A Brief Look at EUR/GBP 28/03/2013

The European currency declined against most of its counterparts after a worse than estimated Unemployment change in Germany. The pair hit a new low of two months after a change in the number of unemployed people during the previous month in Germany released at 13K while economists expected -2K. This is the highest number of unemployed people for the current month since October 2012. Two hours after the open in London, Forex on EUR/GBP were available around 0.8416 and a further decline for the day is expected by analysts.

The euro also came under pressure after a debt auction in Italy saw borrowing costs climb to five-month highs as investors are concerned over political uncertainty in the country. The leader of the first party elections Pier Luigi Bersani wasn’t able to form a new government after talks with rival party leaders ended with rejection from Beppe Grillo.

Market participants are also nervous as Cyprus is due to reopen its banks for the first time in nearly two weeks. The government on the island country has placed control measures to prevent a bank run. People in the country will able to withdraw just 300 euros per day or 3000 euro for people that are going abroad. Lawmakers in Cyprus are concerned that people will withdraw all their money from banks as a rescue plan imposes heavy losses on depositors with over 100 000 euro in their accounts. Cyprus and international leaders reached the bailout deal on Monday several hours before European Central Bank was planning to cut all financial transactions for the country. The second largest bank is set to be wound down and all its depositors with over 100 000 euros will support the rescue plan. Investors and forex trades are worried that a similar plan will be used in the future for other countries in euro zone that have problems with banking system.

Technically speaking, bias is the currency pair remains on downside and cross seems to find its next support level around 0.8360. A price movement below this level would extend the negative trend to 0.8320. On the upside, a break of 0.8580 resistances level is needed to confirm completion of fall from 0.8793. Below it the trend will stay mildly bearish. In case of a break above the highest level this year at 0.8815, a medium term bullish trend will be resumed for attack of the psychological point at 0.90.

Disclaimer:

The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument. 

Quick Technical View of AUD/USD 28/03/2013

The Aussie confirmed the double top formation from yesterday as Forex on AUD/USD broke below the second bottom at 1.0427. The level exactly matches with the 23.6 level of Fibonacci projection from the bottom at 1.0204 to the high of 1.0496. Next support could be projected around next Fibo level at 1.0384. The decline could be stopped by 50 level of the Fibo projection at 1.0350. The last level is crucial for the rise from the beginning of the month and clear break below it could change the medium trend to negative. On other hand Relative Strength Index on one-hour chart is in overbought zone. Cross of 30 level could be taken as a first signal of reversal of the bearish trend. On four-hour chart 14 EMA is crossing 25 SMA which suggest that this could be the end of the bullish trend from 1.0115. On upside price movement above the highest level for this year would return bulls on the market and further rise could be seen.

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

A Brief Look at DAX 28/03/2013

German unemployment unexpectedly rose in March amid other troubles in euro area. Federal Labor Agency reported that the number of job seekers rose seasonally adjusted 13K while expectations were for 3K. The unemployment rate stood at 6.9% this month. The economic indicator didn’t affect Forex on DAX as index is around 10 points up after the announcement. Labor market in Germany still remains different from other euro area nations as while the country enjoys near a two-decade low unemployment, the rate climbed in other 17-nations to 11.9% in January, marking the highest percentage of unemployed people since 1995. One of the bad examples is Spain where current unemployment rate is 26% and economists in the country expect it to rise to 27.1 by the end of the current year. In other two of the biggest economies in Europe unemployment reached record highs in the last two months. French joblessness rate hit 16-year high in February while in Italy the rate hit its highest level since at least 1992 in January. In Greece unemployed force is at unbelievable level 26.4% in December 2012.
Markets will remain closed tomorrow of public holiday. The major index in Germany seems to close performance above 2 percent for the first quarter of the year while one-year return of investments of the asset is more than 11 percent. On Wednesday the German blue chip index is led by Bayer AG and Deutsche Bank AG with 1.57% and 1.13% respectively. In the other side of the list are shares of the carmaker Daimler AG with losses of -1.45% for now.
Technical view of Forex on DAX remains bearish for some corrective movement on Thursday. Negative trend from this week could be extended only if the price of the benchmark index falls below bottom from yesterday at 7748. Next support level on downside could be projected around 7675 followed by 7533 which is crucial for the medium term positive view. On upside Forex on DAX could find first resistance for the day around 7850 and price movement above it would lead the price to towards 7913. For continuation of the bullish momentum in long term the German need a clear break above sentiment 8000 mark

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 28/03/2013

08:55 EUR German Unemployment Change

Forecast: -4K Previous: -3K

German Unemployment Change measures the change in the number of unemployed people during the previous month. A higher than expected reading should be taken as negative/bearish for the EUR, while lower than expected reading should be taken as positive/bullish for the EUR.

