Fundamental Analisis By InstaForex

[IFX Darika]

Dollar Rises To 3-day High Against Yen

The dollar that fell to 92.12 against the yen at 1:25 am ET Thursday rose sharply around 1:45 am ET. As of now, the dollar-yen pair is trading at a 3-day high of 92.98 with 93.2 seen as the next target level.

Meanwhile, the dollar also extended its Asian session's uptrend against the currencies of Europe, Switzerland and U.K. At present, the dollar is worth 1.4346 per euro, 1.5920 against the pound and 1.0333 against the franc.

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[IFX Svetlana]

IEA Keeps 2010 Global Oil Demand Unchanged.

Friday, the International Energy Agency kept its global oil demand forecast for the current year unchanged from its previous forecast in December. The estimate for the previous year was also kept unchanged.

In its latest Oil Market Report, the Paris-based IEA said oil demand would be 86.3 mb/day in 2010, up from 84.9 mb/day estimated for 2009. The agency said growth is driven by non-OECD countries, most notably in Asia. Oil demand recovery in the OECD will likely remain sluggish, despite the recent cold weather, it added.

Moreover, the report showed that crude oil prices surged to 15-month highs in early January on very cold winter weather in much of the northern hemisphere and escalating geopolitical tensions in key oil producing countries. At their peak, prices had jumped by around $10-12/bbl from December lows. Prices have since eased, last trading in a $78-80/bbl range.

OPEC-12 crude output rose 75 kb/day to 29.1 mb/day in December, resulting in effective spare capacity of 5.4 mb/day. Further, the agency said global supply rose 270 kb/day in December to 86.2 mb/day, on both higher OPEC and non-OPEC output.


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[IFX Svetlana]

Euro Mixed Against Majors Amid German PPI.

The German PPI for December was released at 2:00 am ET. Amid the report, the euro showed mixed trading against other major currencies. While the euro gained against the franc, it fell against the dollar and the yen. Against the pound, the euro was little changed.

As of now, the euro is worth 1.4203 against the greenback, 129.43 versus the yen, 1.4744 versus the Swiss franc and 0.8709 versus the pound.

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[IFX Darika]

European Economics Preview: U.K. Public Sector Finance Data Due

The United Kingdom is scheduled to release public sector finance and money supply data on Thursday. The Flash Purchasing Managers' Index reports for major Eurozone economies are also due.

At 3:00 am ET, the Swiss central bank is scheduled to release money supply data for December. M3 money supply had increased 7.6% annually in November.

The release of the Flash Purchasing Managers' Index reports for major Eurozone economies is set to start at 3.00 am ET. The first one expected to hit the wires is the Flash French PMI for both manufacturing and service sectors. The manufacturing PMI is forecast to remain unchanged at 54.7 in January, while the services PMI is expected to rise to 59 from 58.7.

Thereafter, Flash German PMI data is due at 3.30am ET. Economists expect manufacturing PMI to climb to 52.9 from 52.7, while the services PMI is seen at 53, up from 52.7.

In the meantime, the Statistics Denmark is expected to release consumer sentiment data for January. The index is seen at minus 0.8, up from minus 3.6 in the preceding month.

Consumer sentiment data is also due from the Dutch statistical office, along with unemployment figures. Economists expect the jobless rate to edge up to 5.4% in the October to December period.

At 4:00 am ET, Eurozone's PMI report is also due. The manufacturing PMI is expected to stand at 51.9 compared to 51.6 in December, while the services PMI is forecast to rise to 53.8 from 53.7.

The U.K.'s money supply data is due from the Bank of England at 4:30 am ET. M4 money supply is forecast to rise by 8.9% on a yearly basis and by 0.9% on a monthly basis. The U.K.'s public finance report is also due at the same time. Public sector net cash requirement is seen at GBP 25.5 billion compared to GBP 14.7 billion in November.

Afterwards at 6:00 am ET, the Confederation of British Industry is set to release January's Distributive Trade Survey results.

