Analytics, News, and Forecasts for CFD Markets: currency news — 26-05-2011.

EUR/USD recovers amid very light flows. Currently the rate rises on some talk that IMF wants to make sure that Greece is adequately funded. Flows are very light.

Consumer discretionary (+0.8%), telecom (+0.8%), and tech (+0.6%) are today's top performing sectors. At the other end of the spectrum, health care (-0.1%), utilities (+0.1%), and consumer staples stocks (+0.1%) are the worst performing sectors of the session.

   

USD/JPY holds Y81.32 area below rebound highs seen in the Y81.45 zone. Rate holds above Y81.15. Tech resistance comes at Y82.00. Downside in the pair sees bids in place ahead of Y81.00 with stops below.

USD/CAD holds C$0.9790 area after seeing a high at C$0.9815, the pair stalling just shy of earlier mentioned stops atop C$0.9820. Good supply maybe tested above C$0.9800 if those stops triggered.

The dollar dropped against the yen as the economy grew less than forecast and jobless-benefit claims unexpectedly rose, adding to speculation the U.S. will lag behind other nations in raising interest rates.
“Both the GDP and the claims were worse overall,” said Jens Nordvig at Nomura Holdings Inc.. “This is something that suggests that rates in the U.S. are going to stay quite low for the time being. Dollar-yen is always the most sensitive to U.S. rates.”
U.S. gross domestic product grew at a 1.8% annual rate in the first quarter, the same as estimated last month, Commerce Department figures showed today. That compares with a 3.1% gain in the prior quarter. The median forecast of economists called for a 2.2% increase. Consumer spending rose 2.2%, down from a 2.7% initial estimate.
Initial claims for unemployment benefits rose by 10,000 to 424,000 in the week ended May 21, Labor Department figures showed today. The median estimate of economists called for a drop to 404,000.

The euro fell to a record low against the Swiss franc after Luxembourg’s Jean-Claude Juncker, who heads euro-area finance ministers, said the International Monetary Fund may not release its share of aid to Greece next month.
The IMF said in a report today that Switzerland’s central bank should start raising borrowing costs to fight emerging price pressures as the economy strengthens.
The euro earlier rose versus the dollar after European Central Bank President Jean-Claude Trichet said policy makers are “carefully” monitoring inflation, fueling bets the region’s economy is strong enough for higher borrowing costs.
The ECB raised its main refinancing rate to 1.25% last month after keeping it at a record low of 1% for almost two years. The Fed has held its target rate at zero to 0.25% since December 2008. It’s forecast to keep the benchmark unchanged until the first quarter of 2012.

EUR/GBP tested lows around stg0.8608 and back up. Currently cross holds around stg0.8619, but still remains under pressure. From Asian highs cross fell 100 points today.

EUR/JPY holds around Y114.64 after falling to the lows around Y114.44. Cross trades much lower Asian high on Y116.40. EUR/JPY seeing double-edged downside prssure, first from dollar-yen stops and then from euro-dollar sell-off.

Nomura points out last wk's lower jobless claims reading (414k) corresponds with the payroll survey period. They expect next Friday's payroll release to show nonfarm payrolls +175k.

Stock futures were mixed Thursday, suggesting a weak opening, after reports showed an increase in weekly unemployment filings and tepid economic growth in the first quarter.
Stocks have been struggling this month, as optimism over upbeat corporate earnings has been tempered by signs the economy could be in for a slowdown this summer.
Analysts at Standard & Poors are predicting the stock market could be in for a 10% correction over the next month.
Economy: The number of Americans filing first-time claims for unemployment benefits rose 10,000 to 424,000 in the most recent week, the Labor Department said.
Economists were expecting 400,000 initial claims, according to consensus estimates from Briefing.com.
Separately, the government's revised reading on first-quarter U.S. gross domestic product was unchanged from the initial report. The Commerce Department said GDP, the broadest measure of economic activity, grew 1.8% over the same quarter a year ago.
Economists had expected the figure to be revised up to 2%.
Companies: Shares of Tiffany & Co. (TIF) rose more than 4% in pre-market trading after the luxury jeweler reported a 12% jump in sales. The company also hiked its quarterly dividend payment to 29 cents per share from 25 cents.
NetApp (NTAP) shares rose 4% before the open after the data storage company reported strong quarterly results late Wednesday and issued an upbeat outlook for the current quarter.
Freescale Semiconductor (FSL) priced its initial public offering at $18 a share, below its estimated range of between $22 and $24 per share. The company will start trading on the NYSE under the ticker 'FSL.'
Discount retailer Big Lots (BIG, Fortune 500) said earnings rose in the most recent quarter, but issued a dour sales outlook for the current quarter, saying it expects revenue to be flat or down 3%.
World markets:

Oil for July delivery fell 34 cents to $100.98 a barrel.
Gold futures for June delivery fell $1.80 to $1,524.90 an ounce. Silver priced edged 2% lower.
Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.13% from 3.14% late Wednesday.

Sharply lower after the GDP and jobless claims numbers as yields drive the dollar down through support at Y81.70, stops at Y81.60 and Y81.40, and Monday's low of Y81.30. Dollar eased down to Y81.15 on the run. Closest support eyed at Y80.95/90.

EUR/USD $1.4155
USD/JPY Y81.50, Y81.75, Y82.20, Y82.50, Y83.00
GBP/USD $1.6050

The euro rose against the dollar as European Central Bank President Jean-Claude Trichet said policy makers are “carefully” monitoring inflation, fueling bets the economy is strong enough to withstand higher interest rates.
The ECB needs “to avoid commodity-price increases becoming entrenched in longer-term inflation expectations, which could have second-round effects on wages and prices,” Trichet said at a conference in Berlin today, according to a text provided by the Frankfurt-based ECB. “We are carefully monitoring the situation and we stand ready to do whatever is necessary to fulfill our mandate.”
The single currency snapped four days of losses against the Swiss franc, climbing from a record low. The Financial Times reported that European Financial Stability Facility Chief Executive Officer Klaus Regling said Asian investors, including China, may buy Portuguese bailout bonds when the EFSF sells them in June, easing concern that the region’s sovereign-debt crisis will spread.
“China’s interest is definitely a short-term positive,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. “The longer-term issue of a restructuring of some sort for Greece remains in the background and may be an obstacle to a longer-term rally in the euro.”

EUR/USD
Offers: $1.4200/05, $1.4220, $1.4250, $1.4300
Bids: $1.4130, $1.4120/00, $1.4050, $1.4030/20, $1.4000

USD/JPY
Offers: Y82.10/20, Y82.60
Bids: Y81.70/60, Y81.30

• Greek banks could fail if insolvency

Clears above $1.4170, extends recovery to $1.4185, but upside momentum seen faltering. Offers remain in place from above $1.4190 through to $1.4205, with stops noted above. Bids eyed at $1.4140.

• Must avoid commodity prices driving up inflation expectations;
• Non-standard measures no obstacle to monetary tightening;
• Concerned Stability Pact reforms do not go far enough.

The Swiss franc climbed against all of its 16 most-traded peers, reaching a record versus the euro, on concern Greece’s debt crisis threatens the region’s economic recovery as European leaders struggle to resolve it.
The euro erased losses against the dollar as stocks rallied. The pound advanced after the U.K.’s gross domestic product rose in the first quarter. The franc climbed versus Europe’s shared currency for a fourth day, the longest winning streak in a month. 
The franc also strengthened as investors speculated the record exchange rate against the euro won’t prevent Switzerland’s central bank from raising interest rates as the economy expands. Jan-Egbert Sturm, head of the KOF Swiss Economic Institute, told state television the central bank may increase borrowing costs from near zero as soon as next month.
The Organization for Economic Cooperation and Development said in a report today the Swiss central bank should start raising borrowing costs this year to counter emerging inflationary pressures. 
U.S. durable goods orders decreased 3.6 percent following a 4.1 percent jump in March, dropping the most in six months, Commerce Department data showed today. 
The euro fell against the franc as European officials disagreed over how to resolve the debt crisis.
European Union Economic and Monetary Affairs Commissioner Olli Rehn told the French newspaper Les Echos in an interview Greek debt maturities could be extended on a voluntary basis.
European Central Bank Executive Board Member Juergen Stark said Greece, Ireland and Portugal need a “drastic change” in economic policy. Restructuring Greece’s debt “cannot, must not be the solution,” Stark said in a speech in Berlin. Euro-area leaders should “please consider the consequences” of a debt restructuring, Stark said.