greenback

Markets Flat As Investors Wait For News On The Debt Ceiling | July 29, 2011

July 29, 2011 By Rupert Kain

USDCHF trades at record lows

The Australian equity market is pointed to a slightly weaker open today after the Dow finished 62 points lower 12240.11, the blue-chip measure’s fifth straight loss. The S&P500 index shed 4.22 points to close at 1300.67 as lawmakers indicated they were no closer to reaching an agreement to the increase of the debt ceiling and avoiding default.

The stalling of the U.S. debt-ceiling debates has convinced many investors that the government is on track to lose its triple-A credit rating. Attention on the subject intensified late Thursday as House Republican leaders aimed for an evening vote on their latest proposal to cut spending and increase the borrowing limit. The action follows weeks of squabbling between the White House and Congress.

The AUDUSD traded down from highs of 1.1076 overnight to as low as 1.0977, traders seem to be sitting on the fence awaiting for the House of Representatives vote later on Friday.

The USDCHF (see above chart) dropped to a record for the fourth straight day trading down as low as 0.7990 as the US house of representatives headed towards a showdown. At time of writing this report the USDCHF has bounced slightly to sit at 0.8014.

WTI crude had a unexciting evening finishing the US session at 97.44 after US jobless claims dropped to the lowest level in almost four months, this signals that the fuel consumption may increase as the weakness in the jobs markets lightens.

Source Bloomberg, Dow Jones News

INDICES
	Last Traded
SPI 200 future	4427
S&P500 Index	1300.67
Dow Jones Indus. Avg	12240.11
FTSE 100 Index	5873.21

COMMODITIES
	Last Traded
Gold	1615.65
Oil (Nymex)	97.13

CURRENCIES
	Last Traded
AUDUSD	1.0999
EURUSD	1.4325
GBPUSD	1.6360
USDJPY	77.77

Filed Under: July Tagged With: AAA, AUDUSD, Australian equity market, borrowing limit, Congress, Credit Rating, crude oil, currency trading, Daily fx report, Daily fx summary, debt ceiling, default, Dow, Dow Jones Indus. Avg, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE100 Index, fuel consumption, fx market wrap, GBPUSD, Gold, Greece, greenback, House of Representatives, inflation, jobless claims, Light Crude Oil, market wrap, Nymex, Oil, Republicans, S&P500 Index, spending cuts, SPI 200, Swiss Franc, US Dollar, USDCHF, USDJPY, vantage fx, White House, WTI crude

Greek Debt Restructuring Concerns Savage The Euro | May 23, 2011

May 23, 2011 By Vantage FX

The Euro experienced heavy selling on Friday after the ECB rejected proposed restructuring

Good morning. Equity and Commodity markets finished on Friday in the red, with traders moving away from risk assets. Disappointing Existing Home Sales data on Thursday coupled with debt restructuring concerns in Europe, led to a equity wide selloff. Middle East tensions also plagued the headlines, with Syrian officials receiving little support from the West. The US government announced that assets held by the ruling party in the US would be frozen. This comes after reports of heavy civilian causalities. Key economic data released this week includes New Home Sales (market expects 300,000) on Tuesday, Durable Orders (market expects -2%) and Crude Inventories on Wednesday, GDP (market expects 2.0%), Initial Claims (market expects 400,000) and Continuing Claims (3.7m) on Thursday and Personal Income (market expects 0.4%), Personal Spending (market expects 0.5%), and Pending Home Sales (market expects -1.8%) on Friday.

On the equity market front, the S&P500 closed Friday’s session 0.77% lower. Safe haven buying pushed consumer staples and discretionary companies Kraft and Disney higher on Friday. Both companies bucked the overall negative trend for the day. Key corporate earnings released this week includes Campbell Soup and Krispy Kreme, with both companies expected to fall in line with estimates.

