Forex Gold Market Watch

Sunday, February 27, 2011

Dollar fails to gain traction against the euro

EUR/USD

The dollar failed to gain any traction during the last 24 hours and a weak constant lows just beyond 1.3620 vis-à-vis the euro. There was a spike in distaste risk during the Thursday with fresh reports that will move the Iranian warships through the Suez Canal and further political demonstrations in North Africa and the Middle East. The dollar once again failed to gain any benefit from a reduction of the risk appetite due partly to market optimism during outlook global growth.

Data of UNITED STATES registered jobless claims rise to 410,000 last week from a revised 385,000 previously, but the Philadelphia Fed index rose sharply in February from 35.9 to 19.3. Consumer price data was slightly stronger than expected with an increase of 0.4%, while the basic prices rose 0.2%. Inflation data will give some ammunition for the members of the Fed looking for early end, a further quantitative easing, but will still exist for expecting that a majority of the RANGE will continue to be bound to the current policy.

There was further speculation that Portugal will need the support of the euro area, within the next few weeks and was also heightened uncertainty over the banking sector. There were downgrades rating for regional German banks and there was also a sharp increase in temporary borrowing by the ECB. The impact will be limited if it was once, but the euro could be much more vulnerable if there is a constant increase of loans by the ECB.

The dollar was unable to provide any assistance in Asia on Friday and was trapped just beyond the level 1.36.

jobman_021811_1.jpg

Source: VantagePoint Intermarket analysis software

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Yen

The dollar was able to carry out a further attack on the 84 level against the yen during the Thursday and highs near 20 83 crossing during the session of the United States. There was no decline in US yields had a negative impact on the dollar, although technical factors was a key influence.

Global equity markets has maintained a strong brand and broader demand contributed to curbing the Japanese currency. Will still return expectations of capital flows in the coming weeks, which should accompany the yen.

At meetings of the G20 will be monitored closely during the next two days and strong pressure for faster pace of China Yuan revaluation could have impacted on the strengthening of the yen against the dollar.

Sterling

Sterling found support under 1.61 against the dollar during the Thursday and advanced to a peak of just over 1.6723 with American currency came under greater pressure.

The latest survey of industrial CBI recorded improvements at-8 for January-16 last month and there was another very strong reading for prices.

Interest rate expectations remain inevitably a very important focus and MPC Member proposal has maintained his plea for stricter policy with comments that increases the number of rate required to bring inflation back under control and keep expectations in check. The minutes February MPC will be monitored very closely next week to see how close the Bank of England, which was an increase of rates and assess the potential schedule for any future increase.

The banking sector will continue to be monitored closely and there will be some fears that any move by a new Irish Government after 25 February general elections to force international banks to accept the debt would have negative consequences for the United Kingdom and the sterling.

Swiss franc

The dollar failed to break above 0.9620 in franc on Thursday and was subjected to renewed selling pressure in EMAS negotiation with a steep decline for testing support below 0.95. The euro weakened to a low near 1.29 vis-à-vis the Swiss currency as there was a spike in fresh fears about the situation in the Middle East. Safe-haven estimates they will remain very important for the franc.

Domestically, the ZEW confidence index improved slightly to business-17.2-18 2.4 above, but will continue to have trouble the competitive situation. Further strong franc gains will also renewed fears deflationary pressures and increasing pressure on the Central Bank.

jobman_021811_2.jpg

Source: VantagePoint Intermarket analysis software

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Whereas precise up to 86% * 800-732-5407
If you have more recent forecasts sent to you, please go here

Australian dollar

The Australian dollar held just below 1.0050 against the American currency during European trading Thursday and then transferred substantially higher in New York with high above 1.0120. There was a broader sales pressure on American currency and there was also support prices generally stable equity.

Underlying confidence in Australian dollar remains strong and there will be a further strong market support falls. However, there are also concerns over the domestic economy and the possibility of abrupt deceleration if the housing sector, which comes under pressure.


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