environment.

Crude Oil prices rose slightly Tuesday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending. The potential return of Libyan oil also has many speculators eyeing production data and the impact it could have on the price of oil in the near future.

An expected rise in dollar values due to this week’s risk sensitive environment has helped many investors ram up their short-taking positions on physical assets, but with the USD’s gains not materializing in large enough numbers, sentiment appears to have the price of crude oil falling mildly late Tuesday. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week; direction is still unclear regarding the swing.

Jovi Overo

 

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Monday August 22 2011

The US dollar (USD) may be seen trading mildly bullish Monday morning if traders see the global stock market persist in its decline. Although the value of US credit was downgraded, investors have little place else to move their troubled assets outside of US Treasuries. The downturn in the stock market last week has played into the strength of the US economy: its traditional store of value.

Though analysts view the downgrade as overall bearish for the USD, a sharp downturn was held in check by a continued purchase of bonds by European investors. Similar declines and ratings downgrades of several European peripheral nations have made the USD and gold all the more attractive as valued safe-havens.

As for this week, the US economic releases will focus mostly on housing, GDP, and manufacturing. Today’s publications, however, are euro-heavy. Liquidity will likely be higher in today’s early trading as several European events are being published in rapid succession. French and German liquidity will be heightened, and Canada will contribute to today’s movements with its retail sales reports. Traders will want to pay close attention to today’s euro zone data.

The euro (EUR) was seen trading with mixed results this morning following pessimistic reports on euro zone debt woes. Against the US dollar (USD) the euro was trading somewhat bearish in early morning hours Monday as the greenback moved upward against all currency rivals. The euro, however, does not appear in a position to capitalize on the gains being seen elsewhere; its structural weaknesses are gouging its value worldwide.

Traders are looking for a way to balance a renewal of risk aversion with continued shakiness in global markets. A mildly pessimistic sentiment towards investing in the US dollar at the moment, due to the S&P downgrade, has many investors on edge. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, also looks to be losing ground in financial markets as safe haven assets such as the Swiss franc (CHF) and Japanese yen (JPY) make gains; though central bank interventions in Japan may offset the JPY’s gains.

Sentiment across the euro zone has turned negative, with many analysts and economists expecting moves towards safety by traders this week. Any more bearishly-leaning news out of any major global economy will likely pull down on the EUR even further as investors flee risk. With a heavy news day ahead, many traders are anticipating significant data releases to move the market. If today’s data comes in negative, the EUR is likely to take another hit.

The Japanese yen (JPY) was seen trading moderately higher versus most other currencies this morning as its value as an international safe haven continues to push its value bullish. Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. The JPY has been experiencing several long strides lately from the various shifts into riskier assets.

The latest moves of the JPY are causing some concerns, however, as many speculators are anticipating another round of intervention by the Bank of Japan (BOJ). A strengthening yen has benefits for the buying power of the island economy, though its dependence on exports makes a strong yen unfavourable for longer-term growth in Japan’s current financial model.

The price of Gold found support over the past week amid the plummeting strength of the US dollar, the currency in which such assets are valued. Gold has been trading with rather mild price action since June, but traders have been awaiting price resurgence due to the rampant increase in risk aversion due to rising tensions from the euro zone’s periphery and a recent downgrade of US debt by S&P’s ratings agency.

As investors seek safety, the value of gold, which has been seen trading with mixed results, is expected to rise, but a selloff in commodity futures pulled down on precious metals last week. A sudden rise in dollar values due to this week’s uncertain environment is expected to assist the sentiment favouring gold. Should risk sentiment continue to bounce in sporadic directions this week, the price for this precious metal may continue to experience similar swings in value.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday August 17 2011

The US dollar (USD) was experiencing mild upswings yesterday as investors took recent signs of sluggish growth in Europe to mean a ramp up in the intensity of risk aversion. A weakened stock market yesterday was also behind the fuelling of the USD’s gains seen against most major currency pairs.

With several reports from the American housing market being released yesterday, traders have begun to see a return of strength in the core assets of the American economy. Though housing comprises only a portion of US economic strength, it does impact the value of much else by way of home furnishings, retail sales, loans, lending, consumer sentiment and economic outlook. As such, yesterday’s uptick helped the greenback make gains during its already-growing value due to risk aversion.

With a heavy news day expected today, traders are sure to see a growth of portfolio adjustment as volatility becomes elevated. The US economy will be publishing reports on PPI and crude oil inventories. Should today’s news disappoint, there is a possibility that more investment will get pushed towards the safety of the USD.

The British pound (GBP) was seen trading with largely bearish results so far this week as traders continue to assess risk sentiment across the region. The Cable was seen trading bearish in late trading as shifts into the greenback, due to a swing away from global stocks and higher yielding assets helped lift the value of traditional safe havens.