On the currency front, the Japanese Yen continued to trade in a range on Friday, with the currency touching 81.67. With no major economic data released during the session, traders moved away from the yen and traded the higher risk currencies of the Euro and Pound. According to reuters reports, the Japanese budget contraction is expects to hit almost 10 trillion yen leading up to the years 2010-2015. Traders also eyed the potential for intervention from the BOJ in light of recent movements in the pair. Aussie dollar followed the yen during the session, with little or no movement recorded. Trading in a band, the currency pair touched 1.0671, before weakening. Awaiting next weeks’ key policy announcement, the market is factoring in the potential for further support in the resources sector. Recent weakness has spurred a sudden and knee jerk attention to buying. The AUDUSD traded at 1.0671, with a sharp rebound in afternoon trade recorded. Euro weakened considerably against the greenback with news that Greek would be downgraded by fitch. Announcing a B+ rating, the agency cited continued pressure from borrowing costs and economic instability. With both Greece and Portugal experiencing significant monetary loss, the market cautiously watched for further debt contagion commentary. The disappointing announcement from Fitch during the session spurred on a rise in demand for the safe haven currencies, like the Swiss Franc and Japanese Yen.

Filed Under: May Tagged With: AUDUSD, Aussie Dollar, BOJ, budget contraction, campbell soup, commodity market, Continuing Claims, Crude Inventories, currency market, currency trading, debt contagion, debt restructuring, Disney, downgrade, Durable Orders, equity market, Euro, Europe, Existing Home Sales, fitch, Foreign Exchange, forex, forex market wrap, Greece, greenback, Initial Claims, Kraft, krispy kreme, market wrap, Middle East tensions, New Home Sales, Pending Home Sales, Personal Income, Personal Spending, Portugal, pound, S&P500, Swiss Franc, Syria, US Government, vantage fx, Yen

Housing Jitters Extend The Dow’s Losing Streak | May 18, 2011

May 18, 2011 By Vantage FX

Swiss Franc recommenced its long term trend, with the greenback weakening against the safe haven currency

Good morning. Equity markets were mixed on Tuesday, with the major indices experiencing heightened volatility. Opening weaker, traders shifted from currencies and treasuries to equities late in the session. On the economic front, Housing Starts and Building Permits fell short of initial estimates with 523,000 for HS recorded. Building Permits were forecast to reach 590,000 for the April period. The figure was however significantly lower with 551,000 recorded. Across the atlantic, EU officials commented on the Greek debt situation, with Jean Claude Juncker noting the importance of economic stabilisation in the region. He did not rule out the potential for debt refinancing as Greece continues to struggle with the current austerity package. The market is eagerly watching the situation in Portugal and speculating over the economic impact the crisis is having on the small country.

On the equity market front, the S&P500 finished the session flat at 1329. Computer and Technology manufacturer Dell posted a significant rise in profits for the period, with the company recorded a net income of $945 million. This translated into a 134% rise in income. In other corporate news, HP posted a slight increase in profits for the period. The report however fell short of initial forecasts, pushing the stock 7% lower.

On the currency front, the Japanese Yen weakened against the greenback with markets factoring in a possible easing of monetary policy. Citing extended economic pressure from natural disasters and sluggish growth, the Bank of Japan was confident that long term deflation could be alleviated. This had the reverse effect on the pair, with traders moving out of the low yield currency and shifting into the riskier assets. Markets also eyed the potential for further debt worries in Europe and the impact this would have on the yen. The USDJPY traded at 81.36. Aussie dollar consolidated on Tuesday, with the currency reacting to further speculation over interest rates in Australia. The RBA have recently been analysing the housing and retail sales data, with the market cautious over the short term impact of a drop in property prices. Noosa, the Sunshine and Gold Coasts in Queensland have begun to show signs of weakness in the sector, with a significant contraction in housing prices. This could translate into a fall in the currency. The AUDUSD traded at 1.06225. Strong surge in the Euro on Tuesday, with interest rate speculation driving gains. The announcement that British inflation rose during the period, translated into a cross regional currency push. Economists expect a similar scenario in the Euro zone. Debt concerns were eased during the session, as Greece reaffirmed that they would be able to cover their short term debt obligations. Traders continue to be sceptical. The EURUSD traded late in the day at 1.4234.

