Forex News

  Markets are focused today on the U.S. jobs report, and since the U.S. is expected to add more jobs in June than the previous month, gains where seen within the Asian and European stock markets on Friday. The strong ADP employment report yesterday sparked optimism among traders for today's infamous jobs report which is expected to show that the U.S. economy added 105,000 jobs in June from 54,000 in May. A strong Non-farm payrolls number will most likely support confidence in markets and boost demand for high yielding assets, lowering demand on safe heaven, including gold which fell as of this writing to the lowest $1525.10. Yesterday the ECB delivered the a rate hike while BoE maintained its monetary policy firmly in place. As expected Trichet refrained from signaling an August rate increase yet he confirmed the ECB will suspend the collateral rules for Portugal. Markets will continues to trade with a mixed sentiment awaiting the U.S. report, where the dollar index is consolidating...

Optimism spread through European and U.S. markets on Thursday after labor data from the United States beat expectations and rate decisions from Europe came in line with forecasts, where the S&P 500 rose to its highest since May 13 amid rising optimism in markets. Moreover, retailers reported better than expected sales in June, as they offered discounts to consumers, which boosted sales. The ADP employment change for June showed U.S. private employers added 157,000 jobs, more than double the 70,000 added jobs forecasted and rising from 36,000 added jobs in May, while jobless claims fell to 418,000 last week from 432,000, better than median estimates of 420,000. The better than expected labor data sparked optimism among traders ahead of Friday’s jobs report, which is expected to show Non-farm payrolls increased in June by 100,000 jobs. Meanwhile, rate decisions from Europe came in line with expectations, where the Bank of England left the benchmark interest rates unchanged at 0.50% and also left the...

The ECB as expected hiked rates by another 25 basis points to 1.5%. The EUR was on the backfoot overnight, and slid in the wake of the 7:45AM ET announcement. However, during Trichet’s comments, the EUR got a bit of a bounce, as Trichet used phrasing signifying that an interest rate meeting may come in September, the meeting after next. From the Introductory Statement: “Based on its regular economic and monetary analyses, the Governing Council decided to increase the key ECB interest rates by 25 basis points, after raising rates by 25 basis points in April 2011 from historically low levels. The further adjustment of the current accommodative monetary policy stance is warranted in the light of upside risks to price stability. The underlying pace of monetary expansion is continuing to gradually recover, while monetary liquidity remains ample with the potential to accommodate price pressures in the euro area. All in all, it is essential that the recent price developments do not give...

  Most of European and Asian stocks rose on Thursday, as banking shares gained in Asia after China raised the benchmark interest rates, while European markets are waiting for key rate decision from the Bank of England and the European Central Bank, where BOE is expected to leave rates unchanged at 0.50%, while the ECB is expected to raise rates by 25 basis points to 1.50%. Moreover, investors will be also eyeing Trichet’s press conference later  on Thursday, where traders will be watching closely for any hints regarding the outlook for European monetary policy, while data from the labor market will also play a key role in trading, especially the ADP employment change figure ahead of Friday’s infamous jobs report. Stocks in Asia were mixed by closing on Thursday, where the NIKKEI 225 was down by nearly 0.11% to close around 10071, while the Hang Seng index closed higher by 0.06% to trade around 22530. European stock indexes were mostly higher before by...

Pessimism continued to dominate global financial markets on Wednesday after China raised its benchmark interest rates by 25 basis points, while Moody’s Investors Services announced it downgraded Portugal by four notches to junk, which raised concerns once again over the outlook of the European debt crisis. Meanwhile, the ISM services index showed activities in the services sector eased below expectations. The ISM services index eased in June to 53.3 from 54.6 back in May and below median estimates of 53.7, which signals that economic weakness continued through the second quarter of this year, and this also casts more doubts over the outlook of economic growth over the third quarter of this year, since expectations show that economic activity will pick up in the second half of 2011. Stocks in the United States were lower by opening on Wednesday, where the Dow Jones Industrial Average was down by nearly 0.05% to trade around 12,563, while the S&P 500 index was nearly down by...

