forex trading outlook week september 5 2011 : currency market outlook week september 5 2011 : While the market keeps mulling over the dismal U.S. employment report after the long weekend, the Labor Day holiday-shortened week ahead will spice things up in the currency world with five interest rate announcements from major central banks as traders turn their attention to the euro and gauge the odds for the European Central Bank to abandon its hawkish stance and to discontinue its campaign of rate hikes.
In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that will move the markets around the globe.
1. AUD- Reserve Bank of Australia Interest Rate Announcement, Tues., Sep. 6, 12:30 am, ET.
Just until a few weeks ago, the market was pricing a Reserve Bank of Australia rate cut, but following the RBA Governor’s recent statement that “inflation bears careful watching” and that the global economic situation “is not that bad” these expectations have changed. While the Reserve Bank of Australia would not be likely to make any changes to its current monetary policy and is forecast to keep the benchmark rate at 4.75%, if the statement following the monetary policy meeting echoes the RBA Governor’s optimistic outlook, the Aussie dollar could see an opportunity to resume its upward trend against the greenback.
2. CHF- Swiss CPI- Consumer Price Index, the main measure of inflation preferred by the Swiss National Bank, Tues., Sep. 6, 3:15 am, ET.
The record high Swiss franc is not only bad for the economy but it is also deflationary. Should the inflation gauge head lower again, this could give the Swiss National Bank another reason to step up efforts to curb the strength of its currency. The Swiss CPI declined 0.8% m/m in July bringing the annual rate to 0.5% y/y from 0.6% y/y in June and it is forecast to see another 0.1% m/m drop in August.
3. EUR- Euro-zone GDP- Gross Domestic Product, the main measure of economic activity and growth, Tues., Sep. 6, 5:00 am, ET.
The revised reading of the Euro-zone GDP is expected to confirm the preliminary estimate that economic growth was four times slower at 0.2 % q/q in the second quarter of 2011, compared with 0.8% q/q in Q1 2011.
4. USD- U.S. ISM Non-Manufacturing Index, a leading indicator of economic conditions in the services industries: agriculture, mining, construction, transportation, communications, wholesale trade and retail trade, Tues., Sep. 6, 10:00 am, ET.
As the ISM Manufacturing PMI surprisingly held above 50 in August, activity in the U.S. services industries is forecast to follow suit and expand for another month with an ISM index reading of 51.5 in August, down from 52.7 in July.
5. AUD- Australia GDP- Gross Domestic Product, the main measure of economic activity and growth, Tues., Sep. 6, 9:30 pm, ET.
Hit by massive floods, the Australian economy unexpectedly shrunk by 1.2% q/q in the first quarter of 2011 from 0.8% q/q in Q4 2010, but is expected to recover and grow by 1.0% q/q in the second quarter of 2011. A return to growth could keep the higher-yielding Australian dollar well bid, especially if risk appetite makes a comeback.
6. JPY- Bank of Japan Interest Rate Announcement, Wed., Sep. 7, around 12:00 am, ET.
The Bank of Japan is not expected to make any drastic changes to its monetary policy, keeping the benchmark rate at its record low level of 0.10%. However, with the dollar lingering near post WWII lows against the yen, it would not be surprising to see the Bank of Japan reassuring the markets of its commitment to do whatever is necessary in order to prevent any rapid yen appreciation.
7. CAD- Bank of Canada Interest Rate Announcement, Wed., Sep. 7, 9:00 am, ET.
Perhaps the least interesting of the five central bank announcements next week, the Bank of Canada’s meting could end up being a formality with consensus forecasts anticipating policy makers to maintain the status quo, while expressing concerns about the negative impact of the deteriorating economic conditions in the U.S. which is Canada’s largest trading partner. It would be a shocker (and a Canadian dollar negative), but there might be some chance that the Bank of Canada warns that further U.S., Canadian and global economic slowdown could warrant a rate cut in the near future.
8. AUD- Australia Employment Situation and Unemployment Rate, the main gauge of employment trends and labor market conditions, Wed., Sep. 7, 9:30 pm, ET.
The third major spotlight event from “down under” next week could give the Aussie dollar an additional boost with the Australian economy forecast to recover from the 100 jobs lost in July by adding up to 10,400 new jobs in August, while the unemployment rate remains unchanged at 5.1%.
9. GBP- Bank of England Interest Rate Announcement, Thurs., Sep. 8, 7:00 am, ET.
The latest unanimous vote by the Monetary Policy Committee to keep the benchmark rate at the low 0.50% level has made it clear that the Bank of England does not see any urgency to raise interest rates and the September meeting is likely to bring more of the same. A passive Bank of England expected to sit on the sidelines for another month could contribute to the case for GBP weakness ahead of the BOE meeting and possibly even after that if the bank announces or opens the door to an expansion of its Asset Purchases Program. On the other hand, if the bank of England refrains from additional quantitative easing, when the market rout and the risk aversion dust settles, the GBP could begin to be viewed as a less ugly alternative to the USD and the EUR.
10. EUR- European Central Bank Interest Rate Announcement, Thurs., Sep. 8, 7:45 am, ET.
With the Euro-zone economy slowing and inflationary pressures subsiding, the EUR could see selling pressures mounting ahead of the European Central Bank's meeting as the market shifts its expectations for another rate hike by the end of the year and begins to more aggressively price a potential rate cut in the near future. A dovish ECB statement, coupled with fears that Greece would miss its budget deficit targets for the year which might move the country one step closer to exiting the monetary union, could continue to weigh on the single currency next week. Source www.fxstreet.com...
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Showing posts with label forex. Show all posts
Showing posts with label forex. Show all posts
Saturday, September 3, 2011
USD/JPY Technical Analysis forecast week september 5 2011
USD/JPY Technical Analysis forecast week september 5 2011 : Dollar/yen remained range bound. Will it make a move, now that there’s a new government in Tokyo? The rate decision and BOJ Press Conference are the main events this week. Here’s an outlook for the Japanese events and an updated technical analysis for USD/JPY.
Last week readings showed improvement in household spending, Average cash earnings, total domestic currency in circulation and housing starts. However retail sales gained 0.7% less than the 1.1% rise predicted, and preliminary industrial production increased by 0.6%, below the 1.6% expected. Nevertheless these figures show a clear trend of recovery at a
1. Rate decision: Wednesday. The Bank of Japan maintained its overnight call rate at a range of 0 to 0.1% by a unanimous vote but decided to increase the total size of the Asset Purchase Program by 10 trillion yen to 50 trillion yen claiming further easing steps are required to heal the economy. The Bank is forecasting real GDP growth of 0.2-0.6% in fiscal 2011, and 2.5-3.0% in fiscal 2012. No changes are expected.
2. Leading Indicators: Wednesday, 5:00. Japan’s index of economic indicators increased by 2.5 points in June reaching 103.2 from99.4 inthe previous month indicating an improvement in the Japanese economy as it combines indicators from the job market, consumer sentiment and future economic conditions. An increase to 105.9 is predicted.
3. Core Machinery Orders: Wednesday, 23:50. Japan’s core machinery orders leaped by 7.7% in June following 3.0% in the previous month indicating capital spending will increase in the coming months. A decrease of 3.7% is forecasted now.
