Tuesday, June 30, 2009

Euro-Zone's Confidence Rises Regardless Problems

Economy and consumer confidence in the euro zone improved for the third consequent month in June. However, the European Commission still fears problems in future. According to a survey by the European Commission, the overall economic-sentiment indicator for the euro zone inclined sharply to a high of 73.3, from 70.2 in May. In the U.K., the Commission's economic-sentiment index grew sharply for 30 percent straight month to 68.8 in June from May's 66.1.

The gains gave ground to think that the European downturn could begin bottoming out. Economic analysts say, the European Central Bank will not change its medium-term view that it should take additional steps to support growth in the euro zone. The ECB's governing council meets on Thursday and is expected to keep unchanged its key interest rate at the same level of 1.0% and also to announce no changes in policy measures to inflate money supply. Many economists warn that improving sentiment should result better performance in output of goods and services.

Five-Year High for Japan's Jobless Rate

Japan unemployment rate reached its five-year high in May, while household spending performed a rise as the government distributed cash to help the economy growth. According to the statistics bureau, the jobless rate gained 0.2 percent reaching a high 5.2 percent from 5 percent in April.

Japan`s household spending rose 0.3 percent, the first rise in a year and a half. Economists expected outlays to drop 1.5 percent. Takuji Aida, senior Japan analyst at UBS AG in Tokyo stated that the effects of the Japanese policy are already observed and the stimulus package will only have a large effect in the April-June quarter.

Forex Market Update. GBP/USD

In Asian trading GBP traded to 1.6660, and just under the high this month and for the year at 1.6662. The improvement in the GfK consumer confidence figures released earlier today seemed to support the sterling.
The Bank of England information on lending shows the banking system remains frozen, with net mortgage lending in May at record lows.
As for GBP, a rejection of the 1.6662 level risks a retreat in sterling, possibly back to the base of the 1.6200-1.6600 range that has held for much of the month. Pound rebound from USD1.6505 sees rate pressuring up against resistance level ahead of USD1.6530. Above here and rate can edge on USD1.6540/50 ahead of USD1.6560 and stronger interest placed toward USD1.6580.

Friday, June 26, 2009

Japan Inflation in Record Drop

Figures of Japan inflation rate are likely to show that inflation in Japan remained negative in May. The drop in prices for food and energy as well as with weak demand at home and abroad raised deflation in the first economy in Asia. Prices of goods also dropped for the third consequent month. Prices in Japan fell by the most on record last month, bringing fears of a new deflation, as official data from the Ministry of Finance shows .
Consumer prices fell 1.1% in May compared to same month a year ago, the most since records began in 1970. Japan was previously trapped in a deflationary spiral, where prices of goods kept falling, in the 1990s. To sum up the analyst`s forecasts, the say economy management should avoid collapse into deflationary spiral. Analysts consider deflation to be damaging to an economy because consumers delay purchasing until prices fall further. This factor drives down prices more.
Economic output and trading fall if there is little consumer spending. According to the latest data has the worst stage of recession for Japan may be over, the drop in consumer prices follows the worst recession in the economy of Japan.

Two More Years of Recession for Car Japanese Producers

Akio Toyoda the new boss at Toyota, vehicle producer number one in the world, has explained his future plans for returning it to profit. Akio Toyoda the grandson of Toyota's founder became a president at the most decisive moment for the company. The last year was the first one to end with losses for 14 years. He stated, everything possible would be done to avoid a third year of losses adding he would take a 30 percent pay cut for his first year in a new job. Mr. Toyoda stated: "We're looking at two more tough years ahead. But if we unite as one with all our staff from distribution to sales, we'll get over this tough period and Toyota will return to profit."
He announced a new management structure with vice presidents assigned to separate regions to speed up decision-making and make the company more responsive. Also the production of environmentally friendly cars is forecasted. Stock markets negatively responded for Toyoda`s speech.

