User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday March 21, 2008 - 12:43:24 GMT
Global-View - www.global-view.com

Share This Story:
| | Email

FX Blog- Month Ahead Outlook for Major Currencies


US Currency Outlook -- Forex Currency Pairs


Forex Currency Pairs

The pros at GVI prepare forex currency market reports weekly. Reports focus on the dollar and major currency pairs. Forex forecast services are a product of GVI. Check out our weekly forecast of key forex currency pairs at this location.




March 23, 2008

Forex Forecast of Major Currency Pairs


Deleveraging has become the new buzz-word in the financial markets. At this juncture, it is not clear whether this was a coordinated policy decision by the central banks or if it was just the product of the latest phase of the post-sub-prime period. Major banks globally are being pressured to improve their capitalization. There are two ways to improve ones capital ratio. One is to increase the denominator (increase capitalization), and the other way is to shrink the numerator (i.e. Assets or leveraged loans outstanding). The focus in the latest week has been on reducing the leveraged loans of customers. Central banks, such as the Fed, have been providing additional sources of liquidity to the banking system, and in so doing have increased their ability to pressure the major players. Since many of the leverage positions were leveraged against short USD, e.g. long EUR, commodity currencies, commodities, gold, oil etc., a sudden unwinding of those positions means sharp corrections in the value of those investments and an improvement in the USD. The key question now is whether the events of the latest week are just a correction or the start of a new trend.

U.S. economic data continue to deteriorate and it appears that short-term interest rate differentials are likely to continue to widen against the U.S. currency. In the latest week, the Fed cut its discount rate in two steps by 100 bps and the Fed Funds target by 75bps to 2.25%. The fact that there was mild disappointment that the central bank cut its funds rate by 75bps and some were disappointed that they had not eased by more is an illustration of how weak the economy has become.

There still have been no clear signs that either the U.S. Treasury or the Fed is having serious concerns about the weakness of the currency. Secretary Paulson seems to be most focused on the lift the weak currency has been giving to the export sector. Certainly neither wants to see USD weakness to get out of hand or to create weakness in the bond markets, but so far this has not happened. Ongoing deleveraging could remain a (albeit temporary) source of support. The unwinding of risk trades funded by the JPY has continued. It is typical for funds to be repatriated to Japan ahead of its fiscal yearend at the close of March.

President Trichet has been making it clear recently that Europe is still a long way from a rate cut, even though the European economy outside of Germany is showing signs of slowing.

Concern that the ECB will repeat the mistakes of the Fed has been an issue for the EUR. Similar concerns are being expressed about the U.K. and Japan, although the BOE already cut rates in early February. Japanese overnight rates (0.50%) are already hovering at near zero levels anyway.

Forex Market Implications:

Much of the time, interest rate differentials drive the forex markets. Thus with U.S. rates already haven fallen to well below the prevailing levels of the Euro-zone, it is safe to conclude that the USD should remain at risk. However, we will have to wait to see how the deleveraging process plays out. For now, the deleveraging process is a USD positive.



The U.S. and Eurozone economies are both slowing, but the U.S. is much further along in the process. Note below in the U.S. Monetary Policy outlook insert below that official U.S. rates appear still headed lower. This remains a potential USD negative.


UNITED STATES

GVI U.S. Feberal Reserve Bank Policy Meeting Preview

  • Decision: April 30 at 19:15 GMT.
  • Fed Funds rate: 2.25%
  • Expected Decision: -50bp cut
  • Short-term market sentiment contnues to exert a strong infuence on Fed policy decisions. On Tuesday March 18, the central bank cut its funds target by -75bps to 2.25%. That week it also reduced the discount rate by 100 bps to 2.50%. The focus of policy is to reliquify the U.S. financial system. The markets are now expecting a futher -50 bps rate cut on April 30..

FEDERAL RESERVE Policy Objective: The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

uscpi

The chart above shows year/year core PCE for the U.S. relative to its its reported "comfort zone for this key price index. Headline and Core CPI figures are also shown.

ezcpi

ezcpi




s-t rates

The above monthly U.S. employment chart is included because its the most closely followed data release each month, and because one of the objectives of the Fed is to maximize employment.

s-t rates


s-t rates

The chart above shows the current three month libor rate, the current Fed funds target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel U.S. interest rates are headed.




interest rates

The chart above shows the U.S. Fed Funds rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

Major Currency Pairs - Currency Forecasts- Monthly Perspective

foreign currency pairs

The ECB has been sending signals that its monetary policy is neutral (see policy insert below). Notable also have been the effective tightening of policy due to rising credit spreads. Restraining the EUR could be expectations for a cooling of the Eurozone economy and an unresponsive ECB.


