Currency Report
My name is Ian Bellamy and I approve this message.
USD: The European market is closed for Easter Monday. This has resulted in a lack of volatility in the market, as Europe, or more specifically, London, is where the largest amount of foreign exchange is dealt. While the US dollar did rally some due to the US trade bias towards the USD, it is believed that investors are holding off any aggressive positions until the Europeans have their say tomorrow. The magical situation today was the decrease in the price of oil. Iran's move to move to industrial scale uranium enrichment was shrugged off by traders today. The decrease in oil bodes well, as it relieves some of the pressure from the Federal Reserve concerning inflation. The rally to the six week high in the stock market also has given good news to the dollar, in light of a tightening labor market and a housing industry that holds steady through the subprime mortgage woes. Keep an eye out for the minutes of the Federal Reserve President's speeches as they may reveal some important information. President Mishkin, one of the speakers will talk about "Monetary Policy and the Dual Mandate" while the other two speakers, presidents Fisher and Plosser, will elucidate on "Credibility and Commitment." There is no major data to report other than the rhetoric from the Reserve.
EUR: As mentioned before, European markets remained closed for Easter Monday observance, however, they are touted as the biggest upcoming event risk. Focus is being put on the European Central Bank's monetary policy meeting coming on Thursday. While still on track to raise interest rates, it is not expected for this meeting to be the one that does it, as one was just done last month. Comments from President Trichet have been given much scrutiny, as during the months he has introduced and left out the magic words "strong vigilance" from his speeches. These bode well for interest rate hikes, no doubt. If this happens not to be used during the meeting, then June may very well be the month of the rate hike, at the latest.
GBP: Since the Bank of England left the interest rates unchanged, the pound has faltered slightly versus the US dollar and Euro and has continued this way for 3 days. The markets here were also closed for Easter Monday celebrations. There is not much economic data to be released here, so it may continue to fall until something comes up. Tomorrow comes the release of the retail sales rates; in which an increase may bring some pep back to the pound.
JPY: The economy continues to suffer from lower prices and deflation as consumer price figures come in lower from May 2006. A break higher in the Nikkei index has helped the Yen gain some ground over the pound, euro and franc, but not against the US and New Zealand Dollars. The weakness a part of the belief that the Bank of Japan will not go against the carry trades. It may be impossible to have a rate hike in the future, especially since deflation and decreasing retail sales are now problematic.
Commodity Currencies: Commodity currencies appear to be overextended, even with the rise of the Australian Dollar today. Both the Australian and New Zealand Dollars have hit resistance and may be unable to break it. In the case that it does not, it is possible they may test critical supports in the future. As gold and oil have been falling, the Canadian Dollar, which is heavily linked to oil and the other commodity currences have suffered some weakness.
And so has spoken The Minister.
USD: The European market is closed for Easter Monday. This has resulted in a lack of volatility in the market, as Europe, or more specifically, London, is where the largest amount of foreign exchange is dealt. While the US dollar did rally some due to the US trade bias towards the USD, it is believed that investors are holding off any aggressive positions until the Europeans have their say tomorrow. The magical situation today was the decrease in the price of oil. Iran's move to move to industrial scale uranium enrichment was shrugged off by traders today. The decrease in oil bodes well, as it relieves some of the pressure from the Federal Reserve concerning inflation. The rally to the six week high in the stock market also has given good news to the dollar, in light of a tightening labor market and a housing industry that holds steady through the subprime mortgage woes. Keep an eye out for the minutes of the Federal Reserve President's speeches as they may reveal some important information. President Mishkin, one of the speakers will talk about "Monetary Policy and the Dual Mandate" while the other two speakers, presidents Fisher and Plosser, will elucidate on "Credibility and Commitment." There is no major data to report other than the rhetoric from the Reserve.
EUR: As mentioned before, European markets remained closed for Easter Monday observance, however, they are touted as the biggest upcoming event risk. Focus is being put on the European Central Bank's monetary policy meeting coming on Thursday. While still on track to raise interest rates, it is not expected for this meeting to be the one that does it, as one was just done last month. Comments from President Trichet have been given much scrutiny, as during the months he has introduced and left out the magic words "strong vigilance" from his speeches. These bode well for interest rate hikes, no doubt. If this happens not to be used during the meeting, then June may very well be the month of the rate hike, at the latest.
GBP: Since the Bank of England left the interest rates unchanged, the pound has faltered slightly versus the US dollar and Euro and has continued this way for 3 days. The markets here were also closed for Easter Monday celebrations. There is not much economic data to be released here, so it may continue to fall until something comes up. Tomorrow comes the release of the retail sales rates; in which an increase may bring some pep back to the pound.
JPY: The economy continues to suffer from lower prices and deflation as consumer price figures come in lower from May 2006. A break higher in the Nikkei index has helped the Yen gain some ground over the pound, euro and franc, but not against the US and New Zealand Dollars. The weakness a part of the belief that the Bank of Japan will not go against the carry trades. It may be impossible to have a rate hike in the future, especially since deflation and decreasing retail sales are now problematic.
Commodity Currencies: Commodity currencies appear to be overextended, even with the rise of the Australian Dollar today. Both the Australian and New Zealand Dollars have hit resistance and may be unable to break it. In the case that it does not, it is possible they may test critical supports in the future. As gold and oil have been falling, the Canadian Dollar, which is heavily linked to oil and the other commodity currences have suffered some weakness.
And so has spoken The Minister.
posted by Ian Bellamy at
8:32 PM
0 Comments:
Post a Comment
<< Home