Thread: Forex News from InstaForex

Wednesday, the latest monthly Industrial Trends survey from the Confederation of British Industry showed that 17% of the 575 firms surveyed expect the output volume to increase over the next three months, while 34% anticipate a fall. However, the resulting balance of minus 17% was a marked improvement on the previous month's balance of minus 32%.

Thus, firms expect the pace of decline in output to slow significantly in the next quarter, indicating that they believe the toughest phase of the recession may be behind them.

Ian McCafferty, the CBI's Chief Economic Adviser said, "After scaling back production very sharply at the beginning of the year, manufacturers can see a glimmer at the end of the tunnel. They still expect manufacturing activity to fall, but at a much slower rate over the next few months."

The survey found that a balance of 56% reported a below normal order books in May. The CBI said export order books remained below par this month despite the relative weakness of sterling.


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In early European deals on Thursday, the dollar slipped to new multi-month lows against its European and Swiss counterparts as fresh concerns about the strength of global recovery resurfaced.

Yesterday, the Federal Reserve lowered its forecast of U.S. economic growth for the next three years. Minutes from its April meeting showed the Fed projected the world's biggest economy to contract by up to 2 percent this year with the unemployment rate rising to as high as 9.6 percent.

They also showed that Fed policymakers had considered buying more securities to spur recovery, a move that would inject more dollars into the market.

At the April meeting the FOMC voted unanimously to keep the target range between 0 and 0.25 percent. In the accompanying statement the FOMC noted that "the economy has continued to contract, though the pace of contraction appears to be somewhat slower."

"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the statement read.

Once again, the FOMC said that interest rates will remain exceptionally low for some time, adding that they will "employ all available tools to promote economic recovery and to preserve price stability."

A disappointing 2009 outlook from ***************, the world's biggest PC maker, also fanned concerns about corporate profits in a slowing economy.

The dollar, which closed yesterday's trading at 1.1003 against the Swiss franc, fell to a new multi-month low of 1.0962 during early deals on Thursday. The next downside target level for the U.S. currency is seen at 1.07.

In early trading on Thursday, the dollar weakened to 1.3840 against the euro. This set the lowest point for the dollar since January 05. On the downside, 1.40 is seen as the next target level for the dollar. At Wednesday's close, the euro-dollar pair was quoted at 1.3781.

At 4:55 am ET Thursday, the dollar spiked up to 1.5518 against the pound, moving from a new multi-month low of 1.5819 hit in early Asian deals today. If the dollar gains further, it may likely target the 1.535 level. The pound-dollar pair was worth 1.5755 at Wednesday's close.

The pound plummeted after the Standard & Poor's revised the outlook on the U.K. to negative from stable. The rating agency affirmed 'AAA' long-term and 'A-1+' short-term sovereign credit ratings.

Standard & Poor's credit analyst David Beers said, "We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term."

Rating outlooks assess the potential direction of a rating, typically over a period of up to two years.

In economic news, U.K.'s retail sales rose 0.9% in April from the previous month, larger than the expected increase of 0.5%. On a yearly basis, sales grew 2.6%, while economists were looking for a 2.4% rise.

Against the Japanese yen, the dollar is presently trading at 94.97, up from a new multi-month low of 94.31 hit at 9:25 pm ET Wednesday. The next upside target level for the dollar-yen pair is seen at 95.5.

An index measuring tertiary industrial activity in Japan fell a seasonally adjusted 4.0 percent in March compared to the previous month, the Ministry of Economy, Trade and Industry said today, posting a score of 100.8.

That was sharply lower than analyst expectations that had called for a 1.5 percent monthly decline following the revised 1.3 percent monthly easing in February.

Investors are now likely to focus on the North American session, in which the U.S. leading indicator for April, Philadelphia Federal Reserve's manufacturing survey data for May and the weekly jobless claims report for the week ended May 16 are expected.


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Monday, German Ifo business confidence survey is the only major report due from the European economies.

At 2.00am ET, the Statistics Estonia is scheduled to release the foreign trade data for March. The trade deficit stood at EEK 1.1 billion in February, smaller than the EEK 1.57 billion deficit in January.

At 3.00am ET, a slew of statistical reports are due. Hungarian retail sales are forecast to drop 3.5% annually in March, larger than the 3.2% decline seen in February. Meanwhile, Czech consumer confidence and Spanish PPI are also due.