08:55 EUR German Unemployment Rate

Forecast: 6.9%  Previous: 6.9%

The German unemployment rate measures the percentage of the total work force that is unemployed and actively seeking employment during the reported month. A higher than expected reading should be taken as negative/bearish for the EUR, while a lower than expected reading should be taken as positive/bullish for the EUR.

12:00 BRL Brazilian Unemployment Rate

Forecast: Previous: 5.4%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment. A higher than expected reading should be taken as negative/bearish for the BRL, while a lower than expected reading should be taken as positive/bullish for the BRL.

12:30 CAD GDP (MoM)

Forecast: Previous: -0.2%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. Canada releases fresh GDP data on a monthly basis. A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

12:30 USD Continuing Jobless Claims

Forecast:3.040K Previous: 3.053K

Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

12:30 USD GDP (QoQ)

Forecast: 0.5%  Previous: 0.1%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

12:30 USD Initial Jobless Claims

Forecast: 340K Previous: 336K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

13:45 USD Chicago PMI

Forecast: 56.5 Previous: 56.8

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

23:00 KRW South Korean Industrial Production (MoM)

Forecast: Previous: -1.5%

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

23:00 KRW South Korean Industrial Production (YoY)

Forecast: Previous: 7.3%

The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

23:30 JPY Tokyo Core CPI (YoY)

Forecast: -0.6%  Previous: -0.6%

The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument. 

Daily Market Review 28/03/2013

Asian markets traded lower on Thursday on worries over China’s fresh tightening measures and fears over European political and bank problems. Asian investors’ risk appetite was also subdued ahead of a public holiday tomorrow. Markets in United States and London will be shut for the Good Friday holiday. Forex on Shanghai Composite index dropped to its lowest level in a week. Chinese index fell by 2.55% or 58.65 as the biggest bank in the second largest economy in the world slipped over 2% despite posting a 14.6 percent rise for the past year.
In Japan the benchmark index closed red for second consecutive session. The Nikkei 225 index fell 157.83 point or -1.23% and closed on Thursday at 12335.96. European fears weighted on Japanese electronic exporters with high exposure to the euro zone. Sharp shares declined by 2 percent while Sony and Advantest fell 4 percent today. Investors in export oriented county are waiting the central bank meeting next week. This will be the first official meeting of the bank under the new leadership of Haruhiko Kuroda and could give more information about the stimulus program of Bank of Japan. Forex on Nikkei 225 gained 20 percent since the start of 2013 and investors are counting on Kuroda to deliver his promise of asset purchases to reflate the economy and weaken the yen. In the current week the Japanese currency was trading stable against the dollar around 94 levels.
South Korean index manage to close green today after hovering near the 1990 mark for most of the session. Forex on KOSPI closed just 3 points up and posted 0.2% down for the first quarter of the year. In Australia, the Reserve Bank of Australia holds a policy review next Tuesday and investors are curious to see if the bank will cut the official rates in a bit to insulate the economy from instability in Europe. The central bank didn’t cut the official rates in its last meeting earlier this month. Forex on ASX 200 closed red amid these rumors with decline of 9.55 points or 0.28%.
In Europe, markets are expected to open lower, as investors are waiting for reopening of the banks in Cyprus. Banks in the island country are due to reopen today at 10:00 GMT after being shut for almost two weeks. The government in the county placed measures to prevent a bank run. Cypriots will not able to withdraw more than 300 euros a day for a week at least. The persons which will travel abroad will able to withdraw 3000 euros.
Italian political troubles are also in the focus of investors and forex traders. Pier Luigi Bersani was not able to form a government and he will try to find enough broader political to support his new government. Italian FTSE closed red on Wednesday amid political uncertainty and today also is expected to open lower. Forex on DAX are also expected to open lower on Thursday by 6 points at 7783. British FTSE is seen lower by 15 points while French CAC is estimated unchanged at 3711.
On economic front, German unemployment change is scheduled for release five minutes before 9:00 London time. After yesterday’s better than expected Consumer Price Index, Canadian are due to report monthly Gross Domestic Product. Economists are waiting percentage of monthly GDP to rise from -0.2% to positive 0.1%. In United States weekly jobless claims report is expected at the same when the country will show Final GDP for the previous quarter. The number of individuals who filed for unemployment insurance for the first time during the past week is forecasted at 340K while the number for the previous was 336K. On other side, quarterly final GDP is waited better than previous.
On the currency market Euro could fall below yesterday’s four-month low amid the political uncertainty in Italy. Minutes after the opening of markets in Europe, the single currency is trading around 1.28 mark against the U.S. dollar. British pounds added 24 pips or 0.20% from the start of the day and erased losses that posted on Wednesday. The Loonie is moving flat after its rally from yesterday, but positive news from economic data that is expected today could trigger new positive wave against the dollar.