Euro-Zone Orders

According to the EU statistical agency Eurostat new orders for manufacturers in 16 countries with the euro currency fell 35.5 percent in April from a year earlier. This decline is considered to be the toughest since previous year. The worst situation were orders for tools, parts and components sold on to other producers, down nearly 40 percent. Car and home appliance orders decreased by more than a 25 percent.
Orders in Germany economy dropped by 39.5 percent. Eurostat said euro-zone orders slipped 1 percent from level of March. The entire 27-nation EU orders in April fell 35 percent from the same month last year and 0.5 percent compared to March. In Europe, however, new industrial orders in the euro zone turned out to perform very poorly.

Thursday, June 25, 2009

Wednesday Market Update

European shares finished the day sharply higher, up to 3 percent. Such a rise is explained to be boosted by the following factors: optimistic US information on orders for durable goods increased higher than predicted 1.8 percent, optimistic economic outlook from the OECD.
But the main factor spurring the market trades was the European Central Bank`s credit for banks almost half a trillion euros, the largest investment in its history. So banks turned to be the biggest gainers. Oil prices rose supported by fall in stockpiles of US crude and growing geopolitical conflicts in some OPEC member countries.

OECD Economic Outlook

According to the OECD economic outlook its 30 industrialized member countries will rise 0.7 percent next year after dramatic decrease 4.1 percent in 2009. In March, the Paris-based group forecast a 2010 recession of 0.1 percent. According to OECD economic outlook the slowdown in OECD economies is reaching its bottom following the worst decrease for more than 60 years. Though recovery seems to be fragile and weak, as the social and economic damage caused by the worldwide crisis will be lasting for a long time.

The new version of the economic outlook is the first in two years to see previous projections for economic growth most clearly for the industrial economies and the United States. But the economic perspective for the euro area this year have decreased and Japan's have changed little since the OECD's previous economic analyses were published in March. Angel Gurra, the OECD Secretary-General said, that due to firm action to stimulate economies it appears that the countries escaped the worst during this crisis.

Unexpected SNB Intervention

On Wednesday the USD rose highly against the Swiss franc when traders said the SNB was intervening by selling the franc for dollars and euros.The dollar still remained the biggest beneficiary of the intervention reports, on which the SNB refused to make any comments.

The SNB intervention reports also distracted the foreign exchange markets from the fall of the European Central Bank's tender that was first for a year which was its biggest-ever liquidity injection and which weighed the position of the euro.

Analysts admit that the SNB has stepped up its approach and it has enlarged its intervention scope. The US dollar rose two percent against the Swiss franc to reach a high of 1.0907 francs from around 1.066 francs before the reports emerged CHF. Traders observed the SNB buying dollars around 1.0880 francs.

Wednesday, June 24, 2009

The European economy is performing better, showing stabilizing signs after a decline at the fastest pace in at least 15 years in the first quarter. European business confidence rose for 30 percent in June, according to results showed this week. Jean-Claude Trichet, European Central Bank President assumed this month the worst of the recession may be past after the ECB shortened interest rates to a significantrecord low and promised to buy covered bonds to fight the crisis.

The euro-area economy may shrink about 4.6 percent this year and around 0.3 percent in 2010 accordingto the ECB forecasts. Trichet stated that the economy may contract "at much less negative rates" since July the year. In the first quarter, gross domestic product slid 2.5 percent.

Expectations from FOMC

The dollar and euro gained slightly against the yen in Tokyo on Wednesday as trust funds of Japan purchased those units to buy overseas assets. As dealers state, anticipation of such investments, which the trust funds regularly make at month's finish, prompted some short-term foreign exchange traders to buy the dollar and euro earlier the morning. Many players were reluctant to make big bets, particularly on the dollar, ahead of a U.S. Federal Open Market Committee meeting scheduled for later in the global day.

That happens because the FOMC statement is forecasted to contain few dollar-positive cues, as it seems to be much more cautious about the outlook of an economic rise than market players, dealers said. That would also confirm the opinion that the Federal Reserve will take more time before deciding to end its ultra-low 0-0.25% policy Federal Funds Rate. Currency market players said, after the meeting of FOMC the dollar may also further decline against the yen as Japanese firms repatriate overseas earnings ahead of six months at the end of June.

Green Car Loan from Washington

Washington is expected to give a $25 billion loan to the car producing companies Ford, Tesla, Nissan to maintain electric car producing program to develop more fuel-efficient vehicles.

