Weekly Forex News February 24th 2013

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Weekly Forex News February 24th 2013 FCTO: Financial markets were rocked by the Federal Open Market Committee minutes overnight as that triggered speculation that the Fed could tune or stop the open-ended third round of quantitative easing sooner than expected. The Dow Jones dropped 108 points to close below the 14000 level at 13927. Gold was shot hard and dropped to as low as 1554 today as it finally decisively took out the 1600 psychological level. The Dollar index soared through the 81 level and is now heading to the 81.46 resistance and above. In the currency markets the dollar was broadly higher overnight and the strength carried on into the Asian session today. The Sterling is particularly weak as weighed down by the Bank of England minutes released yesterday and braking through an important medium term support level. The Japanese Yen also rebounded strongly against most major currencies but USD/JPY is still stuck in range.

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Weekly Forex News February 24th 2013

  1. 1. Weekly Forex News February 24th 2013FCTO: Financial markets were rocked by the Federal Open Market Committeeminutes overnight as that triggered speculation that the Fed could tune orstop the open-ended third round of quantitative easing sooner thanexpected. The Dow Jones dropped 108 points to close below the 14000 levelat 13927. Gold was shot hard and dropped to as low as 1554 today as itfinally decisively took out the 1600 psychological level. The Dollar indexsoared through the 81 level and is now heading to the 81.46 resistance andabove. In the currency markets the dollar was broadly higher overnight andthe strength carried on into the Asian session today. The Sterling isparticularly weak as weighed down by the Bank of England minutes releasedyesterday and braking through an important medium term support level. TheJapanese Yen also rebounded strongly against most major currencies butUSD/JPY is still stuck in range. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  2. 2. Weekly Forex News February 24th 2013The Dollar was boosted by the Federal Open Market Committee meetingminutes last week. The minutes for the January meeting indicated thatpolicymakers were more upbeat on the US economic outlook as driven byimproved business confidence and household consumption. Discussions oncontinuation of the asset purchase program remained hot. Severalparticipants suggested that the central bank should be prepared to vary thepace of asset purchases, either in response to changes in the economicoutlook or as its evaluation of the efficacy and costs of such purchasesevolved. A number of participants stated that the program should betapered or ended before occurrence of a substantial improvement in theoutlook for the labor market in accordance with cost-benefit assessment. Yetseveral members warned of the potential costs of terminating anddecreasing asset purchases too soon while a few participants cited pastexperience of negative impacts on economic growth, employment, and pricestability of the premature ending of accommodative measures. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  3. 3. Weekly Forex News February 24th 2013Besides this there were opinions that the Fed might provide monetaryaccommodation by holding securities for a longer period than envisioned inthe Committees exit principles, either as a supplement to, or a replacementfor, asset purchases.The Euro was weighed down by a couple of factors. Italys parliamentaryelection on February 24th-26th was a major factor: Democratic Partys Bersaniis still the front runner but polls have been showing that former primeminister Berlusconis People of Freedom Party continues to close the gap.Markets are expecting to see Bersani winning a majority in the lower houseand form a coalition with outgoing prime minister Monti in the upper house.However markets are also complacent on the risk that scandal-miredBerlusconi might return to power. The European Central Bank said that 356banks will pay back 61.1 billion Euros on February 27th as early repayment ofthe second three year long-term refinancing operation. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  4. 4. Weekly Forex News February 24th 2013Thats way short of market expectations of 122.5 billion. Analysts said thatwould be a sign that banks are not finding enough demand for credit insidethe Eurozone which indirectly indicates weak growth momentum.While German ZEW and IFO were solid, Eurozone Purchasing ManagersIndexes triggered much concern of a deepened recession in Q1.Manufacturing PMI dropped slightly to 47.8 versus expectation of a rise to48.4. Services PMI unexpectedly dropped to 47.3 versus expectation of a riseto 49, hitting a three month low. The composite PMI dropped to a twomonth low of 47.3. Germanys data was mixed with Manufacturing PMI risingslightly more than expected to 50.1 but Services PMI dropped more thanexpected to 54.1. However Frances data was worrying: While ManufacturingPMI rose to 43.6, it missed expectation of 43.9. Services PMI even dropped to42.7 unexpectedly versus expectation of a rise to 44.5. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  5. 5. Weekly Forex News February 24th 2013Markit chief economist Chris Williamson noted that "a steepening rate ofdecline in February is a disappointment, and suggests that the Eurozone is oncourse to contract for a fourth consecutive quarter." And, "if it wasnt forGermany, these would be really dire readings." Also, he said that the latestsurvey suggested that the Eurozone economy would shrink 0.2% to 0.3% inQ1.European Commission revised GDP forecast to a 0.3% contraction in 2013down from a prior projection of a 0.1% growth. Unemployment is expectedto jump further up to 12.2%, revised up from prior projection of 11.8%. TheEuropean Commission warned that the job market is a serious concern andthe social consequences will also weigh on growth perspectives. Domesticdemand is not expected to improve until 2013. Seven states are expected tocontract this year including: the Netherlands, Italy, Spain, Portugal, Greece,Cyprus and Slovenia. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  6. 