forexnews2017

Friday, April 6, 2012

Franc Rises vs. Euro, Breaks Ceiling

The Swiss franc broke thorough the cap against euro for the first time it was introduced half a year ago. The currency fell against the US dollar for the fourth consecutive trading session.
The franc rose past the ceiling of 1.20 versus the euro for the first time the Swiss National Bank introduced it in September last year. It was no surprise to market analysts as the currency was steadily rising since the initial slump after the introduction of the cap. All previous interventions of the SNB were unsuccessful and it was just a matter of time before the current one would fail. Saying that, the introduction of the ceiling was the most successful attempt to intervene, for now.

Spanish Yields Rise, and the Euro Falls

9:37 PM Euro

As concerns about the Spanish debt situation continue, and as worries about what’s next for the eurozone resurface, the euro is heading lower. The 17-nation currency is struggling against other major currencies today.

One of the biggest worries right now is that Spain will not be able to stick to its austerity budget, meeting its targets. Due to these concerns, it’s more difficult to sell bonds to investors. Higher yields are being offered, and that is an indication that there might be troubles down the road.

Mexican Peso Declines as Spanish Debt Auction Makes Traders Concerned

9:35 PM Mexican Peso

The Mexican peso declined today for the second day as the negative impact of concerns about the eurozone, caused by the Spanish debt auction, overshadowed the positive effect of improving employment in the United States.

US Dollar Index Rises Today

9:33 PM US Dollar

US dollar index is gaining today, heading higher as a combination of risk aversion and better news in the United States help boost the greenback. Worries about the eurozone are sending Forex traders to safe havens, while the better news in the United States is helping cement some of the gains.

Canada’s Employment Improves Beyond Expectations, Loonie Profits

9:31 PM Canadian Dollar

The Canadian dollar climbed today, erasing earlier losses against the Japanese yen, as Canada’s employers added much more jobs than was predicted by analysts and as the unemployment rate unexpectedly dropped.

Franc Fluctuates Near Ceiling

9:29 PM Swiss Franc

The Swiss franc was struggling today as it nears the ceiling set by the Swiss National Bank, testing the resolve of interim Chairman Thomas Jordan to keep the policy of making the currency weaker.

The Swissie has breached the cap of 1.20 francs per euro yesterday, but retreated back below the ceiling. It was the first time the franc reached the cap since it was introduced in September last year. Today, the currency fluctuates near the cap, but didn’t reach as for now. The franc was up against the US dollar as US non-farm payrolls were somewhat disappointing.

Dollar Harmed by Worse-Than-Expected Non-Farm Payrolls

9:28 PM US Dollar

The US dollar weakened today as non-farm payrolls came out somewhat disappointing, increasing prospects for a next round of quantitative easing by the Federal Reserve and reducing appeal of the greenback.

Euro Mixed On Remarks from Mario Draghi

9:26 PM Euro

Euro is mixed today, dropping against the UK pound, but rising against the US dollar. The economic news today is offering a little uncertainty, and resulting in a degree of choppiness in trading.

Earlier, Mario Draghi, president of the European Central Bank, said that the fear of inflation was high in the 17-nation currency zone. This news came as a surprise to many, who had hoped that the ECB would take steps to stimulate the economy in the face of a possible eurozone recession. Now, though, it appears that this is not likely an option. ECB is likely to keep things the same, in order to battle inflation.

UK Pound Takes the Upper Hand

9:25 PM Great Britain Pound

UK pound is higher today, gaining as things take a turn toward the positive. The news that stimulus is unlikely to come in the eurozone is helping the pound against the euro, and disappointing news in the United States is helping the pound against the US dollar.

Sterling is higher against the euro today, thanks to remarks from Mario Draghi to the effect that inflation remains a problem in the eurozone. It seems unlikely that the ECB will engage in stimulus, and the United Kingdom appears to be making a recovery — even though it’s a very slow one.

Canadian Dollar Slides on US Payrolls & European Debt Problems

9:22 PM Canadian Dollar

The Canadian dollar slipped as US nonfarm payrolls disappointed Forex market participants, rising far less than was expected, and on reemerging concerns about the debt problems in Europe.

