At two months, what are the movement's wins and losses?
Wednesday 23 November 2011
Forex Trading Weekly Forecast - 11.21.2011
Occupy Wall Street After 2 Months: A ScorecardBusinessWeek
Forex Trading Tips
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FOREX-Euro edges adult on short-covering though vulnerable
Fri Nov 18, 2011 7:03am GMT
* Euro in downtrend though dump approaching to be light -trader
* Mounting risk hatred supports dollar
* Aussie dips behind next relation vs USD
* Worries grow as European bank appropriation condition tightens
By Masayuki Kitano
SINGAPORE, Nov 18 (Reuters) – The euro edged aloft on
Friday as traders lonesome brief positions after a new drop
to a five-week low, though a singular banking was approaching to
remain in a downtrend amid fears a euro section debt predicament is
spiralling out of control.
Selling vigour on a euro has strong this week
on signs that contamination was swelling to core euro zone
countries such as France, and a banking is on lane for its
biggest one-week dump given early September.
The spotlight fell on Spain on Thursday, that had to pay
the top rate to sell a 10-year debt given 1997, only shy
of a 7 percent symbol seen as unsustainable.
The euro, however, showed some resilience in a wake
of a Spanish bond auction, removing a boost from short-covering
and holding above a five-week tray of $1.3421 strike on Thursday
on trade height EBS.
“The marketplace is really fervent to sell a euro and also
eager to take some profits,” pronounced Jesper Bargmann, Asia conduct of
G11 mark FX for RBS in Singapore. “So we are saying seductiveness on
the dips to buy.”
Such short-covering seductiveness is approaching to insist and
limit a speed of a euro’s declines, Bargmann said.
“There’s copiousness of two-way seductiveness in a euro now,” he
added. “There’s a lot of brief positions out there and people
are fervent to book some profit. So it’s not an easy trade.”
The euro rose 0.2 percent to $1.3479, though is
still down roughly 2.4 percent for a week, on lane for its
biggest weekly commission decrease given early September.
The euro is approaching to exam a early Oct low of $1.3145
eventually, though a skirmish will substantially be gradual, said
Bargmann during RBS.
“I consider we’ll mangle $1.30 though we consider it’s going to be in a
fairly nurse fashion,” he said, adding that there were likely
to be some spikes and bouts of short-covering in between.
Support for a euro lies during around $1.3405, a 76.4
percent retracement of a Oct rally. The bottom of the
weekly Ichimoku cloud also offers support nearby that level,
coming in during $1.3408.
“The (euro’s) instruction is substantially toward the
downside though looking during how a marketplace has been relocating and
positioning, we have to be heedful of short-covering,” pronounced a
trader for a Japanese brokerage residence in Tokyo.
DOLLAR FUNDINS STRAINS
The deepening of a euro zone’s debt predicament has caused
heightened highlight in dollar appropriation markets this week.
The reward for swapping euros into dollars rose on
Thursday, with a three-month cross-currency basement barter around
6 basement points wider during -136 basement points, a many given the
2008 financial crisis.
“The delayed suit sight pile-up continues, with USD appropriation now
clearly a bigger emanate as contamination spreads some-more deeply into
Spain,” pronounced Sebastien Galy, strategist during Societe Generale.
The Australian dollar, that tends to come underneath vigour in
times of marketplace stress, dipped to a five-week low of
$0.9966 and was final down 0.3 percent during $0.9977.
“While risks to a downside seem some-more apparent, it’s
worth observant that a banking is now oversold on several
momentum-based indicators,” pronounced David Scutt, a merchant during Arab
Bank Australia in Sydney.
“Keeping this in mind, should any good news surrounding
Europe strike a screens, it’s approaching to see a Aussie spring
higher on a behind of brief covering.”
The dollar dipped 0.2 percent opposite a yen to 76.86
yen. Wariness about a probability that Japan may
intervene serve in a arise of a large yen-selling
intervention on Oct. 31, has lent support to a dollar
recently.
Increased signs of dollar-funding strains are another
factor ancillary a dollar, pronounced a merchant for a Japanese bank,
adding that dollar offers from Japanese exporters are approaching to
put downward vigour on a dollar towards a month-end.
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Tuesday 22 November 2011
FOREX-Euro firms though opinion grave on swelling debt crisis
Sorry, I could not read the content fromt this page.
FOREX-Euro rises on ECB lending hope, but down for 3rd week
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* Short covering, ECB boost euro ahead of weekend
* Debt crisis still points to weaker single currency
* Interbank funding strains boost dollar demand (Updates prices, adds quotes and graphics)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 18 (Reuters) - The euro rose against the dollar on Friday on the possibility the European Central Bank will lend to the International Monetary Fund to bail out bigger euro zone economies and as borrowing costs for Italy and Spain eased.
Sentiment on the euro, however, remained bearish, with the common currency headed for a third straight week of losses as fears persisted that the debt crisis could engulf major euro zone states such as France and trigger a break-up of the 17-nation bloc.
Yields on Italian and Spanish bonds eased after the ECB stepped in to stabilize the market, but fears remain that both countries' borrowing costs are at unsustainable levels. [ID:nL5E7MI24O]
Euro zone officials said there have been discussions that the ECB could lend to the IMF (Berlin: MXG1.BE - news) to provide the fund with enough money to bail out even the biggest euro zone countries. [ID:nL5E7MH2MW] Pressure has also mounted on the ECB to step up its bond purchases.
Either approach would be satisfactory, said Andrew Busch, senior currency strategist at BMO Capital Markets in Chicago, "The broader point is that the ECB is finding a way to stabilize the European debt crisis," he said.
"This third-party lending arrangement not only works around ECB laws, but also provides an avenue for the ECB to create enough funding to stabilize the crisis while maintaining its appearance of independence," he added.
The euro last traded up 0.5 percent at $1.3524 on Reuters data, pulling away from a five-week low of $1.3420 struck on Thursday. On the week, the euro was down 2 percent versus the dollar.
The euro's improvement reflects hope for a solution, rather than strong confidence that such a solution will be achieved, said Nick Bennenbroek, head of currency strategy at Wells Fargo.
"For the next week and in the context of choppy trading, our bias is for U.S. dollar strength and global currency weakness."
Many analysts believe the only way to stem the contagion in Europe (Chicago Options: ^REURUSD - news) is for the ECB to buy up large quantities of bonds, effectively the sort of "quantitative easing" undertaken by the U.S. and British central banks.
Bond market participants polled by Reuters saw a 50/50 chance that the ECB will expand bond purchases to engage in outright quantitative easing. [ID:nL9E7J203E]
Support for the euro lies near $1.3405, the 76.4 percent retracement of last month's rally from around $1.3144 on Oct (KOSDAQ: 039200.KQ - news) . 4 to a high of $1.4247 on Oct. 27.
Spanish elections set for Sunday could help support a rise in the euro against the dollar in the very near-term, because the opposition party, which is seen as favoring austerity measures, is expected to win. But most see a downward trend in the euro.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Analysis of policy options [ID:nL5E7MF2XJ]
Other stories on euro zone debt crisis [ID:nL5E7LR1WL]
Countdown for euro zone rescue [ID:nL5E7MF2XJ]
Analysis on difficulty of breakup [ID:nL5E7MF1PJ]
Euro zone crisis in graphics http://r.reuters.com/hyb65p
Interactive timeline http://link.reuters.com/rev89r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
With investors shunning euro zone assets, funding strains were increasing for euro zone financial institutions. The premium for swapping euros into dollars rose, with the three-month cross-currency basis swap hitting its highest level since the 2008 financial crisis. [ID:nN1E7AG18W]
Analysts said high funding costs were pushing banks into shorter duration funding and could spread into spot currency markets, weighing on the euro. [ID:nL5E7MG4HG]
Against the yen, the dollar slid as low as 76.575 on trading platform EBS , the weakest level since Japan (EUREX: FMJP.EX - news) 's massive intervention on Oct. 31. It was last down 0.1 percent at 76.92. (Additional reporting by Wanfeng Zhou in New York and Nia Williams in London; Editing by Leslie Adler)
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FOREX-Euro rises on ECB lending talk, sentiment shaky
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* Short covering, boosts euro ahead of weekend
* Debt crisis still points to weaker single currency
* Interbank funding strains boost dollar demand (Updates prices, adds details, comments, changes byline, dateline, previous LONDON)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 18 (Reuters) - The euro rose against the dollar on Friday on speculation the European Central Bank may start lending to the International Monetary Fund to bail out troubled euro zone economies and as Italian and Spanish bond yields retreated.
Sentiment toward the euro remained bearish, however, and the common currency was headed for a third straight week of losses, as fears persisted that the debt crisis could engulf major euro zone states such as France and trigger a break-up of the bloc.
The European Central Bank again intervened in the secondary market to help ease tensions on debt issued by some of the troubled countries. Pressure was growing on the ECB to step up its bond-buying activity after Italian and Spanish yields hovered near unsustainable levels.
"Some relief in European bond markets and ongoing speculation about how the ECB might help have provided some temporary relief to markets," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
"We see today's rally as temporary and continue to prefer to play the euro from the short side," she added.
The euro rose more than 1 percent to a session peak of $1.3614 on Reuters data, pulling away from a five-week low of $1.3420 struck on Thursday. It last traded at $1.3562, still up 0.8 percent on the day.
