Dollar May Extend Loss Versus Euro on Rate-Cut Speculation
Bloomberg.com: Currencies
Wednesday, November 21, 2007
Bloomberg.com: Currencies
Bloomberg.com: Worldwide
Fed Pares Growth Forecast, Calls October Cut `Close'
Bloomberg.com: Worldwide
Today Market Outlook
Important Economic Calendar - Forex Factory.
UK
4.30 pm - MPC Meeting Minutes.
Forecast = 7 - 2. Previous = 8 - 1.
US
8.30 pm - Unemployment Claims.
Forecast = 330K. Previous = 339K.
10.00 pm - Consumer Sentiment.
Forecast = 75. Previous = 75.
Technical Analysis
GBPUSD
Last High = 2.0680. Low = 2.0455. Close = 2.0662.
Today Pivot Point
3rd Resistance = 2.0968.
2nd Resistance = 2.0824.
1st Resistance = 2.0743.
Pivot = 2.0599.
1st Support = 2.0518.
2nd Support = 2.0374.
3rd Support = 2.0293.
Strategy
Sell below today Pivot around 2.0590 with target 2.0520. Stop above 2.0620. Or Buy around 2.0610 with profit target around 2.0740 stop below 2.0590.
Monday, November 19, 2007
Today Market Outlook
Technical Chart Analysis.
EURUSD
Last Week High = 1.4726. Low = 1.4518. Close = 1.4657.
This Week Pivot Point
3rd Resistance = 1.4957.
2nd Resistance = 1.4841.
1st Resistance = 1.4749.
Pivot = 1.4633.
1st Support = 1.4541.
2nd Support = 1.4425.
3rd Support = 1.4333.
Last High = 1.4675. Low = 1.4581. Close = 1.4657.
Today Pivot Point
3rd Resistance = 1.4788.
2nd Resistance = 1.4731.
1st Resistance = 1.4694.
Pivot = 1.4637.
1st Support = 1.4600.
2nd Support = 1.4543.
3rd Support = 1.4506.
Strategy
Option 1 - Sell around 1.4680 with Profit Target around 1.4640 or 1.4600. Stop above 1.4700.
Option 2 - Buy above 1.4700 with Profit Target around 1.4760 or 1.4850. Stop below 1.4660.
For Details please email me here.
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Sunday, November 18, 2007
Bloomberg.com: Worldwide
G-20 Calls on Asia For More Currency Flexibility (Update2)
Bloomberg.com: Worldwide
Friday, November 16, 2007
Today Market Outlook
Important Economic Calendar - Forex Factory.
European
2.45 pm(Jakarta Time) - French Non-Farm Employment(q/q)(p).
Forecast = 0.3%. Previous = 0.3%.
3.15 pm - Swiss Retail Sales(y/y).
Forecast = 4.1%. Previous = 3.8%.
4.00 pm - Italian Trade Balance.
Forecast = -1.4B. Previous = -0.7B.
5.00 pm - Europe Trade Balance.
Forecast = 3.0B. Previous = 1.3B.
US
9.00 pm - TIC Net Long-Term Transaction.
Forecast = 72.0B. Previous = 69.3B.
9.15 pm - Industrial Production(m/m).
Forecast = 0.1%. Previous= 0.1%.
9.15 pm - Capacity Utilization Rate.
Forecast = 82.0 Previous = 82.1.
Technical Chart Analysis.
GBPUSD
Last High = 2.0619. Low = 2.0415. Close = 2.0438.
Today Pivot Point
3rd Resistance = 2.0770.
2nd Resistance = 2.0694.
1st Resistance = 2.0566.
Pivot = 2.0490.
1st Support = 2.0362.
2nd Support = 2.0286.
3rd Support = 2.0158.
Today strategy.
Direction - Down.
Sell around Pivot 2.0490 with Profit Target around 2.0340. Stop above 2.0520.
Wednesday, November 14, 2007
Today Market Outlook
Technical Chart Analysis
EURUSD
Yesterday resulted losses 20 pips.
Last High = 1.4633. Low = 1.4518. Close = 1.4616.
Today Pivot Point
3rd Resistance = 1.4775.
2nd Resistance = 1.4704.