US nonfarm employment advanced by 120,000 jobs in March. That’s not a bad figure by itself, but it’s significantly below the market expectations of 207,000. On the bright side, the increase in the preceding month was revised upwardly and the unemployment rate unexpectedly went down from 8.3 percent to 8.2 percent. Unfortunately for riskier assets, traders paid more attention to the negative part of the report, making them prefer safety over higher yield.

US Dollar Weakens as Risk Appetite Makes a Cautious Appearance

12:13 AM US Dollar

US dollar is weakening today as risk appetite makes a cautious appearance in the markets. Yesterday, greenback was higher, and gold prices reached a low not seen for 10 weeks. Today equities are still struggling, but higher gold is helping the euro against the US dollar, and some Forex traders are looking for risk.

Some of the fears surrounding economic growth in the eurozone and in China have eased somewhat, and that has provided some of the high beta currencies a little boost today. Euro is benefitting as fears about the eurozone ease somewhat, and as gold prices rise.

UK Pound Higher Against Greenback, Aussie

12:09 AM Great Britain Pound

UK pound is finding some strength today against the US dollar and the Australian dollar. Sterling is rising against the greenback as risk appetite makes an appearance, and gaining against the Aussie as the news about China continues to weigh on the Down Under currency.

Canadian Dollar Rises as Core Inflation Quickens

12:07 AM Canadian Dollar

The Canadian dollar erased its losses against its US counterpart as core inflation data was better than predicted and after prices for crude oil jumped. The currency was flat against the Japanese yen and fell versus the euro.

Annual consumer price inflation was 2.6 percent in February, while core inflation was 2.5 percent. Inflation was below forecast, while core inflation was above the predicted value. On month-over-month basis, the Consumer Price Index rose 0.4 percent last month, exactly as forecasters predicted, and core CPI also advanced 0.4 percent, slightly above forecasts.

Crude oil prices also provided a support to the loonie. Futures for delivery of crude oil in May gained $1.53 to $106.88 per barrel. Crude is the main export of Canada.

USD/CAD traded at 0.9976 as of 20:53 GMT today after earlier it advanced from 0.9993 to 1.0033 — the highest level since February 27. CAD/JPY was down from 82.61 to 82.49 after sliding to 81.83, the lowest since March 8. Meanwhile, EUR/CAD rose from 1.3184 to 1.3241 and the daily maximum of 1.3287 was the highest since February 29.

If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Australian Dollar Gains as Fed Considers Dropping of Monetary Easing

11:59 PM Canadian Dollar

The Australian dollar rose, erasing its previous losses, as stocks gained and prices for raw materials increased as market sentiment gradually turns to risk appetite and on the speculation that the Federal Reserve may reduce stimulus for the US economy.

James Bullard, President of the Federal Reserve Bank of St. Louis, thought that it may be time to drop the monetary easing:

With numerous monetary policy actions still on the table, and others still affecting the economy with a lag, it may be especially difficult to remove policy accommodation at the appropriate pace and at the appropriate time. One may want to approach such a situation with caution.

Bullard considered the US economy is recovering fast enough to exist without excessive stimulus. Fed Chairman Ben Bernanke wasn’t so optimistic about the recovery of the US economy and expressed his view:

Consumer spending is not recovered, it’s still quite weak relative to where it was before the crisis. In terms of debt and consumption and so on we’re still way low relative to the patterns before.

Crude oil gained on concerns about disruption of supplies from Iran. Metals, including gold, silver, platinum, and copper also advanced. The Aussie profited from the rally of commodities and also from expansion of carry trade as speculators were buying the yen to buy assets denominated in the Australian currency.

AUD/USD rose from 1.0395 to close at 1.0465. AUD/JPY went up from 85.85 to 86.16, following the drop to 85.17. EUR/AUD closed lower from 1.2689 to 1.2673, while earlier it advanced as high s 1.2754 — the highest rate since December 30.

If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.