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, 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 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

 

 

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

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

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

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

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

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

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

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

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

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

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

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday August 5 2011

The EUR/USD was seen moving towards 1.4130 late yesterday as investors anticipate a return to risk aversion, but also optimism towards today’s Non-Farm Payroll report. An uptick in US private sector employment Wednesday added to risk-taking sentiment by many investors, but fears of European debt contagion are overshadowing the rise. Should today’s Non-Farm Payroll (NFP) data continue this trend of optimism, we may see the greenback making gains against its rivals as traders return to their traditional store of value en masse.

With the European Central Bank (ECB) holding interest rates steady, and private sector employment rising in the US, the value of the USD appears to be jumping higher as riskier currencies like the EUR dropped in yesterday’s afternoon and evening sessions. Bank interventions in Switzerland and Japan are also making the appeal of those safe-havens diminish, helping to lift 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 seemed nigh impossible just days ago, there is a possibility that more investment will get pushed towards the storage ability of the greenback as investors flee the period of uncertainty wracking Europe.

The euro (EUR) was seen trading bearish yesterday after the European Central Bank (ECB) chose to keep its regional Minimum Bid Rate steady at 1.50%. The statement released shortly after the release gave cause for pessimism among investors as ECB President Jean-Claude Trichet hinted that the region’s debt concerns were returning to the fore; specifically mentioning woes regarding Spain and Italy and recent ratings downgrades by Moody’s Investors Service.

The EUR/USD was seen moving strongly bearish yesterday as a result of the risk averse sentiment that arose from the rate announcement. The price moved from its recent high of 1.4370 to as low as 1.4140 before levelling off mildly. The EUR saw similar losses between 0.2% and 0.6% against its other currency rivals.

Europe’s economic calendar today will be significantly lighter than it has been of late. A report on the French trade is scheduled for 7:45 GMT, shortly before the publication of Germany’s industrial production figure. Italy will also be releasing data on its preliminary GDP for Q3. Most serious investors are focusing their attention on the American release of Non-Farm Payrolls (NFP), the most impactful news event affecting this week’s global economy.

The Japanese yen (JPY) was seen moving moderately bearish throughout the day following a move by the Bank of Japan (BOJ) to intervene in the forex market to drive its national currency lower against its primary rivals. The move came as the yen surged beyond previous intervention levels on heightened risk aversion in the global economy due to debt fears in Europe and the United States. The BOJ tends to resist an overly strengthened yen for the gouging effect it has on Japanese exports. Weakening commodity prices, however, are helping offset the losses from an overly powerful yen, as is the general sentiment that the JPY acts as a solid store of value in times of uncertainty. Given reports that Italy may default in the near future, and that Spain may also follow suit, a period of heightened risk aversion appears inevitable. The JPY, therefore, is positioned to continue gaining despite attempts by the BOJ to prevent such an occurrence. It will be worth watching to see if the BOJ intervenes a second time in the days ahead.

Crude Oil prices met solid resistance Thursday, moving towards $90 a barrel in late trading as sentiment appeared to favour a mild dip in global manufacturing demand. Data releases out of the UK and Europe yesterday 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.

As investors seek shelter, the value of crude oil, which was seen plummeting all week, may continue to do so before today’s close. A sudden jump in dollar values due to this week’s sudden return to risk aversion is expected to drive many investors into lower investments on physical assets; driving oil prices even further down. Should Crude Oil sentiment hold steady today, oil prices may see another slump.

Jovi Overo

 

 

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Wednesday July 27 2011

The Congressional Budget Office informed the GOP that the plan presented by Speaker of the House John Boehner would only cut $850 billion from the budget deficit. Boehner himself had pledged to initially cut $1.2 trillion in spending over the next 10 years. In a blow to Republicans the bill will be sent back for rewriting and throw a wrench in a potential solution to raise the US debt ceiling.

While the debt ceiling negotiations takes the limelight US data yesterday showed disappointing data that fed into USD selling. Housing data continues to drag with the S&P Case-Shiller HPI showing a dip in housing prices by -4.5%. New home sales fell short at 312K on expectations of 321K while the Richmond Manufacturing Index declined to -1 from 3. A bright spot in yesterday’s data were increasing consumer confidence numbers but the three previous negative data releases combined with a very public debt ceiling fight had the greenback on its back foot.

