Posts Tagged: Interest Rates

The Canadian Dollar has lost territory today as the International Monetary Fund decided to cut its growth forecast for Canada. This has determined investors to be less interested in growth-related currencies. The IMF has revised its opinion concerning the growth estimation for Canada, decreasing from the 2.9 percent forecast in June to only 2.1 percent. This outlook has become worse due to the slower global economic growth and to the faltering economic recovery of the United States, which is the most important trading partner of Canada. Also, the downgrade of the Italian credit rating by Standard & Poor’s has had a negative influence upon traders. Mark Carney, the Governor of the Bank of Canada, was concerned about the economy of the United States, declaring the following: “The United States is in the midst of the weakest recovery since the Great Depression, and the bank does not expect that to change at any time soon.” He has also brought Read more »

This has been quite an interesting trading week as there have been lots of changes on the market. Not only that the macroeconomic reports have shown weak data about almost all the countries, fact which has made currencies lose value, but also the Swiss National Bank announced the fact that it has taken the decision of imposing a fix trading rate for the EUR/CHF pair, that of 1.20 in order to stop the overvaluation of the nation’s currency. Despite this additional measure, the Swiss Franc continued to grow against its major counterparts.

The previous week has been quite bad for the Great Britain Pound which has registered the greatest weekly fall against the US Dollar in nine months. This has been possible based on speculation that the weak UK economy is to force the central bank to maintain the interest rates at the record low level. From a virtual point of view, all the fundamental data concerning the Read more »

Two of the major currencies in the world have had an opposed evolution today due to the macroeconomic factors in each zone. If the Euro managed to score gains due to the fact that there is speculation according to which the interest rate in the Eurozone will not be reduced, the Australian Dollar lost some of its value due to the release of the unemployment report.

The Euro gained today against its major counterparts, especially against the US Dollar and the Japanese Yen. This evolution can be explained by the fact that the there is speculation on the market according to which the European Central Bank is not to reduce the value of the interest rates. However, the evolution of the European shares today has been rather limited, fact which can be explained by the means of the growing concerns related to the financial crisis in the region. Traders forecast that Jean-Claude Trichet is going not to accept Read more »

The concerns related to the Eurozone continued to grow today. They have been left behind during yesterday’s trading due to the fact that trader’s attention has been distracted by the severe measures imposed by the Swiss National Bank. The decision of the SNB of imposing a fix exchange rate for the EUR/CHF pair of 1.20 in order to prevent the national currency from growing excessively, has caused a strong reaction on the markets, as the Franc got sold off by over 8% against most of its major counterparts in a very short interval. It seems though that the situation has settled quickly as the attention of traders shifted immediately, turning towards the problems in the Eurozone. There are rumors concerning the fact that Greece is likely not to receive the next tranche of the bailout unless the conditions imposed by the EU leaders are met. A delay in the delivering of the bailout would cause another debt crisis Read more »

The Australian Dollar managed to continue to grow during the previous week as well, posting thus wise gains for the third week in a row. This rally has been sustained by macroeconomic factors and by the economic situation of the world. The rally is extremely powerful against the US Dollar, against which the Australian Dollar has managed to post gains numerous times since April. The Aussie took advantage of the situation in the US and advanced continuously against the country’s currency. But, at the end of the previous week, these fundamentals started to become unfavorable for the Australian currency, and the question whether the rally against the US Dollar can continue to be sustained arose in the minds of most of the traders. However, some of the macroeconomic data sustains the evolution of the currency against other currencies in the world, such as the Euro or the Japanese Yen. For example, the growth of the retail sales has Read more »

The Great Britain Pound showed an increase against all its major counterparts today based on the release of the report which indicates the fact that the consumer prices in the United Kingdom have grown more than it has been forecasted. On the other hand, the annual inflation report which has been released by the government indicates the fact that the value of the inflation has increased by 0.2 percent, going up from the value of 4.2 percent which has been registered in June to the one of 4.4 percent in the month of July. This comes as a surprise as well, as the medium forecast has been that of 4.3 percent. In his letter to George Osborne, the Chancellor of the Exchequer, the Governor of the Bank of England, Mervyn King, stated that he believes that the inflation rate will soon slow down, descending below the target established by the bank, that of 2 percent, based on the Read more »

The downgrade of the US credit rating has had consequences upon all the major currencies on the market, especially against the Australian Dollar which has registered huge losses since the 5th of August. The market functions now especially on sentiment; and the risk-aversion has caused a great deal of trouble to the Australian market, including both the Aussie and the stocks. After the losses registered at the beginning of the week, lots of Australian banks decided to do something as to help the national economy. Some local banks decided to decrease the interest rates, but this will only help the stock market. Moreover, the results will become visible on mid- and long-term bases, so investors are advised to hold on to their stocks if they can. Concerning the national currency, the trading market tried to make the Aussie rally against the other currencies on the market, but they did not actually succeed.

After the rebound on the Read more »

Although it was expected for the RBA to take the decision of increasing its interest rates, it seems that the slowdown in the global economic growth has persuaded the Australian policy makers to maintain the value of the interest rates to the actual level, that of 4.75 percent. By maintaining this outlook which is neutral, the RBA is actually protecting the national economy against a potential risk rising from the problems occurred in the European Union and in the United States, which are also likely to influence the evolution in China, which is now faced with a mild slowdown. While announcing the decision of not increasing the interest rates, the officials from the Bank of Australia have also added that it is “not clear how persistent slower growth will be”.

The Central Bank of Australia emphasized the fact that it is likely for the GDP report to show figures which are to be in line with the previous Read more »

The previous weeks have brought huge gains for the Swiss Franc. But apparently the ascendant lane is not yet to be finished as the Swiss currency has managed once more today to register record highs against most of it major counterparts. This is related to the fact that the US finds itself in a difficult situation due to the debt-lifting measures which threaten to weaken the global economy, managing to push down the demand for unsafe currencies. As the Swiss Franc manages once more to prove its reputation as the safest currency on the market, it has known a very fructuous period lately, with all the problems in the US and in the European Union.

The Swiss Franc has reached new historical highs against the US Dollar and the Euro today. The currency has also managed to reach the maximum level in 3 years against the Japanese Yen. As most of the traders around the world are expecting Read more »

The continuous and still unsolved problems regarding the US debt limit have caused the nation’s currency to hit new all time low levels against competitive currencies such as the Swiss Franc, which has recently had a great evolution on the trading market. The Australian dollar is another currency which has managed to score new gains against the USD for the fifth day in a row today. This signals the fact that the issue related to the debt ceiling is of a really great importance and that the US authorities would better find a solution to it quickly if they do not want their currency to fall even more.

The world’s largest economy is now faced with the possibility of being downgraded to the default level, which would have major negative impacts upon the US economy. In this situation, traders no longer prefer the US Dollar as the safe-haven currency to turn to each time there is uncertainty on Read more »