Forex Fundamental Analysis for August 24, 2011

EUR/USD Daily Fundamental Analysis for August 24, 2011

Volatile and mixed trading prevailed on Tuesday as well with the downbeat data on the one end and the optimism over the Feds on the other, which kept choppy trading evident for the EUR/USD. Commodities and equities were generally trading higher which supported the euro over haven currencies as the expectations for the fed to move and support the recovery and possibly with QE3 remained the upbeat aspect amid the downside pressure. The euro area data were abysmal on Tuesday with the slump in confidence figures on the back of the debt crisis, while although the composite index held unexpectedly at July levels, yet the manufacturing sector contracted which reflects the worsening outlook for the economy. On Wednesday, we expect the jitters to remain evident and volatile trading to prevail with the eyes still on the Fed and more downbeat data expected from the euro area. Germany will start at 08:00 GMT with the IFO Survey for August. The IFO Business Climate index is expected to slow to 111.2 from 112.9 while the Current Assessment is expect at 120.1 from 121.4 and the IFO Expectations to drop to 103.2 from 105.0. The euro area will report the Industrial New Orders for June at 09:00 GMT which is expected flat down from the previous month’s rally of 3.6%. The Durable Goods Orders are due from the United States at 12:30 GMT for July and expected with 2.0% rebound following 2.1% slump while excluding transportation expected with 0.6% drop following 0.1% rise.

AUD/USD Daily Fundamental Analysis for August 24, 2011

The Australian currency, nicknamed Aussie rose versus the greenback after the Chinese economy reported that its manufacturing sector declined at a slower pace during August, easing the fear over the outlook. The Australian economy showed cheerful data, where the nation’s export prices increased more than expected, curbing speculation the RBA will cut interest rates next month. Moreover, Aussie advanced after Asian stocks rose, with the regional benchmark index rebounding from its lowest level in almost a year, as exporters climbed on speculation that the Federal Reserve will announce additional measures to shore up the recovery in the U.S. The Australian economy will release the leading index for June at 00:00 GMT, while it dropped by 0.1% during May. At 01:30 GMT, Australia will introduce its construction word done for the second quarter of the year, which has a low impact on the Aussie’s movements. The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%. The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

EUR/CHF Daily Fundamental Analysis for August 24, 2011

The EUR/CHF fluctuated heavily on Tuesday with the bias seen to the upside on eased fears and expectations for action from central banks to support slowing growth. With rising equities and commodities the sentiment improved slightly with less than expected slowdown in the euro area composite sectors’ performance in August in the euro area and also the Chinese PMI supported the general sentiment which helped unwind demand for haven assets including the franc. The volatility will be evident also on Wednesday with the focus still on the annual Federal Reserve symposium in Jackson Hole with the expectations the Fed will take more action to support the faltering recovery, with bets rising for QE3. In other news, the euro area will report the Industrial New Orders for June at 09:00 GMT which is expected flat down from the previous month’s rally of 3.6%.

NZD/USD Daily Fundamental Analysis for August 24, 2011

The New Zealand dollar rose against its US counterpart after the report today showed that executives expect inflation to average 2.86% in two years time, a report from the Reserve Bank of New Zealand. Meanwhile, the New Zealand dollar also advanced as equities gains boosted demand for the commodity currencies along with cheerful data about the Chinese economy, where China’ industrial production continued to accelerate, adding that New Zealand products will increase on strong demand from China. The New Zealand economy gives some signs of picking up as rising consumer spending and employment add to evidence the nation’s economy grew modestly in the first quarter, buoyed by record-low interest rates and a surge in commodity prices. At 22:45 GMT (Tuesday) the market is waiting important data from the New Zealand economy, where the economy is to present its trade data for the month of July after the recorded trade surplus of NZ$230 million in June. Exports are expected to show an increase during July after rising to NZ$3.97 billion in June, while the nation’s imports showed NZ$3.74 billion in June. The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%. The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

USD/JPY Daily Fundamental Analysis for August 24, 2011

The USD/JPY pair traded in a narrow range early Tuesday near its post-war levels, as the risk appetite remains subdued due to the crisis in the EU and U.S. in addition to the uncertainty about the global economy outlook. On the other hand, the greenback advanced against its major counterparts due to expectations that the Federal Reserve will take extra measures to help the U.S. economy. The Bank of Japan and the Japanese Government made many comments during the last period, as they tried to provide more confidence in the Japanese financial market, and prevent the yen from achieving more gains against the dollar and other currencies. On Wednesday, the U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%. The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

GBP/USD Daily Fundamental Analysis for August 24, 2011

On Tuesday, the pound showed advance against the dollar after three days of decline as the pair followed the general sentiment in the market which was boosted by the release of the better-than-estimated German and Chinese manufacturing reports.

Also, the increasing expectations the Fed Chairman would announce a third round of stimulus in his speech at the an annual central bank conference in Jackson Hole later in the week sapped demand on the dollar.

As the U.K. economy lacks economic data, the main focus will be onU.S.data which are MBA mortgage applications for August 19 at 11:00 GMT followed by durable goods orders which is projected to advance 2.0% in July relative to the preceding 2.1% drop.  

The data may have an impact on the pair’s movements as meanwhile the main focus is onU.S.data to see the progress in the economy amid rising expectations the Fed Chairman would announce a third round of stimulus to stimulate growth.

 

USD/CAD Daily Fundamental Analysis for August 24, 2011

The USD/CAD pair continued to drop on Tuesday, as optimism spread through global markets amid speculations the Fed will announce more stimulus to help the economic recovery regain its momentum, where traders increased their bets of further monetary policy easing by the Federal Reserve Bank, which weighed down on the U.S. dollar, and provided the CAD with momentum to push the USD/CAD pair to the downside. If the Fed announces QE3, we should expect the USD/CAD pair to extend its losses over the coming period, since it will weaken the USD and will also boost demand for riskier assets, which will provide the CAD with strong momentum to push the USD/CAD pair further to the downside. Wednesday August 24: The Durable Goods Orders are due from the United States at 12:30 GMT for July and expected with 2.0% rebound following 2.1% slump while excluding transportation expected with 0.6% drop following 0.1% rise.

USD/CHF Daily Fundamental Analysis for August 24, 2011

On Tuesday, the dollar showed slight decline against the franc as the better-than-estimated German and Chinese manufacturing reports as well as above forecasted European PMI composite index eroded demand on the safe havens, yet the dollar was much affected on expectations the Fed would announce a third round of stimulus to boost the waning recovery. However, the franc’s advance over the dollar was minimized as investors approached intervention from the Swiss National Bank to curb the franc’s advance. Moreover, the data released from the Swiss economy showed improvement as trade surplus widened to 2.83 billion francs in July from 1.74 billion francs a month earlier. On Wednesday, as the Swiss economy lacks economic data, the main focus will be onU.S.data which are MBA mortgage applications for August 19 at 11:00 GMT followed by durable goods orders which is projected to advance 2.0% in July relative to the preceding 2.1% drop.   Now, the main focus is on U.S. data to see the progress in the economy amid increasing expectations the Fed Chairman would announce a third round of stimulus in his speech at the an annual central bank conference in Jackson Hole on Friday, thus the data may have an impact on the pair’s movements.

 

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