4. Economy Watchers Sentiment: Thursday, 5:00.Japan’s business watchers sentiment was less optimistic in July dropping 0.5 points from49.0 in June to 48.5. However they were positive about current conditions, showing a 3.0 point increase from49.6 in June to52.6 in July. The drop indicates worries about global financial crisis that may affect future conditions nut the positive reading reflects certainty inJapan’s recovery from the earthquake and tsunami. Expansion to 54.3 is foreseen.
5. Final GDP: Thursday, 23:50.Japan’s real gross domestic product contracted by 0.9% in the first quarter as predicted. However, compared to a year earlier, GDP decreased by 3.5. Personal consumption dropped by 0.1% and global demand was reduced by 0.8 percentage point. Although the manufacturing sector is expected to rise dramatically in July-September there are worries about sovereign debt crisis arising from the strong yen. Further contraction of 0.5% is expected.
6. Household Confidence: Friday, 5:00. Japanese consumer confidence improved further in July rising to 37.0 from a reading of35.3 in June. Although consumer confidence is still below the 50 point line indicating pessimism the trend upward signifies signs of real recovery in the market. An increase to 41.3 is forecasted.
USD/JPY Technical Analysis
Dollar/yen traded between the 77 and 76.40 lines (discussed last week) before making a limited move above 77 and eventually closed at 76.76 – very range bound.
Technical lines from top to bottom
81,50 was a peak before the recent leg down and has a significant role. 81.06 was a weak line of support in May and slowed down a second move upwards.
80.50 held the pair several times recently and remains a strong and immediate line of resistance on another attempt to settle above 80. The round number of 80 was broken, but this was short lived, and its strength remains.
79.75 is the historic low of 1995 and played a critical role when the pair collapsed in March. It is now a minor line, after being run through. Below, 79.30 proved to be a persistent cap for dollar/yen, holding down recovery attempts. also just now. An attempt to break higher resulted in another downwards leg.
78.50 provided some support before another drop, and is now a weak line of resistance. Further down, 78.20 worked as temporary resistance, and has the same role now.
77.50 was the bottom border of the range, and is set to work as resistance if the pair breaks higher. The pair got close to this line, but didn’t really challenge it now. It is followed by 77, which was a significant cap for the range trading seen for yet another week.
Further below we have the swing record low of 76.25, which was seen on the huge collapse in March and was a bottom just now. The new low of 75.95 is the final frontier in charted territory. Below, the round number of 75 is the next potential cushion.
I am neutral on USD/JPY.
It seems like the Japanese authorities will not intervene unless the pair dives to 75. On the upside, the FOMC decision is awaited. Source www.forexcrunch.com
Last week readings showed improvement in household spending, Average cash earnings, total domestic currency in circulation and housing starts. However retail sales gained 0.7% less than the 1.1% rise predicted, and preliminary industrial production increased by 0.6%, below the 1.6% expected. Nevertheless these figures show a clear trend of recovery at a
1. Rate decision: Wednesday. The Bank of Japan maintained its overnight call rate at a range of 0 to 0.1% by a unanimous vote but decided to increase the total size of the Asset Purchase Program by 10 trillion yen to 50 trillion yen claiming further easing steps are required to heal the economy. The Bank is forecasting real GDP growth of 0.2-0.6% in fiscal 2011, and 2.5-3.0% in fiscal 2012. No changes are expected.
2. Leading Indicators: Wednesday, 5:00. Japan’s index of economic indicators increased by 2.5 points in June reaching 103.2 from99.4 inthe previous month indicating an improvement in the Japanese economy as it combines indicators from the job market, consumer sentiment and future economic conditions. An increase to 105.9 is predicted.
3. Core Machinery Orders: Wednesday, 23:50. Japan’s core machinery orders leaped by 7.7% in June following 3.0% in the previous month indicating capital spending will increase in the coming months. A decrease of 3.7% is forecasted now.
4. Economy Watchers Sentiment: Thursday, 5:00.Japan’s business watchers sentiment was less optimistic in July dropping 0.5 points from49.0 in June to 48.5. However they were positive about current conditions, showing a 3.0 point increase from49.6 in June to52.6 in July. The drop indicates worries about global financial crisis that may affect future conditions nut the positive reading reflects certainty inJapan’s recovery from the earthquake and tsunami. Expansion to 54.3 is foreseen.
5. Final GDP: Thursday, 23:50.Japan’s real gross domestic product contracted by 0.9% in the first quarter as predicted. However, compared to a year earlier, GDP decreased by 3.5. Personal consumption dropped by 0.1% and global demand was reduced by 0.8 percentage point. Although the manufacturing sector is expected to rise dramatically in July-September there are worries about sovereign debt crisis arising from the strong yen. Further contraction of 0.5% is expected.
6. Household Confidence: Friday, 5:00. Japanese consumer confidence improved further in July rising to 37.0 from a reading of35.3 in June. Although consumer confidence is still below the 50 point line indicating pessimism the trend upward signifies signs of real recovery in the market. An increase to 41.3 is forecasted.
USD/JPY Technical Analysis
Dollar/yen traded between the 77 and 76.40 lines (discussed last week) before making a limited move above 77 and eventually closed at 76.76 – very range bound.
Technical lines from top to bottom
81,50 was a peak before the recent leg down and has a significant role. 81.06 was a weak line of support in May and slowed down a second move upwards.
80.50 held the pair several times recently and remains a strong and immediate line of resistance on another attempt to settle above 80. The round number of 80 was broken, but this was short lived, and its strength remains.
79.75 is the historic low of 1995 and played a critical role when the pair collapsed in March. It is now a minor line, after being run through. Below, 79.30 proved to be a persistent cap for dollar/yen, holding down recovery attempts. also just now. An attempt to break higher resulted in another downwards leg.
78.50 provided some support before another drop, and is now a weak line of resistance. Further down, 78.20 worked as temporary resistance, and has the same role now.
77.50 was the bottom border of the range, and is set to work as resistance if the pair breaks higher. The pair got close to this line, but didn’t really challenge it now. It is followed by 77, which was a significant cap for the range trading seen for yet another week.
Further below we have the swing record low of 76.25, which was seen on the huge collapse in March and was a bottom just now. The new low of 75.95 is the final frontier in charted territory. Below, the round number of 75 is the next potential cushion.
I am neutral on USD/JPY.
It seems like the Japanese authorities will not intervene unless the pair dives to 75. On the upside, the FOMC decision is awaited. Source www.forexcrunch.com
EUR/USD Technical Analysis forecast week september 5 2011
EUR/USD Technical Analysis forecast week september 5 2011 ; Euro/dollar couldn’t break out of range and it ended the week 300 pips lower. Will it climb back within range or break lower? The upcoming week is very busy and consists of the rate decision among other events. Here is an outlook for these events, and an updated technical analysis for EUR/USD.
The now quarterly Greek debt crisis is with us again: Greece didn’t meet its obligations and the EU / IMF delegation left the country, with a senior IMF economist saying that a hard default is imminent. Also in the US, things look quite gloomy with zero jobs gained in August. This September isn’t going to be nice, but action is guaranteed.
1. Final Services PMI: Monday, 8:00. Revisions aren’t too common after the initial release. But after we’ve seen a serious downgrade in the manufacturing PMI, this event is of high importance. The initial read was 51.5 points, still in the growth zone.
2. Sentix Investor Confidence: Monday, 8:30. After a year in positive territory, this indicator dropped to -13.5 points. The negative number reflects pessimism among the 2800 analysts and investors surveyed here. A similar number is expected now.
