Economic Events 31/05/2013

00:00 KRW South Korean Industrial Production (MoM)

Forecast: Previous: 2.6%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

00:00 KRW South Korean Industrial Production (YoY)

Forecast: Previous: -3.0%

Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

00:30 JPY Tokyo Core CPI (YoY)

Forecast: -0.2% Previous: -0.3%

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.

00:30 JPY Unemployment Rate

Forecast: 4.1% Previous: 4.1%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact relative to employment data from other countries because the Japanese economy is more reliant on the industrial sector than personal spending. A higher than expected reading should be taken as negative/bearish for the JPY, while a lower than expected reading should be taken as positive/bullish for the JPY.

06:30 INR Indian GDP (YoY)

Forecast: Previous: 4.5%

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 INR, while a lower than expected reading should be taken as negative/bearish for the INR.

07:45 EUR French Consumer Spending (MoM)

Forecast: -0.6% Previous: 1.3%

French Consumer Spending measures the change in the inflation-adjusted value of all goods expenditures by consumers. Consumer spending accounts for the majority of economic activity. 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: 1.08 Previous: 1.02

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 BOE Consumer Credit

Forecast: 0.40B Previous: 0.50B

Consumer credit is defined as borrowing by the UK personal sector to finance current expenditure on goods and services. For consumer credit, the UK personal sector comprises individuals only, i.e. housing associations, incorporated businesses and other non-profit making bodies serving persons are excluded. 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.

10:00 EUR Unemployment Rate

Forecast: 12.2% Previous: 12.1%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact as there are several earlier indicators related to labor conditions in the euro zone. 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.

13:30 CAD GDP (MoM)

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. 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.

13:30 US Core PCE Price Index (MoM)

Forecast: 0.1% Previous:

The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It 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 USD, while a lower than expected reading should be taken as negative/bearish for the USD.

13:30 US Personal Spending (MoM)

Forecast: 0.1% Previous: 0.2%

Personal Spending measures the change in the inflation-adjusted value of all spending by consumers. Consumer spending accounts for a majority of overall economic activity. However, this report tends to have a mild impact, as government data on retail sales is released about two weeks earlier. 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.

14:45 US Chicago PMI

Forecast: 50.0 Previous: 49.0

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.

14:55 US Michigan Consumer Sentiment

Forecast: 83.7 Previous: 83.7

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions. There are two versions of this data released two weeks apart, preliminary and revised. The preliminary data tends to have a greater impact. The reading is compiled from a survey of around 500 consumers. 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.

14:55 US Michigan Inflation Expectations

Forecast: Previous: 3.1%

University of Michigan (UoM) Inflation Expectations measures the percentage that consumers expect the price of goods and services to change during the next 12 months. There are two versions of this data released two weeks apart,Preliminary and Revised. The preliminary release is the earliest so tends to have more impact. 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.

