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Major non-US dollar index finished lower fluctuated

2010-10-09T03:26:00.001-07:00

This time, the main non-US currencies fluctuated, the dollar index shot up slightly after a steady decline. States should strive to boost market confidence and to stimulate economic recovery, rather than excessive discuss monetary war, the foreign exchange market increased market nervousness. At the same time, Group Chairman Juncker said the euro, countries must work together all the major currencies in foreign exchange markets to maintain harmony, avoid the "currency war." In addition, the People's Bank of China Governor Zhou Xiaochuan said the yuan exchange rate reform to be gradual; the speed of reform depends on the situation of China's international balance of payments.

Focus, wind vane:

Analysis of major currencies:

Euro / dollar: dollar opened at 1.3884 level this period, early period, the exchange rate fluctuated, were touched intraday high of 1.3981 and intra day low of 1.3836 levels, followed by a steady rise in the exchange rate. Midday with early, small exchange rate correction. After midday section, dollar rebounded slightly, closing at 1.3940 level nearby. From a technical point of view, the euro / dollar was steady at 5 day MA, but the MACD indicator to shorten the red momentum column, KDJ indicator running on high. If the dollar break through 1.4020 level, the upside target will point to 1.4230 level. If the exchange rate fell below the 1.3800 level, the callback target will point to 1.3520 level.

GBP / USD: The dollar opened at 1.5872 level periods, early periods, the exchange rate rose significantly. Midday with early, the exchange rate continues upward trend intraday high of 1.5965 intraday level refresh. After midday section, showing the exchange rate trend of high order, near the end to close at 1.5960 level. From a technical point of view, GBP / USD rose to 5 day MA, MACD momentum indicator red column amplification, KDJ indicator Guaitou up. If the dollar break through 1.6000 mark, the upside target will point to the 1.6180 level. If the exchange rate fell below the 1.5800 level, the callback target will point to 1.5480 level.

USD / JPY: The dollar opened at 82.31 times the level in early trading hours, the exchange rate fell sharply in intraday trading low of 81.74 to refresh the level of 15 years, then the exchange rate steadily. Midday hours, the exchange rate continues rebound, but the late once again come down near the end to close at 81.90 level. From a technical point of view, the dollar / yen by the 5 day moving average repression, MACD indicators column to enlarge the green momentum, KDJ indicators continue to test a low. If the exchange rate fell below the 81.00 level, the downside target will point to the 79.95 level. If the level of the exchange rate exceeded 82.80, the 84.10 level will point to a rebound goal.

Japanese yen soaring 15-year high of conflict, the authorities do not want to wait "to be appreciated"

2010-08-13T00:25:00.001-07:00

Fed assumed secondary quantitative easing posture no pushing stock and allows yen up crazy.

Wed intraday, USDJPY once below 85 mark, low see 84.72 15 year low. For this on struggling Japan economy, yen sustained appreciation possible catastrophic consequences. Japanese Prime Naoto Kan 12 emergency call Chief Cabinet Sentani from person express yen "appreciation too fast" concerns. Meanwhile central bank, financial province departments officials also urgent action, on currency implementing verbal intervention.

Analysts believe current yen dollar continuous rose large extent stems U.S. economic fundamentals and weak dollar "was appreciation." For Japanese authorities concerned, through further loosen monetary policies or direct purchasing U.S. dollars etc. to interfere currency, hardly obvious results.

Hearsay central start exchange check

Early June, along global market stabilize, investors focus from Ou Indebted crisis transferred to U.S. economic recovery weak, coupled outsiders for Fed return quantitative easing expectations warming dollar continuous weakening. This background, yen sustained appreciate substantially.

Week Fed announced "quadratic quantitative easing" measures, hinted monetary policy shift after yen rally again speed. 11 intraday, USDJPY once below 85 psychological barrier, low see 84.72 for July 1995 since 15 years high. World War II, yen highest point April 19 1995 hit 79.75.

Yen give export oriented Japan economy multiple shocks. First, strong yen weaken numerous Japanese exporters competitiveness compression enterprise profit; addition, yen may accelerate Japanese enterprises overseas transfer production base exacerbate industry "hollowing."

Reason, Japanese stock recent continuous lower. As 12 close, Nikkei has losing streak five days day decline 0.9% intraday once Chong 13 months low. 11, Japanese stocks decline up 2.7%.

Grim situation also alerted Japanese government. Japanese Prime Naoto Kan the 12th emergency call Chief Cabinet Sentani from person, on yen "appreciation too fast" worried. Day Japanese Finance provincial Financial Officer Tamaki Rintaro with BOJ responsible international affairs governing had macro hold the meeting yen soaring issues consultations.

Given yen uptrend too Meng, Japanese authorities have begun changing word about intervention position began passing tentative measures to intervention.

The 12th afternoon Japanese Finance Minister wild Tianjia Yan specialized on yen exchange rate convene temporary news conference. He conference that exchange excessive fluctuations economic unfavorable he has and Prime Chief Cabinet discussed this issue. Wild Tianjia Yan also said closely Exchange market trends while Japanese Government will yen take "appropriate measures."

Earlier central bank rumored had the 12th morning foreign exchange market conducted rare exchange inspection move be many people as verbal intervention behavior. In Japan, whether intervention currency by Finance provincial decided central are concrete executive body.

Enterprise "pressure test"

IMF a officials Thurs also yen worried. The agency Asia Pacific competent said yen further appreciation will Japan economic outlook bring downside risks, if yen sustained appreciation, IMF will do worried.

Economist noted this wave yen soaring fundamental reason lies around U.S. economic outlook uncertainty enhanced while U.S. sustained relax monetary policy makes Japanese and U.S. spreads narrowed weakened yen as Preferred arbitrage transaction currency attractive.

Other hand, weakening dollar also began prompted more international investors eyeing languished years yen assets then certain extent pushed yen. Addition, export rebound brought surplus increase also increased yen uplink pressure. Ended March 31st year, Japan current surplus up increase 27.9%.

Many analysts think force Japan government intervention currency markets a critical exchange level may 85. Considering USDJPY recently Zeng below that location, outsiders authorities might implementation intervention expected increasingly strongly. Thurs European session USDJPY basic flat, in 85.25 nearby transactions.

More signs that Japanese authorities has yen factors mentioned agenda primary position. Government just announced for 200 enterprises Expand similar "stress tests" survey to understand yen soaring impact.

According Japan METI 11 statement, authorities will about 200 enterprises Expand urgent surveys understand yen sharp Appreciation on domestic enterprises impact. Investigation include yen caused enterprises blow and enterprise taken response measures survey automotive, electronics appliances industries small business. Survey scheduled the end of August ended via production provincial will findings based take corresponding countermeasures.

Intervention easy

Merely verbal intervention little real results. Analysts said now placed Japanese Government before choice two: First further relax monetary policy indirectly yen; Second directly through buy dollar thrown yen manner FX intervention. However, whether which way seem challenges may not effective.

Above IMF officials urges BOJ emulate Fed further relax monetary policy. Although Japan's rates level has close zero and also launched several free additional liquidity Xing measures but IMF 认为, Japanese Bank Rengyou explore other Fangan of Kongjian.

JPMorgan 12 said present seems BOJ likely September 7 next meeting interest meeting ago emergency meeting and extend to market supply liquidity deadline and scale. Similar measures may depress Japan longer rates give currency exert downward pressure. But any further relaxation policy move, may be U.S. continuing monetary loose offset.

Another more powerful measures is through selling yen, buy dollars to direct intervention foreign exchange market. Japanese officials since 2004 been never adopted such interventions.

Japanese Government reason repeatedly refused spend direct intervention means also out helpless. Analyst said Japan To intervention currency, must and exchange market some very powerful trend contend which primary one is dollar overall disadvantaged. Rui letter economist Dong Tao (blog) that yen is "being appreciation". In U.S. economic weakening Ou debt cloud dispersed, US-European quantitative easing exit no period background, Japan contrast appear less bad.

Moreover, Japan intervention currency lack strong external political support. Whether U.S. nor European are playing expand exports license, Japan should initiated coordinated international intervention almost impossible. Eurozone official Wed have said European authorities not welcome Japanese Government intervene yen major central banks jointly intervention more impossible. While If Japan alone action successful unlikely temporary aside, also labeled a "currency manipulation" hat.

Given these reasons, industry universal bearish yen market outlook trend. Barclays and Morgan Chase expects USDJPY may month fell to 79.75 postwar low latter also Japan 1971 abandon dollar peg since USDJPY touched minimum.

U.S. dollar surge, creating the largest single-day gain of about two years

2010-08-11T23:22:00.001-07:00

Mainly due to the global growth concerns drag down the stock market, and investors have sought to avoid risk through the traditional safe-haven currency, the dollar Wednesday in New York than all other foreign currencies the yen has rebounded strongly; dollar index record since October 2008 the largest single-day gain, the euro / dollar record by the end of 2008 the largest single-day decline since. Asian markets Thursday in early U.S. dollar index remained at a high of 82.45 near the correction.

As the FED made Tuesday to the bleak assessment of the economic situation, China, Japan and France, a disappointing manufacturing data, and the Bank of England cut its economic growth rate of the expected, those who are more sensitive to economic growth in assets fell sharply.