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument

A Brief Look at USD/CAD 27/03/2013

Forex on USD/CAD are providing good opportunities for trading today. The pair are following a bearish trend this week and a further fall could be seen. For the last 24 hours the U.S. dollar declined 0.48% against the CAD to close at 1.0167. The Loonie however gained on worse than expected news in the United States.

The monthly percentage of Core Durable Goods Orders has fallen from 2.3% to -0.5%. This is the worst percentage of the change in the total value of new purchase orders placed with manufactures for durable goods, excluding transportation, since September 2012. The downward wave of the dollar against the Canadian currency was triggered also by worse than expected data for New Home Sales. Economists expected the annualized number of new single-family homes that were sold during the previous month to fall to 5 000, but government figures showed a decline of 20 000. A rise in crude prices also bolstered the Canadian dollar. forex traders are looking ahead for Crude Oil Inventories later in the day.

On Wednesday the largest economy in the world will continue with data for the construction sector. Pending home sales are scheduled for release later in the day. A change in the number of homes under construction to be sold but still awaiting the closing transaction is expected to decline from 4.5% to -0.3%.

Technically speaking Forex on USD/CAD are in a medium term negative trend. The bearish bias has been formed since the currency pair topped its highest level this year at 1.0342. Positive momentum from 0.9630 is in a corrective pattern that could be reversed above the 1.0100 mark. The latter is crucial for the general trend and a break below it would be taken as the end of the bullish momentum. The short term view is negative, at 1.0135 first and 1.0100 after that. On the upside, first intraday resistance could be projected at around 1.0200 and price movement above this level would lead the price of forex on USD/CAD to the next resistance level of 1.0235. Only a clear break and daily close above 1.03 marks would return the strength of the bullish trend, and price movement above 1.0345 would extend losses of the Loonie towards 1.0447, which is the pick of the past year.

Disclaimer:

The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument. 

Daily market review 27/03/2013

Asian shares traded in mixed territory on Wednesday, led by Australian stocks. Forex on the ASX 200 gained 0.90% or 44.80 points and closed the day near to the sentiment 5000 mark at 4995. The Japanese benchmark index was unable to close above a level of 12 500 in today’s session after news the BOJ may start asset purchases immediately rather than in 2014. The Tokyo index added 0.18% or 22.17 points today. Forex on USD/JPY returned to above the 94 mark and one hour before opening in Europe were available for around 94.8. Market participants await the yen’s decline to be resumed soon and a break above the three-and-half year low of 96.7 hit on March 12 to be seen in coming weeks. The weakness of the Japanese currency has been capped on worries about the euro zone.

The Chinese Shanghai Composite is trading flatly today as three of the largest banks in the country have posted weak 2012 net profit this week. On the other side, Forex on the KOSPI Index posted a one-week-high of 1995 and closed just shy of that level. A decline in the value of the Korean currency boosted exporters such as automakers Hyundai Motor and Kia Motors. Both companies’ shares jumped 1.5 and 2 percent respectively.

