The aussie climbed a further two cents yesterday as figures revealed rising employment in Australia, and as rising risk appetite supported strong demand for high yielding currencies. The Australian dollar continued to push higher as encouraging data from the labour market gave investors further cause to buy into Australian assets. The recent rate hike to 3.25% has increased the yield gap between the two currencies, and the recent downturn in unemployment has simply reinforced the sentiment that Australia is at the forefront of the global economic recovery, strengthening aussie demand.
Posts Tagged ‘Economic Recovery’
The aussie continues to trade strongly, supported by risk appetite in the market
Posted by admin on October 9th, 2009
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Euro advanced against the greenback, buoyed by a relatively upbeat ECB rate statement
Posted by admin on October 9th, 2009
The single currency climbed to a two week high of 1.4815 yesterday as investors continued to sell the dollar to fund riskier trades. The single currency returned to its recent upward trend, initially climbing half a percent, as investors took up dollar selling in the wake of further evidence of global economic recovery. Australian employment data revealed a rise in jobs in September, reinforcing risk appetite and triggering broad dollar selling as its haven appeal weakened. The single currency held its gains in the afternoon after the European Central Bank left interest rates unchanged at a record low 1.0%, as the market expected.
Investors were cautious yesterday ahead of an ECB rate decision, but the euro has rebounded this morning
Posted by admin on October 8th, 2009
The euro relinquished some of its recent gains against the greenback yesterday, with investors on the defensive ahead of the ECB rate decision today. A broadly stronger dollar was the currency of choice yesterday as investors trimmed “riskier” positions in favour of the haven currency as equities slipped into the red, easing risk appetite.The dollar also benefited after a US official said raising interest rates would not derail the US economic recovery. “Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy.Additionally analysts noted that the greenback was being supported by speculation that the dollar’s decline may have been too fast to sustain.In trading this morning, the greenback has come under pressure after Australian employment data reinforced demand for higher-yielding assets. The ECB are widely expected to announce today at 12:45BST that interest rates in the eurozone will remain at a record low of 1.0%, though the tone of the accompanying statement is likely to reflect growing optimism over the state of economic recovery in the region.
Kiwi found support from the strength of its neighbour yesterday, and as global equities rallied strongly
Posted by admin on October 7th, 2009
The pound lost a further one and a half cents to the kiwi following negative UK data, and as the aussie rate hike put the focus on the next RBNZ rate decision. Fears that Britain’s fragile economic recovery is faltering were sparked after official figures revealed a surprise fall in industrial output in August. The data showed a 1.9% drop in manufacturing output month on month, a full 2.5% below the market prediction, encouraging further pound selling. The kiwi also benefited indirectly from the 25 basis point rate rise in Australia, which supported demand for higher-yielding currencies.
Rate rise to 3.25% in Australia boosts demand for the aussie
Posted by admin on October 7th, 2009
The Australian dollar continued to push record highs yesterday, supported by the RBA’s decision to raise rates as the global financial crisis eases. The aussie continued to rally strongly, gaining nearly three cents, a 1.4% movement, as investors sought to take advantage of the higher-yield now available on Australian assets. The Reserve Bank of Australia became the first of the G20 nations to raise their base cash rate and helped to ease fears over the state of global economic recovery. Analysts also noted that the widening yield advantage points to further aussie appreciation, particularly as the RBA, unlike other central banks, does not seem too concerned about their currency strength.
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The euro posted gains against the US dollar on Friday and has reached back over 1.46 this morning
Posted by admin on October 5th, 2009
The single currency shrugged off worse-than-expected US non-farm payrolls data to post gains, closing up 0.2% at 1.4574.Date revealed that the US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures. The Labor Department revealed that US unemployment rate rose to 9.8%, fueling fears that the labour market could undermine economic recovery. The euro initially dropped sharply to a three-week low of 1.4485 on the release of the U.S. payrolls report, as investors were encouraged to the relative safety of the greenback.
Pound advanced against a broadly weaker euro yesterday, but has stumbled in trading this morning
Posted by admin on October 2nd, 2009
Sterling climbed half a cent against the single currency yesterday, helped by a weaker euro, which was undermined by comments from an EU official.In early trading, the pound was able to brush off an unexpected fall in the UK Manufacturing industry, which contracted to 49.5 in September, from 49.7 in August, against the market expectations of an increase to 50.3. The pound then gained against a broadly weakened single currency as European officials expressed discomfort over the euro’s recent rise in value. A top European official announced that he would discuss the EU’s concern over the recent appreciation of the euro at the G7 meeting this weekend.
Data revealed a growing confidence among New Zealand businesses, which has driven the pound down further
Posted by admin on October 1st, 2009
The pound reverted back to its downward trend against the kiwi in trading yesterday, losing 0.8% to close the day near last week’s lows at 2.2163. A strong jump in a New Zealand business confidence survey added to evidence that the economic recovery is gaining pace, supporting demand for the kiwi. The Reserve Bank of New Zealand published a bright economic outlook yesterday, which was also picked up on by investors with expectations for a rate rise strengthening. Additionally, in the US, the second quarter GDP figure was revised upward revealing that the economy had contracted by less than initially expected, which supported a move into riskier assets, although weak employment data did offset this trend slightly.
