EUR/USD
Remains capped beneath 1.4000 as support at 1.3892 is tested. A push below 1.3892 is expected to extend the corrective bull pennant, creating scope for more downside consolidation towards projected support at 1.3785. However, the Mar. 11 reaction low at 1.3752 is secure. A push through Monday's 1.4003 high is required to re-open last week's 1.4036 reaction high.
GBP/USD
Suffers a setback off resistance at 1.6200, and more weakness is expected to the 1.6029 area. This 1.6029 area needs to hold in order to protect the Mar. 11 reaction low at 1.5978, and strengthen the key Mar. 2 reaction high at 1.6344. Only a push above 1.6200 would put bulls in control of the near-term, opening 1.6242.
USD/JPY
A recovery off 81.22 is underway towards the 82.05 intraday lower high. A push through 82.05 would confirm 81.22 as a near-term bear failure, and attract further strength to 82.30 and Monday's peak at 82.46. Failure to force a break through 82.05 would prompt a return to the 81.22 low, as part of a wider bearish continuation pattern.
AUD/USD
A downside probe to 0.9925 through the recent range floor threatens further weakness towards higher lows at 0.9866 and 0.9832. However, the Jan. 12 reaction low at 0.9804 needs to be broken in order to concern longer-term bulls. Regaining ground above 1.0062 is required to lift the tone and re-open 1.0110.
FOREX Focus
Japan should get the weak yen it needs. Certainly, there will be some yen-positive flows as Japanese insurers and Japanese companies repatriate overseas holdings to help with the relief effort after Friday's earthquake. But, it is the government's and the Bank of Japan's fiscal and monetary response to the devastation that will ultimately dictate the downward path of the Japanese currency, and ensure that it loses the safe-haven status that has been helping it in recent months. For Japan, and its recovery, this could be key. Finance Minister Yoshihiko Noda has already made this crystal clear, warning financial markets that he is willing to intervene to push the value of the yen down, given how vital exports will be for the country's recovery from this crisis. The recent strength of the yen had been looking questionable even before the sirens went off Friday in north-east Japan, warning that an underwater earthquake had sent a 10-meter-high wave hurtling towards the coast. The Japanese economy was already virtually on its knees. Repeated spending programs aimed at pulling the economy out of recession had pushed the country's debt-to-GDP ratio to a global record-busting 200%. The Bank of Japan, which had long ago slashed its interest rates to virtually zero, had provided its monetary help through repeated increases in its asset-purchase programs. While the fiscal profligacy left the country's credit rating tumbling, the monetary easing left the yield premium offered by other countries rising. Yet, in a world troubled by the spring uprising in the Middle East and North Africa as well as the sovereign debt crisis in the euro zone, the yen was still clinging on to its traditional reputation as safe haven. This, however, should now come to an end. European Union leaders appear to have finally come up with a compromise solution that should help prevent any serious sovereign default there, and despite continued concerns about the monarchies in Bahrain and Saudi Arabia, the Middle East crisis so far hasn't erupted as violently as many had feared. The yen's initial reaction to the earthquake was a knee-jerk fall, but this quickly went into reverse as financial markets started to anticipate repatriation flows and looked at the 18% rally the yen staged after a massive earthquake in the city of Kobe in 1995.
Europe
The dollar rallied in European trading hours against the euro and higher-yielding Asian currencies amid wild trade Tuesday as panic gripped investors on mounting worries over Japan's escalating nuclear emergency. Investors have sought refuge in safe-haven currencies such as the greenback and Swiss franc while the yen ended largely unchanged as market participants remained uncertain about the unit's prospects.
