Loans currencies

FX Correlations Diverge On Better US Data

admin — Thu, 18 Mar 2010 23:40:05 +0000

Friday’s US Retail Sales smashed forecasts with an outstanding 1.3% increase in November (against consensus forecast of 0.6%); ensuring that for the second week in a row, FX markets were left running for the exit of short USD bets. The dramatic slump in EURUSD from 1.4776 down to 1.4586 stood in stark contrast to the higher close for equity markets, and really underlines the divergence between…

SEK Strengthens On Higher Inflation Path

admin — Thu, 18 Mar 2010 23:38:40 +0000

This morning’s Swedish CPI came in at a firmer than expected 0.2% MoM, 0.9% YoY, against consensus estimates for 0.1% MoM, 0.7% YoY. Indeed today’s reading brings the annualized headline CPI surging back into positive territory for the first time since April 2009 and seems to confirm suspicions that the Riksbank’s current inflation forecast is incorrect. The steady increase in CPI from Sweden

Bank Of England Likely To Remain On Hold, But GBP Remains Heavy

admin — Sat, 06 Mar 2010 02:20:01 +0000

Japan’s Kan held the first press conference this morning in his new role as Finance Minister; and FX markets were treated to some unexpected JPY commentary that will likely underline the case for further currency weakness in 2010. While it is nothing new that officials from both the BoJ and MoF have been uncomfortable with JPY strength in recent months; the near 10% rally in USDJPY from…

Shrugging Off Its Role As A Funding Currency?

admin — Sat, 06 Mar 2010 02:19:01 +0000

European stocks have maintained the early momentum from Asia, as sentiment remains elevated by this morning’s better than expected China data. Interestingly however, the rally in equities and gold has not been echoed ubiquitously in FX markets; and indeed the DXY is unchanged on the day. Instead, the main mover has been JPY, taking on the USD’s role as the predominant funding currency on better…

Are Policy Makers Preparing For Greece Exit?

admin — Sat, 06 Mar 2010 02:18:18 +0000

The start of another week brings with it a fresh spate of sovereign debt concerns, today sparked by an article in the UK’s Telegraph that speculates the ECB is ruminating over the potential legal framework for the possibility of a country leaving the European monetary union. Whether the cited document (entitled: “Withdrawal and expulsion from the EU and EMU: some reflections”) has come about at…

EURUSD Breaks Lower, Eyes 1.4200 Levels

admin — Sat, 06 Mar 2010 02:17:22 +0000

EURUSD has now fallen over 4.5% in the 2 weeks since the surprise non-farm payrolls, and the exit of USD short positions in the market now looks less like a temporary correction and more like a trend reversal with every passing day. Despite still being in the sweet spot of low US rates against a backdrop of improving global data, the truth is that US data has just been a little bit too good…

USDJPY Preferred Pair To Trade Dollar Strength

admin — Sat, 06 Mar 2010 02:16:11 +0000

It’s a typical Non-Farm Payroll Friday, with most currency traders hitting the pause button ahead of the significant economic release later in the day. Although the median estimate is for a 0k change, the amount of variation between individual forecasts is extremely large; with Bloomberg’s survey of 76 economists producing a range of estimates from -100k to +85k. Not only is the level of…

AUD and NZD Outperform

admin — Fri, 19 Feb 2010 10:48:05 +0000

The burden of sovereign debt concerns still weighs heavy on the market, despite encouraging data overnight from New Zealand and Australia. Had this been a few weeks ago, such hawkish sentiment would have had a contagion effect across to most other risk assets, but today, AUD and NZD are the sole beneficiaries of the RBNZ outlook and Australian jobs data. It seems clearer now than ever that the…

FX Markets Choppy As Sovereign Debt Concerns Counter Optimism For US Data

admin — Fri, 19 Feb 2010 10:47:00 +0000

Coming a day after yesterday’s UK debt worries, European markets were given a fresh reminder of the fragile state of Greece’s predicament as Reuters reported comments from ECB’s Stark that the rest of the EU would not save Greece from its fiscal difficulties. These remarks have quickly been followed up by counter comments from Greece’s Finance Minister Papaconstantinou; who strenuously denied…

UK Inflation Rockets Higher To 2.9 Percent

admin — Fri, 19 Feb 2010 10:46:25 +0000

This morning’s UK CPI was sharply higher than forecasts; coming in at a monstrous 0.6% MoM, 2.9% YoY in December, up from last month’s 0.3% MoM, 1.9% YoY rise. Today’s reading comes within a fraction of hitting the 3% threshold where BoE Governor King would be obliged to write a letter to the UK Chancellor of the Exchequer to explain the massive overshoot above the 2% target. GBPUSD has responded…