Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday November 15 2011

After two weeks of following the European political scene US economic data releases return to the spotlight. Today important data will be released beginning with retail sales, PPI, and the Empire State Manufacturing Index. Markets expect that the positive economic momentum that began in Q3 will likely carry over into Q4. An improvement in market sentiment is forecasted with a sharp pickup in the manufacturing sector. Retail sales numbers are expected to show continued growth in consumption though at a slower pace than in the month of September. Inflation pressures on the producer side (PPI) are forecasted to fall while the headline consumer inflation numbers (CPI) continue to rise to 3.9% y/y in September. CPI data for October will be released on Wednesday.

The Fed expects inflationary pressures to drop and in the worst case scenario a deflationary environment would take hold of the US economy. To avoid the threat of deflation the Fed would likely increase its balance sheet through additional bond purchases (QE3). This puts extra significance on Wednesday’s CPI figures as some economists expect the Fed could announce QE3 as early as its December 13th meeting.

Yesterday the EUR came under pressure as peripheral bond yields began to climb once again. Italy had a successful debt auction of 5-year notes but the bonds were priced at their highest yield since Italy came into the EMU. Yields on the Spanish 10-year note climbed above 6% for the first time since the summer and the spread between the Spanish and German 10-year bond yields widened; an indicator of market stress. Spain is coming back into the picture as the Spaniards will go to the polls on Sunday in a general election.

Today brings euro zone flash GDP data. Consensus estimates are for growth of 0.2% and will likely highlight the struggling European economy. ECB President Mario Draghi said the euro zone economy will slip into a mild recession and previous PMI surveys suggest a slowdown in growth. The German ZEW Economic Sentiment survey should also show a more severe downturn in market sentiment, potentially weighing on the EUR.

With increased pressure on peripheral Europe the EUR has come off of its Friday highs versus both the USD and against the JPY. The EUR/JPY is approaching the key 104.70-105 level with the only support remaining on the charts coming in at the September low of 100.75.

Yesterday Japanese Q3 GDP was released in-line with consensus expectations as the Japanese economy grew by 1.5. However, the report had a negative tone as the revised Q2 data showed the economy contracted by -0.5%, more than the previous results showed which were at -0.3%.

The JPY continues to strengthen despite a Japanese economy that is stalling. Neither the traditional intervention nor the “covert intervention” as discussed in yesterday’s FOREXYARD Daily Analysis has been able to stop the JPY’s appreciation.

Wednesday will bring the BOJ meeting and no new policy measures are expected. This could continue the one way movement in the USD/JPY. Yesterday the pair dipped below its 55-day moving average. There is a lack of supports for the USD/JPY until the all-time low at 75.63. Resistance is back at the October 12th high of 77.50.

Today will bring another letter from BOE Governor Mervyn King to the Chancellor of the Exchequer George Osborne, explaining why the rate of inflation is yet again above the central bank’s target of 3%. However, there are some economists who are of the opinion that UK inflation has peaked and will begin to decline. Certainly King and a majority of the Monetary Policy Committee believes this as the BOE suggested in their previous meeting minutes the BOE could start another round quantitative easing to stave off deflationary pressures. Today’s CPI is expected to come in at 5.1%, down from a peak 5.2% in September. A surprise to the upside will likely support sterling while a reading below market expectations and traders could sell sterling on expectations of additional easing by the BOE.

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, Tuesday September 13 2011

The US dollar (USD) was seen trading only mildly bullish early Tuesday morning as investors remained pessimistic about growth in Europe and Asia. A sudden wave of risk aversion seemed to have lifted the greenback following a move by the Swiss National Bank (SNB) to peg the CHF to the value of the EUR at 1.20, and by central banks to stall any monetary moves.

Data on the American budget today may continue to indicate pessimism that could drive the greenback even higher. Recent news has done little to alter the current direction of the forex market, though news could hold values steady should they come in near forecasts. Inflation is forecast to hold steady in several nations this week, which could have the effect of lifting the value of riskier assets, though this will need further data to be confirmed.

As for today, there will be few US economic releases, with most news focused on British inflation. Liquidity will likely be higher in today’s early trading as these data points are published, though the impact of news on Great Britain alone may not be enough to force a surge in any direction on USD pairs and crosses. Inflation and consumer confidence are in focus this week and traders will want to pay attention to the latter in the case of mounting pessimism and its affect on dollar values.

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 inflation and housing 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 global stocks at the moment has many investors on edge and looking for safety. 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) take losses due to recent moves by their central banks.

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 inflationary reports expected all week and most expecting bullish figures, the GBP is in a position to either continue its recent streak, or take heavy losses should inflation be shown in a downturn.

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 industrial production data out this week, traders are waiting to see what the BOJ will do in the face of a downturn. 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 Monday as sentiment appeared to favour a mild downtick in global stocks following policies of monetary stagnation being executed by several central banks last week. Data releases out of Europe and the US 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 jump 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 levelling off this morning, sentiment appears to have the price of crude oil holding steady near $86 a barrel. 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, Friday September 9 2011

The Canadian dollar (CAD) was seen moving lightly bearish late Thursday as investors fled the higher yielding assets from speculation on a market downturn following recent releases on interest rates. A weaker-than-forecast uptick in US private sector employment Wednesday added to risk sensitivity for many investors, leading some to await today’s news before entering more strongly.