1st Resistance = 1.4660.
Pivot = 1.4589.
1st Support = 1.4545.
2nd Support = 1.4474.
3rd Support = 1.4430.
Today Strategy
Direction = Up.
Suggest Sell around 1.4650 with 1st profit target 1.4570; 2nd target around 1.4430. Stop above 1.4680.
Bloomberg News
Indonesia Rules Out Rate Cuts in `Very Near Future' (Update1)
Nov. 14 (Bloomberg) -- Indonesia's central bank ruled out more interest rate cuts in the ``very near future'' as rising global crude oil prices may fan inflation.
``We have to be cautious,'' Bank Indonesia's Senior Deputy Governor Miranda Goeltom said in an interview in Jakarta. ``There is still some room to cut rates in the future, but not in the very near future.''
Indonesia's central bank has kept its benchmark rate unchanged at 8.25 percent since July, after 13 cuts in the previous 15 months, as oil approaching $100 a barrel threatens its inflation target. Higher fuel prices may also damp growth in Southeast Asia's largest economy, Goeltom said. Click here for more details.
Today Market Outlook
Important Economic Calendar - Forex Factory.
European
2.00 pm (Jakarta Time) - German GDP(q/q)(p).
Forecast = 0.60%. Previous = 0.30%.
2.45 pm - French GDP(q/q)(p).
Forecast = 0.60%. Previous = 0.30%.
3.00 pm - ECB President Trichet Speaks.
UK
4.30 pm - Average Earning Index + Bonus.
Forecast = 4.0%. Previous = 3.7%.
4.30 pm - Claimant Count Change.
Forecast = -6.2K. Previous = -12.8K.
5.30 pm - BOE Inflation Report.
US
8.30 pm - Retail Sales(m/m).
Forecast = 0.2%. Previous = 0.6%.
8.30 pm - Core Retail Sales(m/m).
Forecast = 0.3%. Previous = 0.4%.
8.30 pm - PPI(m/m).
Forecast = 0.3%. Previous = 0.1%.
8.30 pm - Core PPI(m/m).
Forecast = 0.2%. Previous = 0.1%.
9.10 pm - Fed Chairman Bernanke Speaks.
Bloomberg News
Paulson Becomes Boxed-in by `Strong' Dollar Chant
Nov. 13 (Bloomberg) -- As U.S. Treasury Secretary Henry Paulson prepares to meet counterparts representing the world's biggest economies, he carries some extra baggage on the plane to Africa.
It's the 13-year-old ``strong'' dollar mantra.
Paulson, like his four predecessors, has stuck with former Treasury chief Robert E. Rubin's phrase that a ``strong'' dollar is in the U.S. interest. Officials repeated the phrase whether the dollar was rising or falling. Now, Paulson is under pressure from European policy makers to more forcefully defend the currency after it fell to a record low last week.
``It's increasingly urgent that the U.S. bolsters its rhetorical position,'' said Ernest-Antoine Seilliere, president of BusinessEurope, the European Union's employers' federation. Paulson should avoid a ``collapse of the U.S. dollar,'' he said.
One option may be to express confidence the currency will retain its dominance in central-bank reserves and, as Paulson did last week, predict stronger American growth, analysts said.
That strategy may meet with limited success because the Federal Reserve is cutting interest rates, while banks in Europe and Asia are either tightening or keeping them unchanged. Moreover, words may carry little weight in a market that's swollen to $3.2 trillion a day.
Paulson, 61, departs today for a six-day trip to Africa that features a gathering of finance ministers and central bankers from the Group of 20 near Cape Town. The G-20 groups the largest developed countries, including the U.S. and Germany, with emerging markets such as China and India.
Top of Agenda
Currencies, oil prices and inflation will top the G-20's agenda, South African central bank Governor Tito Mboweni told reporters on Nov. 8.
Japanese Prime Minister Yasuo Fukuda said in an interview with the Financial Times published today that the yen's gains aren't desirable and warned traders not to make speculative bets on the currency.
Canadian Finance Minister Jim Flaherty will tell his counterparts that Canada is bearing a disproportionate share of the drop in the dollar and will ask China and other nations to accept more of the burden, one of his aides told reporters today in Ottawa on condition of anonymity.
