Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook
The euro exchange rate continued its corrective dip yesterday from 1.4359 Sunday night to 1.4271 after the US close as Asia was gearing up for a new day. The lowest euro low was 1.4250 at the Asian hand-off to Europe, whereupon the euro rates took off to the upside again to 1.4336 so far. You can chart the euro’s fortunes move-by-move to the US equity markets yesterday, with a new risk aversion becoming visible and helping as traders were buying dollars - but not by much. The euro rate recovery this morning also matches the rise in US equity index futures. Overnight, the euro rate drop is attributed by Market News to "Asian and Russian supply of euros, as this pair triggered stops through the Asian base in the $1.4270 area down to $1.4254."
The euro’s low overnight is attributed to the Shanghai Composite falling as much as 5.7% overnight, according to Bloomberg, closing down 2.6% after the CEO of China Construction Bank said excess liquidity in the Chinese economy is leading to asset bubbles. In Asia, foreign exchange traders were also influenced by a comment from a regional US banker that commercial real estate has yet to bite and will continue to bite next year.
As usual, the rise in risk aversion during Asian hours affected the euro/yen and dollar/yen the most. Market News reports that "The morning's drop in Asian stocks led to another wave of risk aversion, which put yen crosses under pressure, and led investors to seek shelter in US dollar exchange rate instruments. Euro-yen fell steadily through the morning session, from a high near Y135.25 to a Y134.23 low. Dollar-yen followed the cross down, falling from Y94.60 through Y94.00 to lows around Y93.92." But the dollar/yen made it only to 93.77 before bouncing back up to 94.43 after Europe came in.
Pounds to US Dollars = 1.6358
Pounds to Euros = 1.1414
Euro to Pounds = 0.8758
Pounds to Australian Dollars = 1.9521
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
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Tuesday, August 25, 2009
Thursday, August 20, 2009
euro exchange rates rose from 1.4090 to 1.4265
Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook
Yesterday the US dollar rate flip-flopped on the US equity market shaking off the negative influence of the Shanghai Composite rout, causing dollar and yen longs great distress. As Market News puts it, "The overnight slide in Chinese stocks led to anticipation of risk aversion in U.S. action and market players entered into euro, sterling and yen carry shorts accordingly. When U.S. equities trimmed losses in early morning action, currency positions were pared back modestly. Later as stocks rallied further, market players raced to unwind existing dollar long position, with the euro exchange rate and other currencies rising sharply."
From the US open around 8 am ET, the euro exchange rates rose from 1.4090 to 1.4265 by noon. The euro has failed to build on it, though, and is sliding softly downward along a hand-drawn resistance line that lies about 1.4225 at 8 am today. We see ultimate support at the midpoint of yesterday's breakout bar at around 1.4188. The Market News technical analyst puts support at something he names the 9-day resistance line (whatever that is) around 1.4242, or maybe the Fibonacci retracement level 1.4246 (50% of the 1.4447 to 1.4046 move).
We say that technical levels are often powerful if everyone is looking at the same indicators, but right now, we have bigger things on our mind like the US equity market decoupling from the Shanghai and some actual economic data, which was in short supply on Wednesday, allowing the oil inventory report to hold the room.
Dollar/yen got a boost, or rather the yen took a hit, on rising oil and commodity prices and rising global equity prices overnight. The FT has an interesting report, saying "Weekly data showed continued currency inflows into the Japanese equity market, prompting BNP Paribas analysts to argue this suggested the dollar was 'increasingly used as a funding currency taking a position
previously occupied by the yen.'"
In the UK, a dire fiscal condition report had little effect, although sterling dipped from 1.6607 before the news to 1.6449. The pound is especially tricky these days, overreacting to the QE stories but now under-reacting to the deficit news. In one of our long-term model systems, sterling is a sell and in the other, it’s a buy, while in the short-term trading system, it’s a buy but with support at about 1.6430, close to the current quote at 8:10 am of 1.6477.
Pounds to US Dollars = 1.6496Pounds to Euros = 1.1586
Euro to Pounds = 0.8628
Pounds to Australian Dollars = 1.9848
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Buy Travel Money, Buy Holiday Money, Best exchange rates for Travel Money
Contact IMS Foreign Exchange + 44 207 183 2790
Australian Dollar exchange rate rallies as do stock markets
Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook
We wrote last winter that at some point, hysteria and selling panic have to stop not because of fundamentals, but because people become exhausted. It's tiring to be truly fearful. It literally wears out the adrenal glands (the source of flight-or-fight juice). A 20% drop in the Shanghai may be just what the doctor ordered as long as it stops somewhere around there... having said that, we doubt the Chinese government is going to intervene in any signficant way. It is newly committed to free markets (one decade) and doesn't want to appear to be rigging them too much. These are very smart people with their eye firmly on the long-term horizon.