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 31/05/2013

Asian markets rebounded today after sharp declines in the previous sessions. The Japanese benchmark index returned some of the losses from yesterday as it gained around 2 percent in the last trading session of May. Forex on Nikkei added 231 points but closed again below the sentiment zone at 14 000 mark. Exporters boosted the Nikkei led by Yokogawa Electric with 5 percent gain after the yen moved off the previous day’s three-week high against its counterpart from U.S. Amid economic news, industrial output in Japan rose 1.7 in April while consumer prices moved 0.4 percent lower annually. On Friday, also retail stocks recovered from their sell off in the last sessions. Shares of Fast Retailing and Sony jumped 3 percent each.
Australian shares also moved higher today after tumbling 1 percent on Thursday supported by mining stocks. Forex on ASX 200 declined over 4 percent in May as they closed below 5000 mark today. Earlier in the day Gindalbie Metals and Western Areas rallied over 6 percent each while the global mining company Rio Tinto and Mount Gibson climbed 2 and 3 percent respectively after the prices of the copper and gold rallied overnight. The price of Gold jumped to its highest level in two weeks. Investors are waiting for the policy meeting of the Reserve Bank of Australia next week when the central bank could cut its official rates.
Soul’s stocks traded higher today with the KOSPI index moved above the psychological 2000 mark. In the session, the Forex on KOSPI hit their highest level since April 29 boosted by automakers Hyundai Motor and Kia Motors. Both companies added 1 percent each.
European markets are likely to open mixed today as investors are still concerned over the future of the Federal Reserve monetary policy. The FTSE 100 is expected 4 points down at 6653, the Forex on DAX are waited 1 point down at 8401 and the French CAC up 8 points above the sentiment 4000 line.
In the U.K., growth could be better-than expected over the next three years according to business lobby group, the British Chambers of Commerce. The service sector is expected better which could boost household consumption and business investments.
On the economic front, Germany is due to release retail sales at 7:00 London time. The economic indicator is forecasted to come at 0.3 while the data in the previous month were negative at -0.5 percent. French Consumer Spending also will be release today. On top of the focus will be the Unemployment rate of the whole euro zone. The percentage of total work force that is unemployed and actively seeking employment during the previous is expected to rise from 12.1% to 12.2%. If this happens this will be a new record high unemployment percentage since the union was created. Italy will show also unemployment data today.
In corporate news, Spain Santander bank announced that it had sold a 50 percent stake in its asset management arm to Warburg Pincus and German Atlantic.

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 30/05/2013

Worldwide stocks and shares are experiencing heavy pressure for the second day running today and the dollar has slipped against most major world currencies, in markets beset with doubts over when the U.S. Federal Reserve might slow its stimulus program.

Top European stocks have crept up 0.2 percent as they steadied after heavy falls yesterday, but another 5 percent plunge from Japan’s Nikkei on the Asian front has left MSCI’s world index at its lowest level in three weeks.

Increases in the value of shares across Europe have been underpinned by mining stocks, which have risen 1.8 percent, as traditional safe-haven investment gold – which has fallen sharply this year as demand for riskier assets has risen – has jumped more than 1 percent to its highest level in over a week.

The job market in the US, not ot mention the economy as a whole, may in fact be strong enough in the coming months to allow the Federal reserve to pare its bond buying by a small amount, a federal poilcymaker is quoted as saying. However, uncertainty over the timing of any shift in value has left the dollar genrally weaker and currently near a session low of 100.555 against the yen. The softer greenback saw the euro drift up to $1.2974 as it neared a two-week high earlirer in the day.

European Commission sentiment data, due at 0900 GMT, will be a focus for traders looking for signs of a pickup following recent patchy surveys. German Chancellor Angela Merkel and French President Francois Hollande also meet ahead of a June EU summit. German Bund futures have recovered some ground after a recent sell-off.

However, investors are also now largely unwilling to place large bets before a sale of 5- and 10-year Italian bonds, amid signs that a 10-month fall in peripheral euro zone borrowing costs could be drawing to a close.

Commodity markets are now focused on the uncertain impact a scale-back in Fed support would have on the global economy and its demand for natural resources and for the dollar, which most raw materials are priced in.

London copper has this morning dropped to its lowest point in two weeks of $7,205.50, bringing its total loss in value this year to 9 percent, and oil has dipped back towards $102 per barrel, this being near the very bottom of its recent range.

“This (Fed easing stimulus) is a very tricky issue. I don’t think Fed chairman Ben Bernanke really wants to start tapering stimulus, but more and more policymakers are for it,” said Joyce Liu, an investment analyst at Phillip Futures.

“It seems that every time there’s a dip, people will start coming to the market to buy,” Liu said about gold.

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 30/05/2013

Brazil Holiday – Corpus Christi Day

02:30 AUD Building Approvals (MoM)

Forecast: 4.0% Previous: -5.5%

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

02:30 AUD Private New Capital Expenditure (QoQ)

Forecast: 0.8% Previous: -1.2%

Private New Capital Expenditure measures the change in the total inflation-adjusted value of new capital expenditures made by private businesses. It is a leading indicator of economic health. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

06:45 CHF GDP (QoQ)

Forecast: 0.2% 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. 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.