3. Retail Sales: Monday, 9:00. This one is expected to be positive. After Germany has shown a nice rise in the volume of sales, the number for the whole region is expected to show growth for a second month in a row.
4. Revised GDP: Tuesday, 9:00. According to the initial flash release, the euro-zone grew by only 0.2% in Q2. After Germany’s slow growth of 0.1% was confirmed, this will likely be confirmed as well.
5. German Factory Orders: Tueday, 10:00. This part of the German economy is still doing very well. The last three months saw significant rises in factory orders, beating estimates. Last month’s 1.8% rise will likely be followed with a drop.
6. German Industrial Production: Wednesday, 10:00. Contrary to the previous and related indicator, industrial production disappointed with a drop of 1.1% last month. A small rise is expected this time.
7. German Trade Balance: Thursday, 6:00. While the euro zone has a deficit in its trade balance, Germany enjoys a wide surplus. This surplus has somewhat squeezed from a peak of 15.1 billion reported 4 months ago to 11.5 billion last month. A small rise is likely now.
8. Rate decision: Thursday, 11:45. Press conference at 12:30. No change is expected in the European Minimum Bid Rate, that currently stands at 1.50%. .It seems that Jean-Claude Trichet finally acknowledges the significant slowdown, but also the drop in inflation, especially core inflation. He mentioned that inflation expectations are “being studied”. He is expected to significantly lower his tone on inflation and say that the risks are balanced and uncertainty is high. The recent CPI Flash Estimate has show that the annual pace of inflation is at 2.5%. This is too high for signalling a rate cut, but not enough for tough talk. The euro will likely slide, although this is partially priced in.
9. French Industrial Production: Friday, 6:45. Europe’s second largest economy has seen a “see-saw” in industrial output. It dropped last month by 1.6%, and will likely tick up now.
EUR/USD Technical Analysis
Euro/dollar had a good start to the week and extended slightly extended the gains. From there it was all downhill: it gradually lost support, with 1.4220 (mentioned last week) being the final support line to fall.
Technical levels, from top to bottom
1.4775 is a significant line in high ground, after being pivotal when the pair traded there. 1.47 follows as a minor line.
1.4650 was a peak in the past and is minor resistance. The 1.4550 line was a peak just now, and has proven to be of high importance. After the pair reached this line, it fell. 1.4520 is now minor resistance below. It capped the euro for another week in a row, and also had a similar role in the past.
1.4480 worked as a cap to the pair just now, and also way back in the past. The round number of 1.44 served as a pivotal line, and is quite weak now.
After being a double bottom, 1.4330 is the next minor line. It switches positions to resistance. The peak of November 2010 at 1.4282 is is still with us as usual. This line works better as resistance than as support, and after it was lost, the pair fell quickly.
EUR/USD had a tough time breaking below 1.4220, which served as support in the past and is immediate resistance now. 1.4160 returned to having an important role in supporting the pair, despite being breached.
Moving lower, the round number of 1.41 provides stronger support now, after preventing a collapse. Just above the round number of 1.40, we find very important support at 1.4030 – it was successfully tested earlier in the summer.
Lower, 1.3950 was a pivotal line when the pair traded in lower ranges and proved that it is of high importance. After the comeback, this line was another clear support line. The bottom of 1.3838 will be closely watched in another fall. This was also a line of support last year. Below, 1.3750 is significant support, if the pair falls to a five month low.
Narrowing channel
Downtrend resistance begins at the end end of June and is quite moderate. Uptrend support begins from the swing low in July and is more sharp. The narrowing channel has been broken twice: once to the upside, but this was short lived. The pair finally closed below uptrend support – this is a bearish sign.
I remain bearish on EUR/USD.
With a fragile banking system and a very fragile Greece, euro/dollar has more room for falls. A break below the long term range depends a lot on the words of Trichet. If he remains stubborn, more choppy range trading can continue. Note that Monday is a holiday in the US, but afterwards, the markets will be fully active (source http://www.forexcrunch.com/
The now quarterly Greek debt crisis is with us again: Greece didn’t meet its obligations and the EU / IMF delegation left the country, with a senior IMF economist saying that a hard default is imminent. Also in the US, things look quite gloomy with zero jobs gained in August. This September isn’t going to be nice, but action is guaranteed.
1. Final Services PMI: Monday, 8:00. Revisions aren’t too common after the initial release. But after we’ve seen a serious downgrade in the manufacturing PMI, this event is of high importance. The initial read was 51.5 points, still in the growth zone.
2. Sentix Investor Confidence: Monday, 8:30. After a year in positive territory, this indicator dropped to -13.5 points. The negative number reflects pessimism among the 2800 analysts and investors surveyed here. A similar number is expected now.
3. Retail Sales: Monday, 9:00. This one is expected to be positive. After Germany has shown a nice rise in the volume of sales, the number for the whole region is expected to show growth for a second month in a row.
4. Revised GDP: Tuesday, 9:00. According to the initial flash release, the euro-zone grew by only 0.2% in Q2. After Germany’s slow growth of 0.1% was confirmed, this will likely be confirmed as well.
5. German Factory Orders: Tueday, 10:00. This part of the German economy is still doing very well. The last three months saw significant rises in factory orders, beating estimates. Last month’s 1.8% rise will likely be followed with a drop.
6. German Industrial Production: Wednesday, 10:00. Contrary to the previous and related indicator, industrial production disappointed with a drop of 1.1% last month. A small rise is expected this time.
7. German Trade Balance: Thursday, 6:00. While the euro zone has a deficit in its trade balance, Germany enjoys a wide surplus. This surplus has somewhat squeezed from a peak of 15.1 billion reported 4 months ago to 11.5 billion last month. A small rise is likely now.
8. Rate decision: Thursday, 11:45. Press conference at 12:30. No change is expected in the European Minimum Bid Rate, that currently stands at 1.50%. .It seems that Jean-Claude Trichet finally acknowledges the significant slowdown, but also the drop in inflation, especially core inflation. He mentioned that inflation expectations are “being studied”. He is expected to significantly lower his tone on inflation and say that the risks are balanced and uncertainty is high. The recent CPI Flash Estimate has show that the annual pace of inflation is at 2.5%. This is too high for signalling a rate cut, but not enough for tough talk. The euro will likely slide, although this is partially priced in.
9. French Industrial Production: Friday, 6:45. Europe’s second largest economy has seen a “see-saw” in industrial output. It dropped last month by 1.6%, and will likely tick up now.
EUR/USD Technical Analysis
Euro/dollar had a good start to the week and extended slightly extended the gains. From there it was all downhill: it gradually lost support, with 1.4220 (mentioned last week) being the final support line to fall.
Technical levels, from top to bottom
1.4775 is a significant line in high ground, after being pivotal when the pair traded there. 1.47 follows as a minor line.
1.4650 was a peak in the past and is minor resistance. The 1.4550 line was a peak just now, and has proven to be of high importance. After the pair reached this line, it fell. 1.4520 is now minor resistance below. It capped the euro for another week in a row, and also had a similar role in the past.
1.4480 worked as a cap to the pair just now, and also way back in the past. The round number of 1.44 served as a pivotal line, and is quite weak now.
After being a double bottom, 1.4330 is the next minor line. It switches positions to resistance. The peak of November 2010 at 1.4282 is is still with us as usual. This line works better as resistance than as support, and after it was lost, the pair fell quickly.
