Forex News

The pressure on the single currency continued in the beginning of this week versus the greenback as the fear of downgrading the credit rating of the EU countries has materialized by the end of last week by cutting the credit rating of 9 of the Euro area remembers by S&P giving all of the EU countries a negative outlook but Germany and Slovenia which has been cut by one notch like Slovakia, Malta, Austria and France which was having a triple A rating like Germany, Finland, Netherlander and Luxemburg who had been maintained with no change while Italy, Spain, Portugal and Cyrus have been cut by 2 notches as the credit rating downgrading risk was one of the elements which were weighing down on the single currency recently especially after S&P's warning on the 5th of last month by placing the credit ratings of 15 euro zone countries on negative credit watch. The reactions of the EU Members were mixed. While Germany has...

The single currency could find the power to get over 1.30 versus the greenback because of the flash release of Dec EU manufacturing PMI index which has come at 46.9 while it has been expected to be 46.2 from 46.4 in November and also the flash reading of Dec EU Services PMI index which rose up to 48.3 from 47.5 in November while it was expected to decline further in the shrinking territory below 50 to 47.1 but the single currency has eased back below 1.30 as it is still finding difficulty to have a place above it after breaking it  yesterday as the uncertainty is still remaining about the crisis outlook as the market participants have not found out what can make them sure about that the worst of the debt crisis is over while the signs of the recession are still emerging in the Euro area The single currency has reached  yesterday 1.2945 versus the greenback by a new...

The Single currency is still under pressure versus the greenback after the ECB's interest rate decision of cutting the interest rate by 0.25% to be at its previous all times low at 1% again as it was before April meeting. The ECB kept its role as funds provider again with no announcement about new buying bonds plans directly which have been aimed by the markets which have seen offering new 3 years loans or lowering the EU reserve banking rate of deposits at its central banks by 50% to be 1% of its assets instead of 2% from the beginning of next year or even cutting the interest rate meanwhile are not enough and can not replace buying bonds directly by the ECB to restore confidence in the EU bonds markets to fall the risk appetite strongly during the ECB's president press conference which focused on the ECB's offering of cheaper money with no reference to direct interventions injecting funds in...

Yesterday, it was reported that Finland will receive the collateral it demanded as a condition of providing aid to Greece. The Finnish government was able to secure the collateral, but it won’t protect the country’s taxpayers from having to pitch in for financing a second wave of the crisis. “The value of the deal is in the eye of the beholder,” said Ville Pernaa, director of the Parliamentarianism at the University of Turku. “But this isn’t really what Finland sought to begin with.” The issue is that the government’s refusal to develop a plan for Finland to assist Greece that was more advantageous to the Finnish electorate could inflame talks between skeptics within the country that hold the third biggest bloc in parliament. The “True Finns” party, led by Timo Soini, which is directly encouraging Greece to default and to admit that the Euro is a failed experiment, is the second most popular party in the country after the National Coalition...

The continuing rally on the risk asset markets yesterday was buoyed by the positive news coming out of the Euro zone. At a meeting with Greek Prime Minister George Papandreou, German Chancellor Angela Merkel yet again announced that Germany will provide all necessary aid to Greece and not allow the country to leave the Euro zone. Greece’s parliament voted 115 to 142 to pass the prime minister’s initiative to introduce an additional tax on property, which says that the country’s leadership is trying to meet all the conditions to qualify to receive another 8 billion Euro tranche of aid.  In addition, the Greek parliament also ratified changes to the agreement on the European Financial Stability Fund (EFSF) aimed at increasing it. Tomorrow, September 29, the German parliament should ratify these changes; when all 17 of the Euro zone countries ratify the amendments, the new agreement will come into force. Riding on this news, the unified currency rose by the end...

The falling of EU Manufacturing PMI of August below 50 in the contracting territory to 49 while the markets were waiting for 49.5 from 50.4 in July raised the markets worries about the growth outlook in the Euro zone showing its needs for stimulation while it's required currently from most of the Euro zone countries to implement governmental austerities plans cutting its spending and raising its taxes for improving their financial situation amid continued investors' concerns about the debt crisis in the Euro zone. These weak manufacturing data have come in line with the falling of Aug Germane IFO last week to 108.7 while the markets were waiting for from decreasing to 111.3 from 112.9 in June following the big drop of Aug EU ZEW to -40 while the consensus was referring to improving to -7.6 from -7 in July and also this week earlier release of EU consuming confidence index falling to -17 in August while it has been forecasted...

American treasury obligations increased in price, steadily moving to a record-high price last seen in December 2008. Yields on 10-year American government bonds fell 2 basis points and are currently at 2.16%. The Japanese yen appreciated in the morning after statistics coming out of the US showed that the Consumer Confidence Index in that country fell sharply. The MSCI Asia Pacific Index is sometimes in the positive zone, sometimes in the negative. American stock exchanges closed in the positive zone and futures on the major American indexes are also in the positive zone. Asian stock markets are so far winning back  positively from yesterday’s American trading session, although some export companies in the Asian region are under pressure from the negative reports coming out of the US and Europe yesterday. Europeans’ certainty in the economic situation dropped unexpectedly to a level not seen since December 2008. The indicator, which reflects the sentiment of managers and consumers in the Eurozone, fell to...

Yesterday, gold demonstrated its biggest intraday fall since 2008. Treasury obligations also fell while stocks in New York rose after publication of data on durable goods and real estate prices. Gold futures fell 5.5% to $1,758.90 per ounce after the close of trading at 4:38PM in New York. Recall that gold prices recently exceeded the $1,900 barrier for the first time ever. The Standard & Poors 500 Index increased 1.3% to 1,177.60, supporting a steep increase of 3.4% from yesterday. Yields on 10-year American treasury notes fell by 14 basis points to 2.30%. DT Trading analysts observed that stocks yesterday both rose and fell. For example, the S&P 500 Index fell by 0.5% and then wrung itself out, swinging more than usual within the bounds of the so-called technical level, since investors are waiting for Federal Reserve Chairman Ben Bernanke’s speech on August 26 at Jackson Hole, Wyoming. Gold prices dropped back amid speculation on the stability of the financial markets. Yesterday’s report...

The risk aversion sentiment has accelerated containing the markets following the falling of June personal income to 0.1% monthly revising down the figure of May to 0.2% from 0.3% while it was expected to be 0.3% and also monthly falling of US personal consumption expenditure by 0.2% while it was expected to rise by 0.2% in June with down revision of the figure of May from 0.2% to 0.1% in July. These new dovish data about the US economy has supported the demand for the gold to reach a new all times high at 1641 per ounce recovering the falling to $1606 because of the reached deal between the republican party and the democratic party of cutting the US governmental spending by $2.1 trillions over the next 10 years for having an agreement for raising the US debt ceiling avoiding defaulting but the rising worries about the US growth outlook have come back supporting the gold following the falling of July...

Trading in America has been sinking slowly and dragging the S&P 500 Index down with it, to the lowest level in almost two months. Bonds and commodities futures collapsed, while the storm clouds of a possible impending US default are gathering. The US dollar, however, appreciated. Surprisingly, the US dollar is finding opportunities for growth even under the threat of a default.  All of the problems surrounding the dollar and American bonds are only pushing it up. One can only imagine the euphoria with which enthusiastic investors will scramble to buy American bonds when the long-awaited news is finally announced. The S&P 500 Index went down 2% for the first time since June 1, falling to 1,304.89 points as of 4PM in New York. The cost of hedging against a default on US bonds went up to the highest rate since February 2010, while yields on 10-year treasury obligations increased two basis points to 2.98%. Coffee and oil futures lost over 1.5%,...