Month: February 2012

Source: ForexYard

The US dollar saw a mixed trading day today, as positive news boosted risk taking in the marketplace which led to gains for currencies like the euro and British pound. News that the Bank of England will inject an additional 50 billion pounds to support the economic recovery, combined with word that Greece had finally reached an austerity deal, caused investors to shift their funds away from safe-havens. As a result, the EUR/USD spent much of the day hovering around the 1.3300 level, an increase of almost 100 pips from a day earlier.

While the greenback dropped against riskier currencies, it was able to extend its gains against the Japanese yen following the release of a better than expected US Unemployment Claims figure. The figure showed that 358K people claimed first time unemployment benefits in the US last week. That number was substantially lower than the anticipated 369K, and was seen as further proof that the US economy was moving ahead with its recovery. The USD/JPY reached as high as 77.34 after the news was released, before staging a slight downward reversal.

Turning to tomorrow, traders will want to continue paying attention to any news out of the euro-zone, which could lead to an increase in risk taking. In addition, the UK PPI Input figure at 09:30 GMT, followed by Trade Balance reports from the US and Canada at 13:30 GMT, are likely to generate heavy trading to close out the week. Should any of the economic indicators come in above expectations, the dollar is likely to extend its losses against the European currencies.

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.

The Bank of England (BoE) held the Bank Rate at 0.50%, and expanded its Asset Purchase Program (Quantitative Easing) target by 50 billion to a new total of GBP 325 billion, after increasing it by 75 billion at its October meeting.  On its asset purchase program, the Bank said: “In the light of its most recent economic projections, the Committee judged that the weak near-term growth outlook and associated downward pressure from economic slack meant that, without further monetary stimulus, it was more likely than not that inflation would undershoot the 2% target in the medium term.”

The Bank also held the official Bank Rate unchanged at 0.50% at its December meeting last year; the rate has remained on hold since March 2009, when the Bank reduced the interest rate by 50 basis points to 0.50%.  The United Kingdom reported annual consumer price inflation of 4.2% in December, 5.2% in September, 4.5% in August, and 4.4% in July, and still above the Bank’s inflation target of 2.00%.

Cisco Systems (CSCO) announced earnings that beat analyst expectations, and raised its quarterly dividend. The networking equipment manufacturer reported earnings of $2.6 billion, or 47 cents per share during the fiscal second quarter and revenue of $11.5 billion.

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By Elliott Wave International

Elliott waves often correct in terms of Fibonacci ratios. The following article, adapted from the eBook How You Can Use Fibonacci to Improve Your Trading, explains what you can expect when a market begins a corrective phase. Learn how you can read the entire 14-page eBook below.

Retracements — Corrective Waves

If we look on the left side of this chart, we see a diagram of wave 1 followed by wave 2. It is common for second waves to retrace .618 of wave 1 — thereby making a deep retracement. We will also be looking for .786. We might often see .5, 50%, but .618 is common. On the right side, fourth waves will commonly retrace a smaller percentage or .382 of wave 3. We might also see something like .236.

Examples

I have put the wave count on this chart of the S&P 500. We have waves 1, 2, 3, 4 and 5. Wave 2 is an expanded flat. Wave 4 is a zigzag. Let’s look at the retracements that waves 2 and 4 make.

We see that wave 2 makes a deep retracement. It comes close to .618. Look at this Fibonacci table that I put up; notice that I put .382, .5, .618, and .786. .618 is 1087.75, and the S&P low is 1090.19.

We see that wave 4 makes a shallow retracement of wave 3. It goes just beyond the .382 retracement. .382 is 1169.1, and wave 4 actually bottoms at 1163.75.

In a nutshell, this is what we mean when we say that Elliott waves often correct in terms of Fibonacci ratios.

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By TraderVox.com

The US dollar gained from a two-month low against the Euro, after the announcement Greek Prime Minister that they may be running into some problem on the discussions on cutting down the country’s expenses.  The Finance Minister Evangelos Venilos left Athens for Brussels as the politicians were left discussing the pension cuts which have threatened to stall meeting.