EUR/USD had a tough time breaking below 1.4220, which served as support in the past and is immediate resistance now. 1.4160 returned to having an important role in supporting the pair, despite being breached.
Moving lower, the round number of 1.41 provides stronger support now, after preventing a collapse. Just above the round number of 1.40, we find very important support at 1.4030 – it was successfully tested earlier in the summer.
Lower, 1.3950 was a pivotal line when the pair traded in lower ranges and proved that it is of high importance. After the comeback, this line was another clear support line. The bottom of 1.3838 will be closely watched in another fall. This was also a line of support last year. Below, 1.3750 is significant support, if the pair falls to a five month low.
Narrowing channel
Downtrend resistance begins at the end end of June and is quite moderate. Uptrend support begins from the swing low in July and is more sharp. The narrowing channel has been broken twice: once to the upside, but this was short lived. The pair finally closed below uptrend support – this is a bearish sign.
I remain bearish on EUR/USD.
With a fragile banking system and a very fragile Greece, euro/dollar has more room for falls. A break below the long term range depends a lot on the words of Trichet. If he remains stubborn, more choppy range trading can continue. Note that Monday is a holiday in the US, but afterwards, the markets will be fully active (source http://www.forexcrunch.com/
Wednesday, July 27, 2011
US Dollar vs Canadian Dollar Interest Rate Forecast 2011
US Dollar vs Canadian Dollar Interest Rate Forecast 2011 ; The market remains confined to a very well defined downtrend off of the 2010 highs and will need to break back above 0.9900 at a minimum to force a shift in the overall structure. However, we are seeing some shorter-term signs of a potential base by 0.9450, and look for any additional weakness from here to be very well supported on dips ahead of 0.9500. Look for a break back above 0.9700 to confirm and accelerate. Only below 0.9500 concerns.
US Dollar / Canadian Dollar Interest Rate Trading Bias: Bearish
An important bounce in Bank of Canada interest rate forecasts has led to a similar move in the Canadian Dollar itself. Twelve month interest rate hike expectations for the Bank of Canada nearly doubled on a surprise jump in Canadian Consumer Price Index inflation data, warning that the central bank may need to move soon to counteract inflationary risks.
All else remaining equal, improved CAD rate prospects could keep the USDCAD lower. Yet the pair’s correlation to crude oil prices continues to trade near record-highs, and the Canadian Dollar’s trajectory may very much depend on moves in energy prices.
Watch future Bank of Canada interest rate decisions, CPI data, and the price of Crude Oil to guide Canadian Dollar price action through the foreseeable future.
US Dollar / Canadian Dollar Valuation Forecast
USDCAD Valuation Bias: Bullish
The disparity between USDCAD spot and PPP-implied exchange rates remains significant at 20.3 percent. Of all the majors, the so-called Loonie is the most sensitive to the implications of June’s QE2 expiration: first, its intimate correlation to the S&P 500 means that the response of market-wide risk sentiment to the likely rise in US borrowing costs will be mirrored in the USDCAD exchange rate; second, Canadian economic growth (and thereby its scope for interest rate hikes) is closely anchored to demand for the country’s exports from the US, so the degree to which higher yields slow the recovery in the world’s top economy will be critical for its Northern neighbor.
On balance, this seems point the way higher for USDCAD, for surely at least some slowdown in US economic activity is in the cards even if the recovery is not altogether derailed (easily the more probable scenario, in our opinion). This points the way lower for the S&P 500 and slashes hopes for any near-term monetary tightening on the part of the Bank of Canada, seemingly opening the door for USDCAD to trim the current valuation gap.
What is Purchasing Power Parity?
One of the oldest and most basic fundamental approaches to determining the “fair” exchange rate of one currency to another relies on the concept of Purchasing Power Parity. This approach says that an identical product should cost the same from one country to another, with the only difference in the price tag accounted for by the exchange rate. For example, if a pencil costs €1 in Europe and $1.20 in the US, the “fair” EURUSD exchange rate should be 1.20. For our purposes, we will use the PPP values provided annually by Bloomberg. We compare these values to current market rates to determine how much each currency is under- or over-valued against the US Dollar. (source http://www.dailyfx.com )
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US Dollar / Canadian Dollar Interest Rate Trading Bias: Bearish
urrency, Central Bank | US Dollar, US Federal Reserve | Canadian Dollar, Bank of Canada | Net USDCAD Spread | Signal |
| 1-Year Expectations(Basis Points) | 16 | 58 | (42) | Bearish |
| Yield in 1 Year(Percent) | 0.41 | 1.58 | (1.17) | Bearish |
An important bounce in Bank of Canada interest rate forecasts has led to a similar move in the Canadian Dollar itself. Twelve month interest rate hike expectations for the Bank of Canada nearly doubled on a surprise jump in Canadian Consumer Price Index inflation data, warning that the central bank may need to move soon to counteract inflationary risks.
All else remaining equal, improved CAD rate prospects could keep the USDCAD lower. Yet the pair’s correlation to crude oil prices continues to trade near record-highs, and the Canadian Dollar’s trajectory may very much depend on moves in energy prices.
Watch future Bank of Canada interest rate decisions, CPI data, and the price of Crude Oil to guide Canadian Dollar price action through the foreseeable future.
US Dollar / Canadian Dollar Valuation Forecast
USDCAD Valuation Bias: Bullish
The disparity between USDCAD spot and PPP-implied exchange rates remains significant at 20.3 percent. Of all the majors, the so-called Loonie is the most sensitive to the implications of June’s QE2 expiration: first, its intimate correlation to the S&P 500 means that the response of market-wide risk sentiment to the likely rise in US borrowing costs will be mirrored in the USDCAD exchange rate; second, Canadian economic growth (and thereby its scope for interest rate hikes) is closely anchored to demand for the country’s exports from the US, so the degree to which higher yields slow the recovery in the world’s top economy will be critical for its Northern neighbor.
On balance, this seems point the way higher for USDCAD, for surely at least some slowdown in US economic activity is in the cards even if the recovery is not altogether derailed (easily the more probable scenario, in our opinion). This points the way lower for the S&P 500 and slashes hopes for any near-term monetary tightening on the part of the Bank of Canada, seemingly opening the door for USDCAD to trim the current valuation gap.
What is Purchasing Power Parity?
One of the oldest and most basic fundamental approaches to determining the “fair” exchange rate of one currency to another relies on the concept of Purchasing Power Parity. This approach says that an identical product should cost the same from one country to another, with the only difference in the price tag accounted for by the exchange rate. For example, if a pencil costs €1 in Europe and $1.20 in the US, the “fair” EURUSD exchange rate should be 1.20. For our purposes, we will use the PPP values provided annually by Bloomberg. We compare these values to current market rates to determine how much each currency is under- or over-valued against the US Dollar. (source http://www.dailyfx.com )
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Sunday, July 24, 2011
Asian stocks and oil declined July 25 2011, Barack Obama and Congress failed to reach a deal on raising the debt limit
Asian stocks and oil declined July 25 2011, Barack Obama and Congress failed to reach a deal on raising the debt limit - U.S. Economy Prediction july 2011 ; Asian stocks and oil declined for the first time in five days, while Treasuries dropped and gold rallied to a record as President Barack Obama and Congress failed to reach a deal on raising the debt limit, intensifying concern the nation will default.