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[IFX Svetlana]

ECB's Noyer: French Economic Recovery Fragile And Slow

French economic recovery would be fragile and slow, reports said Friday citing an interview of European Central Bank Governing Council Member Christian Noyer with French newspaper Le Republicain Lorrain.

Noyer said the government's latest forecast for the year's economic growth of 1.4% is realistic. Wednesday, the government revised its outlook from 0.75% growth initially estimated. He said expiry of stimulus measures, rising unemployment and weak private consumption would lead to slow and fragile recovery. Moreover, investment continued to be sluggish.

Moreover, he urged the French government to control rising budget deficit. "The state cannot live indefinitely in deficit," reports quoted Noyer. "It is therefore necessary to better control public spending and to pursue structural reforms in order to assure confidence in public opinion, for businesses and for the markets," he added.

 

[IFX Svetlana]

ECB's Noyer: French Economic Recovery Fragile And Slow

French economic recovery would be fragile and slow, reports said Friday citing an interview of European Central Bank Governing Council Member Christian Noyer with French newspaper Le Republicain Lorrain.

Noyer said the government's latest forecast for the year's economic growth of 1.4% is realistic. Wednesday, the government revised its outlook from 0.75% growth initially estimated. He said expiry of stimulus measures, rising unemployment and weak private consumption would lead to slow and fragile recovery. Moreover, investment continued to be sluggish.

Moreover, he urged the French government to control rising budget deficit. "The state cannot live indefinitely in deficit," reports quoted Noyer. "It is therefore necessary to better control public spending and to pursue structural reforms in order to assure confidence in public opinion, for businesses and for the markets," he added.

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[IFX Darika]

Greenback Mixed Ahead Of Jobless Claims

The dollar remained mixed versus other major currencies Thursday morning in New York, holding yesterday's gains versus the euro and yen while ceded a bit of ground against the sterling and loonie.

Traders were looking ahead to key data on the jobs situation and manufacturing sector, following Wednesday's decision by the Federal Reserve to maintain its key lending rate near zero.

The Labor Department is due to release its customary jobless claims report for the week ended January 23rd at 8:30 AM ET. Economists expect a decline in claims to 450,000. Lingering weakness in the jobs market compelled the Fed to reiterate it will keep rates at record low levels for an extended period yesterday.

The Commerce Department is set to release its durable goods orders report, which gives the value of orders placed for goods designed to last for more than 3 years, at 8:30 AM ET. Economists look forward to a 2% increase in durable goods orders for December.

The dollar leveled off versus the euro after hitting a fresh 5-month high of 1.3935 last night. Against the yen, the buck was steady at Y90.25, an improvement from a monthly low near Y89 set earlier in the week.

The number of unemployed in Germany rose in January, ending declines in past six consecutive months, as heavy snowfall and freezing temperatures hurt the country's labor market.

The seasonally adjusted number of unemployed increased by 6,000 month-on-month to 3.43 million in January. But, the increase was less than the expected 15,000. The rise in January follows a drop of 3,000 in the previous month.

Eurozone economic sentiment rose for the tenth successive month, a survey conducted by the European Commission showed Thursday. The economic confidence index stood at 95.7 in January, up from a revised reading of 94.1 in the previous month. The expected reading was 92.3.

Meanwhile, retail sales in Japan fell 0.3 percent on year in December, the Ministry of Economy, Trade and Industry said on Thursday. That missed forecasts for a 0.3 percent annual gain after the revised 1.1 percent contraction in November.

The dollar continued to show a lack of direction versus the sterling, easing to 1.6265. The pair has bounced back and forth between 1.6100 and 1.6300 for the past week.

With commodity prices stabilizing this morning, the dollar gave back some of its recent gains versus its Canadian counterpart, slipping a Canadian penny from yesterday's monthly high near C$1.0680.

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[IFX Darika]

Malaysia Dec. Trade Surplus Widens

Friday, the Department of Statistics Malaysia announced that the trade surplus stood at MYR 12.1 billion in December, up from MYR 8.88 billion in November. This was the 146th consecutive month of trade surplus since November 1997. Economists expected a trade surplus of MYR 9.35 billion for December.