Markets in Europe were expected to open higher on Wednesday as investors and traders watched Cyprus impose capital controls on its banks to prevent a bank run when they re-open tomorrow. On Tuesday major indices in the old continent closed mostly flat, with only the Spanish IBEX closing in the red after a deep fall. forex traders finished trading on the index yesterday below the 8000 mark as it slipped by 150.10 points or 1.84%, and today markets are set to open higher led by German DAX which is called 21 points at 7900. The British FTSE 100 is expected to rise 13 points ahead of the Current Account report later in the day. The difference in value between imported and exported goods, services income flows during the previous quarter is estimated exactly as previously, at -12.8B. Forex on the CAC also are expected to open trading higher by 14 points at 3762.

In Cyprus thousands of people took to the streets yesterday to protest against reports that larger depositors could lose up 40 percent of their savings. They also called for the central bank governor to resign. The banks on the island country are due to re-open tomorrow and the finance minister is figuring out measures to prevent a run on the banks. On the economic front in Europe, forex traders expect an Italian 10-year bond auction and quarterly Final Gross Domestic Product of the U.K. In the afternoon the Canadian monthly report is scheduled for release. Core CPI is waited at 0.3% while the CPI is forecast to rise from 0.1% to 0.6%.

On the currency market, the Euro is at the major support level at 1.2840 as from the beginning of the trading session, and in Asia the single currency is down against the dollar by 0.24%. A clear break and daily close below this level would suggest that a medium trend is again in action. In that case, next support on the daily chart could be projected at 1.2650. The British pound is heading in the opposite direction and the cross pair is going sharply down. The cable is moving up against the dollar today and reversing the fall from yesterday.

Disclaimer:

The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument. 

Economic Events 27/03/2013

07:00 EUR German Consumer Climate

Forecast: 5.9 Previous: 5.9

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

07:45 EUR French GDP (QoQ)

Forecast: Previous: -0.3%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

08:00 CHF KOF Leading Indicators

Forecast : 1.02 Previous: 1.03

The KOF Leading Indicators Index is designed to predict the direction of the economy over the following six months. The index is a composite reading of 12 economic indicators related to banking confidence, production, new orders, consumer confidence and housing. A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.

09:30 GBP Current Account

Forecast: –12.7B Previous: -12.8B

The Current Account index measures the difference in value between exported and imported goods, services and interest payments during the reported month. The goods portion is the same as the monthly Trade Balance figure. Because foreigners must buy the domestic currency to pay for the nation’s exports the data can have a sizable effect on the GBP. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

09:30 GBP GDP (YoY)

Forecast: 0.3% Previous: 0.3%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

09:30 GBP GDP (QoQ)

Forecast: –0.3% Previous: 0.3%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

12:30 CAD Core CPI (MoM)

Forecast: Previous: 0.1%

The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

12:30 CAD CPI (MoM)

Forecast: 1.0% Previous: 1.0%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

12:30 CAD CPI (YoY)

Forecast: 1.0% Previous: 0.5%

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

14:00 USD Pending Home Sales (MoM)

Forecast: –0.5% Previous: 4.5%

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

21:45 NZD Building Consents (MoM)

Forecast: Previous: -0.4%

Building Consents (also known as Building Permits) measures the change in the number of new building consents issued by the government. Building consents are a key indicator of demand in the housing market. A higher than expected reading should be taken as positive/bullish for the NZD, while a lower than expected reading should be taken as negative/bearish for the NZD.

Daily Market Review 26/03/2013

Asian markets were sending out mixed signals on Tuesday amid liquidity fears in China and comments from the Euro group president about using the bailout in Cyprus as a template for future deals. forex traders followed the downside move of the Japan’s benchmark index which finished the second session of the week below sentiment mark of 12 500. The Nikkei 225 index slipped by 74.84 points or 0.60% and closed at 12471.62 after the announcement of the new Bank of Japan governor that he advocated the purchase of longer-term government bond. The losses of the Nikkei were extended as Kuroda said that he has two year to achieve inflation in the county to the target of 2 percent.

Forex on USD/JPY didn’t effect on his statement as the currency pair returned again above 94 levels. On Monday, the Japanese yen slipped to 93.50 and hit its lowest level in three weeks. Forex on USD/JPY are in a long term positive trend and a corrective pattern in the last month could finish soon for further waves towards psychological 100 marks.

