Missing the charts mentioned in these posts?
Subscribe to our e-mail news letter now and receive our full daily currency insight with the charts, market data, national interest rates and much more.
Our currency insights are put together daily by our highly experienced FOREX dealers who have complete overview of the foreign exchange markets at their fingertips.
We only publish our critically acclaimed news letters here when we have a chance, however subscribe now at: http://www.halofinancial.com/knowledge/market_commentary.aspx and we will make sure you always receive the information on time!
We also have a less frequent report, if you just want to know about the currency market every 7 days. Please subscribe to our Weekly Currency Insight at the above link.
Thanks for visiting this blog
The Halo Financial Team
Friday, 10 July 2009
Today's Highlights
No change decision from the BoE boosts Sterling Euro hit by Eastern Europe’s IMF requests
FX Market Overview
Yesterday was most notable for the change of mood in the markets. The fact that the bank of England left its base rate on hold and wasn’t tempted to throw more money at their asset repurchase schemes meant traders were happier to buy Sterling. Those same traders were given an incentive to sell Euros as it became clear how many Eastern European countries are applying to the International Monetary Fund for assistance.
Problems in Eastern Europe will tend to damage the Euro because so many EU banks have a sizable exposure to the emerging economies of the region. So when 10 Eastern European countries including Bulgaria, Serbia, Romania, Belarus, Croatia, Macedonia, Ukraine and Latvia are all applying for loans from the IMF, the assets of those banks is diminished and investors run away to safer products.
US Vice President Joe Biden said that the stimulus packages the US authorities have instigated may take 18 months to show real success. This worried investors into seeking safer havens for their funds and the Japanese Yen was the main recipient of these flows. The US Dollar was sold rather heavily against the Pound and Japanese Yen. Thankfully, for those planning to move to or import from Canada, this USD weakness also weakened the Canadian Dollar and that caused the Sterling - Canadian Dollar exchange rate to break out of its recent range and rally to higher rates.
Sterling is also stronger against the Australian and New Zealand Dollars as investors, whizzed money from these high yielding currencies into the Japanese Yen and some into Sterling. We are, this morning, testing the top of the ranges on both of these currencies and Sterling sellers have already and will continue to make hay in this sunshine.
As well as the ‘has the economy changed direction’ debate, the other debate that is raging is about how much investor cash is still tucked away and inactive. One of the reasons the market could be trading in such easily identifiable ranges is that the volumes are reduced while nervousness pervades the markets. That nervousness will tend to keep the less adventurous investors out of play and the shorter term investors who are perhaps more comfortable with risk will tend to trade the known ranges and be more ready to change their view. So there is some evidence to suggest that we may well see much more substantial moves in exchange rates once the threat of further economic decline has abated and nervous investors are more prepared to get involved.
Today brings UK producer price data and US trade deficit numbers. Both have the potential to move markets. We will also get the Michigan consumer sentiment index which is a very useful indicator of the state of US high streets and shopping malls.
And then it is the weekend. I will enter it pondering why so many words change their meaning over time. It can be confusing. Since the advent of twitter, we can’t now talk about tweeting birds without raised eyebrows or chauvinist accusations and the word, ‘gay’ used to mean nothing more than happy or brightly coloured. However, in an effort to do my bit for butchering the English language, I propose we reassign the word ‘ineffable’. It used to refer to something indescribable but now it fits perfectly as a description of someone who did something wrong but escaped too quickly to be sworn at.
Problems in Eastern Europe will tend to damage the Euro because so many EU banks have a sizable exposure to the emerging economies of the region. So when 10 Eastern European countries including Bulgaria, Serbia, Romania, Belarus, Croatia, Macedonia, Ukraine and Latvia are all applying for loans from the IMF, the assets of those banks is diminished and investors run away to safer products.
US Vice President Joe Biden said that the stimulus packages the US authorities have instigated may take 18 months to show real success. This worried investors into seeking safer havens for their funds and the Japanese Yen was the main recipient of these flows. The US Dollar was sold rather heavily against the Pound and Japanese Yen. Thankfully, for those planning to move to or import from Canada, this USD weakness also weakened the Canadian Dollar and that caused the Sterling - Canadian Dollar exchange rate to break out of its recent range and rally to higher rates.
Sterling is also stronger against the Australian and New Zealand Dollars as investors, whizzed money from these high yielding currencies into the Japanese Yen and some into Sterling. We are, this morning, testing the top of the ranges on both of these currencies and Sterling sellers have already and will continue to make hay in this sunshine.
As well as the ‘has the economy changed direction’ debate, the other debate that is raging is about how much investor cash is still tucked away and inactive. One of the reasons the market could be trading in such easily identifiable ranges is that the volumes are reduced while nervousness pervades the markets. That nervousness will tend to keep the less adventurous investors out of play and the shorter term investors who are perhaps more comfortable with risk will tend to trade the known ranges and be more ready to change their view. So there is some evidence to suggest that we may well see much more substantial moves in exchange rates once the threat of further economic decline has abated and nervous investors are more prepared to get involved.
Today brings UK producer price data and US trade deficit numbers. Both have the potential to move markets. We will also get the Michigan consumer sentiment index which is a very useful indicator of the state of US high streets and shopping malls.
And then it is the weekend. I will enter it pondering why so many words change their meaning over time. It can be confusing. Since the advent of twitter, we can’t now talk about tweeting birds without raised eyebrows or chauvinist accusations and the word, ‘gay’ used to mean nothing more than happy or brightly coloured. However, in an effort to do my bit for butchering the English language, I propose we reassign the word ‘ineffable’. It used to refer to something indescribable but now it fits perfectly as a description of someone who did something wrong but escaped too quickly to be sworn at.
Subscribe to:
Posts (Atom)
