User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday November 7, 2008 - 17:51:34 GMT
BHF-Bank -

Share This Story:
| | Email

FX Briefing - The “Big Three” directionless

FX Briefing 7 November 2008


·        BoE cuts by 150, ECB and SNB by 50 basis points

·        US employment collapses in September and October

·        IMF forecasts GDP decline in industrialized countries in 2009

·        G20 summit meeting unlikely to produce tangible results


The “Big Three” directionless

The protracted financial crisis is having a marked impact on the real economy worldwide. The third quarter was weak, but it looks as though the fourth quarter will be even weaker. The current data are alarming: in the US, the ISM index for the manufacturing sector plummeted from 49.9 in August to 38.9 in October, thus indicating a sharp contraction. Levels have not been so low since the recession at the beginning of 1991. The service sector is not faring much better either: in October, the ISM non-manufacturing index fell to 44.4 – its lowest level since the survey started in 1997. It is worrying to see that the situation on the US labour market is deteriorating rapidly. Surveys, initial jobless claims data, company reports: they are all indicating that more and more jobs are being cut.


In Europe, the employment market has not yet been affected as much. In the EU as a whole, the

unemployment rate only rose slightly up until September from 6.8 to 7.0%, in the eurozone from 7.2 to 7.5%. However, in some countries, things are looking much worse: in Spain, unemployment has been rising constantly during the last 16 months from 8.0 to 11.9%. In Ireland, the unemployment rate has increased from 4.6 to 6.6% in the last 12 months. In the UK, it has gone up from 5.0% last November to 5.6%.


The employment situation in other parts of Europe has remained robust up to now, but this should not lull us into a false sense of security: some economies – including Germany – still had fat order books which kept them going up until summer. These reserves are now coming to an end. According to the results of the EU Commission’s survey of industry, over a quarter of the companies are now saying that their order books are too thin. And things are looking gloomy, as far as industrial new orders are concerned too. The German producing sector recorded an 8% plunge in September; the average volume of orders in the third quarter was almost 5% lower than in the same quarter of last year. Things are going the same way in the eurozone: industrial new orders are likely to have fallen for the third consecutive quarter.


From a global perspective, things are not much better. Only a few weeks after the World Economic Outlook was published, the International Monetary Fund felt obliged to revise its growth forecast down again. Now the IMF is expecting a GDP drop of 0.3% (as opposed to an increase of 0.5% previously) in industrialized countries in 2009. If this forecast proves to be correct (and we ourselves are even more sceptical than the Fund), it would be the first time that GDP declines on an annual basis in the industrialized countries since the end of World War 2. For the developing countries and emerging markets, the forecast was cut by 1 percentage point to 5.1%. The reasons for this were weaker demand from industrialized countries, the collapse in commodity prices and investors’ retreat from emerging markets. Asian currencies in particular are facing a massive appreciation against the euro and other European currencies.


The rapid deterioration of growth prospects, diminishing inflation risks as a result, and the financial market crisis looming in the background have prompted central banks to slash interest

rates. Last week, the Fed had already lowered its central bank rate to 1.0%; this week the Bank of England, the ECB and the Swiss National Bank made further interest rate cuts. The BoE shocked markets with a radical cut: in view of weak economic activity, – after stagnating in Q2, real GDP fell in Q3 by 0.5% quarter on quarter – and frightening constraints in lending, it cut the bank rate by 150 bp to 3.0%. The ECB, however, only lowered the refi rate by 50 basis points to 3.25%, as had been generally expected. The SNB also lowered the 3-month Libor target rate by 50 bp to 2.0%.


The interest rate cuts had very little impact on the forex markets. After the first shock, the pound actually gained slightly in reaction to the Bank of England’s step. Market participants are evidently firmly convinced that the industrialized countries are in the grip of a crisis and that, within a very short time, central bank rates in Europe will be cut to similar levels to US rates. For the forex markets, it does not really matter whether this happens in two, three or four steps.


Like last week, exchange rate movements were relatively slight this week too. At the end of the

week, the euro firmed to slightly under 1.28 against the US dollar. CAD, AUD and NZD all posted slight gains. USD-JPY ended the week at about the same level as the previous week, at around 97.20. Emerging market currencies (HUF, PLZ, TRY, ZAR, KRW, BRL) were somewhat weaker, losing 2 to 3%. The Czech koruna dropped a bit more: the turmoil of the last few weeks had not affected it much, but the exchange rate was now probably reacting to the deterioration in the economic outlook and the unexpectedly sharp repo rate cut on Thursday by 75 bp to 2.75%.


We are not expecting major exchange rate movements among the Big Three in the near future. We are under the impression that the markets are following fundamental, macroeconomic developments more closely again – looking for signs as to how deep and protracted the recession will be. However, no new revelations are expected for the time being. The dollar is suffering a bit as a result of the weakening labour market in the US; the negative surprises in the October labour market report (released today) could make themselves felt at the beginning of next week. During the course of the week, developments in Europe are likely to be in the spotlight: on Wednesday, the German GDP figures for Q3 will be published; the Italian, French and eurozone figures will follow on Thursday. We are expecting a slight contraction of economic activity across the board, which would confirm the recession and limit the euro’s upward potential.


At the weekend, the (extended) G20 group are meeting in Washington to discuss the consequences of the financial crisis and possible ways to reform the international financial system. The discussion is focused on financial supervision: involving players and products more; tightening and harmonizing standards; co-ordination and exchange of information between the supervisory authorities, and also the potential role of the IMF or other institutions. There is, however, a considerable clash of interests among the participants. It is all about national versus supranational competences; about influence on institutions and authorities such as the IMF; about financial centre interests and basic economic policy convictions. Furthermore, the US government is not fully functional at the moment, and the Europeans cannot agree amongst themselves. We are therefore expecting a full programme of working groups and summit meetings to be arranged, but nothing tangible to emerge for the time being.


Stephan Rieke +49 69 718-4114

Economics Department

+49 69 718-3642

[email protected]

Foreign Exchange Trading

[email protected]

Jörg Isselmann

+49 69 718-2695

Matthias Grabbe / Klaus Näfken

+49 69 718-2688


<i>This 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 States.

© 2007 BHF-BANK Aktiengesellschaft

All rights reserved. Please mention source when quoting from it.



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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

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.

Contact us

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.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

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