Currency Market Updates

Euro Trading News: Euro Falling Against The Dollar

23, August 2010

Reports today suggest the forex market analysts are the most pessimistic on the Pound since May 2009, predicting the Chancellor’s cuts will eat into economic growth, the already soft economic recovery is forecast to slow causing Sterling to fall back against both the Dollar and Euro. Median estimates suggest the Pound will drop 8 per cent against the Euro by year end as the recent bullish UK data starts to deteriorate.

The US Dollar rose sharply on Friday against the Euro, Sterling, Aussie and Candian dollar on the back of risk aversion, while safe haven currencies such as CHF and the YEN strengthened against the dollar.

The Fed is perceived by the markets to be in a holding pattern until further directional economic data is released. Weakness in global equities carried through to European markets sending major indices lower while US stocks are lower as the sell off continued. The current lack of Tier 1 economic data out of the US is putting the focus on the equity markets.

The Euro fell against a basket of currencies on Friday and remains on the defensive this morning as comments by a senior ECB official fuelled expectations for liquidity to remain a concern for the single currency. ECB Governing Council member Axel Weber told Bloomberg in an interview published on Friday it would be “wise” to extend unlimited liquidity to banks past the end of 2010.

The Euro was further hit after the US Federal Reserve said the US and global economic recovery was losing steam, striking a nerve with investors. The euro zone is seeing an increasing split not only in banking but in the economy in general. While the euro zone economy improved in the second quarter with Germany setting the tone, southern Europe recorded much more muted growth. Market analysts believe the ECB may have little option but to keep flooding the money market with cash to help banks and governments in the EU.

The Euro zone economy will remain under the spotlight today with the release of the flash August euro zone PMI’s which are expected to fall back from 56.7 in July to 55.5. In the US the focus will be on the release of housing and labour market figures. On Friday of this week the focus will be on the UK with the release of Q2 GDP growth figures.

Report by Alistair Cotton

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Market Analysis Video: Inside MarketClub

How To Use The SmartScan Tool Profitably

20 August 2010

Today you can take a look inside MarketClub and see the SmartScan tool in action. Watch and see how to spot stocks that are trading in-line with the trend in the three major indices.

We will be looking at several different stocks and picking one, which according to our “Trade Triangle” technology, could have a significant move.


Want to trade like Adam? Click here for FREE lessons.

If you would like to make a comment about this video on the MarketClub Trading Blog Click Here

Adam Hewison
President of INO.com
Co-founder of MarketClub

Free Teaching Resources
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Market Analysis Videos: S&P500 And Gold

Watching the S&P500 and Gold Markets

20 August 2010

On Monday, August 16th, early trading triggered a key weekly “Trade Triangle” to the downside. The weekly “Trade Triangle” turned red, indicating that all trends are negative and now pointing lower.

This new 90 second market analysis video shows you some of the scenarios we can see playing out for the S&P 500.


Want to trade like Adam? Click here for FREE lessons.

The second video explains about upside targets in the gold market. The MarketClub “Trade Triangle” technology flashed a buy signal on gold at $1,210.52 on August 12. Since that time the gold market has rallied some $15 and closed yesterday up at $1235.40. (see this post)


Want to trade like Adam? Click here for FREE lessons.

If you would like to make a comment about this video on the MarketClub Trading Blog Click Here

Adam Hewison
President of INO.com
Co-founder of MarketClub

Free Teaching Resources
Free Educational Trading Videos

Trading Videos
Latest Trading Videos

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Currency Market Updates: Dollar Falls Again

20, August 2010

Gilts opened lower and Sterling remained on the back foot on Thursday morning ahead of UK Public finances and UK retail sales. The market continues to be concerned about public sector debt so any poor data was expected to see the market react abruptly as investor’s fear the UK government will struggle to meet its target for narrowing the deficit this year.

However, unexpectedly, retail sales actually rose three times faster then had been predicted in July. The Office for National Statistics said retail sales rose 1.1% on the month, the strongest growth since February 2010 and well above analyst forecasts for a 0.4 % rise. On the year, retail sales rose 1.3 %, again above forecasts of 0.6 %.

