ForexLive » Wrap up

ForexLive US wrap-up: Is it Friday yet?

Jamie Coleman — Thu, 02 Sep 2010 20:04:29 +0000

ECB keeps rates unchanged; extends extraordinary liquidity operations into early January; 3-month refis to be done at variable, not fixed rates
ECB staff raises GDP and inflation forecasts, Trichet sees no double dip
US jobless claims fall 1,000 to 472,000
US nonfarm productivity falls 1.8% in Q2
US pending home sales rise 5.2% in August
Chain store sales rise 3.2% on August: ICSC
Reuters poll: 55% of economists polled see BOC rate hike next week
US factory orders rise 0.1% in July, June revised higher to -0.6%
S&P 500 average 0.9% to 1090
US 10-year note yields rise 5 bp to 3.63%

A mostly range-bound session with EUR/USD stalling ahead of 1.2850. Stops reside just above 1.2860, traders report. Dips were limited to 1.2805 with European corporate buying seen on dips.

JPY pairs were quiet save for AUD/JPY which was a strong performer. AUD/USD closes at trend highs 0f 1.9120 ahead of payrolls.

Sorry for abbreviated wrap-up but we have a hurricane on the way and I need to do some prep work…

ForexLive European Wrap: Not much going on. GBP has poor morning, CHF good one

Gerry Davies — Thu, 02 Sep 2010 11:24:39 +0000

Sweden’s Riksbank raises key repo rate to 0.75% from 0.5%
French Q2 ILO jobless rate falls to 9.7%, better than median forecast of 10%
Japan’s Ozawa: FX intervention just by Japan may not have much effect, but should be prepared to act
Swiss Q2 real GDP +0.9% q/q, +3.4% y/y, better than median forecasts +0.8%, +2.7% respectively
Nationwide UK August house prices -0.9% m/m, +3.9% y/y. Much weaker than median forecasts of -0.3%, +4.9% respectively
UK construction PMI 52.1 in August, down from 54.1 in July. Much weaker than median forecast of 53.2
Euro zone Q2 GDP confirmed at +1.0% q/q. Revised up to 1.9% y/y from previous 1.7%
Swiss retail sales +4.8% y/y in July, better than median forecast of +2.3%
Spanish/German 10 year government bond yield spread fall to 169 bps . Lowest since August 20

Not too much going on. Sterling has had a poor morning, underminned by poor house price, construction PMI data. Swissy on the flip side has had good morning, underpinned by good Q2 GDP, retail sales data.

EUR/USD firmer on day, up at 1.2825 from early 1.2790. The pairing did suffer a bit of a swoon posting a session low 1.2777, but ready buyers emerged. The sell-off seemed to coincide with announcement of Swedish rate hike, which saw heavy selling of the EUR/SEK cross.

Asian central bank and hedge funds notable buyers below 1.2800 this morning. On the topside sell orders noted at 1.2830/50 and they’ve helped cap rally attempts at 1.2838 so far.

Cable down at 1.5400 from early 1.5445. Poor UK house price/construction PMI data have weighed on sterling. Real money buyer seen around 1.5375 low helping lend much-needed support.

EUR/GBP up at .8325 from early .8280, but sell orders noted at .8330/50 have capped topside at .8338 so far.

EUR/CHF down at 1.2980 from early 1.3015 having been as low as 1.2945 at one stage. Swissy supported by strong GDP/retail sales data. UK clearer notable seller in very early trade.

USD/JPY unchanged at 84.18. Got as low as 84.01 before decent buying from a Dutch bank lent much-needed support. The Danish bank, who has been notable buyer of late, was also said to have been in buying again.

ForexLive Asian Session Wrap – Early Asia followed the US lead into positive territory only to fizzle in a lethargic market

David Horton — Thu, 02 Sep 2010 04:19:43 +0000

Australian Coalition clouds it’s chances in the election race with a A$ 7-9bn financing ‘black-hole’
The German Bundesbank trying to oust controversial board member
Australian July Trade Balance A$ 1.888bn seasonally adjusted – not up to expectation but minor impact on the AUD
Economy Avoids Recession Relapse as Data Can’t Get Much Worse

Much stronger ISM data from the US gave the Asian market a start on the positive side with risk-positive trading following a firm US equity market; the Asian bourses duly followed suit and early on the market looked to trade bouyantly. The only news of the session was the Australian Trade data which came in under expectation and a minor negative impact on the AUD. Prior to this news the risk trades had started to come back on profit taking and have stayed in the lower range of the session in a lacklustre market. There was no new news nor talk from Tokyo – a change from recent days ! and no flows of significance to report…..