Strong gains were booked against the dollar by all of the G7 currencies with significant moves in the dollar block currencies. Pressures in the financial markets are predominantly felt in the USD with the dollar index falling to a low of 73.446. The last time the dollar index traded this low was in May. Despite the USD weakness it appears that real money portfolio managers are expecting a positive outcome from the debt ceiling struggles as the yield on the 10-year note actually fell yesterday back below the 3% level. 30-year Treasuries also strengthened. If markets were forecasting a US default, pressures would be felt in the US government bond yields.

Sterling performed well yesterday after Q2 GDP numbers came in line with consensus forecasts at 0.2%. Traders were largely expecting a more disappointing figure. While growth of 0.2% is nothing to brag home about and does signal a stagnant UK economy, a figure that came in below this level may have supported additional asset purchases by the BOE. The GDP report does not rule out more quantitative easing but sets the bar a bit higher for additional easing of monetary policy. While the British pound is certainly no prize, in a contest of the least ugly with the dollar and the euro, it may just be pulling ahead.

The GDP data helped cable climb to its highest level since mid-June, rising above the previously broken trend line from the May 2010 low. The next resistance for the GBP/USD is found at the end of May high at 1.6550. Support is located at this week’s low at 1.6220.

The dollar block currencies were the strongest performers yesterday versus a weak US dollar. The AUD was supported by both comments from RBA Governor Stevens who suggested the Australian economy is improving and talked down a potential interest rate cut this year. Inflationary pressures also supported the AUD. Q2 inflation climbed 0.9% on consensus forecasts of 0.7%. Following the data release this morning traders pushed the AUD/USD to a 30-year high. The next target for the AUD/USD is the big round number at 1.1100.

 

The Kiwi is also trading at a 30-year high after strong business confidence numbers helped to boost the New Zealand dollar. Tonight the RBNZ is expected to keep the cash rate steady at 2.50% but the accompanying rate statement could contain more hawkish language given the strong GDP the New Zealand economy produced in H1. Any hint of an interest rate increase could boost the NZD/USD to the next big round number at 0.8800.

Spot gold climbed to a new all-time high at $1,625. This is the second consecutive day the price of spot gold has reached a new high as traders worry over the US debt ceiling crisis. Spot gold may also be receiving a bid due to the potential for the US to lose its AAA rating. S&P has warned its highest rating could be in jeopardy if the US doesn’t cut $4 trillion from the debt. On Monday President Obama warned the US could lose its rating for the first time in history. More gains in the commodity could be booked should Congress and the President fail to come to an agreement over the debt ceiling.

Jovi Overo

 

Beta 2 Ltd, Jovi Overo, Beta 2 Ltd, Friday July 8 2011

With the European Central Bank (ECB) hiking interest rates, and private sector employment rising in the US, the value of the USD appears to be taking a dive as riskier currencies like the EUR jumped in yesterday’s afternoon and evening sessions. The US dollar was seen decreasing yesterday as traders began to seek riskier assets following statements by the ECB’s Trichet that Portugal was not in as bad a shape as assumed, and debt and inflation would be taken care of throughout the euro zone.

The EUR/USD was seen moving towards 1.4370 yesterday while the GBP/USD levelled off near 1.6015. An uptick in US private sector employment yesterday added to the risk-taking sentiment by most investors. Should today’s Non-Farm Payroll (NFP) data continue this trend of optimism, we may see the greenback taking severe losses against its rivals as traders seek out higher yields.

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 seemed nigh impossible just days ago, there is a possibility that more investment will get pushed towards the higher yielding EUR, driving USD values lower.

The euro (EUR) was seen trading bullish yesterday after an announced increase to its regional Minimum Bid Rate by 25 basis points to 1.50%. The statement released shortly after the release gave cause for optimism among investors as ECB President Jean-Claude Trichet hinted that the region’s debt concerns were not as dire as many had assumed; specifically mentioning woes regarding Portugal and its recent ratings downgrade by Moody’s.