Filed Under: May Tagged With: AUDUSD, Aussie Dollar, austerity measures, Australia, Bank of Japan, british inflation, Building Permits, currencies, currency market, currency trading, deflation, Dell, equities, equity market, EU, Euro, euro zone, EURUSD, Foreign Exchange, forex, forex market wrap, Gold Coast, Greece, Greek debt, greenback, housing data, Housing Starts, HP, interest rates, Jean Claude Juncker, market wrap, monetary policy, Noosa, Portugal, Queensland, RBA, Retail Sales Data, S&P500, Sunshine Coast, treasuries, USDJPY, vantage fx, volatility, Yen, yield

Traders Watch The Events Play Out In Greece | May 17, 2011

May 17, 2011 By Vantage FX

Significant range for the Euro dollar, with traders assessing the Greek debt situation

Good morning. Equity markets remained weak on Monday with the major indices reacting to economic uncertainty. Oil and Gold futures opened the session on a positive note before contracting late in the session. This had a significant effect on the resource based currencies of the AUD and CAD. News stories that commanded the headlines included the arrest of IMF chief for sexual assault. Economists reassessed the outcome for the debt talks in light of this breaking story. Economically the Housing index and Empire Manufacturing were released during the session. According to the report, the housing market stayed in line with initial forecasts. Manufacturing however contracted significantly, with 11.9 recorded for the 1^st week of May. Tomorrow will see the important release of Housing Starts, Building Permits and Industrial Production.

On the equity market front, the Dow Jones closed 47 points lower with the index reacting to mixed corporate earnings and merger and acquisition speculation. NY Stock Exchange shares weakened considerably, as news broke that the bid from the Nasdaq and ICE would be blocked. Cash rich Google announced that it would use its large balance sheet for debt issuance opportunities. This could result in a significant upside adjustment in earnings.

On the currency front, the Aussie dollar weakened against the greenback on Monday with the currency reacting to speculation over RBA minutes. Leading up to the key meeting, traders were cautious and apprehensive in light of recent developments. Risk aversion also played an important role during the session, with an equity and commodity market selloff pushing all of the major risk pairs lower. After a big week of economic news last week, traders have little leads or direction. The AUDUSD traded at 1.0564. Consolidating late in the session, the Japanese Yen rallied against the greenback early in the day. A dismissive and sentiment focused market, the currency pair initially reacted to volatility before strengthening after Mitsubishi’s earnings news. Announcing a significant uplift in profits for the period, the car manufacturer highlighted that a stronger yen had a slight impact on the result. The company cited that a reduction in overall borrowing costs had contributed to the result. The USDJPY traded at 80.76. Sterling followed other risk currencies during the session with the currency falling to 1.6197. The market continued to focus on the debt concerns in Greece and the possibility of default. Limited economic leads this week will also spur thin trading and heightened degrees of volatility. The Bank of England is forecast to release its minutes very soon, with traders speculating that rates will continue to stay on hold.

Filed Under: May Tagged With: AUD, AUDUSD, Aussie Dollar, Bank of England, borrowing costs, Building Permits, CAD, commodity market, consolidating, corporate earnings, currency market, currency trading, Dow Jones, Empire Manufacturing, equity market, european debt, Foreign Exchange, forex, forex market wrap, Gold, Google, Greece, greenback, Housing Index, Housing Starts, ICE, IMF Chief, Industrial Production, M&A speculation, market wrap, Nasdaq, New York Stock Exchange, NYSE, Oil, RBA, risk aversion, USDJPY, vantage fx, volatility, Yen

CPI And Its Effects On Gold | May 16, 2011

May 16, 2011 By Vantage FX

Volatility in Gold with CPI data pushing the commodity into a range

Good morning. Equity and Commodity markets closed the Friday session off on a weaker note with Consumer Price Index data falling in line with initial estimates. Recording 0.4% for the period, the market was disappointed with the result. European debt jitters continued with the possibility of further default by Greece. Germany announced that they would not extend the emergency bailout package, and pushed for stricter austerity measures. Chinese Inflation data continues to pressure the markets, with the large economic power announcing last week a new increase in liquidity requirements for banks. This had the subdued effect on the global economic outlook, as traders eyed the possibility of a slight contraction in the shirt term. Key economic data released in the US this coming week includes Housing Starts (market expects 565,000), Building Permits (market expects 590,000), Industrial Production (market expects 0.5%), on Tuesday, and Initial Claims (market expects 420,000), Continuing Claims (market expects 3.713m), Existing Home Sales (market expects 5.22 million), and Leading Indicators (market expects no change) on Thursday.

