User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday March 10, 2006 - 16:06:54 GMT
BHF-Bank -

Share This Story:
| | Email

FX Briefing 10 March 2006

• BoJ ends quantitative easing, but overnight rate to remain at zero for now
• Dollar strengthens across the board, hawkish Fed pushes US bond yield up
• Investments in high-yield currencies getting riskier

Carry currencies under pressure

As expected, the euro’s gains after ECB president Trichet’s hawkish comments following the press conference did not last long. During the course of the week EUR-USD fell by over a cent to around 1.19. Neither was the yen able to hold its ground after initially strengthening to 116 against the dollar in view of the impending Japanese monetary policy shift. Last Thursday, the BoJ actually brought its quantitative easing policy to a close – sooner than a lot of people had expected. But after a bit of to-ing and fro-ing, market participants came to the conclusion that the BoJ’s future policy might not turn out to be quite as aggressive as already priced in. As a result, USD-JPY rose to over 118 again and EUR-JPY increased slightly to just under 141. Market rumour has it that there were concealed official yen sales after the monetary policy decision in Japan had been announced.

During the course of the week, several emerging market and carry currencies dropped considerably. Most Asian currencies got away relatively unscathed. Losses during the week remained under one per cent and thus less than those of the yen. However, most central and eastern European currencies were hit harder, particularly the zloty, which fell by 3.5%, the forint and the Czech koruna. The Turkish lira lost over 3% against the dollar. Some South American currencies were similarly affected, especially the Brazilian real which lost a good 2%, the Chilean peso and, less severely, the Mexican peso. The New Zealand dollar and the Iceland krona also continued to plummet, dropping 3.4% and 6.3% respectively this week.

On the surface, there were good “domestic” reasons for most of the movements. In Iceland, the current account continued to deteriorate; in Poland the government is attacking the central bank’s independence; in Brazil the corruption affair around president Lula is spreading, in Mexico the impending election is causing political unrest, in New Zealand the central bank is changing from a rate rise policy to a sideways movement. And so forth.

But if one looks hard enough, one can always find a fly in the ointment. None of the weak points are new, but they are gaining more significance because monetary policy is changing worldwide.

Firstly, the US is no longer a low interest rate country. The more US money market rates rise, the more the interest rate advantage of the high yield currencies shrinks. The question then arises whether it is worth taking the additional exchange rate and credit risks.

Secondly, one used to be able to rely on the Bank of Japan for free liquidity, but now the Japanese too are getting ready to raise interest rates. Despite all the BoJ’s assurances that it will proceed cautiously, monetary policy has become a source of uncertainty. Moreover, the strong economic growth and the high Japanese current account surplus are pointing towards an appreciation. So traders putting their money on a permanently weak yen, be warned.

We believe that the willingness to run exchange rate risks will diminish, especially in the case of the “minor” currencies which had been popular during the search for yield in the past years. Investors are more likely to reduce their exposure at the first signs of trouble arising in individual countries. The danger of such movements snowballing is also increasing. Once the flight reflex is triggered, some currencies will be abandoned for no apparent reason. However, we do not expect a panic like during the Asia crisis when investors stampeded out of carry trades virtually overnight. Monetary policy today is treading a lot more cautiously and the economic situation in the respective countries is a lot more robust than in 1997/98.

The latest words from the Fed confirm the impression that for the time being interest rates will continue to be raised in the US. William Poole, president of the St. Louis Fed, for instance, thinks that inflation is currently more likely to accelerate than decelerate given the strength of the global economy. Moreover, Mr Poole does not expect the stabilization of the housing market to cause a significant slowdown in private consumption. His colleague Timothy Geithner of the New York Fed indicated that the interest rate dampening effect of the high foreign capital inflows might have to be offset by a more restrictive monetary policy to keep demand growth and inflation under control.

Labour market data for February and the Beige Book will further underpin the Fed’s relatively hawkish position. Next week’s survey results (Empire State Manufacturing, Philly Fed index UMI consumer sentiment) are likely to be either higher or at least stable at a high level. Data on industrial production, retail sales, housing starts and building permits is likely to be distorted by the cold weather, which will somewhat impair their significance. February consumer prices will probably follow the trend of the previous months, with headline inflation dampened by the decline in energy prices. All considered, we see no reason for the Fed to adopt a softer tone in the run-up to the FOMC meeting on 28 March. Therefore the dollar will remain well supported.

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

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."

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 31 July 2018
AA JP- Bank of Japan
A 06:00 DE- Retail Sales
A 09:00 EZ- flash HICP/GDP
AA 12:30 US- Core PCE Deflator
A 14:00 US- CB Consumer Confidence
Wed 1 Aug 2018
A Final Mfg PMIs
AA 12:15 US- ADP Private Payrolls
A 15:00 US- EIA Crude
AA 18:00 US- Federal Reserve Decision
Thu 2 Aug 2018
AA 11:00 GB- Bank of England Decision
A 13:30 US- Weekly Jobless
Fri 3 Aug 2018
A Final Services PMIs
AA 12:30 US- Employment
A 12:30 US/CA- Trade

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