Month: September 2012

By Central Bank News
    The Bank of Canada (BOC) held its target for its overnight interest rate unchanged at 1.0 percent, as widely expected, and repeated that it may have to it tighten policy if economic expansion continues in order to keep inflation close to target.
    “In Canada, while global headwinds continue to restrain economic activity, underlying momentum remains at a pace roughly in line with the economy’s production potential,” the BoC said in statement, adding that it expects growth to pick up through 2013 with consumption and business investment to remain the main drivers.
    Canada’s GDP expanded by 2.50 percent in the second quarter from the same 2011 quarter, up from 1.8 percent in the first quarter. The BoC expects 2.1 percent growth in 2012 and 2.3 percent in 2013. 
    The bank noted that core inflation had been softer than expected in recent months but it, along with CPI inflation, is expected to return to 2 percent in the next year. 
    The BoC targets inflation of 1-3 percent, with a midpoint of 2.0 percent.

    Consumer Price Inflation in Canada has been coming down rapidly in recent months, hitting 1.3 percent in July after peaking at 3.7 percent in May last year.
    In July the BoC said it expected CPI inflation to remain noticeable below its target due to the fall in oil prices but in today’s statement it said that prices for oil and other commodities produced by Canada had increased since July, despite the slower economic momentum.
    “To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term,” the BoC said.
    The BoC has used the same tightening language since April and on Aug. 22 Governor Mark Carney also used the same phrase.
    The BoC has held its key interest rate at 1.0 percent since September, 2010.
    www.CentralBankNews.info

      

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 5 September 2012, 07:00 EDT

SPOT MARKET gold prices fell briefly below $1690 an ounce Wednesday morning in London trading, remaining close to six-month highs, while stocks and commodities were also broadly flat, ahead of tomorrow’s policy announcement from the European Central Bank.

Silver prices dipped below $32 per ounce before recovering, ending the morning over 1% up on the week so far.

“The next resistance is at $1700,” says the latest technical analysis from bullion bank Scotia Mocatta.

Spot gold prices briefly touched that level on Tuesday, following the release of the latest ISM purchasing managers index data.

The ISM data show US manufacturing activity contracted in August for the third month in a row, prompting further speculation about the possibility of a third round of quantitative easing from the Federal Reserve, whose policymakers meet next Tuesday and Wednesday.

“[The ISM report] gives the Fed another green light to launch QE3 next week,” reckons Paul Dales, senior US economist at consultancy Capital Economics.

“Will QE really come?” asks Dominic Schnider at UBS Wealth Management.

“It is a little too early to go full throttle…policymakers are heating things up, but will what eventually comes out to be as big as the market is looking for?”

The volume of gold held to back shares in the world’s biggest gold ETF, the SPDR Gold Trust (GLD), rose to its highest level since March 19 yesterday, hitting 1293.1 tonnes. Total gold ETF holdings meantime set an all-time record Tuesday, according to newswire Reuters.

On the New York Comex, open interest in gold futures rose to six month highs yesterday, although we will not know the balance of bullish and bearish positions until the weekly Commitment of Traders report comes out at the end of the week.

In Europe meantime, the ECB and Bank of England are due to make their latest policy announcements tomorrow. Earlier this week, ECB president Mario Draghi reportedly told a committee of European Parliament lawmakers that he favors buying sovereign bonds of up to three years in maturity on the open market.

“We expect the ECB action to be supportive of gold,” says today’s commodities note from Standard Bank.

“A stronger Euro and weaker Dollar could see gold move above $1700.”

Over in India, traditionally the world’s largest gold buying nation, there are fears of another rise in gold import duties.
“The government may look at increasing the duty to 7.5%,” says Prithviraj Kothari, president of the Bombay Bullion Association.

“Any such move will hit demand in a big way.”

“Any increase in duty will play havoc on the industry,” agrees Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation.

“The industry is grappling with high gold prices and demand is slow.”

Rupee gold prices set another all-time high on Wednesday, as the Rupee fell to a six-week low against the Dollar.

Indian gold jewelry demand however is set to rally in the second half of 2012, after falling to three-year lows in the six months to June, precious metals consultancy Thomson Reuters GFMS said Tuesday.

GFMS, which published its Gold Survey 2012 Update 1 yesterday, added that it expects gold prices to breach $1800 by the end of this year, with gold investment forecast to hit record levels and central banks expected to add a further 220 tonnes of gold to their reserves, following the 273 added in the first half of the year.

