Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday November 11 2011

The EUR came off of its lows as Italy pulled back from the brink. Italian 10-year bonds were trading back below the 7% yield, a level considered unsustainable by most fixed income analysts. The turnaround came after a successful Italian bond auction. Italy paid higher than normal rates but the bid-cover was almost 2:1, a modest level of success for the bond auction. Perhaps it may have been the ECB buying a large portion of the Italian bonds though the ECB will only report its bond purchases on Monday.

Both France and Italy released disappointing industrial production data with France reporting a -1.7% contraction on consensus expectations of a -0.7% drop. This highlights the stalling growth problem in the euro zone. To counter the economic slowdown the ECB may cut interest rates again next month to support the economy, a negative for the EUR.

As expected the Bank of England left both its benchmark interest rate steady and did not add to its asset purchase facility. However, the size of the QE program is currently under review. This most likely is a hint at a future policy move to increase the size of the central bank’s balance sheet to support the UK economy. Unlike the Fed or ECB, the BoE does not release an accompanying statement after there is no policy change. To find out additional details economists and traders will have to wait for the release of the meeting minutes which are set to be released on November 23rd.

The BoE has left the door open for additional stimulus to support the struggling UK economy. Typically quantitative easing leads to weakness for a currency though the GBP/USD remains above the level from October 6th when the BoE announced it would purchase an additional GBP 75 bn of government bonds.

The yen gained yesterday in an environment that is typical of USD weakness. The USD/JPY continues to move below 78, a level that is close to its 100-day moving average at 77.65. Japanese core machinery orders dipped -8.2% during the month of September with a strong yen causing corporations to delay large purchases.

Today services data showed declined more than forecasted. Traders will also be eyeing the BoJ meeting next Tuesday. Expectations are low for additional easing of monetary policy given the most recent expansion of the BoJ’s balance sheet, though the BoJ move was hardly noticed as the announcement of the Greek referendum overshadowed the news. The USD/JPY has support at 77.50 from the mid- October lows and resistance from the November 4th high of 78.15.

The AUD has clawed back following Wednesday’s crash as the AUD was pulled lower with other higher yielding currencies. Employment data released yesterday showed a decline in the unemployment rate but new jobs added were in-line with consensus forecasts.

Recent Chinese data has also been supportive of the AUD with Chinese CPI falling to 5.5% in October. The drop in inflationary pressures dispels the theory of a hard landing for the Chinese economy and opens the door to potential easing of Chinese monetary policy. Yesterday’s data showed China’s trade balance widened but was below consensus forecasts which may signal further slowing of the Chinese economy.

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 14 2011

The US dollar (USD) was seen trading mildly bullish Tuesday as investors weighed the impact bond auctions in Greece and Italy will have on the euro zone. A sudden wave of risk aversion last week seemed to have helped the greenback surge, and pessimism about sovereign debt in Europe is supporting this pressure. The EUR/USD seems to be floating closer to 1.33 as technical pressures also begin to mount.

Data on American economic optimism yesterday also signalled an uptick in outlook from the previous month, as reported by IBD/TIPP. The news has done little to the forex market, however, though it could ripple through longer-term analyses on US financial markets should further dips in industry be reported. Manufacturing has been forecast to slump moderately going into the third quarter as most indicators revealed decreased demand. How this will affect the greenback in the weeks ahead is so far undetermined.

As for today, there will be a heavy string of US economic releases, with most news focused on retail sales and the producer price index (PPI). Liquidity will likely be much higher in today’s afternoon trading as these reports get published. With consumer confidence, inflation, and retail sales in focus this week, the picture on future demand and growth levels is expected to become moderately clarified and this could weigh heavily on currency direction in the short- and mid-term.

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.

A mildly pessimistic sentiment towards investing in the euro at the moment has many investors on edge when considering regional investments. An embattled euro zone is sending financial ripples through its neighbours and some are concerned it could pull growth down across the entire continent. With yesterday’s inflationary data out of Britain, this doesn’t seem to be the case, at least for the island economy north of Western Europe. Housing data seemed a bit pessimistic, but consumer prices are indeed growing at a healthy rate in the UK.

Sentiment across the region may have turned negative, with many analysts and economists expecting moves towards safety by traders this week, but the GBP could see a solid weathering of this financial storm so long as data remains bullish. Great Britain appears positioned for a relatively better quarter than its southerly neighbours. The pound could see some bullish movement this week as a result of this overall sentiment.

The New Zealand dollar (NZD) was seen trading mildly higher versus most other currencies this morning as its value responded to recent challenges with relatively more optimism than some had anticipated. Data in New Zealand has been mixed lately with some indications that inflation is not rising as strongly as in other economies, but perhaps in a good way. Food prices fell 1.3% this month, which could produce bearish pressure on the NZD, but should prove to be a boon for consumers in times of economic stress.