On the equity market front, the S&P500 weakened 0.7% or 100 points. The market reacted to corporate news in the tech sector, with Yahoo shares falling considerably, due to the Alibaba news. Key corporate data released on Monday includes earnings from JC Penney, and Urban Outfitters. Both companies are forecast to report solid profits.

On the currency front, the Japanese Yen continued to track yesterday’s movements with the currency consolidating at 80.71. CPI data fell in line with estimates with 0.4% recorded for the period. The market reacted to the economic results with trepidation and caution. Traders continue to be concerned over the economic implications of a stronger yen. Intervention fears have however been eased recently, with the greenback rising against the currency. Weakening to 1.41051, the Euro reacted to US Inflation news and Greek debt concerns. Speculation that refinancing may be required to cope with the ballooning interest costs, the market reacted negatively to the currency. Recent positive comments from ECB Chairman Trichet have had little impact on the region, with economists continuing to see very real risk in the economic system and the debt markets. Key data released next week, will paint a defining picture of the recovery and whether further government stimulation is required. The greenback rose against the Swiss Franc on Friday, with traders moving away from the European based currencies. A sharp rise in the afternoon session was recorded with the market finding Solis in the US dollar. Across the board, traders eyed weakness in the commodity space, coupled with low volatility in inflation. The CPI result was in line with estimates. Private Banking firms in Switzerland highlighted the degree of pressure the strong currency had on investment. A reduction in investment has begun translating into a fall in overall headcount. The USDCHF traded at 0.8926.

Filed Under: May Tagged With: Alibaba, austerity measures, Building Permits, Chinese Inflation Data, commodity market, consolidating, Consumer Price Index, Continuing Claims, contraction, CPI, currency market, currency trading, ECB, ECB Chairman, equity market, Euro, european debt, Existing Home Sales, Foreign Exchange, forex, forex market wrap, Germany, Greece, greenback, Housing Starts, Industrial Production, inflation, Initial Claims, intervention, JC Penny, Leading Indicators, liquidity requirements, market wrap, S&P500, Swiss Franc, Trichet, Urban Outfitters, US Dollar, US inflation, USDCHF, vantage fx, yahoo, Yen

Weakness in Commodities Pushes Aussie Dollar Lower | May 12, 2011

May 12, 2011 By Vantage FX

The Aussie dollar reacted to an equity and commodity market selloff on Wednesday

Good morning. Weakness in Equity markets recommenced with commodity jitters pushing the major indices lower. Reacting to trade deficit data and the potential for hyper inflation in China, the markets experienced heightened volatility. Light Crude Oil futures posted a 5% fall with traders assuming a slight contraction in the economy, as a result of the China announcement. Economically Treasury Budget data posted a $40.5 billion deficit – slightly better than previously forecast, whilst Trade Balance touched $48.2 billion. Officials in China noted that inflationary pressure continued to stay above the acceptable management level. Economists predict that the Chinese central bank will raise rates in the coming weeks. In other news, European debt worries continued to weigh on the indices with Greek government workers protesting over austerity measures. German Chancellor Merkhel responded negatively to the call for additional funding, with the leader proposing a further tightening of fiscal and government spending in the country.

On the equity market front, the Dow Jones closed 1% lower or 130 points. Oil companies Exxon and Chevron dragged the index lower, with a fall in energy commodities highlighted as a key contributor. Entertainment company Walt Disney disappointed the market, with the company releasing a worse than expected earnings result.

On the currency front, the Aussie Dollar weakened considerably against the greenback on Wednesday with the market reacting to chinese inflation figures. With the local budget released during the previous session, the market was apprehensive about the long term outlook, in light of property data. Reacting to a better than expected treasury balance figures, economists cited the possibility of a slight contraction in demand for resources, if Chinese interest rates are raised. The AUDUSD traded at 1.0698. Reporting a significant drop in earnings, car manufacturer Toyota drove equity and currency market volatility higher. The USDJPY traded at 80.96 late in the session. The announcement however did not surprise analysts with many forecasting a weakening in earnings. The recent earthquake, tsunami disasters coupled with the stronger yen, have had a dramatic effect on the demand for the local currency. Important economic data released during the session included Trade and Treasury Balance data. The reports supplied mixed figures. Consolidating late in the day, the Euro opened lower against the US dollar on Wednesday. The market reacted to news that Greece may require additional funding to cover obligations. Germany reacted to the news, citing the importance of further austerity measures. Riots in Greece over budget cuts and government restructuring also pressured the local government, the EU and the Euro during the day. The Euro zone continued to shy away from further monetary grants. The EURSUD traded at 1.42017.

