The Forex Daily Digest – November 13, 2009
The USD has lost ground, with strategists attributing the modest weakness to market participants taking profits on the dollar's recent bounce. A modest return to risk appetite was seen triggering some weakness in the USD. The EUR was mixed, edging up a bit on the USD but falling against the JPY and the GBP as foreign-exchange traders reacted to data on euro-zone economic growth. The third-quarter data confirmed the 16-nation region that shares the single currency returned to growth after five consecutive quarters of contraction.
Gold climbed in London, heading for a second weekly gain, as a weaker USD boosted demand for the precious metal as an alternative investment. The USD fell against the EUR as a report today showed Europe’s gross domestic product expanded for the first time in six quarters.
Also providing concern for currency traders, Treasury Secretary Geithner said the U.S. government's borrowing needs would be substantially less than expected. And President Obama will attend the Singapore summit on his first state visit to Asia. Obama's begun his eight-day trip in Tokyo with other stops scheduled for Beijing, Shanghai and Seoul.
China’s yuan forwards increased for a third day against the USD after the central bank signaled a more flexible approach to setting the currency’s exchange-rate before Obama’s first visit to the nation. The 12-month non-deliverable contracts traded near the highest level in three weeks after finance ministers at the Asia-Pacific Economic Cooperation summit in Singapore called for “market-orientated exchange rates,” without naming the yuan. This week the People’s Bank of China said foreign-exchange policy will take into account global capital flows and changes in major currencies and scrapped language in a previous report to keep the yuan “basically stable.”
A reversal in risk appetite on Wall Street continued into Asian trading, pushing the AUD sharply lower as a thin domestic data calendar next week means dealers will look to equity markets for direction. The major local talking point will likely be Tuesday's release of minutes from the Reserve Bank of Australia's November policy meeting, which will be read for signs of further rates tightening to come.
Citing trading patterns, the Gaitame.com Research Institute Ltd. said the GBP may fall to the lowest level in more than one month against the yen. The GBP is about to enter a downtrend as it forms a so-called dead cross in which its short-term conversion line falls below a longer-term baseline on an ichimoku chart, this according to the Tokyo-based currency analyst at the research unit of Gaitame, Japan’s biggest currency margin trader.
The CAD fell from a three-week high against its U.S. counterpart as gold retreated from a record, crude oil tumbled and stocks dropped, discouraging demand for higher-yielding assets. The CAD fell for the first time in four days and slipped against 12 of the 16 most-actively traded currencies. The USD increased against all but two major counterparts, the pound and the South Korean won, as investors sought safer assets.
The U.S. economic calendar will be busy next week. Major reports include Retail Sales, Business Inventories, the Empire State Manufacturing Index, Producer Price Index, Capacity Utilization and Industrial Production, Housing Starts and Building Permits, the Consumer Price Index, Leading Indicators and the Philly Fed Index.
Companies scheduled to release earnings in the coming week include Lowe’s, Home Depot, Intuit, Sears, PetSmart, Saks Inc, BJs Wholesale, Target, Air France-KLM, The Royal Bank of Scotland, and D.R. Horton.
Happy trading,
James Dicks
Gold climbed in London, heading for a second weekly gain, as a weaker USD boosted demand for the precious metal as an alternative investment. The USD fell against the EUR as a report today showed Europe’s gross domestic product expanded for the first time in six quarters.
Also providing concern for currency traders, Treasury Secretary Geithner said the U.S. government's borrowing needs would be substantially less than expected. And President Obama will attend the Singapore summit on his first state visit to Asia. Obama's begun his eight-day trip in Tokyo with other stops scheduled for Beijing, Shanghai and Seoul.
China’s yuan forwards increased for a third day against the USD after the central bank signaled a more flexible approach to setting the currency’s exchange-rate before Obama’s first visit to the nation. The 12-month non-deliverable contracts traded near the highest level in three weeks after finance ministers at the Asia-Pacific Economic Cooperation summit in Singapore called for “market-orientated exchange rates,” without naming the yuan. This week the People’s Bank of China said foreign-exchange policy will take into account global capital flows and changes in major currencies and scrapped language in a previous report to keep the yuan “basically stable.”
A reversal in risk appetite on Wall Street continued into Asian trading, pushing the AUD sharply lower as a thin domestic data calendar next week means dealers will look to equity markets for direction. The major local talking point will likely be Tuesday's release of minutes from the Reserve Bank of Australia's November policy meeting, which will be read for signs of further rates tightening to come.
Citing trading patterns, the Gaitame.com Research Institute Ltd. said the GBP may fall to the lowest level in more than one month against the yen. The GBP is about to enter a downtrend as it forms a so-called dead cross in which its short-term conversion line falls below a longer-term baseline on an ichimoku chart, this according to the Tokyo-based currency analyst at the research unit of Gaitame, Japan’s biggest currency margin trader.
The CAD fell from a three-week high against its U.S. counterpart as gold retreated from a record, crude oil tumbled and stocks dropped, discouraging demand for higher-yielding assets. The CAD fell for the first time in four days and slipped against 12 of the 16 most-actively traded currencies. The USD increased against all but two major counterparts, the pound and the South Korean won, as investors sought safer assets.
The U.S. economic calendar will be busy next week. Major reports include Retail Sales, Business Inventories, the Empire State Manufacturing Index, Producer Price Index, Capacity Utilization and Industrial Production, Housing Starts and Building Permits, the Consumer Price Index, Leading Indicators and the Philly Fed Index.
Companies scheduled to release earnings in the coming week include Lowe’s, Home Depot, Intuit, Sears, PetSmart, Saks Inc, BJs Wholesale, Target, Air France-KLM, The Royal Bank of Scotland, and D.R. Horton.
Happy trading,
James Dicks
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