Ranges EUR/USD 1.2785/1.2814 EUR/JPY 107.51/1.8.26 USD/JPY 84.07/57 CABLE 1.5429/63 USD/CHF 1.0150/87

AUD/USD 0.9054/0.9117 AUD/JPY 76.13/98

GOLD $1246.60 OIL $73.65 (Light Crude October)

ForexLive US wrap-up: ISM data lessens double-dip fears

Jamie Coleman — Wed, 01 Sep 2010 20:17:57 +0000

ADP employment report: US private sector lost 10,000 jobs in August
ISM rises to 56.3.; much stronger than expected
Fed’s Plosser downplays utility of MBS reinvestment; opposes more QE without clear deflation dangers
Fed’s Fisher: Ball in Congress’s court; Fed has done all it can
S&P jumps 3.0% after ISM surprise
US bonds slump, yields rise sharply after data; 10-yr notes up 11 bp to 2.58%

US markets opened in a risk-loving mood this morning after strong Australian and Chinese data. The mood was dimmed briefly by the downbeat ADP data which foretells a weak employment report on Friday but the expectation that the Fed will crank up the printing presses should the economy keep deteriorating limited the damage.

The EUR/USD took center stage in early New York dealing as a 1.2550/1.2850 came into play shortly after the ADP data. We rallied as high as 1.2856 before falling back after the ISM report.

Focused turned from EUR pairs to commodity plays as the best of the risk-loving strategies. In fact EUR/CAD selling was a factor in the dip in EUR/USD off the highs in addition to a rise in US bond yields. EUR/USD finds support in the short-term at the 1.2780 level. Small stops are eyed below that level. Steady real-money interest was noted to buy EUR/USD in very quiet afternoon markets.

USD/JPY jumped ahead of the data on talk of a bullish analysis by a noted NY think-tank and really took off after ISM. We jumped to the 94.67 level before sell orders from Japanese exporters were able to cool the rally. Japan missed a golden opportunity to take USD/JPY higher right after the data…

Dips were relatively shallow with most afternoon dealings in the 84.40s. It is a decent close considering after ADP were close to trend lows, slipping to 83.66.

Commodity currencies extended their gains after ADP with AUD nearing the 0.9100 level late in the day. USD ?CAD dipped below 1.05 and ends at 1.0510.

EUR/CHF and USD/CHF saw significant short-covering after the ISM data greatly lessened risk aversion. EUR/CHF ends at 1.3000 from 1.2916 NY lows. It reached 1.3040 on a squeeze. USD/CHF jumped from 1.0066 session lows to 1.0183 intraday and ends the session at 1.0155.

The first three hours of the US trading were fairly chaotic but markets barely budged through the afternoon hours, apparently content to wait for further clues on the economy. Improved claims and payrolls will keep the risk rally rolling while bad news on both will prompt renewed fears that the Fed will need to take further action.

ForexLive European Wrap: Risk sentiment in good shape

Gerry Davies — Wed, 01 Sep 2010 11:16:39 +0000

China’s passenger car sales rose 59.3% y/y in August, marked improvement from the 15.4% y/y rise seen in July
Departing White House economist Romer: US budget deficit cannot be excuse for leaving unemployed to suffer. US has tools that would bring unemployment rate down, must find will to use them
Currency trading growth slowed amid crisis, BIS says
German July retail sales -0.3% m/m, +0.8% y/y, weaker than median forecasts of +0.5%, +1.4% respectively
Swiss PMI for August 61.4, demonstrably weaker than median forecast of 66.0
Euro zone final manufacturing PMI for August 55.1, fractionally up from flash 55.0, but down from 56.7 in July and lowest read since February
UK manufacturing PMI for August 54.3, demonstrably weaker than median forecast of 57.0. Lowest read since last November
Spanish/German 10 year govt bond spread narrows to 177 bps from 186 bps at Tuesday settlement. Italian/German 10 year govt bond spread narrows to 158 bps from 165 bps at Tuesday settlement
German FinMin: Sees little sign of higher interest rates in foreseeable future. Greece deserves respect for its efforts on budget consolidation

EUR/USD started around 1.2700 and made an orderly ascent in early trade. The overnight release of good Australian Q2 GDP and Chinese August PMI data had set the tone. The momentum increased as European stocks extended their gains, and stops through 1.2750 and 1.2780 were triggered on way to session high 1.2812.

Middle Eastern selling, probably including sovereign interest, has been noted above 1.2800.

Cable at 1.5380 effectively unchanged on the day. Early rally floundered after running into well noted sell orders up at 1.5415/25. The release of demonstrably weaker UK manufacturing PMI has served to inhibit cable gains, despite the generally better risk sentiment which would usually lift the pairing.

EUR/GBP UP AT .8316 from early .8255, with major Swiss commercial bank notable buyer of the cross after the weak PMI data.

EUR/CHF up at 1.2972 from early 1.2900, underpinned by the better risk sentiment, swissy losing a little of it’s safe haven premium.

USD/JPY down at 84.00 from early 84.35, garnering absolutely no support from the better risk environment. A touch worrying. Well not if you’re short I guess.

AUD/USD up at .9055 from early .8975, underpinned by better risk sentiment. Stops tripped through .9040 on way to .9061 session high. More stops noted through .9080.

