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, 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 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, Thursday August 25 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 stock rebounds led to minor returns of portfolio diversification. So far, this action has pushed investors back into the value of the euro (EUR), sapping safe-haven appeal from the greenback for the time being, though isn’t expected to last much longer.

Economic news over the last few weeks has pushed traders into a position of market pessimism, but trading yesterday behaved less 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 relatively light news day expected from the US today, traders will want to be on watch for volatility in the USD/CHF pair today with several reports from Switzerland expected in the early morning hours. Following yesterday’s better-than-expected durable goods orders figures; today’s data should help generate some volatility as investors assess unemployment. As the trend persists, any added 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.

The Swiss franc (CHF) was seen trading with largely bullish results yesterday as traders shifted portfolios on recent outlook from the euro zone. Traders took cue from the SNB announcement over a week back and made a heavy push into the Swissie in the past week’s trading sessions. With no other news of bank interventions in Europe in sight, the CHF looks to be on the rise.

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 uncertainty in Europe is generating significant bearish shifts as European leaders struggle to contain the spreading 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 significant string of news out of the United States, with several moderate reports out of Switzerland and Great Britain. 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 until just recently. Should today’s reports show additional weakness in the US, or Switzerland, there is a good chance traders will purchase more francs.

The Japanese yen (JPY) was pushed back yesterday, as the Bank of Japan (BOJ) unveiled a new fund of approximately $100 billion in order to curb the rising strength of the island currency. 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 last week, 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. With Wednesday’s move by the BOJ, the future of the yen’s strength is as yet undetermined, but will likely adopt a bearish overture in the next few days.

Crude Oil prices held mildly higher Wednesday as traders began to anticipate a US dollar (USD) downturn on speculation of another round of quantitative easing in the US. Data releases out of Europe and the US last week are also driving many investors into and out of safe-haven assets sporadically as market direction became less certain. The recent intervention by the Bank of Japan (BOJ) also upset market forecasters as the status of traditional safe-havens came under scrutiny.

The impact has been a rise in oil values from under $85 a barrel last week to a current price near $86.50 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 Wednesday, sentiment appears to have the price of crude oil holding steady, with gradual gains 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; direction is unclear.

Jovi Overo

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Tuesday August 23 2011

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 an uptick in mortgage delinquencies from the previous month, revealing a slump in the number of households able to pay off their mortgages. 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 manufacturing. Today’s publications, however, will mainly be euro-centric. 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) is expected to be seen trading with mixed results this morning ahead of a slew of reports on the euro zone’s major economies’ manufacturing and service sectors. 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 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. 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 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