The market will just have to sort itself out.
The best of all possible worlds would be if Chinese credit is indeed tightened and the stock market decides it can live with that. Then global stock markets will rally like crazy, and so will the Australian Dollar exchange rate. The US dollar rate will sink back as the need for a safe-haven fades and relatively riskier currencies, including the euro exchange rate which yield a tad more - go back into favor. We imagine this is still the big-picture and the events in the Chinese stock market are just a bump in the road.
We can't find a reason to buy dollars other than safe-haven reasons, especially with the political picture in the US so nasty… even FIFO doesn’t work anymore, with Europe actually ahead of the US in the growth sweepstakes, a rare occurrence.
The problem is that we can't name the exact timeframe in which risk appetite comes back. We have to watch the Shanghai and commodity prices, especially oil. Instead of nice smooth swings, we could continue to get jumpy moves that are up one day and down the next. For tend-following traders, this is a recipe for big losses, so extreme caution is called for.
Pounds to US Dollars = 1.6496
Pounds to Euros = 1.1586
Euro to Pounds = 0.8628
Pounds to Australian Dollars = 1.9848
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
We wrote last winter that at some point, hysteria and selling panic have to stop not because of fundamentals, but because people become exhausted. It's tiring to be truly fearful. It literally wears out the adrenal glands (the source of flight-or-fight juice). A 20% drop in the Shanghai may be just what the doctor ordered as long as it stops somewhere around there... having said that, we doubt the Chinese government is going to intervene in any signficant way. It is newly committed to free markets (one decade) and doesn't want to appear to be rigging them too much. These are very smart people with their eye firmly on the long-term horizon.
The market will just have to sort itself out.
The best of all possible worlds would be if Chinese credit is indeed tightened and the stock market decides it can live with that. Then global stock markets will rally like crazy, and so will the Australian Dollar exchange rate. The US dollar rate will sink back as the need for a safe-haven fades and relatively riskier currencies, including the euro exchange rate which yield a tad more - go back into favor. We imagine this is still the big-picture and the events in the Chinese stock market are just a bump in the road.
We can't find a reason to buy dollars other than safe-haven reasons, especially with the political picture in the US so nasty… even FIFO doesn’t work anymore, with Europe actually ahead of the US in the growth sweepstakes, a rare occurrence.
The problem is that we can't name the exact timeframe in which risk appetite comes back. We have to watch the Shanghai and commodity prices, especially oil. Instead of nice smooth swings, we could continue to get jumpy moves that are up one day and down the next. For tend-following traders, this is a recipe for big losses, so extreme caution is called for.
Pounds to US Dollars = 1.6496
Pounds to Euros = 1.1586
Euro to Pounds = 0.8628
Pounds to Australian Dollars = 1.9848
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
Tuesday, August 18, 2009
Euro exchange rate up against the US dollar
Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook
The US dollar rate was already losing ground yesterday morning in New York, with the best level at 10 am at 1.4040, just shy of the round number 1.40. The euro exchange rate proceeded to put on gains all day, closing at 1.4080, although the range was narrow 40 points and the euro rate bounce was interpreted as the normal bounce off a level near support. The US dollar rates was on the firm side across the board yesterday on the global stock market story, with the riskier currencies (Canadian Dollar and Australian Dollars exchange rates) tracking US equities point-for-point.
But the euro exchange rate move kept going and turned out to be more than bounce, reaching 1.4135 by 7 am ET today, on the news that the German ZEW investor sentiment index rose to 56.1 in August from 39.5 in July and far better than the forecast of 45. Yesterday, US data was also pretty good, suggesting risk aversion on equity losses was overdone. The US data set the stage for the Germany data today. Well, that was one bounce. As of 8 am, the nice ZEW effect is already wearing off and the euro exchange rate is down to near 1.4100.
You'd think risk aversion would be too important a phenomenon to seesaw back and forth in a single day. Maybe it’s the wrong name, or maybe we are attaching too much importance to it. When we first started to use the term, we thought it was pretentious and self-important, but gradually came to accept it along with everyone else as useful shorthand. But now we are back to thinking "risk aversion" is pretentious and too weighty for the sentiments it is describing - plain old greed and fear.
