User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday April 21, 2006 - 21:36:15 GMT
FXCM - www.dailyfx.com

Share This Story:
| | Email

Forex: Things Get Worse for the Dollar as Reserve Diversification Resurfaces

DailyFX Fundamentals 04-21-06

By Kathy Lien, Chief Strategist of www.dailyfx.com

• Things Get Worse for the Dollar as Reserve Diversification Resurfaces
• Switzerland Increases Yen Reserves
• Commodity Currencies Continue to Rise as Oil Climbs to New Record High

US Dollar

In yesterday’s Daily Fundamentals, we talked about how the US dollar rallied while oil prices sold off for no reason other than exhaustion. We indicated that the themes have not changed which means that any further extension moves would probably have been limited. That was exactly what we saw today as the dollar resumed its slide while oil prices hit a new all time high. Sparked by the release of the FOMC minutes from the March 28th meeting, fundamentals turned sharply bearish for the dollar this week. On a day devoid of any US economic data, we were surprised to see a fresh wave of selling on news from Sweden. Bringing reserve diversification which is one of the biggest deterrents to long term gains in the dollar back to the forefront was the announcement by Sweden’s central bank that they have cut their dollar reserves by 17 percent and increased their euro reserves by 13 percent. Russia took this opportunity to add their two cents by saying that the dollar was not the “absolute” reserve currency and the country’s trade and current account deficits could affect’s it attractiveness in the future. Data from Switzerland also indicates that the central bank has reduced the share of dollars in its reserves and instead has increased its share of yen reserves. This comes on the heels of comments by Iceland on Wednesday about their possibility of abandoning the volatile Krona in favor of the more stable Euro. This fresh wave of reserve diversification talk has enough punch to take the Euro back to its previous highs, but before it does so we have few US events that are worth watching. No economic data is due for release on Monday, but we will be receiving consumer confidence on Tuesday. Given the climb in oil prices and the slowdown in the housing market, confidence is more likely to deteriorate than improve this month. On Wednesday, we are expecting Durable Goods and New Home Sales. On Thursday, Federal Reserve Chairman Ben Bernanke will be testifying on the economy, which will be an event not to be missed. At many other recent speaking engagements, Bernanke has refrained from mentioning the economy, so each time he is actually scheduled to talk about it, we will be paying particular attention especially since the market will be looking for his validation of the more dovish tone reflected in the FOMC minutes. Finally on Friday we are expecting the advance release of first quarter GDP along with the University of Michigan Confidence report and the Chicago Purchasing Managers index.

Euro

The Euro continued to climb higher driven by the reserve diversification factors mentioned in the US dollar section of this report. Economic data out the region was also mixed, which added little to today’s move. French consumer spending fell less than expected in the month of March, but there was also a downward revision to the February number. The country’s recovery continues to be modest at best, but the improvement in the labor market is helping to keep consumption steady. The Italian trade balance narrowed in the month March, but by far less than the market had been anticipating. Given the rally in the Euro and higher oil prices, exports were predicted to suffer, but they didn’t thanks to the rise in industrial orders. Meanwhile February retail sales came in slightly weaker than expected, rising by a mere 0.1 percent. In the week ahead, there are a lot of important pieces of Eurozone economic data due for release including the region’s trade balance, German retail sales, German industrial production, the IFO report and Eurozone Industrial production. There is also little rumor circulating on the possibility of a significant decline in April German unemployment, which would reverse the sharp rise we saw in March. The G7 meeting is going on at the moment and IMF / World Bank meetings are scheduled for this weekend. Therefore we would not be surprised to see more comments from policy officials around the world similar to the ones made by Russia this morning. In all likelihood, any meaningful comments will probably not be dollar positive.

British Pound

After yesterday’s dip, the British pound regained strength against the US dollar and remained basically unchanged against the Euro today. The weekly department store sales report from John Lewis showed another strong week of consumer spending which is certainly encouraging going into next week’s retail sales report. Aside from that, we are also expecting GDP numbers for the first quarter, consumer lending figures and the Nationwide house price report. After the inflation figures released yesterday, the market is worried that the Bank of England may be leaning closer to lowering rates now than keeping them on hold. This makes the rest of the releases due this week even more important to either confirm or deny that. Judging from the market’s forecasts, weakness is expected more than strength.

Japanese Yen

The Japanese Yen rallied against all of the major currency pairs today except for the Australian dollar. Even though Sweden’s Riksbank announced that they reduced their yen reserves from 8 percent to zero, reports that Switzerland increased its Yen reserves helped to keep the currency lifted. Today’s rally appears to be driven more by end of the week profit taking in the crosses than fundamentals. China stood firm on their currency policy and did not announce any changes during President Hu’s visit to the US. With the G7 meeting this weekend, there is the possibility that harsher words may be used towards China in the Communique, and if it does, even though it will probably have little influence of China’s decision, the greater emphasis on the subject may weigh over USD/JPY. Oil prices hit a new record high above $75 a barrel which over the long term should also have negative impacts on the Japanese economy. Meanwhile the Japanese economic calendar is very light next week, but important reports from Australia and New Zealand should still make Asian session trading interesting.

 

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 11 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
  • POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI

  • POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
  • POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
  • POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
  • POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision


  • POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
  • POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
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