Forex News | Currency News by Forexlive

Euro zone March unemployment rose to 8.9%, worse than the median forecast of 8.7%. It will be interesting to see whether the recent strong increase in risk appetite weathers this piece of bad news. 

 The inital reaction is for EUR/USD to slip about 15 points to 1.3320.

Meanwhile euro zone April inflation came in at 0.6% y/y, unchanged from March, and exactly in line with the median forecast.

Cable has slipped back, presently at 1.4905, having earlier posted a 1.4947 session high.  Talk of USD sales at today’s 15:00 GMT fix and generally robust risk appetite should lend the pairing some fairly decent underpinning.  Initial technical support now lies at 1.4890/95.

Comments from Italy’s Industry Minister Claudio Scajola that there is “reasonable optimism” that a deal between Fiat and Chrysler could be announced today should help underpin improved risk sentiment and inturn cable.

Technical resistances remain at 1.4940/50 and then 1.5000

Wires carrying comments from Italy’s Industry Minister. The official feels reasonably optimistic a Fiat-Chryler deal can be signed today. The minister wants a meeting with Fiat to clarify plans on output, jobs, at Italian plants after the deal is done.

No immediate response in market to news, EUR/USD relatively steady at 1.3355.

German April s.a unemployment rose +58k, slightly better than median forecast of +65k.  The unemployed total in April rose to 3.585 mln or 8.3%.   Not good and set to get worse.

EUR/USD has pretty much shrugged off the data, presently at 1.3365.

Well further cable gains were on the cards, the pairing extending its rally to 1.4895 at writing. Cable is being helped by talk of  month-end USD equity-related sales lined up for the 15:00 GMT fix. Euro, sterling, aussie seen main beneficiaries.

Technical resistance now at 1.4910, 1.4940/50 and 1.5000.

EUR/USD is makng good ground early, presently at 1.3370. Risk appetite remains health, being underpinned by a number of factors including better than expected corporate earnings out of the States.

Out of 44 S&P 500 listed companies  reporting yesterday, a hefty 37 provided better than expected results for the Q-1.

Stops in the 1.3350/55 area have accelerated the rally. Technical resistance now lies at 1.3390/95, which could well be tested fairly soon.

Cable has firmed in early European trading, presently at 1.4830. Risk appetite having been dented slightly overnight by Chrysler/swine flu developments, still looks robust.

Nationwide April house prices came in at -0.4% m/m, -15.0 y/y versus +0.9% and -15.7 in March. The numbers were better than median forecasts of -1.2% and -15.8% and will have helped underpin cable early.

Technical support lies at 1.4805/10, resistance at 1.4850/55.  Downside for cable looks pretty limited at present, further gains could well be on the cards.

The JPY has firmed marginally in overnight Asian trade as recently improved risk appetite takes a slight knock.  USD/JPY is down at 97.25 from a North American close Wednesday around 97.65, while EUR/JPY is down at 129.20 from around 129.60.

The very slight souring of  sentiment has come primarily from two developments. Firstly, the WSJ reports that Chrysler talks have broken down and bankruptcy looks imminent. Administration officials, who have been making contingency plans for this eventuality, say all the pieces are in place to get the auto maker through bankruptcy court quickly, maybe in a matter of weeks.

Elsewhere in Mexico, President Calderon has asked people to stay home during a partial economy shutdown from May 1 through May 5.

While risk sentiment has taken a slight knock, it still looks fairly healthy overall. Asian stocks made decent gains overnight.

• NewZealand cuts rates by 50 basis points.
• Latest GFK/NOP consumer confidence poll for the UK rises to -27 from -30.
• March Japan Industrial Production rises 1.6% month-on-month( forecast was 0.8%).
• Australia March Private Sector Credit rises 0.1%
• South Korea March Industrial Output +4.8%
• Article in the WSJ saying that talks with Chrysler have failed and Capter 11 is imminent

Yen crosses were bought throughout the morning, continuing the uptrend from overnight. This in turn kept the likes of EURO, AUDUSD and Cable bid, with buyers on any dip back under 1.3300 in Euro. AUDUSD held tight just under 7300 as traders eyed the previous top at 7325. GBPUSD ran up hard taking out stops above 1.4820 but that that was short lived as article in the afternoon from the WSJ stated that Chrysler talks had failed and that Chapter 11 bankruptcy was imminent. This saw all Yen crosses sold back down to the day lows. Entire up moves were negated on the back of this aricle.

Ranges:

EURUSD 1.3244 – 1.3337

GBPUSD 1.4744 – 1.4854

AUDUSD 7230 – 7291

USDJPY 97.12 – 97.86

EURJPY 128.90 - 130.24

Goodluck

Sam

South Korea’s Industrial Output rose 4.8% in March from February, s/adj. This was far better than the forecasted 2.7%. From a year earlier, the Industrial Output Index fell 10.6%.

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