The latest movements of the Kiwi are causing some concerns, however, as many speculators are anticipating a bearish turn following recent surges in risk aversion. With interest rate decisions out later this evening, investors are waiting to see what the Reserve Bank of New Zealand (RBNZ) will do. A strengthening Kiwi has benefits for the buying power of the island economy, though its dependence on exports makes a strong NZD unfavourable for longer-term growth in New Zealand’s economy.

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 spike in dollar values due to this week’s risk sensitive environment has prevented many investors from taking positions on physical assets, creating a consolidation pattern on oil charts, but with the USD’s gains not materializing in large enough numbers early this week, 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 later in the trading week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Monday September 12 2011

The US dollar (USD) was seen trading heavily bullish Monday morning as traders saw a sharp rise in risk aversion following last week’s economic reports and interest rate statements. The EUR/USD dropped from week’s high of 1.4281 to a low of 1.3581, a mark not seen since early February. The USD/JPY saw somewhat milder gains, with the greenback inching above 77.80 before levelling off.

Interest rate statements from last week portrayed a global economy in crisis. Each central bank seemed to be taking a wait-and-see approach with monetary policies, holding rates steady and declaring a pessimistic outlook. The impact appeared to get magnified with each bank statement, forcing a sharp return in safe-haven appeal which helped the greenback make significant gains, especially considering the removal of the Swiss franc (CHF) from buy status due to a pegging strategy by the Swiss National Bank (SNB).

As for this week, the US economic releases will focus mostly on retail sales, consumer confidence, and inflation. Today’s publications appear to be JPY-heavy, however, with no significant reports coming out of the United States. Liquidity will likely be mild in today’s afternoon trading as low market activity is being forecast.

The euro (EUR) was seen trading with largely bearish results this morning following last week’s sobering assessments by central banks worldwide. Against the US dollar (USD) the euro was trading near a 7-month low of 1.3581, with few signs of halting this bearish movement. Against the Great British pound (GBP), the EUR witnessed a similar plummet in strength, hitting a March 2011 low of 0.8575.

Traders appear to be ditching the 17-nation common currency in exchange for safe-haven assets amid expectations of a double-dip recession. A pessimistic sentiment towards investing in the EUR at the moment has many investors on edge. An embattled euro zone, fending off market bears amid turmoil in its peripheral nations, looks to be standing on uncertain ground as traditional safe-havens, like the Swiss franc (CHF) and Japanese yen (JPY), are removed from such status by central bank manoeuvres, making the USD the only stable store of value in the foreign exchange market.

Economic sentiment across the euro zone remains negative, with many analysts and economists expecting moves towards safety by traders this week following last Friday’s sudden surge of risk aversion. With a light news day ahead, many traders are awaiting more data releases later in the week before coming back to the EUR. If today’s data also turns negative, the EUR is likely to take another hit.

The Japanese yen (JPY) was seen trading moderately higher versus most currencies this morning as its value as an international safe haven begins to get challenged by the prevailing economic conditions. Being linked to international risk sentiment, the yen has experienced an expected uptick during a period when shifts away higher yielding assets became prominent. With several bank interventions from Japan’s central bank, and a mood of seeking more stable stores of value among investors, the yen appears to be on shaky ground.

The latest moves of the JPY are causing some concerns, however, as many speculators were anticipating a downturn following the Bank of Japan’s (BOJ) latest rate statement. 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 persistence of the yen’s rising strength is causing some furrowed brows in Japan’s economic circles, and this may be a cause of its mixed trading behaviour.

The price of Gold found weak support over the weekend amid the surging strength of the US dollar, the currency in which such assets are valued. Gold has been trading with stronger price action since early August, but traders have been awaiting a price correction from the rampant increase in risk aversion due to rising tensions from the euro zone’s periphery and a sudden lift off in dollar values.

As investors seek safety, the value of Gold, which has been seen trading with mixed results, is expected to rise following its current consolidation pattern near $1855 per troy ounce, 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

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, Tuesday September 6 2011

US traders will return from their Labor Day holiday to find the state of markets in turmoil. A combination of the euro zone debt crisis and the slowing of the global economy are pressuring risky assets. With the US stock markets closed on Monday the S&P 500 looks to gap significantly lower upon Tuesday’s opening bell. As noted in yesterday’s daily analysis, US investors will be looking to both the President and the Fed for policy responses to stop the bleeding.

President Obama will speak on Thursday and will provide support with a fiscal response, most likely proposing an extension of the payroll savings tax cut, prolonged unemployment benefits, and a program to support employment with infrastructure development. The wild card remains the monetary policy response from the Fed. Economists continue to debate the merits of rolling the Fed’s short term debt it holds on its balance sheet into longer term Treasuries. Barring any significant fallout in the equity markets, QE3 remains relevant, just not for the September Fed meeting.