The impact of hedging by investors, the euro / yen fell nearly 2.3%. Meanwhile, the Australian dollar, Canadian dollar, New Zealand dollar and global economic growth is closely related to the currency against the U.S. dollar's decline were more than 1.0%.

The dollar index closed at 82.38 Wednesday, rose 1.9% over Tuesday's closing left and right, the highest since October 2008 the largest single-day gain.

France, Japan and China to promote financial flows and weak data in U.S. dollars. Although the Wednesday release of the Chinese consumer price index in July, total retail sales of social consumer goods and industrial value added data shows that the Chinese economy continues to grow, but growth is less than expected. In addition, Japan's machinery orders and industrial production data in France fell sharply.

Because of weak U.S. economic reports fueled the economic growth investors worried about a slowdown in the U.S. dollar has been under pressure in the past six weeks. But the global economic situation after the markets have become increasingly uneasy, some investors worry that a weak U.S. economy will also make other parts of the economic slowdown.

Although the U.S. dollar against the euro Wednesday, and other high yielding currencies up, the dollar / yen, slightly lower rate once dropped to 84.74 in the European trading session, the highest since July 1995 the lowest level, but the dollar recovered in the intraday trading session in New York most of the lost ground. U.S. dollar / Japanese yen and U.S. Treasury yields performance is closely related to the Federal Reserve said it would mortgage-backed securities after the expiry of the proceeds reinvested in the bond market, bond yields back down again.

U.S. Treasury bond yields down a large number of safe-haven buying, to encourage a large number of U.S. Treasury bonds held by Japanese investors locked in profits, repatriation of funds. Japan is America's second-largest holder of government bonds, after China.

07:30 GMT, the dollar index was at 82.43, EUR / USD 1.2849/52 report, the dollar / yen, 85.19/23.

U.S. Federal Reserve left interest rates unchanged means taking days of gains

2010-08-10T21:49:00.001-07:00

FED Tuesday announced a short-term interest rate decision and policy statement, as expected, to maintain the federal funds rate unchanged at 0% -0.25%, and said it would, when necessary, the use of policy instruments to promote economic recovery and price stability. Message 1, the dollar gave up gains for all days, mainly Africa and the United States surged.

The Fed said in a statement, since the June Federal Open Market Committee meeting after a number of signals that U.S. output and employment have slowed down the pace of recovery. Consumption is gradually rising, but still subject to high unemployment rates, moderate economic growth, declining home prices and tightening credit restrictions. Software and equipment investment is growing, however, continued weakness in non-residential sector, businesses are still reluctant to increase employee. Housing starts remain at weak levels. Bank lending continues to shrink. However, FOMC is expected, despite the recent economic recovery may be slower than expected, but in an environment of price stability, resource utilization will gradually return to a higher level.

The Fed said that inflation rate in recent quarters, tended downward, with the large amount of idle resources to push up the cost pressure, long-term inflation expectations remain uncertain, the inflation rate may be limited for some time in the future.

FOMC maintained the federal funds rate unchanged at 0% -0.25%, and still expected to remain low resource utilization, upward trend of inflation is limited, inflation expectations remained stable economic environment, such as the Federal Reserve to extend the near-zero interest rates for a longer period approach provides a reason.

In order to support price stability in the environment of economic recovery, the Fed will be through the agency debt and MBS principal payments reinvested in longer-term Treasury securities held by the practice to maintain the present level position, and said that if after the expiration of its debt holdings The Fed will be extended.

FOMC also said it will continue to focus on the economic outlook and financial development, and when necessary the use of policy instruments to promote economic recovery and price stability.

The Fed said its holdings of domestic securities held steady at a level of about 2.054 trillion U.S. dollars. Will be released mid-month operation of the temporary arrangements to purchase, and to the middle of next month is expected to purchase the assets. The first report will be released on August 11 and announced to the purchase plan in mid-September.

The Fed said it will start on Aug. 17 to buy U.S. Treasury bonds, purchased two years to focus on the 10-year U.S. Treasury bonds, but also indicated that it may purchase additional year the national debt, including the purchase of inflation-protected bonds. The purchase of the object will focus to avoid high demand for the securities, or a large number of holders of securities.

While many analysts and experts is expected to be announced by the Federal Reserve mortgage-backed bonds due repatriating their capital, but most had expected the Fed to buy MBS rather than the national debt further.

Clearly, the Fed lowered its economic outlook, saying the recovery will be slower than expected. In short, this is dollar negative. Another move was the Fed will fund the repayment of debt due to the re-investment bonds, which bonds will rise, yields fall, it will wither away dollars. But I think this situation will not last, the bond market to digest the Federal Reserve is expected to restart the asset purchase plan may be, but the Fed did not, so I expect the dollar to rebound.

U.S. dollar index was at 80.85, EUR / USD 1.3183/87 report, GBP / USD 1.5849/53 report, the dollar / yen, 85.33/36.

China's holdings of Japanese government bonds for six consecutive months

2010-08-09T22:24:00.001-07:00

June this year, China's total holdings of 456.4 billion yen (about 5.3 billion U.S. dollars) of Japanese bonds. By the end of June this year, China has to continue for 6 months, the Japanese bond holdings, holdings of this year's amount will set a new high since 2005.

The move means that China is turning to the huge foreign exchange reserve diversification of assets, including Japanese government bonds. May China's holdings amount has reached 735.2 billion yen, this figure has been reached since 2005 when the historical record, and far more than in January to April this year, the total holdings of 541 billion yen debt.

Diversified hedge the risk of foreign exchange assets

Reported the same day also showed that China's holdings of the first half of the total amount of Japanese government bonds was 1.73 trillion yen. This total is almost 7 times the total in 2005, is also China since 2005, holdings of Japanese government bonds up to a year.

Since June this year, the U.S. dollar against 16 major currencies have been devalued, more and more investors lost confidence in it. China's holdings are likely to dollars or euros in order to hedge the risk of future depreciation. The long term, the yen bonds will lead Asian countries are more widely held, that the Japanese bond market, is good news.

East China is attempting to diversify their risk of holding foreign bonds, while the select holdings of Japanese government bonds because they do not want a weak dollar led to asset deflation.

That record in 2005, when China ended because of a decade-long peg to the dollar system. This year in June, China announced the second exchange reform, the RMB pegged to a basket of currencies began to implement a managed floating exchange rate system, similar to the changes began to occur.

As of the end of June, China's foreign exchange reserves up to 2.45 trillion U.S. dollars. As of the end of May, China held 867.7 billion U.S. dollars of U.S. Treasuries, compared to the 900.2 billion U.S. dollars in April decreased.

In addition, Japan, Korea, Hong Kong, India, and Singapore are also holdings of U.S. Treasuries in May.

But some analysts said that China's holdings of Japanese government bonds does not necessarily mean that China's confidence in the Japanese economy is growing, because China to buy Japanese government bonds are mostly short-term.

Japan welcomes China's purchase debt

Market demand for corresponding rise in Japanese bond prices. Japan's benchmark 10-year bond yields fell on August 4 to 7 year low at 0.995 percent.

Despite the dramatic increase of China's holdings, in fact, only drop in the ocean: The Japanese government bonds average daily amount of 19 trillion yen.

However, the Japanese Ministry of Finance is very welcome China's holdings, because it can attract more people to buy the bonds. Yoshihiko Noda, Japanese Finance Minister last month, said the Chinese government is very welcome to buy Japanese government bonds, which will also help the Japanese government bond investors seek to achieve diversification.

Attract more foreign investors to buy Japanese government bonds on the Japanese government is crucial, because the domestic population continues to shrink is threatening Japan's national saving, and national saving has largely maintained its bond sale.

Interestingly, Japan's Finance Ministry has recently launched an advertising or words to attract the male citizens to buy government bonds: "Japanese government bonds held by most women favor men."

The country's sovereign debt agencies believe that, because about 95% of Japanese government bonds held by domestic investors in the country, this will help increase the national debt credit, although this amount has already reached Japan, 200% of gross domestic product as high. However, this evidence has begun to decline: Since March this year, holding 12% of the outstanding debt of the Japanese public pension funds have started the first 9 years of debt reduction.

Euro gains faces an important test of the resistance, focus on the ECB rate decision

2010-07-07T20:49:00.001-07:00

New York on July 7 euro strengthened slightly against the dollar, after trading update since the May 21 high of 1.2663, after pressure from EU regulators published a list of banks and major test standards, but has little effect on the currency markets. Investors are waiting for ECB interest rate decision Thursday to provide clear clues to trends. From a technical perspective, 1.2670 and 1.2770 key resistance around the euro will be short-term objectives need to overcome, if the breakthrough in the effective exchange rate, the recent exchange rate is expected to rise above the 1.30 mark.

European Central Bank will announce interest rate decision, the current interest rate is 1.00%. The ECB is widely expected to keep benchmark interest rate unchanged at 1%.

Eurozone May producer price index PPI showed that euro zone economic growth slowdown in the pace began to slow, inflation will decline in the near future the ECB will not consider raising interest rates.

Signs of economic slowdown in the euro area and the gradual strengthening of the savings measures mean that the ECB will likely wait until the third quarter of 2011 before raising interest rates.

Bank of England interest rate decision will be announced, the market expected the Bank of England will keep interest rates at the meeting remain unchanged at 0.5%.