Asia
The yen stabilized Monday morning in Asia after a choppy start to the day, as the Bank of Japan took unprecedented steps to boost market liquidity following Friday's earthquake and tsunami. In announcements throughout the morning, the BOJ offered to inject a record 18 trillion yen into money markets -- Y15 trillion in same-day funds through three separate operations, plus three trillion yen in repurchase agreements. The yen had spiked sharply upward in early trading on expectations of repatriation flows, but soon erased those gains and traded in a tight band from around 0100 GMT. As of 0450 GMT, the U.S. dollar was trading around Y82.12, up from an earlier low of Y80.60, the greenback's lowest level against the yen since Nov. 9. While repatriations would tend to buoy the yen, the BOJ liquidity injections, combined with signals from Japanese officials that they could intervene in currency markets if necessary, kept the U.S. dollar supported for now. A strengthening yen could hurt Japan's export-dependent economy. Meanwhile, Chinese Premier Wen Jiabao, in closing remarks to China's annual legislative gathering, stressed that the yuan's appreciation must be gradual. Wen said the government needs to consider the impact on employment, business and overall social stability. That could point to a slower pace of appreciation, especially after China posted a trade surprise deficit of $7.3 billion in February. The dollar/yuan central parity rate was set Monday at $6.5701, vs 6.5750 on Friday. In Japan, Finance Minister Yoshihiko Noda said Monday morning that authorities will monitor yen levels for now. A senior Finance Ministry official warned Monday morning of the possibility of intervention to stem a strong yen rise. Authorities "will take decisive steps if necessary," he told reporters at the Finance Ministry.
World
Japan's yen surged against other major currencies Friday in New York after a devastating earthquake set off expectations that companies will repatriate yen to help pay for rebuilding efforts. Traders swiftly sold the yen just after the earthquake before reversing course. The dollar fell about 1.4% against the yen on the day, while the euro was down about 0.5% against the yen. "Speculation in advance of repatriation, that's what is driving the yen up right now," said Jeffrey Young, head of North American FX Research at Barclays Capital in New York. Traders are betting that insurers with exposure to Japan and companies based in the country will soon need to buy large quantities of yen to cover damages and pay out insurance claims. They would be forced to exchange foreign currencies for yen, further hurting the dollar, euro and other major units. But it is still too early to assess the extent of the damage and how much money may be needed to rebuild parts of the country that were destroyed by the earthquake and tsunami it triggered, leading to some uncertainty about longer term currency moves. "I'm personally not expecting a huge yen appreciation, but the net impact is probably negative for dollar/yen," said a portfolio manager at a London-based hedge fund. This source expects some Japanese firms to repatriate cash, but only gradually - and he doesn't expect a massive flow of yen back into Japan. The long-term effects on Japan's economy and the yen were still not known. But Moody's Investors Service said it was highly unlikely the country's debt rating would be affected by the earthquake.
Selasa, 15 Maret 2011
FOREX Intraday snapshot
EUR/USD
Remains capped beneath 1.4000 as support at 1.3892 is tested. A push below 1.3892 is expected to extend the corrective bull pennant, creating scope for more downside consolidation towards projected support at 1.3785. However, the Mar. 11 reaction low at 1.3752 is secure. A push through Monday's 1.4003 high is required to re-open last week's 1.4036 reaction high.
GBP/USD
Suffers a setback off resistance at 1.6200, and more weakness is expected to the 1.6029 area. This 1.6029 area needs to hold in order to protect the Mar. 11 reaction low at 1.5978, and strengthen the key Mar. 2 reaction high at 1.6344. Only a push above 1.6200 would put bulls in control of the near-term, opening 1.6242.
USD/JPY
A recovery off 81.22 is underway towards the 82.05 intraday lower high. A push through 82.05 would confirm 81.22 as a near-term bear failure, and attract further strength to 82.30 and Monday's peak at 82.46. Failure to force a break through 82.05 would prompt a return to the 81.22 low, as part of a wider bearish continuation pattern.
AUD/USD
A downside probe to 0.9925 through the recent range floor threatens further weakness towards higher lows at 0.9866 and 0.9832. However, the Jan. 12 reaction low at 0.9804 needs to be broken in order to concern longer-term bulls. Regaining ground above 1.0062 is required to lift the tone and re-open 1.0110.