The MSCI Asia Pacific Index slipped 0.7 percent as of 11:31 a.m. in Tokyo. Standard & Poor’s 500 Index futures lost 0.9 percent to 1,328.30. Yields on 10-year Treasuries gained three basis points. The dollar sank 0.7 percent against the Swiss franc. It traded at 78.47 yen after earlier reaching a four- month low. Gold added as much as 1.4 percent to $1,624.07 an ounce. Oil fell 0.9 percent in New York.
U.S. House Speaker John Boehner told Republicans that there’s no agreement on a plan for raising the ceiling before a default threatened for Aug. 2, risking a cut to the nation’s AAA credit rating. As Democrats and Republicans endorsed dueling plans for raising the debt ceiling, China, the top holder of American debt, said it remains confident an agreement will be reached before the deadline, according to Xia Bin, an adviser to the People’s Bank of China.
“Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating,” Mohamed A. El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., wrote in an e-mail. His firm is the world’s biggest manager of bond funds. “A last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable,” he said.
U.S. Economy Prediction july 2011
The impasse may further aggravate the slowing U.S. recovery. The Commerce Department may say on July 29 gross domestic product rose at a 1.8 percent annual pace in the second quarter after a 1.9 percent gain in the previous three months, according to the median forecast of 69 economist surveyed by Bloomberg News. Home sales languished and consumer confidence dimmed, other data may show.
The dollar fell 0.7 percent to 81.38 Swiss centimes from 81.92 last week. It earlier fell to 78.12 yen, the weakest level since March 17. Japan’s monetary authorities “will take resolute actions when necessary” in the currency markets, Kyodo News reported Finance Minister Yoshihiko Noda as saying yesterday. Noda said today that he’s watching developments on the U.S. debt talks.
The Australian dollar weakened against 13 of its 16 most- actively traded counterparts and fell 0.5 percent to 84.86 yen as speculation that the U.S. may default sapped demand for higher-yielding assets. South Korea’s won retreated from a three-year high, dropping 0.1 percent to 1,053.48 per dollar.
Oil retreated to $99.04 a barrel on the New York Mercantile Exchange, following four straight weeks of gains. Immediate- delivery gold traded at $1,611.16 an ounce, up 0.6 percent, while cash silver rose 0.6 percent to $40.3237 an ounce. Corn for December delivery sank 1.9 percent to $6.7225 a bushel, while wheat slid 1.5 percent to $6.82 a bushel.
The MSCI Asia Pacific Index slipped 0.7 percent as of 11:31 a.m. in Tokyo. Standard & Poor’s 500 Index futures lost 0.9 percent to 1,328.30. Yields on 10-year Treasuries gained three basis points. The dollar sank 0.7 percent against the Swiss franc. It traded at 78.47 yen after earlier reaching a four- month low. Gold added as much as 1.4 percent to $1,624.07 an ounce. Oil fell 0.9 percent in New York.
U.S. House Speaker John Boehner told Republicans that there’s no agreement on a plan for raising the ceiling before a default threatened for Aug. 2, risking a cut to the nation’s AAA credit rating. As Democrats and Republicans endorsed dueling plans for raising the debt ceiling, China, the top holder of American debt, said it remains confident an agreement will be reached before the deadline, according to Xia Bin, an adviser to the People’s Bank of China.
“Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating,” Mohamed A. El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., wrote in an e-mail. His firm is the world’s biggest manager of bond funds. “A last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable,” he said.
U.S. Economy Prediction july 2011
The impasse may further aggravate the slowing U.S. recovery. The Commerce Department may say on July 29 gross domestic product rose at a 1.8 percent annual pace in the second quarter after a 1.9 percent gain in the previous three months, according to the median forecast of 69 economist surveyed by Bloomberg News. Home sales languished and consumer confidence dimmed, other data may show.
The dollar fell 0.7 percent to 81.38 Swiss centimes from 81.92 last week. It earlier fell to 78.12 yen, the weakest level since March 17. Japan’s monetary authorities “will take resolute actions when necessary” in the currency markets, Kyodo News reported Finance Minister Yoshihiko Noda as saying yesterday. Noda said today that he’s watching developments on the U.S. debt talks.
The Australian dollar weakened against 13 of its 16 most- actively traded counterparts and fell 0.5 percent to 84.86 yen as speculation that the U.S. may default sapped demand for higher-yielding assets. South Korea’s won retreated from a three-year high, dropping 0.1 percent to 1,053.48 per dollar.
Oil retreated to $99.04 a barrel on the New York Mercantile Exchange, following four straight weeks of gains. Immediate- delivery gold traded at $1,611.16 an ounce, up 0.6 percent, while cash silver rose 0.6 percent to $40.3237 an ounce. Corn for December delivery sank 1.9 percent to $6.7225 a bushel, while wheat slid 1.5 percent to $6.82 a bushel.
U.S. dollar may fall impact U.S. debt ceiling as August 2 deadline
U.S. dollar may fall imfact U.S. debt ceiling as August 2 deadline : The U.S. dollar may fall next week on concern the United States may lose its top-notch credit rating with politicians nowhere close to reaching an agreement on lifting the U.S. debt ceiling as an August 2 deadline looms.
Fears of a full-blown euro zone debt crisis have subsided for now after the announcement of a second bailout for Greece and the focus is shifting to Washington where efforts to avoid a U.S. default enter crunch time.
The drawn-out battle has dented risk appetite in recent weeks and led ratings agencies to warn of a potential downgrade. Such a move, some fear, could send interest rates soaring and erode the dollar's reserve currency status.
Dollar investors have so far been complacent as the U.S. currency rose against the euro and a basket on Friday. Most investors expect some sort of deal by August 2 to avoid a default, although some fear that failure to reach a major deficit cut plan could lead to a credit ratings cut. That worry is set to grow as time is running out.
"If the markets don't hear anything going into the weekend, I think the first instinct will be to sell first and ask questions later," said Boris Schlossberg, director of currency research at GFT in New York.
"There's much less cooperation amongst the U.S. legislators than there is amongst the Europeans. That kind of dichotomy could begin to hurt the dollar ..."
While efforts to craft a $3 trillion deficit-reduction deal gained traction on Thursday, the White House and Republicans have not broken their impasse over higher taxes, which are opposed by the Republicans, who control the lower house.
The White House initially set a July 22 target for a deal that would leave enough time to get it through the legislative process. But it has backed off that timeframe.
"It's brinkmanship and no one's going to blink until they really have to," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "The market would really like to see a big deal, something along the lines of $3 to $4 trillion that really addresses the structural problems of the U.S. economy."
RISK OF DOWNGRADE
Standard & Poor's said on Thursday there is a 50-50 chance the U.S. AAA credit rating could be cut within three months.
"The potential for the U.S. to lose its triple-A rating is definitely there," said Andrew Busch, global currency and public policy strategist at BMO Capital Markets in Chicago. "That is going to be problematic for the markets, which would cause the market probably to sell the U.S. dollar."
Analysts expect the dollar to weaken especially against the safe-haven Japanese yen and Swiss franc.
The debt ceiling impasse has also whipsawed 30-year Treasury bonds lately, as the long-dated debt is most vulnerable if the country fails to reduce its deficit.
A downgrade to AA will likely hurt Treasuries, though most fund managers are not thought to be restricted by the government debt's ratings and thus are unlikely to be forced to sell the debt.