The Bank of Canada (BOC) also held rates steady this week, along with every other major economy announcing a rate decision, but talk was slightly more optimistic in the northern giant’s economy than elsewhere. The downtick seen in the Loonie was significantly milder than in other currencies. This may be partially due to the CAD’s disconnect 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 Canadian publication of its employment change data and unemployment rate. Should today’s news foreshadow a modest growth in the Canadian economy’s employment sector, 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 support the CAD 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 bearish in late trading as shifts away from the greenback, due to uncertainty about global employment levels, caused several market participants to opt for other stores of value. The pair was last seen holding near 1.3970 in late trading Thursday.

With nearly every analyst anticipating yesterday’s move, and the accompanied dovish statement by Trichet, the market followed suit with expectations and witnessed a quick plummet in EUR values. Several reports have begun to assume a possible rate reduction as early as mid-2012 by the ECB, though future economic growth will factor heavily in such a decision. For now, traders appear to be looking to a weakening 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 $89 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, 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, Thursday August 18 2011

The US dollar (USD) was seen trading moderately lower at yesterday’s close after a day of mixed news from the global economy. Weak gains seen on the USD this week was offset yesterday after the Swiss National Bank (SNB) failed to halt the rising strength of the franc (CHF). So far, this action has pushed investors back into the value of the Swissie, sapping safe-haven appeal from the greenback.

Economic news over the last few weeks has pushed traders into a position of market pessimism; and trading yesterday behaved more so than many analysts had anticipated. Little news has emerged which put a dent in the amount of pessimism surrounding the forex market, traders are now eyeing the remainder of August news to determine what the third quarter may bring.

With a very heavy news day expected from the US today, traders will want to be on guard against added volatility as today’s news may generate some swings in value. Following yesterday’s better-than-expected PPI growth figures, today’s data should help generate some volatility as investors assess CPI, manufacturing, and home sales. As the trend persists, any additional negativity in today’s news will likely spark heavier aversion from risk. Where the CHF stands in this fight could be the deciding factor in how much the USD gains as a result.

The Swiss franc (CHF) was seen trading with largely bullish results yesterday as traders moved away from riskier assets worldwide. The move came after the Swiss National Bank (SNB) delivered a dovish statement that failed to peg the currency to any regional neighbours, nor set a price floor on its skyrocketing value. Traders took cue from the SNB announcement and made a heavy push into the Swissie in yesterday’s early trading hours.

The largely bearish reports out of Europe yesterday have appeared to confirm many fears felt by traders who were anticipating a string of pessimism. Debt concerns remain a priority in the euro zone’s periphery, and the holiday season in Europe is generating significant uncertainty as European leaders take leave amid a tremendous crisis. Such moves are acting solely as a fuel to the fire lit beneath the CHF, assisting its meteoric rise.

On tap today, traders will witness the release of a less a string of news out of the United States, with zero data arriving from Switzerland or the euro zone. Many analysts are now looking to Germany to shore up much of the euro zone’s economic strength, with added responsibility falling to one of the few nations which has experienced very little economic distress. Should today’s reports show additional weakness in the US, there is a good chance traders will purchase more francs.

The Japanese yen (JPY) was given a boost yesterday, as market reports showed further flight to safety. Piling atop recent reports on Japan’s shrinking household spending figures, the publication of Japanese trade data has shown a decline in exports consistent with an overly strengthened yen. Despite a meeting between French and German ministers over economic cooperation, the Pacific

Nations appear to be rushing ahead with their bullish endeavours, contrary to market outlook among the European nations.

Japan’s economy has been much worse in its performance than it was expected to be just one month ago. Investors have been piling into the JPY en masse as its strength as a store of value gained appeal. As housing slumps, and as monetary adjustments take place in China and New Zealand, the Japanese and Swiss economies now finds themselves gaining the most from the blows coming down on Europe. Should this bombardment continue the JPY will likely remain in its current bullish channel.

Crude Oil prices fell mildly lower Wednesday as the downgrade of US debt by S&P last week pulled demand for oil significantly lower. Data releases out of Europe and the US last week are also 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 impact has been a decline in oil values from over $100 a barrel a few weeks back to a current price near $85 a barrel. 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, with gradual losses priced in. Should Crude Oil sentiment continue to flatten this week, oil prices may reach a decision point which forces a wide swing by week’s end.

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, Monday August 15 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 and consumer inflation. Today’s publication of TIC’s Long-Term Purchases report will coincide with a housing index released an hour later at 15:00 GMT. Liquidity will likely be kept more to a minimum in today’s early trading as several European banks close in observance of Assumption Day. French and Italian liquidity will be absent, but Japanese data may offset the lower volatility. Traders will want to pay close attention to today’s American 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 several European nations on holiday today, liquidity will likely be kept to a minimum, helping the EUR stave off intensely deep declines.

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. Another round of intervention may become more necessary if this morning’s GDP figures show a sluggish economy.

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