Filed Under: May Tagged With: Angela Merkhel, AUDUSD, Aussie Dollar, austerity measures, budget cuts, chevron, China, Chinese Central Bank, commodities, contraction, currency market, currency trading, Dow Jones, equity market, Euro, euro zone, EURUSD, Exxon, Foreign Exchange, forex, forex market wrap, German Chancellor, Germany, government restructuring, Greece, Greece riots, greenback, hyper inflation, inflationary pressure, Light Crude Oil, market wrap, Merkhel, Oil, Toyota, Trade Balance, trade deficit data, Treasury Budget data, US Dollar, USDJPY, vantage fx, volatility, Walt Disney, Yen

Intervention Concerns Squashed By Falling Japanese Yen | May 11, 2011

May 11, 2011 By Vantage FX

Japanese Yen weakened considerably against the greenback, as currency sentiment shifts.

Good morning. Equity markets were buoyant in trade on Tuesday, with investors eyeing positive corporate announcements. Commodities were mixed during the session, with Oil closing slightly lower, and gold consolidating. Reacting to Export, Import Prices and Wholesale Inventories data, traders are still awaiting key CPI and PPI data later in the week. In Canada, key Analysts cited that the new government would enhance the already strong economy and boost resource output. The comments came off the back of news released last week when the elections were finalised. Chinese officials announced during the session that the country had posted a significant surplus in trade, with a 29.9% increase in exports for the period. This came, after Treasury Secretary Timothy Geitner, met with the Chinese Central Bank and Government.

On the equity market front, the S&P500 rose 0.8% to close at 1357. News that Microsoft would purchase internet telecommunications company Skype for $8 billion, sent a clear message that big M&A was still viable, in spite of the previous debt crisis. Entertainment company Disney, announced that earnings slightly contracted for the period, with $942 million posted. Interest Rate risk, coupled with a slowdown in advertising revenues has impacted margins considerably.

On the currency front, The Swiss Franc took a breather on Tuesday, with the greenback rising on Export, Import Price and Wholesale Inventory data. A strong reaction by base metal commodities coupled with several corporate announcements on the equity markets contributed to volatility. Falling during the morning session, the USDCHF traded off relatively light volumes. The evening session price for the currency pair was 0.8807. Pound Sterling fell against the US dollar, with speculation that the Bank of England Chairman would reduce his long term economic forecasts for the country. Awaiting the key BOE meeting, traders prompted the move, with a switch into the Euro. Mixed economic data including manufacturing figures coupled with recovering property prices, has pressured the pair and sentiment towards the currency. The GBPUSD traded at 1.6357. A shift in trader sentiment supported the greenback on Tuesday with the currency rising against the Japanese Yen. Markets reacted to positive data from the previous couple of sessions, with Export and Import Sales figures also rising for the period. Wholesale Inventories touched 1.1% in March, which was above initial estimates. The Japanese Yen opened firmer before consolidating at lunch and selling off in the evening. The USDJPY traded at 80.74.

Filed Under: May Tagged With: Bank of England, base metal commodities, BOE, BOE Chairman, Canada, Chinese Central Bank, Chinese Government, commodities, CPI, currency market, currency trading, Disney, elections, equity market, Euro, Export Prices, Foreign Exchange, forex, forex market wrap, GBPUSD, Gold, greenback, Import Prices, interest rate, manufacturing data, market wrap, microsoft, Oil, pound, PPI, S&P500, Skype, Sterling, Swiss Franc, Timothy Geitner, trade surplus, Treasury Secretary, US Dollar, USDCHF, USDJPY, vantage fx, volatility, Wholesale Inventories, Yen

Rebound in Commodities Drives Risk Pairs Higher | May 10, 2011

May 10, 2011 By Vantage FX

Silver spiked in trade on Monday, with short covering driving the price higher.