Nissan expects to sell electric cars in the US and Japanese market since April 2010, and by 2012 to launch the production for sales worldwide. Japanese Nissan will get almost two billion dollars of government cash to build electric cars in the US and construct an advanced battery manufacturing plant.

Tuesday, June 23, 2009

Very Bullish on Dollar, Cites World Supply

The dollar may strengthen against most major currencies as a U.S. “explosion of savings” reduces the world economy supply.
“We are very bullish on the U.S. dollar on most major cross rates in the short term, and even more so in the longer term,” as it was mentioned in the report of Carl B. Weinberg, chief economist in Valhalla, New York,. “A global dollar shortage will appear as the U.S. current-account deficit declines.”
The U.S. currency declined 0.5 % to $1.3867 per euro as of 7:22 a.m. London.
Get more detailed information about currency rate changes on the website.

Oracle Releases Profit Report

Tuesday, June 23 Oracle Corp. is expected to release declining sales for the fourth quarter of the year, but according to some experts the business software company finished the period strongly. Oracle is scheduled to report its quarterly results when the market closes. The company is now on the way to finish its $7.4 billion take-over acquisition of Sun Microsystems Inc., a transaction that stunned the technology world when both companies announced it in April. The transaction is supposed to close this summer. This deal is supposed to take Oracle into the market of hardware, an brand new area for the company until now.

As experts state Oracle will post profit of 44 cents per share on $6.47 billion in revenue, that will constitute a 11 percent decline from last year.

June 23 Latest Market Update

Late Monday morning the U.S. dollar is considerably higher after a new risk aversion, with the commodity currencies including the Australian and Canadian dollars and in particular are selling off dramatically as commodity prices fall.

The Australian dollar is trading 79.17 U.S. cents from 80.57 on Friday. The U.S. dollar is trading around C$1.1540 against its Canadian currency from C$1.1339 on Friday.
Traders are waiting for Federal Reserve's open market to announce tomorrow a new Federal Funds Rate. This fact brings uncertain mood among investors, which in turn is weighing on stocks and other riskier asset classes including commodities.

A report of Marc Chandler, chief currency strategist at Brown Brothers Harriman in New York, said the combination of the World Bank's forecast for a deeper recession this year than it anticipated as recently as March, together with some reports that China's commodity stockpiling is set to slow, has strengthened on industrial metal prices and has encouraged gaining profit in the so-called commodity currencies , such as the South African rand and Brazilian real.

Monday, June 22, 2009

Week Business Agenda

During a week there will be a number of events and the publications, capable to influence the markets, including the currency market. Indeed, the major event will be the result of session of the US Federal Open Market Committee. The decision on a interest rate (likely, without surprises, the rate will remain at the level of 0,0-0,25 %) will be announced on Wednesday evening and also there text of covering message will be available. The latter is one of considerable interest. First, it will reflect FRS`s vision on current economic situation; analysts expect changes in forecasts about the terms of U.S. economy recovery. Then, it may include information concerning the monetary policy led by the U.S. government. In particular, how long still will be the repayment of state bonds. It may also include inflation issues. The key task of the Federal Reserve is to prevent inflation rally and not to waste the appropriate moment to toughen the monetary policy.

Anyway, interest rate is not likely to be reviewed in close outlook. In spite of several signals the U.S. economy keeps on being volatile and vulnerable, negative processes slow but recovery does not seem to be faced soon. In particular, unemployment rate increases, and it may reach the threshold of 10 percent, and such a state in labor market will not give ground for the FRS to raise the interest rate, as low interest rate spurs to some extent the business under these circumstances.
View the detailed information about interest rates of other countries on the website.

Iran Crisis Influence on Currencies

The new foreign exchange trading week started with the strengthening of the Dollar and Yen. The Asian tarders began buying of these currencies as the way of responding to political events in Iran. As some officials assume, political crisis causes demand for safe assets, such as the Japanese Yen and U.S. Dollar in this case. Both currencies succeeded in trading against Euro, it was reasoned by lowering number of speculating on interest rate difference.