07:00 GBP Nationwide HPI (MoM)

Forecast: 0.4% Previous: -0.1%

The Nationwide Housing Price Index (HPI) measures the change in the selling price of homes with mortgages backed by Nationwide. It is the U.K.’s second earliest report on housing inflation. 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.

09:00 NOK Norwegian Core Retail Sales (MoM)

Forecast: Previous: 0.20%

Retail sales data represents total consumer purchase from retail stores. It provides valuable information about consumer spending which makes up the consumption part of GDP. A higher than expected reading should be taken as positive/bullish for the NOK, while a lower than expected reading should be taken as negative/bearish for the NOK.

10:00 EUR Business and Consumer Survey

Forecast: 89.0 Previous: 88.6

The Business and Consumer Survey is a composite index which measures the level of confidence in the euro zone. The index is compiled from five different indicator surveys which are taken on a monthly basis, including: industrial, services, consumer, retail, and construction. The survey can indicate potential in both consumer and business spending in the euro zone. 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.

10:00 EUR Consumer Confidence

Forecast: -22.0 Previous: -22.3

Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. The reading is compiled from a survey of about 2,300 consumers in the euro zone which asks respondents to evaluate future economic prospects. Higher readings point to higher consumer optimism. 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.

13:30 CAD Current Account

Forecast: -16.0B Previous: -17.3B

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 affect on the CAD. 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.

13:30 US Continuing Jobless Claims

Forecast: 2,950K Previous: 2,912K

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.

13:30 US GDP (QoQ)

Forecast: 2.5% Previous: 2.5%

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.

13:30 US Initial Jobless Claims

Forecast: 340K Previous: 340K

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.

15:00 US Pending Home Sales (MoM)

Forecast: 1.1% Previous: 1.5%

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.

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 USA/CAD 29/05/2013

This currency pair is continuing its upward trend based on the US dollar strength which was buoyed in the last several weeks by improving economic data for consumer confidence, unemployment claims and durable goods orders.
Today the Bank of Canada will be revealing its rate statement which should give some idea about the monetary policy for the mid-term. They will also be announcing the overnight rate at which major financial institutions borrow and lend overnight funds between each other. Both of these would send a strong signal for the currency pair’s movement in the short term, but are likely to confirm the move upwards.

The RSI is currently at 54.3 and just came out of the oversold zone, signaling some downward movement in the next few days, but the range boundary lies at around 1.03465 and should be a strong support. If that level were to be breached, a larger move downward would follow to the next support at 1.03 and the one after it at 1.02470. If the trade remains in range it should bounce to its next resistance at 1.042 and the near term top of the range 1.048.

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 29/05/2013

Shares and bonds worldwide dropped in value this morning as strong U.S. data fanned speculation that the Federal Reserve may soon begin tapering back its bond-buying program.

Europe’s FTSE 300 index of top European shares is now down 1.0 percent, thereby returning much of the previous day’s 1.3 percent gain.

“We still see the rally continuing as the U.S. economy is getting stronger, monetary policies will remain supportive and there are not a lot of alternatives to equities,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

The prospects of stronger U.S. growth allied to an early retreat from the Fed’s $85 billion a month stimulus program weighed heavily on fixed income markets, and both German Bunds and peripheral eurozone debt tracked falls in U.S. Treasuries.

German Bund futures contract is also down 35 ticks to 143.48, following on from a rise in the 10-year Treasury note yield to a high of 2.235 percent today, its highest since April 2012.

And the lower-regarded ten-year Spanish government bond yields are up 4 basis points at 4.34 percent and Italian yields up 3.4 bps to 4.08 percent.

Some analysts have said the debt market may have over-reacted to the short-term risks of any Fed tapering.

“We think the market has overplayed the short-term risk that the Fed will change its policy, that they will start tapering QE. We think it’s too early for that,” said Elwin de Groot, senior market economist at Rabobank.

