Currencies Direct and MarketClub Updates

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Tom Nadir — Tue, 17 Nov 2009 11:45:25 +0000

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Friday 13 – So far So Good For Sterling

Tom Nadir — Fri, 13 Nov 2009 14:56:32 +0000

Currency Market Updates

13, November 2009

Great start to the morning for sterling pushing up against the USD and the euro as it sterling was largely ignored as the global markets have bigger fish to fry. Tim Geithner the US treasury secretary reiterated his sentiment on a stronger USD. This was supported by the APEC finance minister’s conference which also registered it’s support for the USD and the IMF.

However talk is cheap and it is clear that the USD is posing a problem due to recent volatility and weakness. Although the USD gained back from 1.50 to 1.4850 against the euro this move is hardly significant and we can expect further wranglings over the USD during Obama’s visit to China. Sterling nipped higher on the blindside as the markets focused elsewhere.

Euro zone GDP has come in at +0.4% which is slightly weaker than the expected +0.5%. This has not really affected the euro as the data was fairly in line with expectations. Yesterday the ECB bulletin was broadly optimistic and it was maybe the uncertainty on inflation that has deflated the euro.

Later today we have the US trade balance and the University of Michigan Consumer confidence to provide more feedback on the US economy. The weaker US dollar should help the numbers.

Recently the relative strength of currencies is becoming an issue for economies. We heard this week Mervyn King talk of the weakness of the pound benefiting the UK economy. The same could be said of the USD.

Conversely Japan, Switzerland and economies pegged to the USD have voiced concerns of their currency strength. We now have the Prime minister of New Zealand noting concern on the strength of the NZ Dollar. In the last year the huge volatility and FX movements have certainly changed the dynamics of global markets. With economies battling towards growth the dynamics of fx will be a major issue going forward.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in The Market Club Tagged: currencies market, currency forex market trading, currency market exchange, currency market updates, currency markets, currency trading, foreign currency market, online currency trading, the currency market, trading currencies, Trading Video

Markets Digest Bank of England Inflation Report

Tom Nadir — Thu, 12 Nov 2009 12:06:27 +0000

Currencies Direct Reviews Quarterly Inflation Report and Australian Economy

12, November 2009

Yesterday sterling weakened after the release of the Quarterly Inflation report and the accompanying speech by Mervyn King. The feedback from King was actually not too bad when taken into context over the last six months; inflation was earmarked to rise and growth forecasts were upped. The reason why the pound weakened was related to the Bank keeping an “open mind” on further Quantitative Easing and also noting that the weaker pound is a key driver for the UK economy.

It seems the Bank is still treading tentatively and is taking no chances. We have little data for the rest of the week for sterling; sterling has held firm after falling yesterday holding above 1.10 against the euro and 1.65 on the USD The market will want to see continued improvements in economic data following small improvements in manufacturing, jobless claims and housing data.

This morning EUR/USD has failed to hold on to the key 1.50 level falling to 1.4950; 1.50 is a stubborn barrier that the euro cannot seem to push through with strong support for the USD at this level. This move has allowed sterling to creep higher against the euro towards 1.11 but I would expect range trading on EUR/USD and a possible re-test of 1.50.

In other news the Australian economy is still driving forward with the unemployment rate holding at 5.8% but with 24,500 new jobs created raising the chances of another 25 basis point rate rise. This puts the Australian economy well ahead of the curve and naturally the AUD has strengthened on the improved sentiment and the recent rise in interest rates. Eurozone data just released confirmed a fifth consecutive increase in Industrial production by 0.3%; later European Central Bank president Trichet will speak later in Frankfurt.

Speaking in Singapore U.S Treasury Secretary Tim Geithner has again reaffirmed the importance of a strong dollar and also a stable USD. In addition he also noted that Asia and in particular China will play a major role in leading global recovery. The importance of a strong and stable dollar are key to global economies; Singapore and Indonesia, Malaysia and Taiwan among others need to regularly buy USD to keep their local currencies from strengthening too much against the USD.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

Posted in The Market Club Tagged: Australian Economy, Bank of England, Currencies Direct, Currencies Direct and MarketClub Updates, currencies market, currency forex market trading, currency market exchange, currency market updates, currency markets, currency trading, foreign currency market, online currency trading, Quarterly Inflation Report, the currency market, tom nadir, trading currencies, Trading Video

Good News Then Bad News For Sterling

Tom Nadir — Wed, 11 Nov 2009 14:40:44 +0000

Currencies Direct Review

11, November 2009

A busy day in the markets this morning for economic data from the UK. Firstly we kicked off with UK October jobless claims and ILO unemployment rate. The jobless claims came in better than expected and the unemployment level came in at 7.8% against a forecast of 8%. Initially the pound hopped higher towards 1.68 on the USD and 1.12 against GBP/USD as the market responded to the improvement, however it still had an eye on the Bank of England inflation report to follow.