Some investors closed their bets against the euro ahead of the weekend, which also boosted the euro, and gains accelerated after automatic buy orders were triggered around $1.3550.
Support lies near $1.3405, the 76.4 percent retracement of last month's rally from around $1.3144 on Oct (KOSDAQ: 039200.KQ - news) . 4 to a high of $1.4247 on Oct. 27.
Speculation of the ECB taking a more forceful role in stemming the debt crisis has gained traction in recent days. On Thursday, European officials said there have been discussions about the central bank possibly lending to the global lender, which would give it enough money to bail out bigger euro zone countries. [ID:nL5E7MH2MW]
Bond market participants polled by Reuters saw a 50/50 chance that the ECB will expand bond purchases to engage in outright quantitative easing. [ID:nL9E7J203E]
FUNDING STRAINS
While the euro could push higher in the near term as a short squeeze continues, the prevailing trend remains for a lower euro.
"Courageous market participants can sell the euro around $1.3550-60, we would start shortening euro/dollar at $1.3650," Commerzbank (Other OTC: CRZBF.PK - news) bank strategists wrote to clients.
There are signs that investors have stopped shifting money into the relatively safer German bunds and are instead abandoning the euro zone altogether, with German bond yields no longer falling as peripheral yields rise.
With investors shunning euro zone assets, funding strains were increasing for euro zone financial institutions. The premium for swapping euros into dollars rose, with the three-month cross-currency basis swap hitting 138.5 basis points on Friday, the highest since the 2008 financial crisis. [ID:nN1E7AG18W]
"So far this has not had a dramatic effect on the euro, but it is likely to be behind some of the recent weakening," said FxPro's chief economist Simon Smith.
Analysts said high funding costs were pushing banks into shorter duration funding and could spread into spot currency markets, weighing on the euro. [ID:nL5E7MG4HG]
The safe-haven Japanese yen and Swiss franc gained. The dollar slid as low as 76.575 , the weakest since Japan (EUREX: FMJP.EX - news) 's massive intervention on Oct. 31, and was last down 0.3 percent at 76.78. The dollar also lost 0.9 percent to 0.9129 Swiss franc . (Additional reporting by Nia Williams in London; Editing by Chizu Nomiyama)
FOREX-Euro up but ECB uncertainty, US deficit debate weigh
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* Short-covering, ECB boost euro ahead of weekend
* Debt crisis still points to weaker single currency
* U.S. budget deficit debate could sway sentiment
* Euro short bets rise in latest week
NEW YORK (Frankfurt: A0DKRK - news) , Nov 18 (Reuters) - Investors will remain wary of placing bets in favor of the euro, with issues on both sides of the Atlantic (Stuttgart: A0J3C9 - news) likely to contain risk appetite.
While the euro rose against the dollar on Friday on the possibility the European Central Bank and the International Monetary Fund will bail out bigger euro zone economies and borrowing costs for Italy and Spain eased, sentiment remained bearish.
The common currency fell for three straight weeks as fears persisted that the debt crisis could engulf major euro zone states such as France and trigger a break-up of the 17-nation bloc.
"While we had some consolidation today, the overall dynamics for the euro remain weak and we expect it to end the year at around $1.29," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York.
"There is not much clarity on what is needed to support the euro zone as a whole," he said. "The ECB remains reluctant to increase purchases of periphery bonds and the EFSF (European Financial Stability Facility) has not yet been fully implemented."
Yields on Italian and Spanish bonds eased after the ECB stepped in to stabilize the market, but fears remain that both countries' borrowing costs are at unsustainable levels. For more, see: [ID:nL5E7MI24O]
Euro zone officials said there have been discussions that the ECB could lend to the IMF (Berlin: MXG1.BE - news) to provide the fund with enough money to bail out even the biggest euro zone countries. [ID:nL5E7MH2MW] Pressure has also mounted on the ECB to step up its bond purchases.
Economists say only the ECB would have enough fire power to quell a confidence crisis spreading throughout the euro zone. But EU law forbids the bank to finance government borrowing directly, thus the possible arrangement with the IMF.
"Right now there is no buyer of last resort for the bonds and while austerity measures can boost short-term confidence, they are not a panacea," McCormick said. "The headwinds in Europe (Chicago Options: ^REURUSD - news) are potent and acute."
Many analysts believe the only way to stem the contagion in Europe is for the ECB to buy up large quantities of bonds, effectively the sort of "quantitative easing" undertaken by the U.S. and British central banks.
Bond market participants polled by Reuters saw a 50/50 chance that the ECB will expand bond purchases to engage in outright quantitative easing. [ID:nL9E7J203E]
Many economists say the euro zone is on the brink of another recession. This could prompt the ECB to cut interest rates again, a negative for the euro, as it would make higher-yielding currencies more appealing.
The euro last traded up 0.4 percent at $1.3514 on Reuters data, pulling away from a five-week low of $1.3420 struck on Thursday. On the week, the euro was down about 2 percent versus the dollar.
The dollar could gain on risk aversion next week given that a high-profile effort to trim stubborn U.S. budget deficits appeared near collapse on Friday as Democrats and Republicans were unable to agree on tax increases and benefit cuts. [ID:nN1E7AH0HA]
The 12-member "Super Committee" in Congress has until midnight on Wednesday to strike a deal that would save at least $1.2 trillion over 10 years.
Spanish elections set for Sunday could help support a rise in the euro against the dollar in the very near-term, because the opposition party, which is seen as favoring austerity measures, is expected to win. But most see a downward trend in the euro. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Analysis of policy options [ID:nL5E7MF2XJ]
Other stories on euro zone debt crisis [ID:nL5E7LR1WL]
Countdown for euro zone rescue [ID:nL5E7MF2XJ]
Analysis on difficulty of breakup [ID:nL5E7MF1PJ]
Euro zone crisis in graphics http://r.reuters.com/hyb65p
Interactive timeline http://link.reuters.com/rev89r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Currency speculators raised their bets in favor of the U.S. dollar in the latest week to their largest in a month, according to data from the Commodity Futures Trading Commission released on Friday. [ID:nN1E7AH1JL]
"What is surprising is how little the USD has gained over the last few months, not how much it has gained," said Steven Englander, global head of currency research at CitiFX, a division of Citigroup (NYSE: C - news) , in New York.
"The key to more pronounced USD strengthening would be backing away from the Fed (Federal Reserve) from its 'no hike ever' rhetoric or a complete euro zone collapse," he said. "Barring such moves, the inclination of investors will be sell USD as soon as risk appetite stops deteriorating."
Against the yen, the dollar slid as low as 76.575 on trading platform EBS , the weakest level since Japan (EUREX: FMJP.EX - news) 's massive intervention on Oct (KOSDAQ: 039200.KQ - news) . 31. It was last down 0.1 percent at 76.86. (Additional reporting by Gertrude Chavez-Dreyfuss and Wanfeng Zhou in New York and Nia Williams in London; Editing by Dan Grebler)
UPDATE 1-BNY Mellon scores prejudiced forex authorised victory
Fri Nov 18, 2011 3:33pm EST
* Judge dismisses 2 of 3 claims in Virginia forex lawsuit
* Virginia willingly forsaken a explain in a suit
* State wants some-more than $900 mln in penalties, damages
Nov 18 (Reuters) – Bank of New York Mellon Corp said
on Friday a state decider discharged dual of 3 of a remaining
claims in a Virginia lawsuit seeking about $932 million in
penalties and indemnification over unfamiliar sell trades executed for
public grant skeleton in that state.
But a Virginia Attorney General’s bureau pronounced in a
statement a executive explain in a box — that a bank
violated a Fraud Against Taxpayers Act — stays intact. The
case is still move toward trial.
In a dais government on Friday, Fairfax County Circuit Court
Judge Terrence Ney discharged dual forms of fake claim
allegations, or theories, brought opposite BNY Mellon by
Virginia Attorney General Kenneth Cuccinelli. The state
voluntarily forsaken another claim, while a remaining claim
accuses BNY Mellon of formulating fake forex pricing reports.
For BNY Mellon, a world’s largest control bank, the
ruling was significant. It was a initial time a decider ruled on
a fake explain explain in one of a forex lawsuits it is
defending against. False claims principle tend to be similar
from state to state.
“We are gratified that a justice discharged dual of a three
remaining claims brought by (Virginia) and we are gratified
that a decider scheduled a prompt conference on a one remaining
claim,” BNY Mellon pronounced in a statement.
Cuccinelli’s bureau pronounced in a matter a court
unequivocally hold a contribution purported were sufficient to allow
the lawsuit to proceed.
“There were 3 swap theories of how a bank
violated a law,” a matter said. “Two of a three
theories were discharged but prejudice, that means the
commonwealth can refile them if it chooses. But a central
claim … remains.”
In August, Cuccinelli filed a lawsuit opposite BNY Mellon on
behalf of a $50 billion-plus Virginia Retirement System and
other open grant plans. The censure indicted a world’s
largest control bank of charging undisclosed markups on
standing-instruction forex trades.
Standing-instruction trades executed by BNY Mellon and
Boston-based State Street Corp have been a theme of
several lawsuits filed opposite a banks by open pension
plans around a United States. The trades, also called
nonnegotiable trades, are typically for amounts reduction than $1
million.