ForexLive Asian market wrap: Risk trades rally on China’s PMI, Australian GDP

Sean Lee — Wed, 01 Sep 2010 04:16:50 +0000

Australian Q2 GDP +1.2%, fastest growth in 3 years
Australian stockmarket rises 2%
China’s official August PMI 51.7
HSBC China PMI 51.9, up from 49.4
Australia July manufacturing index 51.7
Spain’s Zapatero: Debt auctions show that Spain can meet financing costs
Japan PM Kan and his challenger Ozawa put forward their policy platforms; the latter supports direct FX intervention
Regional stockmarkets rise by 0.5% or more

Risk trades have benefitted today from the strong Australian GDP numbers and also the improving Chinese PMI. AUD/JPY has risen by 1.5% and EUR/CHF has also risen by 50 pips.

USD/JPY opened the session on its lows at 84.05 but no-one was willing to stay short in fear of some direct intervention. None eventuated but the aforementioned economic data fuelled some buying of the JPY crosses. Ranges: USD/JPY 84.03/59; EUR/JPY 106.60/107.42; AUD/JPY 74.89/76.08.

The AUD has risen strongly across the board after the excellent GDP numbers and the promising Chinese PMI. Range: AUD/USD .8913/.9003.

EUR/USD has also benefitted primarily from demand in the crosses. Ranges: EUR/USD 1.2664/1.2708, EUR/CHF 1.2868/1.2925

Cable traded pretty much in line with the EUR, with the EUR/GBP cros confined to a 20 pip range. Cable 1.5337/91, EUR/GBP .8252/72.

Markets: Nikkei +0.6%, HK +0.4%, Kospi +1.3%, All Ords +1.8%. Gold $1248/oz. Oil $72.25/bbl.

ForexLive US wrap-up: Sloppy month-end; CHF at record highs

Jamie Coleman — Tue, 31 Aug 2010 20:32:57 +0000

Canadian GDP slows to 2.0% in Q2; Q1 revised down to 5.8%
ISM NY index falls to 55.6 in August from 59.4 in July
Case Shiller home price index rises 4.2% in June y/y; strength seen fleeting
Chicago PMI slips to 56.7 in August from62.3 in July
MNI: ECB seen delaying exit strategy, continue providing unlimited liquidity to EU banks; worries about US economy, EU periphery cause delay
FOMC minutes: Deflation risk small but inflation, employment levels lower than desirable for longer than expected
S&P 500 closes nearly unchanged at 1049; holds support at 1040 again
US bond yields close 6 bp lower at at 2.47%
EUR/CHF closes at record 1.2870 after touching 1.2850 intraday

Month-end markets tend to be quite challenging, to put it politely, and today was no exception. Wide, unpredictable rages were the rule, not the exception today.

EUR/USD swung in a 1.2661/1.2744 range in New York. The fixing had less of an impact on the market than earlier feared, occurring about the middle of the days range near 1.2710. EUR cross selling was the main them, especially after Market News International printed story saying that ECB sources anticipate a delay in the exit strategy through the end of 2010, at least.

Risk aversion played a role as well as EUR/CHF plummeted to 1.2850 on panic buying of Swiss from players who had previously bought dips in EUR/CHF. USD/CHF held important support at 1.0130, however.

USD/JPY rose early in the session, threatening stop-loss buy orders at the 84.70 level. Reports of buying by a handful of central banks ahead of 84.00 barriers helped sooth the nerves of dollar bulls. Selling of USD/JPY and EUR/JPY and GBP/JPY at month-end helped knock USD/JPY lower in the afternoon, down as far as 83.83. Japanese accounts were among the late-day sellers pushing the pair to its lows. EUR/JPY fell as low as 106.25 during the afternoon after a morning rally as high as 107.78.

GBP/USD was sold heavily for month-end purposes while EUR/GBP saw the traditional month-end demand.

USD/CAD rallied on weak Canadian GDP which helped raise doubts of a BOC rate hike on September 8. One and done (one more 25 bp hike to 1%) at that meeting before a long pause is now the consensus call. USD/CAD reached 1.0672 before easing but Asian central bank buying at 1.0630 stemmed the pullback. Central bank sellers are now rumored at 1.0700.

AUD/USD was out of the spotlight today with a large fixing radar in AUD rumored overnight either flying under the radar or not materializing. 88.60/0.8920 was the New York range. We end at 0.8905.

ForexLive Asian market wrap: CHF and JPY again the main movers

Sean Lee — Tue, 31 Aug 2010 04:21:22 +0000

Japan’s July industrial output +0.3% MoM
Japan’s July retail sales +3.9% YoY
Japan’s July average wage +1.3% YoY
UK consumer confidence in August improves to -18 from -22 in July
UK house prices fall 0.3% MoM
Australian retail sales +0.7% MoM against expectations for 0.4%
Australian July building approvals +2.3% MoM
Australian current account deficit AUD$5.6bln
Regional stockmarkets fall by 2%

Once again movements in the FX market have been led by firstly the CHF and later on the JPY.

