interest rate cut in March, keeps all options open
pushes rouble to the tolerance limit; central bank set to cut lending
scope for yen to depreciate despite drastic fall in GDP
Euro remains under pressure
forex markets have continued to follow the familiar pattern: on signs that the
crisis is escalating, the yen firms against the dollar, and at the same time,
the dollar strengthens against the euro, and vice versa. Towards the middle of
the week, EUR-USD rose to over 1.30. This was presumably due to firmer equity
markets because of some positive news from the corporate sector, and possibly
also because of the BoJâ€™s announcement that it was earmarking 1 trillion yen to
purchase corporate shares. In the US,
pending home sales rebounded, which probably also contributed to the favourable
the course of the week, however, the euro gave up its gains again: due to the
ECB governing council meeting, weaker US
economic indicators and concern about the US
labour market figures, the euro fell to around 1.28. Speculation against the
Russian rouble could have weighed on the euro too.
ECB Council is keeping its options
had been announced in January, the ECB governing council left interest rates
unchanged at 2% at its meeting on Thursday. However, it signaled quite plainly
that an interest rate cut was likely in March, when the new staff
projections were available. By referring to the current market expectations,
ECB president Jean-Claude Trichet hinted at the press conference that rates
would probably be cut by 50 basis points.
what is perhaps even more significant, in our view, is that, in its statements
on further monetary policy action, the ECB council is keeping all its options
open â€“ from zero interest rate policy to quantitative easing measures. It has
not said anything concrete, but it is no longer ruling anything out either. If
the economic situation continues to deteriorate, the ECB can thus be pragmatic.
ECB council itself is expecting an â€śextended period of significant economic
to â€śvery negativeâ€ť GDP growth in the fourth quarter. Thus the ECB seems to be
approaching our estimate. We are expecting GDP to have fallen by 1.5%
quarter-on-quarter in the eurozone in Q4, and by 1.8% in Germany.
The European growth data will be published this coming Friday and could put
pressure on the euro next week.
at least mid-December, the Russian rouble has been under significant pressure
to depreciate. The central bank is trying to stabilise the roubleâ€™s exchange
rate against a currency basket of US dollar (55%) and euro (45%). On 22
January, the central bank announced that it would stop the rouble from
depreciating beyond 41 against this basket. The markets immediately started
pushing the rouble to that limit. The rating agency Fitch helped a bit too by
rating by one notch to BBB on Wednesday. For the last few days, the rouble
basket has been just under 41. The central bank, which has lost about 1/3 of its
$600bn reserves in the last 6 months, is probably intervening massively at the
Russian central bank is in a dilemma: on the one hand, the economy and the
financial sector are
in a difficult situation, because as a result of the international financial
crisis and the plunge in commodity prices, foreign capital inflows have plummeted.
Accordingly, the Russian central bank is trying to stabilise the financial
sector with generous supplies of liquidity and keep corporate lending going. On
the other hand, the central bank is thus nurturing speculation against its own currency:
the banks are said to be using a large proportion of the central bank loans to
speculate against the rouble â€“ which apparently appears more lucrative to them
at the moment than lending to Russian companies.
the extensive speculation, the Russian currency reserves are melting away
bank is not likely to just sit back and watch this happening. It could either
give up the
peg to the currency basket, in which case the rouble would probably depreciate
significantly, or it could stop the speculation by means of monetary policy and
administrative measures. A return to capital transaction controls is unlikely
for political reasons. It is more likely that central bank lending will be
drastically reduced, possibly in combination with increasing interest
rates. At the moment, Moscow
appears to be leaning more in this direction. We are therefore inclined to
think that it will be possible to uphold the 41 mark for the time being.
USD-JPY: limited upward potential
the course of the week, USD-JPY firmed somewhat from just under 90 to over 91.
Remarkably, the yenâ€™s strength is in complete contrast to the fundamental state
of the Japanese economy.
Here Q4 is set to be the third negative quarter in a row. The GDP data, due to
be published on 16 February, will probably show that macroeconomic performance
contracted by around 3% quarter-on-quarter.
national trade association sees exchange rate developments as being responsible
for this to a large
extent, as export revenues are falling a good deal faster than export volumes.
It is demanding that the yen should be stopped from appreciating further. There
are rumours that the Japanese government is considering intervening.
a technical point of view, there are plenty of potential ways of weakening the
yen: intervening against oneâ€™s own currency is not a problem. However,
politically, there is only limited scopefor doing so: on the one hand, it must
be borne in mind, that by most standards, the yen is not overvalued; its
development over the past months is rather a correction of its having been
significantly undervalued in the past years. Thus the Japanese government will
probably find it difficult to get international support. This applies particularly
to the US,
where the new government has already adopted a position against the valuation
of the yuan, and where, in view of the crisis, protectionist tendencies appear
to be increasing. Furthermore, it must be assumed that Japanese investors and
companies will take advantage of the yenâ€™s weak phases to unwind foreign investments
(carry trades) or repatriate foreign revenues.
a background of dire growth data we are expecting USD-JPY to recover somewhat;
the risk of intervention is likely to support this trend. On the whole,
however, we only see limited upward potential.
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
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
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.
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.
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.
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 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.
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 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.
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.
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.