Currency Trading

Monday, February 14, 2011

The Australian Dollar and British Pound had a good start in Asia, gave back gains through Europe trade yet managed to maintain its allure through America to end up topping the climbers. The Euro had an unfruitful day.

Asian session – USD loses steam

The US Dollar ended as the worst performing currency in Asia, with the Aussie and the British Pound gaining the most, AUD/USD rose to 1.0070, GBP/USD was taken to 1.6070. AUD was benefited by a “leak” hinting a weaker-than-forecast CPI in China today, GBP took advantage of a hunt to stops. EUR/USD regained 1.3550 after a major downgap at the opening.

Japanese Q4 GDP -0.4% QoQ, first quarterly fall in 15 months. Japan’s EconMin Yosano stated that the economy is stagnated but there is signs to be confident. Chinese exports dropped by 2.2% in Jan, imports picked up by 2.2%. Asian stocks rallied, Shanghai up by 1.75%.

European session – Euro makes another step backward

The Euro failed to hold the bearish tide triggered by concerns on the Irish bail-out coupled with uncertainty on rescuing German WestLb. EUR/USD fell as low as 1.3450 from 1.3540. GBP/USD pulled back to session lows around 1.6000, unable to sustain the strong bid tone from Asia. EUR/GBP down at 0.8415.

In the fundamental landscape, very few newsworthy. Euro zone December industrial prodcution -0.1% m/m, +8.0% y/y, in line with median forecasts flat. Portugal Q4 GDP -0.3% q/q, +1.2% y/y against +0.3%, +1.4% in Q3. Euro stocks at in a flatline.

Amerian session – Placid day, USD gives back gains

It was a very quiet journey, with the main highlight being the USD surrending part of its early gains in Europe. EUR/USD extended losses to 1.3430 before a rebound sent the price to 1.3490. GBP/USD picked up to 1.6035. AUD/USD held onto gains at 1.0030.

The US calanedar was virtually empty. Eurogroup’s Juncker and EU’s Rehncrossed the wires, not ruling out the possibility to resze the EFSF to accomodate further needs, saying it could be raised to an effective lending capacity of EUR 500 bln from 440 bln. US Stocks eked out some gains, the S&P 500 rose 0.30%. Oil prices drewn back to $84.95/bbl, while Gol was firmer at $1,361.00/oz.

source: http://www.fxstreet.com