This report was more dovish than anticipated and the door was left wide open for more QE when the markets were looking for signals on a conclusion. King also noted that weaker sterling will help exports indicating that the drop in sterling is not a concern but a benefit. This led to a drop in sterling across the markets and once again the BoE’s dovish tone is holding sterling back.

It will be interesting to see how GBP/USD trades following this data as the USD is still under pressure. The bull run towards 1.70 technically remains intact and on the upside there is not too much resistance in the path of 1.70. If GBP/USD can hold above 1.66 then it should stay in a positive mode against the USD despite the negatives from the BoE.

Regarding the weak USD we are getting mixed messages from the US with Tim Geithner backing a stronger USD and at the same time Federal Reserve Bank of Dallas President Fisher stating that the USD is undergoing an orderly depreciation. The dollar is certainly on a downward trend and shows no sign of bucking this trend at the moment.

GBP/EUR has frittered lower following the inflation report back into the 1.10 levels, the euro has continued to push higher against the USD beyond 1.50 giving the euro good support.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

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Posted in The Market Club

Sterling Encountered an Enormous Banana Skin This Morning!

Tom Nadir — Tue, 10 Nov 2009 15:12:02 +0000

Currencies Direct Reviews the State of GBP

10, November 2009

… in the Far East just as the currency looked as though it might consolidate at its recently hard won higher levels ahead of the release of the latest Quarterly Inflation Report from the Bank of England and the US public holiday – both tomorrow.

Then at 5:18 this morning, Fitch said that the UK was most at risk of losing its AAA sovereign rating amongst the major economies, with Germany being the least likely. Cable dropped from 1.6755 to 1.6610 without touching the sides and GBP/EUR witnessed a corresponding fall from 1.1183 to 1.1090 before a recovery of sorts.

At 6.14am the ratings agency attempted to repair the earlier damage to Sterling by reiterating its outlook for the UK as stable because the Government (which ever party this relates to) is expected to articulate a stronger fiscal consolidation plan over the next 12-months. Sterling bounced a tad, up to 1.6660 and 1.1120 which are about the levels we are at now.

This price action, unfortunately, negated some earlier positive news from the UK showing that the RICS house price balance came in better than the pre-release survey and that, on the same vein, Britains are expecting things to improve with a poll in The Times indicating that people foresee good times just around the corner…. Today, with a lack of market moving data scheduled for the UK, the early drop in Sterling will likely weigh for most of the day.

A strong German ZEW could add to pressure on the pound later this morning. I suppose the BIG question that comes from this little cameo is whether the UK Government will be able to deliver the goods in terms of the assumed spending cuts. A maintaining of the tighter fiscal policy will also support the opinion that UK interest rates will stay lower for a longer period than had been originally assumed and that these facts favour the view that Sterling’s cyclical weakness is set to continue for some time yet.

Other than that, equity markets had another good day, Wall St up by a strong 2.03% and S&P up 2.22% leading to an expectation for a good showing in Europe. It is possible that ahead of the Veteran’s Day holiday in the US tomorrow, we see a little profit taking but the trend for the remainder of the year looks set to carry on ever onwards and upwards.

Again, this will add further downwards pressure on the the US dollar and lead to a test of the support level against the euro at 1.5060 and the more important Fibonacci level of 1.5168 which is the 76.4% retracement of the July/November 2008 extremes.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in The Market Club Tagged: Bank of England, Currencies Direct and MarketClub Updates, currencies market, currency forex market trading, currency market exchange, currency market updates, currency markets, currency trading, foreign currency market, online currency trading, the currency market, tom nadir, trading currencies, Trading Video

Good Start for Sterling Following US Figures

Tom Nadir — Mon, 09 Nov 2009 13:07:50 +0000

Currency Market Updates

9, November 2009
The pound is off to a flyer in particular against the USD
hitting 1.68 and pushing to 1.12 against the EUR. Some attention in the markets is focusing on the Kraft/Cadbury developments which is sterling supportive in relation to M & A flows. EUR/USD is also testing the 1.50 level again this morning; Euro zone investor confidence has come in much better than expected with the highest reading since June 2008. GBP/EUR struggling to gain further due to the EUR
strength against the USD

