User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday February 17, 2006 - 17:24:45 GMT
BHF-Bank - www.bhf-bank.com

Share This Story:
| | Email

FX Briefing 17 February 2006

Highlights
• Strong growth in Japan brings monetary policy change closer
• Bernanke indicates sustained necessity for further tightening
• Euro is “pig in the middle”

USD or JPY: a tough choice

After the yen’s substantial gains last Friday, there was not much movement this week. The US dollar benefited from the rather hawkish message delivered by the new Fed chairman and the strong economic data and showed quite a firm tendency. EUR-USD fell somewhat to below 1.19. USD-JPY recovered slightly to about 118.50. EUR-JPY is somewhat firmer at just under 141. The losers of the week were the Swedish krona and Norwegian krone and the New Zealand dollar. Reports that interest rate rises could be lower than expected, particularly in view of the very low inflation rates which are currently under 1%, had a negative impact on the Scandinavian currencies. In New Zealand, there are increasing signs that growth is slowing down.

At present, there are two main currents on the forex markets. The first is Japan. Despite a very unfavourable start to the year, the Japanese economy grew by around 2¾% in 2005; in the fourth
quarter, real GDP increased by a further 1.4% quarter-on-quarter and is thus 4.2% higher than the previous year. The figures clearly highlight the fact that Japan is no longer a case for concern. Even if the increase in consumer prices is still only very small for the time being, there is less and less justification for a zero interest rate policy, given the strong growth and substantial company profits. The BoJ is giving stronger hints that there will be monetary policy changes in the next few months; the yield on 2-year government bonds has increased by 10 points to 0.43% within just over a week.

The other is the US. For quite a long way into January, the markets had believed that the risks for the US economy were increasing and that the Fed’s interest rate hike policy would come to an end at 4.50%, or at latest 4.75%. In view of the Fed’s comments and the latest economic development, this certainty has begun to waver. The nFOMC statement of 31 January still indicated a possible need for further interest rate hikes, and Ben Bernanke, the new FOMC chairman, confirmed this stance in his testimony before Congress. Mr Bernanke said that “in the absence of countervailing monetary policy action, the risk existed that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading to further upward pressure on inflation.”

Moreover, there are no signs at all of the feared slowdown. Quite the contrary: private consumption, which had already picked up in the course of Q4, has strengthened further this year. January retail sales rose by 2.3 % month-on-month. Admittedly, the relatively mild weather boosted sales of apparel and building materials, and gasoline stations’ turnover rose due to higher gasoline prices. But even a conservative estimate comes to an increase in private consumption of clearly over 5% in Q1 (annualized, qoq). The output of utilities was curbed by the warm weather in January, but production in the manufacturing sector rose by 0.7% month-on-month. In addition, the first survey results for February (Empire State manufacturing index and Philly Fed index) show that the trend in manufacturing has remained at least favourable. Even residential construction, which has been causing some concern, is looking strong. Housing starts rocketed by 14.5% in January, thus hitting a fresh high, and building permits rose by 6.8%. Apparently, people had taken advantage of the favourable weather conditions.

Therefore the forex markets have (at least) two potential favourites. Strong growth and relatively
high and rising interest rates are generally good prerequisites for a strong currency. This makes the US dollar attractive. The yen on the other hand has exceptionally strong economic momentum behind it and a new monetary policy era is dawning in Japan.

Given the current developments, we think that the classic carry currencies should be approached with caution. The markets have become used to readily available liquidity from Japan for free. But because of increasing uncertainty about the future path of Japanese interest rates, the risk of yen short positions will be seen as higher. Although the pull of the interest rate difference will remain high, investors will generally become more cautious. As US interest rates have risen, the advantage of investing in higher interest foreign currencies has diminished, so that incurring a currency risk has lost a lot of its appeal for US investors.

The rates between the three major currencies are more difficult to assess. Volatility in the USDJPY exchange rate will probably increase, but the trend will be less pronounced. The euro, on the other hand, is in a way “pig in the middle”: growth is solid but not really exceptional; the level of interest rates is rising, but will remain clearly below that in the US. We therefore expect both EUR-USD and EUR-JPY to weaken somewhat.

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 15 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Thu 14 Dec
23:50 JP- Tankan Survey

Mon 18 Dec
10:00 EZ- final HICP
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account
Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude
Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP
Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes
Mon 25 Dec
00:00 Christmas Holidays

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --23:50-- JP- Tankan Survey
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