Analytics, News, and Forecasts for CFD Markets: currency news — 24-02-2011.

The rate rise has now become 'overdue' and credibility of the BOE is at risk if it fails to act.
The minutes of the February meeting of the MPC showed Sentance backing a 50bp hike - in previous meetings he had been calling only for a 25bp rise.

The Swiss franc climbed to a record against the dollar and the yen strengthened to an almost three- week high as the uprising in Libya drove oil to a 29-month high, spurring demand for the safest assets.
Crude for April delivery topped $103 per barrel in New York, the highest since September 2008. Brent crude oil futures rose in London to $119.79 a barrel, the most since August 2008.
Currencies of commodity exporters such as Australia and Canada climbed.
The dollar reached the lowest in three weeks versus the euro amid speculation the European Central Bank will raise interest rates before the Federal Reserve. The yen breached 82 per dollar for the first time since Feb. 8 as U.S. Treasury yields traded near three-week lows, dimming the attraction of dollar-denominated assets.
“The situation in the Middle East is still playing out,” said Amelia Bourdeau, a currency strategist in Stamford, Connecticut, at UBS AG. “Between that and interest-rate differentials, that’s what’s driving the currencies.”

The stock market recenly made an upward push, but it was rebuffed at the neutral line. That encouraged sellers to redouble their efforts so that stocks dropped to fresh session lows.
The broader market's retreat has dragged down retailers to a 0.4% gain after they had been up more than 1% in the early going. Sears Holding (SHLD 82.72, -4.53) has been hit particularly hard; its shares are down more than 5%, even though the company posted an upsided earnings surprise and stronger-than-expected revenue for the latest quarter.

Stocks have been backed down in recent trade so that the major equity averages are back to being mixed.
In contrast to the prior session, when energy was the only sector to advance, energy stocks have fallen to a 0.8% loss, which makes them this session's worst performing sector. Energy's pullback comes in the face of further gains by oil prices.
Oil prices are currently up 1.3% at $99.35 per barrel, but still a few dollars off of overnight highs above $103 per barrel.

HSBC economist Ryan Wang says Jan durable goods data were disappointing. "For nondefense capital goods ex-aircraft, both orders (-6.9%) and shipments (-2.0%) registered significant declines. These declines come after upwardly revised gains in December: over the past two months orders are down 3.0% and shipments are still up 0.4%. The results indicate that momentum in capital spending may be weaker than what the very robust readings from recent manufacturing surveys have suggested." He sees slower momentum in the sector.

U.S. stocks were set to fall at the open, as crude oil prices hover at $100 a barrel and investors continue to keep a wary eye on ongoing political tensions in Libya.
Stocks declined for a second straight session Wednesday, as oil prices surged to briefly cross the $100 per barrel mark amid mounting turmoil in the North African country.


Economy: Weekly initial jobless claims came in lower than expected. The number of Americans filing for unemployment benefits for the week ending Feb. 19 dropped by 22,000, to 391,000. Economists expected 410,000 claims.
The durable goods orders report matched expectations. The government reported that orders rose 2.7% in January, up from a revised 2.5% in December.
The Commerce Department issues its new home sales report at 15:00 GMT, which will be followed by a report on crude oil inventories.
Companies: General Motors Co. (GM) reported an annual profit of $4.7 billion in 2010 on Thursday morning. It's the automaker's first annual profit since 2004.
Before the bell, Target (TGT, Fortune 500) reported that its quarterly earnings jumped more than 10%. The stock slipped slightly in premarket trading.
Earnings from department store Kohl's (KSS, Fortune 500) are also due before the opening bell.
American International Group (AIG, Fortune 500) will report after the closing bell, and is expected to post a massive loss.

EUR/USD eases slightly in the wake of the released US data that showed stronger than expected durables and a bigger drop in weekly claims than expected. Euro eases to $1.3760 area but earlier dips were contained to $1.3750 area (bids/support).

Data released
07:00     Germany     GDP (Q4) preliminary    0.4%    0.4%    0.7%
07:00     Germany     GDP (Q4) preliminary Y/Y    4.0%    4.0%    3.9%
07:45     France     Consumer confidence (February), new method    85    85    85
09:00     Italy     Retail sales (December) adjusted    0.2%    -    -0.3%
09:00     Italy     Retail sales (December) Y/Y unadjusted    0.4%    -    1.0%
10:00     Italy     Business confidence (February)    103.0    103.8    103.4 (103.6)
10:00     EU(17)     Economic sentiment index (February)    107.8    106.7    106.8 (106.5)
10:00     EU(17)     Business climate indicator (February)    1.45    -    1.45 (1.58)
11:00     UK     CBI retail sales volume balance (February)    6%    31%    37%

The pound slid to a three-week low against the euro on concern a surge in oil prices may derail the global economic recovery, and a report showed retailers expect no growth next month.
Sterling fell after oil surged to a 30-month high of more than $119 a barrel. Central bank policy maker David Miles said officials shouldn’t rush to raise interest rates to prove they are “tough” on inflation as forecasts warrant a “very gradual” tightening.
“Rate expectations are being pushed back a bit because the market is seeing the oil price as being stagflationary,” said Steve Barrow at Standard Bank Plc. “It’s both inflationary and a source of weaker growth. That’s something which is likely to weigh on sterling.”
Retailers saying sales volumes increased from a year ago outnumbered those reporting declines by 6 percentage points, compared with 37 percentage points in January, the Confederation of British Industry said today.
Brent oil surged after Barclays Capital estimated that political revolt in Libya, which holds Africa’s biggest crude reserves, caused it to cut two-thirds of output. As much as 1 million barrels of Libya’s 1.6 million barrels of daily oil production, the ninth-largest among the 12 members of the Organization of Petroleum Exporting Countries, may have been lost, Barclays said in a report yesterday. Goldman Sachs Group Inc. estimated disruptions at 500,000 barrels a day.
Britain’s currency has gained 3.6% against the dollar this year amid mounting pressure on the Bank of England to raise its key rate from a record low 0.5% as inflation persists above its target. Consumer-price growth accelerated to 4% last month, a Feb. 15 report showed, the 14th consecutive month above the 2% goal.