Two sizeable flows in EUR/CHF, firstly from 1.2990 and subsequently from 1.2960, drove this cross lower on the day as risk-aversion and the daily close below 1.30 combined to encourage fresh selling by investment funds. USD/CHF has again been unable to break below 1.0220. Ranges: EUR/CHF 1.2929/99, USD/CHF 1.0229/66.

EUR/USD broke below short-term support at 1.2660 and triggered stops, helped by the heavy selling in EUR/CHF. After bottoming out at 1.2633, the pair rebounded modestly to close the gap back to 60 on the s/t charts. Ranges: 1.2633/73

USD/JPY has drifted lower throughout the session but sizeable bids between 84.30/50 have slowed the fall. Further verbal intervention from FinMin Noda has had no impact whatsoever and it seems the market has stopped listening to them. Ranges: 84.27/66, EUR/JPY 106.63/107.19

Sterling has been unaffected by the data released earlier in the session and finishes the session close to its opening levels. Dealers anticipate heavy two-way turnover in the GBP at the month-end London fix. Ranges: Cable 1.5455/77, EUR/GBP .8172/93

The AUD has benefitted slightly from the strong retail sales data which continues to show an economy in decent shape. Ranges: .8912/56

Markets: Nikkei -2.9%, Kospi -1.2%, HK -0.8% and Shanghai -0.5%. Gold $1239/oz, oil $74.25/bbl.

ForexLive US wrap-up: BoJ aftermath spills over to US markets

Jamie Coleman — Mon, 30 Aug 2010 20:08:42 +0000

BOJ adds JPY 10 trln to fixed rate loan program to banks, lengthens tenor to six months; market disappointed.
British Chamber of Commerce upbeat on UK outlook
US personal income up 0.2%, spending up 0.4%; mixed, spending better than expected
Canadian current deficit surges to C$ 11 bln in Q2; blames US
ECB adds to bond purchases: buys EUR 142 mln last week
Dallas Fed manufacturing index improves to -13.5 from -21
Obama says spoke with advisers on additional steps to spur economy
S&P 500 falls 1.4% to 1051
US 10-year note falls 11 bp in yield to 2.54%

USD/JPY fell throughout the session, slipping to 84.51 as the US equity market slipped throughout the session. The market reaction to the BOJ tepid further easing measures was to undo all of the gains seen toward the end of last week in USD/JPY as well as much of the back-up in US yields seen on Friday. Hedge fund bids remain rumored at the 84.50 level.

EUR/JPY slid as well, dragging EUR/USD as low as 1.2659. The cross tested key support at the 127.00 level and closes on the lows.

Cable was pushed lower during the New York session with heavy selling seen from 1.5520 on down to around the 1.5460 area. Risk aversion played a major role.

USD/CAD rallied on risk aversion as well as steady demand for USD/CAD from US real money accounts. It rebounded from the 1.0480 area in early North American trade to close close to 1.0600 in thin trade. AUD ends on its lows at 0.8920.

EUR/CHF, the risk barometer of choice? It fell to the 1.2980s today and closes just below 1.3000. USD/CHF hangs onto support ahead of 1.0220.

ForexLive Asian Session Wrap – We waited in earnest for the BOJ to only disappoint..

David Horton — Mon, 30 Aug 2010 04:28:14 +0000

NZ Trade Deficit NZ$ 186m in July
NZ Business Confidence 16.4% in August vs July 27.90%
BOE’s Bean: More easing may be necessary; Regulation, not monetary policy to ward off boom/bust
Deficit Cost Declines Give Obama Stimulus Clinton Couldn’t Get, from Bloomberg
Australia Q2 Company Gross Operating Profit +18.9% QoQ
Australia: HIA July New Home Sales -7.00% MoM vs last -5.10% in June
News from the BOJ saw disappointment for the market and no surprises

The opening in Asia saw the market trade higher from the US closes in expectation of news from the expected emergency BOJ meeting that took place this morning. The Nikkei in turn opened firm and at one point was up over 3.1% into lunch. Disappointment reigned as the minutes of the meeting were merely at the modest level of expectation – no change to overnight call rate @ 0.10%; increase in the fixed rate market funds from Yen 20 to 30 trn and up to 6mths maturity. The market had bought USD/JPY up to 85.91 and EUR/JPY 109.57 in anticipation and sold off immediately to where we close the session near the lows of the day.