EUROZONE

GVI European Central Bank Policy Meeting Preview

  • Decision: April 10 at 12:45 GMT.
  • ECB Refi rate: 4.00%
  • Expected Decision: No Change
  • ECB President Trichet signaled no future policy changes after its March meetng. While the central bank is till talking tough about inflation, it might now be consideringing a more neutral posture on policy. Key Eurozone PMI figures, which correlate well with GDP, are pointing to a developing economic slowdown.

    ECB Policy Objective: The primary objective of the ECB's monetary policy is to maintain price stability. The ECB aims at inflation rates of below, but close to, 2% over the medium term.

    ezcpi

    The chart above shows year/year HICP (Harmonized CPI) for the Eurozone relatrive to its "below 2%" target level.

    ezcpi

    ezcpi




s-t rates

The chart above shows the current three month libor rate, the current ECB  "refi" rate target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel Eurozone interest rates are headed.


interest rates

The chart above shows the ECB refi rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

forex forecast services Japanese repatriations have been a recent source of JPY demand. Another impetus for this unwinding of positions has been an expectation that China will allow an increased pace of revaluations of the yuan vs. the USD.



JAPAN

GVI BOJ Policy Meeting Preview

  • Decision: April 9
  • Current Overnight Target Rate: 0.50%
  • Expected decision: No change.
  • There is modest market speculation now about a future BOJ rate CUT. Note below that core and headline CPI remain mildly deflationary. Also the economy has started to slow again. The political situation also is unstable. Despite official talk about policy "normalization" a move to higher rates anytime soon is unlikely and would be ill-advised. Note in the short-term rate chart below that the markets have adjusted out the odds of future hikes.

BANK OF JAPAN Policy Objective: The Bank of Japan Law states that the Bank's monetary policy should be "aimed at, through the pursuit of price stability, contributing to the sound development of the national economy."

Nationwide CPI

The chart above shows year/year core nationwide CPI and the reported BOJ goal of between 0% and 2% for this price index. 

Manufacturing PMI


s-t rates

The chart above shows the current three month libor rate, the current BOJ overnight rate target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel Japanese interest rates are headed.


interest rates

The chart above shows the Japanese overnight rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

major currency pairs The BOE cut rates at its February meeting as expected. Future rate reductions are seen. The GBP has come under pressure thanks to the credit exposure of U.K. institutions to the sub-prime debt. The BOE caved following considerable criticism because of its slow policy response to the sub-prime crisis. It appears that the BOE has been leaning against it banks to deleverage as well.


UNITED KINGDOM

GVI Bank of England Policy Meeting Preview

  • Decision: April 10 at 12:00 GMT.
  • BOE Repo Rate: 5.25%
  • Expected Decision: Possible -25bp rate cut.
  • The BOE outlook remains mixed as policy makers have to balance concerns about inflation against the risk of a slowing economy. Note below that both the U.K. Manufacturng and Services PMIs have turned south. Inflation data are mixed. See also that the short-term credit markets are expecting further rate reductions over time.

    BANK OF ENGLAND Policy Objective: The Bank's monetary policy objective is to deliver price stability, low inflation, and, subject to that, to support the Government's economic objectives including those for growth and employment. Price stability is defined by the Government's inflation target of 2%.

    ezcpi

    The chart above shows year/year CPI for the U.K. relative to its 2% target for this key price index. 


    ezcpi




s-t rates

The chart above shows the current three month libor rate, the current Repo Rate  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel U.K. interest rates are headed.


interest rates

The chart above shows the U.K. repo rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

forex currency market reports The Swiss National Bank tries to maintain a stable relationship of the CHF vs. the EUR. It is never pleased with weakness of the CHF against the EUR. SNB President Roth has sent a clear signal that the final rate hike of this tightening cycle has probably been seen.



SWITZERLAND

GVI Swiss National Bank Policy Meeting Preview

  • Decision: June 19 at 12:00 GMT.
  • SNB 3mo Swiss libor target: 2.75%
  • Expected Decision: No Change
  • There are concerns that the global economy is slowing. The SNB has indicated that the peak in interest rates has been reached. The rise of the CHF has been a restraint on the economy as well. The Swiss CPI (see below) is well below its target ceiling. The SNB manages the value of the CHF as critical element of monetary poilcy.

