Forex Fundamental Analysis for November 9, 2011

EUR/USD Fundamental Analysis for November 9, 2011

The pair showed incline on Tuesday in a choppy trading where the main highlight in the market remains on the latest developments from the euro area, more specifically Greece and Italy with eyes on the second-day EU finance chiefs meeting. For Greece, the debt-mired economy is now close to naming a new Prime Minister for the new coalition government, after Greek Prime Minister George Papandreou agreed to step down, providing some hopes the new government would follow the EU/IMF bailout program after last week’s referendum call on EU/IMF bailout had raised concerns that Greece may default, especially as euro zone finance minister’s referred in their first-day meeting in Brussels that the new coalition government has to show its commitment to the EU/IMF program to receive the sixth tranche this month. In Italy, hopes increased that Silvio Berlusconi will approve last year’s budget which would enable him to pass the announced austerity measures needed to cut the country’s huge budget squeeze, where speculations increased earlier on Tuesday and on Monday that Berlusconi will step down, yet he denied such a claim. Italian bond yields rose to record high earlier on Tuesday on fears spreading in markets that Italy may default on its debt obligations ahead of a crucial budget vote. On the flip side, worries increased as European leaders still did not agree on a certain criteria for expanding the powers of the European rescue fund to 1 trillion euros from the current 440 billion euros. On Wednesday, while the euro area lacks fundamentals, the U.S. will release MBA mortgage applications for Nov. 4 at12:00 GMT followed by whole sale inventories at 15:00 GMT. The data is not expected to have a remarkable impact on the pair, where the pair will be most affected by latest developments from the euro zone.

USD/JPY Fundamental Analysis for November 9, 2011

The USD/JPY pair traded in a narrow rang early on Tuesday, where it leaned to the downside but still within post intervention areas. Also, the greenback didn’t show a great performance against other major currencies, helping the USD/JPY pair to keep its quiet movements. The FX market still has some confidence about the outlook, which reflected on the high demand over the risky assets, while the BOJ’s intervention still has a slight effect on the Japanese currency which kept it weak against the dollar. On Wednesday, at 23:50 GMT (Tuesday), Japan will release the Current Account Total for September, where it’s expected to show a surplus of 1330.5 billion yen from the previous surplus of 407.5 billion yen. The Adjusted Current Account Total for September is expected to show a surplus of 941.0 billion yen from the previous surplus of 652.6 billion yen, while the Trade Balance for September is expected to show a surplus of 327.1 billion yen from the previous deficit of 694.7 billion yen. At 04:00 GMT, the Japanese economy will release the Eco Watchers Survey: Current for October, where the previous reading was 45.3, as for the Eco Watchers Survey: Outlook, it has a prior reading of 46.4. The U.S. economy will release the Wholesale Inventories for September at14:00 GMT, where the prior reading was 0.4% and it’s expected to come at 0.6%.

GBP/USD Fundamental Analysis for November 9, 2011

The pair showed incline on Tuesday trading after the release of better-than-expected U.K. manufacturing data. Manufacturing production showed 0.2% expansion in Sep. compared with the revised -0.3%, while industrial production showed a flat reading from the August’s reading of 0.3%. However, the main highlight in the market remains on the latest developments from the euro area, more specifically Greece and Italy. Hopes increased that Silvio Berlusconi will approve last year’s budget which would enable him to pass the announced austerity measures needed to cut the country’s huge budget squeeze, where speculations increased earlier on Tuesday and on Monday that Berlusconi will step down, yet he denied such a claim. For Greece, the debt-mired economy is now close to naming a new Prime Minister for the new coalition government, after Greek Prime Minister George Papandreou agreed to step down, providing some hopes the new government would follow the EU/IMF bailout program after last week’s referendum call on EU/IMF bailout had raised concerns that Greece may default, especially as euro zone finance minister’s referred in their first-day meeting in Brussels that the new coalition government has to show its commitment to the EU/IMF program to receive the sixth tranche this month. On the other hand, worries increased as European leaders still did not agree on a certain criteria for expanding the powers of the European rescue fund to 1 trillion euros from the current 440 billion euros. On Wednesday, U.K. visible trade balance report for the month of Sep. will be due at09:30 GMT. The U.S., on the other hand, will release MBA mortgage applications for Nov. 4 at12:00 GMT followed by whole sale inventories at 15:00 GMT. The data is not expected to have a remarkable impact on the pair, where the pair will be most affected by latest developments from the euro zone.

USD/CHF Fundamental Analysis for November 9, 2011

The pair showed a slight decline on Tuesday ahead of the awaited Italian budget vote and the second-day EU finance chiefs meeting.   Movements remained within narrow ranges amid mixed vibes between fears and hopes. Hopes increased that Silvio Berlusconi will approve last year’s budget which would enable him to pass the announced austerity measures needed to cut the country’s huge budget squeeze, where speculations increased earlier on Tuesday and on Monday that Berlusconi will step down, yet he denied such a claim. The main highlight in the market remains on the latest developments from the euro area, more specifically Greece and Italy. Now, Greece is close to naming a new Prime Minister for the new coalition government, after Greek Prime Minister George Papandreou agreed to step down, providing some hopes the new government would follow the EU/IMF bailout program after last week’s referendum call on EU/IMF bailout had raised concerns that Greece may default, especially as euro zone finance minister’s referred in their first-day meeting in Brussels that the new coalition government has to show its commitment to the EU/IMF program to receive the sixth tranche this month. On the other hand, worries increased as European leaders still did not agree on a certain criteria for expanding the powers of the European rescue fund to 1 trillion euros from the current 440 billion euros. The pair showed some decline, pushed down by the dollar’s drop, yet expectations of intervention by the SNB to curb the franc made some investors refrain from buying the franc. SNB Vice President Thomas Jordan said on Tuesday the franc remains overvalued and the bank is ready to intervene at any time if needed.     On Wednesday, while the Swiss economy lacks fundamentals, theU.S.will release MBA mortgage applications for Nov. 4 at12:00 GMTfollowed by whole sale inventories at15:00 GMT. The data is not expected to have a remarkable impact on the pair, where the pair will be most affected by latest developments from the euro zone and any announcement or intervention by the SNB.