FOREX Focus
Japan should get the weak yen it needs. Certainly, there will be some yen-positive flows as Japanese insurers and Japanese companies repatriate overseas holdings to help with the relief effort after Friday's earthquake. But, it is the government's and the Bank of Japan's fiscal and monetary response to the devastation that will ultimately dictate the downward path of the Japanese currency, and ensure that it loses the safe-haven status that has been helping it in recent months. For Japan, and its recovery, this could be key. Finance Minister Yoshihiko Noda has already made this crystal clear, warning financial markets that he is willing to intervene to push the value of the yen down, given how vital exports will be for the country's recovery from this crisis. The recent strength of the yen had been looking questionable even before the sirens went off Friday in north-east Japan, warning that an underwater earthquake had sent a 10-meter-high wave hurtling towards the coast. The Japanese economy was already virtually on its knees. Repeated spending programs aimed at pulling the economy out of recession had pushed the country's debt-to-GDP ratio to a global record-busting 200%. The Bank of Japan, which had long ago slashed its interest rates to virtually zero, had provided its monetary help through repeated increases in its asset-purchase programs. While the fiscal profligacy left the country's credit rating tumbling, the monetary easing left the yield premium offered by other countries rising. Yet, in a world troubled by the spring uprising in the Middle East and North Africa as well as the sovereign debt crisis in the euro zone, the yen was still clinging on to its traditional reputation as safe haven. This, however, should now come to an end. European Union leaders appear to have finally come up with a compromise solution that should help prevent any serious sovereign default there, and despite continued concerns about the monarchies in Bahrain and Saudi Arabia, the Middle East crisis so far hasn't erupted as violently as many had feared. The yen's initial reaction to the earthquake was a knee-jerk fall, but this quickly went into reverse as financial markets started to anticipate repatriation flows and looked at the 18% rally the yen staged after a massive earthquake in the city of Kobe in 1995.
Europe
The dollar rallied in European trading hours against the euro and higher-yielding Asian currencies amid wild trade Tuesday as panic gripped investors on mounting worries over Japan's escalating nuclear emergency. Investors have sought refuge in safe-haven currencies such as the greenback and Swiss franc while the yen ended largely unchanged as market participants remained uncertain about the unit's prospects.
Asia
The yen stabilized Monday morning in Asia after a choppy start to the day, as the Bank of Japan took unprecedented steps to boost market liquidity following Friday's earthquake and tsunami. In announcements throughout the morning, the BOJ offered to inject a record 18 trillion yen into money markets -- Y15 trillion in same-day funds through three separate operations, plus three trillion yen in repurchase agreements. The yen had spiked sharply upward in early trading on expectations of repatriation flows, but soon erased those gains and traded in a tight band from around 0100 GMT. As of 0450 GMT, the U.S. dollar was trading around Y82.12, up from an earlier low of Y80.60, the greenback's lowest level against the yen since Nov. 9. While repatriations would tend to buoy the yen, the BOJ liquidity injections, combined with signals from Japanese officials that they could intervene in currency markets if necessary, kept the U.S. dollar supported for now. A strengthening yen could hurt Japan's export-dependent economy. Meanwhile, Chinese Premier Wen Jiabao, in closing remarks to China's annual legislative gathering, stressed that the yuan's appreciation must be gradual. Wen said the government needs to consider the impact on employment, business and overall social stability. That could point to a slower pace of appreciation, especially after China posted a trade surprise deficit of $7.3 billion in February. The dollar/yuan central parity rate was set Monday at $6.5701, vs 6.5750 on Friday. In Japan, Finance Minister Yoshihiko Noda said Monday morning that authorities will monitor yen levels for now. A senior Finance Ministry official warned Monday morning of the possibility of intervention to stem a strong yen rise. Authorities "will take decisive steps if necessary," he told reporters at the Finance Ministry.
