ÔÉėChina‚Äôs central bank raises reserve requirement ratio to
sceptical about Greek savings plan
remains on course
No real alternatives to the dollar
At the end of last week, after the release of weaker- than-expected
US jobs data for December, EUR-USD had strengthened from 1.43 to about 1.45.
After hovering around this level for most of the week, it finally dropped to 1.44. The yen, which
had suffered a setback last week after comments made by the new finance
minister, firmed to around 91 against the dollar.
The dollar still remains the favoured currency. This
is not so much because of US economic
data, which painted a mixed picture, but rather because
the rest of the world is not looking particularly attractive at the moment. The
Chinese central bank, which had started to raise central bank bill rates the previous week, increased the reserve
requirement ratio for commercial banks from 15.5 to 16%, thus underlining its intention to
curb credit expansion. Many observers are now expecting the PBoC to raise lending rates too.
China‚Äôs shift towards a less expansive monetary policy is
having an impact on equity and currency markets, particularly those in the
Asian emerging markets, and on commodity markets. Asian equity markets, for
instance, were much weaker than US markets.
is still grappling with the debt crisis in Greece. This week, the Greek government unveiled a plan to
cut the budget deficit to 8.7% of GDP this year and reduce it to 2.8% of GDP by
the end of 2012. But markets are skeptical whether the government will be able
to implement the measures in the face of mounting opposition from
interest groups such as trade unions. Despite the ambitious plan, spreads between 10- year
Greek government bonds and Bunds widened to 282 basis points.
ECB President Jean-Claude Trichet‚Äôs remark that the
European central bank would not change its collateral rules for the sake of Greece probably had a negative impact too. If the ECB
reverts to pre-crisis rules in 2011 as planned, Greek government bonds may no
longer be accepted as collateral by the ECB after that date.
German GDP growth data for 2009 is unlikely to have
made the euro more attractive either. According to the preliminary results of
the German Federal Statistical Office, German GDP fell by 5% in 2009. Those who
had forgotten the true extent of the damage when growth rates turned positive
again in the second quarter of 2009, will have been brought back to earth with
a bump by that figure.
Moreover, the Statistical Office reported that economic
growth in Germany probably stagnated
in the fourth quarter, which was another
disappointment. If this assessment proves correct, the
statistical overhang for 2010 could turn out to be lower
than forecast. Thus some downward revisions are likely, especially as growth in
the first quarter of 2010 could be lower than expected due to the weather.
Money market deceptively calm
On Thursday, the ECB held its first meeting of the
year. As expected, last month‚Äôs assessment
was confirmed: interest rates remained appropriate; the
euro area economy was expected to grow at a moderate pace; inflationary
pressure was low. The previous month, the governing council had outlined its
plans to exit from unconventional measures. There was no additional information on this topic this time. In reply to journalists‚Äô questions,
Mr Trichet merely said that there would still be an abundant supply of liquidity in the
money market for some months to come. While that was the case, the EUONIA rate would also be
close to the deposit facility rate. Furthermore, Mr Trichet said that decisions
on further steps in money market management would be taken in March.
The ECB appears to be in no hurry to bring money
market management back to normal ‚Äď
particularly as regards draining excess liquidity from
the money market and reverting to refinancing operations with variable interest
rates. We, however, think it risky to bank on money market rates remaining at
their present level until the second half of 2010 at least.
On the one hand, in December, the ECB predicted a
gradual recovery in financial markets,
and pointed out that the continuation of the
unconventional measures harboured a risk of market distortion. On the other
hand, the excess liquidity is not likely to be drained from the market ‚Äúnaturally‚ÄĚ
before July at the earliest, as that is when the one-year tender of ‚ā¨442bn
issued in June matures. And it could be even later than that, if, for example,
market participants take advantage of the 6-month tender at the end of March to
stock up substantially.
We consider it unlikely that the ECB will wait six
months or more before embarking on implementing its decision to bring money
market functions back to normal. Furthermore, its commitment to allocate the
one-week tender in full is only valid until the middle of April. Changing to a
variable-rate tender could prove difficult, however, if the money market
remains flooded. We would therefore not be at all surprised if the central bank
was already in the throes of considering ways of mopping up liquidity.
Stephan Rieke +49 69 718-4114
Grabbe / Klaus N√§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.