Thomas Higgins, global macro strategist at Standish Mellon Asset management, said that ironically, in the event of a U.S. default, which is highly unlikely, investors may want to be overweight Treasuries in the short term because of the negative implications for economic growth. Standish oversees $80 billion in assets.
SINGING KUMBAYA
The euro last traded down 0.4 percent at $1.4361. The dollar also rose 0.3 percent to 0.8178 Swiss franc, off a record low of 0.8034 set on Monday. It also rebounded from an earlier four-month trough of 78.22 yen to last trade at 78.43 yen.
"The dollar has remained largely unmoved thus far because no one wants to be caught with a short position in the event that Congress starts singing 'kumbaya'," said Karl Schamotta, senior market strategist at Western Union Business Solutions. "The markets have already largely discounted a positive outcome."
Some analysts are sceptical how much the dollar could benefit even if politicians make notable progress on a deal.
Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York, said while a rally in the first 24 hours is possible, the dollar could come under renewed pressure as an increase in global risk appetite encourages investors to use the dollar as a funding currency. (source http://www.reuters.com )
will august 2 affect dollar exchange rate, us dollar prediction after aug 2, us dollar prediction 2 August, dollar value us defalt, will august 2 affect dollar exchange rate, , u s debt the nearer to 2 august will the dollar fallwhat will happen in USA after august 2nd?, what happens to the dollar if default,
Fears of a full-blown euro zone debt crisis have subsided for now after the announcement of a second bailout for Greece and the focus is shifting to Washington where efforts to avoid a U.S. default enter crunch time.
The drawn-out battle has dented risk appetite in recent weeks and led ratings agencies to warn of a potential downgrade. Such a move, some fear, could send interest rates soaring and erode the dollar's reserve currency status.
Dollar investors have so far been complacent as the U.S. currency rose against the euro and a basket on Friday. Most investors expect some sort of deal by August 2 to avoid a default, although some fear that failure to reach a major deficit cut plan could lead to a credit ratings cut. That worry is set to grow as time is running out.
"If the markets don't hear anything going into the weekend, I think the first instinct will be to sell first and ask questions later," said Boris Schlossberg, director of currency research at GFT in New York.
"There's much less cooperation amongst the U.S. legislators than there is amongst the Europeans. That kind of dichotomy could begin to hurt the dollar ..."
While efforts to craft a $3 trillion deficit-reduction deal gained traction on Thursday, the White House and Republicans have not broken their impasse over higher taxes, which are opposed by the Republicans, who control the lower house.
The White House initially set a July 22 target for a deal that would leave enough time to get it through the legislative process. But it has backed off that timeframe.
"It's brinkmanship and no one's going to blink until they really have to," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. "The market would really like to see a big deal, something along the lines of $3 to $4 trillion that really addresses the structural problems of the U.S. economy."
RISK OF DOWNGRADE
Standard & Poor's said on Thursday there is a 50-50 chance the U.S. AAA credit rating could be cut within three months.
"The potential for the U.S. to lose its triple-A rating is definitely there," said Andrew Busch, global currency and public policy strategist at BMO Capital Markets in Chicago. "That is going to be problematic for the markets, which would cause the market probably to sell the U.S. dollar."
Analysts expect the dollar to weaken especially against the safe-haven Japanese yen and Swiss franc.
The debt ceiling impasse has also whipsawed 30-year Treasury bonds lately, as the long-dated debt is most vulnerable if the country fails to reduce its deficit.
A downgrade to AA will likely hurt Treasuries, though most fund managers are not thought to be restricted by the government debt's ratings and thus are unlikely to be forced to sell the debt.
Thomas Higgins, global macro strategist at Standish Mellon Asset management, said that ironically, in the event of a U.S. default, which is highly unlikely, investors may want to be overweight Treasuries in the short term because of the negative implications for economic growth. Standish oversees $80 billion in assets.
SINGING KUMBAYA
The euro last traded down 0.4 percent at $1.4361. The dollar also rose 0.3 percent to 0.8178 Swiss franc, off a record low of 0.8034 set on Monday. It also rebounded from an earlier four-month trough of 78.22 yen to last trade at 78.43 yen.
"The dollar has remained largely unmoved thus far because no one wants to be caught with a short position in the event that Congress starts singing 'kumbaya'," said Karl Schamotta, senior market strategist at Western Union Business Solutions. "The markets have already largely discounted a positive outcome."
Some analysts are sceptical how much the dollar could benefit even if politicians make notable progress on a deal.
Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York, said while a rally in the first 24 hours is possible, the dollar could come under renewed pressure as an increase in global risk appetite encourages investors to use the dollar as a funding currency. (source http://www.reuters.com )
will august 2 affect dollar exchange rate, us dollar prediction after aug 2, us dollar prediction 2 August, dollar value us defalt, will august 2 affect dollar exchange rate, , u s debt the nearer to 2 august will the dollar fallwhat will happen in USA after august 2nd?, what happens to the dollar if default,
AUD/USD prediction for week july 25 2011
AUD/USD prediction for week july 25 2011 : AUD/USD broke out of near term range last week and rose to as high as 1.0874. Rise from 1.0390 has resumed and should be target a test on 1.1011 resistance this week. Overall outlook remain unchanged. we're still favoring the case that correction pattern from 1.1011 is finished with three waves down to 1.0390 already and rise from there is tentatively treated as up trend resumption.
Break of 1.1011 will confirm and target 61.8% projection 0.9703 to 1.1011 at 1.0390 at 1.1198 next. On the downside, below 1.0774 minor support will turn bias neutral and bring consolidations first. But downside should be contained well above 1.0524 support and bring another rise.
In the bigger picture, rise from 0.8066 is part of the up trend from 2008 low of 0.6008 and is still in healthy status. Such up trend should target 100% projection of 0.6008 to 0.9404 from 0.8066 at 1.1462 on resumption. On the downside, Break of 1.0182 resistance turned support is needed to be the first signal of medium term reversal. Or we'll stay bullish in AUD/USD.
In the longer term picture, long term up trend from 0.4773 (01 low) is still in progress and would possibly target 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084. AUD/USD is staring to show loss of upside momentum with weekly MACD crossed below signal line and there is possibility of bearish divergence condition too. Nevertheless we'd still prefer to see at least sustained trading below 55 weeks EMA (now at 1.0055) before considering long term reversal.
Break of 1.1011 will confirm and target 61.8% projection 0.9703 to 1.1011 at 1.0390 at 1.1198 next. On the downside, below 1.0774 minor support will turn bias neutral and bring consolidations first. But downside should be contained well above 1.0524 support and bring another rise.
In the bigger picture, rise from 0.8066 is part of the up trend from 2008 low of 0.6008 and is still in healthy status. Such up trend should target 100% projection of 0.6008 to 0.9404 from 0.8066 at 1.1462 on resumption. On the downside, Break of 1.0182 resistance turned support is needed to be the first signal of medium term reversal. Or we'll stay bullish in AUD/USD.
In the longer term picture, long term up trend from 0.4773 (01 low) is still in progress and would possibly target 100% projection of 0.4773 to 0.9849 from 0.6008 at 1.1084. AUD/USD is staring to show loss of upside momentum with weekly MACD crossed below signal line and there is possibility of bearish divergence condition too. Nevertheless we'd still prefer to see at least sustained trading below 55 weeks EMA (now at 1.0055) before considering long term reversal.