World
Japan's yen surged against other major currencies Friday in New York after a devastating earthquake set off expectations that companies will repatriate yen to help pay for rebuilding efforts. Traders swiftly sold the yen just after the earthquake before reversing course. The dollar fell about 1.4% against the yen on the day, while the euro was down about 0.5% against the yen. "Speculation in advance of repatriation, that's what is driving the yen up right now," said Jeffrey Young, head of North American FX Research at Barclays Capital in New York. Traders are betting that insurers with exposure to Japan and companies based in the country will soon need to buy large quantities of yen to cover damages and pay out insurance claims. They would be forced to exchange foreign currencies for yen, further hurting the dollar, euro and other major units. But it is still too early to assess the extent of the damage and how much money may be needed to rebuild parts of the country that were destroyed by the earthquake and tsunami it triggered, leading to some uncertainty about longer term currency moves. "I'm personally not expecting a huge yen appreciation, but the net impact is probably negative for dollar/yen," said a portfolio manager at a London-based hedge fund. This source expects some Japanese firms to repatriate cash, but only gradually - and he doesn't expect a massive flow of yen back into Japan. The long-term effects on Japan's economy and the yen were still not known. But Moody's Investors Service said it was highly unlikely the country's debt rating would be affected by the earthquake.
Remains capped beneath 1.4000 as support at 1.3892 is tested. A push below 1.3892 is expected to extend the corrective bull pennant, creating scope for more downside consolidation towards projected support at 1.3785. However, the Mar. 11 reaction low at 1.3752 is secure. A push through Monday's 1.4003 high is required to re-open last week's 1.4036 reaction high.
GBP/USD
Suffers a setback off resistance at 1.6200, and more weakness is expected to the 1.6029 area. This 1.6029 area needs to hold in order to protect the Mar. 11 reaction low at 1.5978, and strengthen the key Mar. 2 reaction high at 1.6344. Only a push above 1.6200 would put bulls in control of the near-term, opening 1.6242.
USD/JPY
A recovery off 81.22 is underway towards the 82.05 intraday lower high. A push through 82.05 would confirm 81.22 as a near-term bear failure, and attract further strength to 82.30 and Monday's peak at 82.46. Failure to force a break through 82.05 would prompt a return to the 81.22 low, as part of a wider bearish continuation pattern.
AUD/USD
A downside probe to 0.9925 through the recent range floor threatens further weakness towards higher lows at 0.9866 and 0.9832. However, the Jan. 12 reaction low at 0.9804 needs to be broken in order to concern longer-term bulls. Regaining ground above 1.0062 is required to lift the tone and re-open 1.0110.
FOREX Focus
Japan should get the weak yen it needs. Certainly, there will be some yen-positive flows as Japanese insurers and Japanese companies repatriate overseas holdings to help with the relief effort after Friday's earthquake. But, it is the government's and the Bank of Japan's fiscal and monetary response to the devastation that will ultimately dictate the downward path of the Japanese currency, and ensure that it loses the safe-haven status that has been helping it in recent months. For Japan, and its recovery, this could be key. Finance Minister Yoshihiko Noda has already made this crystal clear, warning financial markets that he is willing to intervene to push the value of the yen down, given how vital exports will be for the country's recovery from this crisis. The recent strength of the yen had been looking questionable even before the sirens went off Friday in north-east Japan, warning that an underwater earthquake had sent a 10-meter-high wave hurtling towards the coast. The Japanese economy was already virtually on its knees. Repeated spending programs aimed at pulling the economy out of recession had pushed the country's debt-to-GDP ratio to a global record-busting 200%. The Bank of Japan, which had long ago slashed its interest rates to virtually zero, had provided its monetary help through repeated increases in its asset-purchase programs. While the fiscal profligacy left the country's credit rating tumbling, the monetary easing left the yield premium offered by other countries rising. Yet, in a world troubled by the spring uprising in the Middle East and North Africa as well as the sovereign debt crisis in the euro zone, the yen was still clinging on to its traditional reputation as safe haven. This, however, should now come to an end. European Union leaders appear to have finally come up with a compromise solution that should help prevent any serious sovereign default there, and despite continued concerns about the monarchies in Bahrain and Saudi Arabia, the Middle East crisis so far hasn't erupted as violently as many had feared. The yen's initial reaction to the earthquake was a knee-jerk fall, but this quickly went into reverse as financial markets started to anticipate repatriation flows and looked at the 18% rally the yen staged after a massive earthquake in the city of Kobe in 1995.