Over the weekend the G20 agreed a new framework aimed at re-balancing the global economy and will present detailed plans by the end of Jan. In the meantime the US dollar is weak and this is leading to a stronger euro and Yen; the IMF have also noted that the USD is still overvalued raising concerns that the USD could weaken further. Targets will be for the euros to hold above 1.50 and GBP/USD to push towards 1.70.
On Friday the non-farm payrolls for the US slipped by a worse than expected 190k and the unemployment level hit 10.2%. This was not good news for the US economy in the short term, although the market may still look forward to a slowly improving employment sector. It was not enough to turn the market into risk aversion and USD strength.
Report by Phil McHugh
Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Compiled by Tom Nadir.
You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in Currencies Direct Tagged: Currencies Direct, Currencies Direct and MarketClub Updates, currencies market, currency forex market trading, currency market exchange, currency market updates, currency markets, currency trading, foreign currency market, online currency trading, the currency market, tom nadir, trading currencies, Trading Video

QE Expanded by £25 billion and Sterling Rises – Why?

Tom Nadir — Fri, 06 Nov 2009 13:32:50 +0000

Currencies Direct Reviews QE Moves and US Non-farm Payroll

6, November 2009

The Monetary Policy Committee voted as expected to leave interest rates unchanged at 0.5%. However Quantitative Easing was expanded by £25 billion to take the programme to £200 billion of money created to buy debt. This was less than many expected and in the accompanying statement the Bank of England were slightly more upbeat on a pick up in economic activity and the market has taken the perception that we will now see at the very least a pause in the programme.

This changes the perception towards exit strategies and to a more hawkish tone…this has given sterling a boost even in the light of the decision to expand QE. The market is looking forward and the prospect of the next quarter showing the UK economy returning to growth and the halting of further QE. The markets however remain very fickle and this sentiment could change very quickly.

Yesterday UK manufacturing rose 1.7% above expectations and Industrial Production climbed, again supportive of the sentiment that the worst is behind us.

Today we have the Non-farm payroll report from the US. This is a huge number for the markets and the general assumption is that if the number is above expectations then the USD could weaken further and vice versa. Expect volatility between 12-2 pm on the back of this. EUR/USD is looking to push back over the 1.50 level and GBP/USD is looking to break beyond 1.66. The recent Euro strength against the USD has tempered sterling gains against the euro.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in The Market Club Tagged: currencies market, currency forex market trading, currency market exchange, currency markets, currency trading, foreign currency market, online currency trading, Phil McHugh, the currency market, tom nadir, trading currencies, Trading Video

BoE Rate Decision Eagerly Awaited

Tom Nadir — Thu, 05 Nov 2009 10:24:49 +0000

Currencies Direct Reviews – Bonfire Day in the UK!

5, November 2009

Today at midday the MPC will announce the decision on interest rates and Quantitative Easing. Interest rates are almost certain to remain on hold at 0.5% with the decision on QE to take the spotlight. As today has drawn closer the expectation has escalated that the Bank of England will expand, the question is if they do by how much? The argument is that if they are going to expand then why not do £50 billion rather than £25 billion.

The reasons for expanding are very apparent. The recent dire GDP number, rising unemployment, dire public finances and banks that are still not passing on this increased liquidity. On the other hand most major economies are now looking at exit strategies from unconventional measures and there is a danger that over cooking QE could stoke inflation and lead to an inflationary problem and sharp interest rate increases to combat this.

At the same time there are whispers that the Q3 GDP will be revised upwards and that Q4 GDP will show an exit from recession and a slow recovery for the UK. So the arguments and the significance of today’s decision are evident. The BoE are walking a fine tightrope and they do not want to topple either way and obviously stay on track in controlling inflation.

The implications for the currency markets today are high. Volatility will be severe with the decision at midday followed by the European Central Bank decision at 12:45. If QE is expanded then this should lead to a sterling sell off, if they do not then we could see a sterling rally. The ECB are not likely to throw in any surprises today holding rates at 1% and giving little away in relation to monetary policy measures.

Last night the Federal Reserve maintained their rates and offered up no surprises with the statement to maintain “exceptionally low levels for an extended period”. They were slightly more optimistic than previously but nothing close to hawkish. The reaction therefore was to sell USD and an initial surge pushed GBP/USD towards 1.66 and EUR/USD towards 1.49 before fading in later trading.

One eye would have been on today’s central bank decision suppressing the appetite of the dollar sellers. Hold on to your hats today!