Saturday, July 23, 2011
Effect of US debt default on dollar value
Effect of US debt default on dollar value : Other impacts could come due to another crash in the financial markets. Once a default takes place, U.S. debt immediately becomes more expensive to finance. Treasury bond rates would likely skyrocket, and the mortgage rates that are influenced by long-term Treasury rates could also rise. Other interest rates might be affected as well, as dollar-denominated debt in general becomes more expensive..
Asia Not Worried About Possible US Debt Default
Other large economies in Asia have significant currency reserves in U.S. dollars. For India, it is more than half of its foreign currency assets. And South Korea has invested nearly two-thirds of its $300 billion worth of reserves in U.S. dollar assets. Read More...
Euro Rallies Versus Dollar as European Summit Eases Region's Debt Turmoil
The euro rose for the first time in three weeks against the dollar and touched a two-week high after European leaders agreed to a new bailout for Greece and expanded the role of the region’s rescue fund. Read More...
Dollar may fall as debt ceiling deadline nears
The U.S. dollar may fall next week on concern the United States may lose its top-notch credit rating with politicians nowhere close to reaching an agreement on lifting the U.S. debt ceiling as an August 2 deadline looms. Read More...
Debt default would mean financial crisis round two
Neither is the case with the US. It borrows in its own currency and at yields of around 3 per cent it is hard to see any risk of default priced into US Treasuries. But without a deal to raise the debt ceiling, the US Government would find itself at least 40c in the dollar short of being able to pay its bills. It runs a deficit of US$125 billion a month. Read More...
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Asia Not Worried About Possible US Debt Default
Other large economies in Asia have significant currency reserves in U.S. dollars. For India, it is more than half of its foreign currency assets. And South Korea has invested nearly two-thirds of its $300 billion worth of reserves in U.S. dollar assets. Read More...
Euro Rallies Versus Dollar as European Summit Eases Region's Debt Turmoil
The euro rose for the first time in three weeks against the dollar and touched a two-week high after European leaders agreed to a new bailout for Greece and expanded the role of the region’s rescue fund. Read More...
Dollar may fall as debt ceiling deadline nears
The U.S. dollar may fall next week on concern the United States may lose its top-notch credit rating with politicians nowhere close to reaching an agreement on lifting the U.S. debt ceiling as an August 2 deadline looms. Read More...
Debt default would mean financial crisis round two
Neither is the case with the US. It borrows in its own currency and at yields of around 3 per cent it is hard to see any risk of default priced into US Treasuries. But without a deal to raise the debt ceiling, the US Government would find itself at least 40c in the dollar short of being able to pay its bills. It runs a deficit of US$125 billion a month. Read More...
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Thursday, July 14, 2011
forex economic calendar download
forex economic calendar download : The omission made in describing the Forex Trading risk factor that these risks are in direct relation to the individual’s mental attitude and money management, and often their greed. Drive an automobile without brakes and you’ll be lucky to survive the pile up. Forex Trading is no different. It is not a one day millionaire gamble, it is not a business of chance. It is a highly lucrative and skilled profession made easy by a little diligent application.
fx economic calendar outlook - Free Download
fx economic calendar outlook Free Software Download - Google Calendar Outlook 2011 Calendar, Economic Graph Software, Economic Graph Creator and more Read More...
Economic Calendar - Outlook Import Guide
Learn how to import our Economic Calendar into iCal from Outlook. Download the weekly iCal by clicking on the ““download iCal” button and save it on you Read More...
Free Economic calendar software Download
Free download economic calendar software Files at Software Informer - Share Microsoft Outlook calendar, contact, distribution list and task information with Read More...
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fx economic calendar outlook - Free Download
fx economic calendar outlook Free Software Download - Google Calendar Outlook 2011 Calendar, Economic Graph Software, Economic Graph Creator and more Read More...
Economic Calendar - Outlook Import Guide
Learn how to import our Economic Calendar into iCal from Outlook. Download the weekly iCal by clicking on the ““download iCal” button and save it on you Read More...
Free Economic calendar software Download
Free download economic calendar software Files at Software Informer - Share Microsoft Outlook calendar, contact, distribution list and task information with Read More...
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canadian dollar forecast 2012
canadian dollar forecast 2012 : Canada was the first Group of Seven country to raise interest rates following the global financial crisis in 2008, lifting its target for the overnight rate three times last year before pausing.
The Bank of Canada will raise interest rates sometime in the fourth quarter as a sturdy, if unspectacular, domestic recovery offsets global headwinds, according to a Reuters survey.
The median forecast of a July Reuters poll of 37 economists and strategists pushed back previous rate hike forecasts of a third-quarter increase projected in a May poll. The central bank is now seen holding its key policy rate at one per cent in the third quarter.
The median forecast also showed that the bank would end the fourth quarter with the key rate at 1.50 per cent, down from 1.75 in the previous poll.
The rate was seen ending 2012 at 2.50 per cent, down from 3 per cent.
Analysts said a rate increase would likely send the Canadian dollar - already a point of concern for the central bank - higher, which could result in another rate hike pause.
The currency is above parity with the U.S. dollar, trading around $1.04.
The poll, which showed 16 of 37 forecasters expect the central bank to start raising rates in the fourth quarter, echoed the results of a poll of primary dealers conducted June 29, which found most had pushed back their forecasts as well.
Two primary dealers - the institutions that deal directly with the central bank as it carries out monetary policy - have pushed their targets into 2012.
"It's a tough call, but our view is they're likely to wait until early next year and then gradually raise interest rates at that point," said Adrienne Warren, a senior economist at Bank of Nova Scotia.
"Certainly, the path will be contingent on the performance of the U.S. economy ... There's so much uncertainty out there in the economic outlook right now. Sentiment can change quite easily over the next few months in either direction."
In the poll, five of 11 primary dealers surveyed expected the first rate hike to come in the third quarter, compared with 10 in May's poll. Four predicted a hike in the fourth quarter.
BMO Capital Markets pushed its expectations for the first increase to the fourth quarter from the third. Desjardins Securities was unavailable as it was currently revising its forecasts.
Overnight index swaps, which trade based on expectations for the key central bank policy rate, showed investors see only a slim chance of a rate hike this year.
One concern for the Bank of Canada is recent data that showed inflation rose to 3.7 per cent in May, its highest level in more than eight years.
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The Bank of Canada will raise interest rates sometime in the fourth quarter as a sturdy, if unspectacular, domestic recovery offsets global headwinds, according to a Reuters survey.
The median forecast of a July Reuters poll of 37 economists and strategists pushed back previous rate hike forecasts of a third-quarter increase projected in a May poll. The central bank is now seen holding its key policy rate at one per cent in the third quarter.
The median forecast also showed that the bank would end the fourth quarter with the key rate at 1.50 per cent, down from 1.75 in the previous poll.
The rate was seen ending 2012 at 2.50 per cent, down from 3 per cent.
Analysts said a rate increase would likely send the Canadian dollar - already a point of concern for the central bank - higher, which could result in another rate hike pause.
The currency is above parity with the U.S. dollar, trading around $1.04.
The poll, which showed 16 of 37 forecasters expect the central bank to start raising rates in the fourth quarter, echoed the results of a poll of primary dealers conducted June 29, which found most had pushed back their forecasts as well.
Two primary dealers - the institutions that deal directly with the central bank as it carries out monetary policy - have pushed their targets into 2012.