Europe
The dollar rallied in European trading hours against the euro and higher-yielding Asian currencies amid wild trade Tuesday as panic gripped investors on mounting worries over Japan's escalating nuclear emergency. Investors have sought refuge in safe-haven currencies such as the greenback and Swiss franc while the yen ended largely unchanged as market participants remained uncertain about the unit's prospects.
Asia
The yen stabilized Monday morning in Asia after a choppy start to the day, as the Bank of Japan took unprecedented steps to boost market liquidity following Friday's earthquake and tsunami. In announcements throughout the morning, the BOJ offered to inject a record 18 trillion yen into money markets -- Y15 trillion in same-day funds through three separate operations, plus three trillion yen in repurchase agreements. The yen had spiked sharply upward in early trading on expectations of repatriation flows, but soon erased those gains and traded in a tight band from around 0100 GMT. As of 0450 GMT, the U.S. dollar was trading around Y82.12, up from an earlier low of Y80.60, the greenback's lowest level against the yen since Nov. 9. While repatriations would tend to buoy the yen, the BOJ liquidity injections, combined with signals from Japanese officials that they could intervene in currency markets if necessary, kept the U.S. dollar supported for now. A strengthening yen could hurt Japan's export-dependent economy. Meanwhile, Chinese Premier Wen Jiabao, in closing remarks to China's annual legislative gathering, stressed that the yuan's appreciation must be gradual. Wen said the government needs to consider the impact on employment, business and overall social stability. That could point to a slower pace of appreciation, especially after China posted a trade surprise deficit of $7.3 billion in February. The dollar/yuan central parity rate was set Monday at $6.5701, vs 6.5750 on Friday. In Japan, Finance Minister Yoshihiko Noda said Monday morning that authorities will monitor yen levels for now. A senior Finance Ministry official warned Monday morning of the possibility of intervention to stem a strong yen rise. Authorities "will take decisive steps if necessary," he told reporters at the Finance Ministry.
World
Japan's yen surged against other major currencies Friday in New York after a devastating earthquake set off expectations that companies will repatriate yen to help pay for rebuilding efforts. Traders swiftly sold the yen just after the earthquake before reversing course. The dollar fell about 1.4% against the yen on the day, while the euro was down about 0.5% against the yen. "Speculation in advance of repatriation, that's what is driving the yen up right now," said Jeffrey Young, head of North American FX Research at Barclays Capital in New York. Traders are betting that insurers with exposure to Japan and companies based in the country will soon need to buy large quantities of yen to cover damages and pay out insurance claims. They would be forced to exchange foreign currencies for yen, further hurting the dollar, euro and other major units. But it is still too early to assess the extent of the damage and how much money may be needed to rebuild parts of the country that were destroyed by the earthquake and tsunami it triggered, leading to some uncertainty about longer term currency moves. "I'm personally not expecting a huge yen appreciation, but the net impact is probably negative for dollar/yen," said a portfolio manager at a London-based hedge fund. This source expects some Japanese firms to repatriate cash, but only gradually - and he doesn't expect a massive flow of yen back into Japan. The long-term effects on Japan's economy and the yen were still not known. But Moody's Investors Service said it was highly unlikely the country's debt rating would be affected by the earthquake.
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