News of debt contagion spreading across the euro zone also has several economists worried that a toppling of consumer confidence may be up next. Whether Great Britain is affected by this regional tug is a matter for speculation at the moment, however. Should today’s reports on inflation indicate a downturn in growth, and thus demand, there is a chance that traders will take the news to mean the pound sterling will meet further resistance in the near future.

On tap today, traders will witness the release of the significant reports on unemployment and hourly wages. The UK Claimant Count Change indicator measures the monthly change in the number of Britons applying for unemployment insurance for the first time. Alongside this indicator, the Bank of England (BOE) will release the latest results of a vote on monetary policy. Also, the quarterly report on average earnings will underline the employment data with the shift in personal income. Should these reports display dismal results, the GBP will likely fall through the remainder of the week.

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday after data releases have begun to shift traders back into safety. The Aussie has been losing momentum these past few weeks as risk aversion becomes predominant in the global market. Fears emanating from the current market environment have led many to seek safety.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the Swiss franc (CHF) and Japanese yen (JPY). With significant reports being released this morning, forex traders are likely to see heavy movement by the Aussie in today’s trading hours. News out of Japan Monday is also expected to hike volatility throughout the Pacific countries of China, New Zealand and Australia. Pacific traders should be cautious in this week’s trading.

Crude Oil prices dipped slightly Monday as sentiment appeared to favour a mild downtick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected rise in dollar values due to this week’s risk sensitive environment has helped many investors ram up their short-taking positions on physical assets, but with the USD’s gains not materializing in large enough numbers, sentiment appears to have the price of crude oil falling mildly late Monday. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week; direction is still unclear regarding the swing.

Jovi Overo

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday August 16 2011

The US dollar (USD) was experiencing short swings yesterday as investors anticipate what impact this week’s housing data will have on the weakened US economic outlook. The greenback had found moderate strength in the morning hours, but soon pared its gains as investment data turned sour. The value of safe-haven assets like the Swiss franc (CHF) and Japanese yen (JPY) have been buoyed by a shift away from higher yielding assets, though the Swissie’s value was gouged by recent talk of capping its strength.

With the economies of Europe and the US posting little positive news on yesterday’s calendar, the amount of pessimism surrounding the forex market, particularly in the fragile United States and euro zone, appears to have grown, further dampening the strength of the EUR, GBP, and AUD. The dollar has seen mild gains as it tends to do when risk aversion grows, though its value rests on shaky ground considering recent financial manoeuvres currently underway.

With a heavy news day expected today, however, traders are sure to see a return of portfolio adjustment as volatility becomes elevated. The US economy will be publishing several reports on housing and one industrial production figure alongside the capacity utilization rate indicator. Should today’s news disappoint, there is a possibility that more investment will get pushed towards the safety of the Swissie and yen, driving USD values lower in the process.

The Great British pound (GBP) has been seen trading with largely bearish results so far this week as traders assess the risk sentiment across the region. The Cable was seen trading bearish in late trading as shifts into the greenback, due to uncertainty about a recent deal struck over the debt ceiling in the United States and subsequent ratings downgrade, caused a stir in the foreign exchange market.

News of debt contagion spreading across the euro zone also has several economists worried that a toppling of consumer confidence may be up next. Whether Great Britain is affected by this regional tug is a matter for speculation at the moment, however. Should today’s reports on inflation indicate a downturn in growth and thus demand there is a chance that traders will take the news to mean the pound sterling will meet further resistance in the near future.

On tap today, traders will witness the release of moderately significant reports on inflation at the consumer and retail level in the UK at 9:30 GMT. Should the figures reveal stagnation in inflationary growth, we could see heftier flights to safety in the days and weeks ahead. This would likely push the value of the GBP lower over the long-haul as traders continue to flee risk in larger numbers.

The Australian dollar (AUD) was trading mostly weaker versus its currency counterparts yesterday after data releases have begun to shift traders back into safety. The Aussie has been losing momentum these past few weeks as risk aversion becomes predominant in the global market. Fears emanating from the current market environment have led many to seek safety.

This movement has gouged the AUD against all of its currency rivals, especially against safe-havens like the Swiss franc (CHF) and Japanese yen (JPY). With significant reports released this morning, forex traders are highly likely to see heavy movement by the Aussie in today’s trading hours. News out of Japan yesterday is also expected to hike volatility throughout the Pacific countries of China, New Zealand and Australia. Pacific traders should be cautious in today’s trading.

Crude Oil prices held steady Monday as sentiment appeared to favour a mild uptick in global stocks following reports of monetary moves being made by several central banks. Data releases out of Europe and the US last week are still driving many investors back into safe-haven assets as many reports suggested a surprise downtick in growth among global industrial output and consumer spending.

An expected dip in dollar values due to this week’s risk sensitive environment has helped many investors ram up their long-taking positions on physical assets, but with the USD’s losses not materializing in large enough numbers, sentiment appears to have the price of crude oil holding steady. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by mid-week.

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