The Forex Daily Digest – January 14, 2010
The dollar gained a little ground on the euro and other major currencies in volatile trading Thursday after U.S. economic reports let some of the air out of hopes the largest global economy would continue to recover smoothly. Analysts noted news reports that William Dudley, president of the Federal Reserve Bank of New York, said the target interest rate as set by the Federal Open Market Committee could remain unchanged for up to two years.
The European Central Bank left official interest rates unchanged, holding its key lending rate at a record low 1% as it begins to slowly drain hundreds of billions of euros in liquidity from the banking system due to the recovery in the economy and financial markets. The move was widely anticipated. European Central Bank President Jean-Claude Trichet last month outlined the ECB's plans for slowly withdrawing liquidity measures. .
Trichet also said the euro zone economy will grow at a moderate rate in 2010 but recovery will be uneven. He told a press conference, "The Governing Council expects the euro area economy to grow at a moderate pace in 2010, recognizing that the recovery process is likely to be uneven and that the outlook remains subject to uncertainty."
Trichet also said the idea that Greece could be forced to leave the euro zone is an "absurd hypothesis." Asked how realistic he thought talk of Greece or any other member of the 16-strong club being pushed out of the euro or leaving the euro, Trichet told a news conference, "I do not comment myself on absurd hypotheses, so that would be my response." But, he also said that the new Athens government had a lot work in ahead of it.
The CAD traded at nearly the highest level in three months as an unexpectedly strong Australian jobs report encouraged investors to bid for higher- yielding assets such as stocks and commodities. The CAD has gained 2.1 percent in January against the USD. Crude oil, Canada’s largest export advanced which extended its 30-day advance to 15 percent.
The JPY weakened against higher- yielding currencies for a second day after an Australian employment report beat analysts’ forecasts and stocks rose in Asia and Europe, increasing demand for riskier assets. The JPY fell versus all 16 of its most-traded peers, and dropping the most against the AUD. The EUR rose against the JPY before the meeting of the European Central Bank at which policy makers kept interest rates unchanged.
On Friday’s economic calendar watch for the Consumer Price Index, the Empire State Manufacturing Index, Capacity Utilization and Industrial Production, as well as the University of Michigan Consumer Sentiment report. Scheduled earnings include J.P Morgan Chase, BH Global Marine, AEP Industries and Carter Holdings.
Happy trading,
James Dicks
The European Central Bank left official interest rates unchanged, holding its key lending rate at a record low 1% as it begins to slowly drain hundreds of billions of euros in liquidity from the banking system due to the recovery in the economy and financial markets. The move was widely anticipated. European Central Bank President Jean-Claude Trichet last month outlined the ECB's plans for slowly withdrawing liquidity measures. .
Trichet also said the euro zone economy will grow at a moderate rate in 2010 but recovery will be uneven. He told a press conference, "The Governing Council expects the euro area economy to grow at a moderate pace in 2010, recognizing that the recovery process is likely to be uneven and that the outlook remains subject to uncertainty."
Trichet also said the idea that Greece could be forced to leave the euro zone is an "absurd hypothesis." Asked how realistic he thought talk of Greece or any other member of the 16-strong club being pushed out of the euro or leaving the euro, Trichet told a news conference, "I do not comment myself on absurd hypotheses, so that would be my response." But, he also said that the new Athens government had a lot work in ahead of it.
The CAD traded at nearly the highest level in three months as an unexpectedly strong Australian jobs report encouraged investors to bid for higher- yielding assets such as stocks and commodities. The CAD has gained 2.1 percent in January against the USD. Crude oil, Canada’s largest export advanced which extended its 30-day advance to 15 percent.
The JPY weakened against higher- yielding currencies for a second day after an Australian employment report beat analysts’ forecasts and stocks rose in Asia and Europe, increasing demand for riskier assets. The JPY fell versus all 16 of its most-traded peers, and dropping the most against the AUD. The EUR rose against the JPY before the meeting of the European Central Bank at which policy makers kept interest rates unchanged.
On Friday’s economic calendar watch for the Consumer Price Index, the Empire State Manufacturing Index, Capacity Utilization and Industrial Production, as well as the University of Michigan Consumer Sentiment report. Scheduled earnings include J.P Morgan Chase, BH Global Marine, AEP Industries and Carter Holdings.
Happy trading,
James Dicks
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