Good morning. Equity and Commodity markets started the week on a positive note, with Oil Futures rising 5% intraday. With no key data released during the session, market movements were governed by interest rate and economic growth speculation. Later in the week, CPI and PPI results will be released. Housing prices continue to be a cause for concern, with industry information provider Zillow, indicating that home values would continue to erode in the coming months. Across the atlantic, debt worries in Greece continue to dominate the markets, with ratings agency Standard and Poor downgrading the country to B and C. This comes on top of a sovereign rerating from Moody’s. The company was also very bearish on the outlook, citing the potential for a further default. Markets have also begun to factor in how a potential rate rise in the EU would impact the current bailout package.

On the equity market front, the S&P500 closed 0.45% higher with AIG weakening the financial sector. Continued speculation over the sale price for the troubled Insurer, has led to significant declines in the share value. The stock lost 3.2% during the session. Car rental company Hertz, agreed to boost its takeover valuation for Thrifty. This led to a 13% rise in the takeover target. Hertz and Avis are currently vying for ownership of the troubled company.

On the currency front, the Japanese Yen strengthened against the major pairs on Monday, with the currency reacting to corporate earnings from major retailers. Toshiba reported a strong up lift in revenues and sales for the period, with the company highlighting a shift in trading conditions. The rise in earnings also prompted intervention speculation and whether or not the Bank of Japan would be so eager to weaken the currency. Economists were conscious that this could be a rare exception. The USDJPY traded at 80.27. Posting solid gains against the greenback, the Aussie dollar finished the session at 1.0772. Opening weaker after Business Confidence data indicated that corporate earnings were at risk, the currency stabilised in the afternoon session. Resurgence in commodities, particularly Oil and Energy commodities contributed to the movement. Analysts are still cautious over the direction of the US dollar, as PPI and CPI data later in the week will paint a picture of the health of the economy.

Filed Under: May Tagged With: AIG, Aussie Dollar, Avis, Bank of Japan, bearish, Business Confidence data, commodities, commodity market, corporate earnings, CPI, currency market, currency trading, energy, equity market, Foreign Exchange, forex, forex market wrap, Greece, greenback, Hertz, Housing Prices, interest rate, intervention, market wrap, Moody's, Oil, oil futures, PPI, rate rise, S&P500, sale price, share value, sovereign downgrade, Standard and Poor, stock, Thrifty, Toshiba, US Dollar, USDJPY, vantage fx, Yen, Zillow

Non Farm Payrolls Surprise Economists | May 9, 2011

May 9, 2011 By Vantage FX

Pound Sterling consolidated on Friday after buoyant Non Farm Payrolls

Good morning. Equity markets reacted to Non Farm Payrolls data on Friday, with the major indices finishing the session on a positive note. Reporting 244,000 NFPs for the month of April, the market also reacted to Private employment data. The unemployment rate however rose to 9%, along with consumer credit. This figure outpaced previous estimates with $6 billion posted. Economic news that is set to be released this week includes Import and Export Prices, and Wholesale Inventories (market expects 1%) on Tuesday, Trade Balance (market expects $47.8 billion deficit), Crude Inventories and Treasury Budget on Wednesday, Initial Claims (market expects 423,000), PPI (market expects 0.5%), Core PPI (market expects 0.2%), Retail Sales (market expects 0.6%), Business Inventories (market expects 0.9%) on Thursday and CPI (market expects 0.4%), and Core CPI (market expects 0.1%) on Friday. Across the Atlantic, speculation that Greece may leave the Euro was quashed by the Prime Minister and several Greek government officials. Citing further debt woes in the country, economists were concerned that the hike in borrowing costs could further erode sovereign ratings in the region.

On the equity market front, the S&P500 rose 0.3% off the back of buoyant NFP. Key corporate earnings released this week includes Tyson and auction house Sotheby’s. Both are expected to report healthy earnings for the quarter.

On the currency front, the Euro weakened against the greenback on Friday, with the currency pair trading at 1.4352. Non Farm Payroll had the reverse effect on the EUR, as traders shifted over the US dollar. The positive jobs data indicated that the US economic recovery could be on track. The key question raised by many in the market, is the impact of inflation on general growth and when the Fed might raise rates. This speculation also boosted buying the USD. Surprising Non Farm Payrolls data pushed the Japanese Yen lower in early trade on Friday. The market reacted to the news that non farm payrolls rose 244,000. This represented a significant gain from previous estimates. Bank of Japan officials watched the currency movements closely, as speculation has begun to mount over the possibility of further intervention measures. The recent selling of the yen, by the BOJ and the G7 only had a temporary impact on the price. The USDJPY traded at 80.54. Aussie Dollar consolidated on Friday, with traders deciphering key economic data released. With the Reserve Bank keeping rates on hold early in the week, the market reacted to a swing back in commodity prices. Oil and Silver pressured the AUD on Thursday, and this flowed over into Friday. Economists have speculated over the impact of sustained commodity weakness on the demand for the AUD. The implications of a flat monetary policy could also see further consolidation in the currency. The AUDUSD traded at 1.0691.

