Talking Points
• Japanese Yen: Tips Lower Against Most Currencies
• Pound: BoE Maintains Cautious Outlook
• Euro: Bundesbank Says Rates Are “Appropriate”
• U.S. Dollar: Risk Sentiment To Drive Price Action on Light Event Risk
British Pound Rallies as U.K. Labor Market Improves, European Policy Makers Convene With IMF on Greek Bailout
Meanwhile, the Bank of England minutes showed the MPC voted unanimously to hold the benchmark interest rate at 0.50% and to maintain the asset purchase target at GBP 200B earlier this month, but went onto say that above-target inflation was being a “concern” for some board members.
Nevertheless, the central bank said that “overall, the committee agree that it was appropriate to maintain the current stimulatory stance” as policy makers aim to encourage a sustainable recovery, and noted that the rebound in economic activity “appeared to have been carried forward into the beginning of 2010” as the expansion in monetary and fiscal policy continues to feed through the real economy. At the same time, jobless claims in the U.K. fell 32.9K March to exceed expectations for a 10.0K decline, with the claimant count rate unexpectedly slipping to 4.8% from 4.9% in the previous month, while the ILO unemployment rate increased to 8.0% during the three-months though February versus forecasts for a 7.8% clip. As the short-term rally in the GBP/USD tempers off ahead of the monthly high at 1.5523, a rise in public sector net borrowing could weigh on the exchange rate on Thursday as market participants expect the budget deficit to rise another GBP 24.0B in March following the GBP 12.4B rise in the previous month, but an better-than-expected 1Q GDP reading could push the exchange rate higher as investors weigh the prospects for future growth.
The Euro held a narrow range during the overnight trade after bouncing back from a fresh weekly low of 1.3399, but the single-currency may face increased selling pressures as European policy makers and the International Monetary Fund convene with the Greek government to discuss the EUR 45B bailout for the ailing economy. At the same time, Bundesbank Axel Weber said that he “never made an assessment of the short or long term financing needs” for Greece and argued that he never said the nation would need an EUR 80B bridge loan from the EU, and went onto say that it would take some time for the EU, ECB, and the IMF to hammer out the bailout package. In addition, the central bank head said that varying pace of growth in the euro-area could hamper the Governing Council’s policy as price pressures “are tilted a bit to the upside in the short-term,” but reiterated that interest rates “remains appropriate” as the ECB expects President Trichet expects to see an “uneven” recovery this year.
The greenback lost ground against most of its major counterparts as the rise in risk appetite carried over into the overnight trade, while the USD/JPY tipped higher for the third-day to reach a fresh weekly high of 93.40. As the economic docket for the U.S. and Canada remain fairly light for Wednesday, risk sentiment is likely to drive price action going into the North American session, which could push the greenback lower as it remains the most popular funding-currency, next to the Japanese Yen.
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Forex Weekly Trading Forecast - 04.19.10
To discuss this report contact David Song, Currency Analyst: dsong@fxcm.com
DailyFX provides forex news on the economic reports and political events that influence the currency
3 comments:
alo
thanh ha la vo doi
According to today's forex signals and recommendations the dollar strengthened broadly on Friday after data showed that U.S. core consumer prices rose 0.3% in April and were 1.8% higher on a year-over-year basis, the largest increase since October.
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