Source: ForexYard
GBP
The Pound has become increasingly volatile in the past week as forex traders struggle to determine the correct market price for the Pound and its main currency crosses. Lately, the GBP has been moving on economic data coming out of the British economy. It still isn’t clear if the worst of the economic recession is over for Britain. According to unemployment figures released today, it seems the recession is far from over. However, it may be beginning to ease, as the number of people claiming the Job Seekers Alliance was nearly 30,000 less people than forecasted. As a result the GBP went bullish today. This was also helped by better than forecasted Trade Balance and Manufacturing Production figures.
Since the release of these important figures earlier today the Pound has climbed against most of its major currency pairs. The GBP/USD rate rose by a massive 140 pips as trader confidence returned back to the former safe-haven Pound. The Pound has risen by 70 pips against the EUR so far today to stand at the 0.8926 level. The question now is can GBP bullishness continue? A strong Pound may only be maintained in the coming days, if the British economy releases more better-than-expected economic figures. If this does occur, then the confidence of investors may continue to return back to the Pound in the short-term.
EUR
The focus of the minds of EUR traders has altered dramatically in the past 6 months. For example, earlier the year people were talking about EUR/GBP parity. Now investors are asking themselves if the EUR/USD can reach the 1.4000 level. This has returned to the forefront as the Dollar continues to lose strength against the Euro-Zone currency as stock market rallies in the U.S. in the past several weeks and Obama’s handling of the economy has given investors confidence that the U.S. can climb out of the recession by the 2nd or 3rd quarter of 2010. EUR bullishness vs. the USD depends a lot on the EUR and U.S. publishing to post better-than-expected data releases.
As of now in Tuesday’s trading, the EUR is up against the Dollar by 20 pips at 1.3621, down from the day’s high of 1.3709. It seems that in order for the EUR to become more solid against the USD, the EUR will need to show more proof of economic improvement in the Euro-Zone. Against the EUR today, the EUR is trading significantly lower against the JPY, as the JPY fights to show that it’s the number one safe-haven currency. Additionally, many analysts believe that Japan’s economic fortunes are beginning to improve, whereas Europe’s economy continues to falter. The key for the EUR’s fortunes for the coming week will be Germany’s ability to tackle the deepening recession. A failure to do so will lead to a bearish EUR.
CHF
The CHF or Swiss Franc has shown some increasing bullishness in the past several weeks. The markets are proof that the Franc continues to go from strength to strength, despite the global economic downturn. The CHF owes a lot of its strength to economic uncertainty amidst the financial crisis. Many forex traders feel that the Swiss economy and Swiss currency are a safe bet until the conclusion of the current global recession. Additionally, Swiss banks, such as Credit Suisse are already showing signs of improvement as the Swiss National Bank (SNB) shows its effectiveness in tackling the recession in Switzerland.
The EUR/CHF rate today currently stands at 1.5078 as this currency cross remains fairly stable. However, against the USD, the CHF is up 20 pips at 1.1064. The CHF is likely to continue its bullishness against the USD, provided that the optimism from the U.S. and Switzerland does not dissipate. Against the GBP in the past week, the CHF has climbed significantly. However, in today’s trading the Swiss Franc is down 125 pips against the British Pound due to a string of better-than-expected economic figures released from the British economy. A strong Swiss Franc may only be maintained if the Swiss government continues to successfully uphold the value of the CHF. Traders are advised to follow PPI figures from Switzerland on Thursday morning at 7:15 GMT.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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