The Shanghai Composite index fell by 27.44 point or 1.18 to 2299.28 while the Korean KOSPI closed in the green for a second consecutive day. The Chinese index declined below the 2300 mark to under perform the region after reports that China’s central bank may conduct another liquidity draining operation today. On other side, Australian benchmark index also posted negative trading. Forex on ASX 200 declined by 40 points or 0.80% and closed at 4950.20.

European equities are expected higher today, reversing losses from yesterday. Binary traders waited FTSE 100 up by 11 points at 6389 while German DAX index is called up 27 points. The index is set to open at 7887 after yesterday sharp fall. On Monday, Forex on DAX opened higher, topped 8031 points and slipped to its lowest level since three week. French CAC 40 is called up 10 points at 3737 after yesterday decline of 1.12%.

Yesterday, president of the Eurogroup said the bailout plan in Cyprus could serve as a model for dealing with future banking crisis in the euro zone. The deal in the island involves the winding down the Popular Bank of Cyprus and imposes a levy on deposits over 100 000 in Cypriot banks that are not insured. The banks in the country have been close since March 16 and will remain closed till Thursday as a secure measure.

On the economic front U.K.’s monthly CBI is scheduled for announcement at 11:00 London time. Later in the day are expected Core Durable Goods Orders in United States and New Home Sales. Both economic indicators are expected worse than previous.

Currency market is quiet in the morning on Tuesday after yesterday’s volatile session. The Euro is trading near to its lowest level of the year. On Monday the single currency dropped against the dollar and hit new lowest level at 1.2829. Further downside move could be expected as decline from the first day of the week couldn’t be reversed so easy. British pound also posted negative trading against the dollar yesterday. Forex on GBP/USD fell below 1.52 mark and today are still trading below it. However, the Aussie continues its upside move from the previous week and new high is waited today.

Disclaimer:

The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument. 

Daily Market Review US Opening 26/03/2013

Breaking news is hitting the wires as we approach the end of the European trading session, that the European Parliament will ask big savers to mark losses on their accounts if the banks where they hold their money run into trouble, as leaked by a senior EU lawmaker. Although some policymakers are claiming , adding momentum to a policy unveiled as part of a Cypriot bailout.

Although some policymakers have sought to present the deal in Cyprus and the losses suffered by depositors at two of its banks as a one-off event, many experts believe it marks a dramatic change in the strategy how Europe deals with troubled banks, to spare taxpayers who have been on the hook for previous bailouts.

Jeroen Dijsselbloem, head of the Eurogroup of euro zone finance ministers, communicated on Monday that in the future, members of the Eurozone should first ask banks to recapitalize themselves, then look to shareholders and bondholders and then “if necessary” to uninsured deposit holders. Now in all likelihood tough treatment of big depositors will be written into a new EU law, making losses for large savers a permanent feature of future banking crises. As a result prices for Forex of the rumour the Euro dropped to a session low around 1.2827, only to recover to trade around 1.2879 as of writing as traders are looking beyond rumours for now.

Meanwhile Forex investors paid attention to demand for durable goods produced in the US surged in February by 5.7%, suggesting factory activity continued to expand at a moderate pace, even though an indicator of future business spending dropped. Other data on Tuesday indicated the housing market keeps on rebounding with prices for single-family homes marking their biggest year-on­ year gain in January in six-and-a-half years. On the disappointing side the report for consumer confidence showed Americans in March turned more pessimistic about short term prospects, causing the indicator to tumble to 59.7.

Forex on the GBP eased from near 6-week highs against the euro and fell against the dollar on Tuesday, after weak retail sales data put investors back in doubt about Britain’s economic outlook. Unseasonal cold weather and snow in March is likely to hurt activity and could tip Britain towards a triple-dip recession, traders reported. That view seemed to be backed by a survey from the Confederation of British Industry that showed its monthly retail sales balance in March at its weakest since last August and well below analysts’ forecasts. The EURGBP was up 0.3 percent at 84.90 pence, holding above a Feb. 11 low of 84.42 pence and getting a boost after a sharp selloff on Monday. Forex on GBPUSD fell 0.1 percent to $1.5150, well shy of a one-month high at $1.5280 hit on Monday. The pound had recovered last week after some decent economic data in Britain lessened chances of a recession and as problems in the euro zone resurfaced, prompting some to run for British assets.

Disclaimer: The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.