2011 February

Risk Yield and Commodities Support Gains | February 28, 2011

February 28, 2011 By Vantage FX

Good morning. Consumer Sentiment on Friday drove gains in the Equity and Base Metal markets. With Political unrest in Libya still plaguing the minds of traders, GDP figures announced during the session, painted an uncertain picture. Recording 2.8% for the period, the figure was below market expectations of 3.3%. Temporary weakness in the energy futures markets also contributed to the bounce back in the market. Key data to be announced in the US this week includes Personal Income (market expects 0.3%), Chicago PMI (market expects 67.5), Pending Home Sales (-3.2%) on Monday, Construction Spending (market expects -0.6%) on Tuesday, Crude Inventories and the Beige Book on Wednesday, Initial Claims (market expects 400,000), ISM Services (market expects 59) on Thursday, Non Farm Payrolls (market expects 180,000), Unemployment Rate (market expects 9.1%), and Factory Orders (market expects 2.1%) on Friday.

On the equity market front, the Dow Jones closed 61 points higher on Friday with surprising corporate announcements from Intel and Boeing. Aircraft manufacturer Boeing announced a $30 billion contract signing with the Air Force. The market reacted positively to the news with the stock rising 2.2%. Chip giant, Intel received supportive analyst comments from a large Wall Street Investment Bank, pushing the company higher intraday. Notable companies to release earnings this week include Mining company Coeur D’Alene and Liberty Media.

On the currency front, on Friday, the Aussie dollar rose to 1.0142 with buoyant commodity prices pushing the currency higher. A strong Oil price worked in favour of the AUD, with the greenback falling as economists speculated on the impact of the recent events. The US economy is very sensitive to energy costs. GDP data will confirm the daily trend for the currency pair, with a market expectation of 3.3% . This will be a slight rise from the previous period. Easing of tensions in Libya, helped support the US dollar against the Euro during the Friday session. Trading at 1.3777, speculators limited their euro exposure leading up to US GDP data. Although the markets are factoring in better than expected figures, recent inflationary talks in Europe continue to unsettle the currency. The debt crisis continues to also plague the minds of traders, with Greece and Ireland possibly unable to repay short term debt.

Filed Under: February Tagged With: Air Force, AUD, Aussie Dollar, base metal market, Biege Book, boeing, Chicago PMI data, Coeur D'Alene, commodity prices, Construction Spending data, consumer sentiment, Crude Inventories, currency market, currency trading, debt crisis, Dow Jones, energy futures market, equity market, Euro, Europe, Factory Orders figures, Foreign Exchange, forex, forex market wrap, GDP Data, GDP figures, Greece, greenback, Initial Claims Data, Intel, Ireland, ISM Services data, Liberty Media, Libya, Non Farm Payrolls data, oil price, Pending Home Sales data, Personal Income data, political unrest, unemployment rate, US Dollar, vantage fx, Wall Street Investment Bank

Gold Reacts to Home Sales Data | February 25, 2011

February 28, 2011 By Vantage FX

Good morning. Equity and Commodity markets experienced heightened volatility on Thursday with the indices closing slightly lower. Renewed fears that the crisis in Libya could impact oil reserves and lead to a regional political readjustment, sent the market lower in morning trade. Pre empting possible unrest in Saudi Arabia, King Abdullah announced a possible reform package that would extend to education, healthcare, and housing. Political Analysts and Economists are watching the impact of the announcement and whether the new reform would be well received in the Kingdom. Energy commodities reacted to the news with Light Crude falling to $96 a barrel. In Europe on Thursday, the Banking sector began preparations for the introduction of new liquidity ratios and capital adequacy requirements. Basel III will focus on tighter regulatory reform and restrictions on borrowing ratios. Major European financials finished lower during the session. New Home Sales data released in the US, painted a grim picture with a 12.6% fall in January. The government was quick to highlight the inconsistency in the sector. Friday will see GDP figures released with the market forecasting 3.3%.

On the equity market front, the S&P500 found some support towards the close with the index finishing 1 point lower. The Nasdaq bucked the overall trend and rose 14 points with buoyant earnings in the tech sector driving gains. Online company WebMD reported better than expected earnings with the company citing a recovery in trading conditions. The stock finished the session 8.7% higher. Hewlett Packard continued to experience selling pressure with the stock weakening 3% intraday. Earnings released earlier in the week, coupled with weaker market conditions have contributed to the movements.

