Month: October 2012

By Central Bank News
    The central bank of Uganda cut its key Central Bank Rate (CBR) by a further 200 basis points to 13.0 percent to provide further stimulus to the economy following a sharp drop in inflation.
    The Bank of Uganda (BOU), which has now cut its benchmark rate 7 times this year for a total reduction of 1,000 basis points, said the CBR rate was now approaching a level that was consistent with core inflation of 5 percent and any further rate cuts this year were likely to be minor.
    Uganda’s annual headline inflation rate fell to 5.4 percent in September from 11.9 percent in August while the annual rate for core inflation fell to 4.8 percent from 11.4 percent in August, the bank said.
    The bank said the sharp drop in September inflation was due to base effects but added that inflationary pressures had been easing the entire year due to weak demand, as the economy is operating below potential output, and a stable exchange rate.
    “Any further reductions in the CBR in 2012 are likely to be small, unless there is a major downward shock to inflation and aggregate demand more broadly, which seems unlikely in the short term,” the bank said in a statement.
    The central bank said it expects inflationary pressures to remain subdued in the short-term with the core inflation rate stabilizing around 5 percent in the last quarter of 2012 and to remain at that level in the first half of next year.
    “In the short-term, monetary policy will continue to emphasize stimulating a recovery in aggregate demand in order to boost real economic growth, while safeguarding against any resurgence in inflation,” the BOU said.
    The central bank said previous rate cuts had not been passed fully through by commercial banks to their lending rates but it was hopeful there would be “a significant reduction in bank lending rates for all borrowers” in October.
    The BOU said the band around the CBR would remain at plus/minus 3 percentage points and the margin on the Rediscount Rate would remain at 4 percentage points. The Rediscount rate will be set at 17 percent and the Bank Rate at 18 percent.
    www.CentralBankNews.info
    
    

By Chris Vermeulen, GoldAndOilGuy.com

The price of gold hit a record high this past week . . . in euro terms (at about 1380 euros). The record came after a number of actions by central banks around the world, trying to stimulate their respective economies. The actions, usually centered around money printing, once again had investors looking for refuge in gold.

Since the beginning of September, investors have bought about 75 tons of gold through exchange traded funds. Reuters says that gold ETFs, such as the largest gold ETF – the SPDR Gold Shares (NYSE: GLD), are on track for their biggest quarterly inflows in over a year, of 3.285 million ounces. Finally, according to UBS, investors have also raised their bullish bets on gold futures to the highest level in more than a year.

All the world’s major central banks took action recently including the Bank of Japan which launched a fresh round of monetary stimulus. The main action though was centered in Europe and the United States. The European Central Bank has promised to buy an unlimited quantity of eurobonds going forward. And the Federal Reserve announced its third round of monetary stimulus, QE3, that promises to buy $40 billion of mortgage-backed securities monthly on top of its ongoing Operation Twist program of buying long-dated Treasuries.

Speaking about the monetary easing, Barclays precious metals analyst Suki Cooper put it this way to the Financial Times, “Gold finally found the catalyst it had been waiting for all year after the Fed announced open-ended quantitative easing.”

Another reason for gold’s rise in euro terms, it must be noted, is the continuing fiscal turmoil in Europe itself, particularly in Spain. Spain’s largest autonomous region, Catalonia, manages an economy as big as Portugal’s. The problem is that it has debts of 42 billion euros which it is struggling to service. Catalonia has requested a 5 billion euro temporary bailout from Spain’s central government, adding to its debt burden. In a real show of defiance, Catalonia is also refusing to implement austerity measures. Add to that, bank stress tests in Spain showed that the country’s 14 largest lenders will need 60 billion euros in new capital.

No surprise then that physical demand for gold bars and coins in Europe rose 15 percent in the second quarter, according to the World Gold Council!

Another positive fundamental reason in the corner of gold bulls is the recent currency appreciation in the Indian rupee. India is traditionally the world’s largest consumer of gold. Sales have been slow there this year due to the government trying to slow down gold sales there through rises in a gold import tax. However, the recent rise in the rupee has made gold purchases more palatable and gold sales to India have hit their highest level in two months.