The dollar, which has been rising on bets on a reduction in Fed stimulus, is however hovering at almost three-year highs against most major currencies, held in check by a stronger yen.

The Japanese yen, often used as a safe haven by investors, gained as stocks fell, is now rising around 0.7 percent at 101.65 to the dollar.

The recent firmness of the dollar dragged on copper and platinum, while oil was near a one-month high just above $104 per barrel as Tuesday’s upbeat U.S. data fed hopes of improved demand from the world’s top consumer.

“People are starting to realize that the United States has got to lead us out of this economic slump,” said Tony Nunan, an oil risk manager at Mitsubishi Corp in Tokyo.

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 29/05/2013

00:50 JPY Retail Sales (YoY)

Forecast: -0.4% Previous: -0.3%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. 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.

02:30 AUD Construction Work Done (QoQ)

Forecast: 1.0% Previous: -0.1%

Construction Work Done measures the change in the total value of completed construction projects. It provides an early indication of trends in building and engineering construction activity. The data is an estimate, based on a survey of approximately 80% of the value of both building and engineering work done during the quarter. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

07:00 EUR GfK German Consumer Climate

Forecast: Previous: 6.2

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.

08:55 EUR German Unemployment Change

Forecast: 5K Previous: 4K

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.

11:00 GBP CBI Distributive Trades Survey

Forecast: 3 Previous: -1

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease. 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.

13:00 BRL Brazilian GDP (YoY)

Forecast: 2.3% Previous: 1.4%

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 BRL, while a lower than expected reading should be taken as negative/bearish for the BRL.

13:00 EUR German CPI (MoM)

Forecast: 0.2% Previous: -0.5%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers. 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.

13:00 EUR German CPI (YoY)

Forecast: 1.3% Previous: 1.2%

The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers. 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.

15:00 CAD Interest Rate Decision

Forecast: 1.00% Previous: 1.00%

Bank of Canada (BOC) governing council members come to a consensus on where to set the rate.Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. A higher than expected rate is positive/bullish for the CAD, while a lower than expected rate is negative/bearish for the CAD.

23:45 NZD Building Consents (MoM)

Forecast: Previous: -9.1%

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.

 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 28/05/2013

The Japanse yen has stalled this morning as a result of Japanese shares trying to recover after some sharp falls, easing worries that investors may have to close their yen-selling positions to make up for last week’s losses

With the Nikkei’s dramatic decline of more than 10 percent pulling the yen higher against the dollar, in the longer term, the Bank of Japan’s aggressive easing stance is still expected by the majority of invesstors to weaken the yen over the coming months.

The US dollar has risen more than 1.2 percent to 102.20 yen this morning, up more than a full yen from a two-week low of 100.66 on Friday, and staying above technical support levels, at 100.80 yen on Tuesday, breaking through resistance at 102.00 yen.

On the Asian front, Japan’s Nikkei share average has lost more than 7 percent, coincidentally its largest intraday drop since mid-March 2011. This has therefore buoyed currencies which gain in times of financial uncertainty, nemaly the Japanese yen and the Swiss franc.

The Nikkei is therefore up 1.2 percent today, recovering from its three-week low, which it hit last Tuesday.

“The yen and Swiss franc have dropped noticeably this morning essentially because risk assets seem to be stabilizing,” said Alvin Tan, currency strategist at Societe Generale in London.

Tan said although they forecast the dollar to touch 108 yen by the end of the year, he thinks this move lower in the yen could be a knee-jerk reaction.

“We are bearish yen for the year… but near term we are concerned that the risk-off sentiment can extend further and so the yen can strengthen in the very near term.”

Against the yen, the euro has also gained 1.1 percent to 131.88 yen, pulling away from Thursday’s trough of 129.95.

Like the Japanese currency, the safe-haven Swiss franc has also fallen against the dollar and the euro. The dollar is up 0.7 percent against the Swiss franc at 0.9697 francs, while the euro is up 0.5 percent at 1.2515 francs.