On the currency front, Capital Expenditure and Sentiment figures helped support the Aussie dollar during the session. Trading at 1.00876, the currency pair broke through resistance with capital spending data indicating that the local economy may be on a strong growth pattern. With a 1.3% rise in the last quarter of 2010, speculation by economists and traders over RBA monetary policy movements have held the currency above the key parity level. The market expects the RBA to increase rates by 25 basis points. The Bank of Japan watched the Japanese Yen closely on Thursday as the market reacted to the Oil prices and tensions in Libya. Flight to safety continued to push the greenback lower with traders eyeing the possibility of a contagion effect in the Middle East region. Protests in the largest Oil producer in North Africa, played havoc on valuations and long term economic forecasts. A consistent rise in Light Crude Oil could influence macro economic factors and stall the overall global recovery. The USDJPY traded at 81.74.

Filed Under: February Tagged With: Aussie Dollar, Bank of Japan, Basel III, capital adequacy, capital expenditure figures, capital sentiment, commodity market, contagion effect, currency market, currency trading, education, energy commodities, equity market, Europe, Foreign Exchange, forex, forex market wrap, GDP, greenback, healthcare, Hewlett Packard, housing, King Abudullah, Libya, Light Crude Oil, liquidity ratios, Middle East, monetary policy, Nasdaq, new home sales data, North Africa, oil price, oil reserves, RBA, reform, resistance, S&P500, Saudi Arabia, US, USDJPY, vantage fx, volatility, WebMD, Yen

Traders Eye Safety of Franc | Febraury 24, 2011

February 24, 2011 By Vantage FX

Good morning. Commodity markets continued to react to political unrest in Libya and Bahrain, with Light Crude Oil touching $99 a barrel. Existing Home Sales data strengthened 2.7% during the January period, with the market initially forecasting 5.36 million. Across the Atlantic, the European Industrial Output for December increased 2.1%, which was in line with initial estimates. Economists cited that the report was a key barometer for inflation and economic growth. Comments from ECB Chairman Trichet indicated the possibility of a tightening in monetary policy in the short term if costs remain robust. Ireland heads into an election this week, with the current Prime Minister Cowin stepping down. Thursday will see a slew of economic announcements in the US with Initial Claims, Durable Orders and New Home Sales.

On the equity market front, the Dow Jones fell 104 points on Wednesday. Newspaper giant The Washington Post struggled during the session, with the company posting weaker than expected fourth quarter results. The stock reacted to the downgrade with a 5% fall intraday. Diversified oil and gas producer Denbury Resources, announced a significant jump in revenues with $10.4 million in net income for the period. The market warmed to the news with the company closing 3.4% higher.

On the currency front, the Swiss Franc rose against the greenback on Wednesday with the currency pair touching 0.9328. Safe haven buying from yesterday extended to today, with traders surprised at the movements. Speculation that Euro zone interest rates may rise soon, also had a positive effect on the Swiss Franc. Recent comments from the Swiss Central Bank have indicated that they are also looking at the impact of inflation on economic growth. Pound Sterling rose against the greenback on Wednesday with BOE minutes supporting the currency. Highlighting the need for a tightening of policy, one of the Bank of England officials was in favour of a shift in rates. Trading at 1.6223, the currency pair also experienced relief rally buying. Yesterday’s sell off in the sterling was a result of Libya and Middle East tensions and the potential for a fall in Oil output. Rebounding during the session, the Euro reacted positively to monetary policy sentiment. Speculating that the ECB may raise rates in the coming months, economists looked towards previous inflationary and growth reports for an indication of how Trichet and the Board will move. A number of European countries have warmed to the idea of a tightening in policy, to combat long term inflation. The EURUSD traded at 1.3760.

Filed Under: February Tagged With: Bahrain, Bank of England, BOE, commodity market, currency market, currency trading, Denbury Resources, Dow Jones, ECB, ECB Chairman, equity market, Euro, euro zone, European Industrial Output, Existing Home Sales, Foreign Exchange, forex, forex market wrap, greenback, inflation, interest rates, Ireland, Libya, Light Crude Oil, Middle East, monetary policy, pound, Prime Minister Cowin, Sterling, Swiss Central Bank, Swiss Franc, The Washington Post, Trichet, US Durable Orders, US Initial Claims data, US New Home Sales, vantage fx

Tensions in Libya Trigger Sell Off | February 23, 2011

February 24, 2011 By Vantage FX

Good morning. Equity markets weakened on Tuesday with tensions in Libya and the Middle East continuing to scare investors. Colonel Gaddafi announced that he would not stand down as leader of Libya, sparking riots and violence across the country. Light Sweet Crude jumped on the news with the futures rising 6.7% to $95 a barrel. Consumer Confidence data in the US highlighted a significant surge for the February period with the index settling at 70.4. The market expected 67. Contributing to these figures, the Case Shiller housing index recorded a slight fall in December. The 1% contraction in house prices indicated the ongoing weakness in the sector. Existing Home Sales will be announced on Wednesday with a forecast of 5.23 million. This represents a softening in the number of sales from the previous period.