At 4.00am ET, a monthly business confidence survey is due from the Munich-based Ifo Institute for Economic Research. German business confidence is seen at 84.9 in May, up from 83.7 in April. Meanwhile, the expectations index is forecast to rise to 85.4 from 83.9 and current assessment to improve to 84.5 from 83.6.

The Hungarian Central Bank is set to announce the interest rate decision at 8.00am ET. The central bank is widely expected to hold the base rate at 9.5%.


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News are provided by InstaForex in partnership with RTT.

During early European deals on Tuesday, the British pound declined to a 4-day low against the US dollar as Britain's top share index fell 0.8 percent in early today with investors nervous after reports that North Korea fired more short range missiles, denting oil and metal prices and pressuring commodity stocks.

The pound also showed weakness against other major currencies. The British currency thus fell from an Asian session's 4-day high against the European currency and the Swiss franc.

By 4:57 am Eastern Time, the FTSE 100 .FTSE was down 36.45 points at 4,328.84 after gaining 0.5 percent on Friday. The index is down 2.1 percent this year, but has gained over 25 percent since touching a six-year trough on March 9.

Against the US dollar, the British pound traded down during early deals on Tuesday. At 5:00 am ET, the pound-dollar pair touched a 4-day low of 1.5781, compared to 1.5911 hit late New York Monday. If the pair falls further, 1.553 is seen as the next target level.

The British currency that closed Monday's North American session at 0.8812 against the European currency reached a 4-day high of 0.8776 at 2:05 am ET Tuesday. Thereafter, the pound reversed its direction and is currently trading at 0.8795 against the euro with 0.892 seen as the next target level.

Germany's gross domestic product posted its sharpest decline since records began in 1970 on weak investment activity and a sharp drop in net exports.

The German economy contracted 3.8% on a sequential basis in the first quarter, the Federal Statistical Office said in a detailed report today. The first-quarter drop in GDP marked an unprecedented fourth successive quarterly contraction for Germany's economy.

In the fourth quarter of 2008, the gross domestic product had slipped 2.2%. Compared with the first quarter of 2008, GDP decreased a price-adjusted 6.7% in the first quarter of 2009, much larger than the 1.7% drop seen in the fourth quarter. When calendar-adjusted, the economic performance went down 6.9%.

Elsewhere, a consumer climate survey by market research firm GfK Group revealed that German consumer sentiment remained unchanged in May amid the economic crisis. The survey's forward-looking overall indicator showed a value of 2.5 points for June, matching May's reading.

Economic expectations improved slightly for the second month in a row. The corresponding indicator showed a reading of minus 28.3 points in May, up 2.9 points from previous month.

UK's sterling lost ground after hitting a 4-day high of 1.7305 against the Swiss franc at 2:05 am ET Tuesday, The pound-franc pair is currently trading at 1.7255, compared to Monday's closing value of 1.7230. The next downside target level for the pair is seen around 1.704.

Switzerland's employment growth slowed in the first quarter and the UBS Consumption indicator declined in April.

The Swiss Federal Statistical Office announced that the employment increased 0.8% year-on-year in the first quarter, slower than the 1.6% in the previous quarter. Economists were looking for a decline of 0.1%.

The employment level stood at 3.957 million in the first quarter, down from 3.963 million in the preceding quarter. Economists had predicted the employment level at 3.92 million.

The UBS said its consumption indicator for Switzerland fell slightly to 0.92 in April from 0.99 in March, resuming the downtrend after a rise in March. The indicator has thus remained below its long-term average of 1.50 for seven months.

The British pound that climbed to 151.20 against the Japanese yen at 2:00 am ET Tuesday weakened thereafter. The pound-yen pair thus dropped to 149.61 at 4:40 am ET. On the downside, 146 is seen as the next target level for the British currency. The pair closed Monday's New York deals at 150.90.

A report released by Japan's Finance Ministry showed that Japan's net external assets as at the end of 2008 were down 9.9% year-over-year at 225.51 trillion yen due to the strengthening yen. The Bank of Japan's corporate service price index report for April showed a 0.2% monthly drop and a 2.4% year-over-year decline. Annually, prices have shown a negative trend since October 2008.