“I think we’re on pretty safe ground saying that we’ve already seen the lows for the year and that firmer prices, particularly towards year-end, are on the cards,” said GFMS global head of metals analytics Philip Klapwijk.

“But we’re also expecting a bumpy ride…any intensification of the Eurozone crisis or dashing of hopes for further easing by the Fed and you could easily see the rally derailed for a while.”

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Article by AlgosysFx Forex Trading Solutions

In yesterday’s European trading session, the Euro lost against the US dollar on fears that the European Central Bank could disappoint at tomorrow’s meeting, and would not disclose much details about its possible intervention in the markets until the German Constitutional Court makes a judgement on September 12 over the legality of the European Stability Mechanism, the Euro Zone’s bailout fund. This led to the incline of the Greenback despite economic data showing a contraction of the US’ manufacturing activity in August. As the ECB meeting draws closer, the shared currency is projected to decline versus the Buck in today’s European trading exchanges.

In a closed-door session at the European Parliament in Brussels, ECB President Mario Draghi told lawmakers that the bank has lost control of borrowing costs in the Euro Zone. He also said that the central bank’s primary mandate requires it to intervene in bond markets to take back control of interest rates and make certain the Euro’s survival. Everyone seemed to have been fixated on the ECB’s bond-buying plan, but the risks of disappointment are seen to add pressure to the single currency.

Today, the Euro Zone’s Retail Sales figure in July is projected to drop by 0.2 percent, and activity in the services sector is likely to be confirmed at 47.5 points, which are expected to push the Euro lower than its peers. As tomorrow’s meeting would likely disappoint while the judgement of the German court is still pending, the EUR/USD pair is set to decline in today’s European exchanges, favoring a short position in today’s European exchanges.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx

By Central Bank News
    The National Bank of Poland (NBP) held its interest rates unchanged, as expected by most economists.
    The Polish central bank said in a brief statement that it had kept interest rates unchanged and would explain its decision at a press conference.
    The bank’s reference rate was kept at 4.75 percent, the lombard rate at 6.25 percent, the deposit rate at 3.25 percent and the rediscount rate at 5.00 percent.
    Economists had expected the bank to keep rates unchanged but signal that it may cut rates later this year due to a slower economy.
    The economy decelerated to a 2.4 percent annual growth rate in the second quarter from 3.5 percent in the first quarter and 4.4 percent in the fourth quarter. The economy grew 4.3 percent in 2011.
    Inflation, as measured by the consumer price index, eased to 4.0 percent in July from 4.3 percent in June. The NBP targets inflation of 2.5 percent, plus/minus one percentage point.

Source: ForexYard

The US dollar fell against several of its main currency rivals yesterday, following a worse than expected American manufacturing indicator which led to increased speculations that the Fed will soon take action to boost the US economic recovery. Turning to today, analysts are warning that the dollar could extend its recent downward trend if investors remain convinced that both the ECB and Fed will soon take actions to boost the euro-zone and US economic recoveries. At the same time, any dollar losses could be limited ahead of Friday’s Non-Farm Payrolls figure, which is forecasted to show growth in the US employment sector.

Economic News

USD – Manufacturing PMI Leads to Dollar Losses

After steadily gaining on several of its main currency rivals during the first part of the day yesterday, the dollar began falling during afternoon trading after a worse than expected US manufacturing indicator signaled a further slowdown in the US economic recovery. The USD/JPY fell 15 pips after the indicator was released to trade as low as 78.27. Against the Swiss franc, the greenback advanced some 45 pips to reach as high as 0.9563 during morning trading, before falling to the 0.9535 level following the news release.

Turning to today, analysts are warning that given the increased speculations that the Fed could initiate a new round of quantitative easing in the coming weeks, the dollar could extend its recent bearish trend. That being said, traders will want to monitor announcements out of the euro-zone today. While it is widely expected that the ECB will soon unveil its own steps to lower borrowing costs in the region, it is not yet known exactly what those steps will be. Any signs that the new ECB initiatives will not be enough to combat the euro-zone debt crisis could lead to risk aversion and boost the dollar.

EUR – Euro Reverses Some of its Recent Gains

The euro spent much of yesterday’s trading session in a bearish trend, as uncertainties regarding the details of an ECB plan to lower borrowing costs in the euro-zone led to mild risk aversion in the marketplace. The EUR/JPY fell more than 50 pips during European trading, eventually reaching as low as 98.44 toward the end of the day. Against the US dollar, the common currency dropped more than 60 pips to trade as low as 1.2557. Disappointing US data later in the day resulted in the euro bouncing back to the 1.2575 level.