On the equity market front, the S&P500 reacted to a broad based asset selloff with the index falling 2%. Retail giant Walmart announced disappointing earnings results which came in contrast to market expectations. Hewlett Packard reported a 16% rise in earnings for the period, however a cautious 12 month forecast sent the stock considerably lower.

On the currency front, the Aussie dollar pierced through parity falling to 0.9988 late in the trade day. Libyan tensions and further Earthquake fears in New Zealand pushed risk currencies lower in trade. A bounce in resources was unable to support the Aussie dollar. Traders also speculated over the possible effect of the political fallout in the Middle East, and whether or not a contagion could occur. Consumer Confidence data in the US recorded a significant shift for the February period. The 70.4 confidence level figure helped the greenback in afternoon trade. The Euro experienced a sharp fall early in the trade day, with the market reacting to political news. Continued uncertainty in the Euro zone, due to debt refinancing costs is weighing on the currency with heightened volatility experienced. The EURUSD recovered later in the session, with ECB comments helping the currency. A proposed 10 point plan that focused on debt guidance was distributed to leading European officials. Economists were comfortable with the move, as it spelled further stability in the region. The EURUSD traded at 1.3650.

Filed Under: February Tagged With: Aussie Dollar, Case Shiller Housing Index, Colonel Gaddafi, currency trading, ECB, equity market, Euro, euro zone, EURUSD, Existing Home Sales, Foreign Exchange, forex, forex market wrap, Gaddafi, greenback, Hewlett Packard, Libya, Light Sweet Crude, Middle East, New Zealand Earthquake, parity, S&P500, US COnsumer COnfidence data, vantage fx, volatility, Walmart

Middle East Political Crisis Spreads | February 22, 2011

February 22, 2011 By Vantage FX

Good morning. Commodity markets reacted to Middle East tensions on Monday with Gold and Light Crude Oil rising significantly. Breaking $91 a barrel, Oil rose 6% as a result of fears that tensions in Libya could affect oil supply in the region. Libya accounts for a large percentage of oil and is a member of OPEC. Reports that Gaddafi had left the country for Venezuela, circulated with economists highlighting the importance of local governance. Leading Hedge Fund Kingpin George Soros surprised the market on Monday, with comments speculating over the impact of Obama reform on both the political and economic landscape. Indicating that Republicans were in a commanding leadership position, Soros was also complimentary to the “Tea Party”. Previously the Hedge Fund Manager had been a staunch advocate of the Obama Administration.

On the equity market front, the S&P500 was close on Monday due to the President Day Holiday. Energy producer Chesapeake announced that it would divest a large Arkansas gas area for $4.7 billion. The market was quiet on the deal, with analysts assessing the acquisition weight on quarterly earnings.

On the currency front, the US dollar found some support on Monday with the currency rising against the Japanese Yen. Trading at 83.15, the pair fell into a tight upward range for much of the session. With middle east tensions rocking the major equity markets, traders were surprised at the movements of the yen. Traditionally the safe haven currency strengthens during political situations or economic turmoil as traders looked towards asset protection. Today did not see this happen, with the greenback firming against the yen. Subdued session for the Euro, with middle eastern tensions the key driver for equity and currency movements. The US equity markets were closed for the President Day holiday. With key economic figures released later in the week, traders are cautious in their positions. The G20 meeting on Friday spurred initial buying in the Euro, before weakness creaked into the pair. The EURUSD traded at 1.3675.