As investors wait for the Troika meeting and the ECB decision, some analysts have already indicated that there will be no deal today. The comments from some of the leaders from the Greece meeting have indicated that they might need some more time to discuss some issues on the agreement. These comments have resulted favorably to the dollar with many investors preferring haven assets. Earlier speculations of a deal had forced the dollar to a two months low against the euro.

The dollar continued with its bullish trend against 14 of its major peers. This trend has been precipitated by the declining Asia equities which has boosted demand for the US dollar. This trend is expected to continue if no more good news coming from the Troika and Greece meeting.

With a 0.2 percent increase against the euro at 12:26 p.m., the euro was exchanging at $1.3237 down from $1.3313 that was reached since December 12. The dollar also gained against the Japanese currency by 0.2 percent to exchange at 77.19 yen per dollar. These levels are expected to change as the region’s finance ministers convene a meeting at 6 p.m. in Brussels.

The European Central Bank is expected to benchmark its interest rate at 1%. The meeting which is expected later today and the announcement by the banks president later today is expected to make some changes on its interest rate. Majority of the analysts are projecting the rate to be at 1% while others are projecting a cut to 0.75%. The last ECB announcement in Jan 12 saw the euro rise to .8 and .7 percent against the dollar and the yen respectively.

Article provided 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.
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By TraderVox.com

The possibility of Greece securing a second bailout has pushed the Euro to a two-month high against the Yen and the Dollar. The regions Finance Ministers are expected to meet today for the approval of the second financing agreement for Greece. This has resulted to significant increase in demand for the European assets.

Despite the dispute over the pension cut, Greek politicians agreed on other aspects of the deal which has resulted to the advancement of the euro against the Yen for the second day. ECB is expected to meet today to put in place monitory policy required before Mario Draghi, the Bank’s President announces the policy at a press conference. Analysts are speculating that investors will be looking for haven assets.

According to Neil Jones, a hedge-fund sales head at Mizuho Corporate Bank, the euro has gained tremendously because investors are expecting a deal from today’s meeting. He added that only the final touches on the agreement will be done after which the market will be waiting for the announcement from Draghi to gauge hawkishness or dovishness.

The Euro rose 0.3 percent to 1.3303 at 8.44 a.m. London time but had touched it’s highest against the dollar since December 12 of 1.3313. Against the yen, Euro rose 0.4 percent to settle at 102.66; earlier, it had reached 102.77 yen which is the highest since December 13.

The gain was as a result of speculation that the Greece would pass the agreement on spending cuts which is one of the requirements for a second bailout set by the Troika which comprise of IMF, ECB, and the EU. However, the discussions stalled after the Greek lawmakers failed to agree on the pension cuts.

Later the Greek Finance Minister announced that there were doubts on the agreement which has caused the Euro to pare the previous gains. As of 12:22 PM, the euro was trading at $1.3239. The Prime Minister Lucas Papademos and the three political leaders agreed on all other requirements except for the pension cuts which they said required more elaboration and discussions.

Article provided 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

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 9 Feb., 08:45 EST

The WHOLESALE MARKET gold price slipped 0.6% to $1730 in London on Thursday morning, regaining most of that dip as the European Central Bank kept its key lending rate on hold and the Bank of England extended its purchases of UK government bonds to £325 billion ($515bn).

When completed, this new Quantitative Easing will see the Bank hold nearly one-third of the UK’s outstanding national debt.

“The growing consensus among central bankers is that their experiment with QE is still working,” wrote Gavyn Davies, now of Fulcrum Asset Management and previously a policy advisor to the UK government, as well as head of global economics at Goldman Sachs until 2001 and chairman of the BBC until 2004, in the Financial Times on Wednesday.

“It was a shot in the dark, and a rather desperate one at that. But up to now it has had the desired effect, which is certainly a far better outcome than the alternative.”

“The Bank of England’s latest round of quantitative easing is likely to increase the risk of higher inflation,” said World Gold Council director Marcus Grubb to Reuters, “and prompt investors to seek assets, such as gold, which can act as a hedge against rising prices.”

The gold price for UK investors today slipped 0.5% to £1093 per ounce as the Pound rallied.