So for now, many of the fundamentals look to favor a move higher for gold, although there is technical resistance at its 2012 high of $1791.

Know when to buy gold, silver, oil and stocks –  GoldAndOilGuy.com

Chris Vermeulen

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 2 October 2012, 06:45 EDT

WHOLESALE gold prices hovered in a tight range just below $1780 an ounce for most of Tuesday morning in London, just below a new 2012 spot market high touched yesterday following comments from US Federal Reserve policymakers.

Silver prices traded just below $35 per ounce, close to seven-month highs, while stocks and the Euro ticked higher despite warnings that Spain is underestimating the amount of recapitalization its banks need.

Commodities were broadly flat, with copper showing some strength, while major government bond prices fell.

A day earlier, Dollar gold prices touched a new 2012 high at $17971 per ounce during Monday’s US session, while the gold price in Euros set a fresh all-time record at €44,583 per kilo (€1386 per ounce).

“The gains were prompted by Fed President Evans’ comments that the quantitative easing measures adopted [by the Fed last month] did not go far enough,” reckon analysts at Commerzbank.

“On top of this, Fed Chairman Bernanke expressed concern about weak economic growth, making additional bond purchases a possibility… In a climate of ultra-loose monetary policies and the relentless Eurozone debt crisis, demand for gold as a store of value and alternative currency is likely to remain strong.”

“We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio,” say analysts Nicholas Johnson and Mihir Worah at world’s largest bond fund Pimco.

“The supply of gold is constrained, and we see demand increasing consistent with global economic growth on a per capita basis. Regarding inflation in particular, we feel that the Federal Reserve’s decision to begin a third round of quantitative easing makes gold even more attractive.”

Holdings of gold backing the world’s largest gold ETF, SPDR Gold Shares (GLD), rose by nearly 2 tonnes to 1322.6 tonnes yesterday, the first day of the new quarter, though they remain 0.7% off last Tuesday’s all-time high.

Investment bank UBS meantime has said it expects a boost in physical gold trading volumes when China returns from a week-long holiday next week.

Spain’s banks could need up to €105 billion to absorb potential losses on their loans, according to ratings agency Moody’s. That’s more than last Friday’s €60 billion estimate and more than the €100 billion credit line Spain agreed with other Euro members in June.

“The recapitalization amounts published by Spain are below what we estimate are needed for Spanish banks to maintain stability in our adverse and highly adverse scenarios,” say Moody’s analysts Maria Jose Mori and Alberto Postigo.

“If market participants are skeptical about the stress test, negative sentiment could undercut the government’s efforts to fully restore confidence in the solvency of Spanish banks.”

Spain’s government meantime is ready to ask for a bailout to help fund public spending as soon as next weekend, although Germany would prefer it to wait, Reuters reports.

“It doesn’t make sense to send looming decisions on Greece, Cyprus and possibly also Spain to the Bundestag one by one,” a senior German source told the newswire.

“Bundling these together makes sense, due to the substance and also politically.”

Here in the UK, house prices are likely to be flat or modestly declining over the next 12 months, according to building society Nationwide.

Across the Atlantic, the Commodity Futures Trading Commission may now find it impossible to revive its plan to introduce a new “position limits” rule after the move was blocked in court last week, according to a Florida law professor.

On Friday, US District Judge Robert Wilkins ruled that the move was unnecessary in order for the CFTC to comply with the Dodd-Frank Act and rejected it.

“Even if Democrats win the White House, the rulemaking process will take years to complete and, my guess, the Democrat commissioners at the CFTC will probably have lost their appetite for this battle,” says Jerry W. Markham of the Florida International University at Miami.

“I am disappointed by [the] ruling,” CFTC chairman Gary Gensler said Friday.

“The Rule addresses Congress’s concern that that no single trader is permitted to obtain too large a share of the market, and that derivatives markets remain fair and competitive. I believe it is critically important that these position limits be established as Congress required….we are considering ways to proceed.”

Among the activity regulated by the CFTC is the trading of silver and gold futures and options on the Comex.

