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Dukascopy Forex Overview: 09-03-2012 - Morning

Dukascopy Bank analytic desk report
Published: 09/03/2012 09:50
Dukascopy Fundamental Analysis
EUR
"Draghi may prepare the markets for the scenario that inflation won’t come down below 2 percent in 2012"
- Jens Sondergaard, chief European economist at Nomura International Plc
The European Central Bank kept rates on hold at 1.0 per cent on Thursday, pausing to assess potential inflation risks.


USD
"The downtrend in claims, even with this modest uptick this week, is being sustained"
- Eric Green, chief market economist at TD Securities Inc
The number of Americans claiming for unemployment benefits rose to 362 thousand in the week ended March 3 from the week before, said the Department of Labor on Thursday.


GBP
"A fourth year of interest rates at 0.5% looks highly probable"
- Howard Archer, an economist at IHS Global Insight
Bank of England kept rates at 0.5 per cent and refrained from further monetary stimulus on Thursday, marking three years since rates were first cut to the record low.

CHF
"The markets have picked up following the falls from earlier in the week"
- Simon Denham, chief executive officer of Capital Spreads
The Swiss blue-chip index SMI, a measure of the largest and most actively traded companies, gained 0.84%, or 51.39 points, to 6,153.93. The broader Swiss Performance Index advanced 1.43%, or 79.58 points, to 5,646.62.
JPY
"The economy will resume growing in the first quarter as exports increase and as rebuilding after the earthquake proceeds"
- Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co
Japan’s economy contracted less than the government’s initial estimate in the fourth quarter, improving growth prospects. Gross domestic product fell 0.2 points from the previous three months, said the Cabinet Office on Thursday.
Dukascopy Technical Analysis
EUR/USD
"It seems the market has confidence in it [forced Greek debt restructuring], and it's allowed the euro to continue to do well"
- Credit Suisse (based on WSJ)
EUR/USD has been able to extend its rally from 1.3087 due to the absence of formidable resistances on its path. However, a level at 1.3322/50 is unlikely to give in, thus keeping long-term bearish bias intact.

EUR/JPY
"By Greece avoiding a disorderly default, it will remove a key risk hanging over the markets over the next few weeks"
- Faros Trading in Stamford (based on CNBC)
The currency couple carries on advancing further. After it has overcome a resistance located at 108.75, EUR/JPY should focus on attaining 109.38/58 (55 week ma). Subsequent levels are situated at 110.26 and 111.57.

GBP/USD
"By Greece avoiding a disorderly default, it will remove a key risk hanging over the markets over the next few weeks"
- Faros Trading in Stamford (based on CNBC)
The currency couple carries on advancing further. After it has overcome a resistance located at 108.75, EUR/JPY should focus on attaining 109.38/58 (55 week ma). Subsequent levels are situated at 110.26 and 111.57.

USD/JPY
"Before investors jump into sterling/dollar longs that could take it towards $1.60 they will wait for the PSI (Greek debt swap deal) to see whether collective action clauses are employed"
- ING (Reuters)
While rallies are contained by resistances which lie at 1.5881 (200 day ma), 1.5927 and 1.6000, the Cable is expected to decline in weeks to come. The initial support should be encountered at 1.5670, followed by 1.5650/43.

USD/CHF
"I’m bearish on the yen the most among the major three currencies. Markets are focused on the fact that the BOJ will remain accommodative"
- Toshiya Yamauchi at Ueda Harlow Ltd. (based on Bloomberg)
As long as a key support at 80.76 manages to repel dips of USD/JPY currency pair, the short- and long-term outlooks should stay bullish. The pair is likely to find resistances at 81.87/90, 82.08 and 82.23.
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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
Private Investors Said to Agree to Swap 85% of Greek Debt
The Greek government said it reached its target in the biggest sovereign restructuring in history, with a 95.7 percent participation rate among investors after it received approval to activate collective action clauses.

USA
February jobs gains seen strong, keeping Fed at bay
Employment likely grew solidly for a third straight month in February, a sign the economic recovery is becoming more durable and in less need of further monetary stimulus from the Federal Reserve.

Asia & Pacific
China Jan-Feb industrial output below estimates
China's industrial production and retail sales growth weakened in the first two months of 2012 from the year-earlier period, an official data release showed Friday.
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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 partly recovered from previous losses on Wednesday as data showed hiring advanced in US.

Dow Jones Industrial Average
Dow Jones Industrial Average index breached its downward path and climbed higher on jobs data amid fading concerns about Greece’s default.

FTSE 100
FTSE 100 index extended gains on Thursday on news Greece will finally conclude its debt swap agreement.
Commodity Overview
Precious Metals
Precious metals posted moderate gains on Wednesday on weaker US Dollar and hopes that Greece will manage to agree with private bondholders on the debt swap deal.
 
Industrial Metals
Base metals except for aluminium moved higher on Wednesday amid depreciating US Dollar and stronger equities.
 
Energy
Energy markets were mostly higher on Wednesday amid broadly weaker US Dollar and smaller than expected increase in the US oil inventories.
 
Agriculture
Rural commodities fell on Wednesday ahead of USDA report on crop estimates due on Friday
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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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