EUR/CHF Fundamental Analysis for November 9, 2011

The pair showed a slight bearishness on Tuesday ahead of the awaited Italian budget vote and the second-day EU finance chiefs meeting. Trading remained volatile and within narrow ranges as sentiment became mixed. SNB Vice President Thomas Jordan said on Tuesday the franc remains overvalued and the bank is ready to intervene at any time if needed, which increased speculations the bank will intervene again to continue its battle to curb the franc’s runway, especially as the most recent economic reports and earnings by Swiss companies showed the negative effect of the franc’s appreciation. Nevertheless, the main highlight in the market remains on the latest developments from the euro area, more specifically Greece and Italy. Silvio Berlusconi will approve last year’s budget which would enable him to pass the announced austerity measures needed to cut the country’s huge budget squeeze, according to expectations, where speculations increased earlier on Tuesday and on Monday that Berlusconi will step down, yet he denied such a claim. Italian bond yields rose to record high earlier on Tuesday on fears spreading in markets that Italy may default on its debt obligations ahead of a crucial budget vote For Greece, the debt-mired economy is now close to naming a new Prime Minister for the new coalition government, after Greek Prime Minister George Papandreou agreed to step down, providing some hopes the new government would follow the EU/IMF bailout program after last week’s referendum call on EU/IMF bailout had raised concerns that Greece may default, especially as euro zone finance minister’s referred in their first-day meeting in Brussels that the new coalition government has to show its commitment to the EU/IMF program to receive the sixth tranche this month. On the other hand, worries increased as European leaders still did not agree on a certain criteria for expanding the powers of the European rescue fund to 1 trillion euros from the current 440 billion euros. On Wednesday, both economies lack fundamentals which suggest that the pair would follow the general sentiment in the market, noting that the main focus will be on the latest developments from the euro area and any new announcements or decisions by the SNB.

AUD/USD Fundamental Analysis for November 9, 2011

The AUD/USD pair dropped early on Tuesday after disappointing fundamentals from the Australian economy, which reduced demand on the Aussie, pushing the pair to the downside. The Australian trade balance for October narrowed to A$ 2564 million compared to the previous of A$ 2953 million, while the business conditions survey dropped to -1 compare to the previous reading of 2. On the other hand, the Aussie has lost the momentum against the greenback and other major currencies since the RBA cut rates, which reduced demand on the Australian currency and helped the US dollar gain more ground. On Wednesday at 23:30 GMT(Tuesday), the Westpac Consumer Confidence for November will be released from the Australian economy, where it had a prior reading of 0.4%. At the same time Australia will release the Home Loans index for September, which is expected to come at 1.8% from the prior reading of 1.2%. The U.S. economy will release the Wholesale Inventories for September at14:00 GMT, where the prior reading was 0.4% and it’s expected to come at 0.6%.

USD/CAD Fundamental Analysis for November 9, 2011

The USD/CAD pair was little changed on Tuesday, as rising fears that Italy could be next victim of the European debt crisis overshadowed better than expected housing starts in Canada. Fears from the EU debt crisis continued to dominate markets ahead of a key confidence vote for Italian Prime Minister Berlusconi, where yields on Italian bonds rose to a record high in the euro zone era amid concerns over Italy’s fiscal health. Meanwhile, Canada released the housing starts for October, where housing starts rose to 207.6 thousand, compared with the prior estimate of 205.9 thousand and above median estimates of 195.0 thousand, which provided the Canadian dollar with some bullish momentum that led the USD/CAD pair to pare its gains. Traders will continue to monitor the developments from Europe regarding the debt crisis, especially amid the lack of major economic data from Canada and the United States, but overall, we expect the USD/CAD pair to extend its gains over the coming period. Wednesday November 09: Canada will release the new housing price index for September at 12:30 GMT, where the index is expected to rise by 0.1% in line with the prior rise. The United States will start the session at 15:00 GMT with the wholesale inventories for September, with expectations that the index could have expanded by 0.6% from 0.4%.

NZD/USD Fundamental Analysis for November 9, 2011

The NZD/USD pair traded in a narrow range for the fourth consecutive day on Tuesday, where the absence of fundamentals and the sideways movements for the greenback against other majors didn’t provide any clear direction for the pair. The weak outlook for the New Zealand economy prevented the Kiwi from recoding more gains against other currencies, while the stable greenback and the absence of news from New Zealand economy kept the pair within a narrow range. On Wednesday at 20:45 GMT (Tuesday), The New Zealand economy will release the annual House Prices for October, which had a previous reading of 0.7%. The U.S. economy will release the Wholesale Inventories for September at 14:00 GMT, where the prior reading was 0.4% and it’s expected to come at 0.6%.

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