EUR/USD rose from $1.3700 to $1.3808 before retreated to $1.3750 and currently holds within the $1.3750/85 range.

GBP/USD recovered to $1.6212 following its decline to $1.6140. In general rate remains under pressure.

USD/JPY set stable a bit higher lows on Y81.85. A break of Y8175 to open a deeper move toward next support area between Y81.65/50.

US data starts at 1330GMT, when initial jobless claims are expected to fall 5,000 to 405,000 in the February 19 week after rising in the previous week.
At the same time, durable goods orders are expected to surge 3.0% in January after the 2.3% drop in December.
At 1500GMT the New Home Sales data is due, where the pace of new home sales is expected to slow to a 305,000 annual rate in January after the December spike.
The weekly EIA Crude Oil Stocks data is due at 1600GMT.

USD/JPY set stable a bit higher lows on Y81.85, Rate trades currently at Y81.85. A break of Y8175 to open a deeper move toward next support area between Y81.65/50.

GBP/USD retreats amid euro-dollar slippage, but holds above earlier lows on $1.6143. Bids are reported into $1.6140, A break to open a deeper move toward $1.6100. While rate can hold above $1.6140 seen keeping hopes alive for another recovery attempt.

Demand for havens drove the Swiss franc to a record high against the dollar as crude prices surged in the wake of the latest wave of violence to strike North African oil producer Libya.

As global equity markets resumed their sell off, with many extending losses into a fourth-consecutive session, investors sought safety, hurting the currencies of emerging markets and boosting the likes of the Swiss franc and Japan’s yen.
“The traditional safe haven currencies of the yen and the Swiss franc are currently outperforming as fears build that escalating social and political tensions in Africa and the Middle East will lead to a significant supply-driven oil price shock dealing a sizeable negative blow to global growth,” said Lee Hardman at Bank of Tokyo Mitsubishi UFJ.
The Swiss franc last peaked against the dollar and the euro in late December when the market’s predominant concern was eurozone sovereign debt.
Although the euro has since recovered some ground, on Thursday the Swiss franc climbed to a new record versus the dollar.
The US currency fell to a low of SFr0.9238 and by mid-morning in London.
Dollar weakness may have been prompted, analysts said, by an International Monetary Fund report that suggested the lack of fiscal tightening measures in the US increased the risk of higher borrowing costs, which could hurt global growth.
Furthermore, the euro was helped by an economic sentiment survey that showed a rebound in confidence in February following a blip lower in January.

EUR/GBP extended highs to stg0.8532, testing resistance area between stg0.8525/30. Cross failed to set above and eased back to stg0.8520. If rate can make a clear break above stg0.8530 seen oening potential for a move toward stg0.8575/85.

Cable shows little reaction to much weaker than expected UK CBI reported sales balance. Currently GBP/USD holds around $1.6171 after probing lows around $1.6140.

EUR/USD printed session high on $1.3807, but holds shy of pressing stops above $1.3810. Rate backs off to $1.3790 but again seen meeting willing buyers into the dip.

EUR/USD $1.3725, $1.3695, $1.3675, $1.3650, $1.3600, $1.3875
USD/JPY Y82.35, Y82.50, Y82.75, Y82.85, Y83.00
EUR/JPY Y113.70
AUD/JPY Y82.00
GBP/USD $1.6175, $1.6100, $1.6345
EUR/GBP stg0.8400
AUD/USD $1.0165, $0.9960, $0.9940, $0.9925, $0.9865
USD/NZD $0.7555

The dollar fell against most of its major counterparts on speculation central banks in Europe and the U.K. will seek to combat inflation from rising fuel costs by increasing interest rates before the Federal Reserve.

07:00 Germany GDP (Q4) preliminary 0.4% 0.7%
07:00 Germany GDP (Q4) preliminary Y/Y 4.0% 3.9%
10:00 EU(17) Economic sentiment index (February) 106.7 106.5
10:00 EU(17) Business climate indicator (February) - 1.58
11:00 UK CBI retail sales volume balance (February) 31% 37%
13:30 USA Jobless claims (week to 19.02) 409K 410K
13:30 USA Durable goods orders (January) 3.2% -2.3%
13:30 USA Durable goods orders excluding transportation (January) 0.4% 0.5%
13:30 USA Durable goods orders excluding defence (January) - -2.5%
15:00 USA New home sales (January) 315K 329K
21:30 USA M2 money supply (14.02), bln - +5.6
23:30 Japan Nationwide CPI (January) - -0.3%
23:30 Japan Nationwide CPI (January) Y/Y - 0.0%
23:30 Japan Nationwide CPI ex fresh food (January) Y/Y -0.3% -0.4%
23:30 Japan Tokyo-area CPI (February) - -0.5%
23:30 Japan Tokyo-area CPI (February) Y/Y - -0.1%
23:30 Japan Tokyo-area CPI ex fresh food (February) Y/Y -0.3% -0.2%