Expectations that the U.S. Federal Reserve is ready to scale back its massive stimulus program have helped support the dollar.

The euro is down 0.2 percent at $1.2910 against the dollar, trading well within its recent range of $1.28-1.32. Some strategists, however, expect the euro to slip lower

The Australian dollar is struggling, with the market still betting on yet more interest rate cuts given slower growth in the country’s single biggest export market, China.

The Aussie ticked up 0.4 percent to $0.9673 this morning, after a test to the downside was blocked by option-related bids just under $0.9600, but it still stayed close to the 2012 nadir of $0.9581.

A break there would take it back to lows not seen since October 2011. It has fallen 9 percent from a high of $1.0583 set just last month.

 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.

Economimc Events 28/05/2013

07:00 EUR German Import Price Index (MoM)

Forecast: -0.5% Previous: -0.1%

The German Import Price Index measures the change in the price of imported goods purchased domestically. 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.

07:15 CHF Trade Balance

Forecast: 1,757.000B Previous: 1,900.000B

The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported. 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.

08:15 CHF Employment Level

Forecast: 4.10M Previous: 4.12M

The Employment Level measures the number of people employed during the previous quarter. Job creation is an important indicator of consumer spending. 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.

10:30 ZAR South African GDP (QoQ)

Forecast: 1.60% Previous: 2.10%

Gross National Product and Gross Domestic Product is the total value of the finished goods and services produced in the economy. It is not a precise measure of national economic well-being but expressed in volume (adjusted for inflation) it is the closest single number we have got to such a measure. It is the sum of final expenditures; Export of goods and services, Imports of goods and services, Private Consumption, Government Consumption, Gross Fixed Capital Formation and Increases/Decreases(-) in stocks. A higher than expected reading should be taken as positive/bullish for the ZAR , while a lower than expected reading should be taken as negative/bearish for the ZAR.

15:00 US CB Consumer Confidence

Forecast: 71.0 Previous: 68.1

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism. 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.

15:00 US Richmond Manufacturing Index

Forecast: Previous: -6

The Richmond Manufacturing Index rates the relative level of business conditions including shipments, new orders, and employment. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 100 manufacturers in the Richmond area. 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.

15:30 US Dallas Fed Mfg Business Index

Forecast: Previous: -15.60

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state factory activity. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share of firms reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero,suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. 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.e ILS.

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.

Technical Analysis Of The Currency Pairs 27/05/2013

EUR/USD
The single currency remained almost unchanged on Friday after volatile session, closing the weekly session at levels of 1.2927. Currently the pair is moving slightly up, but expectations remain rather neutral, which is confirmed by the Relative strength Index (RSI), located in the middle of the scale. On the upside, strong resistance is located at 1.3000 levels. A possible decline would bring the pair to retest the 1.2820 levels of support.

GBP/USD
The British pound recorded increase during the trading on Friday, closing the week at levels of 1.5119. The rise of the currency is continuing and today, as the pair is currently located at the levels of first resistance at 1.5150. If there is a breakthrough this level, the uptrend of the GBP/USD from 1.5010 will be confirmed. On the down side, any downturn would turn expectations to negative and the pair will head back to the support at 1.5010.

USD/JPY
The Japanese yen continued its climb at the end of the week, closing the session on Friday at levels of 101.25 after volatile session. On today’s session USD/JPY is moving downwards and broke the first support level at 101.00. For now, bias remains negative and further decline of the pair would lead it to test the 100.00 levels. On the upside, if there is an increase, the pair will head back to 102.00 levels.

USD/RUB
The pair registered volatile session on Friday closing the week with decline at levels of 31.12. Today the pair is moving slightly higher with first resistance expected at 31.41. Any decline would bring the pair down to the levels of first support at 31.00. On the bigger picture, the bias remains neutral, as the pair is moving in a range of 30.00-31.00.

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.