Filed Under: May Tagged With: AUD, Aussie Dollar, Bank of Japan, BOJ, borrowing costs, Business Inventories, commodity prices, Consumer Credit, Core CPI, Core PPI, corporate earnings, CPI, Crude Inventories, currency market, currency trading, equity market, Euro, Export Prices, Fed, Foreign Exchange, forex, forex market wrap, G7, Greece, greenback, Import Prices, indices, inflation, Initial Claims, Jobs Data, market wrap, monetary policy, NFP, Non Farm Payroll, Oil, PPI, Prime Minister, private employment data, Reserve Bank, retail sales, S&P500, silver, Sotheby's, sovereign ratings, Trade Balance, Treasury Budget, Tyson, unemployment rate, US Dollar, USDJPY, vantage fx, Wholesale Inventories

ISM Services Data Weighs On The Markets | May 5, 2011

May 5, 2011 By Vantage FX

V Shaped recovery for the Swiss Franc in light of mixed economic signals

Good morning. Equity and Commodity markets reacted to disappointing services data and private employment. Reporting 52.8 for April period, the ISM index fell short of the expected 57.4. Employment Change figures also contracted with 179,000 posted for the period. Leading up to key Non Farm Payroll data on Friday, the market has begun factoring in the potential of a softening in growth. Gold, Silver and Oil continued their slide during the session, with each commodity reacting to inflationary forecasts. Prominent Hedge Fund Manager George Soros, divested large stakes in the precious metals, citing the potential for a inflationary readjustment. Commenting on the federal reserve’s recent bond purchasing stance, the Billionaire, was comfortable with rising consumer prices. The market tracked this announcement, with traders reacting to selling pressure and volatility.

On the equity market front, the S&P500 closed 0.6% weaker with mixed corporate leads. Newscorp disappointed the market with profits touching $639 million. This translated into 24 cents per share, which was below the 27cents forecasted. In contrast to this result, Whole Foods released buoyant earnings with a 33% rise in profits. The stock rose 5.7% off the back of the news.

On the currency front, the Swiss Franc continued to gain ground against the greenback, with traders speculating over interest rate movements. Leading up to the Swiss Central Bank’s meeting on June 16^th, the market is expecting further gains. A rise in rates is forecast, as the economists focus on the imbalance between the Swiss and European economies. Leaving rates at record lows during the last meeting, the SNB is expected to take an aggressive stance. The Swiss Franc traded at 0.8613. EURUSD weakened considerably late in the session, with traders eyeing potential hang over effects from the Greek and Portuguese debt crisis. A cross asset sell off was recorded with commodity profit taking compounding losses. The recent shift out of equities for many hedge funds has also been cited as a potential contributing factor. Leading up to Non Farm Payrolls on Friday, economists are reaffirming their ling term inflationary forecasts. The EURUSD traded at 1.4833. Sterling weakened to 1.6496 with market jitters spurring a rise in overall volatility. UK Construction data was lower than initially expected, with the market attempting to price in the possibility of a rate rise later in the year. Recent disappointing economic figures have led to indecision and growth uncertainty. The Bank of England has cited this dilemma in their comments.

Filed Under: May Tagged With: Bank of England, BOE, bond purchasing, commodity market, currency market, currency trading, debt crisis, Employment Change figures, equity market, EURUSD, forex, forex market wrap, George Soros, Gold, Greece, greenback, Hedge Fund, Hedge fund manager, inflationary readjustment, interest rate, ISM Index, market wrap, Newscorp, Non Farm Payroll, Oil, Portugal, previous metals, private employment data, S&P500, sell off, selling pressure, services data, silver, Swiss Central Bank, Swiss Franc, UK Construction Data, vantage fx, volatility, Whole Foods