In South Africa, which has been hit by a series of strikes and protests and platinum and gold mining sites, the world’s biggest platinum producer Anglo American Platinum has said it will fire any striking workers who do not turn up to a disciplinary hearing today.

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

The US dollar is foreseen to gain alongside the Australian dollar today as the Reserve Bank of Australia unexpectedly slashed interest rates while the US factory sector posted an encouraging uptick in September. Bucking the trend from China, Japan, Europe and in the UK, manufacturing in the US surprisingly expanded last month as new orders and employment ticked up.

The Institute for Supply Management reported that its Manufacturing PMI inclined from 49.6 points to 51.5 points last month, surpassing estimates of a modest rise to a grade of 49.8. In a positive sign of things to come, the forward-looking new orders gauge increased to its highest level since May at 52.3 while the employment gauge also increased from 51.6 points to 54.7 points, auguring well for the jobs report due on Friday. In addition, measures of production, export demand, prices paid and order backlogs climbed during the month. Analysts say that sustained strength in motor vehicle sales and a recovery in demand for home construction are helping manufacturers offset weakness in exports and business investment. Meanwhile, a report today from Autodata Corp. is seen to further buttress views that strong auto sales would help support factory conditions in the months ahead. Total vehicle sales are believed to have come in at a 14.4 Million annual rate in September, not far from the two-year high of 14.46 Million rate seen in August.

Likewise improving sentiment for the Dollar is a speech yesterday by Federal Reserve Chairman Ben Bernanke at the Economic Club in Indiana. He broadly defended the central bank’s bond-buying stimulus plan, saying it is necessary to support a sluggish economic recovery. He reiterated that Fed’s goals of price stability and maximum sustainable employment, defending against criticism that the program could stoke higher inflation. He also pledged that record stimulus will remain even after the expansion gains strength. In effect, QE3 will spur growth, cut unemployment, help savers and support the US dollar.

The primary mover for the pair, however, is today’s unprecedented move by the RBA to cut rates from 3.5 percent to 3.25 percent, its lowest level since 2009, as the outlook for the global economy had softened in recent months. Such slowdowns have caused declines in commodity prices which have substantially helped support the Australian economy in recent years. The high Aussie also played a part in the decision, with the central bank noting that the high currency has dented the bottom line of exporters. The board also forecasts that the peak in resource investment will likely take place next year at a lower level than earlier expected. Considering these, a short position is recommended for the AUD/USD trades today.

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

By TraderVox.com

Tradervox.com (Dublin) – The loonie advanced against the greenback and most peers after a report from the US showed that the US manufacturing sector unexpectedly expanded, boosting demand for commodity related currencies as risk appetite grew. Signs of growth in the US boost Canadian currency, since US is the Canada’s largest trading partner. The risk sentiment in the market and data showing faster growth in Canada than earlier reported pushed the loonie up against major peers in the market.

Statistics Canada released its revised economic data yesterday, which indicated a faster growth and crude oil continued with its advance for the third day in a row reversing earlier declines. Adam Button said that the expansion indicated in the manufacturing sector indicates an increased demand for raw materials in the US, which is positive for the Canadian dollar. Adam, who is a currency analyst at Forexlive.com in Montreal, noted that when the US stocks move up the Canadian dollar moves up as well. Crude oil futures advanced by 0.2 percent to 492.35 a barrel in New York yesterday, after they fell by one percent earlier in the day.

One-month implied volatility options for the dollar-loonie exchange rate advanced by 7 percent yesterday, the highest since August 30. Implied volatility is quoted by traders to set option prices and it signals the projected rate of currency swings. The advance came as the Institute of Supply Management report indicated that the US Factory index rose to 51.5 in September from the 49.6 level registered in August. According to a report by Statistics Canada, raw material prices rose more than forecast in August and the prices for their products declined in the same month. The raw material-price index rose by 3.4 percent which is more than the 1.2 percent rise predicted by most market analysts.

The Canadian currency rose by 0.1 percent against the dollar to trade at 98.23 Cents per US dollar at the close of day in Toronto. This rise was supported by GDP review data which showed that the Canadian economy grew by 1.9 percent on the year as opposed to the previous reading of 1.8 percent.