    SWISS NATIONAL BANK Policy Objective: The National Bank equates price stability with a rise in the national consumer price index (CPI) of less than 2% per annum. In so doing, it takes account of the fact that not every price movement is necessarily inflationary. Furthermore, it believes that inflation cannot be measured accurately. Measurement problems arise, for example, when the quality of goods and services improves. Such changes are not properly accounted for in the CPI; as a result, inflation, as measured by the CPI, will be slightly overstated.

    chcpi

    The chart above shows year/year CPI and the Swiss goal of less than 2% for this price index. 

    chpmi




s-t rates

The chart above shows the current three month libor rate, the current three-month Euro-Swiss target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel Swiss interest rates are headed.


interest rates

The chart above shows the Swiss three-month Euro-swiss rate target, three month libor, and two- and ten-year bond yields over the past twelve months.

currency exchange forecast The Australian economy has been improving. A key focus for the Reserve Bank of Australia remains above target inflation, plus strong employment and commodity demand. This has kept the AUD underpinned. The Reserve Bank of Australia is still trying to rein in price pressures.


AUSTRALIA

GVI Reserve Bank of Australia Policy Meeting Preview

  • Decision Anouncement: April 1 at 03:30 GMT.
  • RBA Cash Rate Target: 7.25%
  • No rate changes likely.
  • Inflation continues to be a problem for the Reserve Bank. Nevertheless, the policy statement with the March 4 rate hike of +25bps to 7.25% suggested some softness could be developing in the economy. This suggests that rates have reached their cyclical peaks. Note in the chart below that the two RBA core measure are pressing the top end of the bank's allowable limit. The global economic slowdown and historic highs of AUD are likely to restrain the risk of future rate hikes.

RESERVE BANK OF AUSTRALIA Policy Objective: The policy objective is a target for consumer price inflation, of 2-3 per cent per annum. Monetary policy aims to achieve this over the medium term and, subject to that, to encourage the strong and sustainable growth in the economy. Controlling inflation preserves the value of money. In the long run, this is the principal way in which monetary policy can help to form a sound basis for long-term growth in the economy.

aucpi

The chart above shows year/year and the CPI target of 2% to 3% for this price index. 

aupmi


s-t rates

The chart above shows the current three month bank bill rate, the current Cash Rate target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel Australian interest rates are headed.


interest rates

The chart above shows the Australian overnight rate target, three month bank bills, and two- and ten-year bond yields over the past twelve months.

us currency Trading in the CAD has become increasingly volatile recently as JPY carry trades are unwound. The Bank of Canada has been making precautionary rate cuts to keep pace with the Fed. The fear is that the Canadian economy will be dragged down by U.S. economic weakness. Additional rate cuts could still be in the pipeline.


CANADA

GVI Bank of Canada Policy Meeting Preview

  • Decision: April 22 at 14:00 GMT.
  • BOC Overnight Target Rate: 3.50%
  • Expected Decision: Odds favor another -25bp rate cut. The latest policy statement and BOC comments suggest that further cuts are in the pipeline.
  • There are concerns that the Canadian economy could be negatively impacted by the global economic slowdown and the high level of the Canadian currency. Note below that both the Ivey Manufacturng PMI might have started to weaken. BOC core inflation is below bank estimates. The high level of the Canadian currency. Short-term credit markets anticipate additional rate cuts through 3Q08.

    BANK OF CANADA Policy Objective: The Bank of Canada aims to keep inflation at the 2 per cent target, the midpoint of the 1 to 3 per cent inflation-control target range. This target is expressed in terms of total CPI inflation, but the Bank uses a measure of core inflation as an operational guide. Core inflation provides a better measure of the underlying trend of inflation and tends to be a better predictor of future changes in the total CPI.

    cacpi

    The chart above shows year/year CPI-X (core CPI) and the target of 2% for this price index. 

    PMI


s-t rates

The chart above shows the current three month Banker Acceptance rate, the current BOC overnight rate target  and where the futures markets are currently trading three month rates for the specified periods in the future. The chart also includes comparisons of where these futures rates were trading most recently, a week ago and four weeks ago.  The chart provides a view on where the markets feel Canadian interest rates are headed.


interest rates

The chart above shows the Canadian overnight rate target, three month Bankers Acceptance, and two- and ten-year bond yields over the past twelve months.

John M. Bland is a co-founder and partner of Global-View.com. Prior to Global-View.com, he was a Vice-President and senior dealer in a forex inter-bank and futures trading arm of a subsidiary (ContiCurrency) of the Continental Grain Company in NYC. Previous to that, he was one of the early members of the Chemical Bank corporate advisory service in NYC, and also worked in international liability management for that bank. John holds an MBA from the Hass School at the University of California at Berkeley and a bachelor�s degree in International Economics from Berkeley.

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 18 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Wed 18 Oct
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales

Forex Trading Outlook


Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.

  • POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.



  • POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.

  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.



  • POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.


  • POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105