28 January, 2013
The British Pound broadly underperformed in overnight trade, down against its top counterparts. The selloff followed comments from incoming Bank of England Governor Mark Carney, who is due to replace the current BOE chief Mervyn King in July. Carney said central banks have not “maxed out” the possibilities for further stimulus and may do more, stressing the need to achieve “escape velocity” as developed economies struggle to pick up pace in the aftermath of the Great Recession. The remarks hinted that Carney will pursue further accommodation when he takes the reins at Threadneedle Street.
A quiet economic calendar in European hours is likely to see forex traders looking ahead to the US data docket for directional guidance. December’s Durable Goods Orders report is in focus, with economists forecasting a 2 percent month-on-month increase, yielding the largest increase in three months. US releases have increasingly fallen short of expectations since late December (according to data from Citigroup) however, warning of a vulnerability to downside surprises as the markets’ outlook is adjusted lower. Pending Home Sales and the Dallas Fed’s Manufacturing Activity Survey are also on tap, with softer outcomes penciled in for both.
On the corporate earnings front, cycle-sensitive Caterpillar Inc is due to report fourth-quarter results. Expectations suggest sales fell 2.3 percent compared with the third quarter while earnings declined from $2.260 to $1.703 per share. Traders are likely to be most concerned with the company’s guidance however as they continue to build the outlook for global growth against a backdrop of lingering uncertainty on the US fiscal policy front. Indeed, while forecasts from the IMF, the World Bank and private-sector economists (as polled by Bloomberg) argue for a modest pickup in 2013, a large dose of austerity from Washington DC may meaningfully change the landscape.
German consumer confidence will rise in February from a 7-month low, according to the GFK survey. The survey result was reported at 5.8, slightly higher than an expected 5.7 and better than January's revised 5.7 survey result...
Though its recent gains have been particularly reserved, the Dow Jones FXCM Dollar (ticker = USDollar) managed to fourth consecutive daily advance through Monday's close...
The European Central Bank is in focus as it releases details of next week's first 3-year LTRO repayment. The central bank gave lenders the option to return the money early when it conducted the repo operations. Repayments will be held weekly on the last business day starting January 30...
The fundamental tide continues to grow, yet speculative trends refuse to be driven from their stubborn state of stasis. That is a burden for the US dollar which still plays a dominate role in the FX market as a safe haven and reserve currency...
On one hand, the S&P 500 - a benchmark for risk appetite trends - closed this past week at its highest level in five years. On the other, we have the Dow Jones FXCM Dollar Index (ticker = USDollar) - the world's reserve currency and thereby a primary safe haven - closing Friday at its highest level in six months...
A resurfacing of US debt ceiling concerns on Monday saw a sharp fall in the S&P500 index, and a rally in the US Dollar as investors sought the safer asset...
The dollar has put in for a few particularly interesting moves over the past 24 hours. Yesterday, the greenback extended its advance against the euro to more permanently shift EURUSD off multi-month highs at 1.3400, while GBPUSD closed below 1.6000 for the first time in eight weeks...
Prices turned lower from resistance at the top of a rising channel set from mid-September, taking out near-term support at smaller channel bottom to expose the 50% Fibonacci retracement at 10038. A further push below that aims for the 61.8% level at 10009...
The US Dollar corrected higher – rising against all of its leading counterparts – as prices corrected after yesterday’s aggressive selloff. The greenback fell 0.6 percent, marking the largest single-day drop in close to four months, as risk appetite swelled in the wake of better-than-expected Chinese trade figures...
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