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Dukascopy Forex Overview: 08-03-2012 - Morning

Dukascopy Bank analytic desk report
Published: 08/03/2012 10:40
Dukascopy Fundamental Analysis
EUR
"We are absolutely certain that the ECB will leave rates unchanged this month"
- Analysts at Danske Bank
The European Central Bank (ECB) is widely expected to leave interest rates unchanged today after it allotted 529 billion euros of three-year loans to the banking sector.


USD
"Conditions continue to improve at a moderate pace and are consistent with other indicators suggesting some firming of the labor market"
- Joel Prakken, chairman of Macroeconomic Advisers
The number of Americans, who have found a job in a private sector rose to 216 thousand in February from 173 thousand the previous month, the ADP Employer Services said on Wednesday.


GBP
"Retailers are having to work hard to encourage customers"
- Mike Watkins, senior manager of retail services at Nielsen
U.K. shop-price inflation slowed in February as stores cut prices to lure shoppers, the British Retail Consortium said on Wednesday. Retail prices rose 1.2 per cent from the same period last year.

CHF
"European markets sit delicately poised once again, with traders asking what next"
- Chris Weston, an institutional trader at IG Markets
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, rose 0.91%, or 55.01 points, to 6,102.54. The broader Swiss Performance Index gained 0.90%, or 49.51 points, to 5,567.04.

JPY
"The Greek debt issue and euro region’s negative growth fueled a drop in markets, which were already overheated"
- Koichi Kurose, chief economist at Resona Bank Ltd.
"The Greek debt issue and euro region's negative growth fueled a drop in markets, which were already overheated," said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd.
Dukascopy Technical Analysis
EUR/USD
"As the [participation] number rises, the odds of something terrible happening diminishes. That will naturally be euro positive"
- Faros Trading (based on WSJ)
The currency pair has bounced off a support at 1.3096 and is currently climbing higher. Nonetheless, this rally is likely to be short-lived, since most of the daily indicators are pointing to the downside - 1.2974/54 first, then 1.2624.

EUR/JPY
"Any suggestion the deadline [of Greek deal] might be extended would probably send shivers down the spine of any 'risk-on' traders and EUR would like suffer badly"
- BNP Paribas (based on CNBC)
Support at 105.85 has repelled off EUR/JPY, which is now advancing toward 108.00. In case the latter level is penetrated, the pair may reach 108.75 (55 week ma) next. Subsequent resistances are located at 109.38/58 and 110.26.

GBP/USD
"Positive data surprises from the UK have provided some support of late but we think the domestic picture will start to run out of steam and sterling will be back under pressure"
- Morgan Stanley (Reuters)
Being that the Cable has breached an uptrend support, the dip is expected to extend down to 1.5650/43. Resistances are situated at 1.5886 (200 day ma) and 1.6000, they should contain intraday rallies.

USD/JPY
"Quote"Investors are feeling less pessimistic about the global economy. Now that the yen is starting to ease, manufacturers who had really been hurt are coming back"
- Mizuho Asset Management (based on Bloomberg)
A formidable level at 80.54 is unlikely to give away in the nearest future, as it is supported by 80.42, 80.00 and 79.55. Consequently, the outlook is from neutral to positive, allowing for the pair to attain 81.49 within the day.

USD/CHF
"The current account deficit was widely expected, so I wouldn't read too much into this move. No one really wants to make aggressive bets ahead of Friday's U.S. jobs data and the Greek deal outcome"
- Sumino Kamei, BTMU (based on Reuters)
The Greenback is likely to recommence strengthening against the Swiss Franc, as USD/CHF has already formed a base at 0.8931. Bullish targets lie at 0.9253 (55 day ma) and at 0.9317, while 0.9088 and 0.9075 underpin the pair from below.
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Expert Commentary
"The US is going through a very slow recovery, with several unanticipated difficulties, if compared to previous recessions"
In light of a steady recovery of the US economy, Dukascopy decided to interview Olivier Morand, Professor of Economics at University of Connecticut, who shared his opinion on the present economic situation in the US and its prospects. >>

"We expect that GDP growth will shrink from 4.3-4% to 3-3.5%"
N. Novikova on the economy of the Russian Federation. >>

"The government in Japan is pressuring the Bank of Japan to take more aggressive policy measures"
Jane Foley expects the Yen to weaken further. >>
Press Review
Europe
60% of Greek Bond Holders Committed to Debt Swap
Investors with about 60 percent of the Greek bonds eligible for the nation’s debt swap have so far indicated they’ll participate, putting the country on the verge of the biggest sovereign restructuring in history.

USA
"Deliberative" Senate gripped by paralysis
The Senate is under the gun to pass a transportation bill that would rev up road construction and create or save millions of jobs.

Asia & Pacific
Japan reports record current account deficit
Japan has reported a record current account deficit because of rising energy imports, as the country's economic recovery remains fragile.
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Market Research
Currency Index & Volatility
After receiving a strong impetus at the very start of the observed period (Feb 29 - Mar 6), the American Dollar continued to appreciate relative to the most of its counterparts throughout the remaining part, gaining 1.6% in value over the last five trading days.
Dukascopy Bank Sentiment Index
Current global economic outlook
The current and six-month global economic outlooks improved for a second consecutive month in February. Gauges assessing the economic expectations advanced to 0.48 and 0.52, according to a poll conducted by Dukascopy Bank SA. The three-year economic outlook rose to 0.66 from 0.64 in January.
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Global Stock Market Review
S&P
S&P 500 index experienced the biggest decline in 2012 on renewed concerns about the outcome of Greek deal.

Dow Jones Industrial Average
Dow Jones Industrial Average index faced its worst day in three months giving up more than 200 points on Tuesday.

FTSE 100
Japan’s Nikkei Stock Average extended losses for a third straight day and fell 0.64% or 61.57 points to 9,576.06, marking the lowest value in two weeks. Exporters maintained downward path on stronger Yen.
Commodity Overview
Precious Metals
Precious metals moved down on Tuesday amid appreciating US Dollar and lingering concerns over the Euro Zone debt crisis.
 
Industrial Metals
Base metals tumbled on Tuesday along with broadly stronger US Dollar and weaker equities.
 
Energy
Energy markets were mostly lower on Tuesday on the firm US Dollar and demand concerns.
 
Agriculture
Rural commodity futures declined on Tuesday on the negative global economic outlook
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Disclaimer:
This overview can be used only for informational purposes. Dukascopy Bank SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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