EUR / USD is approaching major resistance at 1.2670 and 1.2767-83. May 21 former high point, and the latter in December 2009 and April 14 connected to high resistance formed downward trend, but also the euro from April 12 fell to 1.1875 low 1.3692 high 50% of the back stalls.

In mid-May is still touched 1.2670 EUR / USD key technical; added that if the euro to break through this level, it is expected to reach 1.30 in the next few weeks.

EUR / USD is still faced with strong resistance, it seems the recent rebound in the exchange rate will not be able to get more kinetic energy. Therefore reasonable to expect that the euro / dollar in the next few years, experience a prolonged decline in the pattern.

If Greece is to restructure its debt, or a euro zone member countries from the European Monetary Union, the euro / dollar parity level or to fall.

The euro will take a long time to restore investor confidence. Some caught in the euro zone sovereign debt crisis did not show a clear signal to solve the problem completely.

Temporary relief of the market fears, the European contingent debt reduction a long way

2010-07-07T04:05:00.001-07:00

In the trillion-dollar financial rescue plan in Europe, the European Central Bank decided to buy government bonds and the European deficit reduction plan Xinghuoliaoyuan under the action of multiple factors, the market for European sovereign debt fears appear to suspend trend. Recently, in addition to a number of European government bonds re-entered the list of major international fund managers to buy outside the euro-dollar exchange rate also was up there.
Data show that last week several major global fund managers began buying a few months the first time since the Spanish government bonds. The other fund companies, such as Baring Asset Management and Standard Life Investments, although unwilling to "bet" in Spain, Greece and Portugal bonds, but ready to "hit" the Italian bond.

This is different from the case in May. In addition to the tragic Greek bond market was abandoned, but also almost no international buyers in Spain, Italy, the debt crisis that the European "periphery" countries interested in bonds. Who are optimistic that this may be the European government bond market, a sign of recovery, as Spain, Greece and Portugal, the bond market has to withstand stress over time, but now emerging signs of recovery.

In addition to the European government bond re-Mu "Spring", the euro exchange rate is also slightly better. Lasted for several months in the downhill, the euro against the U.S. dollar gained in the past month there. Data show that since June 7, the euro rose against the dollar by 5%. In addition, since the end of June has been Spain, Portugal and Greece, the bond market rise has reached 3%. Some optimists even said that, along with the market's fears ease the debt crisis in Europe, the European debt crisis is over the worst of optimism is rising.

But professionals have a different view. Some analysts even believe that the current suspension of the debt crisis in Europe might be "false", with efforts to further weaken the economic recovery in Europe, more and more countries will have to bear the enormous pressure of the debt crisis of suffering.

In fact, the burden of excessive government debt problem has spread into the whole issue of the euro zone. The ratio of euro area GDP, the level of debt has increased more since 2007, nearly 20%. Looking around at the Fiscal Policy of the report, saying on the tight fiscal spending is nothing less harsh, but really put into practice to see the current debt crisis is still subject to some of the largest southern European countries. He predicted that by 2011 the level of the eurozone budget deficit may be slightly down, but the ratio of debt to GDP could continue to rise, to 2013 may exceed 90%. Not if the debt burden continues to increase, most of the euro-zone countries need within the next 3 years will also increase the budget deficit into a surplus. In accordance with national financial plan recently released, and only in the output gap narrowed, the level of economic growth above the potential growth at some time be possible to achieve this goal.

According to our current forecast for euro-zone economic outlook, fiscal austerity efforts need to be further strengthened. But the current situation is a neutral fiscal policy this year, next year's debt reduction efforts may not exceed 1% of GDP. If the goal of debt to GDP ratio remained at 2009 levels continue to rise is no longer the goal, the next three years, the rate of debt reduction of not less than 3% per year. If we allow the government debt levels continue to rise, even if the long-term interest rates remain stable in the euro zone a large portion of national wealth will be used for debt servicing. If the Government can not make a deal --- reducing government services and social welfare expenditure, increased tax burden will be difficult to avoid. By then, the country risk will be transferred to the corporate sector risk, capital costs will lead to a decline in investment spending, which drag down economic growth. Different countries for the euro area, this impact on economic growth may vary. The monetary policy would again face a new challenge, may have hampered the integration of the euro area.

Japan announced long-term growth strategy, and strive to fight deflation

2010-06-18T23:47:00.001-07:00

Japanese government announced on June 18 and long-term growth strategy. Japanese government said, and strive to achieve more than 2% economic growth, end deflation, and reduce the budget deficit.

Japanese government plans to stimulate the growth needs of the industries to fill the output gap to the next 10 years, average annual real economic growth rate increased to more than 2%.

Japanese Government's commitment to cut domestic corporate tax rate, and gradually the level of integration with the major countries, from the current 40% to 25% down.

The Government has also hinted that future tax increases, and said that if people bear the cost of expanding social welfare, then boost demand and employment policy effects will be maximized.

Government of all types make good use of fast-growing Asian demand initiatives, such as infrastructure projects overseas and create a scale of 19.7 trillion yen in the market, as well as boost from fashion and film and other industries income to 1 trillion yen.

And the Government will consider introducing tax cuts and other concessions to attract foreign companies to Japan, the Asian headquarters move, and setting up of loose control and tax benefits enjoyed Erjuquanqiu the industrial Ou Jing Zheng Li.

Japanese government in the economic growth strategy also called for the central bank "everything possible" to defeat deflation. Its also said that the price decline for the termination of the fiscal and monetary policy should help Japan avoid excessive appreciation of the yen.

In the financial sector, the Government intends to 2013/14 year ago, the establishment of a trading securities, commodities and other financial products, integrated exchange.

Fed rate hike is expected to be delayed Popular recent Wall Street

2010-06-18T23:33:00.001-07:00

In the latest Federal Reserve monetary policy meeting next week, almost certainly, the Fed will continue to maintain its zero interest rate stance. It is especially noteworthy in recent weeks, "to postpone a rate hike" seems to have become popular in big organizations, word.
Inflation is the result of the Federal Reserve Bank rate hike expectations adjustment factors. Although the bank has been the core inflation rate is expected to fall to 1% or less, but significant declines in the prices of services, and slow wage growth, and thus a downward trend in inflation is likely to continue for some time.

U.S. Labor Department data released Thursday showed the U.S. consumer price index in May fell the third consecutive month, making more room for the Fed to keep interest rates low.

Moderate economic growth and the level of instability, combined with minimal employment growth, so the Fed will not rush to raise interest rates. At the same time, Fed officials rarely too early to the market interest rate expectations on the clarification.

American Bankers Association released this week, according to the latest interest rate outlook shows 14 largest U.S. bank economists predicted the Fed will be their first time to push interest rates, the latest estimate for the Fed may next year interest rates for the first time.

Federal Reserve may raise interest rates continue to adopt a "wait and see attitude," because inflation is not a threat.

Earlier this year, economists widely expect the Fed will start in December this year, the current accommodative monetary policy tightening, and may be seen in the December high inflation risk. But over the past six months, this view has changed, the United States now faces the risk of deflation has been changed.

In this morning's latest rate hike outlook, ABA's Economic Advisory Committee said that this year will be the U.S. consumer price inflation slowed to nearly 1% level, and in 2011 only increased to 1.8%.

In addition, the current U.S. economic outlook pessimistic mood were related to the faltering labor market. Despite the continued growth in U.S. employment and unemployment down, but May's payrolls report are cause for grave alarm, after deducting the temporary recruitment of factors, not the month employment increase of almost. Not resume as long as the job market, wage pressures will not increase, while the economy is difficult to show on inflation, tightening monetary policy naturally without just cause.

Another independent report released Thursday, the United States in May rose 0.8% on real income is expected to rise 0.3%. Since the October 2009 date, real income has risen 2.1%. Analysts said the weak job market to prevent the workers demand wage increases.

U.S. dollar exchange rate rose 5 consecutive days

2010-04-21T18:37:00.001-07:00

Dollar Wednesday 5 consecutive trading days up, as the market expected Greece to the European Union and the International Monetary Fund launched emergency rescue plan, the Greek government bonds sharply higher interest rates, putting pressure on the euro.

Euro against the dollar from Tuesday's 1.3441 U.S. dollars fell to 1.3395 U.S. dollars.

Dollar against the other six kinds of tracking major currencies dollar index rose from Tuesday's 81.039 to 81.202 points.

U.S. dollar against Japanese yen from 93.13 yen rose to 93.20 yen.

Greece 10-year Treasury rate on the German 10-year Treasury interest rate spreads have increased to more than 5 percentage points, the Greek government bonds interest rate from the euro since the first time since its introduction in 1999 of 8%.

Greek officials have begun with representatives of the European Union and the International Monetary Fund talks started Wednesday, a move that marks the Greek market is about to start last month reached 45 billion euros emergency response plans.

Sterling exchange rate against the dollar and the euro have risen, the latest data show that in March the UK jobless claims fell more than expected.

Although down from an intraday high of some, but the pound against the dollar is still up 0.2% to 1.5410 U.S. dollars. Euro exchange rate against the pound sterling was down 0.5%, to 86.93 pence.