There was also a sharp improvement in Public Finances mainly driven by strong growth in tax receipts. The Treasury were quick to react after seeming concerned that this figure would be interpreted as more positive for future budget forecasts and they announced that their figures were still in line with the Office for Budget Responsibility full forecast. Sterling strengthened off the back of these figures and moved 1% higher against the Dollar and 0.5% against the Euro.

The UK managed to start the day off on a positive note but unfortunately the States were unable to continue this trend. U.S unemployment claims spiked to a nine month high. The Labour Department reported initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000, the highest since mid-November.

The dollar came under further pressure after factory activity in the US Mid-Atlantic region fell in August to -7.7 from 5.1 in July reported by the Federal Bank of Philadelphia on Thursday. This reading was the lowest reading since 2009.

The Dollar fell further against the Yen and nearly touched the 15 year low we saw earlier on this week as investors continue to remain apprehensive about the pace of the US economic recovery. Obama spoke out yesterday urging the Congress to push legislation to force tax cuts and ease credit for smaller businesses.

Gold benefited yesterday as investors flocked to safety. Gold looks set to climb higher and closed yesterday up at $1235.40. Conversely, Brent Crude Oil slumped by 1% to close at $74.40 as uncertainty in the US may signal lower demand.

Other news in the headlines includes a slew of takeover activity as companies eye up targets. There will be ongoing coverage of BHP’s now hostile takeover bid for Potash. BHP will begin the hard sell of the $40bn hostile bid to their own shareholders next week at road shows across the globe. It wouldn’t come as a surprise if BHP increase their bid after Potash rejected it and due to the likely scenario of a rival bidder entering the market. BHP could probably hike their offer to as much as $165/$170.

Analysts have tipped Brazil’s Vale and rival Chinese and Russian firms to be on the sidelines. Other M&A activity includes Intel’s announcement that it will buy McAfee for $8bn and the $2.9bn hostile bid launched by Korea National Oil Corp for UK explorer Dana Petroleum after it’s takeover offer was rejected. No doubt we will get more stories about this flurry of hostile M&A activity over the weekend.

Today is a quiet day with only Canada’s CPI date for July out at 12.00.

Report by Philip Ryan

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Currency Market News: Pound Gets A Boost

18, August 2010

The Euro regained ground against the Dollar and Sterling yesterday as Ireland’s 2014 and 2020 bond auctions largely passed without incident. Spreads were already tightening ahead of the auction, and final bid-to-cover ratios of 5.4 and 2.4 respectively showed that demand remains firm.

Spain also sold 5.5 billion euros of 12- and 18- month bills at lower yields than in previous auctions in July. We wait to see if ECB intervention was the main reason for the strong demand. The European data picture was less rosy, however, as the ZEW Economic Sentiment survey was much lower than expected at 14.0 (consensus. 20.0), though the current situation index was firm at 44.3 (cons. 24.0).

Sterling is trading up 50 pips after the release of the Bank of England minutes showed one member, Andrew Sentance, voted to start the withdrawal of the exceptional monetary stimulus. This is the third straight meeting that Sentance has been the lone dissenting voice calling for a 25 basis point increase in the banks base rate.

He argued that the economic recovery is gaining momentum and the Bank needed to act to make sure inflation expectations are not allowed to deviate from current levels due to the current inflation rate stuck stubbornly above target.

Traders have taken this as a positive sign for the UK economy and the Pound now has just broken through 1.56 against the Dollar and 1.21 against the Euro.

Overnight, currency markets exhibited all the symptoms of risk aversion in overnight trade, with the US Dollar and the Japanese Yen tracking higher against all of their major counterparts. The dollar was also supported by data released yesterday which showed that producer prices for finished goods rose slightly in July, the first such increase in three months.

The price rise of the core index was the largest gain since January and, taken with the Consumer Price Index last Friday which also showed an increase for July, the report should help ease concerns among some Fed officials about the possibility of a drop in prices and salary, or deflation.

Apart from the Bank of England minutes, today is very light on the data front with Eurozone construction and US crude oil figures the only highlights.

Report by Alistair Cotton

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