At a conference set for Dec. 21, BNY Mellon will get another
chance to plea a remaining explain in a case, which
accuses a bank of formulating papers that showed fake forex
prices. Ney disagreed on Friday with BNY Mellon’s authorised team
that a government was misapplied in a case.
Monday 21 November 2011
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FOREX-Euro edges aloft vs dollar, though gains might fade
Sorry, I could not read the content fromt this page.
Forex: GBP/USD: Key support during 1.5720/05 – Mercury Forex
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Forex: EUR/USD rallies to 1.3600
FITITOL–>
FXstreet.com (Barcelona) – The Euro is trade aloft on Friday, pleat prior day’s waste after bouncing adult from 1.3445 low in Asia, as a span accelerated gains on European session, breaching 1.3555/70 insurgency area, to strike uninformed 2-day highs during 1.3600.
On a upside, a span competence find resistances during during 1.3645 (intra-day level) and above here, 1.3775 (intra-day level, and 1.3810 (Nov 14 high). On a downside, support levels sojourn during 1.3420/30 (Nov 16/17 lows), and next here, 1.3355 (Oct 9 low) and 1.3240 (Oct 6 low).
On a overall, however, a span stays anchored to Eurozone debt woes, disposed to serve decrease to 1.3140 and 1.3000, says Ron William, technical researcher during MIG Bank: “Bearish movement stays anchored by heightened contamination fears driven by larger European emperor debt risk. Expect downside range into 1.3146 (Oct pitch low) and psychological turn during 1.3000, afterwards 1.2870 (2011 vital low).”
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TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC, NSCC, DTC, OCC NFA) is a protected bonds broker-dealer and a purebred futures elect merchant, and also a member of a Boston Options Exchange, Chicago Board Options Exchange, Chicago Stock Exchange, International Securities Exchange and NASDAQ OMX. Its TradeStation Prime Services division, formed in New York, seeks to yield primary brokerage services, including bonds lending, to tiny and mid-sized sidestep supports and other firms. TradeStation Forex, Inc. (Member NFA) is a Retail Foreign Exchange Dealer (RFED) that exclusively provides a company’s Forex brokerage offering. The company’s record subsidiary, TradeStation Technologies, Inc., develops and offers devise trade program collection and subscription services. Its London-based subsidiary, TradeStation Europe Limited, an FSA-authorized brokerage firm, introduces UK and other European accounts to TradeStation Securities, Inc. and TradeStation Forex, Inc.
About Monex Group, Inc.
Monex Group, Inc. (Tokyo Stock Exchange 1st section: 8698), including a categorical auxiliary Monex Inc. (Tokyo, Oki Matsumoto, Chairman and CEO), an online bonds brokerage, provides modernized and singular financial services to particular investors. Monex Group has been a colonize among Japanese online bonds brokers given a finish liberalization of commissions and fees in batch brokerages in 1999. Monex relentlessly strives to offer a business in Japan innovative products and services and has determined a repute as a singular eccentric financial establishment group. Its services cover MA advisory, debt equity underwriting, item government focusing on choice investments, investment education, and other investment banking functions along with an online placement network to some-more than 1.2 million particular investors in Japan.
Monex Group aims to globalize a patron bottom and businesses in serve to enhancing a tellurian product line and services. Specifically, in new years, Monex has embarked on an desirous devise to strengthen a products and services globally by focusing a enlargement efforts to date on a flourishing Chinese market, by opening deputy offices in Beijing and appropriation BOOM Securities (HK) Limited and a organisation companies in Hong Kong. As a core component in a serve enlargement and tellurian diversification of a businesses, it has been seeking opportunities to enhance into a U.S. market, that it saw as a blank post in achieving a truly tellurian platform. The merger of TradeStation provides Monex with an evident enlargement and clever blurb participation in a U.S. online brokerage market.
CONTACT: Media Contact: Loren Lopez (954) 652-7011 llopez@tradestation.com© Copyright 2011, GlobeNewswire, Inc. All Rights Reserved
Sunday 20 November 2011
Trading Forex and the Internet
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Forex: USD/CHF contrast support area during 0.9094
FITITOL–>
FXstreet.com (Barcelona) – The cranky is nose-diving during a impulse losing some-more than 120 pips given a daily high during 0.9224
The change in a investors’ ardour favoring riskier resources in today’s event could be a trigger for this downward transformation in a pair, losing during a time of essay 1.4% during 0.9091, only above a daily low. Supporting this concept, a singular banking and a bruise are gaining clever momentum, advancing both opposite a greenback.
In a same tone, a Dollar Index is creation uninformed lows, dropping roughly 1%.
The insurgency levels are located during 0.9237 (high Nov.7), 0.9287 (Upper Bollinger 21d), 0.9290 (high Oct.10) and 0.9319 (high Oct.6).
On a flip side, a crack of a MA-10d during 0.9094 would display 0.9046 (hourly sup/res), 0.8954 (low Nov.11) and 0.8929 (MA 21d).
Managed Forex Trading How To Benefit From A Managed Account
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Majors Daily Forecast 18 Nov 2011
GBP/USD
Trading range: 1.5745 – 1.5855
Trend: Upward
Buy during 1.5757 SL 1.5725 TP 1.5845
USD/CHF
Trading range: 0.9215 – 0.9115
Trend: Downward
Sell during 0.9205 SL 0.9237 TP 0.9121
Today’s Economic Calendar:
Time GMT, Country, Indicator, Forecast, Prior
00:01 UK Nationwide consumer certainty Oct – 45
07:00 Germany PPI Oct 0.1% 0.3%
07:00 Germany PPI Oct Y/Y 5.3% 5.5%
12:00 Canada CPI Oct 0.1% 0.2%
12:00 Canada CPI Oct Y/Y 2.7% 3.2%
12:00 Canada CPI core Oct 0.1% 0.7%
12:00 Canada CPI core Oct Y/Y 1.9% 1.9%
15:00 USA Leading indicators Oct 0.5% 0.2%
FOREX-Euro seen vulnerable, rises on short-covering
Fri Nov 18, 2011 12:16am EST
* Euro in downtrend though dump approaching to be light -trader
* Mounting risk hatred supports dollar
* Aussie trims detriment after dipping next relation vs USD
* Worries grow as European bank appropriation condition tightens
By Masayuki Kitano
SINGAPORE, Nov 18 (Reuters) – The euro edged aloft on
Friday as traders lonesome brief positions and requisitioned profits
after a new dump to a five-week low, and a single
currency was approaching to sojourn on a downtrend given of the
spiralling euro section debt crisis.
The spotlight fell on Spain on Thursday, that had to pay
the top rate to sell a 10-year debt given 1997, only shy
of a 7 percent symbol seen as unsustainable.
The euro, however, showed some resilience in a arise of the
Spanish bond auction, handling to reason above a five-week trough
of $1.3421 strike in Thursday’s Asian trade.
The euro is being upheld by brief covering, pronounced Jesper
Bargmann, Asia conduct of G11 mark FX for RBS in Singapore, adding
that such profit-taking seductiveness is approaching to insist and limit
the speed of a euro’s declines.
“Market is really fervent to sell a euro and also fervent to
take some profits,” Bargmann said. “So we are saying seductiveness on
the dips to buy.”
“There’s copiousness of two-way seductiveness in a euro now,” he
added. “There’s a lot of brief positions out there and people
are fervent to book some profit. So it’s not an easy trade.”
The euro rose 0.2 percent to $1.3484, though is still
down roughly 2.4 percent for a week, on lane for a biggest
weekly commission decrease given early September.
Selling vigour opposite a singular banking has intensified
this week as misunderstanding in euro section bond markets widespread to
AAA-rated France.
The euro is approaching to exam a early Oct low of $1.3145
eventually, though a skirmish will substantially be gradual, said
Bargmann.
“I consider we’ll mangle $1.30 though we consider it’s going to be in a
fairly nurse fashion,” he said, adding that there were likely
to be some spikes and bouts of short-covering in between.
Support for a euro lies during around $1.3405, a 76.4
percent retracement of a Oct rally. The bottom of the
weekly Ichimoku cloud also offers support nearby that level,
coming in during $1.3408.
A merchant for a Japanese brokerage in Tokyo pronounced there was
talk that a euro choice position with a strike during $1.35 was set
to end today, and that players holding such a position may
buy a euro on dips and sell into rallies.
“The instruction is substantially toward a downside though looking at
how a marketplace has been relocating and positioning, we have to be
wary of short-covering,” a merchant said.
DOLLAR FUNDINS STRAINS
The deepening of a euro zone’s debt predicament has caused
heightened highlight in dollar appropriation markets this week.
The reward for swapping euros into dollars rose on
Thursday, with a three-month cross-currency basement barter around
6 basement points wider during -136 basement points, a many given the
2008 financial crisis.
“The delayed suit sight pile-up continues, with USD appropriation now
clearly a bigger emanate as contamination spreads some-more deeply into
Spain,” pronounced Sebastien Galy, strategist during Societe Generale.
The Australian dollar, that tends to come underneath vigour in
times of marketplace stress, dipped to as low as $0.9973 earlier,
matching a five-week low overwhelmed on Thursday.
The Aussie after pared some waste to change hands at
$1.0002, down 0.1 percent from late U.S. trade on
Thursday.