Economic outlook may be the next obstacle to euros

2010-04-21T02:19:00.001-07:00

In the Greek government and the IMF talks with the EU against the background of relief mechanism, many market participants and experts believe that "the Greek story" may be more than that, the euro reversed the timing has not yet come.

"Emergency" or "mechanism"?

ECB's Governing Council member Weber recently announced that Greece may need to save up to 80 billion euros of funds to avoid default. Earlier, the EU and the IMF have agreed to separately provide 30 billion euros to Greece and 150 million Euro loan, the interest rate is 5%, while Greece last week's issue of 1.2 billion euros for six months and one year of bond scene when there is an over subscription, the country Local issue 1.5 billion euros this week, two 3-month bonds.

Only truly implemented in Greece, after a series of financial cuts, the financial problems are considered resolved. The key question is whether these countries, the financial reduction plan implemented as scheduled, while also ensuring that economic growth was robust enough to withstand such measures as tax cuts.

It seems in the small net, long-term perspective, the key is just like the Greek crisis, the crisis can be an example of this principle behind the euro area, structural and institutional problems remain unresolved, while the euro zone is the same money behind the corresponding labor Member States is very uneven, and uneven economic development, on the other hand the euro area itself is also a lack of exit mechanism, and emergency measures design. In addition, pull into the IMF would be involved in this rescue are the future and so a long pattern is not known.

The euro zone economy will grow 1.15% this year, the U.S. economy will be recorded in the 3% increase; In addition, the Fed will raise rates to 0.75% this year, while the European Central Bank will have to maintain 1% of the year benchmark interest rates unchanged.

At present, Spain is working in the 2013 budget deficit of 11.2% of its share of GDP, adjusted to within the requirements of the EU, Portugal is also working to reduce the deficit.

EU and IMF assistance program does not change the medium-term prospects, that the euro zone's economic recovery is likely to slow in other developed economies, which will allow the euro to continue in the downstream channel this year.

Euro anterior worrisome?

This year, the biggest decline against the dollar, the euro more than 8%, the EU and the IMF has been reaching out of the news earlier this month, the euro rebounded more than 2%, while in the past week, the euro fell against the dollar by 1.2% straight again.

Including BNP Paribas, Morgan Stanley, financial institutions, including that in the future, "drag" of the European economy will be the factors that hinder the euro exchange rate upward.

BNP Paribas is expected, in view of the Greek crisis, the euro against the dollar will fall next year to 1.19 position to the lowest since March 2006. Euro trouble far more than that, it is likely that the EU rescue plan will occur in the future, because the euro zone countries will have to withstand external financial pain reduction and salary adjustment process.

Foreign exchange strategist has largely reduced the expected future euro, now that the euro-dollar exchange rate will reach 1.33 by the end of this year, is expected early this year is 1.45.

The involvement of the EU and the IMF may allow transfer of sovereign debt crises from Greece to Germany and France, represented the main Eurozone countries. "This will make the euro more is not optimistic."

However, investment in Shanghai Ming Lau Kam Shan-yuan, chief financial analysts are of the newspaper reporters that the recent IMF and the EU reaction, at least the depth of the deterioration of Greece's debt is unlikely.

Dollar rose against major currencies

2010-03-30T19:33:00.001-07:00

Dollar Tuesday rebound, month U.S. consumer confidence index increase exceeded expected further Description U.S. economic than European earlier recovery.

By favorable economic data and a poll stimulation sterling Tuesday intraday 0.9%.

Tracking dollar other 6 kinds major currencies dollar index from Mon's 81.344 point rose to 81.447 points.

Dollar index expected consecutive 4 months consecutive second quarter rose.

EURUSD exchange from Mon's 1.3466 U.S. dollars fell to 1.3426 U.S. dollars. Euro in breakthrough 1.35 U.S. dollars important juncture with yesterday as immediately down.

Euro March or fourth consecutive month fell.

USDJPY exchange from Mon's ¥ 92.57 rose to ¥ 92.84.

USDJPY exchange month expected rising this will three months first rose. USDJPY exchange In end ¥ 88.87. USDJPY exchange rate first quarter estimated will fall past four quarters USDJPY exchange rate three quarters fell.

U.S. economic Conference Board said March consumer confidence index from February 46.4 rose to 52.5.

U.S. 10 year yields 3.88%, well above Germany 3.11% level. A country bonds yield higher investors the country bonds interest larger low yields countries exchange will under pressure.

Positive economic data yields spreads and Eurozone national debt problems will dollar formation support.

Ireland and Greece

Relevant Ireland countries banks need government support news also given euro pressure. This will become Eurozone country needs face another problem.

Greece Mon bonds issuance results disclosure Description investors Greece Treasurys interested not large. Greece € 5,000,000,000 (67 billion) 7 year Treasuries oversubscription rate only 1.4 times, This result shows market little interest herald Greece further Issue bonds will face difficulties.

Greece bond investors require Greece yields Germany yields premium further expanded. Analysts said Greece 10 year yields German bonds the spreads from Monday 3.15% to 3.3% around.

Greece 7 years yields equivalent 6.01 to 6.02%, while German same deadline bonds yield 2.63%.

Britain

Pound rising partly British fourth quarter GDP be upward revised to growth 0.4% also Britain prices also rebound.

GBPUSD (1.5070,0.0003,0.02%) exchange from Mon's 1.4975 U.S. dollars rose to 1.5085 U.S. dollars.

Analysts said a poll opposition Conservatives pairs opposition Labor party weak lead further expanded this also pounds formation support.

Fear Election will two parties evenly matched neither can majority advantages sterling since the beginning began fell. Market worried minority party or coalition government not have sufficient courage launch rating agency requested budget cuts measures.

Greece complete the sale of U.S. dollar decreases in debt reduction

2010-03-29T22:41:00.001-07:00

U.S. dollar declines against the euro exchange rate was maintained, but the decline has been a marked reduction. Currency traders noted that Greece has completed the settlement of a seven-year euro bond sales. As of 3:15 pm Eastern time Monday, the dollar index fell 0.06% to 81.35 points.

The euro against the U.S. dollar exchange rate of 1 euro 1.3453 U.S. dollars, more than last Friday when the North American close of 1.3411 U.S. dollars foreign exchange market. Morning, the dollar rose as high as 1.35 U.S. dollars.

Last week the euro hit a 10-month low, but the important officials in the euro area clearly a rebound after his speech. The officials said they had a backup plan assistance to Greece to reach a consensus, including the IMF to provide support. Greek officials announced this morning, after the issuance of state bonds bond traders said some of the Greek government bonds sold by the yield of about 5.90%.

Some analysts pointed out that this bond sale results not only in Greece is an important test, this could trigger the market's concerns about the overall strength of the European Union. Has survived a bullet, but there are a lot of bullets are not emitted. Such a high rate of return is a problem, the market's view on the surrounding bonds may deteriorate further.

The economic report released today by the European Commission developed a 16-nation euro-zone economic confidence index in March reading of 97.7, ring than increasing 1.8. The European Commission pointed out that, after the suspension in February, after picking up the momentum of economic confidence rose to reproduce. According to Thomson Reuters survey, economists on average expected in March of the economic confidence index rose to 97.4 points.

Today, the U.S. dollar is not the only one economic report released to make clear response. U.S. Department of Commerce this morning, announced in February consumer spending growth in line with expectations than the ring, personal income than the flat ring.

British pound against the U.S. dollar was up 0.0655% to 1 sterling 1.4972 U.S. dollars, mainly due to the UK the latest data on consumer borrowing better than expected. U.S. dollar rebounded against the yen, up 0.0757% to 1 dollar ¥ 92.5000.

Euro deemed to be concerned about the US-farm breathing and the Greek bond issuance

2010-03-28T19:48:00.001-07:00

IMF together to put on a safety net for the time being, Greece to help ease investor anxiety, but the euro will not fall to an end. In addition to usher in the market this week, public attention in the United States by the non-farm employment report, the Greek bond issuance will also be particularly noteworthy.

The euro last Thursday's agreement is only fighting for a breathing time, there is no greater help. He and other analysts expect the coming months, the euro / dollar will drop to 1.30.

Greece this week, is expected to wade across the public debt market, trying to test the commitment to obtain relief against the backdrop of finding ways to reduce bond yields.

Greece, for solving the debt crisis of the most critical question is whether the Government can reduce the cost of borrowing, that its huge budget deficit "downsizing." 10-year Greek government bond market yield 6.24%, almost no euro benchmark German bond yields 3.16% twice as high. Early this year, issuing 10-year and 5-year bonds, it is estimated duration of the bonds will be three-year or seven-year period, while the latter is more likely.

According to Greek Public Debt Management Agency, PDMA data show that Greece will face in April due 11 billion euros of debt, and in May will further faced with 11.646 billion euros of debt maturity.

If the bond market's reaction this week, Greece is not strong, then the debt risk may be spread to Portugal, and means that a particular country or region will be forced to seek such a financing mechanism similar to the Greek.

Although the ECB will continue to accept the Greek government bonds as collateral, but in the public debt market access issues in the euro area and the euro is facing great challenges.

Germany in the euro area due to continuous pressure from other Member States to reduce fiscal deficits, economic growth momentum is set to become the common currency will face the next problem.