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 OilPrice.com

The first concern of the Emir of Qatar is the prosperity and security of the tiny kingdom.  To achieve that, he knows no limits.

Stuck between Iran and Saudi Arabia is Qatar with the third largest natural gas deposit in the world.  The gas gives the nearly quarter of a million Qatari citizens the highest per capita income on the planet and provides 70 percent of government revenue.

How does an extremely wealthy midget with two potentially dangerous neighbors keep them from making an unwelcomed visit?  Naturally, you have someone bigger and tougher to protect you.

Of course, nothing is free.  The price has been to allow the United States to have two military bases in a strategic location.  According to Wikileak diplomatic cables, the Qataris are even paying sixty percent of the costs.

Having tanks and bunker busting bombs nearby will discourage military aggression, but it does nothing to curb the social tumult that has been bubbling for decades in the Middle Eastern societies.  Eighty-four years ago, the Moslem Brotherhood arose in Egypt because of the presence of foreign domination by Great Britain and the discontent of millions of the teaming masses yearning to be free.  Eighty-four years later, the teaming masses are still yearning.

Sixty-five percent of the people in the Middle East are under twenty-nine years of age.  It is this desperate angry group that presents a danger that armies cannot stop.  The cry for their dignity, “I am a man,” is the sound that sends terror through governments.  It is this overwhelming force that the Emir of Qatar has been able to deflect.

A year after he deposed his father in 1995, Sheikh Hamad bin Khalifa Al-Thani established the Al-Jazeera television satellite news network.  He invited some of the radical Salafi preachers that had been given sanctuary in Qatar to address the one and a half billion Moslems around the world.  They had their electronic soapbox and the card to an ATM, but there was a price.

The price was silence.  They could speak to the world and arouse the fury in Egypt or Libya, but they would have to leave their revolution outside of Qatar or the microphone would be switched off and the ATM would stop dispensing the good life.

The Moslem Brotherhood, that is a major force across the region, dissolved itself in Qatar in 1999.  Jasim Sultan, a member of the former organization, explained that the kingdom was in compliance with Islamic law.  He heads the state funded Awaken Project that publishes moderate political and philosophical literature.

How Qatar has benefited from networking with the Salafis is illustrated by the connections with Tunisia where Qatar is making a large investment in telecommunications.  Tunisian Foreign Minister Rafiq Abdulsalaam was head of the Research and Studies Division in the Al Jazeera Centre in Doha.  His father-in-law Al Ghanouchi is the head of the Tunisian Muslim Brotherhood party.

Over much of the time since he seized power, Sheikh Hamad bin Khalifa Al-Thani has followed the policy of personal networking, being proactive in business and neutral on the international stage.  The Emir is generous with the grateful, the Qatar Sovereign Wealth Fund bargains hard in the board room and the kingdom makes available Qatar’s Good Offices to resolve disputes.

Qatar’s foreign policy made an abrupt shift when the kingdom entered the war against Qaddafi.  The kingdom sent aircraft to join NATO forces.  On the ground, Qatari special forces armed, trained, and led Libyans against Qaddafi’s troops.

The head of the National Transition Council Mustafa Abdul Jalil attributed much of the success of the revolution to the efforts of Qatar that he said had spent two billion dollars.  He commented, “Nobody traveled to Qatar without being given a sum of money by the government.”

Qatar had ten billion dollars in investments in Libya to protect.  The Barwa Real Estate Company alone had two billion committed to the construction of a beach resort near Tripoli.

While the bullets were still flying, Qatar signed eight billion dollars in agreements with the NTC.  Just in case things with the NTC didn’t work out, they financed rivals Abdel Hakim Belhaj, leader of the February 17 Martyr’s Brigade, and Sheik Ali Salabi, a radical cleric who had been exiled in Doha.

If Qatar’s investments of ten billion dollars seem substantial, the future has far more to offer.  Reconstruction costs are estimated at seven hundred billion dollars.  The Chinese and Russians had left behind between them thirty billion in incomplete contracts and investments and all of it is there for the taking for those who aided the revolution.