6. Weekly Forex News February 24th 2013The Bank of England minutes unveiled that Governor Mervyn King, PaulFisher and David Miles favored adding more stimuli to boost the economybut their proposal was rejected by 6 other members. The pound weakenedfurther while UK stocks and gilts rebounded after the report amidexpectations of more easing measures later in the year. Meanwhile, thecentral bank indicated the possibility of using measures other than assetpurchases to boost the fragile economy in the future. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  7. 7. Weekly Forex News February 24th 2013Moodys downgraded the UKs debt rating from AAA to AA1 and changed theoutlook to stable. Moodys said that economic growth in the UK will be"subdued" because of weak global activities, as well as a drag "from theongoing domestic public and private-sector Deleveraging process." It notedthat the period of sluggish growth "poses challenges to the governmentsfiscal consolidation program, which we now assume will extend well into thenext parliament." Also the "rising debt burden" meant "a deterioration in theshock-absorption capacity of the governments balance sheet, which isunlikely to reverse before 2016." Chancellor of the Exchequer Osborneresponded in a statement that "we have a stark reminder of the debtproblems facing our country and the clearest possible warning to anyonewho thinks we can run away from dealing with those problems." View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  8. 8. Weekly Forex News February 24th 2013The Yen recovered on news that Japan would not buy foreign bonds. Alsotraders took profits on their short positions as they are waiting thenomination of the next Bank of Japan governor. So far, prime minister Abehas kept his mouth shut on whether former deputy Bank of Japan governorMuto or Iwata would be nominated as the next Central Bank governor andmarkets are still keenly awaiting the decision. Its believed that Muto is seenby many as a less aggressive option and would be more accepted by theopposition Democratic Party of Japan. Indeed the Democratic Partys shadowfinance minister Maehara said that they will not automatically reject Muto.The Bank of Japans minutes for the January meeting indicated that a fewmembers were reserved about the upgrades of the Japanese economicoutlook. Meanwhile two Bank of Japan members expressed that extendingthe maturity of bank bond buys was an option. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  9. 9. Weekly Forex News February 24th 2013The Canadian dollar extended the recent decline against dollar after anotherround of weak economic data. Retail sales dropped sharply by 2.1% inDecember much weaker than expectation of 0.3%. Ex auto sales were alsoweak and dropped point 9% versus expectation of a 0.1% rise. Consumerprice index moderated more than expected to 0.5% year on year in Januarywhile core CPI also moderated to 1% year on year. View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  10. 10. Weekly Forex News February 24th 2013The New Zealand dollar was weighed down by the Reserve Bank of NewZealand governor Wheelers comments today and recovery in AustralianDollar New Zealand Dollar helped lift the Aussie mildly elsewhere. Wheelerwarned that "when the New Zealand dollar is coming under upwardpressure, we want investors to know that the kiwi is not a one- way bet."And he noted that the Reserve Bank of New Zealand is "prepared tointervene to influence the kiwi" even though "given the strength of recentcapital flows, we can only attempt to smooth the peaks." He said that theG3s ultra loose monetary policies "are aimed at stimulating growth but alsohave significant spillover effects," and many other countries are affected asinvestors sought higher yields. Nonetheless, Wheeler noted that limitation ofintervention and a swiss-style cap isnt practical for the Kiwi. Financeminister English also said last week that weakening the Kiwi throughintervention against large scale speculation is like being "out in the war zonewith a peashooter." View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  11. 11. Weekly Forex News February 24th 2013The Reserve Bank Of Australia minutes released in the Asian session unveiledthat recent rate cuts have shown effective in boosting the economy whilebenign inflation might trigger further rate easing. Regarding developments inChina and Japan, the minutes stated that "a wide range of indicators showedthat growth in the Chinese economy had stabilized, underpinned by publicspending and somewhat stimulatory financial policies. There had also beenindicators of stronger growth of domestic demand" in East Asia with theexception of Japan. After brief weakness the Aussie was limited bycomments from the Reserve Bank governor Stevens that the central bank haslikely paused the rate cut cycle. Stevens said in his testimony to aparliamentary committee that last years cuts were already "substantial" andrates are at an "appropriate level right now". He emphasized that there isalready a "good deal of interest-rate stimulus in the pipeline" and the boardjudged that it was "sensible" to allow time for the rate cut to "do its work". View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  12. 12. Weekly Forex News February 24th 2013Meanwhile Stevens noted that the Australian dollar exchange rate is"somewhat" overvalued. But he warned that "you need to be prettyconfident that it is seriously over-valued, or the market is behaving in somequite irrational way, before you would launch large-scale intervention."Separately, Treasurer Swan said hes "beginning to see some of the signs ofstimulus flowing from monetary policy into some of the non-mining sectorsof the economy." View FCTOFX Live Trading @ http://bit.ly/W9RJWK
  13. 13. Weekly Forex News February 24th 2013The new retail forex trading offering from Forex Currency Trading OnlineLtd., www.FCTOFX.com, has been developed out of the retail customer’sdesire to profit from managed Forex trading, without having their capitalheld, managed and controlled by an unknown or unregulated third-party.Our Forex trading software is fully adaptable to suit your risk profile, withdaily weekly and monthly maximum drawdowns set from just 1% to 25%. Wecurrently have 18 co-existing strategies, trading over 17 currency pairs,across all 3 trading sessions. This software system is designed to be fullyautomated, however is manually monitored 24 hours a day, being upgradedand modified to take full advantage of changing market conditions. For More Information: www.FCTOFX.com View FCTOFX Live Trading @ http://bit.ly/W9RJWK

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