Analysis Topic: Currency Market Analysis
The analysis published under this topic are as follows.
Thursday, March 08, 2007
Currency Forecasts - USD/JPY and GBP/EUR - Short-term Dollar rally expected / Currencies / US Dollar
By: Ashraf_Laidi
Wednesdays release of a weaker than expected ADP report (forecast for private employment payrolls) showing the net creation of 57K jobs in February, suggests that Friday's release of February non-farm payrolls may come in well below consensus estimates of 100K.
The ADP report has been generally effective in predicting whether non-farm payrolls would come in above or below consensus forecasts, rather than predicting the actual figure.
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Thursday, March 08, 2007
Will Crude Oil be traded in currencies other than the US Dollar ? / Currencies / Global Financial System
By: Julian_DW_Phillips
Oil is priced in the U.S. $, which makes it one of the vital interests of the U.S. Without this backing to the $ we have no doubt the path of the $ to the global reserve currency would have been impaired and be undergoing a major attack by now. The thought of oil being priced in currencies other than the $ poses a threat to the credibility of the U.S.$ of major proportions. Any talk of a switch to pricing in other currencies [let alone an actual switch] poses a threat to the U.S. $ in its reserve currency role. This threat is now a real one and poses a considerable danger to the $ in time.Read full article... Read full article...
Tuesday, March 06, 2007
More Central Banks diversify away from the US Dollar- Forex Crises to follow / Currencies / Analysis & Strategy
By: Julian_DW_Phillips
For years now we have warned of tsunami like capital waves crossing the globe bringing financial drama with it. We have pointed to the structural problems that could give rise to the damage these waves will cause. We have warned of the Central Bank's moves away from the U.S.$. We have also warned of the damage the Trade deficit is doing to the U.S. We have also warned of global foreign exchange and rates crises.
We coined the expression "Live now, Pay later" syndrome that has been all-pervasive in the U.S.A. Add this to the "so far, so good" attitude and what happened this week in global markets has been long overdue. It signals that globalization and the free flow of capital across this globe of managed foreign exchange rates, plus the interdependency of global economies will undermine all paper currencies to some extent. This week saw that begin . Probably a group of global funds thought the time was ripe in many markets to rattle some cages and down the markets went. That they should have this ability and power is the frightening thing and the situation can only worsen as other speculators and fund powerhouses get the scent of this action.
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Sunday, March 04, 2007
British Pound (GBP/USD) Targeting a Significant Downtrend to 1.8600 / Currencies / British Pound
By: Nadeem_Walayat
The US Dollar strengthened late last week, especially against much a weaker British Pound, which ended Friday on a weak 1.9430. The Pound earlier in the week again failed to get anywhere near breaching the previous high of 1.9890.
Wednesday, February 28, 2007
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By: Sarah_Jones
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Wednesday, February 28, 2007
US Dollar Index Elliott Wave Analysis and Forecast / Currencies / Forecasts & Technical Analysis
By: David_Petch
Today's report is about analysis of the US Dollar Index. Fibonacci time extensions of two different waves are shown midway on the chart and Fib price retracements of the most recent decline from November till December shown on the right hand side. The 61.8% retracement level was strong resistance, which sent the index down to test the 38.2% retracement level. The lower 55 MA Bollinger band is rising, with the upper 55 MA BB declining.
This suggests we can expect to see the USD chopping sideways for 5-10 days before a sharp decline occurs. There is a Fib cluster around March 20 th , suggestive that a bottom in the USD looms around this date. Short-term stochastics have the %K beneath the %D, with another 3-4 weeks at a minimum before a bottom is in place.
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Tuesday, February 27, 2007
Zero Degrees of US Dollar Seperation / Currencies / US Dollar
By: Jim_Willie_CB
The last several months have provided a keen lesson in currency defense by a nation which has been written off in many circles as owning a dead and hopeless currency. Some key inter-related feedback loops have been on my radar, each vitally important and changing, which underscore in my viewpoint how major markets are inseparable, each inter-connected, and integrally important if the USDollar is to avoid a much deserved crash. A quip of mine at a conference one year ago centered on my claim that the USDollar was backed by the full force of the US Military.
While true in some respect, the actual defense day to day entails a green triangle not to be confused by the iron triangle which fortifies the Pentagon funding, namely the US Congress, the defense contractors, and the lobbyists when grease the funding wheels. Complementing this death grip which has contributed over decades to do irreparable harm to the USDollar, the green triangle consists of holding down gold in a straight jacket, and holding down crude oil in a giant clamp. Never stated is its purpose to reinforce the USDollar from its implied inverse leverage device as hedge funds run for cover. The greenback and gold shine in opposite directions. The greenback and crude oil flow in opposite directions. Goldman Sachs has been at the controls on most of the master machinery.