The EUR/USD was seen moving strongly bullish yesterday as a result of the risk taking sentiment that arose from the rate adjustment. The price moved from its recent low of 1.4250 to as high as 1.4375 before levelling off mildly. The EUR saw similar gains between 0.2% and 0.6% against its other currency rivals.

Europe’s economic calendar today will be significantly lighter than it has been of late. A string of reports on German and French trade and budget balances, respectively, will get published early in the morning. An Italian industrial production figure will be then released shortly thereafter. Most serious investors are focusing their attention on the American release of Non-Farm Payrolls, the most impactful news event affecting this week’s economy.

The Australian economy released strongly bullish news yesterday morning with the publication of an employment indicator that showed the economy adding over 23,000 jobs over the past month. Despite a rate hike in China pulling strongly down on the value of the Aussie Wednesday and Thursday, this morning’s movement appears to favour stronger risk seeking behaviour among investors and yesterday’s surprisingly high growth in Australian employment has many traders moving back towards the Australian dollar (AUD).

Weakening commodity prices may still pull on the nation’s economic growth and the AUD’s meteoric rise has gouged Australia’s exports. While the downturn may look dismal from afar, runaway inflation caused by the Aussie’s rise was expected to cut into the country’s growth projection eventually. As traders adjust their portfolios and risk assessment for the Land Down Under, the possibility exists for a solid uptick later in the year. For now, heightened risk taking is pushing the value of the Aussie higher and today’s US NFP data will either confirm or deny this new momentum.

Crude Oil prices found solid support Thursday, moving towards $100 a barrel in late trading as sentiment appeared to favour a mild growth in global industry alongside a potential uptick in demand for the black gold. Data releases out of the UK and Europe yesterday were driving many investors back into riskier assets as most reports suggested growth among the major industrial nations of the West would be on the rise. If proven accurate, the new outlook would have oil prices rising back into a bullish channel as demand increased.

As investors seek risk, the value of crude oil, which was seen fluctuating wildly all week, may in fact rise to a weekly high above $100 a barrel before today’s close. A sudden drop in dollar values due to this week’s sudden return to risk is expected to drive many investors into higher investments on physical assets; driving oil prices even higher. Should Crude Oil sentiment hold steady today, oil prices may see another meteoric rise similar to the spike that occurred in 2008 just before the global economy crashed.

Jovi Overo

(more at Beta 2)

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday June 17 2011

Poor economic data out of the United States continued to weigh on the US dollar yesterday as investors continued to eye the interest rate differentials between the US and Europe. Yesterday’s manufacturing data out of Philadelphia highlighted a stark downturn in the manufacturing sector of the American northeast over the past month, raising risk aversion.

The data comes on the coattails of similar downturns across Europe seen earlier this month. A decline in British retail sales yesterday may also translate over to a flight to safety. News out of the American economy continues to reveal softness and stagnation as global output levels enter a period of decline. If data remains as weak as they are now, traders will likely continue to see weight applied to the value of the world’s riskier assets while the USD sees mixed results.

On tap today will be consumer confidence levels from the University of Michigan (UoM). The reports on consumer sentiment will likely support the latest news of stagnation and declines in growth. With the Republican debates kicking off this past week, and Rep. Anthony Weiner (D-NY) stepping down from office due to his recent scandal, criticism of President Obama’s economic policies and stimulus will likely get revved drastically, possibly leading to a steep decline in American confidence levels. The US dollar may not see much weakness from this turn of events as it tends to do well in times of risk aversion.

The euro rose in yesterday’s late-trading sessions as economic news, mixed with some political drama, has had investors balancing between debt concerns and interest rate differentials. Soft data out of the American economy, however, has held many traders leery of seeking safety in the greenback. After yesterday’s severe downturn in the Philly Fed Manufacturing Index, investors appear to have shifted their gaze on Greece’s potential for a bailout, with optimism beginning to take hold late yesterday.

As for today, the euro zone turns its economic data engine back on with the publication of two less significant reports. At 9:00 GMT, Italy will publish its trade balance. The figure is expected to reveal a mild slowdown in the growth of Italy’s deficit. The news may help support an impending growth in Italy’s home market.