Market News Singapore reports today the euro/yen and dollar/yen tracked the Shanghai and Tokyo stock markets move-for-move all morning in Asia, with improvements in the equity indices reflected almost immediately. "Euro-yen, a popular risk sentiment play, rose strongly earlier in the session, mounting its Y133.32 overnight to hit a peak of Y134.20 this morning. But by midday here, the cross was drifting back down to Y133.71 as stock market indexes headed back south." Special Case - the Mexican Peso: The US dollar rate rose strongly against the peso for the biggest one-day move since May, according to Bloomberg, led by the drop in global stocks yesterday that led traders to think the rise in "higher-yielding, emerging-market assets has outpaced the prospects for economic growth." The dollar peak in March at 15.5803 and dropped to 12.7686 last Friday, or about 17%.
Also, the Brazilian real fell "to the lowest this month as foreign direct investment in China plunged in July and Japan’s second-quarter economic growth missed estimates, raising uncertainty about the global economic recovery. The currency lost 1.7% to 1.8807 per U.S. dollar at 5:09 p.m. New York time, from 1.8484 on Aug. 14. It earlier fell as much as 1.9%to 1.8840, the weakest since July 31. Today's drop pared the real’s gain this year to 23%, the best performance against the us dollar exchang rate among 26 emerging-market currencies tracked by Bloomberg. The Bovespa stock index declined 2.5%, the most in eight weeks.”
Pounds to US Dollars = 1.6550
Pounds to Euros = 1.1768
Euro to Pounds = 0.8495
Pounds to Australian Dollars = 2.0550
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
The US dollar rate was already losing ground yesterday morning in New York, with the best level at 10 am at 1.4040, just shy of the round number 1.40. The euro exchange rate proceeded to put on gains all day, closing at 1.4080, although the range was narrow 40 points and the euro rate bounce was interpreted as the normal bounce off a level near support. The US dollar rates was on the firm side across the board yesterday on the global stock market story, with the riskier currencies (Canadian Dollar and Australian Dollars exchange rates) tracking US equities point-for-point.
But the euro exchange rate move kept going and turned out to be more than bounce, reaching 1.4135 by 7 am ET today, on the news that the German ZEW investor sentiment index rose to 56.1 in August from 39.5 in July and far better than the forecast of 45. Yesterday, US data was also pretty good, suggesting risk aversion on equity losses was overdone. The US data set the stage for the Germany data today. Well, that was one bounce. As of 8 am, the nice ZEW effect is already wearing off and the euro exchange rate is down to near 1.4100.
You'd think risk aversion would be too important a phenomenon to seesaw back and forth in a single day. Maybe it’s the wrong name, or maybe we are attaching too much importance to it. When we first started to use the term, we thought it was pretentious and self-important, but gradually came to accept it along with everyone else as useful shorthand. But now we are back to thinking "risk aversion" is pretentious and too weighty for the sentiments it is describing - plain old greed and fear.
Market News Singapore reports today the euro/yen and dollar/yen tracked the Shanghai and Tokyo stock markets move-for-move all morning in Asia, with improvements in the equity indices reflected almost immediately. "Euro-yen, a popular risk sentiment play, rose strongly earlier in the session, mounting its Y133.32 overnight to hit a peak of Y134.20 this morning. But by midday here, the cross was drifting back down to Y133.71 as stock market indexes headed back south." Special Case - the Mexican Peso: The US dollar rate rose strongly against the peso for the biggest one-day move since May, according to Bloomberg, led by the drop in global stocks yesterday that led traders to think the rise in "higher-yielding, emerging-market assets has outpaced the prospects for economic growth." The dollar peak in March at 15.5803 and dropped to 12.7686 last Friday, or about 17%.
Also, the Brazilian real fell "to the lowest this month as foreign direct investment in China plunged in July and Japan’s second-quarter economic growth missed estimates, raising uncertainty about the global economic recovery. The currency lost 1.7% to 1.8807 per U.S. dollar at 5:09 p.m. New York time, from 1.8484 on Aug. 14. It earlier fell as much as 1.9%to 1.8840, the weakest since July 31. Today's drop pared the real’s gain this year to 23%, the best performance against the us dollar exchang rate among 26 emerging-market currencies tracked by Bloomberg. The Bovespa stock index declined 2.5%, the most in eight weeks.”
Pounds to US Dollars = 1.6550
Pounds to Euros = 1.1768
Euro to Pounds = 0.8495
Pounds to Australian Dollars = 2.0550
Bye For Now
Barbara Rockefeller
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange + 44 207 183 2790
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