“While risks to a downside seem some-more apparent, it’s
worth observant that a banking is now oversold on several
momentum-based indicators,” pronounced David Scutt, a merchant during Arab
Bank Australia in Sydney.
“Keeping this in mind, should any good news surrounding
Europe strike a screens, it’s approaching to see a Aussie spring
higher on a behind of brief covering.”
Against a yen, a dollar dipped 0.1 percent to 76.87 yen
, with investors heedful of serve Japanese movement in the
wake of a large involvement on Oct. 31.
Saturday 19 November 2011
FOREX-Euro firms though opinion grave on swelling debt crisis
SymbolPriceChange039200.KQ4,310.00-560.00ACA.MI4.46-0.18
CBKF.EX1.72+0.19
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* Short covering boosts euro forward of weekend
* Debt predicament still points to weaker singular currency
* Interbank appropriation strains boost dollar demand
(Updates levels, adds details, comments)
LONDON, Nov 18 (Reuters) – The euro rose opposite the
dollar on Friday as investors unwound bearish bets on a single
currency to book increase forward of a weekend but, with a euro
zone debt predicament escalating, ardour to sell on upticks was
high.
Pressure was ascent on a European Central Bank to step
up a bond-buying programme with Italian and Spanish bond
yields tighten to unsustainable levels and plummeting direct from
other, real-money investors.
Until a resolution emerges that creates a ECB a lender of
last resort, any gains in a euro are expected to be fleeting.
“With so many adult in a atmosphere there’s zero else to concentration on
apart from a immediate, that is that a euro section looks to
be streamer into a precipice. Ahead of a weekend we don’t
think anyone is prepared to opposite that view,” Jane Foley, senior
currency strategist during Rabobank.
The euro rose 0.4 percent to $1.3510, not distant from
its five-week low of $1.3421 struck on Thursday and still down
roughly 2 percent for a week.
Support for a singular banking lies during around $1.3405, the
76.4 percent retracement of final month’s convene from around
$1.3145 on Oct (KOSDAQ: 039200.KQ – news) . 4 to a high of $1.4248 on Oct. 27. Large option
expiries during $1.3500 and $1.3550 are also expected to lean trade.
“The marketplace has an ardour to take on new shorts because
without a ECB there doesn’t seem to be any other customer in the
European emperor debt market,” Foley said.
Bond marketplace experts polled by Reuters saw a 50/50 chance
that a ECB will enhance bond purchases to rivet in outright
quantitative easing.
Prospects for a euro have dimmed this week on signs that
the predicament was swelling to core euro section countries such as
France, with many investors still looking to sell into every
rally.
With German bond yields no longer descending as peripheral
yields rise, analysts suggested that portfolio adjustments were
not only relocating from marginal debt to core Bunds, though that
investors were abandoning a euro section altogether.
Traders contend that given a bulk of investors have already
been using bearish positions on a euro in a past few
months there is singular range for a banking to tumble further,
despite what some politicians have described as a misfortune crisis
in a segment given World War II.
While highlighting a risk that a brief fist could
push euro/dollar aloft in a nearby term, Commerzbank (EUREX: CBKF.EX – news)
strategists pronounced a prevalent trend was for a reduce euro.
“Courageous marketplace participants can sell a euro around
$1.3550-60, we would start cutting euro/dollar during $1.3650,”
the bank pronounced in a note.
FUNDING STRAINS
With investors shunning euro section assets, appropriation strains
were augmenting for euro section financial institutions, boding ill
for a euro and other riskier resources while charity support for
the viewed reserve of a U.S. dollar.
The reward for swapping euros into dollars rose, with the
three-month cross-currency basement barter hitting
138.5 basement points, a top given a 2008 financial crisis.
“So distant this has not had a thespian outcome on a euro, but
it is expected to be behind some of a new weakening,” said
FxPro’s arch economist Simon Smith.
Analysts pronounced high appropriation costs were pulling banks into
shorter generation appropriation and could widespread into mark currency
markets, weighing on a euro.
With many investors preferring safety, a yen outperformed
the dollar. The dollar dipped to a two-and-a-half week low
against a yen of 76.63 yen.
“Generally protected havens are doing really good during a impulse and
once you’ve filled adult your bearing on dollars, a yen is the
next one in line, irrespective of either we competence be worried
about intervention,” pronounced Adam Myers, comparison FX strategist at
Credit Agricole (Milan: ACA.MI – news) in London.
This tumble extended a yen’s delayed climb behind towards levels
where Japanese authorities intervened on Oct. 31 to break the
currency. However, Myers pronounced a stream gait of strengthening
meant another turn of involvement was doubtful to come until
next year.
The Swiss franc also outperformed a dollar, pushing
dollar/Swiss franc down 1 percent on a day to 0.91160 francs.
The dollar was final trade during 0.9145 francs, down 0.8 percent
on a day.
(Additional stating by Pratima Desai; Editing by Susan
Fenton)
Forex: USD/CAD plunges during European session
FITITOL–>
FXstreet.com (Barcelona) – The USD/CAD has been trade to a upside given Oct 27 with flourishing concerns on a Eurozone debt predicament and tragedy between Israel and Iran, as Iran develops a chief program. This European event has shown a diseased greenback, as Germany published a aloft than approaching PPI and are rumors on talks between a IMF and a ECB for a emperor debt shopping deal.
The span has strike a uninformed 1-month high, during 1.0301, and fell by a draft after being incompetent to crack opposite 1.0300 psychological level. At a impulse of writing, a USD/CAD is quoting during 1.0257.
Mataf.net suggests resistances during 1.0415, followed by 1.0335 and 1.030. As for supports, they competence be during 1.0155, 1.0205 and 1.0265.
FOREX-Dollar gains for 4th day as euro zone woes persist
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* Stocks, commodity currencies fall in risk-averse market
* ECB buying push bond yields lower, initially lifts euro
* Euro zone official says no aid for Italy under EFSF
(updates prices, adds comment)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 17 (Reuters) - The dollar advanced for a fourth straight session on Thursday in a risk-averse market that saw stocks and commodities sell off on concerns the banking and fiscal problems of the euro zone's peripheral countries could spread to healthier economies in the region.
Commodity (Euronext: COMIN.NX - news) currencies such as the Australian, Canadian, and New Zealand dollars, including emerging market units, posted sharp losses against the safe-haven U.S. dollar as well, as investors grew frustrated the two-year old debt crisis remained unresolved.
"I think this euro zone crisis could worsen before it gets better," said James Keegan, chief executive and chief investment officer at Seix Investment Advisors in Upper Saddle River, New Jersey.
Keegan, who oversees about $26 billion in assets, added that the threat of contagion is real, and it is "questionable whether the euro zone as an entity would survive."
Bond yields in some debt-ridden euro zone countries such as Italy dropped from extreme levels, which suggested easing investor anxiety. That initially underpinned the euro, but the support faded on more negative developments in Italy.
One was on a comment from a euro zone official saying there are no plans for any financial assistance program for Italy under the euro zone bailout fund. [ID:nP6E7L300I].
By late afternoon, the dollar index, a gauge of its value against six currencies, rose 0.4 percent to 78.301 .
"For now, the dollar will only rally when there's a crisis," said Kit Juckes, head of foreign exchange at Societe Generale in London. "(And) the world is in crisis as the euro zone's leaders fight for the single currency's survival."
He arbitrarily placed the dollar's peak in March 2012 as he cannot see how the crisis will be resolved before Christmas. "But crises, by definition, don't last forever. Dollar strength will be temporary, though it may also be very violent."
The euro was little changed versus the dollar at $1.34610, having risen as high as $1.35403 on trading platform EBS. It had earlier fallen to a five-week low of $1.34210. Below there, key downside target lies near the Oct (KOSDAQ: 039200.KQ - news) . low of $1.3140.
Traders cited bids in the $1.3440 area.
Italian bond yields on Thursday fell back below the critical 7 percent mark, a level widely deemed unsustainable, as Prime Minister Mario Monti unveiled sweeping reforms to dig the country out of crisis. The spread between French 10-year bond yields and German bunds also eased from record highs.
That helped the euro bounce back above $1.35 after three straight days of decline.
The outlook for the common currency remains bleak, however, and it would likely resume weakness next week should it fail to go beyond $1.36, analysts said.
U.S. data showing initial jobless benefit claims at a seven-month low last week and a strong rebound in future home construction earlier boosted appetite for risk and lifted the euro. [ID:nN1E7AG0BT].
ECB BUYING
European Central Bank buying of Italian and Spanish debt before and after the debt sales helped ease some pressure on yields but looked modest in size, traders said.
Pressure has grown on the ECB to take a greater role in tackling the crisis, with Paris saying it should intervene more forcefully, but Germany and the ECB itself oppose that view.
Seix's Keegan said the ECB is unlikely to succumb to pressure for more aggressive intervention in the fixed income market, much like what the Federal Reserve did in the U.S. bond market under its quantitative easing program.
"That bar for the ECB to come in is so much higher," Keegan said, adding that the bank would need to see a Lehman Brothers (Berlin: GYW.BE - news) -type collapse before it actually steps in.