Taking into account the agreements signed by the European Union brewing great deflationary pressure, or implied by euro / dollar will fall to the 1.31 line. "He added," this level or at the end of this week touched.

Meanwhile, in the European economy may be lagging behind the U.S. economy against the backdrop of the United States this week, five will be baked in March non-farm data, or will contribute to the Fed will suffer from the European Central Bank to tighten monetary policy expectations, which will further boost demand for U.S. dollars The additional downward pressure on the euro.

Economists expect payrolls report will show steady growth in the U.S. job market, some people are expected in March non-farm employment will increase by 30 million people.

March non-farm employment data may have to give up when the Federal Reserve has always been a "long period of time to maintain low interest rates" the position has a great influence.

Portugal's sovereign credit rating was lowered short-term fear of dropping precipitously dropped to 1.30 euros

2010-03-24T19:51:00.001-07:00

While the euro was under the Greek problem "everything possible to destroy" the occasion, Fitch Wednesday announced that it would cut one of Portugal's sovereign credit rating files, and the country's rating outlook as negative, which further exacerbated the recent losses in the euro. The euro fell across the board in New York Wednesday, the euro / dollar fell nearly 150 points shortly, in May 2009 after hitting the lowest 1.3324. There are many foreign exchange analysts said the euro / dollar in the next few days may fall to 1.3000 level.

At the same time, the euro zone sovereign debt market concerns raised risk aversion, thus safe-haven buying triggered by the overall U.S. dollar rose, the dollar index hit a high of 81.92 last May.

Fitch Ratings Wednesday will be one of Portugal's sovereign credit rating cut to AA-, and warned that if the Portuguese in 2010 and 2011 the performance of the financial and economic conditions continued to weaken, it may lead to the re-rating has been lowered.

In view of severe budgetary situation of Portugal in 2009, the country Fitch long-term foreign and local currency issuer default rating lowered to AA from AA-. Fitch said in a press release, Portugal rating outlook to negative reflects the existence of a structural weakness in the country and all sectors of the economy are in a high debt situation, the global economic crisis on the Portuguese economy and the potential impact of the medium-term public finance worrying.

Eurozone economic data released today, performing well, but did not provide support for the euro. According to Markit Economics survey released Wednesday showed the euro zone in March PMI rose to 55.5 of the 31-month high point in February to 53.7, previously expected to be 53.8. Ifo research institute released data on Wednesday showed that Germany's Ifo business climate index in March rose to 98.1,2 the month was 95.2, exceeding previous market expectations of 95.9.

Brown Brothers Harriman (Brown Brothers Harriman) analyst said that while the euro area, including the euro zone PMI data were better than expected, but failed to provide support for troubled euro, because Portugal rating has been lowered to make the investment are beginning to pay attention outside the euro zone countries, the incident also shows that Greece, the problem may only be tip of the iceberg.

Investors in Europe and Japan's sovereign credit worries that have made the market risk aversion increased.

Data impact have to take second place, the euro / dollar drops below key technical levels of speculative dollar buying appeared to dominate the currency markets. He claimed that Portugal was lowered ratings for investors is a good reason to continue to sell the euro.

Today, U.S. economic data released by the general poor, but analysts said the economic data for the current market of concern about the decline in the euro zone sovereign debt worries triggered safe-haven buying will support the U.S. dollar continue to rise.

The U.S. Commerce Department data released Wednesday showed U.S. durable goods orders in February rose 0.5 percent monthly rate, after a seasonally adjusted for the 1,781.2 billion U.S. dollars, market expectations for the monthly rate will increase 0.6%.

Wednesday the U.S. Commerce Department reported a seasonally adjusted basis, the United States in February new home sales fell an annualized monthly rate of 2.2%, annualized total of 308,000, a record low. Previously, economists surveyed expect new home sales in February on-year increase in the rate of 1.9%, annualized total of 315,000.

Investors will focus shift is scheduled for Thursday and Friday's EU summit meeting. It has been reported that the current IMF may lead to the implementation of debt-ridden Greek relief; after the euro zone leaders to uphold the Greek issue should be resolved within the euro area does not need IMF intervention.

A German government official said Wednesday, Thursday and Friday at the summit of EU leaders will not make a decision on the Greek aid scheme, any rescue plan will only "last resort" and would have to deal with a major IMF funding.

The official declined to be named in the European Union summit news conference, said that the Greek problem is not a formal topic of this summit. The official also said a growing number of countries supported the German view that the IMF rescue plan should be in any Greek play an important role.

Portugal rating has been lowered, and the uncertainty of the prospects for the Greek aid is extremely negative news. The next few days the euro / dollar may fall to 1.30.

Credit default swaps into euro conducive to the recovery of original sin

2010-03-17T18:51:00.001-07:00

The euro has become the world's a paradise for speculators. Greece caused by bad debts in arrears panic mood or other serious deficits in Europe's economies, spread, and probably Europe's banking system will bring about a chain reaction panic. With the economic downturn, for Greece, Portugal, Spain and other euro-zone countries, it is difficult for economic growth is not dependent on a huge budget, even in their economic growth before the crisis had been too much to rely on public finances.

Credit default swaps debt crisis of the Greek original sin?

In the eyes of EU officials, credit default swap market is considered the chief culprit in the debt crisis triggered Greece. Greek Prime Minister George Papandreou had a speech in Washington, said: "These speculators recklessly, they will default through the betting Greece earn billions every day." Papandreou shelling aimed at protecting investors from Greece, the impact of debt default CDS, are allowed to help a neighbor's house is like buying fire insurance, and then set fire to a neighbor's house for compensation farce.

Greece has 90 billion in net sovereign credit default swaps outstanding, compared to, but it issued more than 400 billion U.S. dollars of government bonds. According to BIS data, the net position in credit default swaps accounted for the highest proportion of government bonds is Portugal, but only 5%.

Greek huge debt and deficit, investors panicked and have demanded that the Greek bonds have a higher rate of return. Last year, the Greek GDP, the deficit amounted to 12.7%, while in the country in April and May need to pay about 230 billion euros of debt principal and interest. Greece This year alone, the need to raise about 540 billion euros.

In Europe, the sovereign bonds in January to credit default swaps rose to 60 billion U.S. dollars, which is by far the most active month, while government bonds also increased the number of transactions. The euro area bond issuance this year, the net amount will reach 425 million euros; credit default swaps, the net position (planing to open contracts), only 64 billion euros.

The European Commission has said it will review the need to ban "no insurance" sovereign credit default swaps, which protect buyers of government debt does not actually own any senior debt. Baerniai EU internal market commissioner, said the EU would be Greece and other EU countries, credit default swaps to conduct an internal investigation and said he would like to know relevant information.

Credit default swaps are no longer the holder of financial assets, the risk of default insurance for the conservative areas, it has actually alienated for both buyers and sellers of credit insurance contracts against the gambling behavior. In fact, both sides can and needs of credit insurance, financial assets have no relationship, they bet on is whether there is an event of default of credit. And scale of such an act has already far beyond the credit default swaps were originally designed.

Some for the sovereign credit default swaps market reforms are necessary. Like other credit default swaps, as there is sufficient reason to request to move to OTC financial instruments, the central clearing house, buyers and sellers communicate with the central clearing house, reducing the counterparty risk. Europe and the Americas have already such a sensible change of plan is ready. However, the blame speculators difficulties caused by the Greek idea is wrong-headed, but no insurance against sovereign credit default swaps solution worse.

Should carefully examine these credit default swap contract is "effective." Some elements should certainly be subject to verification. In order to reduce the risk of market participants, trading the contract should be an exchange through a central contract parties (central counterparty) to conduct. She believed that "speculators" in manipulating the price of these credit default swaps. In turn, increased cost of default insurance policy to promote European bonds, bond proceeds. The government in trouble will be the situation even worse.

Depreciation of the euro or conducive to economic recovery in Europe

From the beginning of 2010, the euro depreciated against the U.S. dollar by 10%. In this situation, the depreciation of the euro not only is not a harbinger of inflation, but welcomed by the European exporters, especially Germany and France businesses welcome. Some countries within the European Union also believe that the euro overvalued, because the economic recovery of Germany and Finland, well, they are completely able to provide very competitive products and services, but as a member of the euro zone, the exchange rate prices are uniform, which significantly reduced their earnings.

French media reported that the Greek budget crisis led to the euro exchange rate continued to drop. In the difficult times of economic recovery, the euro's depreciation for France's exports is good news. According to the French research institute COE-Rexecode deputy director Alain Henriot analysis of the situation of a weak euro will temporarily not prompt the European Central Bank (ECB) to consider raising interest rates. Lack of economic growth in Europe, unemployment remains high and excess capacity and lower the rate of inflation and other factors not modify the current support for the European Central Bank to implement the policy of low short-term interest rates, a weak euro and lower interest rates will be linked with each other to maintain.

Observations from the technical side, the euro rebounded against the dollar's recent strength, the Japanese line of random indicators Sicha, CCI is above the 100 level, the exchange rate are still very overbought, the rally probably will be difficult to sustain, below the level of support at 1.3650.

Data

Credit default swaps: buying credit default insurance, the party known as the buyer to assume the risk that one party is referred to as the seller. If the financial assets of the two sides agreed there is no event of default, then the buyer to the seller on a regular basis to pay the "premium," while the event of default, then the seller bear the loss of the buyer's assets.