Since the Bank of England began quantitative easing 3 years ago, gold has risen 70% for Sterling investors.

“Continued optimism over Greece is supportive of gold,” said one London dealer this morning, noting the recent link in daily moves between the gold price and the European single currency vs. the Dollar.

“There is agreement on all the issues bar one,” said Greek finance minister Evangelos Venizelos to reporters in Athens today, claiming that only state pensions remain under discussion in budget cuts demanded by Greece’s EU partners and the International Monetary Fund in return for their €130 billion ($172bn) bail-out.

Greek unemployment has risen to 20.9%, the Statistical Authority said today. A large chunk of Greece’s outstanding debt is due for repayment on March 20th.

Holding UK rates today at a record low of 0.5% for the 36th month in succession, the Bank of England announced a shift in its purchases of government debt, targeting more 3-15 year maturities than long-dated gilts.

Twenty and 30-year gilt prices fell on the news, nudging interest rates higher, but shorter-term UK debt rose sharply, knocking the annual yield offered to buyers of 5-year gilts back down towards last month’s record lows beneath 1.0%.

UK inflation over the last 5 years has averaged 3.2% per annum. The Bank’s official target is 2.0% per year.

Back in the gold bullion market, “Everyone is in wait-and-see mode,” Reuters quotes Ronald Leung at Lee Cheong Gold Dealers in Hong Kong.

“We don’t see much scrap [supply] and buying has cooled after prices rebounded. [But] Greece seems to be closer to a concrete deal, which weighs on the Dollar and helps [the gold price].”

Keeping its key lending rate at 1.0% again on Thursday, the ECB will this month repeat its unlimited offer of 3-year loans to Eurozone banks, an offer which drew demand of nearly half-a-trillion Euros in December.

Many analysts expect demand to top €1 trillion on Feb. 29th.

“[Such action] will lead to a lot of interest into gold,” reckons UBS Wealth Management’s head of commodity research, Dominic Schnider.

“Real assets remain something people like to have in their portfolios. $2000 an ounce should be easily achieved. We actually expect prices to go above.”

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(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.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

The EUR/USD spent much of yesterday range trading, as investors were fearful of opening fresh buy positions ahead of possible Greek news. The market place is not forecasted to be nearly as quiet today, as euro-zone and British interest rate decisions and press conferences are forecasted to generate significant volatility. Should any of the news turn out to be negative, investors are likely to revert back to safe-haven assets which could cause the euro and GBP to drop.

Economic News

USD – US Unemployment Claims may Boost Dollar

The US dollar spent much of the day yesterday range trading against most of its main currency rivals, including the euro, British pound and Swiss franc. Traders were hesitant to bet against the greenback ahead of possible news on a Greek debt swap deal. The one exception was against the Japanese yen. The USD/JPY took moderate losses throughout much of the day before stabilizing around 76.80 during the evening session.

Turning to today, market sentiment will likely be determined by a combination of international news indicators. First, traders will want to pay attention to interest rate decisions from both the UK and euro-zone. While no changes are forecasted for either rate, the press conferences that follow the indicators are likely to shed some light on the current state of the British and euro-zone economies. Any positive sentiment could result in risk taking, which will likely cause the dollar to drop.

Later in the day, traders will want to pay attention to the weekly US Unemployment Claims, scheduled for 13:30 GMT. The figure will shed some additional light on the current employment situation in the US, following last week’s positive Non-Farm Payrolls report. A lower than expected unemployment figure may help the greenback during the evening session.

EUR – Euro-Zone Minimum Bid Rate Set to Generate Volatility

The euro saw very little movement for much of the day yesterday, as traders were reluctant to open fresh positions ahead of possible developments regarding the Greek debt crisis. The EUR/USD was able to maintain, but not extend, its gains from the previous day, and spent most of the session range trading around the 1.3250 level. Against the Japanese yen, the euro took some slight losses after traders began trimming some of their long positions. That being said, the EUR/JPY was able to stabilize around the 102.00 level in the evening session.