However, the Japanese Yen shows 0.5 percent growth in the pair JPY/USD, meanwhile USD/EUR result does not seem so firm, about ¼ percent. At the open session EUR/USD is at 1.39, as Friday session closed at the point of 1.3940. The attempts to remain under the rate under 39 level failed. USD/JPY fell up to 96 level, while support for Yen came from cross-rates. Talk of bids by Japanese traders at 96.45/50, then 96.15/20 suggests buying the Dollar is favored in Asian market, however, as Nikkei has erased its initial gain(now up 29 points).

At the same time, despite the crisis in Iran the oil prices remain at the same level with no attempt to break the downside trend.

View the complete technical analysis for major world currencies on the website.

Trichet Speech Announcement

On Monday, June 22nd at 8:00 AM EST, Jean Claude Trichet, European Central Bank Chief, is expected to talk about the current state of Europe economy recovery after the world financial crisis. At the Hotel Ritz in Madrid he will be speaking before a conference organized by the New Economy Forum and the Wall Street Journal.

The European currency is controlled by the ECB's Chief more than by any other single financial official. Thus his today`s speech may may effect the Euro position. As some market analysts expect, Trichet's speech will contain more positive words about the future of European economy and it may produce depressing influence on the Greenback. The EUR/USD remains at 1.4000 level.

Jean Claude Trichet is famous for his sentiment of inflation and broad hints that are closely analyzed being quickly acted upon by small and large participants in the currency markets.

Friday, June 19, 2009

Porsche in Search of New Investors

Now Porsche is trying to improve its balance sheet by getting an outside investor. This investor appears to Qatar. At this point, the Porsche and Piech owner family controls 100% of the company's voting shares. This transaction is expected to encourage Europe`s currency market investors.

Additionally, Porsche has asked for a €1.75 billion loan from KfW which is a state-controlled bank for the remainder of a €12.5 billion credit facility, which Porsche anticipated to secure as credit markets turned downside due to financial market woes.

The outcome of the talks with Qatar and KfW are agreed to have a significant impact on Porsche's position in negotiations with Volkswagen over fusion into an integrated company. Both Porsche and Volkswagen keep silence about the current status and prospects of the merger talks since news broke that Porsche might clinch a deal with Qatar.

18.06 Forex Trading Results

According to The Philadelphia Federal Reserve Bank, its business activity index improved to negative 2.2 in June from minus 22.6 in May. This fact has been recorded as the highest reading since September 2008.

That was considerably above economists' forecasts of minus 17, based on the average predictions among U.S. economists. The manufacturing survey also showed the index's measure of future activity surged to its highest level since September 2003. Philadelphia Fed Index is an indicator of overall economic situation in Pennsylvania, Delaware, New Jersey. If it accounts for economy development if its level is above zero, if not, it indicates recession.

DJIA rose 37.19 (+0.44%) and remains at the level 8534.37. Nasdaq index slid 2.43 points (-0.13%) and keeps at the level 1805.63. Quite unexpected information arguing business activity rise caused a new wave of risk position demand.

Euro declined to an intraday low against the dollar and other currencies in evening trading Thursday as U.S. stocks pared earlier gains.

Thursday, June 18, 2009

Australia`s sales in Forex

During last month The Reserve Bank of Australia sold a 5-year record amount of Australian Dollars in forex market that accounted for A$1.433 billion. During a month the Australian dollar rised by 6.4% against other major currencies. Without any pressure on the currency, Australian Dollar could be even higher. As a result, export profits could still be marginalized. In April, a testament to this theory, saw exports plummet by 11.3% where the currency rallied 6.6%.

Accompanying the official press release were comments by the bank saying that the influence that the cash rate has had on bank financing has weakened. Such a statement may indicate that further rate cuts may be in the cards for the RBA as the threat of credit tightening becomes more obvious.

View the complete information on the website.

New Outlook for Investors

For a second day the dollar declined against major currencies on Wednesday after U.S. inflation data cut speculation on the fact that the Federal Reserve would raise interest rates soon.
An increase in stock prices and better economic data in recent months had led investors to think that the U.S. recession was moving to an end and that interest rates may need to rise by year end. "The latest inflation data has obviously reminded market participants that inflation is still not as much of a worry right now," said Samarjit Shankar, director of global foreign exchange strategy at the Bank of New York Mellon in Boston.