Against the yen, the euro was down at 103.598 , rebounding from a five-week low of 103.40 set earlier on EBS. The dollar slipped 0.1 percent to 76.979 yen . (Additional reporting by Wanfeng Zhou; Editing by Padraic Cassidy)
FOREX-Euro firms but outlook grim on spreading debt crisis
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* Short covering boosts euro ahead of weekend
* Debt crisis still points to weaker single currency
* Interbank funding strains boost dollar demand (Updates levels, adds details, comments)
LONDON, Nov 18 (Reuters) - The euro rose against the dollar on Friday as investors unwound bearish bets on the single currency to book profits ahead of the weekend but, with the euro zone debt crisis escalating, appetite to sell on upticks was high.
Pressure was mounting on the European Central Bank to step up its bond-buying programme with Italian and Spanish bond yields close to unsustainable levels and plummeting demand from other, real-money investors.
Until a solution emerges that makes the ECB the lender of last resort, any gains in the euro are likely to be fleeting.
"With so much up in the air there's nothing else to focus on apart from the immediate, which is that the euro zone looks to be heading into the precipice. Ahead of the weekend I don't think anyone is ready to counter that view," Jane Foley, senior currency strategist at Rabobank.
The euro rose 0.4 percent to $1.3510, not far from its five-week low of $1.3421 struck on Thursday and still down roughly 2 percent for the week.
Support for the single currency lies at around $1.3405, the 76.4 percent retracement of last month's rally from around $1.3145 on Oct (KOSDAQ: 039200.KQ - news) . 4 to a high of $1.4248 on Oct. 27. Large option expiries at $1.3500 and $1.3550 are also likely to sway trade.
"The market has an appetite to take on new shorts because without the ECB there doesn't seem to be any other buyer in the European sovereign debt market," Foley said.
Bond market experts polled by Reuters saw a 50/50 chance that the ECB will expand bond purchases to engage in outright quantitative easing.
Prospects for the euro have dimmed this week on signs that the crisis was spreading to core euro zone countries such as France, with most investors still looking to sell into every rally.
With German bond yields no longer falling as peripheral yields rise, analysts suggested that portfolio adjustments were not just moving from peripheral debt to core Bunds, but that investors were abandoning the euro zone altogether.
Traders say that since the bulk of investors have already been running bearish positions on the euro in the past few months there is limited scope for the currency to fall further, despite what some politicians have described as the worst crisis in the region since World War II.
While highlighting the risk that the short squeeze could push euro/dollar higher in the near term, Commerzbank (EUREX: CBKF.EX - news) strategists said the prevailing trend was for a lower euro.
"Courageous market participants can sell the euro around $1.3550-60, we would start shortening euro/dollar at $1.3650," the bank said in a note.
FUNDING STRAINS
With investors shunning euro zone assets, funding strains were increasing for euro zone financial institutions, boding ill for the euro and other riskier assets while offering support for the perceived safety of the U.S. dollar.
The premium for swapping euros into dollars rose, with the three-month cross-currency basis swap hitting 138.5 basis points, the highest since the 2008 financial crisis.
"So far this has not had a dramatic effect on the euro, but it is likely to be behind some of the recent weakening," said FxPro's chief economist Simon Smith.
Analysts said high funding costs were pushing banks into shorter duration funding and could spread into spot currency markets, weighing on the euro.
With most investors preferring safety, the yen outperformed the dollar. The dollar dipped to a two-and-a-half week low against the yen of 76.63 yen.
"Generally safe havens are doing very well at the moment and once you've filled up your exposure on dollars, the yen is the next one in line, irrespective of whether you might be worried about intervention," said Adam Myers, senior FX strategist at Credit Agricole (Milan: ACA.MI - news) in London.
This fall extended the yen's slow creep back towards levels where Japanese authorities intervened on Oct. 31 to weaken the currency. However, Myers said the current pace of strengthening meant another round of intervention was unlikely to come until next year.
The Swiss franc also outperformed the dollar, pushing dollar/Swiss franc down 1 percent on the day to 0.91160 francs. The dollar was last trading at 0.9145 francs, down 0.8 percent on the day. (Additional reporting by Pratima Desai; Editing by Susan Fenton)
FOREX-Euro seen vulnerable, rises on short-covering
* Euro in downtrend but drop likely to be gradual -trader
* Mounting risk aversion supports dollar
* Aussie trims loss after dipping below parity vs USD
* Worries grow as European bank funding condition tightens (Updates levels, adds comments)
SINGAPORE, Nov 18 (Reuters) - The euro edged higher on Friday as traders covered short positions and booked profits after its recent drop to a five-week low, and the single currency was expected to remain on a downtrend because of the spiralling euro zone debt crisis.
The spotlight fell on Spain on Thursday, which had to pay the highest rate to sell its 10-year debt since 1997, just shy of the 7 percent mark seen as unsustainable.
The euro, however, showed some resilience in the wake of the Spanish bond auction, managing to hold above a five-week trough of $1.3421 hit in Thursday's Asian trade.
The euro is being supported by short covering, said Jesper Bargmann, Asia head of G11 spot FX for RBS (LSE: RBS.L - news) in Singapore, adding that such profit-taking interest is likely to persist and limit the speed of the euro's declines.
"Market is very eager to sell the euro and also eager to take some profits," Bargmann said. "So we are seeing interest on the dips to buy."
"There's plenty of two-way interest in the euro now," he added. "There's a lot of short positions out there and people are eager to book some profit. So it's not an easy trade."
The euro rose 0.2 percent to $1.3484, but is still down roughly 2.4 percent for the week, on track for its biggest weekly percentage decline since early September.
Selling pressure against the single currency has intensified this week as turmoil in euro zone bond markets spread to AAA-rated France.
The euro is likely to test its early October low of $1.3145 eventually, but its descent will probably be gradual, said Bargmann.
"I think we'll break $1.30 but I think it's going to be in a fairly orderly fashion," he said, adding that there were likely to be some spikes and bouts of short-covering in between.
Support for the euro lies at around $1.3405, the 76.4 percent retracement of the October rally. The bottom of the weekly Ichimoku cloud also offers support near that level, coming in at $1.3408.
A trader for a Japanese brokerage in Tokyo said there was talk that a euro option position with a strike at $1.35 was set to expire today, and that players holding such a position may buy the euro on dips and sell into rallies.
"The direction is probably toward the downside but looking at how the market has been moving and positioning, you have to be wary of short-covering," the trader said.
DOLLAR FUNDINS STRAINS
The deepening of the euro zone's debt crisis has caused heightened stress in dollar funding markets this week.
The premium for swapping euros into dollars rose on Thursday, with the three-month cross-currency basis swap around 6 basis points wider at -136 basis points, the most since the 2008 financial crisis.
"The slow motion train crash continues, with USD funding now clearly a bigger issue as contagion spreads more deeply into Spain," said Sebastien Galy, strategist at Societe Generale (Paris: FR0000130809 - news) .
The Australian dollar, which tends to come under pressure in times of market stress, dipped to as low as $0.9973 earlier, matching a five-week low touched on Thursday.
The Aussie later pared some losses to change hands at $1.0002, down 0.1 percent from late U.S. trade on Thursday.
"While risks to the downside appear more apparent, it's worth noting that the currency is now oversold on several momentum-based indicators," said David Scutt, a trader at Arab Bank Australia in Sydney.
"Keeping this in mind, should any good news surrounding Europe (Chicago Options: ^REURUSD - news) hit the screens, it's likely to see the Aussie spring higher on the back of short covering."
Against the yen, the dollar dipped 0.1 percent to 76.87 yen , with investors wary of further Japanese action in the wake of its massive intervention on Oct (KOSDAQ: 039200.KQ - news) . 31. (Additional reporting by Ian Chua in Sydney, Hideyuki Sano in Tokyo; Editing by Kavita Chandran)
FOREX-Euro rises 5-week low but contagion fears persist
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* Spanish bond yields soar after poor auction
* ECB buying helps bond yields retreat, lifts euro
* Italy's Mario Monti outlines reforms to boost confidence (Updates prices, adds details)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 17 (Reuters) - The euro edged higher from a five-week low against the dollar on Thursday after bond yields in some of the heavily indebted euro zone countries eased from extreme levels, but gains were likely short-lived on fears the debt crisis is spreading.
U.S. data showing initial jobless claims at a seven-month low last week and a smaller-than-expected fall in housing starts also boosted appetite for risk and lifted the euro.
Italian bond yields fell back below the critical 7 percent, a level widely deemed unsustainable, as Prime Minister Mario Monti unveiled sweeping reforms to dig the country out of crisis. The spread between French 10-year bond yields and German bunds also eased from record highs.
That helped the euro bounce back above $1.35 after three straight days of decline. The outlook for the common currency remains bleak, however, and it would likely resume weakness next week should the $1.36 level hold, analysts said.
"If you look at some of the PIIGS (Portugal, Italy, Ireland (Xetra: A0Q8L3 - news) , Greece and Spain) yields, they have started to become fairly negatively correlated to euro/dollar," said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida.
The euro rose 0.4 percent to $1.3517, having risen as high as $1.3539 on Reuters data. It had earlier fallen to a five-week low of $1.3420. Below there, key downside target lies near the Oct (KOSDAQ: 039200.KQ - news) . low of $1.3140.
The premium of Spanish and French bonds over German Bunds hit fresh euro era highs after poor demand at their debt sales raised fears that the euro zone crisis could spiral out of control and potentially lead to a break-up of the bloc.