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Wednesday, February 14, 2007
Dollar Requires Valentines Lift from Bernanke - Currencies Analysis / Currencies / Forecasts & Technical Analysis
By: Ashraf_Laidi
The dollar selloff of the past 2 days is reaching key support levels, which would only stabilize from an upbeat testimony by Fed Chairman Ben Bernanke.
We expect Fed chairman Ben Bernanke's testimony to offer a vital dose of support for the dollar as his message should not only reiterate the upbeat tone of the last FOMC statement, but also reflect the particularly hawkish remarks from Fed officials last Friday.
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Wednesday, February 07, 2007
The US Dollar will Crash during 2007 due to $8.6 trillion debt / Currencies / US Dollar
By: Mike_Whitney
“Whatever future developments may prove to be, my best guess is that the US will continue to maintain a facade of Constitutional government and drift along until financial bankruptcy overtakes it.” Chalmers Johnson, “Empire V. Democracy: Why Nemesis is at our Door”
Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.
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Wednesday, February 07, 2007
Rising Crude Oil and G7: Yen Strength or US Dollar Weakness ? / Currencies / Forecasts & Technical Analysis
By: Ashraf_Laidi
The dollar's technical outlook has taken a turn to the worse on a combination of aggressive pre-G7 currency talk favoring yen stability and an 18% increase in oil prices over the past 3 weeks.
Oil Rebound as Fast as Past Decline
An 18% rise over a 3-week period is as significant as a 20% decrease over a 4-week period (oil's decline from mid December to mid January), but oil's rebound has not yet made it to the front pages as it is "only" at 4 week highs, which is not as "spectacular" as 18-month lows - seen in mid January. But the magnitude of the current rebound is comparable to the prior declines. The significance of the recent oil increase is such that US consumers may start to struggle in spending their way to an economic soft landing and keeping intact the Goldilocks scenario (neither too hot nor too cold). A prolonged slowdown in US housing would raise risks of a double whammy for the US economy, especially at a time, when US manufacturing deepens in a recession.
Tuesday, February 06, 2007
Market Wrap - US Dollar / Currencies / Forecasts & Technical Analysis
By: Douglas_V_Gnazzo
The US Dollar was up versus the Euro and Yen last week, supposedly based on the speculation that the Federal Reserve will not lower interest rates anytime soon, choosing instead to keep them steady and unchanged. The US Dollar index was down 0.4% for the week, closing out at 84.95. The British pound gained versus the dollar based on speculation that the Bank of England will raise interest rates to slow the economy down, which is expanding at a faster pace then the BOE feels safe with regarding inflationary pressures.
The Yen Carry Trade is alive and well, at least for the moment. The market is short yen meaning it is betting it will fall. The U.S. Commodity Futures Trading Commission reported that net shorts rose to a record 173,005 from the prior record of 164,860 the week before.
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Friday, January 26, 2007
Currency Market Forecast - Further Aussie Dollar (AUD) Unwinding Ahead due to softer Inflation / Currencies / US Dollar
By: Ashraf_Laidi
This week's softer than expected consumer inflation figures from Australia have eroded chances of a February rate hike and may have finally concluded the 4 ½ year old tightening cycle adopted by the Reserve Bank of Australia, which lifted interest rates from 4.25% to 6.25%. The headline CPI slowed to 3.3% in y/y in Q4 from 3.9% in Q3, undershooting expectations of a 3.6% reading. Although the core CPI (excluding volatile items) edged up to 2.7% from 2.6%, the seasonally adjusted weighted median CPI slipped to 3.0% from 3.2%. Markets were especially caught off guard by the 0.1% decline q/q, which was the first decrease in 8 years. The soft CPI report was clearly a result of falling energy and commodity prices, which triggered a 12.4% drop in gasoline costs and a 5.2% in fruit prices. But the report was instrumental in dampening probabilities of a February rate hike from as much as 80% to less than 15%.Read full article... Read full article...
Wednesday, January 24, 2007
Turmoil in the currency markets as US builds up crude oil stocks - foretell Iran strike ? / Currencies / Forex Trading
By: Ashraf_Laidi
Light sweet crude is down 20 cents at $54.80 per barrel, after Tuesday's $2.48 jump to $55.04 on reports that the US Dept of Energy will purchase 100K barrels of oil per day starting next spring. While the decision is part of the Bush Administration's latest commitment to reduce US dependency on imported oil, the aggressive approach on beefing up SPR may reflect heightened possibility of a US military strike against Iran as early as March or April, at a time when US navy ships are piling up in the Persian Gulf. Yesterday, markets were filled with chatter of a Kuwait-based newspaper article reporting that the US will launch a military strike on Iran before April 2007, citing "reliable sources".According to the article, the strikes will be launched from US ships with Patriot missiles guarding all oil-producing countries in the region. The attacks would be planned in April, the last month of British PM Blair in office. The immediate result of such an attack is a protracted run up in oil prices, which could reach the $70 per barrel mark in less than a week.