U.S. Federal Reserve maintained the benchmark interest rate 0-0.25% range unchanged

2010-03-16T21:59:00.001-07:00

Federal Reserve interest rate at the end the one-day announced after a meeting to maintain the range of 0-0.25% of the benchmark interest rate unchanged. This is in line with market expectations. The Federal Open Market Committee policy statement issued after the show, the interest rate will be in the "long time" be maintained at low levels, the Fed is more optimistic view on the economy, but the real estate market is still weak, the Fed will continue to use the necessary policy tools .

Prior to this, market participants widely expect the benchmark rate will not adjust their bone of contention is whether the Fed will repeat that interest rates will be "long time" remained at historic lows and the Federal Reserve in the end when it will stop using this qualifier. According to Thomson Reuters survey, the majority of people expect a "long time" will be unchanged, and the facts proved that this expectation is correct.

Some Fed watchers said that the recent sustained positive economic data will lead to Federal Reserve officials in the April meeting, to remove this language. If the Fed to do so, it will clearly show that the Fed right to determine the economic outlook is more optimistic and believe ultra-low interest rate policy is no longer necessary, the financial markets will react accordingly.

Fed since December 2008 Bianjiang interest rates low levels close to zero. The Federal Reserve said many times in the past year, given the still-fragile economic recovery, interest rates will remain very low. Low interest rate policy aimed at promoting bank lending and spur economic development.

One purpose of the Fed statement is to allow investors and companies to better understand the outlook for monetary policy. Monetary policy research papers are published in the near future, said the prospect of Federal Reserve monetary policy more clear, the role of its regulation will be more effective.

After a number of Fed officials in speeches the market has reached a consensus that the Fed calls "a long time" is about 6 months time. The Fed's next meeting will be conducted April 27-28.

Pounds by blocking long-short shorts massive eight-fold difference between the sterling crisis of 1992

2010-03-15T23:13:00.001-07:00

Pounds is experiencing a severe crisis of confidence. Currently held by those who pound futures short positions against the U.S. dollar has hit all-time high in 1992, the difference between long-short "sterling crisis" when the 8 times. Pounds so far this year has already depreciated by about 6%, the worst performance in 13 years; In addition, the UK's deficit has also been expanded to a level close to Greece. Analysts believe that these factors have made investors worried about pounds will continue to decline, resulting in significant increase in sterling against the U.S. dollar short positions.

Data indicate that the current short sterling against the U.S. dollar futures contracts and long gap between the number of contracts has reached in 1992 when the eight times more. At that time, "financial predators" Soros shorting of about 10 billion pounds, and forced the then British government had to withdraw from the European exchange rate mechanism. Sterling was also in 1992, has fallen around 19%.

In addition, the British government expects a deficit this year will reach the size of GDP, 12.6%, while Greece was 12.7%.

England into second degree at high risk of a recession, the pound more and more like the emerging market countries, currencies, bond yields rose on the pounds is no longer beneficial. The bank also expects sterling-dollar exchange rate will also be on the basis of a further devaluation of the current 13.8%, to the end of the year is relegated to the 1.31 U.S. dollars.

However, the rating agencies Moody's report released on the 15th, the United Kingdom all the major political parties have recognized the need for consolidation of public finances; the country's "AAA" rating on a temporary worry, mainly because the British Government to improve the balance sheet capacity is still worth the wait.

Some analysts believe that the debt of the United Kingdom have good credit, so that investors are willing to purchase these bonds, the creditors of the long-term holding, rather than a large number of sell-off. British Chancellor of the Exchequer Alistair Darling also proposed to reduce the deficit by the end of last year, specific plans, promised to cut the deficit in 2014-2015 fiscal year by half to 84 billion pounds, accounting for 4.4% of gross domestic product. This plan will guarantee and stability of the British Government to play an active role in the sustainability of debt.

15, Sterling continued to pressure sterling 1.5158 U.S. dollars against the U.S. dollar reported a drop of 0.18%; pounds reported ¥ 137.3100 against the yen, down 0.09%; sterling against the euro, reported that 0.9061 pounds, up 0.03%.

The euro fell against the dollar may be even 10% of the market outlook

2010-03-12T19:21:00.001-08:00

Since last November, the euro against the dollar has fallen nearly 10%, the exchange rate last month fell into narrow ranges, this does not give birth to the ban and some investors question: whether the euro reached a fair value of the final level? Analysts through a number of factors considerations conclude that the fair value of the euro against the dollar should be 10% lower than current levels.

Euro-zone members of the sovereign debt issue is behind the euro's decline in the major promoter, but the value of the dollar against the euro compared with the can to provide investors with clues to find out whether the euro fall too far or there will be more declines.

From the medium term, which is commonly used at present investors to determine the monetary value of the cycle, all indicators suggest the value of the euro being overvalued.

Taking into account the relative gross domestic product, the relative current account, relative productivity and net foreign asset position and other factors, the fair value of the euro should be lower than the current level of 10%.

Since last November touched 1.5145 15-month highs, the euro against the dollar Thursday traded as low as the 1.3675 in New York time. But if the euro against the U.S. dollar fell further to 10%, then the exchange rate will reach 1.2300 level.

The euro might not be such a decline in the short term. Not saying that the euro will fall 10 percent in the next month.

Related to the debt problem could hinder economic recovery in the eurozone and the European Central Bank will be shrouded behind the Fed's rate-hike under the beginning of this year, the euro against the dollar has lost nearly 5%.

Analysts have said that the current market sentiment is still bearish on the euro, as investors continued to tangle in the euro area peripheral countries such as Portugal, Greece and the financial situation.

In addition, even if euro-zone member states raised concerns about sovereign debt have been alleviated, other factors will continue to drag on the euro weakness. Again, the interest rate factors also often affect the market demand for a currency.

In 2009 most of the time, near-zero interest rates in the United States drove investors to borrow U.S. dollars and buying, including high-yielding currencies including the euro. Today, the U.S. economy began to gradually recover, OK to tighten monetary policy gradually makes dollar-denominated assets may also be more attractive.

The euro exchange rate is still near the top of the level of the long-term trading range. However, the next six months, or we will see the euro to reach 1.18 against the dollar, so now, do not rule out the exchange rate will be lower. "

Since the inception of the euro in 1999, the euro against the dollar, the average price of around 1.18.

However, historical long-run price is only for investors to gauge whether a particular currency is over-valued in a public target. Other indicators include the level of purchasing power parity (PPP), as well as import and export trade data or the relative price levels.

The United States Banknote Printing and the economic and debt crisis in Europe might lead to a new financial tsunami

2010-03-07T23:58:00.001-08:00

In order to get rid of the financial crisis, October 3, 2008 the U.S. House and Senate passed the Bush administration's "700 billion U.S. dollars in the financial system rescue bill," February 17, 2009 The new president, Obama also signed the "787 billion U.S. dollar economic stimulus plan. " 2 rescue package is far more than one trillion U.S. dollars of investment, the deficit for the debt-ridden years of the U.S. government is indeed hard-pressed. Use of U.S. national gold reserves, 8200 tonnes of gold valued at current market prices by more than 3000 billion U.S. dollars, and far from necessary; domestic bond financing, the U.S. people a very low savings rate; external borrowing, all countries are engaged in self-help, not to mention the financial crisis, the strengthening of national awareness to guard against financial risks, be more cautious in buying U.S. debt.

March 18, 2009, the Fed issued a statement in the next 6 months up to 300 billion U.S. dollars to buy a long-term bonds, while further 750 billion U.S. dollars purchase mortgage-related securities and mortgage debt 100 billion U.S. dollars. This is known as "quantitative easing" monetary policy is the central bank to inject liquidity directly to the market 1.15 trillion U.S. dollars, equivalent to the U.S. central bank announced it would go full steam ahead printed bills.

According to modern banking theory and practice of the currency, national central bank can not buy their own bonds issued by the Government and its relevant government bonds. Because once we open up the Road, financial and monetary co-casting of the gate, it means a country's financial debt and deficits have been directly monetized, that is equivalent to the national publication of the base currency. The image that is to make the fiscal deficit to catch the currency of the train, but no traffic control. Pay in the absence of a crisis situation, the Fed transform into credit markets, money-printing machine. The U.S. economy is more deeply engraved with "print money economy" tag, or the United States officially entered the "money printing economy" era.

Will appear in the second quarter of the global systemic crisis has worsened the situation of sovereign debt default and the subsequent formation of the "debt wall" will be fatal conflict of the Western banking system. In the laboratory the first 42 month forecast report, the think tank said that as countries in 2009, putting in a lot of funds to rescue the market, allowing ease the crisis temporarily, but did not solve the crisis of the institutional issues, these issues will be the first of this year the outbreak of the second quarter.

All of these issues the most fundamental key is the world's financial system on short-term acute shortage of funds and national debt far beyond saving. At present the return of Western developed countries are faced with the debt from 2005 to 2007 the peak period, when the world that there is a "free lunch" and a substantial debt, and today due to insufficient profits (only 2% -5%, far from the estimated year 10%), to be returned when the principal is insolvent. Western developed countries in 2010 to the enterprise from the home until the countries are faced with a huge debt repayment. Of which the main problem is the phenomenon of sovereign debt defaults rise: from 2008, Iceland, Latvia, in 2009, Ireland, Dubai, has been to this year's Greece, have suffered similar problems. The next wave could predict the other hand, is more serious three countries: Japan, the United Kingdom and the United States. These three countries, once a debt default, it will shake the entire world's financial system, and no one country can propose a solution to this.