Following Italy’s data release will be a 10:00 GMT publication of the euro zone’s regional trade balance. This report measures the change in value for imported and exported goods. Expectations are for a growth in the region’s trade deficit which may put pressure on the EUR ahead of the week’s close. News surrounding the appropriation of funds for Greece is gripping the market right now after the data falter in the United States drastically altered many portfolios. Look to a mildly strengthening EUR if the dollar can’t find its footing today.

The Japanese yen (JPY) has been trading with somewhat mixed results since Thursday, with gains made against several currencies and losses elsewhere. After a week of ups and downs, the Japanese yen appears set to make gains today as investors appear to be seeking safety. The dominant stance of risk aversion overarching yesterday’s environment of optimism has many traders moving towards the yen against the higher yielding currencies like the euro, which dropped to a six-week low during yesterday’s afternoon sessions.

However, the yen was slightly lower versus the US dollar as the pair moved up from previous intervention levels near 80.00. The USD/JPY held steady at yesterday’s low, finding support near 80.30 and moving up towards 80.90 by today’s opening Asian sessions. Japan’s morning release of its Monetary Policy Meeting Minutes should have shed light on JPY values and direction, but so far the forex landscape appears calm. If this past week’s soft data from the Western powers proves pivotal, the JPY could find solid support ahead of this week’s closing.

Oil prices slumped below $92 a barrel yesterday morning following a report out of the United States on Wednesday which revealed a decline in its oil stockpile data. These US oil stockpile reports had shown significant growth for a few weeks before finally experiencing a downturn. The sudden halt of this inventory growth had a sharp effect on the value of Crude Oil as its price fell from a recent high near $103 a barrel to a current low just under $92.

The value of the US dollar versus the euro in recent trading has pushed towards a three-week high near 1.4160, which originally hurt the value of oil. With today’s steady sideways movement, traders appear likely to see oil faltering somewhat before this week’s market close. Whether oil traders decide to lift oil prices from a buy-in on physical assets, or whether they decide to pull away from the black gold out of a perceived risk averse environment, is a point traders will bear witness to next week.

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Thursday June 9 2011

The US dollar experienced mixed results yesterday as traders began to shift in and out of the greenback following last week’s non-farm employment data and this week’s relatively positive sentiment. The results so far have been for the value of the USD to decline and then hold versus its currency counterparts.

The euro zone has so far benefited from this shift, but failed to break through the significant price barrier at 1.47 against the dollar. The issue of interest rate differentials has generated market tension over the past two weeks and, indeed, the shift in value among the safe-havens and the EUR has made currency forecasting a much more difficult profession. Today’s rate statements out of Europe will be of primary interest for most traders.

As for today, as just mentioned, traders will be focusing more attention on Europe given the recent hype about interest rate differentials. The US economy will also be publishing several significant reports, though, which could make today’s trading interesting. The unemployment claims report and trade balance figure should generate intense volatility in today’s later sessions.

The euro felt pressure versus the US dollar this morning, with the pair’s price reaching a one-month high near 1.4700 then entering a moderate decline. Soft data out of the American economy last week forced a revaluation by many investors who went long on the USD following the European Central Bank’s (ECB) cloudy rate statement from a month back. Today’s rate statement, therefore, has gained in prominence in relative terms.

With the US economy releasing several soft data reports, the euro zone is set to take a major jump against its Atlantic rival should it be capable of pushing hawkish in today’s rate announcement. A dovish approach, however, could signal continued weakness in the region as well as a less significant divergence between the two regions’ respective interest rates.

As for today, the euro zone will be publishing its monthly interest rate decision. Most investors are turning their attention on this announcement following last month’s unclear direction. There also appears to be a good chance that dollar bears will continue to push the EUR higher as the day wears on, but only if news from Europe delivers on expectations for hawkishness in its policy statement.

The Japanese yen (JPY) has been trading with largely positive results since Friday as investors turn their focus towards news out of the euro zone. After a week of ups and downs, the Japanese yen appears set to take losses today as investors largely seek out risk ahead of today’s rate statements in Europe and Britain.

The USD/JPY was seen trading somewhat lower this morning, holding steady near 80.20 and moving up towards 80.60 at today’s opening Asian sessions. Market news released out of Europe today will likely be the driving force behind forex market values and traders would be wise to watch the rate statement by the European Central Bank (ECB) scheduled for 13:30 GMT since it has a strong correlation with global economic growth and monetary values.