Filed Under: February Tagged With: Arkansas, Barak Obama, Chesapeake, commodity market, currency market, currency trading, equity market, Euro, EURUSD, Foreign Exchange, forex, forex market wrap, G20 Summit, Gaddafi, gas, George Soros, Gold, greenback, Hedge Fund, Libya, Light Crude Oil, Middle East, Middle East tensions, Obama, Oil, OPEC, Republicans, S&P500, US Dollar, US equity market, vantage fx, Venezuela, Yen

Equities Compliment Safety of Swiss Franc | February 21, 2011

February 22, 2011 By Vantage FX

Good morning. Equity markets finished last week on a positive note with the major bourses shrugging off political tensions in the Middle East. With the G20 meeting in Paris on Friday, and violent protests in Bahrain and Libya, the markets opened cautiously before support from the corporate sector drove gains. The G20 summit signalled a turning point for the world economy, with monetary and fiscal policy debate fuelling economic instability in the 2^nd world and emerging market economies. China’s recent rate rise in light of inflationary pressures highlighted this point. The US at the summit also noted the importance for a shift in the Chinese Yuan in the coming 12 months, to ensure that global economy would not suffer. Monday will see the US equity markets closed for Presidents Day. Economic news that will be released this week includes Consumer Confidence (market expects 67) on Tuesday, Existing Home Sales (market expects 5.23 million) on Wednesday, Initial Claims (market expects 410,000), Durable Orders (market expects 3%), New Home Sales (market expects 310,000) on Thursday and GDP (market expects 3.3%) on Friday. The GDP deflator figure is forecast to touch 0.3% for Q4.

On the equity market front, the Dow Jones closed 73 points higher last Friday. With the US market closed on Monday, traders will eye key earnings from retailer Wal-Mart on tuesday. The market is looking for a strong fourth quarter from the company. Other large caps reporting earnings during the session include Home Depot, Macys and Hewlett Packard.

On the currency front, the greenback rallied against the Swiss franc on Friday with the currency pair touching 0.9527. Tensions in the middle east had little impact on the movements, with traders watching the G20 meeting closely. Overnight CPI data in the US also supported the dollar, with economists forecasting the possibility of a rebound in interest rates in the coming 12 months. Swiss Central Bank comments recently have given rise to the possibility for fiscal and monetary changes. Cautious about the G20 meeting, traders pushed the Euro lower on Friday. Trading at 1.3579, the currency reacted to news that European banks were reliant on ECB lending overnight. Estimated figure of 16 billion was lent during the session, with economists concerned at the amount. This figure translates into one of the largest borrowing amounts in the last 3 years. Initially reacting to the report, the Euro tracked a consistent trend before weakening at lunch.

Filed Under: February Tagged With: Bahrain, China, Chinese Yuan, Consumer Confidence, CPI Data, currency market, currency trading, Dow Jones, Durable Orders, ECB, equity market, Euro, Existing Home Sales, fiscal policy, Foreign Exchange, forex, forex market wrap, G20, G20 Summit, GDP, GDP Deflator, greenback, Hewlett Packard, Home Depot, inflationary pressures, Initial Claims Data, Libya, Macys, Middle East, monetary policy, New Home Sales, Paris, Swiss Central Bank, Swiss Franc, US, vantage fx, Wal-Mart, Yuan

US Economic News Drives Aussie Dollar | February 18, 2011

February 18, 2011 By Vantage FX

Good morning. Equity and Commodity movements on Thursday surprised traders with mixed economic and political news having little dampening effect. Announcing that CPI rose to 0.4% for the January period, economists had initially factored in a 0.3% rise for the period. This complimented a disappointing initial claims figure of 410,000, which was slightly above estimates. In other economic news, the Philadelphia Fed released buoyant manufacturing data with the index touching 35.9. Such a figure excited the market, boosting risk appetite in the equity, commodity and currency asset classes. The Federal Reserve announced on thursday that it had launched a fresh wave of Bank Stress Tests, to assess the impact of hyper unemployment on capital liquidity ratios. The move comes after Bernanke and the Fed commented on the extension of the bond purchasing program and stimulatory measures. Middle East political tensions continue to monopolise the headlines with Libyan protests, and escalating violence in Bahrain playing havoc on the regional stability. Economists previously factored in the political risk in the region, with the majority of the major currencies holding firm against the greenback during the Thursday session.

On the equity market front, the Dow Jones closed 30 points higher, with the healthcare and financial sectors adding to the volatility. Ensign posted a better than expected profit for the period, driving the medical devices company 13% higher. The market reacted negatively to reports that Apple’s Steve Jobs may be terminally ill, with the stock falling 1.5% in early trade. Speculation that the technology visionary may have aggressive cancer led to temporary fall in the stock before recovering late in the day.