Today, a lack of significant news out of the euro-zone means that traders will want to continue monitoring announcements regarding the details of the ECB’s plans to lower borrowing costs in Spain and Italy. If the ECB fails to take any significant actions in the near future to combat the euro-zone debt crisis, risk aversion is likely to return to the marketplace which could negatively affect the euro. Later in the week, traders should not forget to pay attention to the US Non-Farm Payrolls figure. The figure is considered extremely important and could lead to heavy volatility for the euro.

Gold – Gold Range Trades Ahead of Euro-Zone News

The price of gold saw relatively little movement yesterday, as investors were hesitant to open new positions ahead of significant euro-zone news later in the week. Still, gold was able to briefly touch a five-month high at $1698.76, after a worse than expected US indicator led to an increase in demand for precious metals.

Today, analysts are predicting that gold could remain near its recent highs ahead of the euro-zone Minimum Bid Rate and ECB Press Conference on Thursday. Any indications today that the European Central Bank will finally unveil plans to lower borrowing costs in Spain and Italy could help gold maintain its bullish trend.

Crude Oil – Crude Oil Reverses Gains amid ECB Uncertainty

The price of crude oil fell by more than $1 a barrel during European trading yesterday, as uncertainty regarding potential new steps from the ECB to boost the euro-zone economic recovery led to mild risk aversion in the marketplace. The commodity traded as low as $95.78 during afternoon trading, down around $1.55 for the day.

Turning to today, oil traders will want to pay attention to announcements out of the euro-zone regarding what new initiatives the ECB could announce at a press conference on Thursday. Any indications that the steps will not be strong enough to effectively combat the euro-zone debt crisis, could lead to risk aversion and cause oil to extend yesterday’s losses.

Technical News

EUR/USD

The Bollinger Bands on the weekly chart are beginning to narrow, signaling a possible price shift in the coming days. Furthermore, the Williams Percent Range on the same chart is approaching the overbought zone, indicating that the price shift could be downward. Opening short positions may be the wise choice for this pair.

GBP/USD

Most technical indicators on the daily and weekly charts show this pair range trading, making it difficult to make a long-term prediction. Traders may want to take a wait and see approach, as a clearer trend is likely to present itself in the near future.

USD/JPY

The daily chart’s Slow Stochastic appears close to forming a bearish cross, indicating that an upward correction could occur in the near future. Furthermore, the Williams Percent Range on the weekly chart has dropped into oversold territory. Opening long positions may be the right move for this pair.

USD/CHF

Long-term technical indicators are providing mixed signals for this pair. On the one hand, the MACD/OsMA on the weekly chart has formed a bearish cross, meaning that downward movement could occur. On the other hand, the same chart’s Williams Percent Range has fallen into oversold territory. Taking a wait and see approach may be the best choice for this pair.

The Wild Card

EUR/SEK

The Williams Percent Range on the daily chart has crossed over into overbought territory, indicating that this pair could see a downward correction in the near future. Furthermore, the Slow Stochastic on the same chart appears close to forming a bearish cross. This may be a good time for forex traders to open short positions.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

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By TraderVox.com

Tradervox.com (Dublin) – The debt crisis in euro zone has worsened and it is now affecting the overall rating of the European Union. According to a report by Moody’s Investors Service rating company, outlook for the EU has been downgraded to negative from stable as a result of risks to France, Germany, UK and Netherlands, which are the biggest contributors of the Union’s budget. The rating company also downgraded the outlook on the Union’s provisional AAA rating to negative from stable for its medium term note program. These moves by Moody’s are hurting investor confidence in the region which is already down from the prolonged debt crisis.

According to the statement released on Monday, the change is reflective of the negative outlook on the AAA ratings of the member countries that contribute largely to the EU budget. The statement indicated that the member states’ creditworthiness is correlated as they are all exposed to euro region debt crisis. The move has come at a time when German Central Bank, Bundesbank, is opposing the move by the European Central Bank to rollout a bond buying program aimed at lowering borrowing costs for nations wallowing in debt crisis. However, German Chancellor Angela Merkel has reiterated her commitment to supporting ECB efforts to salvage the euro. Delivering the statement, Moody’s indicated that the weakening commitment of the member states to the changes proposed to the EU’s fiscal framework have resulted to conservative budget which is credit negative.

