User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday February 10, 2006 - 16:25:37 GMT
BHF-Bank - www.bhf-bank.com

Share This Story:
| | Email

FX Briefing 10 February 2006

FX Briefing 10 February 2006
Highlights
• Signs are increasing that BoJ will change policy in Q2
• Monetary policy uncertainty makes USD-JPY more volatile
• Pace of renminbi appreciation increases ahead of G7 meeting

The dawning of a new era: the end of quantitative easing policy draws closer

At the beginning of the week, the euro continued its downward trend, which had started after the release of US labour market data, but then stabilized within a narrow range of 1.1950 to 1.2000. The few attempts to break out of this tradingrange proved to be short-lived. USD-JPY was much more volatile: the dollar firmed up against the yen initially, parallel to the EUR-USD movement. However, on Tuesday morning, the rate slipped from over 119 to a temporary low of 117.61.

Increasing nervousness
This could have been partly due to reports that a large Japanese insurance company was planning to increase the euro share in its portfolio at the expense of the dollar. However, the main reason was probably market players’ increasing nervousness about the imminent end of the zero interest rate policy, particularly around the Bank of Japan policy board meeting. From Wednesday on, the yen started recovering again. Central bank governor Toshihiko Fukui announced that, starting with the next policy meeting, the assessment of the price development would become more crucial. But this statement did not have a lasting impact either, for USD-JPY climbed to just under 119. On Friday morning however, fear of interest rate hikes gained the upper hand again on the Asian markets, and USD-JPY fell to around 117.70.

The Japanese economy has found its footing: for the third consecutive year the gross domestic product has been growing at or above potential. Fourth quarter GDP growth is expected to have reached 1-1.5% quarter-on-quarter, which would bring the annual growth rate in 2005 to around 2.7%. Even if the economy loses momentum, the statistical overhang from last year will ensure a decent growth rate in 2006 too. The growth impulses are no longer coming from external trade alone; private consumption and business investment in particular are doing well too.

So far the Bank of Japan has stuck to its zero interest rate policy with quantitative targets for (over-)providing the banks with liquidity. The bank had committed itself to continuing with its ultra-loose monetary policy until a clear upward trend in inflation rates had been established. The core rate of Japanese consumer prices (excluding fresh food) has now been positive year-on-year since October. At the beginning of March, January price data will be published. We expect inflation to have picked up to around 0.4% year-on-year and this is the level we will probably be seeing for the rest of the year too.

Because of these developments, the BoJ had already started to pave the way for a monetary policy turnaround last year. It remained rather vague about this, however, especially with respect to a time frame. Central bank governor Fukui spoke of some time in the fiscal year 2006/07, which starts in April. Mr. Fukui was alsointent on curbing interest rate hike expectations. He said that the interest rate level would still be very low after the policy change. With the latest remark that more weight would in future be given to the assessment of the price development, the signs are increasing that the transition to a conventional interest rate orientated monetary policy might commence in spring. A good opportunity for this would be 28 April, when the bi-annual Outlook for Economic Activity and Prices is presented. Just like the Fed and the ECB earlier, the Japanese central bank will want to give the capital markets some indication of its longer-term plans for interest rates. Its monthly report would be one possibility to make its intentions transparent. One argument against starting a new era of monetary policy at the end of April is that virtually the whole of Japan traditionally takes off the following Golden Week with its three national holidays.

To start with, the BoJ will reduce excess liquidity. The target range for the banks’ current account balances with the central bank might, for instance, be cut to 27-32trn yen, which a minority on the board has been voting for for months. The interest rate can only be used as a tool for steering the money market when liquidity matches actual demand. Therefore the BoJ is unlikely to set a positive key interest rate until some time in the second half of the year.

The market has priced in relatively strong interest rate hikes; the money market contract for December is currently implying a 3-month money market rate of around 0.5%. As long as the central bank remains unspecific about its intentions, the uncertainty about the pace and extent of interest rate increases will be relatively high. In this situation, USD-JPY remains prone to correction. Given the huge interest rate differential, the yen is still one of the most attractive currencies to borrow, but the risk of carry trades is increasing as the Japanese economy continues on its path of solid growth and the central bank starts to tighten.

China: Faster renminbi appreciation?
The renminbi’s appreciation since the central parity adjustment last summer has been disappointing. The theoretically possible fluctuation of 0.3% compared to the fixing of the previous day has in no way been used to its full extent. Over more than six months, the renminbi has gained as little as 0.7% against the US dollar. But since the Chinese New Year Festival, it has moved somewhat more strongly (cf. chart). The purpose of this movement might be to take the wind out of G7/G8 critics’ sails this weekend.

Stephan Rieke +49 69 718-4114
Economics Department
+49 69 718-3642
volkswirtschaft@bhf-bank.com
Foreign Exchange Trading
devisenhandel@bhf-bank.com
Jörg Isselmann
+49 69 718-2695
Matthias Grabbe / Klaus Näfken
+49 69 718-2688

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.
© 2005 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."



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 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


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



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