He also added: “The market has had to scale back its expectations for a Fed rate hike. That has obviously taken away some element of support for the dollar," he added.

Higher interest rates in the U.S. compared to Europe tend to attract investment flows into the U.S. dollar. Brian Dolan, chief currency strategist at Forex.com in Bedminster, New Jersey. said that observe dollar weakness because the idea is that inflation is not clear right now and that is seen as a positive in terms of the bullish outlook and risk appetite.

View more detailed information on the website or on the forex blog.

U.S. Consumer Costs Decline

The living cost in the U.S.A. fell over the last 12 months by the most in sixty years, easing concern that government efforts to revive the economy will lead to a certain outbreak of inflation. The analysts expect it will encourage trade.

The consumer price index slid by 1.3 percent in the year finished in May, the most since 1950. Price index increased only 0.1 percent last month, less than it was expected, with the same position in April 2009.

No rise in sale gains is one reason companies are finding with problem how to pass increases in costs of fuel on to consumers. Higher gasoline price will probably restrain Americans who spend a lot at a time on the background of economy showing positive signs.

Michel Moran, chief economist at Daiwa Securities America Inc. in New York says that inflation is not an serious issue. She says:“There are huge amounts of slack in the economy and demand is quite soft, so it’s difficult to see how inflation can pick up for the balance of the year.”
Energy costs rised by 0.2 percent in May, as a 3.1 percent rise in the price of gasoline was resulted by declines in oil and natural gas.

View the complete information on the website.

Wednesday, June 17, 2009

No Clear Direction for Market

The euro rose on Wednesday as investors bought it back after steep falls against the dollar and yen this week, but the market struggled for clear direction as it tried to decide if a dollar recovery had run its course.

But with a question over its reserve currency status resurfacing on Tuesday, analysts said the market was not sure which direction to head.

The dollar has fallen against major currencies such as the euro and Australian dollar on the currency market this year, with investors unwinding safe-haven dollar positions as the worst of the economic crisis faded and as questions arose over its suitability as the world's main reserve currency.
Both it and the yen have clawed back some lost ground this month as investors have paused to assess whether rallies in riskier assets including shares have got ahead of themselves.

View the complete information on the website.

Yen Remains Stable

Asian stock markets were largely negative on Wednesday, with investors doubting how fast the U.S. recession is easing after a mixed set of economic indicators on the forex market.

"The Japanese yen is the strongest currency, gaining ground across the board, particularly against the U.S. dollar. While the BoJ again raised the assessment of the economy, indicating conditions had stopped deteriorating, the announcement was expected," BBH said.
The yen's gains may be more closely tied to a rights issues from Sumitomo Mitsui, where there is talk that foreign demand could account for half the demand, BBH said.
Late Tuesday morning, the dollar is at Y96.41 from Y97.84 after having dipped to Y96.08, its lowest level since June 4 according to EBS.

View the detailed information on the website.

Tuesday, June 16, 2009

No Impact on Currency Market Yet

The dollar cannot extend its Monday level in overnight trading also worked against the currency The investors who were reassured by comments reinforcing the dollar's status on Monday concentrated on the issue as the summit meeting of Brazil, Russia, India and China unfolded.

According to late morning press reports, the leaders of those BRIC economies called for a "more diversified" global currency system. Earlier, a Kremlin economic aide had said that Russian President Dmitry Medvedev "will raise the reserve currency issue," prompting the euro to climb against the dollar. The euro pushed briefly to a session high at $1.3934 after U.S. economic releases but the data did not make a marked impact on currency markets.

View more detailed information on the wesite.

Euro Goes on Slipping

The EUR has fallen below the $1.3800. It happened for the first time since last days of May. Risk aversion and selling pressure are still in favor. Buying the U.S. dollar is spurred. Late morning trading was marked by dollar selling cased by news that biannual stability review of European Central Bank admits euro zone financial sector is about to face a new wave of tests, worse credit terms and falling of asset prices.