No sooner had Qaddafi been caught and shot, Qatar approached Bashar Al-Assad to establish a transitional government with the Moslem Brotherhood.  As you would expect, relinquishing power to the Brotherhood was an offer that he could refuse.  It didn’t take long before he heard his sentence pronounced in January 2012 on the CBS television program, 60 Minutes by Sheikh Hamad bin Khalifa Al-Thani.

The Emir declared that foreign troops should be sent into Syria.  At the Friends of Syria conference in February, Prime Minister Hamad bin Jassim al-Thani said, “We should do whatever necessary to help [the Syrian opposition], including giving them weapons to defend themselves.”

Why would Qatar want to become involved in Syria where they have little invested?  A map reveals that the kingdom is a geographic prisoner in a small enclave on the Persian Gulf coast.

It relies upon the export of LNG, because it is restricted by Saudi Arabia from building pipelines to distant markets.  In 2009, the proposal of a pipeline to Europe through Saudi Arabia and Turkey to the Nabucco pipeline was considered, but Saudi Arabia that is angered by its smaller and much louder brother has blocked any overland expansion.

Already the largest LNG producer, Qatar will not increase the production of LNG.  The market is becoming glutted with eight new facilities in Australia coming online between 2014 and 2020.

A saturated North American gas market and a far more competitive Asian market leaves only Europe.  The discovery in 2009 of a new gas field near Israel, Lebanon, Cyprus, and Syria opened new possibilities to bypass the Saudi Barrier and to secure a new source of income.  Pipelines are in place already in Turkey to receive the gas.  Only Al-Assad is in the way.

Qatar along with the Turks would like to remove Al-Assad and install the Syrian chapter of the Moslem Brotherhood.  It is the best organized political movement in the chaotic society and can block Saudi Arabia’s efforts to install a more fanatical Wahhabi based regime.  Once the Brotherhood is in power, the Emir’s broad connections with Brotherhood groups throughout the region should make it easy for him to find a friendly ear and an open hand in Damascus.

A control centre has been established in the Turkish city of Adana near the Syrian border to direct the rebels against Al-Assad.  Saudi Deputy Foreign Minister Prince Abdulaziz bin Abdullah al-Saud asked to have the Turks establish a joint Turkish, Saudi, Qatari operations center.  “The Turks liked the idea of having the base in Adana so that they could supervise its operations” a source in the Gulf told Reuters.

The fighting is likely to continue for many more months, but Qatar is in for the long term.  At the end, there will be contracts for the massive reconstruction and there will be the development of the gas fields.  In any case, Al-Assad must go.  There is nothing personal; it is strictly business to preserve the future tranquility and well-being of Qatar.

Source: http://oilprice.com/Energy/Energy-General/Qatar-Rich-and-Dangerous.html

By Felix Imonti for Oilprice.com

Source: ForexYard

The euro was able to bounce back from a three-week low against the US dollar yesterday, after positive manufacturing data out of Italy and Spain resulted in moderate risk taking among investors. The news also helped both crude oil and gold recover from some of their recent losses. Today, news out of Spain is once again forecasted to generate market volatility. While the euro saw a minor upward correction yesterday, analysts were quick to warn that until Spain formally requests a bailout, gains were likely to be temporary. Any sign today that Spain is closer to requesting an aid package may help the euro.

Economic News

USD – US Manufacturing Data Sends USD/JPY Higher

While risk taking in the marketplace led to losses for the US dollar against its higher-yielding currency rivals yesterday, a better than expected US ISM Manufacturing PMI did help the greenback against the Japanese yen. The USD/JPY shot up more than 20 pips immediately following the release of the news to trade as high as 78.09. That being said, the Australian dollar was able to benefit from euro-zone news and gained on the greenback throughout the day. The AUD/USD traded above the 1.0400 level yesterday, up close to 50 pips during the European session.

Turning to today, a lack of significant economic indicators out of the US means that any dollar movement is likely to be a result of news out of the euro-zone. Traders will want to closely monitor any announcements out of Spain and whether it is any closer to requesting an ECB bailout package. Later in the week, traders will not want to forget about the ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, FOMC Meeting Minutes and the all-important Non-Farm Payrolls figure. All of these indicators are forecasted to generate significant volatility for the greenback.