On the currency front, the Aussie Dollar broke back through parity and rebounded to 1.0114. Weakness in the greenback resulted from mixed inflationary and initial claims data, which highlighted to the market the fragility of the US economy. Expectations that the Fed will not raise rates in the coming year also pushed traders towards yielding currencies like the AUD. Fed Chairman Bernanke will comment on the recent stimulatory measures before a senate oversight committee. Traders expect this to impact currency movements during the session. US CPI data pushed the Japanese Yen higher in trade on Thursday. Trading at 83.32, the USDJPY reacted to news that the data fell in line with initial market estimates. Traders were expecting a jump in inflation for the period, which would indicate that the economy was on track for considerable rebound. This did not eventuate with the market looking towards the safety of the Japanese Yen, Swiss Franc and Gold. Traders continue to be cautious over movements in the yen, with expectations that the BOJ could intervene in the market to stem the appreciation.

Filed Under: February Tagged With: Apple, AUD, Aussie Dollar, Bank Stress Tests, Bernanke, BOJ, bond purchasing, capital liquidity ratios, commodity market, CPI, currency market, currency trading, Dow Jones, Ensign, equity market, Fed, Fed Chairman, Federal Reserve, Financial Sector, Foreign Exchange, forex, forex market wrap, Gold, greenback, healthcare sector, index, inflation, inflationary data, Initial Claims Data, initial claims figures, Libyan protest, manufacturing data, Middle East, parity, Philadelphia Fed, risk appetite, Steve Jobs, stimulatory measures, Swiss Franc, US CPI Data, US Economy, USDJPY, vantage fx, volatility, Yen

Equities and Commodities React To PPI Data | February 17, 2011

February 17, 2011 By Vantage FX

Good morning. Equity markets reacted to US economic data on Wednesday with the major indices rallying. Core Producer Price Index figures helped support moves with a 0.5% rise for the corresponding period. Economists had initially factored in 0.2%. Housing Starts also highlighted a recovery in the economy with 596,000 new residential properties. In contrast to these figures, Building Permits fell shy of market expectations with 562,000 recorded for January. Economists are still undecided over the extension of stimulatory bond purchasing measures and whether excessive monetary supply is still required. Comments from the Fed have provided an indication of longer term growth forecasts, with an expected 3.5% for 2011. Across the Atlantic, European officials continue to disagree on the governmental and fiscal reforms. The proposed bill, which looks at pension age and government wage calculation has met resistance with Belgium being the latest country to argue against its introduction. In the middle east, political tensions continue to fuel market volatility with protests in Libya and Bahrain, spilling over into the streets.

On the equity market front, the S&P500 rose 8 points to close at 1336. Financial stocks led the charge with traders increasing their exposure in light of solid economic data. Retail company Abercrombie and Fitch closed 7% higher, with earnings beating initial estimates. Online Forex company FXCM felt the effects of a broker stock revaluation with the stock recording a 12% loss for the session.

On the currency front, Sterling fell heavily against the US dollar on Wednesday with the Bank of England indicating that the UK economy could be subject to tighter monetary control in 2011, Forecasting a rise in inflation to 5%, the longer term forecast is 2-3%, in light of a rise in interest rates. Central Banker Mervyn King was confident that the UK economy would not be subject to a double dip scenario. The GBPUSD traded at 1.6037. The Japanese Yen weakened in trade on Wednesday with risk appetite pushing the US dollar higher. US Wholesale data that was released during the session indicated that cost pressure was continuing to cause concern. A rise of 0.8% for the January period, was driven by a rebound in fuel and energy costs. Core PPI figures were above initial forecasts with 0.5% recorded. Traders reacted to the news moving away from the traditional safety blankets of the yen and Swiss franc. The USDJPY traded at 83.89.

Filed Under: February Tagged With: Abercrombie and Fitch, Bahrain, Bank of England, Belgium, bond purchasing, Building Permit figures, Central Banker, currency market, currency trading, energy, equity market, Federal Reserve, fiscal reform, Foreign Exchange, forex, forex market wrap, fuel, FXCM, GBPUSD, Housing Starts, inflation, interest rates, Libya, Mervyn King, monetary supply, PPI figures, Producer Price Index figures, risk appetite, S&P500, Sterling, Swiss Franc, UK Economy, US Dollar, US Economic Data, USDJPY, vantage fx, volatility, Yen

Aussie Reacts To Chinese Inflation | February 16, 2011

February 16, 2011 By Vantage FX

Good morning. Equity markets reacted to Retail Sales data on Tuesday with the indices lower in trade. Reporting a 0.3% rise for the period, economists had initially factored in 0.5%. Indicating that costs had resulted in a reduction in buying power, the Commerce Department was comfortable with the lacklustre results. Building confidence also contributed to the weakness in the market, with the NA Home Builders indicating that the market was still apprehensive when referencing real estate and building. Across the globe, China announced that CPI had topped 4.9% for the period. Currency traders and Analysts expected a mid 5% range. New loan data also gave rise to a tightening in rates, with a significant jump in approvals for the month of January. According to a local correspondent, a staggering $157 billion was lent during the period. Key economics to be announced on Wednesday include Housing Starts, Building Permits, PPI, Industrial Production and Crude Inventories.