Spain saw its borrowing costs rising to their highest since 1997, close to the psychologically important level of 7 percent, while Paris had to pay markedly more to sell 7 billion euros of government debt.
"The Spanish auction was really bad and yields are rising to levels where there are expectations that fresh margin calls will be imposed," said Nomura currency analyst Geoff Kendrick. "The only way to trade euro is to sell. It is headed lower and our year-end target of $1.30 looks to be tested soon."
ECB BUYING
The European Central Bank buying of Italian and Spanish debt markets before and after the debt sales helped ease some pressure on yields but looked modest in size, traders said.
Pressure has grown on the ECB to take a greater role in tackling the crisis with Paris saying it should intervene more forcefully, but Germany and the ECB itself oppose that view.
Simpson said it's key for the ECB to at least continue what it's been doing until the European Financial Stability Facility (EFSF) is finalized and in operation.
"Right now if the ECB pulled away completely from its bond buying activity, we probably would see yields go through the roof. They've been basically the only buyers."
Against the yen, the euro rose 0.3 percent to 104.01 , rebounding from a five-week low of 103.37 set Wednesday. The dollar slipped 0.1 percent at 76.96 yen .
The outlook for euro zone assets took another beating after rating agency Moody's downgraded 12 German public sector banks. Analysts said investors will shy away from the region until policymakers take more concrete and forceful actions.
"It is becoming increasingly clear that the crisis in Europe (Chicago Options: ^REURUSD - news) is unfolding like a slow-motion car crash which is odd given that largely speaking all the facts seem to be known, i.e. too much debt and a concern about it being paid back," said Dave Floyd, managing partner and head of FX trading at Aspen Trading Group, based in Bend, Oregon.
"Thus one can only assume it has been the pathetically slow and some would say half-hearted attempts by politicians to put steps in place to reassure markets that have seemingly paralyzed the markets." (Editing by Chizu Nomiyama)
Friday 18 November 2011
Forex: Euro Rallies On ECB Rumors, Sterling Outlook Weighed By BoE
Market sentiment continued to pick up on Friday on rumors that the European Central Bank will increase its efforts to address the sovereign debt crisis, and the rise in risk appetite may gather pace throughout the North American trade as European policy makers weigh alternative measures to stem the risk for contagion. Talking Points
Euro: Rallies On Market Rumors, ECB To Cap Weekly Asset Purchases British Pound: BoE’s Weale Sees More QE In February, Meeting Minutes On Tap U.S. Dollar: Weakens Across The Board, Fed’s Dudley Reiterated Dovish Tone Euro: Rallies On Market Rumors, ECB To Expand Policy Further The Euro advanced to 1.3586 on speculation that the European Central Bank will lend through the International Monetary Fund to bail out troubled countries, but the fundamental outlook for the region remains bleak as policy makers struggle to stem the risk for contagion. Meanwhile, a Germany newspaper reported that the ECB has agreed on a weekly EUR 20B limit on its asset purchases in light of the growing rift within the Governing Council, but it seems as though the governments under the monetary union are becoming increasingly reliant on the central bank as they struggle to get their house in order. Nevertheless, an economic advisor to German Chancellor Angela Merkel, Peter Bofinger, noted that the ECB has the ability to put a cap bond yields under its price-stability mandate, and encouraged the central bank to act sooner rather than later as the region braces for a ‘mild recession.’ As the ongoing turmoil in the financial system dampens the outlook for the region, we are likely to see the ECB take additional steps to stimulate the ailing economy, but the council may move away from its nonstandard measures as the asset purchase program comes under increased scrutiny. As the fundamental outlook for the euro-area remains clouded with high uncertainty, the relief rally in the EUR/USD is likely to be short-lived, and we may see the pair continue to find resistance around the 20-Day SMA at 1.3757. In turn, we should see the euro-dollar extend the reversal from 1.4246, and the exchange rate is likely to threaten the rebound from 1.3145 as European policy makers struggle to restore investor confidence. British Pound: BoE’s Weale Sees More QE In February, Meeting Minutes On Tap The British Pound pared the overnight rally to 1.5887 and the sterling may face additional headwinds over the following week should the Bank of England show an increased willingness to expand monetary policy further. Indeed, the central bank meeting minutes highlights the biggest event risk for the following week, and the MPC may see scope to increase its asset purchase program beyond the GBP 275B target as policy makers see an increased risk of undershooting the 2% target for inflation. BoE board member Martin Weale argued that there’s a ‘very strong case’ to ease policy further while holding an interview with the Financial Times, and went onto say that the central bank may add to its asset purchases in February should the economy ‘evolve as the forecasts suggest.’ The dovish tone held by the BoE continues to spur a bearish outlook for the sterling, and the GBP/USD may make another run at the 38.2% Fibonacci retracement from the 2009 low to high around 1.5680-1.5700 to test for near-term support. U.S. Dollar: Weakens Across The Board, Fed’s Dudley Reiterated Dovish Tone The U.S. dollar lost ground on Friday following the shift in risk sentiment, and the reserve currency may weaken further during the North American trade as equity futures foreshadow a higher open for the U.S. market. As the economic docket remains bare for the rest of the day, we should see risk trends continue to drive price action in the currency market, but comments from the Federal Reserve could spark a shift in market sentiment as investors weigh the prospects for future policy. New York Fed President William Dudley continued to strike a dovish tone for monetary policy and said that the central is going ‘everything’ it can to stimulate the economy as it faces ‘significant downside risks,’ and we may see the FOMC keep the door open to expand policy further given the ongoing weakness within the private sector. --- Written by David Song, Currency Analyst To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com. Will the EUR/USD Retrace The Advance From Earlier This Year? Join us in the Forum Related Articles: Weekly Currency Trading Forecast FX Upcoming Fed's Richard Fisher Speaks on U.S. Economy Fed's John Williams Speaks on Financial Markets Tokyo Department Store Sales (YoY) (OCT) Declines for the fourth consecutive month. Nationwide Department Store Sales (YoY) (OCT) German Producer Prices (MoM) (OCT) Slowest pace of growth since December 2010. German Producer Prices (YoY) (OCT) Italian Industrial Orders s.a. (MoM) (SEP) Biggest decline since August 2009. Italian Industrial Orders n.s.a. (YoY) (SEP) Italian Industrial Sales s.a. (MoM) (SEP) Falls the most since November 2008. Italian Industrial Sales n.s.a. (YoY) (SEP) Consumer Price Index (MoM) (OCT) Slowest pace of growth since July. Core CPI holds above 2% for second month. Consumer Price Index (YoY) (OCT) Bank of Canada CPI Core (MoM) (OCT) Bank of Canada CPI Core (YoY) (OCT) Leading Indicators (MoM) (OCT)DailyFX provides forex news on the economic reports and political events that influence the currency market.
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FOREX-Dollar rises for 4th straight session on Europe woes
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* Stocks, commodity currencies fall in risk-averse market
* ECB buying push bond yields lower, initially lifts euro
* Euro zone official says no aid for Italy under EFSF
(Recasts, updates prices, adds comment, changes byline)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 17 (Reuters) - The safe-haven dollar rose for a fourth straight session on Thursday in a risk-averse market that saw stocks and commodities sell off on concerns euro zone banking and fiscal problems could spread to healthier economies.
Commodity (Euronext: COMIN.NX - news) currencies such as the Australian, Canadian, and New Zealand dollars as well as emerging market units posted sharp losses as investors grew frustrated the two-year old debt crisis is far from being resolved.
"I think this euro zone crisis could worsen before it gets better," said James Keegan, chief executive officer and chief investment officer at Seix Investment Advisors, in Upper Saddle River, New Jersey.
Keegan, who oversees assets of about $26 billion, pointed out that the threat of contagion is real and it is "questionable whether the euro zone as an entity would survive."
Bond yields in some of the debt-ridden euro zone countries such as Italy dropped from extreme levels, which suggested easing investor anxiety about the region's debt crisis. That initially underpinned the euro, but the support faded on more negative headlines on Italy.
One was on a comment from a euro zone official saying there are no plans for any financial assistance program for Italy under the euro zone bailout fund. [ID:nP6E7L300I].
By mid-afternoon, the dollar index, a gauge of its value against six currencies, rose 0.3 percent to 78.269 .
The euro was up slightly at $1.34748, having risen as high as $1.35403 on trading platform EBS. It had earlier fallen to a five-week low of $1.34210. Below there, key downside target lies near the Oct (KOSDAQ: 039200.KQ - news) . low of $1.3140.
Traders cited bids in the $1.3440 area.
Italian bond yields fell back below the critical 7 percent, a level widely deemed unsustainable, as Prime Minister Mario Monti unveiled sweeping reforms to dig the country out of crisis. The spread between French 10-year bond yields and German bunds also eased from record highs.
That helped the euro bounce back above $1.35 after three straight days of decline. The outlook for the common currency remains bleak, however, and it would likely resume weakness next week should it fail to go beyond $1.36, analysts said.
U.S. data showing initial jobless claims at a seven-month low last week and a strong rebound in future home construction also boosted appetite for risk and lifted the euro. For a wrapup in U.S. economic data, click on [ID:nN1E7AG0BT].
