The Forex Daily Digest – November 30, 2009
The USD fell against other major currencies, falling back from gains made last week, after the United Arab Emirates offered emergency assistance to banks in Dubai, calming market fears about an ominous debt default. The USD pared some losses after one of two flagship firms behind Dubai's rapid growth said it had asked for three listed Islamic bonds to be suspended from the Nasdaq Dubai until it could inform the market fully about the outlook for the bonds.
European Central Bank President Jean-Claude Trichet and top European Union officials appeared ready to return from China empty-handed after they over the weekend called on Chinese leaders to allow the yuan to appreciate. Chinese Premier Wen Jiabao told reporters that "Some countries are now calling for yuan appreciation while imposing trade protectionism on China, which is unfair and actually limits China's development.” Trichet said that Chinese leaders said they will continue with currency reforms.
The GBP fell against the EUR, headed for its first monthly decline since September, after a report showed U.K. consumer confidence unexpectedly weakened. The GBP dropped against 15 of the 16 most- traded currencies and touched the lowest level against the EUR in more than a month after sentiment dropped for the first time in 10 months.
The governor of the Bank of Japan said he will act decisively in the event of renewed financial market turmoil, his strongest indication yet at fresh support for the economy that analysts say could involve buying more government bonds or a return to quantitative easing. A government spokesman said quantitative easing will definitely an agenda item when BOJ Governor Masaaki Shirakawa and Prime Minister Yukio Hatoyama meet later this week.
Options traders are adding to bets the JPY will rise against the USD even after the Ministry of Finance pledged to “do what is necessary” to stem gains following a surge to a 14-year high. Contracts granting the right to buy the JPY versus the USD rose last week to a 2.1 percentage-point premium relative to options for selling Japan’s currency. The odds of the JPY strengthening past 84.83 per dollar, the highest since July 1995, to 84.5 by the end of March rose to 80 percent.
And the CAD strengthened as a Canadian government report showed the nation’s economy grew from July through September for the first time in four quarters. The currency gained against 11 of its 16 most-traded counterparts, advancing for the first time in three days.
There are a number of reports on the economic calendar Tuesday including October Construction Spending, the November ISM Manufacturing Index, Pending Home Sales for October, and Auto and Trucks Sales for November.
On the earnings calendar, watch for Advanced Viral Research, Beacon Roofing, Staples, Universal Technical Institute, and Greene King Plc.
Happy trading,
James Dicks
European Central Bank President Jean-Claude Trichet and top European Union officials appeared ready to return from China empty-handed after they over the weekend called on Chinese leaders to allow the yuan to appreciate. Chinese Premier Wen Jiabao told reporters that "Some countries are now calling for yuan appreciation while imposing trade protectionism on China, which is unfair and actually limits China's development.” Trichet said that Chinese leaders said they will continue with currency reforms.
The GBP fell against the EUR, headed for its first monthly decline since September, after a report showed U.K. consumer confidence unexpectedly weakened. The GBP dropped against 15 of the 16 most- traded currencies and touched the lowest level against the EUR in more than a month after sentiment dropped for the first time in 10 months.
The governor of the Bank of Japan said he will act decisively in the event of renewed financial market turmoil, his strongest indication yet at fresh support for the economy that analysts say could involve buying more government bonds or a return to quantitative easing. A government spokesman said quantitative easing will definitely an agenda item when BOJ Governor Masaaki Shirakawa and Prime Minister Yukio Hatoyama meet later this week.
Options traders are adding to bets the JPY will rise against the USD even after the Ministry of Finance pledged to “do what is necessary” to stem gains following a surge to a 14-year high. Contracts granting the right to buy the JPY versus the USD rose last week to a 2.1 percentage-point premium relative to options for selling Japan’s currency. The odds of the JPY strengthening past 84.83 per dollar, the highest since July 1995, to 84.5 by the end of March rose to 80 percent.
And the CAD strengthened as a Canadian government report showed the nation’s economy grew from July through September for the first time in four quarters. The currency gained against 11 of its 16 most-traded counterparts, advancing for the first time in three days.
There are a number of reports on the economic calendar Tuesday including October Construction Spending, the November ISM Manufacturing Index, Pending Home Sales for October, and Auto and Trucks Sales for November.
On the earnings calendar, watch for Advanced Viral Research, Beacon Roofing, Staples, Universal Technical Institute, and Greene King Plc.
Happy trading,
James Dicks
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