Market expectations:

Prospects for recovery in the global economy while the United States increasingly optimistic about data this week under a light side, the market focus will continue to put the Greek government's solution to the deficit problem. They expect the euro / dollar fluctuations this week in between 1.3500-1.3700, the dollar / yen will be among the line between 89.00-92.00. The Greek government launched the implementation of fiscal austerity program encountered any doubts or difficulties may be weighed on the euro.

In addition, the payrolls report is expected to continue the positive impact of about the performance of the currency market this week, as investors are speculating the central bank will first withdraw Which unconventional incentives. They said that unless poor weather, the United States in February possible to achieve employment growth. But Fed officials are worried about the high unemployment rate and expects U.S. interest rates will remain low for some time

Gold early February low of 1044 U.S. dollars from an ongoing three-month rebound, despite the 1140 U.S. dollars above the face a certain degree of profit-taking pressure, but increased state of affairs remains intact, and there is no indication that the dynamics of gold rally reversed, suggesting that Gold continues rally on further upside potential. At the same time continuing the recent rise in crude oil prices also bring about positive support for gold, which will continue to enhance its assets in gold as an inflation hedge appeal.

Progress in the debt crisis of market risk preferences

2010-03-03T01:08:00.001-08:00

Asian time major currencies against the U.S. dollar continue to firm, yesterday, in Greece will launch a new fiscal austerity measures in exchange for EU assistance, the news is not only to support the euro, but also boost the overall market risk appetite. But in view of the market will be announced the next few days a number of important event risk, the overall market sentiment remained subdued, the euro / dollar and other major currency pairs remain range in the near future.

Asia City, announced in February the UK Nationwide consumer confidence index rose to 80 from 73, helping to reverse the pound against the euro over the past few days of disadvantage; Australian GDP growth of 0.9% in the fourth quarter, in line with expectations, but the annual rate of increase of 2.7%, high - than-expected 2.4%. Which the private sector investors substantial growth of 4.9%, for 2008 the largest increase since the first quarter, household spending held steady, indicating the recovery of domestic economic situation is very optimistic. But the Australian dollar / U.S. dollar showed little reaction to the data, showing the exchange rate yesterday after the Reserve Bank raising interest rates, have absorbed the fundamentals of good expectations of Australia.

Progress on the debt problems of Greece may temporarily ease market concerns about the issue, so that the market's focus shifted today announced a number of event risk, including the evening as a leading indicator of non-farm payrolls data on challenger layoffs, ADP report and the ISM non-manufacturing Industry Index (1257.179,12.48,1.00%), tomorrow's Europe, the Bank of England interest rate decision, as well as Friday's non-farm payrolls. Tend to wait until the market may lead to the exchange rate continue to live within range.

Reserve Bank of Australia is expected to raise interest rates another 25 basis points to lead the wave of global interest rates

2010-03-01T18:01:00.001-08:00

Reserve Bank of Australia interest rate decision announcement. At present the mainstream view is that the Fed may be in 5 months, raised the benchmark interest rate for the fourth time to once again lead the world's central banks raise interest rates surge.

Market information from the present point of view, this meeting Reserve Bank of Australia is likely to raise interest rates by 25 basis points, the benchmark interest rate from 3.75% to 4%. Economists believe that a strong job market in Australia, while China's economic prospects for the better, these are the reasons to support the Federal Reserve raising interest rates.

Prospects for interest rates, the market also have different voices. Some economists said that the European sovereign debt and the financial market turmoil may prompt the RBA's concerns to wait a month to raise rates.
Is not clear today, Reserve Bank of Australia raising interest rates. He noted that interest rates need to rise, but if there is no raising interest rates, it was because of sovereign debt crises linger too weak U.S. economic data, along with how to maintain consumer is full of uncertainty.

Aussie dollar boosted by demand for carry trade, but the rally at the same time hampered by weakness in the pound, falling commodity prices repression.

Today, still concerned about the January retail sales, building permits, and so on.

The euro fell 7 weeks straight week, a number of events focusing

2010-02-28T20:22:00.001-08:00

Because investors are still worried about the euro zone sovereign debt problems, the euro against the dollar last week, remain under pressure, Zhou K-line to form a seven-week losing streak trend. Some analysts said this week there will be a number of heavy events, such as the United States in February non-farm employment data, as well as including the European Central Bank interest rates, including resolutions of the world's four major central banks were expected to risk events will have a significant impact on the foreign exchange markets. In addition, the EU would put concrete measures to rescue Greece will also be the focus of investor attention.

The euro against the dollar February 22 to February 26 when the week opened newspaper 1.3631, the maximum on the touching 1.3690, the lowest detection 1.3451, to close at 1.3627, and compared to the previous week's close of 1.3612, was up 15 points. Zhou K-line revenue has gone on under the shadow pole Yin Xian, suggesting that there is a strong buying support for the bottom.

February 18 due to the Federal Reserve unexpectedly announced that it will discount rate by 0.25% to 0.75%, so that the market for the Fed to raise rates sooner than expected to heat up, early last week, the euro extended the previous week's decline.

Greek sovereign debt worries "lingering" The euro continued to pressure

But the euro's troubles not over. Announced the result of Fitch Ratings, Greece's four largest banks by credit rating "BBB +" down to "BBB", raised investors concerns about euro zone sovereign debt crises mood Tuesday the euro against the dollar to remain under pressure.

Fitch Ratings Tuesday four of Greece's largest bank issuer default rating (IDR) down 1, to almost junk bond rating, saying the Greek government to tighten fiscal policy will have a significant impact on the real economy.

Fitch will National Bank of Greece SA, Alpha Bank AE, EFG Eurobank Ergasias SA, as well as the ratings were compared with Piraeus Bank SA lowered to "BBB", only a junk bond rating higher than 2.

Standard & Poor's Ratings Services warned Wednesday that may be the Greek sovereign debt credit rating from the current "BBB +" down to junk status.

Bernanke to raise interest rates been selling U.S. dollars is expected to pour cold water on

Federal Reserve Chairman Ben Bernanke testified to Congress last week, the foreign exchange market is also the focus of attention, the remarks undermined the Fed's rate hike expectations, the dollar under pressure, which is half the euro's rebound after last week, an important reason.

Bernanke testified before Congress Wednesday and Thursday, said the weak job market and low inflationary pressures will likely make a longer period of time the Federal Reserve will keep interest rates at very low levels.

Bernanke said the Fed raised its discount rate does not mean that monetary policy change, when the tightening of policy will depend on economic and financial situation. He added that the Fed will continue to purchase mortgage-related securities for evaluation.

In addition to Bernanke's speech, the one promoting the euro's rally last weekend, the reason is related to German bonds may be a report from Greece. Friday (February 26) has the authority quoted four unnamed members of the speech in Germany reported that Germany may be purchased through state-owned development bank KfW Greek bonds, after the release of the report, the euro / dollar hit an intraday high of 1.3683.

Fed officials took turns to suppress interest rates expected

February 18 the Federal Reserve unexpectedly raised the discount rate by 25 basis points to 0.75%, the market think that this is a prelude to raising interest rates, but last week, several Fed officials, including Bernanke, then delivered a speech, in order to raise interest rates is expected to cool, resulting in the U.S. dollar against a basket of currencies down weeks.

The U.S. economy still needs to abnormal low level of interest rates because inflation is very "non-ideal low-level" in the next few years of economic growth will be very slow.

At present the United States does not exist inflationary pressures, coupled with the economic recovery process is very slow, this also means that the U.S. benchmark interest rates would continue for some time in the future be maintained at a very low level.

Bumpy road to economic recovery in the United States will make the Fed needs to maintain low interest rates for at least 6 months "a period of time."

The euro is still a heavy

Foreign exchange analyst said that despite the apparent rebound in the euro momentum of last weekend, but investors remained for Greece and the euro area financial situation of other countries concerned about the euro remains fragile.

Eurozone economic data and the situation continues to deteriorate, the euro will continue to be under tremendous downward pressure.

Although the popularity of the euro has been heating up Friday, but according to already published data, the establishment of the euro currency speculators an empty position in a record fourth consecutive week high.

According to Scotiabank to the United States Commodity Futures Trading Commission (CFTC) released Friday a week, "a trader position reporting" (Commitments of Traders Report) for the analysis of the week ending Tuesday, the euro for the empty net speculative positions, that is, the empty positions number of contracts rose to about 72,000 copies.

Focus on series of heavy events this week

21:30 U.S. Department of Labor will be released in February non-farm employment data, economists expect the U.S. in February non-farm employment will be reduced by 5 million people, worse than in January's decrease of 2 million people, the unemployment rate will rise from 9.7% to 9.8%. The data will have an important impact for the currency markets.

In addition to non-farm employment data, the world's top four central banks will announce interest rate decision, expected to be significant effects on the foreign exchange markets.