ECB BUYING
The European Central Bank buying of Italian and Spanish debt markets before and after the debt sales helped ease some pressure on yields but looked modest in size, traders said.
Pressure has grown on the ECB to take a greater role in tackling the crisis with Paris saying it should intervene more forcefully, but Germany and the ECB itself oppose that view.
Ronald Simpson, director of currency research at Action Economics in Tampa Florida said it's key for the ECB to at least continue what it's been doing until the European Financial Stability Facility (EFSF) is finalized and in operation.
"Right now if the ECB pulled away completely from its bond buying activity, we probably would see yields go through the roof. They've been basically the only buyers."
Seix's Keegan does not think the ECB would aggressively intervene in the fixed income market, much like what the Federal Reserve did in the U.S. bond market under its quantitative easing program.
"That bar for the ECB to come in is so much higher," Keegan said, adding that the bank would need to see a Lehman-type event before it actually steps in.
Against the yen, the euro was flat at 103.663 , rebounding from a five-week low of 103.40 set earlier on EBS. The dollar slipped 0.1 percent at 76.940 yen .
(Additional reporting by Wanfeng Zhou; Editing by Andrew Hay)
FOREX-Euro edges up on short-covering but vulnerable
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* Euro in downtrend but drop likely to be gradual -trader
* Mounting risk aversion supports dollar
* Aussie dips back below parity vs USD
* Worries grow as European bank funding condition tightens (Updates levels, adds comments)
SINGAPORE, Nov 18 (Reuters) - The euro edged higher on Friday as traders covered short positions after its recent drop to a five-week low, but the single currency was expected to remain in a downtrend amid fears the euro zone debt crisis is spiralling out of control.
Selling pressure on the euro has intensified this week on signs that contagion was spreading to core euro zone countries such as France, and the currency is on track for its biggest one-week drop since early September.
The spotlight fell on Spain on Thursday, which had to pay the highest rate to sell its 10-year debt since 1997, just shy of the 7 percent mark seen as unsustainable.
The euro, however, showed some resilience in the wake of the Spanish bond auction, getting a boost from short-covering and holding above a five-week trough of $1.3421 hit on Thursday on trading platform EBS.
"The market is very eager to sell the euro and also eager to take some profits," said Jesper Bargmann, Asia head of G11 spot FX for RBS (LSE: RBS.L - news) in Singapore. "So we are seeing interest on the dips to buy."
Such short-covering interest is likely to persist and limit the speed of the euro's declines, Bargmann said.
"There's plenty of two-way interest in the euro now," he added. "There's a lot of short positions out there and people are eager to book some profit. So it's not an easy trade."
The euro rose 0.2 percent to $1.3479, but is still down roughly 2.4 percent for the week, on track for its biggest weekly percentage decline since early September.
The euro is likely to test its early October low of $1.3145 eventually, but its descent will probably be gradual, said Bargmann at RBS.
"I think we'll break $1.30 but I think it's going to be in a fairly orderly fashion," he said, adding that there were likely to be some spikes and bouts of short-covering in between.
Support for the euro lies at around $1.3405, the 76.4 percent retracement of the October rally. The bottom of the weekly Ichimoku cloud also offers support near that level, coming in at $1.3408.
"The (euro's) direction is probably toward the downside but looking at how the market has been moving and positioning, you have to be wary of short-covering," said a trader for a Japanese brokerage house in Tokyo.
DOLLAR FUNDINS STRAINS
The deepening of the euro zone's debt crisis has caused heightened stress in dollar funding markets this week.
The premium for swapping euros into dollars rose on Thursday, with the three-month cross-currency basis swap around 6 basis points wider at -136 basis points, the most since the 2008 financial crisis.
"The slow motion train crash continues, with USD funding now clearly a bigger issue as contagion spreads more deeply into Spain," said Sebastien Galy, strategist at Societe Generale (Paris: FR0000130809 - news) .
The Australian dollar, which tends to come under pressure in times of market stress, dipped to a five-week low of $0.9966 and was last down 0.3 percent at $0.9977.
"While risks to the downside appear more apparent, it's worth noting that the currency is now oversold on several momentum-based indicators," said David Scutt, a trader at Arab Bank Australia in Sydney.
"Keeping this in mind, should any good news surrounding Europe (Chicago Options: ^REURUSD - news) hit the screens, it's likely to see the Aussie spring higher on the back of short covering."
The dollar dipped 0.2 percent against the yen to 76.86 yen. Wariness about the possibility that Japan (EUREX: FMJP.EX - news) may intervene further in the wake of its massive yen-selling intervention on Oct (KOSDAQ: 039200.KQ - news) . 31, has lent support to the dollar recently.
Increased signs of dollar-funding strains are another factor supporting the dollar, said a trader for a Japanese bank, adding that dollar offers from Japanese exporters are likely to put downward pressure on the dollar towards the month-end. (Additional reporting by Ian Chua in Sydney, Hideyuki Sano in Tokyo)
FOREX-Euro weighed by contagion worries; Aussie eyes parity
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* Euro struggles after 3 days of decline
* Fitch warning on U.S. banks adds to contagion fears
* Aussie under pressure, eyeing parity vs USD
SYDNEY, Nov 17 (Reuters) - The euro wallowed at five-week lows versus the dollar and yen in Asia on Thursday as bond market turmoil spread across Europe (Chicago Options: ^REURUSD - news) , sparking calls for the European Central Bank to intervene more forcefully in markets.
Investors were also nervously watching to see how German financial markets will react after Moody's cut the ratings of 12 German public-sector banks, believing they are likely to receive less federal government support if needed.
The euro stood at $1.3441, versus $1.3492 late in New York, and was not far off Wednesday's trough around $1.3430 -- a low not seen since Oct (KOSDAQ: 039200.KQ - news) . 10. Support is seen at $1.3399, a level representing the 76.4 percent retracement of the October rally, ahead of $1.3375, the 78.6 percent retracement.
Souring the mood further, Fitch warned it may downgrade its "stable" outlook for U.S. banks, because of contagion from problems in troubled European markets.
"While U.S. banks have been under scrutiny for some time over their exposure to Europe, an explicit warning from the ratings agency amplified market concerns over the extent and impact of contagion," said analysts at BNP Paribas (Other OTC: BNPQF.PK - news) .
French borrowing costs continued to rise on Wednesday and ECB buying of Italian and Spanish debt failed to reassure markets. There were also growing signs of strain in money markets, with euro zone banks finding it harder to obtain dollar funding.
However, Germany remained resolutely opposed to letting the central bank take a bigger role in resolving the debt crisis, even though many analysts believe the only way to stem the contagion is for the ECB to carry out the sort of quantitative easing undertaken by the U.S. and British central banks.
All these factors helped drive the dollar index to its highest level in five weeks. The index was at 78.366, having risen as high as 78.397 on Wednesday.
As usual, commodity currencies bore the brunt of the dip in risk appetite with the Australian dollar shedding another cent to reach a five-week low at $1.0050, from Wednesday's high of $1.0185.
"The AUD/USD remains under downward pressure and could try to push under parity to a support pivot point of $0.9986 in the near term," said Besa Deda, chief economist at St. George Bank.
Among the G3 currencies, dollar/yen remained a sea of calm as the danger of more intervention by Japan (EUREX: FMJP.EX - news) kept markets wary. Dollar stood at 77.05 yen, having carved out a slim trading range roughly between 76.80 and 77.20 since the Oct. 31 intervention.
There is no major Asian economic data on Thursday, leaving the focus firmly fixed on developments in Europe.
The new Italian prime minister is expected to present an austerity programme to the upper house on Thursday, while Athens is thrashing out a deal with private bondholders to cut its public debt, sources say. (Editing by Wayne Cole)
FOREX-Dollar holds firm as bank funding worries grow
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* USD benefits from mounting risk aversion
* Aussie hit, back below parity vs USD
* Worries grow as European bank funding condition tightens
SYDNEY, Nov 18 (Reuters) - The U.S. dollar held firm in Asia on Friday, while the euro was surprisingly resilient with European banks seen repatriating funds back home as signs of funding stress grew amid a deepening euro zone debt crisis.
The spotlight fell on Spain on Thursday, which had to pay the highest rate to sell its 10-year debt since 1997, just shy of the 7 percent mark seen as unsustainable. Even then, it could not raise the full target amount.
"The slow motion train crash continues, with USD funding now clearly a bigger issue as contagion spreads more deeply into Spain," said Sebastien Galy, strategist at Societe Generale (Paris: FR0000130809 - news) .
The euro was at $1.3462 versus $1.3459 late in New York, having recovered from a five-week low of $1.3421 plumbed on Thursday. Support for the common currency was seen around $1.3400, the 76.4 percent retracement of the October rally.
That saw the dollar index retreat slightly from a five-week peak of 78.467 to 78.282. The dollar, however, gained sharply against commodity currencies such as the Australian dollar, which are normally sold in times of market stress.
As a result, the Aussie fell below parity for the first time since Oct (KOSDAQ: 039200.KQ - news) . 12. It stood at $0.9986, having touched $0.9973 overnight.
"While risks to the downside appear more apparent, it's worth noting that the currency is now oversold on several momentum-based indicators," said David Scutt, a trader at Arab Bank Australia in Sydney.