Message for China
European finance ministers gathered today in Brussels and telegraphed a similar message on China. Luxembourg Finance Minister Jean-Claude Juncker also said ``recent sharp moves in exchange rates are unwelcome,'' referring to the euro's climb.
European Central Bank President Jean-Claude Trichet has revived rhetoric blasting excessive moves in the euro. He said at a Frankfurt press conference last week that ``brutal'' fluctuations are ``never welcome,'' emulating language used when the euro soared in 2004.
Trichet typically reiterates comments from Group of Seven statements when asked about exchange rates. When he veers from that line, traders and counterparts can quickly grasp his message.
The euro climbed to $1.4752 on Nov. 9, the strongest since its 1999 debut. The currency has appreciated 11 percent since the start of 2007 and 45 percent in the past five years. It traded at $1.4616 at 10:14 a.m. in New York.
`Frustrated'
``The Europeans will be frustrated,'' said Peter Dixon, an economist in London at Commerzbank AG, Germany's second-biggest bank. ``European competitiveness and profitability are going to be badly damaged.''
Paulson doesn't have Trichet's flexibility to express concern at the speed of the dollar's move, analysts said. Any substantive change from the ``strong dollar'' phrase raises risks that the shift could send it plunging.
When Paul O'Neill, President George W. Bush's first Treasury secretary, told a German newspaper that ``we don't follow, as is often said, a policy of a strong dollar,'' the U.S. currency slid 1 percent versus the euro. He later clarified that he did favor a ``strong'' dollar.
O'Neill's successor, John Snow, added a phrase that the Bush administration also believes exchange rates ought to be set freely in open markets, based on fundamentals.
Paulson on two occasions last week added his own words to his support for a strong dollar and market-set exchange rates based on fundamentals. On Nov. 8, he said that the U.S. ``will continue to grow'' and expressed optimism that officials' commitment to growth will inspire ``confidence in our economy.''
A day later, he told reporters ``The dollar has been the world's reserve currency since World War II and there's a reason.''
`Marginal Change'
``It was a marginal change,'' said Sophia Drossos, a currency strategist in New York at Morgan Stanley, who used to help manage the Fed's currency reserves. ``He didn't have to point those things out if he didn't want to. It was a way to show he's not asleep at the wheel.''
While a weakening dollar has helped sustain U.S. growth through the worst housing recession since 1991, analysts said there are reasons for Americans to favor a stronger currency, similar to the time of the 1994-1995 birth of the strong-dollar policy.
Inflation
The falling currency threatens to stoke inflation at a time when the Fed has been lowering interest rates to buttress growth. Chairman Ben S. Bernanke said last week the Fed will ensure the weaker dollar doesn't feed through to broader prices. There are also questions about the dollar's status as the dominant reserve currency.
``It appears that the U.S. Treasury has consistently moved'' in the direction of resurrecting the original attributes of a strong-dollar policy, said Thomas Stolper, an economist at Goldman Sachs Group Inc. in London.
Still, any shifts in language may have limited impact on exchange rates, particularly because the dollar is losing its yield premium as the Fed cuts interest rates, analysts said.
Traders now buy and sell an average of $3.2 trillion a day in the foreign-exchange market, compared with $718 billion in 1989, Bank for International Settlements figures show.
To contact the reporter on this story: Chris Anstey at canstey@bloomberg.net Last Updated: November 13, 2007 11:27 EST
Tuesday, November 13, 2007
Bloomberg.com: Currencies
Sell Euro as ECB May Intervene to Check its Advance, UBS Says
Bloomberg.com: Currencies
Today Market Outlook
Important Economic Calendar - from Forex Factory.
Japan
Interest Rate Announcement
Forecast = 0.50%. Previous = 0.50%.
BOJ Governor Fukui Speak
UK
4.30 pm(Jakarta Time) - CPI(y/y)(Consumer Price Index).
Forecast = 1.90%. Previous = 1.80%.
4.30 pm - Core CPI(y/y).
Forecast =1.70%. Previous = 1.50%
Europe
5.00 pm - German ZEW Economic Sentiment.
Forecast = -19.5. Previous = -18.1.