US data will be released today with the ISM services PMI due out at 14:00 GMT. The survey is expected to show continued weakness in the services sector though forecasts keep the data well above the 50 boom/bust level. The survey will be watched closely as it is considered a leading indicator in contrast to last week’s non-farm payrolls report which is a lagging indicator.

Prior to the European open the EUR/USD has made a push below the 1.4050 support level. Market positioning is directionless according to the most recent CFTC data.The next support for the EUR/USD is found at the 200-day moving average at 1.4010. However, the real test will be the long term trend line from May 2010 which comes in at 1.3975.

European equities were hit on Monday though one has to point out the light volumes due to the Labor Day holiday in the US. Nevertheless, the German DAX finished the day down by a whopping -5.28% and the London FTSE 100 was lower by -3.58%. French banks were hit hard as US money markets continue to pull their funding.

A rumour of an Italian ratings downgrade was also spreading and the source appears to be the Société Générale Rates Strategy team who noted the possibility in their daily note on Monday morning. Comments from Mario Draghi, the Italian who is set to take over the helm of the ECB on October 31st was quoted in the wires as saying the ECB buying of Italian bonds is temporary and is not a substitute for fundamental budgetary discipline. Italian 10-year bond yields are up to 5.58%, above the 5% yield the ECB has tried to maintain. The Italian parliament is attempting to pass budget reforms with an aim to balance the budget by 2013 with EUR 14 bn in cuts and an additional EUR 6 bn in new taxes.

Greek bond yields continue to come under pressure with the 2-year rising to a record 50.37%. The Greek 5-year CDS also stands at a record 2493 bp. A default of Greece is at risk once again which could bring about additional pressure on the EUR and European equities.

The EUR/CHF is trading back near the 1.10 level after almost touching 1.20, a truly a remarkable move. The SNB risks losing both its hard fought gains in the pair as well as the central bank’s credibility should the SNB not step into the market to stop the appreciation of the CHF.

The RBA agreed to hold its benchmark rate steady at 4.75% in light of the increasing risks to the European and US economies. Uncertainty in the global economy may only be temporary and the RBA maintained hawkish tone as inflation remains elevated and economic growth continues to increase due to higher commodity prices. On Monday company operating profits in Q2 rose 6.7% compared to a -2.2% decline in Q1.

On the other hand it appears the RBA is weighing heavily the global economic situation versus its own sovereign factors. The RBA may be leaving the door open to a holding period should the economies of Europe and the US continue to underperform.

The downturn in risk sentiment has left the AUD susceptible and the AUD/USD has sold off since Thursday’s high of 1.0763. Support for the pair stands at the mid-August low of 1.0315. As mentioned in yesterday’s daily analysis, traders should keep eyeing the AUD/NZD as the pair is encroaching on the neckline from a bullish head and shoulders pattern.

Spot gold prices climbed to a new record high this morning as risk sentiment hit the wall following yesterday’s European equity losses. Risky assets were down across the board with higher yielding currencies and commodities all taking a hit. Traders have been eager to move into gold as systematic threats continue to plague the euro zone and the possibility of an additional round of monetary policy easing has kept traders from moving into the USD as typically occurs during periods of low risk sentiment.

The price of gold has recovered all of its losses from late August following the raising of margin requirements in a number of international exchanges. With the rebound in the price to a new all-time high this leaves the big round number of $2,000 as the next potential resistance. To the downside the August 25th low of $1,702.50 will serve as support.

Jovi Overo

 

 

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

The EUR/USD was seen moving towards 1.4270 late yesterday as investors attempt to speculate on market direction ahead of today’s highly anticipated Non-Farm Payroll release. 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.

With private sector employment rising in the US at a slower pace over the past few months, the value of the USD appears to be consolidating as riskier currencies like the EUR adjust ahead of this month’s interest rate decisions. Bank interventions in Japan are also making the appeal of safe-havens diminish, helping to prevent a strong rise in the dollar in this week’s trading.

Most significant on today’s calendar will be the US publication of its Non-Farm Payrolls (NFP) data. Should today’s news foreshadow a modest growth in the largest economy’s employment sector, an assessment that seems less likely from data released just days ago, 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.

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 sideways in late trading as shifts away from the greenback, due to uncertainty about the US employment sector, caused several market participants to opt for other stores of value. The pair was last seen consolidating near 1.4270 in late trading Thursday.

The mixed reports out of Europe yesterday have appeared to confound traders who were anticipating a string of bearish results. Though debt concerns still loom in the region, optimistic data has had the impact of muting the EUR’s losses against its primary basket of currencies. With a heavy news day expected today, traders should see some added volatility in today’s EUR market.