"Keeping this in mind, should any good news surrounding Europe (Chicago Options: ^REURUSD - news) hit the screens, it's likely to see the Aussie spring higher on the back of short covering."
Against the yen, the dollar was steady near 77.00 yen , with investors wary of further Japanese action in the wake of the massive $100 billion intervention on Oct. 31.
Following a Fitch Ratings report released this week highlighting concerns over U.S. banks' exposure to euro zone debt, banks are showing little willingness to lend to one another, raising the risk that the debt crisis will turn into a credit crunch.
The premium for swapping euros into dollars rose on Thursday, with the three-month cross-currency basis swap around 6 basis points wider at -136 basis points, the most since the 2008 financial crisis.
German Finance Minister Wolfgang Schaeuble said on Thursday the euro zone's debt crisis was beginning to hit the real economy and urged vigilance to prevent contagion from infecting banks and insurance firms.
News out of the euro zone was mixed on Thursday, although Italy showed progress. The country's new prime minister announced sweeping reforms including a crackdown on tax evasion and changes to the tax system in order to dig the country out of crisis.
Athens, however, saw anti-austerity protesters clash with police.
Many analysts still believe the only way to help contain the contagion is for the ECB to buy up large quantities of bonds, effectively the sort of 'quantitative easing' undertaken by the U.S. and British central banks.
But Berlin continued to resist, saying European Union rules prohibit such action. (Editing by Ed Davies)
FOREX-Euro slips to 5-week lows as debt crisis deepens
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* Euro hits five-week low, eyes Oct (KOSDAQ: 039200.KQ - news) . trough around $1.3140
* ECB's buying Italian bonds fails to bring down yields
* More euro losses seen as crisis spreads to core Europe (Chicago Options: ^REURUSD - news)
(Updates prices, adds comment, details)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 16 (Reuters) - The euro fell to five-week lows against the dollar and yen on Wednesday as rising French and Italian borrowing costs heightened concerns about contagion in the euro zone debt crisis.
The European Central Bank's purchase of Italian and Spanish bonds brought only temporary relief. Once intervention stopped, yields resumed climbing as investors doubted how much the ECB can buy to support the bond market.
Analysts expect the euro to remain under pressure as troubles in the periphery appear to be spreading to core nations in Europe with France the latest target of investor angst as policy makers remain behind the curve in finding a solution to the region's debt problems.
"The euro/dollar is being pushed and pulled by many things in the market of late, but ECB intervention in the Italian and Spanish bond markets seems to give the pair some support and comfort today," said Greg Michalowski, chief currency analyst at FXDD, a retail brokerage in New York. "Tomorrow Spain is scheduled to sell 4 billion 10 year bonds. How that auction goes will give the market a clue as to the real demand from investors."
The euro was last little changed at $1.3534 , after earlier dropping as low as $1.3427 on Reuters data, the weakest level since Oct. 10.
Against the yen, it traded at 104.26 yen , after earlier hitting 103.37 yen.
The common currency also came under pressure after Italian bank UniCredit (MDD: UCG.MDD - news) said it would ask the ECB to extend its access to funding, stoking concerns about the health of euro zone banks. [ID:nL5E7MG237]
"Markets are slowly losing their will to believe in an EU solution, and this is being reflected in the debt market," said Paul Bregg, a currency trader at Western Union Business Solutions in Denver, Colorado.
Traders cited euro selling from macro funds. Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston, said net inflows into the euro "have virtually dried up, with the seeming hesitation on the part of even the more tactical market participants."
The dollar slipped 0.1 percent to 77.03 yen .
Dollar/yen has now broken through the 61.8 percent Fibonacci retracement of the move on intervention on an intraday basis for four straight days.
ECB ROLE
Bond purchases by the ECB initially pushed Italian yields down to around 6.83 percent and sparked a rebound in the euro. But yields later climbed back above 7 percent, a level widely deemed unsustainable.
Mario Monti, a former European commissioner, was sworn in as prime minister and formed a new technocrat government in Italy on Wednesday, but analysts were skeptical the move would be enough to calm financial markets.
In a sign the debt crisis is spreading to Europe's core economies, the yield spread between French 10-year government bonds over German Bunds hit its highest level since the euro's launch in 1999 before easing. France is the second-largest economy in the euro zone.
This made for a difficult backdrop for auctions of up to 11 billion euros of Spanish and French bonds Thursday. The Spanish sale of new 10-year debt is likely to struggle as the country's finances come under scrutiny days before a general election.
France and Germany clashed over whether the European Central Bank (Other OTC: CBSU.PK - news) should intervene to halt the debt crisis.
A French government spokeswoman said the ECB's role is to ensure the stability of the euro, but also the financial stability of Europe. But German Chancellor Angela Merkel made clear Berlin would resist pressure for the central bank to take a bigger role in resolving the debt crisis. [ID:nL5E7MF410] Western Union (NYSE: WU - news) 's Bregg said the rise in French borrowing costs was especially worrying. "Rumors of a debt downgrade are circling daily. This is not good news, especially when France is one of the main funding countries for the bailout fund and Europe's number two economy." (Reporting by Nick Olivari and Wanfeng Zhou; Editing by Andrew Hay)
Thursday 17 November 2011
FOREX-Euro hits 1-mth low, crisis threatens more EU members
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* Euro shaky, markets wary of contagion to core countries
* Euro support seen at $1.3410 but test of $1.3145 likely
* With crisis getting dire, ECB may be forced to act -analyst
* NY Fed calls on prime brokers to raise collateral spooks traders
TOKYO, Nov 16 (Reuters) - The euro slipped to a fresh one-month low against the dollar and the yen on Wednesday as the euro zone debt crisis threatened to engulf top-rated members such as France, as government bonds of core countries came under pressure.
The common currency fell as far as $1.3437, its lowest level in more than a month, after the French bond yield spread over benchmark German bunds hit euro-era highs near 200 basis points and the spread of triple-A rated Austria also shot up.
Italian yields spiked back above the critical 7 percent level as the appointment of former EU Commissioner Mario Monti to head a new government failed to quell concerns over the country's long-term political and economic future.
"It's not clear if a new government in Italy can carry out measures that would satisfy the market. I would not be surprised if the euro falls to around $1.30 within two weeks," said Masafumi Yamamoto, chief strategist at Barclays (LSE: BARC.L - news) .
Funding strains among European banks are evident with euro/dollar three-month cross currency basis swap spreads widening to a level not seen since late 2008.
With the currency bloc caught in a vicious cycle of falls in government bonds hurting the region's big banks, further undermining confidence in the area, the euro is coming under heavy pressure.
The next immediate target for euro/dollar is seen at $1.3405-10, the bottom of the weekly Ichimoku cloud and a 76.4 percent retracement of the pair's rally last month. A break there would open the way for a test of the Oct (KOSDAQ: 039200.KQ - news) . 4 low of $1.3145.
Daisuke Uno, chief strategist at Sumitomo Mitsui Bank, said the debt crisis that started in Greece two years ago may be festering even in Germany.
"In the past, the spreads of periphery countries gained as their bond yields rose, while German bund yields fell. But these days bund yields hardly fall. What this means is that the debt domino is almost reaching Germany," Uno (KOSDAQ: 114630.KQ - news) said.
"I think the ECB is likely to take policy action, probably buying more government bonds and cutting rates, even before the next policy-setting meeting on Dec. 8," he added.
EUROPEAN CONCERNS
Positive U.S. retail data on Tuesday did little to help mitigate worries over the global economy.
"While it is clear that the data in the U.S. is improving, European concerns far outweigh at present," said David Scutt, a trader at Arab Bank Australia in Sydney.
"Markets are clearly expecting a circuit breaker to alleviate pressure on periphery bond yields. If no announcement is forthcoming in the days ahead, one suspects that the situation could unravel fairly quickly."
Political developments in two euro zone hot spots were mixed. In Rome, Prime Minister designate Monti will meet the Italian president on Wednesday to present a new government.
But in Athens, Greek conservatives said they would not bow to "dictates from Brussels" over a bailout designed to save their country from bankruptcy and safeguard the euro.
The market was also spooked by the news that the New York (Frankfurt: A0DKRK - news) Federal Reserve will be increasing the collateral requirements on primary-dealer banks in transactions dealing with mortgage-backed securities, in an effort to lower the settlement risks with its counterparties.
"I don't understand exactly why the Fed has done this when it wants to support housing markets by buying MBS, but this does suggest the Fed is anticipating serious conditions and is taking measures against deterioration in the euro zone crisis," said a Japanese bank trader.
Rumours about more credit downgrades in Europe (Chicago Options: ^REURUSD - news) -- though hardly unusual these days -- dogged the euro.
The wobbly euro lifted the dollar index to a one-month high of 78.375, well off the week's low of 76.751.
Broad risk aversion also hit commodity currencies hard, with the Australian dollar falling more than one percent to $1.0063.
The dollar held steady against the yen around 77.00, with the threat of more intervention by Japan (EUREX: FMJP.EX - news) keeping investors wary of buying the Japanese currency. The Bank of Japan kept its policy on hold as expected.
Euro zone and U.S. inflation data will be in focus next and a stronger-than-expected result for Europe may dim prospects for a follow-up interest rate cut by the European Central Bank. (Additional reporting by Ian Chua and IFR's John Noonan in Sydney; Editing by Joseph Radford)
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