EUR – Spanish News May Continue Impacting Euro

Positive manufacturing data out of Spain and Italy yesterday was able to help the euro make gains against several of its main currency rivals. Against the US dollar, the common currency, which had hit a three-week low during overnight trading, gained some 75 pips to trade as high as 1.2937, before falling back to the 1.2900 level. The EUR/JPY advanced more than 100 pips over the course of the day before peaking at the 101.01 level.

Today, traders should be aware that while the euro might continue seeing moderate gains over the course of the day, analysts are warning that any bullish movement may be temporary. With Spain’s debt crisis still very much on the minds of investors, significant bullish movement for the common-currency is unlikely to occur until a formal ECB bailout request is made and there are is at least some indication that the country is recovering. In addition, traders will want to keep an eye on Greece, as the country is still facing substantial economic difficulties that have the potential to weigh down on the euro.

Gold – Gold Bounces Back amid Risk Taking

Positive euro-zone indicators helped the price of gold bounce back to a more than six-month high yesterday. The precious metal advanced more than $20 an ounce during European trading, eventually reaching above $1791. A minor downward correction brought prices down to the $1785 level by afternoon trading.

Turning to today, gold may be able to extend its bullish run if investors determine that the euro-zone economic recovery is progressing. That being said, with big questions regarding the debt situations in both Spain and Greece, traders should be aware that the slightest bit of negative European news could cause the precious metal to stage a downward correction.

Crude Oil – Crude Oil Gains Close to $2 a Barrel

The price of crude oil spiked throughout the day yesterday, as a return to risk taking among investors helped higher-yielding assets recoup some of their recent losses. Crude traded as high as $93.30 during the European session, up just under $2 a barrel for the day.

Today, oil traders will want to continue paying attention to news out of the euro-zone, particularly anything out of Spain or Greece. Any indications that Spain is getting ready to request a bailout package could help crude oil extend yesterday’s gains.

Technical News

EUR/USD

While the Williams Percent Range on the daily chart has crossed over into oversold territory, most other long-term technical indicators place this pair in neutral territory. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

GBP/USD

A bearish cross has recently formed on the weekly chart’s Slow Stochastic, indicating that a downward correction could occur in the coming days. Furthermore, the Williams Percent Range on the same chart has crossed over into overbought territory. Opening short positions may be the smart choice for this pair.

USD/JPY

In a sign that upward movement could occur in the near future, a bullish cross appears to be forming on the daily chart’s MACD/OsMA. That being said, most other technical indicators on the daily and weekly charts show this pair range trading. Taking a wait and see approach may be the smart choice.

USD/CHF

A bullish cross has formed on the weekly chart’s Slow Stochastic, signaling that this pair could see an upward correction in the coming days. Furthermore, the Williams Percent Range on the same chart is very close to dropping into oversold territory. Traders may want to open long positions for this pair.

The Wild Card

USD/DKK

The Bollinger Bands on the daily chart are narrowing, signaling that this pair is likely to see a shift in price in the near future. Furthermore, the Slow Stochastic on the same chart appears to be forming a bearish cross. This may be a good time for forex traders to open short positions ahead of a possible downward correction.

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 TraderVox.com

Tradervox.com (Dublin) – The Australian dollar dropped against all of its major peers today after the Reserve Bank of Australia unexpectedly dropped the interest rates by 0.25 percentage points. The Australian dollar dropped to the lowest level in three weeks against the greenback as the RBA pushed interest rates to the lowest since 2009.

According to Callum Henderson, the reaction to the rate reduction is negative for the Aussie and may drop to as low as $1.0250 by the end of the week. After the announcement, the Australian dollar dropped to $1.0294, its lowest since September 7. The currency then regained to close the day at $1.0306 which is 0.5 percent lower than yesterday’s close in Sydney. The Australian dollar dropped to its lowest against in a year against the New Zealand dollar shedding 0.9 percent to trade at NZ$1.2402.