  Concerns from the European debt crisis continued to mount after Moody’s announced it downgraded Portugal’s credit rating to junk after signaling Portugal will need a second bailout because it can’t meet its debt targets. The news increased risk aversion in markets and pushed investors to target lower yielding and safe assets. This report outlined that Portugal might need to apply for another bailout package such like Greece. Panic in the markets might be triggered at any time, therefore caution will persist for a while, bringing gains to the safe heaven gold yesterday that rose above the $1515.00 level, while the dollar index rose today to the highest of 74.95. The euro fell today as Moody's signaled that Portugal will need a second aid package although it received one earlier this year. As the debt situation is getting more complicated in Europe, the euro might witness more losses. Tomorrow the ECB and BoE will make news, while on Friday the U.S. will release the employment...

U.S. stock markets fluctuated between gains and losses on Tuesday after a long weekend, where mixed feelings spread through financial markets, as risk aversion increased in markets amid speculations China will raise interest rates to battle upside risks to inflation, while Moody’s said bad loans in China could prove far worse than previously thought. Moreover, Standard and Poor’s said it will consider a rollover for Greek debt under the French proposal as a “selective default”, which increased concerns once again over the outlook of the European debt crisis. Moreover, factory orders in the United States rose in May by 0.8%, compared with the prior revised drop of 0.9% and slightly below expectations of 1.0%. Trading remains somewhat calm as investors are cautious ahead of key data from the labor market that will be released later this week, especially after stock markets enjoyed their best week in nearly two years. Stocks in the United States were mixed by opening on Tuesday, where the Dow...

The euro's momentum against the U.S. dollar was halted on Tuesday, as signs of a slowdown in Europe's service sector activity started to appear. At the moment, the euro fell down below the $1.45 barrier, trading at $1.4496.The euro is still too strong for the Japanese yen, however, rising 0.08% to ¥117.58. The euro suffered losses as analysts' focus shifted from Greece to hard data, which suggested the Eurozone economy is slowing down. The euro was hit by a sharp slowdown in France's service sector activity. In June, France's services PMI fell to 56.1, from 62.5 in May, which represents the steepest fall in the 13 year history of the index. The index still remains above the 50 points mark, however, which indicates expansion. France is the Eurozone's second largest economy and the majority of its GDP falls on its service sector. As a result, a sharp slowdown in France's service sector will have markets worried as more pressure builds up on...

  As full volume returned to the Forex and commodity markets today since trading was thin yesterday because of the Independence Day holiday in the U.S., fears over the global economic outlook reemerged. The global economic picture is now not only affected negatively by Europe's debt crisis and the slowing U.S. economy, but also by the questions about China’s prospects for growth since it’s the world's third biggest economy. A possible slowdown of China's economic growth could have a negative impact on the global recovery. Moody's warned about China’s bad loans that are posing a threat and the problem is being underestimated by Chinese officials. Concerns over the European debt crisis also resurfaced after the Standard and Poor’s said it will consider a French plan to rollover Greek debt as a “selective default”, which weighed down on the Euro as caution prevailed. Risk aversion may persist as later this week the ECB will hold their monetary policy meeting on Thursday while on Friday the U.S....

Last Saturday, finance ministers from the Eurozone met to complete the quarterly transfer of loan funds to Greece.  The IMF will hold a similar meeting later this week (most likely on Friday).  For the most part, this was not a surprise, since we did see the Greek parliament successfully pass its austerity vote last week but the Euro and equities have remained supported so far this week.  The end of last week saw the S & P 500 close 1.44% higher on Friday, following the daily close in the Nikkei 225 above the key psychological 10000 level (the first time this has happened in two months). In addition to the positives seen in the Greek story, there were also strong expectations for June’s US ISM data, which rose to 55.3 (against expectations of 52.0).  The EUR/USD is currently seen at 1.4510-1.4580 while the USD/JPY is ranging at 80.70-80.90.  Today will see no major US macro data today, as the markets are...