Ranges EUR/USD 1.2735/70 EUR/JPY 108.72/109.57 USD/JPY 85.22/91 CABLE 1.5516/60 USD/CHF 1.0271/1.0309

AUD ranged 0.8983/0.9031 after taking out stops early to push over the 0.9000 with AUD/JPY 76.60/77.53 trading with the Tokyo news

GOLD 1235.60 and OIL (Light Crude – October) 75.19

ForexLive US wrap-up: Asset markets improve after Bernanke

Jamie Coleman — Fri, 27 Aug 2010 20:23:54 +0000

Bernanke blazes no new monetary trails in his Jackson Hole speech; markets breath a sign of relief.
Fed stands ready to easy further but only if economy slows significantly; Bernanke, Fed staff less fearful on growth than Wall St.
US GDP revised down to 1.6% in Q2; smaller downward revision than expected.
Reuters, Nikkei add to expectations that BOJ will loosen policy early next week
ECB’s Weber: Upbeat on European growth; reaching self-sustaining recovery– CNBC
S&P 500 rises 1.7% after bouncing from 1040 support
US 10-yr note yield rises 16 bp in yield to 2.64%

Loads of volatility intraday as the market tried to get its head around Bernanke’s message as well as deal with sizable flows, some for month-end in thin Friday summer markets.

The market initially treated the Bernanke comments as a catalyst to reduce risk. They sold stocks, commodities (and commodity currencies) and EUR/JPY. Then just as quickly, the risk switch was flipped back on all those trend reversed and asset markets recovered a significant portion of their losses on the week.

EUR/USD fell to 1.2678 shortly after the speech only to recover to 1.2780 little more than an hour later. Stops above the 1.2760 level were triggered on the rally.

USD/JPY jumped to 85.46 after breaking through downtrend resistance at 85.37 on an intraday basis. Heavy exporter sales are seen up to the 85.50 level but another round of stops is seen just above that level.

AUD/USD was in demand by hedge funds early in the day and again at the 15:00 GMT fixing where is soared from 0.8925 to 0.8985. We end the day essentially on session highs around 0.8985.

USD/CAD was quite choppy, spiking to 1.0648 after Bernanke spoke before reversing to end the week near its lows, around 1.0520

Monday will see very thin markets with London closed for a bank holiday.

Have a great weekend all!

ForexLive European Wrap: Should have gone fishin

Gerry Davies — Fri, 27 Aug 2010 11:11:57 +0000

Japan PM Kan: Will decide on economic stimulus, strong yen measures on August 31
Australian Opposition leader Abbott: Does not want fresh election. Key to next govt rests with three sitting independents
UK Q2 GDP revised up to +1.2% q/q +1.7% y/y from initial +1.1%, +1.6% respectively
UK Treasury says while cautiously optimistic about economy, job “not yet done”
German July import prices -0.2% m/m, +9.9% y/y, marginally firmer than median forecasts of -0.3%, +9.8%
Swiss KOF leading indicator 2.18 in August vs 2.20 median forecast
French 2010 industrial investment seen rising 5% vs 6% in previous forecast – INSEE
Spain’s July retail sales -2.4% y/y, weaker than median forecast of +0.5%

Market effectively on hold, hunkered down awaiting the release later today of US Q2 GDP and then Fed Chairman Bernanke speaking from Jackson Hole. Price action in all majors very pedestrian

EUR/USD sits at 1.2720, effectively unchanged on the day. Earlier slight dip ran into Russia, China buying in the 1.2700/10 area. That ellicited a spike higher with session high 1.2739 posted. Russia then turned seller, taking profit, and that for all intents and purposes was that. BIS has been seen buying around 1.2715 since, but made no decernible impact in a disinterested market.

Cable at 1.5515, some 10 points lower than when I started which sums that up. Better than expected Q2 GDP revision ellicited marginal rally but it was fleeting. Session high 1.5539. Some pointed to the -1.6% q/q contraction in business investment component as reason for failure to hold gains. Go figure.

USD/JPY sits at 84.70, unchanged on the day. PM Kan says he’ll decide on economic stimulus, strong yen measures on August 31. Can’t wait.

ForexLive Asian market wrap: Japanese politicians again try to ‘talk’ the JPY down

Sean Lee — Fri, 27 Aug 2010 04:11:43 +0000

Japanese PM Kan announces that he will hold a press conference (we believe at 06:00 GMT) to outline steps to fight the rising JPY
FinMin Noda adds the usual about taking appropriate steps ‘when necessary’
Japan July core CPI -1.1% YoY, as expected
Japan unemployment rate 5.2%, against 5.3% forecasts
Japan July real household spending +1.1% YoY
Iron Ore prices fall for third consecutive day
Nikkei bounces back into positive territory after Kan announces press conference

It was a very quiet session which has only stuttered into a little bit of life over the last 30 minutes after PM Kan announced his press conference on how the Japanese authorities plan to fight against the rise in the Yen. The economic data earlier in the session had no effect. Ranges: USD/JPY 84.28/56, EUR/JPY 107.01/55.

EUR/USD has had a very quiet 27 pip range, falling initially along with EUR/JPY and EUR/CHF on the usual Friday risk-off trade but then recovering back to its opening level. Ranges: EUR/USD 1.2693/1.2720, EUR/CHF 1.2993/1.3030.