Weak US data yesterday afternoon strengthened dollar appeal, trimming sterling’s gains
Posted by admin on October 1st, 2009
A mixed bag of data in the US prevented the pound from sustaining early gains yesterday, eventually closing just 0.1% up on the day at $1.5980. The pound shot up against the dollar in early trading, posting an intra-day high of 1.6123, after an industry report showed consumer confidence in the U.K. jumped by the most in 14 years. But the greenback trimmed its losses after the ADP Non-farms employment data revealed a worse-than-expected change in US employment which eased risk appetite and returned investors to the haven currency. The sharp dip, was initially offset as more data revealed an upward revision in the US GDP figure to just a 0.7% contraction from a previous -1.0%, and beating forecasts of a downward revision.
Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
Posted by admin on September 30th, 2009
Evidence that the UK economic recovery is strengthening enabled sterling to reverse a five day slide against the kiwi, closing up at 2.2341. Sterling clawed back nearly two cents, or 0.8%, in the wake of strong data referring to retails sales, credit lending, and a final upward revision to the GDP figure.Sales volumes at UK retailers bounced back to their strongest level for five months in September, reaching levels well above expectations, whilst the second quarter GDP figure in the UK was revised to just a 0.6% contraction. The positive data was offset slightly by a weaker-than-expected UK current account deficit, but investors seemingly overlooked this, with demand for the pound broadly rising.In trading this morning however, the kiwi has advanced, supported by a survey showing business confidence in New Zealand at a ten-year high, which fed speculation of a rise in rates.The kiwi also benefitted from a sluggish dollar and strength in the aussie, which supported appetite for riskier assets.
An easing of risk appetite weakened the euro yesterday, but it has rallied back over $1.46 so far today
Posted by admin on September 30th, 2009
The single currency hit a two-week low against the greenback yesterday as a rise in risk aversion strengthened demand for the haven currency.The dollar rose for a second day as evidence that economies have yet to shake off the worst effects of the global recession spurred demand for the safety of the U.S. currency. Russia’s central bank cut its main interest rate, signaling that things are not as positive as they appeared previously, and spurring demand for the dollar. The greenback also found support following a disappointing US consumer confidence survey, which cautioned investors in their risk appetite.
Bearish sentiment towards the pound on Friday allowed the kiwi to make substantial gains
Posted by admin on September 28th, 2009
The kiwi dollar climbed another 1.2% on Friday, as demand for the high yield currency remained strong in the wake of positive economic data. Investors continued to move their funds into the riskier currency on Friday as data in the US revealed a strengthening economic recovery. Selling pressure on the pound was also high on Friday as comments from the BoE revealed their willingness to see the currency remain weak, undermining investor confidence. The kiwi also received support from a slight rise in oil prices. The New Zealand dollar tends to fair well when commodity prices are on the up owing to the nature of the economy.
The pound’s decline continues, as confidence in the currency is undermined
Posted by admin on September 25th, 2009
Sterling went into its steepest daily decline against the single currency in 5 months yesterday, losing 1.2%, after Mr. King revealed that he was content with the current value of the pound. Sterling hit its lowest euro price since early April, extending broad losses after Mervyn King said that a weak pound was supporting a necessary rebalancing of the UK economy.The euro was also supported by a further rise in business confidence in Germany. Although expectations for the Ifo economic survey were not matched in September’s report, the modest increase reflected optimistic future expectations for economic recovery.Demand was further eroded as the Daily Telegraph reported yesterday that the Bank of England was set to meet with economists in a “crisis” meeting designed to stem alarm and confusion over the QE program and the weakness of the pound.Additionally, once the pound broke below the 1.10 level, automatic sell off points were triggered, driving sterling down to a near six month low of 1.0922.The pound has slid further in trading this morning, losing another 0.5%, and currently trading around 1.0900.
US Dollar May Gain as Currency Markets Follow Risk Trends in European Hours (Euro Open)
Posted by admin on September 21st, 2009
The US Dollar may rise as stocks retreat and US equity index futures point to a lower open on Wall St with currency markets focused on trends in risk sentiment to drive price action, looking past a virtually empty economic calendar. Key Overnight Developments• NZ Service Sector Expands For Second Month on Inventories; Sales Decline• UK House Prices Fell Least in a Year in September, Says Rightmove• Euro, British Pound Sold Against US Dollar as Most Stocks Fall in AsiaCritical LevelsThe Euro trended lower to start the trading week, testing as low as 1.4678 to the US Dollar in overnight trading.
Forex Weekly Trading Forecast – 09.21.09
Posted by admin on September 20th, 2009
US Dollar Overdue for a Technical Bounce, But Fundamental Reversal…Fundamental Outlook for US Dollar: Neutral- Speculation for rate hikes deferred as fundamentals temper exuberant risk appetite- The steady charge in risk appetite keeps the dollar on the short side of carry interests- Sentiment can often run askew of fundamentals; but what do technicals say about the dollar?The dollar was able to relieve the pressure of suffering its worst trend on recent record by clawing out the first bullish close in eleven consecutive trading days; but that does not mean the burdened currency is necessarily primed for a true reversal.
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