Forex News Blog
Back to The Headlines
Friday August 10, 2007 - 09:28:47 GMT
Share This Story
ACM - www.ac-markets.com
Yen gains as investors unwind riskier trades
By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland
News and Events:
The yen rose sharply on Thursday as investors ran from risky low-interest rate-funded trades following further revelations the US sub-prime mortgage crisis has spread to Europe. The Euro fell as much as 2.46% against the Yen and 1.5% against the Dollar after France's largest listed bank, BNP Paribas, temporarily suspended redemptions at three funds worth 1.6 billion euros ($2.2 billion), sending overnight US and euro zone borrowing rates soaring.
The high-yielding Australian and New Zealand Dollars dropped by respectively 3% and 4% against the Yen, as investors scrambled to unwind carry trades. In carry trades, investors borrow in low-yield currencies like the yen to finance investments denominated in high-yield currencies. Analyst said "It's a flight from risk. Those currencies with high yields that have been backed by speculative inflow have been crushed."
Reflecting liquidity fears, European overnight borrowing rates spiked to their highest level since October 2001, prompting the European Central Bank to inject around 95 billion euros ($130 billion) into the system in a quick overnight tender.
In yesterday trading, UsdJpy was down 1.5% at 117.94 while the EurJpy slid 2.46% to 160.97, the biggest daily drop in two years. In recent weeks, the Yen has maintained a tight negative correlation with US stocks, with investors buying back Yen when stock prices fall. US equities markets sputtered, with the Dow Jones industrial average down by 2.83%, as investors turned to safe-haven US Treasury bonds.
The EurUsd slipped 0.98% to 1.3667, well below July's record high near 1.3852. Analysts said the Euro may continue to be vulnerable against the dollar and the yen if credit market sentiment does not improve.
Meanwhile, high-yielding currencies fell, contrasting with Wednesday's trend, when investors embraced carry trades after the Federal Reserve predicted sustained economic growth.
Today's Key Issues (time in GMT):
10.00 EU June OECD Leading Index (vs 107.6 May)
12.00 CAD July Unemployment rate 6% to 6.2% vs 6.1%
12.30 US July Import Prices 1% vs 1%
12.30 US July Export Prices 0.3% vs 0.3%
18.00 US Federal Budget $-32.5B vs $-33.2B
The Risk Today:
EurUsd has corrected from Monday 1.3840 high erasing all Friday's rebound. Yesterday dropped under 1.3750 pivot point has put the July positive trend on hold. Further decline will open the way toward 1.3610 late July low. Initial resistance holds 1.3750 former support. Renewed strength over 1.3750 may focus again on 1.3925 and 1.3986 resistances.
GbpUsd dropped down to 2.0211 yesterday near earlier weekly lows 2.0188 Tuesday and 2.0157 Wednesday. Further weakness may open the door toward new low at 2.0138 (50% retracement of 1.9623 â€“ 2.0654 advance). On the downtrend market may find support around 2.0200 before looking at 2.0100 support (former trend resistance). A break there will open the door back down to 2.0000 pivot point. Rebound looks limited with recent Trendline from 2.0654 to 2.0396 closing the way up near 2.0362 open/close Wednesday/Thursday.
UsdJpy touched yesterday the Trendline resistance at 119.78. Downtrend remains strong and going back to further downtrend and 116.58 Trendline support. Initial resistance holds 119.50 end of July high.
UsdChf in consolidating near 1.1950 area. Market traded down to 1.1819 on Monday new key support. Pressure remains below 1.2091 (23.6% retracement of 1.2771 â€“ 1.1881 decline) and current down trend, may shift on 1.1742 May 2005 low support and 1.1483 March 2005 low. Trendline resistance hold 1.2016 at very short term before 1.2050 strong resistance (retracement of 1.2771 â€“ 1.1819 decline).
Resistance and Support:
|S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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
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:
Upgrade Your Trading experience. Try the Amazing Trader
- Actionable trading levels delivered to YOUR charts in real-time.
- Live trading strategy sessions.
- Market Updates with Trading Tools.
Trading Ideas for 19 February 2018
Upgrade Your Trading. Try The Amazing Trader
GVI Trading. Potential Price Risk Scale
Mon 19 Feb 2018
AA: Major, A: High, B: Medium
00:00 CN, US- Holiday
Tue 20 Feb 2018
00:00 CN- Holiday
A 10:00 US- ZEW Survey
Wed 21 Feb 2018
00:00 CN- Holiday
A All Day flash PMIs
A 15:00 US- Existing Homes Sales
A 15:30 US- EIA Crude
AA 19:00 US- Fed Meeting Minutes
Thu 22 Feb 2018
A 09:00 DE- IFO Survey
A 09:30 GB- GDP
AA 13:30 CA- Retail Sales
A 13:30 US- Weekly Jobless
Fri 23 Feb 2018
A 10:00 EZ- Final HICP
AA 13:30 CA- CPI
John M. Bland, MBA
co-founding Partner, Global-View.com
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.