Cable has also enjoyed a very quiet 23 pip range, probably tired after the big exertions from yesterday. Ranges: Cable 1.5516/39, EUR/GBP .8178/94.

AUD/USD has also shown no inclination to move. Range: .8846.68

Markets: Nikkei +0.15%, Shanghai -0.3%, Others flat. Gold $1237/oz, Oil $73/bbl.

ForexLive US wrap-up: Dollar dips ahead of GDP; Bernanke

Jamie Coleman — Thu, 26 Aug 2010 20:34:10 +0000

US weekly jobless claims fall to 473,000 from 504,000; 4-week moving average at 9 month high.
Canadian FinMin Flaherty: Struggling US economy a major concern for Canada
KC Fed index 0 in Aug from 14 in July
Chicago Fed manufacturing 81.4 in July from 79.6 in June
Spanish court rules against government in tax case but impact seen limited
S&P 500 losses 0.8% to 1047; Dow closes below 10,000
US yields fall 6 bp to 2.48% in 10-yr note

A huntin’ we will go, a huntin we will go…

Traders went hunting for stop-loss orders in EUR/USD today and found them just above 1.2750. We reached 1.2765 before quickly slipping back. A story that implied a sudden EUR 5 bln budget hole for Spain after a tax court ruling sent EUR/USD quickly back below 1.2700 and from there we spent the afternoon range trading. Early morning selling saw EUR/USD dip to 1.2666/. Stops lie at 1.2660/656 on the downside and at 1.2780 and 1.2830 on the topside.

USD/JPY did very little in New York today, easing modestly late in the day on falling stocks and falling yields but holding well within recent ranges. 84.32/72 was the New York range.

Cable surged after stronger than expected retail data early in the but was unable to sustain levels in the 1.5600 region. We end the day at the 1.5525 level.

Commodity currencies gave up early gains in afternoon trade and ed on a soggy note, as did risk appetites. AUD/USD closes at 0.8865 and USD/CAD at 1.0567.

EUR/CHF ends at the bottom of the days range and gave back all the gains made in Europe as it rose to 1.3143 intraday. It ends at 1.3022, with the markets still on the lookout for more dire US data despite today’s respite via the improved weekly claims data.

ForexLive Asian market wrap: Hunting for stops

Sean Lee — Thu, 26 Aug 2010 04:15:52 +0000

Japanese Government calls on BoJ for further monetary easing
Japanese PM to face leadership vote
Australian Q2 Capex weaker than expected at -3.9% QoQ
Australian election: PM’s chances improve as Independents disagree with Opposition
China continues to expand its non-financial overseas investments
UK economy: Pay growth steady
Regional stockmarkets gain by up to 0.5%

It has been a busy session for the JPY crosses with first political events and then stop-loss runs driving the market.

USD/JPY opened at 84.60 but moved higher initially on calls from the Japanese Govt to the BoJ to ease monetary policy further. There was heavy turnover around the previously pivotal 84.75/80 level and the market got as high as 86.90 before running out of steam. Stop-loss moves in the EUR/JPY and GBP/JPY during afternoon trade have been mainly driven through the base currency component. Ranges: USD/JPY 84.56/90, EUR/JPY 107.09/84, GBP/JPY 130.75/131.95.

EUR/USD has edged higher through the session driven once again by EUR/JPY flows. EUR/CHF has also managed a modest gain as traders put some risk trades back on the table. Ranges: EUR/USD 1.2651/1.2721; EUR/CHF 1.3034/79

Cable has made a sharp move higher in the afternoon driven by some sizeable stop-loss orders in both cable (above 1.5525) and GBP/JPY (above 131.50). Early session moves were relatively slow as GBP/JPY buying ate through decent cable offers towards 1.5510. Once the offers were filled the stops were triggered and cable gapped 30 pips higher. Ranges: Cable 1.5468/1.5563, EUR/GBP .8171/95.

The AUD has lagged the gains in the other majors with disappointing Capex data and the on-going political uncertainty deterring buyers. AUD/USD will nonetheless close the session about 10 pips higher but the AUD lost ground against the EUR and the GBP. Ranges: AUD/USD .8833/74

Markets: Nikkei +0.3%, All Ords +0.6%, Seoul +0.3%, HK flat. Gold unch at $1241/oz, Oil +0.5% at $73/bbl.

ForexLive US wrap-up: More horrific data but markets shrug it off

Jamie Coleman — Wed, 25 Aug 2010 20:19:12 +0000

US durable goods orders much weaker than expected
US new home sales fall 12% in July to record low level
Obama holds conference call with economic advisers
SNB’s Hidebrand: SNB will act if sees deflation risks; not there now
Sarkozy wants to rein in FX volatility when France heads EU in early 2011
US equities reverse early 1% losses, close 0.3% higher at 1055
US 10-year note falls to lows of 1.42& after housing data; rebounds to close at 2.53%

Another day another set of horrendous US economic data….