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in Currencies Direct Tagged: Bank of England, Currencies Direct, Currencies Direct and MarketClub Updates, currencies market, currency forex market trading, currency market exchange, currency markets, currency trading, foreign currency market, online currency trading, Quantitative Easing, the currency market, tom nadir, trading currencies, Trading Video

Huge Decision Looms for Bank of England

Tom Nadir — Wed, 04 Nov 2009 10:58:02 +0000

Currencies Direct Reviews Bank of England’s Upcoming Decision

4, November 2009

Tomorrow the MPC will meet for their monthly meeting but this time around the implications are huge. The decision on whether to pump billions more into the economy or hold fire has caused widespread debate with increasingly confusing economic signals adding to the issue.

The problem for the MPC is that it does not want to not do enough especially with the prospect of unemployment pushing past the 3 million mark. Data released overnight showed that UK Nationwide Consumer Confidence remained unchanged from September. The pound has surprisingly rallied against the USD and EUR with a good day for equities helping to boost the risk on trade. The USD and JPY fell yesterday and the pound was a major beneficiary of this weakness.

Supporting sterling this morning is economic data that UK PMI for services was up to 56.9 from 55.3 in September. Another good number from the UK. Could sterling be building up for another fall? We will see tomorrow!

Tonight we have the interest rate decision from the US FOMC and the rates look almost certain to be kept on hold. The market will gauge the Fed’s tone regarding existing and possible future policy. In the past the Fed have continued to use the statement “for an extended period” in describing how long rates will remain at very low levels. If this phrase is removed or toned down then the USD should strengthen due to the potential of interest rate increases being more imminent. Also from the US we have ISM services today which will be a key number in monitoring the economic recovery.

In other news poor retail sales data from Australia undermined the AUD slightly as the rest of the commodity currencies gained. Retail Sales came in at minus 0.2% a surprise number especially as Australia have recently upgraded their outlook.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in Currencies Direct Tagged: Bank of England, Currencies Direct, Currencies Direct and MarketClub Updates, Currencies Direct Reviews, currencies market, currency forex market trading, currency market exchange, currency markets, currency trading, foreign currency market, online currency trading, Phil McHugh, the currency market, tom nadir, trading currencies, Trading Video

Where Next for the Pound?

Tom Nadir — Tue, 03 Nov 2009 14:32:16 +0000

Currencies Direct Reviews the Beleaguered Pound

2, November 2009

Yesterday the pound slowly filtered lower as the markets digested the uncertainty surrounding the Bank of England rate decision and the upheaval of the UK banking sector. Against the USD, the pound initially started well before retreating a cent overnight to 1.6290. Against the euro it failed to hold the 1.11 retreating to 1.1050. GBP/JPY has now fallen to 146.75 as the market loses confidence in sterling. The question is will this continue and if so to what extent?

The main issues for the pound are recurring themes, namely further expansion of QE by up to £50 billion on Thursday and the UK’s dire public finances. 1.60 against the USD and 1.10 against the euroare key levels for sterling to hold this week.

Into the mix we also have the changes to the UK banking sector. Lloyds banking group plans to raise £21 billion to avoid government majority control. RBS group said it will sell its insurance division and some branches as it agreed to take an additional £25.5 billion from the government to covet the title of the most expensive bailout in the world. Chairman of the FSA Lord Turner has stated in the Telegraph that splitting the banking sector could create more risk, exactly what they are trying to avoid. He added that dividing the “casinos” from retail banks is too simplistic a solution. This debate, uncertainty and change to the banking sector could start to weigh on the pound in the short term.

Moving away from the UK we have seen a decent run of economic data around the globe as the drive to recovery continues. In the US yesterday we saw ISM manufacturing, pending home sales and construction spending all beating expectations. This produced a push higher on the risk trade and led to initial USD weakness with EUR/USD pushing towards 1.48 and GBP/USD holding above 1.64. This faded in later trading as sterling started to suffer. The better than expected US data will raise the prospects of a good payroll number on Friday.

Australia raised interest rates by 25 basis points as expected. Recent positives in Australia had created a call for a rise of 50 basis points and his may explain the weakness in the AUD after the decision.

Report by Phil McHugh

Contact Currencies Direct for Corporate or Private Transactions. Open an account today and save money.

Currencies Direct is a leading commercial foreign exchange company with offices in the UK, Australia and Spain and has offices across 5 continents. Currencies Direct’s head office and global trading centre is based in the City of London.

The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Compiled by Tom Nadir.

You can view a new trading video here, with my compliments.

BlogCatalog – Finance

Posted in The Market Club Tagged: Adam Hewison, Bank of England, Currencies Direct, Currencies Direct and MarketClub Updates, currencies market, currency forex market trading, currency market exchange, currency markets, currency trading, foreign currency market, online currency trading, Quantitative Easing, the currency market, tom nadir, trading currencies, Trading Video