Exports increased 9.2% month-on-month to MYR 54.67 billion in December from MYR 50.07 billion in November. This was the highest monthly exports for 2009. At the same time, imports climbed 3.4% to MYR 42.58 billion.

On an annual basis, exports increased 18.7% in December, compared to the 3.3% fall in the previous month. Economists were looking for an increase of 12.5%. Meanwhile, imports grew 23.3% in December, faster than the 2.3% increase in November. Economists expected an increase of 21.5%.

In the fourth quarter, exports grew 10.6% sequentially to MYR 159 billion, while imports rose 8% to MYR126.55 billion. Year-on-year, exports and imports increased by 5.1% and 6.7%, respectively.

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[IFX Darika]

Dollar Hits Fresh Highs Versus Slumping Euro

Risk averse traders continued to flock to the relative safety of the dollar on Friday, with the world's de facto reserve currency enjoying a solid bid amid growing speculation the steam has run out of the global recovery.

The buck hit a fresh 9-month high again the euro, which has been hammered amid concerns that Greek debt problems will spread to other fragile economies without meaningful intervention on the part of more stable euro area nations.

However, with the eurozone struggling with anemic economic growth, major economies may be hesitant to drastically boost spending in order to prevent the Greek contagion.

European officials offered vague promises to support Greece on Thursday, and are expected to detail an aid package sometime next week.

Meanwhile, encouraging US retails sales data was overshadowed by news that China is engineering a soft slowdown of its economy.

A report from the Commerce Department on Friday showed that retail sales increased by 0.5 percent in January following a revised 0.1 percent decrease in December.

Adding to worries about the sustainability of the global recovery, China, now the engine of global growth, hiked its reserve requirement on banks in order to stem lending.

Even with the Dow taking back most of a 160 point drop in early dealing, the dollar sustained most of its gains against the euro.

The dollar rose to 1.3531 versus the euro, its highest level since last May, then backed off a penny to 1.3650.

At the same time, the buck extended this week's run of choppy trading versus the sterling, bouncing back and forth near 1.5600. The buck touched an 8-month high of 1.5533 a week ago, but has since risen no further.

The dollar also remained directionless against the yen, hanging around the Y90 mark.

The eurozone continued to lag behind the global economic recovery in the fourth quarter of 2009. Gross domestic product across the eurozone grew by only 0.1% in the fourth quarter compared to the previous three-month period.

The German economy, Europe's largest, unexpectedly stagnated in the fourth quarter as final consumption expenditure and investment failed to support growth.

Better-than-forecast French growth figures may have prevented the eurozone economy from sliding back into contraction mode.

Greece, saw its output shrink by 0.8% in the fourth quarter, casting doubts about the Greek public's willingness to accept cost cutting measures aimed at getting the nation's debt under control.

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[IFX Svetlana]

Dollar On Pause Near 9-Month Highs

Dollar On Pause Near 9-Month Highs

The dollar was little changed versus other major currencies Monday morning in New York, holding onto most of its strong recent gains versus the struggling euro.

The buck hit new 9-month highs last week amid speculation the Federal Reserve may be getting set to tighten monetary policy following a surprise move to raise the discount lending rate to banks.</p>

With Europe mired in debt problems and experience sluggish growth, the dollar has surged over the past few months.

The buck was at 1.3590 versus the euro this morning, having touched as high as 1.3440 last week.

Against the sterling, the dollar was steady at 1.5456, pulling back a penny from Friday's highest mark since last May.

At the same time, the dollar drifted slightly lower versus the yen, easing to 91.20 from a monthly high above 92.

With no major economic data on tap for the day, traders will focus on Fed Chairman Ben Bernanke's appearance before the House Financial Services Committee.

Later this week, the markets will be treated to preliminary fourth quarter growth figures, as well as data on housing and employment.

In economic news from overseas, Greece will meet its very ambitious deficit-reduction goals and the country's government is prepared to take additional measures, Greek central bank governor George Provopoulos said in an interview with Bloomberg.

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