The market was unable to sustain USD bearish momentum, however, prompting short-covering, particularly in USD/JPY. USD/JPY spiked as low 84.04 after the US housing data but ended that hour on its highs for the day up to that time, around 84.70. It later rallied as high as 84.83 as US equities shook off early weakness and rebound on short-covering as well. USD/JPY offers are seen in the 84.90 area while stops lie above 85.00.

Hedge fund buying was rumored in USD/JPY throughout the morning hours.

EUR/USD was a choppy mess today, trading on risk aversion one moment and falling US yields the next. 1.2608/80 was the US range, all in the first two hours of trade. The afternoon was very quiet with most dealing between 1.2650 and 70.

Commodity currencies recouped some lost ground as risk aversion died down as the day wore on. AUD/USD rallied from 0.8770 to end the day around 0.8832. USD/CAD slipped back from the 1.0665 level and looks like it may be trying to put in a double top on the hourly charts. A break of 1.0570 should be good for roughly a cent on the downside, according to the textbook.

Cable ends in the 1.5450s after central bank buying around 1.5400 early in the day helped forge a near-term base. Stops are eyed in the 1.5370/90 window if weakness returns. 1.5480/1.5500 remains a formidable resistance area.

ForexLive European Wrap: Busy morning. Been all over the map

Gerry Davies — Wed, 25 Aug 2010 11:30:11 +0000

German Ifo institute business climate index 106.7, better than median forecast of 105.7
Ireland’s NTMA says S&P rating action is based on “extreme estimate” of bank recapitalisation costs. Doesn’t ascribe any value to “bad banks” current assets. Believes S&P’s approach is flawed
Japan PM Kan: No comment on intervention. PLans to consider economic steps quickly
Australia PM Gillard: Had productive talks with key independent MPs over future government. Responded positively to all points raised by key independents
Swedish consumer confidence 25.2 in August, up from 23.3 in July and better than median forecast of 23.0
Greek FinMin: Recession is shallower than what could have been expected, economy seen contracting less than 4%

Busy morning. EUR/USD sits at 1.2630, marginally lower on the day. Inbetween though we’ve been all the way up to 1.2725 and back down again. BIS capped early rally attempts, selling in the 1.2645/50 area.

Euro bulls were not to be denied though. The pairing was already on the rise (Eastern European buying notable), when the release of better than expected German Ifo data sent us spiking to session high 1.2725. Sell orders had been well noted at 1.2720.30 and they proved durable barrier to upside.

The BIS came in selling again above 1.2700, along with an Asian sovereign and Russia. A powerful triumverate and we were quickly on the slide. Rumours circulated that the Portuguese bond auction had gone badly weighing on the pairing. Infact it went ok. But this hasn’t stopped EUR/USD continiuing lower as Greece bonds get dumped. Worries regarding PIIGS are never far from the surface.

Talk buy orders clustered down at 1.2580/90, stops below. Buy stops said to be gathering just north of the 1.2720/30 sell orders.

USD/JPY up marginally on day, presently at 84.50 from early 84.30. Have been ongoing reports of a Danish bank on the bid down around 84.35. They were notable buyers yesterday as well. Some scuttlebutt they’re working on behalf of a Hungarian investor. Any names come to mind? Who knows whether that’s true, but the talk is out there. Loads of rhetoric from various Japanese officials, which really doesn’t amount to a hill of beans.

Cable little changed on day, infact at 1.5420 it’s unchanged from when I arrived. Dips below 1.5400 have seen decent buy interest emerge quickly. Russia and India have been two notable central bank buyers today. Talk of stops through 1.5370. Sell orders clustered up at 1.5480/00. Probably buy stops just above there.

ForexLive Asian market wrap: Quiet session after big moves on CHF, JPY overnight

Sean Lee — Wed, 25 Aug 2010 04:11:14 +0000

The threat of intervention was enough to dissuade any attempts to take the JPY higher during the Asian trading session

Overnight markets were rattled by the twin hits of an Irish downgrade and very poor US housing data
Japan’s trade surplus more than doubled from a year earlier, thanks in large part to the strong JPY, but the rate of exports growth also slowed, again attributable to the JPY strength
Japan July corporate services prices -1.2% YoY
Australian Q2 construction work +3.5% QoQ
Australian Independent MPs who will decide next Government, support the mining tax
Japanese PM Kan wants to show strong response on Yen soon
Regional stockmarkets 1% lower

The fear of intervention in USD/JPY was enough to encourage some mild profit-taking in it, and in the various JPY crosses. USD/JPY closed in NY at 84.20 and has drifted higher throughout the session albeit amid relatively poor momentum. Ranges: USD/JPY 84.12/50; EUR/JPY 106.24/99.

EUR/USD opened at 1.2630, having been knocked lower in late NY trade after news of the Irish downgrade. EUR/JPY profit taking has been the main influence during the local session. Ranges: EUR/USD 1.2627/69, EUR/CHF 1.2024/61

Cable has followed the moves in EUR/USD with EUR/GBP trading in a very tight range. Ranges: Cable 1.5401/48, EUR/GBP .8195/.8208.