Traders are now likely to focus on the North American session, in which the S&P/Case-Shiller home price index is scheduled for release at 9 am ET. Economists expect an 18.4% year-over-year decline in the 20-city composite house price index for March.

At 10:00 am ET, the Conference Board is scheduled to release its consumer confidence report for May. The survey, which is based on a survey of 5,000 US households, is expected to show that the consumer confidence index rose to 42 in May.


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News are provided by InstaForex in partnership with RTT.

Monday, the U.S. dollar headed south to new multi-month lows against its European, Swiss and UK counterparts as investor risk appetite dampened demand for the safe-haven greenback and boosted higher yielding currencies.

The dollar fell as General Motors is expected file for bankruptcy protection today, which would be the biggest industrial bankruptcy in the history of the U.S., in a deal that will give taxpayers a 60 percent ownership stake and expand the government's reach into big business.

The Obama administration said Sunday that it has deemed GM's reorganization plan viable, and will provide the company $30.1 billion in what is called debtor-in-possession financing - money the company can use while it moves through the bankruptcy process.

The company will also receive some support from the governments of Canada and Ontario, which will lend the firm $9.5 billion.

The dollar fell sharply against other major currencies in the past week as global shares surged up on recovery hopes. But contracting gross domestic product, tumbling business investment spending and homebuilding activity in the U.S. suggested lingering economic weakness and reminded investors that the road to recovery is far from near.

The greenback tumbled to a new multi-month low of 1.4247 against the euro during early deals on Monday. This may be compared to Friday's New York session closing value of 1.4148. On the downside, the next likely target for the greenback is seen around the 1.436 level.

The U.S. currency suffered significant weakness versus the euro in May, falling around 7% despite a series of disappointing news from Europe's largest economy, Germany.

The European Central Bank rate decision is due this week. In May, the ECB has lowered its main refinancing rate to a record low of 1 per cent to boost consumption.

The U.S. dollar slumped to its lowest level since October 2008 against the U.K. currency and hit as low as 1.6434 by 4:15 am ET Monday. At last week's close, the pair was quoted at 1.6190. If the dollar slides further, 1.667 is seen as the next likely target level.

The dollar fell nearly 10 per cent versus the pound in May and tumbled around 3.6% in the previous week on the back of rising U.K. equity markets and encouraging data. The pound is the only currency that has strongly appreciated against the dollar in the past week.

On Friday, the pound spiked higher as U.K. house prices rose unexpectedly in May to record the largest increase since October 2007, hinting that the U.K. economy is on the road to recovery. U.K. house prices rose 1.2% in May from the prior month, reversing a 0.3% decline reported in April

The Bank of England will also meet this Thursday to decide on whether to cut, hold, or raise interest rates further.

Against the yen, the dollar slipped to a 5-day low of 94.47 during today's early trading. The next downside target level for the dollar-yen pair is seen around the 93.8 level. The dollar was worth 95.24 against the yen at Friday's New York session close.

Rising equity markets and signs that the global economy's downtrend is easing, such as a rebound in Japanese industrial production put pressure on the dollar.

Against its Swiss counterpart, the dollar declined to a 6-month low of 1.0621 during Monday's early trading and 1.054 is seen as the next likely target level. At Friday's New York session close, the dollar-franc pair was quoted at 1.0677.

From U.S., the Bureau of Economic Analysis is due to release its personal income & outlays report for April. Economists estimate the report, which is due out at 8:30 am ET, to show that personal income fell 0.2% and the personal spending also declined 0.2% in the month.

Thereafter, the results of the manufacturing survey of the Institute for Supply Management, is due at 10:00 am ET. Economists expect the index to show a reading of 42 for May. the Commerce Department's construction spending report is also scheduled to be released at the same time. The report is expected to show a 1.8% decline in spending for April.

The week's biggest economic news comes on Friday in the form of the U.S. government's monthly jobs report for May. Nonfarm payrolls are expected to drop by 550,000 after slipping 539,000 the month before.


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News are provided by InstaForex in partnership with RTT.

In further signs that the worst of the recession is over, the decline in Eurozone service sector activities eased further in May, reports said Wednesday, citing data released by the Markit Economics.