On the equity market front, the Dow Jones fell 41 points to close at 12,227. Profit taking and a slew of economic data drove the trend for much of the session. Dell announced in after hours that its net earnings were $927 million for the fourth quarter. EPS exceeded analysts’ expectations, whilst revenues were in line for the period.

On the currency front, the Aussie dollar had a subdued reaction to Chinese inflation data, with the currency pair falling to 0.9963 late in the session. Economists were unable to ascertain whether the news was good or bad, as a slowing in inflation data could spell a stabilisation of the economy. On the other hand, the news triggered a reassessment of resource demand and growth in the region. RBA minutes released on Tuesday indicated that the local economy was on track to meet growth guidelines and forecasts, with inflation in a manageable range. Rebounding from earlier lows, the US dollar rose against the Japanese Yen on Tuesday. Trading at 83.57, the currency reacted to news that Chinese inflation was below initial estimates. The January figure surprised the market and led to a selloff in the safe haven currencies. The 4.9% annualised figure was expected to top 5.4% due to significant economic growth in the region. Traders however are still cautious on the outlook for Japan and the public debt situation.

Filed Under: February Tagged With: Aussie Dollar, Building Permints, China, Chinese Inflation Data, Commerce Department, CPI, Crude Inventories, currency market, currency trading, Dell, Dow Jones, EPS, equity market, Foreign Exchange, forex, forex market wrap, Housing Starts, Industrial Production, Japanese public debt, NA Home BUilders, PPI, RBA, Retail Sales Data, US Dollar, vantage fx, Yen

European Sovereign Concerns Weigh On Sentiment | February 15, 2011

February 15, 2011 By Vantage FX

Good morning. Equity and Commodity markets were flat in trade on Monday, with trader’s cautiously awaiting key US and European economic data released later in the week. Producer Price Index figures on Wednesday will provide a clearer picture of the general economy and the strength of the recovery. President Obama on Monday provided an insight into the $3.7 trillion budget which would provide economic guidance for the fiscal 2012 period. Key initiatives of the proposed budget include a significant reduction in the current deficit, through the implementation of cost cutting strategies and investment in infrastructure projects. Republicans are expected to oppose the spending. Across the Atlantic, EU leaders met in Brussels to discuss a financial stability plan and its application in the region. Recent unwillingness to accept new debt level measures by some member states has spurred heightened volatility in the currency. This has also had a direct impact on key confidence levels.

On the equity market front, the S&P500 was relatively flat for much of the session with the index closing 3 points higher. Job site Monster Worldwide received an early boost in trade with the company announcing that HotJobs was now a division of the group. Phone manufacturer Nokia received an analyst downgrade, weighing on the share price. News that the company had partnered with Microsoft had little supportive effect on the stock price.

On the currency front, sovereign debt concerns pushed the euro lower with the price pressing 1.3465. Expectations that the Euro zone members meeting in Brussels would provide a decisive framework and direction for reform, had little supportive impact on the currency. Recent comments from the ECB pertaining to growth forecasts and monetary policy led to wide speculation over the impact of the recent debt woes on the economy. Industrial Output data released during the session also painted an uncertain picture with a 0.1% contraction for the quarter. The Japanese Yen strengthened against the greenback on Monday with traders eyeing caution. Trading at 83.35, the currency pair reacted to local GDP data which indicated that the Japanese economy had contracted 1.1%. Although a disappointing result, economists had previously estimated a 2.4% fall for the period. Citing pressure from a strong Japanese Yen, the Ministry of Finance was conscious of long term economic forecasts. Recent buoyancy in the USD has helped support exporters and their earnings targets.

Filed Under: February Tagged With: brussels, commodity market, currency trading, ECB, equity market, EU, Euro, euro zone, European Economic Data, Foreign Exchange, forex, forex market wrap, GDP, greenback, HotJobs, Industrial Output data, microsoft, Ministry of Finance, monetary policy, Monster Worldwide, Nokia, President Obama, Producer Price Index, S&P500, Sovereign Debt, US Economic Data, USD, vantage fx, volatility, Yen