US
3.00 am - Pending Home Sale(m/m).
Forecast = -2.6%. Previous = -6.5%
Technical Chart Analysis
EURUSD
Last High = 1.4668. Low = 1.4526. Close = 1.4532.
Today Pivot Point
3rd Resistance = 1.4766.
2nd Resistance = 1.4717.
1st Resistance = 1.4624.
Pivot = 1.4575.
1st Support = 1.4482.
2nd Support = 1.4433.
3rd Support = 1.4340.
Strategy
Direction = Down
Sell around 1.4560 with Profit Target 1.4480 or may target 1.4430. Stop above 1.4580.
Monday, November 12, 2007
UK Market Outlook
Important Economic Calendar please scroll down.
Resulted for USDJPY - Profit 80 pips.
Technical Chart Analysis
GBPUSD
Last High = 2.1171. Low = 2.0870. Close = 2.0903.
Today Pivot Point
3rd Resistance = 2.1393.
2nd Resistance = 2.1282.
1st Resistance = 2.1092.
Pivot = 2.0981.
1st Support = 2.0791.
2nd Support = 2.0680.
3rd Support = 2.0490.
Strategy
Direction = down.
Sell around 2.0875 with 1st profit target at 2.0800, then set trailing stop 30 pips if below 2.0750.Stop above 2.0915.
Today Market Outlook
Today US market holiday.
Important Economic Calendar - from Forex Factory.
Japan
6.50 am(Jakarta Time) - CGPI (y/y)
Forecast = 2.2%. Previous = 1.7%.
6.50 am - Current Account
Forecast = 2.10T. Previous = 2.19T.
12.00 pm - Household Confidence
Forecast = . Previous = 44.1.
UK
4.30 pm - PPI(Producer Price Index) Input(m/m)
Forecast = 1.5%. Previous = 3.2%.
4.30 pm = PPI Output(m/m).
Forecast = 0.2%. Previous = 0.1%.
Technical Chart Analysis.
USDJPY
Last High = 112.86. Low = 110.49. Close = 110.69.
Today Pivot Point
3rd Resistance = 114.57.
2nd Resistance = 113.71.
1st Resistance = 112.20.
Pivot = 111.34.
1st Support = 109.83.
2nd Support = 108.97.
3rd Support = 107.46.
Strategy
Direction = Down
Sell around Pivot or Trendline Resistance with profit target today support 1. Stop 111.40
See chart below:
Sunday, November 11, 2007
Forex Online Manual For Successful Trading
Main Stages of Recent Foreign Exchange
Development
The main phases of the further development of the Forex in modern
times were:
• signing of the Bretton Woods Accord;
• constitution of the international monetary fund (IMF);
• emergency of the free-floating foreign exchange markets;
• creation of currency reserves;
• constitution of the European Monetary Union and the European
Monetary Cooperation Fund;
• introduction of the Euro as a currency.
The Bretton Woods Accord was signed in July 1944 by the United States,
Great Britain, and France which agreed to make the currency market stable,
particularly due to governmental controls on currency values. In order to
implement it, two major goals were: emphasized: to provide the pegging
(backing of prices) of currencies and to organize the International Monetary Fund
(IMF).
In accordance to the Bretton Woods Accord, the major trading currencies
were pegged to the U.S. dollar in the sense that they were allowed to fluctuate
only one percent on either side of that rate. When a currency exceeded this
range, marked by intervention points, the central bank in charge had to buy it or
sell it, and thus bring it back into range. In turn, the U.S. dollar was pegged to
gold at $35 per ounce. Thus, the U.S. dollar became the world's reserve currency.
The purpose of IMF is to consult with one another to maintain a stable
system of buying and selling the currencies, so that payments in foreign
money can take place between countries smoothly and timely.
The IMF lends money to members who have trouble meeting financial
obligations to other members, on the condition that they undertake economic
reforms to eliminate these difficulties for their own good and the good of the
entire membership. In total the main tasks of the IMF are:
• to promote international cooperation by providing the means for
members to consult and collaborate on international monetary issues;
• to facilitate the growth of international trade and thus contribute to
high levels of employment and real income among member nations;
• to promote stability of exchange rates and orderly exchange
agreements, and [to] discourage competitive currency depreciation;
• to foster a multilateral system of international payments, and to seek
the elimination of exchange restrictions that hinder the growth of world trade;
• to make financial resources available to members, on a temporary
basis and with adequate safeguards, to permit them to correct payments
imbalances without resorting to measures destructive to national and international
prosperity.