The purchasing managers' index or PMI for the Eurozone service sector rose to 44.8 in May from a flash reading of 44.7 and 43.8 in April. The PMI thus reached to a seven-month high. However, the headline index is still below the 50-mark that divides expansion and contraction. The expectations index for the service sector rose to a 15-month high of 59.1 from April's 54.4.

The composite index that contains both service and manufacturing PMIs was at 44, an increase from previous month's 41.1 and the flash reading of 43.9.

The PMI for Germany's service sector increased to 45.2 from 43.8 in April and that for France stood at an eight-month high of 48.3, up from 46.5 in April and 47.6 initially estimated. The Italian services PMI climbed to 43.1 from 42 in the previous month. However, in Spain, the activity contracted notably. The PMI fell to 39.1 from 42.3.

Out of the euro area, the CIPS/Markit PMI for the British service sector unexpectedly moved above the 50-mark to record a growth for the first time in a year. The indicator rose to 51.7 in May from 48.7 in April, while forecast was for a reading of 49.5. That was the sixth consecutive gain.


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Extending its recent rally, the UK's sterling rallied strongly higher against its major rivals on Tuesday morning in Asia. The pound rose to a 5-day high of 158.6 against the Japanese yen and 1.7548 against the Swiss franc by 8:00 pm ET. The pound also ticked up to 1.6102 against the US dollar and 0.8656 against the euro during this time.

Traders mulled reports showing the average asking price for houses in Great Britain came in at -44.1 in May, the Royal Institute of Chartered Surveyors said today, posting an 18-month index high. The score beat analyst expectations for -50.0 following the revised -58.7 in April for the highest reading since November 2007.

At the same time, the British Retail Consortium report showed today that same-store sales in May were down 0.8 percent on year. Overall sales, including those from newly opened stores, were up 0.8 percent on year.

The next upside target levels for the pound are seen at 1.773 against the franc, 161 versus the yen, 1.61 against the buck and 0.865 against the euro. At Monday's North American session, the pound closed deals at 0.8663 against the euro, 1.7525 versus the franc, 1.6053 against the greenback and 158.14 against the yen.

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Crude oil inventories fell sharply in the recent week, according to Energy Information Administration data released Wednesday morning. Gasoline stockpiles also declined.

U.S. commercial crude oil inventories decreased by 4.4 million barrels from the previous week. At 361.6 million barrels, U.S. crude oil inventories remained above the upper boundary of the average range for this time of year.

The report backed the American Petroleum Institute data revealed Tuesday, showing crude supplies dropped 5.96 million barrels last week. Participation in the API survey is voluntary, so the EIA report is more closely watched.

Total motor gasoline inventories decreased by 1.6 million barrels last week, distillate fuel inventories slipped by 300,000 barrels and propane/propylene inventories increased by 1.4 million barrels.

Over the last four weeks, motor gasoline demand has increased by 0.4 percent from the same period last year, distillate fuel demand has declined 8.4 percent from the same period last year and jet fuel demand is 14.3 percent lower.

Crude oil maintained its early gains following the report. Light sweet crude moved to $70.71, up 90 cents for the session. Oil touched as high as $71.79 shortly after the data was announced but quickly cooled off.


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News are provided by InstaForex in partnership with RTT.

The dollar firmed up in choppy trading versus other major currencies Wednesday, but most of its gains came prior to the release of the Federal Reserve's Beige Book, which said that economic conditions remained weak or deteriorated further during the period from mid-April through May.

After coming under pressure over the last two days versus the euro and sterling amid increased risk appetite, the dollar steadied as a rally in stocks faded, causing traders to seek safer ground in the world's reserve currency.

The dollar spent most of the afternoon between 1.3900 and 1.4000, staying away from a 5-month low of 1.4338 set a week ago. Versus the sterling, the dollar managed to hold its ground near 1.6350, having slipped more than 5 cents over the previous two sessions. 8 days ago, the buck dropped to a 6-month low of 1.6662, culminating a dismal one-month run to the downside.

Russian Central Bank rattled currency traders today by saying it may cut its U.S. treasury investments in favor of International Monetary Fund bonds.

Also Wednesday, official data showed that the German annual inflation rate reached the lowest level since 1987 on easing energy and food prices. French industrial production dropped faster than expected in April due to widespread contraction in all industrial sub-sectors, especially in the manufacture of petroleum products.