The AUD/USD has traded in an .8820/69 range, remaining unaffected by the minor economic data.

Markets: Nikkei, HK, Kospi, All Ords and Shanghai all around 1% lower. Gold unchanged in Asia $1233/oz, similarly oil at $71.80/bbl.

ForexLive US wrap-up: Bad US data a dollar downer for a change

Jamie Coleman — Tue, 24 Aug 2010 20:42:00 +0000

US existing home sales fell 27.2% in July
Nikkei: MOF considering unilateral intervention, BOJ additional easing to curb yen strength
Richmond Fed index falls to 11 in August from 16 in July
Canadian retail sales rose 0.1% in June; weaker than expected
Belgian business sentiment (correlated with ifo) rises to -5.1 in August from -6.5 in July
Chicago Fed’s Evans: Risk of double dip higher than six months ago but does not expect slide back into recession
Rehn expects Greece to receive second tranche of EU/IMF funds; Greek yield spreads soar to post crisis highs at 915 bp anyway.
Fed’s Fisher: Unclear if further Fed ease would be “pushing on a string”
IMF/Hungary to resume talks
US 10-year note closes at 2.495%

EUR/USD extended its slide in early US trade as the market correctly anticipated horrific US housing figures. We slipped as low as 1.2588 in early trade after breaking below the 50% retracement of the 1.1785/1.3335 rally (1.2607) and knockouts and stops at 1.2600.

We rebounded on short-covering ahead of the US data and rallied further despite the shockingly weak US housing data as the market feared the Fed would begin to employ ever more quantitative ease. With the market already heavily short, a squeeze to 1.2720 unfolded before prices ran out of steam. We end on afternoon lows at 1.2662 as risk-off correlation comes back into play.

USD/JPY slid to session lows at 83.61 after the US data, before rebounding on the news in the Nikkei that the BOJ and MOF may be ready to act to attempt to curb JPY strength. 84.45 was the rebound high. Stops lie above 84.50 near-term, traders report. USD/JPY weakened on heavy selling from US real money accounts late in the session, ending around 84.10.

Cable traded heavily in afternoon trade, slipping off rebound highs of 1.5480 to end the day at 1.5413. GBP/JPY sales seem to have been a component of the pullback as was the failure to retake the key 1.5475 technical pivot on a sustained basis.

Commodity currencies gyrated amid broad USD weakness this morning but end soft as global growth fears mount. USD/CAD ends at 1.0605, up from 1.0550, AUD at 0.8827 from 0.8873

EUR/CHF slipped to record lows at 1.3050 after UBS published a research piece saying “don’t expect the SNB to bail you out of EUR/CHF longs”…

ForexLive European Wrap: Yen rules supreme

Gerry Davies — Tue, 24 Aug 2010 11:07:09 +0000

Japanese FinMin Noda: Recent currency moves clearly one-sided
Japan PM Kan: Sudden currency moves are not welcome
Tokyo Stock Exchange CEO: Japan should show its ready to intervene on yen
UK confidence takes an austerity knock – The Telegraph
MPC member Dr Weale: “Foolish” to rule out possibility of double-dip downturn. Fears BOE’s UK growth forecasts too optimistic
UK July s.a mortgage approvals 33,698, down from 34,575
Euro zone June industrial orders +2.5% m/m, +22.6% y/y vs median forecasts +1.5%, +22.9% respectively
German GDP (Q2 final) +2.2% Q/Q, +4.1% y/y. No change from previous estimate and in line with forecasts
Australia cross-bench MPs say expect talks with major parties to run into late next week

Japanese officials continue to talk, market continues to load up with yen. Risk aversion is to the fore and US yields low and these continue to pressure the pairing. There are other reasons, including speculation China is going to be ongoing buyer of JGBs.

USD/JPY down at 84.35 from early 84.95, while EUR/JPY is at 106.35 from around 107.30. Noda gave a press conference and offered absolutely nothing new. This gave yen bulls the greenlight to take more onboard.

We got to session low 84.17 where buying from two Asian sovereigns (Korea and Taiwan) lent some support. Barrier option interest now seen at 84.00 in USD/JPY and 106.00 in EUR/JPY.

EUR/USD down at 1.2605 from early 1.2635. BIS has been seen buying around 1.2610/15 lending much-needed support. Also some option-related buying ahead of 1.2600 barrier option interest.

Attepted rallies have been snuffed out quickly against the risk off backdrop. Stops seen through 1.2600 on downside. Talk of buy orders, including corporate interest, clustered down at 1.2580.

Cable down at 1.5395 from early 1.5425, having been as low as 1.5374. Russia notable seller early. Sterling hasn’t been helped by comments made by new MPC member Dr Weale. (see above)

AUD/USD down at .8840 from early .8870. Australian (local) buy orders down at .8820/25 have lent much needed support.