The price of Crude Oil ended yesterday higher as traders largely began to push back into their investments in physical assets while the US dollar flattened out. A breakdown in talks between OPEC members in Vienna this week has also generated tension among oil speculators who are anticipating a delayed response to rising oil prices. The result has been a sudden climb in oil prices since Tuesday, reaching upwards of $100.50 a barrel this morning.

Recent events have made speculating about oil prices more difficult. The plummeting value of the US dollar since Friday should have helped lift oil prices, but the commodity’s flat movement through most of the week had many withholding their investments in oil until clearer direction was provided. The OPEC spat, however, has made the investment environment around oil even less clear. Without some sign of production output agreement by OPEC, speculation is likely to drive prices into a stable range above $100 a barrel.

 

Jovi Overo

Beta 2 Forex News, Jovi Overo, Beta 2 Ltd, Friday June 3 2011

The US dollar (USD) experienced mildly bullish results yesterday as traders began to shift away from the euro (EUR) following the downgrade of Greece by Moody’s Investor Services. The move was followed by a downturn in risk appetite which has so far fuelled growth in safe havens like the USD, Swiss franc (CHF) and Japanese yen (JPY).

With today’s Non-Farm Payroll (NFP) figure on the way, traders appear to have lost tremendous optimism about the stability of their portfolios and have temporarily shifted to safety. The US economy has so far benefited from this shift as a stronger dollar should give Americans more buying power in the days ahead.

The issue of interest rate differentials has driven market participants bonkers over the past two weeks. Indeed, the shift in value of safe-havens and the EUR has made forecasting a much more difficult profession. Today’s NFP release from the US economy, however, should give us some much needed perspective. If the figure comes out below expectations, which seems typical these past few months, then we should see a further shift into the safety of the USD, JPY and CHF as traders flee risk.

The euro appears to have lost substantially against its primary currency rivals yesterday following the downgrade of Greece by Moody’s Investor Services. The data releases published over the last several days have pushed many traders away from riskier assets, but the EUR had fought through the pain until the bond rating downgrade. With Europe absent from the calendar yesterday in observance of Ascension Day across most of the region, thin market environments favoured the rise of safe-haven currencies.

Many analysts have also the rise in poor fundamental data out of the United States and other large economies. Such detrimental growth figures have weighed on investor sentiment and the ratings downgrade was the straw that broke the camel’s back. The EUR/USD was down from its three-week high of 1.4450 to a current price near 1.4300.

As for today, the euro is largely absent from the calendar. The major news today is the US publication of Non-Farm Payrolls (NFP), but Great Britain’s publication of services PMI data could show further stagnation in the region’s economy. Any additional blight in fundamental data is likely to push more investors into the safety of the Swiss franc and Japanese yen, with the US dollar gaining some of the overflow.

The JPY has been trading with largely positive results since yesterday as investors turn their focus elsewhere. After a week of ups and downs, the Japanese yen appears set to make gains today as investors largely flee riskier assets. The low interest rates of the Japanese economy have helped pull many investors into the safety of the yen following yesterday’s rate announcement by the ECB.

With Japan’s economy coming back online from a week of holiday celebrations, the market should receive a modicum of additional liquidity from the return of this island giant. The impact may be felt in today’s early hours, but the news from the US economy regarding Non-Farm Payrolls (NFP) will be today’s biggest market mover. Traders should tune in to that report as it is likely to drive today’s more important portfolio shifts and adjustments.

The price of Crude Oil ended Thursday much lower as traders largely began to pull out from their investments in physical assets while the US dollar made a rapid jump. The result has been a sharp drop in oil prices, pushing well below yesterday’s expected $102 a barrel and landing close to $99 by day’s end.

Recent events have made speculating about oil prices more difficult. The plummeting value of the US dollar over the last few days should have helped lift oil prices, but the commodity remained in free fall for the second consecutive day. Rising stockpiles in the United States, reported Thursday, may have helped fuel the shift away from oil as rising inventory tends to suppress price hikes. As for the rest today, oil prices appear heavily leaning towards the downside, with targets below $99 a barrel in sight.

Jovi Overo