Out of the euro area, British manufacturing output recorded growth for the second straight month in April signaling that the economy is on the road to a gradual recovery.

The dollar crept higher versus the yen, rising back above 98 to challenge a 4-week high of 98.87, set Monday morning. Wednesday saw some key statistical data releases from major Asian economies. Official reports showed that orders for Japanese machinery dropped to the lowest level in more than two decades and in China, consumer prices fell for the fourth straight month.

Back in the US, the Fed's Beige Book, a compilation of anecdotal evidence on economic conditions from each of the twelve Federal Reserve districts, said manufacturing activity declined or remained at a low level across most districts.

However, the Fed said that several districts also reported that the outlook by manufacturers has improved somewhat.

With the value of exports falling by more than the value of imports in the month of April, the Commerce Department released a report Wednesday morning showing that the U.S. trade deficit for the month came in modestly wider than in March.

The report showed that the trade deficit widened to $29.2 billion in April from a revised $28.5 billion in March. Economists had expected the deficit to widen to $29.0 billion from the $27.6 billion originally reported for the previous month.


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News are provided by InstaForex in partnership with RTT.

Thursday during early deals, the U.S. dollar showed mixed performance against its major counterparts. While the recovered its Asian session's loss against the euro and the pound, it pared gains against the yen and the franc. The dollar rose from a 3-day low against the euro and jumped to a 9-day high against the pound.

Traders now look forward to the New York session, in which the Labor Department is due to release its customary weekly jobless claims report for the week ended June 13th at 8:30 am ET.

The results of the Philadelphia Federal Reserve's manufacturing survey are due out at 10 am ET. Economists expect the diffusion index of current activity to show a reading of -17 for June.

At the same time, the Conference Board is scheduled to release a report on the U.S. leading index for May . The consensus estimate calls for a 0.9% increase in the leading indicators index for the month.

The dollar gained against the euro after falling to a 3-day low of 1.3992 at 3:20 am ET Thursday. The euro-dollar pair that closed yesterday's trading at 1.3947 reached 1.3908 by about 4:55 am ET. The near term resistance level for the dollar is seen at 1.383.

Italy's trade deficit decreased to EUR277 million in April from EUR1.02 billion in the previous year, the country's statistical office ISTAT said today. Economists expected a deficit of EUR250 million.

Exports dropped 28.7% year-on-year to EUR23.9 billion, while imports declined 30% to EUR24.2 billion. Month-on-month, on a seasonally adjusted basis, exports fell 2.9% and imports were down 3.9%.

At 5:25 am ET Thursday, the dollar reached a 9-day high of 1.6191 against the pound, moving up from an Asian session low of 1.647. If the dollar strengthens further, it may likely target the 1.581 level.

A report from the Office for National Statistics showed an annual decline of 1.6% in the U.K. retail sales volume in May. Economists had expected only 0.4% fall in sales. From April, retail sales volume unexpectedly decreased 0.6%, as economists were looking for a 0.3% rise.

Meanwhile, the Bank of England said in a preliminary report that the M4 money supply grew 16.6% year-over-year in May, slower than the 17.4% increase in April. Economists had expected an increase of 17.3%.

On a monthly basis, the M4 money supply rose 0.2% in May, marking the same pace as in the previous month. Economists were looking for an increase of 0.7%.

The dollar jumped to 1.0831 against the Swiss franc before losing ground at 1:10 am ET Thursday. Currently, the dollar-franc pair is worth 1.0769, down from yesterday's close of 1.0802. The next target level for the pair is seen at 1.065.

The Swiss National Bank left its three-month libor target range unchanged at 0-0.75% as expected. In other words, the bank kept its key interest rate unchanged at 0.25%.

The central bank said in a statement that it will continue to provide the economy with a generous supply of liquidity and to purchase Swiss franc bonds with the aim of reducing risk premia on long-term bonds issued by private sector borrowers. The SNB also said it will take firm action to prevent an appreciation of the Swiss franc against the euro.

The dollar soared to 96.10 against the yen by about 3:00 am ET Thursday. Thereafter, the dollar dropped and touched 95.64 at 4:55 am ET and this may be compared to Wednesday's close of 95.71.On the downside, 95.53 is seen as the next target level for the U.S. currency.

News are provided by InstaForex in partnership with RTT.