Sep 14, 2008

The info Forex of the week

While the situation in the USA seems to be improving, with many figures released better than expected in the euro zone prospects appear increasingly poor. Taken by the German indicators, the economic climate in Europe darkens over the week. An example: the Ifo index on business climate in Germany is a sharp decline during the month of August to 94.8, down from 97.5 in July. As a result, the euro lost ground against the dollar and the yen last week.

The USA are undergoing a fairly complex situation: economic indicators are good but many pressures persist. The equities market is still shaken by the bank values, the price of a barrel of oil is subjected to threats of Hurricane Gustav approaching American interests in the Gulf of Mexico but also the Lousiane and New Orleans, where 'On fears a new Katrina. However, the greenback has managed to maintain against the euro last week with convincing figures. Already Monday and Tuesday, the figures on housing reassured: sales of dwellings for July came out a sharp rise to 3.1% -2.8% against the month before, and sales of new homes have experienced same fate (2.4% in July vs -2.1% in June). May consumer confidence, confirmed by the Michigan Friday, was far better than analysts' forecasts to 56.9 against 53.0 expected. But the release of U.S. GDP which has allowed the greenback to remain despite the threats.

In the euro area, many announcements last week were disappointing. Already Tuesday, the Ifo index has set the tone for the week. Exited well below forecasts, this figure, very watched by the market decline was the single currency. Only a good figure may be chosen: the consumer price index (CPI) German has slightly declined, it rose to 3.1% on annual basis (against 3.3% in July). In this context, figures to be published this week are to follow closely, including the announcement of rate of the ECB and the European GDP. It will also look at the evolution of oil prices which remains very correlated to the EUR / USD.





In Japan, several good grades are noted: firstly, the CPI fell by 1.6% to 1.3%, which bodes well for inflation. Household spending fell less than expected to -0.5%, while analysts predicted a drop of -1.8%. The retail, industrial production and business confidence SMEs are also out above expectations. The lights are green for the yen, which is also the concern in markets that leads to a decline in operations carry trade. The Japanese currency is bought and therefore appreciated against the major currencies.

Trade of the week: Short EUR / CAD

The price of EUR / CAD continued its upward movement that had begun early last week. The evolution of 330 pips the increase is easily explained. We have on one side a euro remains stable. In addition to the German CPI published better than expected, no figure has actually influenced its course. In contrast, the Canadian dollar has a strong current. Rumors of recession plainaient on Canada have not been finally confirmed. The contraction in GDP of 0.8% in the first quarter has not renewed the second (+0.3%). But this development remains weak, and analysts predicted an increase of 0.6%. More broadly, the Canadian finance minister says that the foundations of its economy are stronger than those of the rest of the G8 countries to cope with the current slowdown. In this context, forecasting a growth rate of 1% over 2008 is maintained. So there are strong signals retreat on this pair.

The expectations for this week

EUR / USD: the price stabilizes around 1.47 last three weeks. The technical analysis gives us a signal to buy following testing support oblique on a weekly scale (see chart below). Besides, this Monday, new threats to the spread of Hurricane Gustav, Louisiana, New Orleans and the Gulf of Mexico. These threats to push the price of a barrel could play on gender and back to 1.50. If the situation calms down, following the bearish trend is expected on parity. The ECB is expected to announce a status quo on Thursday.





GBP / USD: The cable continues its fall. Following the difficulties facing the British economy, we must be attentive to the announcement of rate of the Bank of England on Thursday. If threats to the USA are confirmed, the price could recover significantly, even consolidate just above 1.80.

USD / JPY: The cross has undergone a correction last week from 108.43 to 107.71. In the current configuration, it should continue its decline as the yen is in great demand in situations of concern in the markets. A first media can be identified at 107.30 and a second at 106.70.

by erectusplus at 9:41 PM |

0 Comments:

Post a Comment

<< Home