The ECB mentioned in its biannual financial stability review that the largest banks of euro zone are predicted to suffer “further strains on profit” resulting in low profitability. It is also mentioned that euro zone banks may suffer further losses of about $283 billion in the period between now and the end of 2010. These losses will be related to some extent on loans. According to C.J.Gavsie, managing director of BMO Capital Markets in Toronto, that this news “throwing a little bit of lack of investor confidence into that European market”. He stated that the euro would reach support level around the $1.3685. EBS states that during late morning trading euro encountered its low at $1.3774 before rebounding. This fact should not be omitted while planning the trading strategies.

The euro moved essentially lower agains other currencies including the yen reaching daily low at Y134.93. Finally in morning trading the yen forced out the US dollar as the main performer in early trading. The Us dollar continues to shift in the same direction as gains by other currencies slowed. The investors started to to find out the dollar in earnest in overnight trading after the statements of finance ministers of the Group of Eight reinforcing the dollar`s status as the first global reserve currency. Alexei Kudrin, the Russian finance minister admitted dollar`s positive points as world`s reserve currency. New York Currency strategists at Brown Brothers Harriman informed that the euro was under pressure by mere signals of steps from G8 to certain form of bank stress testing in Europe.

The more detailed information may be viewed on the website.

Monday, June 15, 2009

No Alternative for Dollar Yet

German magazine Der Spiegel and a Telegraph newspaper report that during Asian hours the German Chambers of Industry and Commerce predict financial problems that are deepening in Germany, Europe's leading economy. It was a sign that despite positive trends in the world economy there are some problem ahead and recovery does not coming soon. According to the report euro is to fall to Y137.22 as of 0450 GMT, down from Y137.75. And against the USD, it was at $1.3946, down from Y1.3995 last week. Hiroshi Maeba, a dealer at Nomura Securities, says that players become bearish on the euro and they try to shift this position from U.S. economic bases to European economic bases to encourage foreign exchange trading.

At the same time the yen strengthened its position against the dollar. This fact is reasoned by the statements made by BRIC nation representatives about their disappointment with the fact that the dollar remains the world major reserve currency. Analysing the current currency market situation Alexei Kudrin, Russian Finance Minister expressed the idea that it is too early to review the alternative to the US dollar. However, some traders in Tokyo admit the possibility that these countries will try tolook for an alternative to replace the greenback.

Some traders said that during Asian hours on Monday, Japanese importers` buying supported the U.S. currency. At this point the yen the U.S. dollar rise against the New Zealand dollar and the U.S. dollar on speculation New Zealand government might step up its rhetoric against strong kiwi on suggesting that this would damage the country's economy.

Friday, June 12, 2009

BNP Fears Pressure on USD

BNP Paribas currency strategies suggest further consolidation of Euro, but so far, however, the bank strategies admit no negative changing in existing appetite to foreign exchange trading. This fact encourages interest to sell the US currency at more attractive price levels.

The bank pays attention to the fact that the negative influence to the US dollar is resulted by the statements of the Russian Bank representatives and other foreign banking officials about their intention to keep on investing in the US federal bonds with benefit to other assets. BNP Paribas`s position is that such a comment gives grounds to anxiety about a possibility of forming quite an essential trend to the diversification of reserves. The bank also admits resumption risks of EUR/USD rise to 1.45.

Thursday, June 11, 2009

Online Gaming Market Analysis in China

A new report about the current situation on China online gaming market was recently released by RNCOS. The report added to RNCOS report gallery under the titled “China Online Gaming Market Analysis”. The market of online games is the most dynamic and developing segment of total China gaming industry. As to this market analysis Chinese market has seen a series of developments encouraged by Internet penetration, fast product development and the process of commercialization.

According to this research there has been an essential strike of the global recession on the gaming industry. The total market revenue grew at 1700% during 2002-2008, and the total revenue surpassed Yuan 18 Billion (US$ 2.65 Billion) by 2008.

The majority of companies performing on Chinese market are located in domestic. The companies located in China have been witnessing fast growth in their total revenue comparing to their foreign competitors. In 2008, revenues obtained by domestic companies grew up to 60% against the 65% growth performed by foreign companies.The market research will help consultants and vendors to receive knowledge on the past, current, and future situation in the industry. It contains forecasts and reviews about development of the industry.

The future perspective mentioned in report has been based on information obtained by interacting with different industry companies, developers, information analyses from research papers, journals and models which are industry-specific.