Currency Report
Hello everyone. Before I start, I would like to express a big thanks to everyone at the KFG for having elected the Minister to the E-Board. I look forward to helping swell the ranks of the club by bringing in some new friends to make money with us.
Anyways, on with the report.
The U.S. economy reported strong corporate earnings and had relatively good rallies in the stock market. However, existing home sales have gone into a correction from spillover from the sub-prime sector and the refusal of home owners to lower their prices. Rising gas prices have lowered consumer confidence to an 8 month low. This may make it all the more real that a rate cut is on the way. The one hope that may provide good news is the durable goods report, which may be higher due to weaker USD valuation, while better weather could help increase home sales. The dollar is stronger versus the Yen, Canadian Dollar and Pound but weaker against the New Zealand Dollar, Euro, Swiss Franc and Australian dollar.
The Euro, contrary to the dollar is higher, trading now at the 1.36 level on the back of a weaker US dollar. Though there is a decline in Eurozone industrial orders, it did not enter in as a factor, as investors are expecting a strong German IFO report. The indicators of the German IFO, such as the the German ZEW and the Belgium business confidence indicator surprised to the upside, signalling that a strong IFO is on the way. Even though oil is climbing, interest rates are going up and the overall strength of the Euro, confidence remains relatively high. The outlook for the rate hike is still on track for June.
In Switzerland, there is still a good story to tell about their economy, though it is relatively mixed. The UBS consumption indicator increased from 2.031 to 2.131. There was a deterioration in the trade balance though. The central bank is ready to intervene if there is a change in the stability however, the outlook is good enough to have a rate increase in June as well, just like the Euro.
In Britain, your friendly central bankers are fighting with inflation. Demand and growth are very high and it has pushed inflation to the point where a rate hike may come as early as this month. Data was mixed as net borrowing and public finance figures are up in the face of lower retail sales. Industrial production is still good though there was also deterioration in trade balance.
The Yen fell against the Euro, US Dollar and the Franc despite stronger inflation. Yen paired currencies, such as the USD/JPY are moving in step with the Dow Jones. A lot of positive data is expected for the Yen, with the trade balance report coming out this evening. The weakness of the Yen should make strong for exports.
Commodity currencies are weaker due to lower gold and oil prices. Australian consumer prices went up .1% lower than the expected .6%. In Canada, indicators increased by .4%, less than the .5% and rates still remained at 4.25%. Comments from the central bank were more hawkish on inflation than before, but were to no avail. Australian and Canadian markets will be closed for ANZAC day. The next event will most likely be on Wednesday when the New Zealand Central Bank announces the interest rate decision.
Here ends the currency report...
This is the Minister signing off.
Anyways, on with the report.
The U.S. economy reported strong corporate earnings and had relatively good rallies in the stock market. However, existing home sales have gone into a correction from spillover from the sub-prime sector and the refusal of home owners to lower their prices. Rising gas prices have lowered consumer confidence to an 8 month low. This may make it all the more real that a rate cut is on the way. The one hope that may provide good news is the durable goods report, which may be higher due to weaker USD valuation, while better weather could help increase home sales. The dollar is stronger versus the Yen, Canadian Dollar and Pound but weaker against the New Zealand Dollar, Euro, Swiss Franc and Australian dollar.
The Euro, contrary to the dollar is higher, trading now at the 1.36 level on the back of a weaker US dollar. Though there is a decline in Eurozone industrial orders, it did not enter in as a factor, as investors are expecting a strong German IFO report. The indicators of the German IFO, such as the the German ZEW and the Belgium business confidence indicator surprised to the upside, signalling that a strong IFO is on the way. Even though oil is climbing, interest rates are going up and the overall strength of the Euro, confidence remains relatively high. The outlook for the rate hike is still on track for June.
In Switzerland, there is still a good story to tell about their economy, though it is relatively mixed. The UBS consumption indicator increased from 2.031 to 2.131. There was a deterioration in the trade balance though. The central bank is ready to intervene if there is a change in the stability however, the outlook is good enough to have a rate increase in June as well, just like the Euro.
In Britain, your friendly central bankers are fighting with inflation. Demand and growth are very high and it has pushed inflation to the point where a rate hike may come as early as this month. Data was mixed as net borrowing and public finance figures are up in the face of lower retail sales. Industrial production is still good though there was also deterioration in trade balance.
The Yen fell against the Euro, US Dollar and the Franc despite stronger inflation. Yen paired currencies, such as the USD/JPY are moving in step with the Dow Jones. A lot of positive data is expected for the Yen, with the trade balance report coming out this evening. The weakness of the Yen should make strong for exports.
Commodity currencies are weaker due to lower gold and oil prices. Australian consumer prices went up .1% lower than the expected .6%. In Canada, indicators increased by .4%, less than the .5% and rates still remained at 4.25%. Comments from the central bank were more hawkish on inflation than before, but were to no avail. Australian and Canadian markets will be closed for ANZAC day. The next event will most likely be on Wednesday when the New Zealand Central Bank announces the interest rate decision.
Here ends the currency report...
This is the Minister signing off.
posted by Ian Bellamy at
5:20 PM
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