"It's a tough call, but our view is they're likely to wait until early next year and then gradually raise interest rates at that point," said Adrienne Warren, a senior economist at Bank of Nova Scotia.
"Certainly, the path will be contingent on the performance of the U.S. economy ... There's so much uncertainty out there in the economic outlook right now. Sentiment can change quite easily over the next few months in either direction."
In the poll, five of 11 primary dealers surveyed expected the first rate hike to come in the third quarter, compared with 10 in May's poll. Four predicted a hike in the fourth quarter.
BMO Capital Markets pushed its expectations for the first increase to the fourth quarter from the third. Desjardins Securities was unavailable as it was currently revising its forecasts.
Overnight index swaps, which trade based on expectations for the key central bank policy rate, showed investors see only a slim chance of a rate hike this year.
One concern for the Bank of Canada is recent data that showed inflation rose to 3.7 per cent in May, its highest level in more than eight years.
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1995 Japanese yen Historical exchange rate
1995 Japanese yen Historical exchange rate ; In 1985 a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$1 in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar.
After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$1 in December 1992. In April 1995, the yen hit a peak of under 80 yen per dollar, temporarily making Japan's economy nearly the size of the US.
Tag ; 1995 yen exchange rate, 1995 dollar yen chart, 1995 japanese yen current exchange rate, JPY chart 1995, historic exchange chart 1995,
| Jan | Feb | Mar | Apr | May | Jun |
|---|
| 99.79 | 98.23 | 90.77 | 83.53 | 85.21 | 84.54 |
| Jul | Aug | Sep | Oct | Nov | Dec |
|---|
| 87.24 | 94.56 | 100.31 | 100.68 | 101.89 | 101.86 |
Tag ; 1995 yen exchange rate, 1995 dollar yen chart, 1995 japanese yen current exchange rate, JPY chart 1995, historic exchange chart 1995,
currency exchange forecast 2012
currency exchange forecast 2012 : The Western European BI tools market grew in 2007 by 8.0% at constant currency,but this represented 17.7% growth in dollars. “Generally,2007 was stronger than expected,”said Alys Woodward,program manager for BI and Analytics in Europe at IDC. “However,currency effects flattened the growth considerably. We expect to see growth continue and a CAGR of 11.0% between 2007 and 2012.
Sterling outlook: What next for the pound?
This is because of the interest rate gap that has merged between the UK and European Union. The main European Central Bank refinancing rate is at 1.25% versus the record low 0.5% maintained for more than two years by the Bank of England. The gap is expected to widen, with the ECB making at least one more hike this year, while the BoE might not raise rates at all. Read More...
6 Month Euro Forecast
The Euro has done well through the first half of 2011, rallying to fresh multi-year highs against the US Dollar and strengthening against almost all G10 counterparts. There remain clear fundamental risks for the single currency in the second half of 2011, and we look for the Euro to fall. The major concern is whether several at-risk countries can remain stable despite clear debt crises. The European Central Bank’s next actions may prove pivotal—especially as the Euro has strengthened on robust interest rate forecasts and is at risk of losses on any significant downgrades. The number of risks to the Euro arguably outweighs those to the US Dollar, leaving us watching for further EURUSD declines. We look for the EUR/USD to end 2011 below 1.25.
Read More...
Forecast for the US dollar
The Federal Funds rate was unchanged at 0-0.25% after June’s Federal Open Market Committee (FOMC) meeting. We now expect it to stay there for almost another year. The Fed acknowledged that the recovery is proceeding at a slower pace than expected, with labour market data noticeably weaker. June’s disappointing result of just 18k non-farm jobs added, on the heals of only 25k in May (revised down from 54k) won’t have altered the committee’s view ahead of its meeting later this month. Read More...
Pound Sterling, the Euro and US Dollar exchange rate forecast
The Pound plummeted to the lowest level in 15 months against the Euro yesterday, amid reports in the UK that showed falling consumer confidence and house prices. The UK currency weakened against all of the 16 most actively traded currencies, as traders scaled back interest rate expectations to August 2012 before the MPC considers raising rates from the record low. Read More...
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Sterling outlook: What next for the pound?
This is because of the interest rate gap that has merged between the UK and European Union. The main European Central Bank refinancing rate is at 1.25% versus the record low 0.5% maintained for more than two years by the Bank of England. The gap is expected to widen, with the ECB making at least one more hike this year, while the BoE might not raise rates at all. Read More...
6 Month Euro Forecast
The Euro has done well through the first half of 2011, rallying to fresh multi-year highs against the US Dollar and strengthening against almost all G10 counterparts. There remain clear fundamental risks for the single currency in the second half of 2011, and we look for the Euro to fall. The major concern is whether several at-risk countries can remain stable despite clear debt crises. The European Central Bank’s next actions may prove pivotal—especially as the Euro has strengthened on robust interest rate forecasts and is at risk of losses on any significant downgrades. The number of risks to the Euro arguably outweighs those to the US Dollar, leaving us watching for further EURUSD declines. We look for the EUR/USD to end 2011 below 1.25.
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Forecast for the US dollar
The Federal Funds rate was unchanged at 0-0.25% after June’s Federal Open Market Committee (FOMC) meeting. We now expect it to stay there for almost another year. The Fed acknowledged that the recovery is proceeding at a slower pace than expected, with labour market data noticeably weaker. June’s disappointing result of just 18k non-farm jobs added, on the heals of only 25k in May (revised down from 54k) won’t have altered the committee’s view ahead of its meeting later this month. Read More...
Pound Sterling, the Euro and US Dollar exchange rate forecast
The Pound plummeted to the lowest level in 15 months against the Euro yesterday, amid reports in the UK that showed falling consumer confidence and house prices. The UK currency weakened against all of the 16 most actively traded currencies, as traders scaled back interest rate expectations to August 2012 before the MPC considers raising rates from the record low. Read More...
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Wednesday, July 13, 2011
new zealand exchange rate forecast 2012
new zealand exchange rate forecast 2012 : Rallies for this pair above 0.8000 have often proven difficult to sustain, and it looks as though we are once again seeing the market falter above 0.8000 following an impressive thirteen big figure rally in 2011. The market has also well exceeded all relevant daily moving averages and we see the risks for deeper setbacks towards 0.7500 at a minimum, before bulls attempt to reassert. Above 0.8400 gives reason for concern.
A noteworthy improvement in Reserve Bank of New Zealand interest rate forecasts has coincided with a fairly sharp New Zealand Dollar recovery. Indeed, the NZD trades at fresh post-float highs, and relative yield expectations have likely played a part. Yet neutral commentary from RBNZ Governor Alan Bollard could put a damper on such forecasts—especially as the New Zealand Dollar itself could represent an impediment to continued economic recovery out of the small island nation.
new zealand exchange rate forecast 2012, new zealand exchange rate forecast 2011, australia exchange rate forecast 2012,
A noteworthy improvement in Reserve Bank of New Zealand interest rate forecasts has coincided with a fairly sharp New Zealand Dollar recovery. Indeed, the NZD trades at fresh post-float highs, and relative yield expectations have likely played a part. Yet neutral commentary from RBNZ Governor Alan Bollard could put a damper on such forecasts—especially as the New Zealand Dollar itself could represent an impediment to continued economic recovery out of the small island nation.
new zealand exchange rate forecast 2012, new zealand exchange rate forecast 2011, australia exchange rate forecast 2012,
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