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Wednesday, January 17, 2007
Currency Forecasts - Effects of Supplying Oil and Military Troops / Currencies / Forecasts & Technical Analysis
By: Ashraf_Laidi
The 17% decline in oil prices so far this year has recalibrated the FX equation in so far as bolstering expectations of a US consumer-led stability to act as a stabilizer to housing's downside risks. This has considerably diminished chances of a March Fed cut and manifested itself across European and Asian currencies. The role of oil's rebound has been such that it took center stage in FX markets, shadowing a string of positive economic data from the Eurozone and the UK. Aside from freeing US consumers' wallets, falling oil prices have reduced the Sep-Nov trade deficit by over 17%, which is likely to contribute as much as 0.7% to Q4 GDP.
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Saturday, January 06, 2007
The global liquidity pyramid is stopping the US Dollar from collapsing / Currencies / Analysis & Strategy
By: Adrian_Ash
What's stopping the US Dollar from doing what it must – and collapsing...?
"Global demand for the Dollar is now driven by the explosion in Dollar-denominated assets," writes Dan Denning from Melbourne, "almost completely out of the control of central banks."
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Thursday, January 04, 2007
British Pound (GBP) Dollar currency forecast and trade point 4-Jan-07 / Currencies / Forecasts & Technical Analysis
By: Nadeem_Walayat
The British Pound (GBP) rallied strongly into early December to just below 1.99, and within touching distance of £/$2.00. The sideways trend which had the appearance of being corrective in the run up to another assault higher, which started as we came into the New Year. That assault failed at 1.9750, and changes the picture as the Pound drifts down to its current level of 1.9511Read full article... Read full article...
Saturday, December 02, 2006
Will China lead a Stampede out of the US Dollar ? / Currencies / Analysis & Strategy
By: Gary_Dorsch
The $2 trillion per day foreign exchange market never sleeps. Yet for the past six months, the big-3 central banks, the Federal Reserve, the European Central Bank, and the Bank of Japan managed to lull the currency markets into a deep trance. Since last May, the big-3 central banks corralled the US dollar to within a 3% to 5% trading range against the British pound, the Euro and Japanese yen.The big-3 central banks utilized their three major weapons, (1) relentless jawboning, (2) Japanese threats of intervention, and (3) coordinated rate hikes, telegraphed far in advance to avoid any nasty surprises in the markets. But the big-3’s spell-binding magic act began to wind down on November 25th, when Chinese deputy central banker Wu Xialong jolted the foreign currency markets, warning other Asian central bankers of the future risk of a US dollar devaluation.
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Friday, December 01, 2006
US Dollar tumbles against most major currencies falling to historic lows against the British Pound and the Euro / Currencies / Strategic News
By: Nadeem_Walayat
The dollar hits new lows against several major currencies, plunging to 1.96 Dollars to the British Pound, 1.33 Dollars to the European Euro, and to 115.5 Japanese Yen to the Dollar. The recent downtrend has been developing since early October, since when US interest rate expectations of further rises have shifted to a possibility of cuts in the new year in the face of a slowing economy on the back of a slump in the US housing market.
The downtrend was recently further reinforced by the outcome of the US election and rumors that the Chinease were planning on significantly diversifying their reserves away from the dollar, including comments made by the Governor of the Chinease Central bank as implying as such.
| British Pound (GBP/$) | Euro (EUR/$) |
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| Japanese Yen ($/JPY) | Canadian Dollar ($/Can$) |
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Monday, November 27, 2006
Japanese economy continues to grow as the dollar weakens / Currencies / Strategic News
By: Sarah_Jones
The Japanese economy grew by 0.5 percent in the three months to September, with GDP at 2.0 percent, showing a seventh straight quarter of positive growth, according to the Japanese Cabinet Office, beating market expectation of just 1.2%. This supports the view of a further strengthening in Japanese stock and housing markets.Read full article... Read full article...
Friday, November 10, 2006
China's plan to diversify $1trillion reserves sends the dollar plunging / Currencies / Strategic News
By: Sarah_Jones
The statement by the Chinese central bank governor Zhou Xiaochuan on Thursday that 'China has a clear plan to diversify its $1 trillion foreign exchange reserves and is considering various options to do so', sends the dollar reeling in response.
The diversification comment made by Zhou, was in retaliation to Democratic US Senator Schumer an leading US-China trade/currency critic's celebratory comments following the Democrats election victories. Senator Schumer, has been pushing for tariffs on Chinese goods amid charges it artificially keeps an undervalued yuan to make exports cheap. Along with others, Schumer wants a 27.5 percent levy on imports from China
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