BOC Undermines Canadian Dollar

The Bank of Canada interest rate decision is clearly a short-term negative factor for the Canadian currency. The downbeat economic assessment also shows that there is a lack of confidence in US and global growth prospects given the Canadian dependence on trade. The Canadian outlook, therefore, is also likely to…

Canada Goes Japanese

Canada’s decision to target monetary reserves of C$ billion is textbook “quantitative easing” (not only credit easing), which is the way the Bank of Japan announced policy easing in 2002-04. Canadian dollar damaged across the board as the Bank of Canada is the latest central bank to dive into quantitative…

Bank of Canada Cuts Target Rate by 25 Basis Points

The Bank of Canada cut the target for the overnight rate by 25 basis points to 0.25%, citing a deeper-than-expected recession in Canada and the fact that “measures to stabilize the global financial system have taken longer than expected to enact”. Markets were evenly split on whether the Bank would…

Commodity Dollars Creeping Higher

A largely unexpected cut leaving Canada’s benchmark rate on a par with the top of the range of the fed funds rate and growing fears over the possibility of backdoor nationalization of some U.S. banks hurt risk appetite earlier today. The dollar in early morning trade has taken a breather…

Pound and Euro Are Fighting Back?

After the Asian session finished down more than 200 points, stocks have traded negatively, as has Europe amid poor bank earnings results, giving investors more reasons to worry about the economic future. All of this is despite the confidence we witnessed during recent days, mainly because traders know the worst…

Tuesday Forex Crawl After Sunday/Monday Sprint

The Tuesday U.S. session has left as many questions as answers in regard to the next leg of Usd strength or weakness. “The dollar index is at major resistance at 87.00, and will need negative equity markets that lead to a move to bonds and Treasury notes for that area…

CAD Eases on Surprise BoC Cut

The Bank of Canada announced the results of its monetary policy deliberations this morning, unexpectedly cutting its benchmark lending rate by 25-basis points to 0.25%, a record low. The BoC acknowledged that “the recession in Canada will be deeper than anticipated, with the economy projected to contract by 3.0% in…

Equities Stabilize, USD and JPY Drift Lower

USD traded lower pressured by report on US bank stress tests and a positive German ZEW report. A report Tuesday suggests that most of the US banks will pass the stress test and USD drifted lower. Monday, US equity markets tumbled and USD rallied in reaction to rumors that a…

Dollar Weakens As Equities Rise On Geithner’s Comments

The dollar reversed direction on Tuesday, halting at least three days of upward momentum as U.S. equities rallied after Treasury Secretary Timothy Geithner said the “vast majority” of U.S.

Geithner Comments Calm Concerns Regarding Financials And Stabilize Dollar Strength

Risk aversion swept the G10 driving the dollar higher across the board.

Yen Crosses Rally As Equities In US Recover, BOC Surprises Markets With Rate Cut

We start with a look at the Aussie-Yen pair, which found a low yesterday at 68.15, following a 370 pip slide in yesterday’s session. Yesterday’s fall was led by a sell-off in equities which increased risk aversion. Today, yen crosses saw a reversal in their fortunes, paring some of the…

Dollar Falls On Improved Sentiment

The dollar fell versus most other key currencies on Tuesday as risk appetite increased after Treasury Secretary Timothy Geithner said the ‘vast majority’ of US banks are well capitalized. The yen fell as the Dow rose 128 points to 7,970

Australia CPI

The Australian consumer price index came in at 0.1 percent for the March quarter 2009, which is below what economists had forecasted, but higher than the 0.3% drop in the December quarter 2008. The CPI rose 2.5% through the year to March quarter 2009, compared to an annual rise of…

Geithner Helps Banks Stocks Rally

U.S. Dollar Trading (USD) gave up some of the strength gained on Monday when the Treasury Secretary Geithner testified that the vast majority of US banks have more capital than required and that the credit markets are improving.