Tuesday (March 2) 11:30, Reserve Bank of Australia interest rates will be announced the resolution, economists expect the RBA will raise rates by 25 basis points. Reserve Bank of Australia in February surprisingly benchmark interest rates unchanged at 3.75%. 22:00 the same day, Bank of Canada interest rate decision announcement will also be published.

Thursday (March 4) 20:00 Bank of England interest rate decision will be announced. 20:45 the same day, the European Central Bank interest rate decision will be announced, followed by the European Central Bank President Jean-Claude Trichet (Jean-Claude Trichet) will hold a press conference.

03:00 Thursday, the Federal Reserve's Beige Book will be released, investors will pay close attention to the U.S. economy and interest rates to find clues prospects.

◎ important event this week, prompted

Monday:

Australia's fourth-quarter current account

Eurozone unemployment rate in January

Canada's fourth-quarter GDP

The United States in January for personal consumption expenditures price index

The United States in February ISM manufacturing PMI

Tuesday:

Japan's unemployment rate in January

Australia 1 Rose adjusted retail sales

Switzerland in the fourth quarter GDP

Eurozone in January Producer Price Index

Italy in February Consumer Price Index initial value

Indicators of the Bank of Canada interest rate decision

Wednesday:

Australia's fourth-quarter GDP

The actual retail sales in Germany in January

Eurozone retail sales in January

The United States in February ISM non-manufacturing index (1245.617,11.80,0.96%)

EIA crude oil inventories last week, the United States change

U.S. Fed's Beige Book

Thursday:

Eurozone GDP revised the fourth quarter, the value of

U.S. initial jobless claims last week,

The United States in January NAR pending home sales index

U.S. January factory orders

U.S. January durable goods orders were revised value

The European Central Bank Governing Council meeting

Bank of England Monetary Policy Committee (MPC) interest rate decision

Friday:

English Rose 2 core producer output prices adjusted index

The United Kingdom in February are not seasonally adjusted input price index Producer

Germany 1 Rose adjusted manufacturing orders

U.S. February non-farm employment change in

The U.S. unemployment rate in February

U.S. population, changes in manufacturing employment in February

U.S. January durable goods orders were up 3%

2010-02-25T16:57:00.001-08:00

The U.S. Commerce Department reported Thursday, as civilian aircraft orders surge in January orders for U.S. manufactured durable goods increased by 3% to a seasonally adjusted basis to reach 175.7 billion U.S. dollars.

January durable goods orders hit since last July has been the biggest monthly increase. Last year, in December durable goods orders increased 1% from an upwardly revised growth of 1.9%.

Economists had expected durable goods orders for January increased 1.5%.

January orders were up primarily from increased orders for civilian aircraft, a 126% contribution. Boeing orders rose in December, but because of statistical time difference, this data only appeared in January in the government figures.

In addition to aircraft, most of the industry demand in January declined.

Excluding volatile transportation orders strong, the January durable goods orders in November and December an increase of 2% in a decrease of 0.6% to 131 billion U.S. dollars. January transportation orders were up 15.6%.

January does not include civilian aircraft, including the core capital equipment orders in November and December last year, were up 3% or more, fell 2.9%. January machinery orders fell 9.7%, but the machinery orders in November and December have increased significantly.

Durable goods is more expensive to sustain three years or even longer manufactured goods. Volatile monthly data, but the trend is reflected in a very good prediction of economic indicators.

The past 6 months, data showed the U.S. manufacturing sector is moving from 60 years to recover the most serious recession, which is due to strong overseas demand, while the U.S. demand growth has also begun to add the enterprise is almost depleted inventory.

Highest level since January durable goods orders in November 2008 a new high since the fall of Lehman Brothers. Last month, durable goods orders rose 9.9%. The year 2009, orders for durable goods decreased by 20%.

In addition, the Labor Department reported that initial claims for unemployment benefits last week increased by 2.2 million to 49.6 million. In 2010 the first 8 weeks, the number of initial claims for unemployment benefits increased in 6 weeks.

Report Details

Shipments of durable goods in January dropped by 0.2% to 180.7 billion U.S. dollars, shipments of durable goods in December last year, growth of 2.4%. Shipments of durable goods excluding transportation rose 1% to 136.1 billion U.S. dollars. Shipments of core capital equipment fell 1.5% to 57.7 billion U.S. dollars.

January durable goods inventories were unchanged at 302.6 billion U.S. dollars.

Transportation orders rose 15.6% in January, of which 126% surge in orders for civilian aircraft. Motor vehicle and parts orders fell 2.2%. Military aircraft orders increased 11.6%. Transportation shipments fell 3.5%.

Does not include orders for electronic products, including semiconductors rose by 4.6%, including electronic products, including semiconductor shipments increased 8.6%.

Machinery orders fell 9.7% while shipments fell 6.2%.

Orders for fabricated metal products remained unchanged, while shipments increased 0.2%. Orders for primary metals increased 1.9% and unit shipments grew 1.1%.

Electrical equipment orders increased 1.4% while shipments fell 1.7%.

The U.S. budget deficit is staggering U.S. dollars in 2010 are still being appreciated

2010-02-24T18:20:00.001-08:00

To Greece as the representative of the European sovereign debt crisis intensified, so that investors will quickly return to U.S. dollars, in December 2009 against the euro has gained about 10%. After the Federal Reserve unexpectedly raised its discount rate, the dollar to rise. But Bernanke's testimony yesterday, said interest rates in the "extended period of time" to maintain low. In addition, the U.S. public finances difficult. These are made risky bets on U.S. dollar long-term advantages. But the Standard & Poor's lowered the credit rating of Greece, once again weighed on the euro lower, the dollar is still not go down.

U.S. dollar index fell the next two days, pulled out a long shadow line, technology-based surface has to consolidation, 5, a downward trend line, KDJ indicators correction Quotes of failure, although the speed of the MACD line Sicha, green column In the gradually released, but the dollar index has not appeared in the Japanese line-level major adjustment of the dollar index could show the way through high consolidation to digest the early gains.

Bernanke's comments weighed on the dollar short-term

Federal Reserve Chairman Ben Bernanke Wednesday on monetary policy and economic conditions for the House Financial Services Committee testimony, he said, the weak job market and moderate inflation, allowing interest rates to the level of the "extended period of time" to maintain low. This inhibition on the Federal Reserve raised borrowing costs closer to the speculation.

Bernanke also said, FOMC to be prepared to stimulate the adoption of unconventional policies to provide support to the economy for some time.

In addition, as the market expected, Bernanke emphasized, the Fed raised the discount rate just for the withdrawal of its financial markets to inject liquidity to the measures taken, This is to prevent access to short-term credit banks relied on the Discount Window , rather than private financing market.

Bernanke also noted that the timing of the policy tightening will eventually come, and argues that the Federal Reserve has a wide range of policy tools at the right time to withdraw from these loose monetary policy.

Bernanke's remarks have reduced the market on expectations the Federal Reserve will soon raise interest rates, the dollar suffered a comprehensive selling. But the foreign exchange market quickly digested the impact of the current decline in the United States refers to regain the majority.

Graphics from a technical perspective, the dollar index is currently at 80.70 near the 50 and 200-day moving average at the 1 week prior to the formation of Jin Cha, but also established a good support around 78.60, the United States means the market outlook is expected to move at least 82.00 of the way.

Federal Reserve Chairman Ben Bernanke now can be ignored freedom of expression and harassment of the Greek-related news, until the "market can be arrogant and desperate to find the best balance point."

The United States in 2010 debt-ridden

U.S. Federal Reserve chairman Ben Bernanke in his testimony talked about the interest rates will remain unchanged, but also warned that if investors returned to the U.S. government deficit to lose confidence in the ability to control the scope, then the U.S. dollar and interest rates will be adversely affected.

Bernanke said that this could lead to a weaker dollar and to inflation levels. He said that around the long-term worries about excessive deficit may also push up interest rates, and thus act as a drag on the economy, on the contrary, the establishment of a viable plan to restore the deficit to the controllable state may push down interest rates, and to economic zone to promote the role.

The White House February 3, said the budget deficit in 2010 will reach 1.565 trillion U.S. dollars, almost GDP, nearly 11%, the highest since World War II.

But the United States before the financial crisis, trade and budget deficits, already very large. U.S. Treasury is still controllable, the weak dollar to boost exports, reduce trade deficit and the end of decades of unrestrained spending is necessary. Baker said that if the United States to invest in education and infrastructure, to maintain high output and productivity, and keep jobs, and will be able to overcome the challenges.

The United States in fiscal year 2009, issued 1.7 trillion of new debt, have found willing buyers, which also makes the public debt totaled 7.89 trillion U.S. dollars, equivalent to GDP, 55%. But there are some preliminary indications that there may be some buyers tired. Ministry of Finance plans to issue a further 1.5-2 trillion dollars in debt, just this week issued a 1,260 billion dollars. Earlier this month, 41 billion U.S. dollars, but long-term debt auction attracted only a moderate need to buy the 30-year period required by buyers of new debt yields more than two years for the highest.

U.S. 10-year Treasury yield is still less than 4%, well below the 1980s and 1990s, the average yield of 7-9%. But analysts are also worried that the Government has not set aside for pensions and health-care liabilities.

Bernanke also said that the size of the deficit-GDP ratio of 3% of basically tolerable level.