To execute these goals the IMF uses such instruments as Reserve tranche
which allows a member to draw on its own reserve asset quota at the time of
payment, Credit tranche drawings and stand-by arrangements are the standard
form of IMF loans, the compensatory financing facility extends financial help to
countries with temporary problems generated by reductions in export revenues,
the buffer stock financing facility which is geared toward assisting the stocking
up on primary commodities in order to ensure price stability in a specific
commodity and the extended facility designed to assist members with financial
problems in amounts or for periods exceeding the scope of the other facilities.
Since 1978 free-floating of currencies were officially mandated by the
International Monetary Fund. That is the currency may be traded by anybody and
its value is a function of the current supply and demand forces in the market, and
there are no specific intervention points that have to be observed. Of course, the
Federal Reserve Bank irregularly intervenes to change the value of the U.S.
dollar, but no specific levels are ever imposed. Naturally, free-floating
currencies are in the heaviest trading demand. Free-floating is not the sine qua
non condition for trading. Liquidity is also an indispensable condition.
A tool for people and corporations to protect investments in times of
economic or political instability is currency reserves for international
transactions. Immediately after the World War II the reserve currency worldwide
was the U.S. dollar. Currently there are other reserve currencies: the euro and
the Japanese yen. The portfolio of reserve currencies may change depending on
specific international conditions, for instance it may include the Swiss franc.
The creation of the European Monetary Union was the result of a long and
continuous series of post-World War II efforts aimed at creating closer economic
cooperation among the capitalist European countries. The European Community
(EC) commission's officially stated goals were to improve the inter-European
economic cooperation, create a regional area of monetary stability, and act as "a
pole of stability in world currency markets."
The first steps in this rebuilding were taken in 1950, when the European
Payment Union was instituted to facilitate the inter-European settlements of
international trade transactions. The purpose of the community was to promote
inter-European trade in general, and to eliminate restrictions on the trade of coal
and raw steel in particular.
In 1957, the Treaty of Rome established the European Economic
Community, with the same signatories as the European Coal and Steel
Community. The stated goal of the European Economic Community was to
eliminate customs duties and any barriers against the transit of capital, services,
and people among the member nations. The EC also started to raise common
tariff barriers against outsiders.
The European Community consists of four executive and legislative bodies:
1. The European Commission. The executive body in charge of making
and observing the enforcement of the policies. Since it lacks an enforcement
arm, the commission must rely on individual governments to enforce the policies.
There are 23 departments, such as foreign affairs, competition policy, and
agriculture. Each country selects its own representatives for four-year terms. The
commission is based in Brussels and consists of 17 members.
2. The Council of Ministers. Makes the major policy decisions. It is
composed of ministers from the 12 member nations. The presidency is held for
six months by each of the members, in alphabetical order. The meetings take
place in Brussels or in the capital of the nation holding the presidency.
3. The European Parliament. Reviews and amends legislative proposals
and has the power to adopt or reject budget proposals. It consists of 518
elected members. It is based in Luxembourg, but the sessions take place in
Strasbourg or Brussels.
4. The European Court of Justice. Settles disputes between the EC and
the member nations. It consists of 13 members and is based in Luxembourg.
In 1963, the French-West German Treaty of Cooperation was signed. This
pact was designed not only to end centuries of bellicose rivalry, but also to
settle the postwar reconciliation between two major foes. The treat stipulated
that West Germany would lead economically through the cold war, and France,
the former diplomatic powerhouse, would provide the political leadership. The
premise of this treaty was obviously correct in an environment defined by a
foreseeable long-term continuing cold war and a divided Germany. Later in this
chapter, we discuss the implications for the modern era of this enormously
expensive pact.