Reserve Bank of Australia statement showed that the Australian economy is experiencing weaker growth. Glen Steven, the RBA Governor, said that the peak in resource investment is expected to occur next year, adding that it might be at a lower level than earlier projected. The Aussie is also being affected by the slow growth in China. The RBA has also published a report showing that commodity price index rose to 90.1 in September from 89.2 in August. The New Zealand dollar rose against its Aussie counterpart as an AMZ National Bank report showed that the price index in the country rose by 3.5 percent in September, the highest increase since April. The kiwi rose by 0.4 percent against the dollar to exchange at 83.11 US cents.

Asian stocks also advanced, with MSCI Asia Pacific Index rising by 0.1 percent after a 0.6 percent rise in the MSCI World Index on Monday. Jonathan Cavenagh, a Currency Strategist in Singapore at Westpac Banking Corp, said that the increase in commodity price in New Zealand has resulted to kiwi’s impressive performance adding that the higher risk appetite is driving the demand for kiwi.

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 US dollar fell from a three-week high against the euro as a gauge of US manufacturing showed the economy is gaining momentum. This dampened the demand for safety increasing risk appetite in the market. The dollar also fell as stress-test results from Spain showed more confidence in financial institutions in the country. The 17-nation currency has improved against most of its peers as Euro Zone is deemed to be heading closer to a solution.

Dan Dorrow, who is the head of research in Connecticut at Faros Trading LLC, indicated that the dollar weakened against the euro as risk appetite was spurred by the good ISM manufacturing data. The dollar declined by 0.2 percent against the euro to trade at $1.2888 at the close of trading yesterday in New York after it had gained 0.4 percent to reach its strongest level since September 11 of $1.2804. Japan currency remained strong against the dollar trading at 77.99 just below the psychologically important line of 78. The Japanese currency dropped against the euro by 0.3 percent to trade at 100.52 yen.

According to Eric Viloria, a Senior Strategist in New York at Gain Capital Group LLC, the euro has been up against most of the other currencies mostly because of the technical analysis rather than fundamental one. He indicated that the 200-day moving average for the euro, which has been supportive of the euro-dollar pair since September 11, has been the market talking point for quite a while now. With spurred risk appetite, the Standard & Poor’s 500 Index rose by 1.1 percent but later dropped 0.3 percent yesterday.

The dollar dropped after the ISM Index of US manufacturing advanced to 51.5 in September according to Tempe. The figure indicates that manufacturing sector in US is improving and it has gone back to expansion. The market was expecting a reading below the level of 50, which is the dividing line between expansion and contraction.

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 sterling pound fell against the euro to a two-week low after UK manufacturing index declined more than the market forecast in September. The sterling pound experienced a huge loss against most of its peers after Bank of England reported net household lending dropped to its lowest level in three years. Sterling losses were also supported by the increased confidence in the Spanish banking system according to stress-test result. The 17-nation currency has gained against the pound as Fitch Rating company indicated that the UK ratings outlook remained on the negative, stating that the government debt will peak at a higher level that earlier predicted in 2015-16 rather than 2014-15.

According to Audrey Childe-Freeman, a London-based Currency Strategist at Bank of Montreal, investors are now looking at domestic data from UK and this is dampening the demand for the UK currency. Despite the losses experienced yesterday, Audrey predicted that the sterling will increase to $1.65 by the end of the year against the dollar. The sterling dropped by 0.5 percent against the euro to trade at 79.93 pence per euro at the close of trading in London yesterday. It had earlier declined by 0.6 percent, registering its largest drop since September 14. The pound dropped by 0.1 percent against the dollar to trade at $1.6155.

The drop came after UK manufacturing index report by Markit Economics and Chartered Institute of Purchasing and Supply showed a decline to 48.4 in September from 49.6 registered in August. A Bank of England report showed that financial institutions in the country granted 47,665 mortgages from 47,557 in August. The net mortgage lending dropped by 276 million pounds, which is the largest drop since 2010. The pound also dropped as stress test result released on Sept 28 showed that the capital deficit for financial institutions in the country is at 59.3 billion Euros, which is less than the 62 billion Euros that was estimated.

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