Dollar Strengthens On Very Light Volumes

Overall, the Asian session saw the majors losing a few pips compared to the greenback. However, the moves came on very light volume and are likely to be retested somewhere later

Australian Dollar Rises Despite Unwinding of Carry Trade

When two weeks ago the Royal Bank of Australia (RBA) cut interest rates, one would have expected the Australian Dollar to suffer proportionately. Instead, the currency continued its steady upward rise, and touched a six-month high, before falling back slightly. One surprised analyst lamented, “These types of inconsistencies can make …

A Smart U-Turn In Risk After US Treasury Secretary Geithner Calms Stress Test Fears

US Treasury Secretary Timothy Geithner’s contribution last night showed a marked improvement from early performances and his comments produced the desired effect. Testifying before a Congressional panel he assured that ‘the vast majority’ of the top US banks have more capital than they needed to overcome the current situation and…

Geithner Talked Markets Higher Yesterday. Will It Last?

The IMF is now hiking their estimate of total, potential losses due to the financial crisis to $4.1T ($2.7T in US, $1.2T in Europe and $150B in Japan). Some stories on the near-complete reversion of capital flows into EE countries. EURHUF might begin the next leg higher very soon.

Stock Market Rebound Blocks The Slide In EUR/USD And USD/JPY

The major cross rates continue to mirror the swings in global investor sentiment. A rebound on the US stock markets gave the EUR/USD and USD/JPY cross rates downside protection.

Geithner Comments Help Ease Stress Test Concerns

The Usd was stable in the Asian session, as the rally in risk failed to gain traction in local equity markets. The EurUsd traded between 1.2970 to 1.2911, while the UsdJpy traded between 98.92 to 98.08. A statement by Treasury Secretary Geithner, that most banks have sufficient reserves to protect…

Sterling Recovers Slightly And Currently Stable As Investor Eye UK Budget

The British Pound rose against the dollar on Tuesday, recovering from steep falls the previous day as investors bought the currency at cheaper levels, though caution ahead of Wednesday’s annual budget capped gains. Sterling gains followed the rise in the euro as well as with other currencies perceived as higher…

U.K. Claimant Count Reaches 12-Year High In March

The number of people seeking unemployment increased again in March to the highest value in the last 12 years. The report shows there were 1.46 million persons on the claimant count in March, and up by 73,700 from one month earlier. The previous released number, for the month of February,…

U.K. Average Earnings Drop To The Lowest Figure Since 1991

The annual rate of growth in average earnings including bonuses was 0.1 per cent in the three months to February 2009.

U.K. Unemployment Rate Reaches 6.7% In February

The unemployment rate increased again in the U.K. in the latest three months to February 2009, to the highest rate seen in the last decade. The released rate of 6.7% is in-line with market expectations.

Preview Of UK Budget, MPC Minutes And UK GDP

On Wednesday, April 22nd UK Chancellor Darling will present the UK 2009 budget. The UK budget deficit may be the largest since World War II with the projected budget deficit rising to 11% of GDP by 2010. The budget is also expected to confirm that the UK economy is experiencing…

Temporary Rebound In Sentiment Fades Quickly

How quickly optimism fades in this uncertain environment. Risk appetite had rebounded in yesterday’s US session as comments by Treasury Secretary Geithner strengthened confidence in the banking system, by stating the ‘vast majority of banks have more capital than they need’

Dollar Resumes Strengthening Overnight

Overall, the market found some additional momentum during the European session, but until now some pairs have moved less than the daily average.

Debt Fears Undermine Sterling

The UK government deficit levels will continue to represent an extremely important medium-term risk factor for the UK currency. Countries with budget deficit levels above 10% of GDP run a very important risk of suffering a collapse in confidence. The degrees of risk appetite will also need to be watched…

Oh My, Darling!

British Chancellor, Alistair Darling addresses the House of Commons in London today announcing the need for a further £292 billion ($423.4 billion) over the five fiscal years ending in 2014. Plans to spend more coupled with an increasingly dry well hole of tax revenues brought on by recession mean that…

Hope Springs Eternal

The great red hope - China. Exports to China fell only 31.5% in March compared with a year earlier, compared to a 39.7% decline in February and one of 45.2% in January, the BBC reported