| CATEGORY: FX |
Thu 09 Aug 2012
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LONDON (SHARECAST) - This is a FOREX market update at the European session pre-open.
Main headlines:
Berlin denies rift over euro crisis.-FT
China’s Inflation Eases to 1.8% as Producer Prices Drop More Than Forecast.-Bloomberg
Window For Rate Cuts in China Closing Fast: Experts.-CNBC
BOJ Refrains From Easing Policy in First Meet With New Board.-Bloomberg
Standard Chartered CEO Says ‘No Grounds’ to Revoke License.-Bloomberg
America’s wrap up:
Productivity, Labor Costs Rise.-WSJ
Obama's lead grows despite voters' pessimism.-Reuters
Drought Effect on Consumer Food Prices Likely Muted.-WSJ
News Corp posts loss on restructuring charge.-Reuters
Brazil’s central bank staff go on strike.-FT
Chile Peso Advances as Economic Growth Lures Foreign Investors.-Bloomberg
Venezuelan cheap petrol policy backfires.-FT
Asia-Pacific summary:
China Consumer Inflation Eases for Fourth Straight Month.-Bloomberg
China Adds Scope to Cut Rates as Japan, South Korea Hold Policy.-Bloomberg
Bank of Korea Holds Rate to Gauge Impact of Europe Following Surprise Cut.-Bloomberg
Asian Stocks Rise After China Data.-Bloomberg
China’s Rule of Law Scrutinized as Gu’s Murder Trial Begins.-Bloomberg
Australia Adds 14,000 Jobs as Unemployment Falls to 5.2%.-Bloomberg
Aussie Gains Versus N.Z. Dollar as Reports Shows Diverging Jobs Prospects.-Bloomberg
India Industrial Production Falls for Third Time in Four Months.-Bloomberg
India picks ex-IMF economist as adviser.-FT
Singapore Trims Growth Forecast on Global Slowdown Risks.-Bloomberg
European news:
Draghi's Shrewd Move Puts Euro Ball in Governments' Court.-WSJ
France’s Rich Prepare to Flee Country on 75% Tax Rule.-CNBC
French central bank warns on recession.-FT
Sterling rises as King damps rate hopes.-FT
Canada's Carney says not a candidate for BoE governor job.-Reuters
Swedish Krona May Strengthen to a Record Against Euro: Technical Analysis.-Bloomberg
FOREX action
EUR: The euro crosses advance after yesterday’s losses. Dismal industrial production figures in Germany prompted a sell-off in European assets. There is talk of a sovereign bailout of Spain and Italy after the summer as they are unable to fix their financial problems in an anaemic growth context. EUR-USD is holding above the 1.2330 support zone while EUR-JPY trades close to 97.00.
GBP: The sterling crosses were given a fillip after yesterday’s release of the BOE’s Inflation Report. Mervyn King damped rate cut hopes even if the British economy is poised to register no growth at all in 2012. Recent industrial production figures gave a positive reading. The cable is now a bit below 1.5700, while GBP-JPY trades near 123.00. EUR-GBP consolidates after breaching again the 0.7900 level.
CHF: We see few changes in the Swiss franc crosses. The USD-CHF moves sideways, pivoting in the 0.97 area. Meanwhile, EUR-CHF is in its familiar trading range close to 1.2000. The recent spike to 1.2080 was short-lived. The SNB is hoarding euros as the latest reserves numbers showed.
Nordics: Both the NOK and the SEK continue to be the darling of many FX investors as they are a safe-heaven play on the Eurozone debt crisis. The NOK is quite strong versus the euro buoyed by Brent gains. The SEK might retest a record high against the euro.
USD & JPY: The greenback and the yen are not losing their allure in a ‘risk on-risk off’ summer context. The BOJ decided today to leave its monetary stance unchanged and refrained to embark on further monetary stimuli. USD-JPY is now moving close to 78.50.
CAD, AUD & NZD: The three dollars move in different directions. Australia’s currency is the strongest after Chinese economic data. The island continent job market is fairing better than New Zealand’s and that dents the kiwi. As we expected, the AUD-USD cross rate consolidated after breaching the 1.06 resistance level.
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