Turning to today, traders will want to focus on the British Official Bank Rate and European Minimum Bid Rate figures and the press conferences that follow each indicator. While no official change to either interest rate is forecasted, the press conferences serve as a good opportunity to gauge the current state of the UK and euro-zone economies. Should either press conference indicate the possibility of a future increase in interest rates, risk taking will likely take place which could boost the euro.

CHF – Franc Recoups Losses against Euro

After taking some mild losses against the euro during the morning session yesterday, the Swiss franc was able to stage a recovery which brought the EUR/CHF pair to 1.2100 toward the end of the European session. The markets were fairly subdued otherwise for much of the day, as traders were eagerly awaiting any news regarding a possible Greek debt swap deal.

Turning to today, traders can expect a much more volatility, as indicators from the UK, euro-zone and US are all forecasted to generate heavy trading. The franc will likely see significant gains should any of the news indicate the global economic recovery is not going proceeding at a quick enough rate. Traders will want to note the economic outlooks from both the British MPC and European ECB. Negative outlooks from either may cause traders to revert their funds to safe-haven currencies like the franc.

Crude Oil – Crude Oil Extends Gains Approaching $100

Crude oil saw dramatic gains during trading on Wednesday, and throughout yesterday’s session. Crude’s bullishness was largely attributed to increased demand out of the US and optimism that a Greek debt swap agreement will finally be put into place. The commodity briefly went above the psychologically significant $100 a barrel level yesterday, before staging a minor downward correction.

Turning to today, crude oil may see additional gains providing that British and euro-zone economic indicators are positive. Additionally, should the US Unemployment Claims figure come in above expectations, risk taking may take place, which could give oil an additional boost as we begin to close out the week.

Technical News

EUR/USD

Long term technical indicators are showing that this pair is range trading, meaning that major market movements are not forecasted at this time. The one exception is the Williams Percent Range on the daily chart, which is currently in overbought territory. Traders will want to keep an eye on the daily chart for indications of a possible downward correction.

GBP/USD

Both the Relative Strength Index and Williams Percent Range on the daily chart show this pair in overbought territory, meaning that a bearish correction could take place in the near future. Traders may want to open short positions ahead of a downward breach.

USD/JPY

Most technical indicators show this pair trading in neutral territory, meaning that no major movements are forecasted for the near future. The one exception is the Stochastic Slow on the daily chart, which has formed a bearish cross. Traders will want to take a wait and see approach for this pair, as a clearer picture may present itself later on.

USD/CHF

The Bollinger Bands on the daily chart are narrowing, indicating that a major price shift may occur in the near term. The Williams Percent Range on the same chart is currently in oversold territory, which can be taken as a sign that the shift will likely be bullish. Traders may want to go long in their positions.

The Wild Card

USD/SEK

Technical indicators on the daily chart show that this pair is oversold, and could see an upward correction in the near future. The Stochastic Slow has formed a bullish cross, while the Williams Percent Range is currently at -95. Forex traders may want to go long in their positions ahead of a possible upward 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.

Source: ForexYard

The Russian ruble (RUS) has been getting hit by a market environment thick with risk aversion. Heightened sensitivity brought on by a German court ruling, Italy’s debate over an austerity package, and peripheral discussions over Greek debt have all led many investors away from the riskier currencies, including the ruble.

Moreover, as a bittersweet pill taken by the Russian economy lately, the Bank of Moscow (BoM) received a 14 billion ruble bailout from state-backed loans as part of a portfolio diversification program aimed at revamping the lender’s development initiatives following the ouster of its former president, Andrei Borodin, in a hostile takeover by VTB. Borodin has fled to London in fear that he may face jail time due to his connection to $415M in loans issued to the wife of Moscow’s mayor as part of a private real estate project.

The bank will be issuing 100 billion rubles in new shares to its primary shareholder, VTB, this year in connection with this latest move. The issuance of these shares was not expected until the end of 2012, but recent market downturns have moved deadlines forward. The bank seeks to increase and enhance its credit portfolio from a current volume of 30 billion rubles to roughly 200 billion rubles by expanding participation from small and midsized businesses.

Read more forex trading 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.