Forex News Blog
Back to The Headlines
Friday August 8, 2008 - 14:08:22 GMT
Share This Story
BHF-Bank - www.bhf-bank.com
Forex Blog - FX Briefing - Dollar rebounds sharply
FX Briefing 8
ECB admits that
the economy is weakening
Q2 growth in
eurozone and Japan set to be negative: recession could be looming
Dollar rebounds sharply
the course of the week, the dollar strengthened against almost all major
currencies. USD-JPY rose to nearly 110, whereas EUR-USD is now only around
1.51. The pound Sterling dropped by about 6 cents to 1.92. The Australian, New
Zealand and Canadian
currencies lost even more ground against the US dollar, as did the forint,
zloty and the Czech koruna.
had little to do with developments in the US
itself: contrary to the fears of some market participants, the FOMC statement
gave no indication of a hawkish bias. The movement was triggered by increasing
concern about growth in the other industrialized countries and in emerging
markets too. Despite the fact that prices are still rising sharply, interest
rate cuts are no longer totally out of the question: the Australian central
bank signaled an intention to do so, and the Czech central bank cut interest
rates unexpectedly to 3.5%.
the signs are indicating that economic growth in both the eurozone and Japan
fell sharply in the second quarter. The relevant national data for both regions
and Eurostat figures are due to be published
next week. Furthermore, there is a strong possibility that the slowdown will
continue in the third quarter, which could result in both regions falling into
a recession (in the technical sense of two negative quarters).
real GDP is expected to have fallen by about 0.5% quarter-on-quarter in Q2,
mainly due to weak private consumption and negative net exports. Given that the
index of coincident economic indicators has been below the critical level of 50
for four consecutive months in June, the government in Tokyo
is now officially assuming that the country has â€śvery probably entered a recessionâ€ť.
the eurozone, it looks as though Q2 2008 could be the first quarter with
negative growth since the introduction of monetary union. Italy
has been losing steam for some time, and the latest figures released this
Friday showed that Italian Q2 GDP dropped by 0.3% quarter-onquarter. In Germany,
which has recently been regarded as the main driver of growth in the eurozone, the
picture could change even more drastically. We are now expecting real GDP to
have plummeted by 0.7% quarter-on-quarter in Q2. If at the same time the Q1
growth rate is revised down somewhat, which we think is likely, the year-on-year
growth rate might have fallen below potential. France
will presumably have just managed to remain slightly above zero quarter- on-quarter.
For the eurozone as a whole, we are expecting growth to have slowed to â€“0.2% quarter-on-quarter.
the past months, the ECB had pointed out that there would be a negative
technical reaction to the strong growth in the first quarter, which was caused
by special factors. At last Thursdayâ€™s press
conference, however, the central bank admitted that growth was slowing down
and that this was not due to technical reasons alone. According to the ECB,
weaker global demand, also in emerging markets, and high energy and commodity
prices are the main factors dampening economic growth, and will continue to do
so in the third quarter.
that the economic outlook has changed, raising interest rates in the eurozone
is not likely
be on the cards. We are expecting the ECB to revise its growth projections down
further in September. In view of falling oil and commodity prices, its
assessment of inflation development is not likely to be revised significantly.
However, this assessment sees prices falling slightly at first, and then more
markedly in the fourth quarter. If economic growth remains weak, there could
even be scope for interest rate cuts towards the end of the year.
our view, the interest rate gap between the US
and the eurozone is set to narrow. This would probably help to strengthen the
dollar, which has been weighed down heavily by the credit crisis and its
consequences. This is not likely to be a straight-line process: the dollarâ€™s
sharp appreciation movement over the last few days is actually crying out for a
correction, at least a temporary one. But at the moment, the impending release
of European and Japanese growth data is weighing on the currencies concerned.
Rieke +49 69 718-4114
Grabbe / Klaus NĂ¤fken
report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and
its affiliated companies (together "BHF-BANK Group") solely for the
information of its clients. The information and opinions in this document are
based on sources believed to be reliable and acting in good faith, but no
representation or warranty, express or implied, is made by any member of the
BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and
recommendations are given in good faith but without legal responsibility and
are subject to change without notice. The information does not constitute
advice or personal recommendation, for which the duty of suitability would be
owed, but may facilitate your own investment decision. Moreover, you should
seek your own advice as to the suitability of an investment matter mentioned
herein. Investors are reminded that the price of securities and the income from
them can go down as well as up and that the past performance of an investment
or a market is not necessarily indicative for future results. This document is
for information purposes only. Descriptions of any company or companies or
their securities mentioned herein are not intended to be complete, and this
document is not, and should not be construed as, an offer to sell or solicitation
of any offer to buy the securities mentioned in it. BHF-BANK Group and its
officers and employees may have a long or short position or engage in
transactions in any of the securities mentioned in this document, or in any
related securities. This publication must not be distributed in the United
2007 BHF-BANK Aktiengesellschaft
rights reserved. Please mention source when quoting from it.
Forex Trading News
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
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."
Actionable trading levels delivered to YOUR charts in real-time.
Register To Test Your Amazing Trader
GVI Trading. Potential Price Risk Scale
Mon 10 Sep 2018
AA: Major, A: High, B: Medium
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan
John M. Bland, MBA
co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Start trading with forex broker Markets Cube
Max McKegg's Daily Forex Trading Forecasts
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
Request a TRIAL of Max's Forex Service.