In a bid to salvage the debt crisis in euro region, Mario Draghi, the European Central Bank President, has indicated that he is committed to buying three-year government bonds as a measure to bring down high borrowing costs. This will probably save the EU ratings as Moody’s indicated that its outlook could be changed to stable of ratings on key countries was restored to AAA status.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

By TraderVox.com

Tradervox.com (Dublin) – The euro gained on Tuesday against the yen as speculation that European Central Bank plan of bond purchases will help solve the debt crisis in the region. Confidence in the euro improved as European Union President Herman Van Rompuy met with German Chancellor Angela Merkel in Berlin as they discussed the debt crisis. World leaders are urging Germany to accept the bond buying program as it might be the only way out of the crisis according to Mario Draghi, the ECB President. The Italian Minister Mario Monti and the French President Francoise Hollande also met in Rome for discussions. Italy and Spain have refrained from asking for aid from ECB, which might lead to a delay in rolling out of the bond buying program.

According to Daisuke Karakama, a Market Economist at Mizuho Corporate Bank Ltd in Tokyo, it would be a good boost for the euro if the European Central Bank were to buy three-year maturity bonds for countries such as Spain and Italy. According to Jean-Paul Gauzes who is a member of European Parliament, Draghi indicated to the parliament that he would be comfortable buying bonds of up to three-year maturity as this does not constitute state financing when he a addressed a closed door session in Brussels on Monday.

As the ECB prepares to hold its policy meeting tomorrow Sept 6, Akira Moroga, a Manger at Aozora Bank Ltd, the euro might experience some short-covering as speculation of bond buying program rises. Economists have indicated that September will be a pivotal month for the euro as it might be the month when the 17-nation currency tumbles or regains market confidence. Further, if Draghi goes ahead with his plan to buy bond from sovereign governments, the euro will be debased and it is likely to fall against major currencies.

The 17-nation currency increased against the yen by 0.4 percent on Tuesday to trade at 98.89 yen during the Tokyo trading session. The shared currency also advanced against the dollar by 0.2 percent to trade at $1.2619.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Source: ForexYard

The euro saw moderate losses against its main currency rivals last night, as uncertainties regarding ECB plans to lower borrowing costs in the euro-zone led to risk aversion among investors. That being said, losses were limited ahead of tomorrow’s ECB press conference and Friday’s US Non-Farm Payrolls. After falling close to $2 a barrel yesterday due to poor US manufacturing data, crude oil extended its bearish trend last night and is currently trading just above the $95.20 level.

Main News for Today

With no major news events scheduled to take place today, traders will want to continue monitoring any announcements out of the euro-zone which could hint at details of the ECB’s plans to lower borrowing costs in Spain and Italy.

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Central Bank News
    The Bank of Thailand (BoT) kept its policy rate unchanged at 3.0 percent, as expected, saying the domestic economy remained robust despite a higher drag on activity from slower global demand.
    Two of the members of the Monetary Policy Committee voted to cut the policy rate by 25 basis points while three members voted to maintain the rate, which has been unchanged since January, when it was cut by 25 basis points. Last month two members also voted to cut rates.
    The bank’s policy rate hit a recent peak in October last year at 3.50 percent and have been heading lower since November when the first cut in rates came.
    “The MPC viewed that the impact of slower global demand on the Thai economy had increased to some extent. Nonetheless, domestic demand remained robust and current monetary conditions were accommodative enough to support continued economic expansion. Credit growth in some sectors had been rapid and warranted close monitoring,” the BoT said.
    Thailand’s economy expanded by 3.3 percent in the second quarter for an annual growth of 4.20 percent, a sharp improvement from first quarter’s 0.4 percent expansion.

    The Thai central bank, which has been under pressure by the government to cut interest rates, said the domestic economy grew at a faster rate in the second quarter than previously forecast and strong momentum in consumption and investment was likely to sustain the trend, along with the positive contribution of government stimulus measures.

    “Nonetheless, the impact of slowing global demand on Thai exports would become more apparent and it was possible that export growth this year would be lower than expected,” the bank said.
    It added that inflation was expected to moderate further and remain within the bank’s target.
    The inflation rate in Thailand was steady in August at an annual rate of 2.7 percent. The BoT targets inflation of 3.0 percent.

    www.CentralBankNews.info