A conference of national leaders in 1969 set the objective of establishing a
monetary union within the European Community. This goal was supposed to be
implemented by 1980, when a common currency was planned to be used in
Europe. The reasons for the proposed common currency unit were to stimulate
inter-European trade and to weld together the individual member economies in
order to compete successfully with the economies of the United States and
Japan.
In 1978, the nine members of the European Community ratified a new plan
for stability—the European Monetary System. The new system was practically
established in 1979. Seven countries were then full members—West
Germany, France, the Netherlands, Belgium, Luxembourg, Denmark, and
Ireland. Great Britain did not participate in all of the arrangements and Italy
joined under special conditions. Greece joined in 1981, Spain and Portugal in
1986. Great Britain joined the Exchange Rate Mechanism in 1990.
The European Monetary Cooperation Fund was established to manage
the EMS' credit arrangements. In order to increase the acceptance of the
ECU, countries that hold more ECU deposits, or accept as loan repayment more
than their share of ECU, receive interest on the excess ECU deposits, and vice
versa. The interest rate is the weighted average of all the EMS members'
discount rates.
In 1998 the Euro was introduced as an all-European currency. Here are
the official locking rates of the 11 participating European currencies in the
euro (EUR). The rates were proposed by the EU Commission and approved by
EU finance ministers on December 31, 1998, ahead of the launch of the euro
at midnight, January 1, 1999.
The real starting date was Monday, January 4, 1999. The conversion
rates are:
1 EUR = 40.3399 BEF 1 EUR = 1.95583 DEM
1 EUR = 166.386 ESP 1 EUR = 6.55957 FRF
1 EUR = 0.787564 IEP 1 EUR = 1936.27 ITL
1 EUR = 40.3399 LUF 1 EUR = 2.20371 NLG
1 EUR = 13.7603 ATS 1 EUR = 200.482 PTE
1 EUR = 5.94573 FIM
The euro bills are issued in denominations of 5, 10, 20, 50, 100, 200,
and 500 euros. Coins are issued in denominations of 1 and 2 euros, and 50,
20,10, 5, 2, and 1 cent.
Forex Online Manual For Successful Trading
Foreign Exchange in a Historical Perspective
Currency trading has a long history and can be traced back to the ancient
Middle East and Middle Ages when foreign exchange started to take shape after
the international merchant bankers devised bills of exchange, which were
transferable third-party payments that allowed flexibility and growth in foreign
exchange dealings.
The modern foreign exchange market characterized by the consequent
periods of increased volatility and relative stability formed itself in the twentieth
century. By the mid-1930s London became to be the leading center for foreign
exchange and the British pound served as the currency to trade and to keep as a
reserve currency. Because in the old times foreign exchange was traded on the
telex machines, or cable, the pound has generally the nickname “cable”. In 1930,
the Bank for International Settlements was established in Basel, Switzerland, to
oversee the financial efforts of the newly independent countries, emerged after
the World War I, and to provide monetary relief to countries experiencing
temporary balance of payments difficulties.
After the World War II, where the British economy was destroyed and the
United States was the only country unscarred by war, U.S. dollar became the
prominent currency of the entire globe. Nowadays, currencies all over the world
are generally quoted against the U.S. dollar.
Forex Online Manual For Successful Trading
Part 1- Introduction.
Foreign Exchange as a Financial Market
Currency exchange is very attractive for both the corporate and individual
traders who make money on the Forex - a special financial market assigned for
the foreign exchange. The following features make this market different in
compare to all other sectors of the world financial system:
• heightened sensibility to a large and continuously changing number of
factors;
• accessibility to all traders in the major currencies;
• guaranteed quantity and liquidity of the major currencies;
• increased consideration for several currencies, round-the clock
business hours which enable traders to deal after normal hours or during
national holidays in their country finding markets abroad open and
• extremely high efficiency relative to other financial markets.
This goal of this manual is to introduce beginning traders to all the
essential aspects of foreign exchange in a practical manner and to be a source of
best answers on the typical questions as why are currencies being traded, who are
the traders, what currencies do they trade, what makes rates move, what
instruments are used for the trade, how a currency behavior can be forecasted and
where the pertinent information may be obtained from. Mastering the content of
an appropriate section the user will be able to make his/her own decisions, test
them, and ultimately use recommended tools and approaches for his/her own
benefit.
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