Posts Tagged: interest rate

The Canadian Dollar has only managed to grow against the US Dollar today, but fell against all its other counterparts due to the fact that traders are looking for higher yielding assets on the market. The growth against the US Dollar can be explained through the fact that the trading sentiment is improving, making investors willing to risk a little bit more. On the other hand, the currency fell against the Euro and the Japanese Yen, which are higher-yielding assets than the Canadian Dollar.

We can notice that the Producer Price Index in the US, which is the most important trading partner of Canada, has increased by 0.2 percent during the month of July, after it has previously fallen by 0.4 percent during the month of June. Due to the global economic situation, market analysts were expecting no change, so this growth actually came as a surprise which has helped to the improvement of the Canadian Dollar’s situation. Read more »

The Australian Dollar registered gains against all its major counterparts today, but especially against the US Dollar. The growth against the US currency has reached new record levels based on the crisis with which the US continues to be confronted as neither of the parties accepts giving up some of its intentions concerning the level of the debt ceiling. As the deadline is to be reached in a week, the situation tends to get worse every single hour, making the US Dollar fall against lots of other currencies around the world. As well, as the consumer inflation reports indicated higher values than the ones expected by traders in what it concerns the Australian economy, values which are hinting more hawkish interest rate policy, the Australian Dollar managed to gain territory and to score new record highs.

The Australian Dollar has been favored by the results of the CPI data for the second quarter of the year 2011 which Read more »

Based on the recent data which shows that the rhythm of the core inflation in the UK has slowed, while the retail price index remained the same, the GBP has recorded losses today against most of its major counterparts. Also, the report which pointed out to the fact that the number of unemployment claims has increased and that the wage growth has slowed were also major factors behind the Sterling’s fall.

During the last month, on a year-over-year basis, the consumer price index remained at the same value, that of 4.5 percent. Even though this level was expected, the surprise came from the fact that the core inflation level has decreased to 3.3 percent, falling from 3.7 percent, in the situation in which a decrease of only 0.1 percent was expected. In the same time, traders have been unpleasantly surprised by the fact that the retail price index has remained at 5.2 percent although analysts were expecting a Read more »

The much expected press conference which took place after the European Central Bank’s rate decision has caused a chain reaction on the Forex market, as the decision of maintain the actual interest rates has sparked with the so desired volatility for which the markets were waiting for since a long time. This has caused the EUR/USD pair to decrease by 120-pips. This happened after the overnight session which has brought a consolidation of the European currency and of all the pairs formed with this currency. This was related to the commentary made by President of the European Central Bank, Jean-Claude Trichet, concerning the decision taken by the Bank, that of maintaining the interest rates at 1.25 percent.

Trichet also stated, while talking about the pressure caused by inflation that “inflation rates are likely to stay clearly above 2 percent in the coming months.” He also added that “inflation expectations must remain firmly anchored in line with the Governing Read more »

This week has turned out to be quite disappointing for the Australian currency as the AUD has continuously been faced with losses based on the account of the slowdown in the global economic recovery, on concerns related to the financial stability and, now, on worries based on the disappointing data coming from the labor market. The government report which has been released yesterday shows that the employment field is less active than it should be and that the Australian employers have added fewer jobs on the market than it has been predicted by the analysts.

The report points out to the fact that the number of employed persons in Australia has only increased by 7,800 persons in the month of May from April, even though specialists have been forecasting an increase by 25,600 persons. Nonetheless, we should not think that this amount is bad, especially if taking into consideration the situation in other countries, such as the United Read more »

The concerns regarding the slowdown of the global economic recovery has had an impact today on some of the major currencies in the world. These worries are caused by the sovereign debt crisis which is still affecting the European economy and by the disappointing economic data which has recently been revealed concerning the US economy.

The Australian Dollar is one of the currencies which had decreased due to these concerns. The recent news regarding the global economic situation has had a strong impact on the currency. Yesterday, the International Monetary Fund has said that its aid program concerning Portugal “entails important risk”. It has also added that “important challenges remain to overcome sovereign debt problems in the euro area”. The fact is that these declarations are to slowdown the optimism which traders had concerning the Eurozone’s economic stability, even though the IMF has already revised its growth projections for the area up to 2.5 percent for the current Read more »

The report of the ECB meeting has showed that the Europe Central Bank has taken the decision of supporting Greece during this difficult problem. The Greek bonds situation is now to find support from the ECB. This is the latest favorable decision which is to help Greece and thus improve the situation of the sovereign debt in the European Union.

The European Central Bank’s President, Jean-Claude Trichet, has recently announced the fact that the bank considered to take measures in order to encourage investors to purchase bonds which are to replace maturing securities. He also added the fact that the bank does not desire to impose losses on creditors. Afterward, he added the following: “That doesn’t mean that we are against the fact that the private sector, as has been asked a year ago when there was a first program for Greece, financial institutions in Europe were asked to maintain their level of outstanding credit. That is not Read more »

What has recently happened?

  • Euro: ECB maintains cautious outlook before the rate decision
  • British Pound: the reversal finally gathers pace, the 23.6 percent Fibonacci is in sight
  • US Dollar: manages to gain direction on safe-haven flows

It has been noticed today that the Euro has been struggling in order to maintain the gains made during the overnight trade. The new shift in the currency’s situation is related to the fact that the European Central Bank continues to maintain a cautious tone in what it concerns the rate decisions which are due out later this week. Vitor Constancio, the ECB Vice President, announced that the economic outlook for the Eurozone continues to remain weak. As he continued to speak in Italian, he insisted upon lecturing the nation on the fact that it needs increased coordination in order to find the proper way of dealing with the sovereign debt crisis. The Central Bank of Europe Read more »

As the situation on the Forex market seems to have changed once more based on the fact that the very important currencies are faced with difficulties at the moment, traders are now heading their attention towards other currencies. Moreover, as the situation in the European Union seems to have finally eased a little and as there are no great perspectives upon the US Dollar in the near future as the US economy is faced with serious problems as it can be seen from all its recent macroeconomic data reports, traders are more and more eager to address riskier currencies.

One of the higher-yielding currencies which managed to take advantage of this situation is the Australian Dollar, which scored points today, growing based on the speculation according to which the bad economic situation with which the United States are now confronted is to boost carry trades. Based on this speculation, the Australian Dollar managed to get the attention of Read more »

One of the most important trading events which took place during the previous week of trading has to do with the strength that the Swiss Franc managed to achieve. This new source of power is related to the problems other countries are confronted with at the present moment which turn the Swiss Franc to be considered a safe heaven. This is related to the fact that the European Union is now confronted with lots of problems concerning the sovereign debt, especially regarding Greece, whose credit rating situation has been downgraded by Fitch Ratings and with the fact that the United States are now confronted with plenty of economical problems as most of the reports released at the end of last week showed that the economy is faced with major problems and that the reversal point which has been so long expected may not yet occur as the Federal Reserve Bank is not even considering increasing the interest rates.

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