On tap today, traders will witness the release of a highly significant report from the United States on its non-farm employment sector. Should the data come in bearish, we could see heftier shifts to safer assets in the days and weeks ahead. This would likely push the value of the EUR lower over the long-haul as traders flee risk.

The Australian dollar (AUD) was seen making leaps and bounds yesterday, as market reports showed modest growth across the boards. Despite recent reports on Australia’s shrinking housing sector, yesterday’s publication of Australian retail sales showed a broadening expansion striking several sectors of Australia’s economy.

Expectations for the retail sales report was for a modest growth of 0.3% from last month’s contraction of 0.1%. The actual figure of 0.5% growth has led many investors to push back into the Australian dollar (AUD) in recent trading. National data on housing and employment has somewhat halted this ascent as many investors hesitate to move into the once-burgeoning AUD. This data, combined with dismal HPI and building approvals reports, has so far caused the Aussie to still see gains, albeit weakly.

Crude Oil prices found solid support Thursday, moving towards $89 a barrel in late trading as sentiment appeared to favour mild stability in global manufacturing demand. Data releases out of the UK and Europe these past two weeks were driving many investors back into safer assets as most reports suggested contraction among the major industrial nations of the West would gain momentum. If proven accurate, the new outlook would have oil prices falling back into a bearish channel as demand decreases further, but so far traders are seeing market fundamentals push oil prices higher.

As investors seek shelter, 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 expected, could drive many investors into lower investments on physical assets; driving oil prices downward by the middle of next week.

Jovi Overo

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Thursday September 1 2011

The US dollar (USD) was seen trading sideways at yesterday’s close after a day of mixed news from the global economy. Mixed sentient towards risk this week was muddled even further as employment data in the United States disappointed traders with oddly bearish results.

Economic news this week has pushed traders into a position of market pessimism; though trading early in the week was acting as though no safe-haven could be found. Little news has emerged which put a dent in the amount of pessimism surrounding the forex market, traders are now eyeing Friday’s NFP report before jumping into more significant investments.

With a heavy news day expected from almost every major economy, traders will be witnessing abnormal volatility combined with reluctance among investors prior to Friday’s ever-important NFP publication. Following yesterday’s pessimistic data from ADP’s Non-Farm Employment Change report on the private sector, today’s unemployment claims will offer another piece of info regarding the employment sector of the US economy. Should it also support pessimism, traders may return mildly to safer assets and away from the USD until more light can be shed.

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 sideways in late trading as shifts away from the greenback, due to uncertainty about the US employment sector, caused several market participants to opt for other stores of value.

The mixed reports out of Europe yesterday have appeared to confound traders who were anticipating a string of bearish results. Though debt concerns still loom in the region, optimistic data has had the impact of muting the EUR’s losses against its primary basket of currencies. With a heavy news day expected today, traders should see some added volatility in today’s EUR market.

On tap today, traders will witness the release of a highly significant report from Switzerland and Great Britain, as well as several minor figures from the euro zone. Should the data come in bearish, we could see heftier shifts to safer assets in the days and weeks ahead. This would likely push the value of the EUR lower over the long-haul as traders flee risk.

The Australian dollar (AUD) was weighed down yesterday, as market reports showed contraction across the boards. Piling atop recent reports on Australia’s shrinking housing sector, today’s publication of Australian retail sales show a broadening contraction striking several sectors of Australia’s economy.

Expectations for the retail sales report was for a modest growth of 0.3% from last month’s contraction of 0.1%. The actual report has 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 HPI and building approvals reports, has so far dragged the Aussie lower and looks to continue doing so this week.

Crude Oil prices held steady Wednesday 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 the week’s end.

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, Tuesday August 30 2011

Liquidity will likely be higher in today’s early trading as several events are being published in rapid succession from Britain, Canada and the US. American liquidity will be heightened, and Canada will contribute to today’s movements with its inflationary data and current account (trade balance).

The US dollar (USD) was seen trading mildly bearish early Monday 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 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 yesterday also signalled a downturn in home sales from the previous month, revealing a slump in housing demand, potentially linked to a string of foreclosures expected in September. 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 housing and consumer confidence. Today’s publications, however, will mainly be Britain-centric. Liquidity will likely be higher in today’s early trading as several events are being published in rapid succession from Britain, Canada and the US. American liquidity will be heightened, and Canada will contribute to today’s movements with its inflationary data and current account (trade balance).

The euro (EUR) is expected to be seen trading with bullish results this morning ahead of a slew of reports from Great Britain, Canada and the United States. Against the US dollar (USD) the euro has been seen trading somewhat bearish as the greenback moves upward against its 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 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 continues to reveal negative market directionality, the EUR is likely to remain bearish.

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 interventions 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. 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 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 beginning to generate some risk taking after statements by the Federal Reserve began to cause investors to seek out higher yields.

An expected dip in dollar values due to this week’s risk seeking 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