Forex Fundamental Analysis for September 1, 2011

EUR/USD Daily Fundamental Analysis for September 1, 2011

On Wednesday trading, the EUR/USD showed some declined after the release of a report showing that euro zone unemployment remained at 10% for the second month in August, providing clues the sluggish growth pace prompted employers to stop hiring employees.

In theU.S., ADP employment report showed decline to 91,000 in July from the revised 109,000, adding further strength to the dollar as safe haven currency. 

On Thursday, the euro area will release PMI manufacturing at 08:00 GMT with expectations to a contraction of 49.7 compared with July’s expansion of 50.4. Yet, earlier, specifically at 06:00 GMT, German GDP final reading for the second quarter will remain unrevised at 0.1%, according to median estimates.

The data is predicted affect the euro movements, especially if it missed analysts’ forecasts as it will add to the jitters already prevailing markets.

On the other hand, the U.S. economy will release initial jobless claims for the week ended August 27 and continuing claims for the week ended August 20 will be available at 12:30 GMT, followed by ISM manufacturing for August, as of 14:00 GMT, which is predicted to show contraction to 48.5 from the prior 59.0 expansion.

Also, the U.S. data will be carefully watched as it may provide some clues whether the Fed would announce further bond purchases planes to reinforce the fragile recovery. 

AUD/USD Daily Fundamental Analysis for September 1, 2011

The Australian dollar (Aussie) slumped against its US counterpart for the first time in five days, as concerns about the global economic recovery has increased which weighed down on demand for the higher yielding currencies and pushed investors to target safe haven investments.

The Aussie currency declined as Asian stocks swung between gains and losses, where exporters dropped after U.S. consumer confidence plunged to the lowest level in more than two years, countering optimism corporate earnings are improving.

While major Asian currencies started the week with a decline after the European debt crisis has returned to dominate markets once again, fueling fears among global investors, and pushed them to ease their investments in higher yielding currencies such as the Aussie.

During Thursday, at 23:30 GMT (Wednesday) Australian economy will report its AiG performance of manufacturing index for August after reaching 43.4 in July.

Moreover, ANZ commodity price (AUG) is due at 01:00 GMT after it declined to -0.1% in July.

At 12:30 GMT theU.S.economy will issue the final reading of Non-Farm Productivity for the second quarter, where the previous reading showed a drop of 0.3% and it is expected to come at –0.5%. The Unit labour Cost for the second quarter is expected to come at 2.3% from the previous 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased to 417 thousand last week.

The Construction Spending for July will be up at 14:00 GMT, where it had a previous reading of 0.2% and expected to come at 0.1%. On the other hand, the ISM Manufacturing for August will be up at 14:00 GMT, where it had a previous reading of 50.9 and expected to drop to 48.5.

EUR/CHF Daily Fundamental Analysis for September 1, 2011

On Wednesday trading, the Swiss franc advanced against majors as the SNB did not announce any new measures to curb the franc’s rally as the bank used to announce new measures in the firs three Wednesdays of August. The rise caused the pair to edge down, yet the pair is heading for the first monthly advance in August after four consecutive months of decline. In fact, the SNB still may announce further monetary measures in the coming period to continue its battle to curb the franc’s runway that hurt Swiss exporters. Moreover, data from the euro area caused the euro to weaken further as unemployment lingered for the second month at 10.0% in July, providing clues the sluggish growth pace prompted employers to stop hiring employees. On Thursday, the Swiss economy release a wave of important data, led by GDP for the second quarter which will be out at 05:15 GMT, followed by retail sales for the year ended July at 07:15 GMT then PMI manufacturing for August at 07:30 GMT.  The data is predicted to affect the franc’s movements as it will determine the latest development in the Swiss economy amid the sluggish global growth and the franc’s appreciation. The euro area, on the flip side, will release PMI manufacturing at 08:00 GMT with expectations to a contraction of 49.7 compared with July’s expansion of 50.4. Yet, earlier, specifically at 06:00 GMT, German GDP final reading for the second quarter will remain unrevised at 0.1%, according to median estimates. Also, the data is predicted affect the euro movements, especially if it missed analysts’ forecasts as it will add to the jitters already prevailing markets.

NZD/USD Daily Fundamental Analysis for September 1, 2011

New Zealand currency, nicknamed Kiwi, is braced for a monthly decline against both the dollar and the yen as concern increased that the global economic growth is slowing down.

The Kiwi declined during the first day of trading as fears from the European crisis continued to escalate, where concern over slowing global growth boosted demand for safer assets, supporting the kiwi to drop against majors.

New Zealand’s currency fell against its 16 most-traded peers today after a survey by ANZ National Bank Ltd. showed business confidence declined this month.

At 22:45 GMT (Wednesday)New Zealandis to issue its terms of trade index (QoQ)(2Q) that has a medium impact on the market, where the previous reading inclined by 0.9%.

Moreover, ANZ commodity price (AUG) is due at 01:00 GMT after it declined to -0.1% in July.

At 12:30 GMT theU.S.economy will issue the final reading of Non-Farm Productivity for the second quarter, where the previous reading showed a drop of 0.3% and it is expected to come at –0.5%. The Unit labour Cost for the second quarter is expected to come at 2.3% from the previous 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased to 417 thousand last week.

The Construction Spending for July will be up at 14:00 GMT, where it had a previous reading of 0.2% and expected to come at 0.1%. On the other hand, the ISM Manufacturing for August will be up at 14:00 GMT, where it had a previous reading of 50.9 and expected to drop to 48.5.

USD/JPY Daily Fundamental Analysis for September 1, 2011

The demand for the yen was bolstered before a report that may show fewer jobs were added in the U.S. this month, boosting prospects the Fed will signal more measures to spur growth.

Moreover, the Japanese economy is in a hurdle phase during this period; because of problems that continue to impede the economic recovery, where the industrial production cycle retreated in July, affected by the yen’s appreciation that recorded a historical level against the greenback.

Furthermore, investors increased their investments during this time as the global events are going to hurt the global economic recovery, which reduced demand for the higher yielding assets.

At 12:30 GMT the U.S. economy will issue the final reading of Non-Farm Productivity for the second quarter, where the previous reading showed a drop of 0.3% and it is expected to come at –0.5%. The Unit labour Cost for the second quarter is expected to come at 2.3% from the previous 2.2%.

At 12:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased to 417 thousand last week.

The Construction Spending for July will be released at 14:00 GMT, where it had a previous reading of 0.2% and expected to come at 0.1%. On the other hand, the ISM Manufacturing for August will be released at 14:00 GMT, where it had a previous reading of 50.9 and expected to drop to 48.5.

GBP/USD Daily Fundamental Analysis for September 1, 2011

On Wednesday, the pound showed decline against the dollar after the release of a report showing thatU.K.consumer confidence plummeted to the lowest in six month in August, adding to concerns thatU.K.recovery is in doubt. In theU.S., ADP employment report showed decline to 91,000 in July from the revised 109,000, adding further strength to the dollar as safe haven currency.   In general, the sentiment was fuelled with concerns that recovery may falter, yet mixed with slight hopes as the Fed minutes gave hopes that policy makers may introduce a third round of stimulus to boost growth, which emboldened demand on low-yielding currencies. On Thursday, the main focus will be on manufacturing data from both economies. At 08:30 GMT, UK PMI manufacturing for August is expected to show further contraction to 48.5 from the 49.1 contraction recorded a month earlier.  On the other hand, the U.S. economy will release initial jobless claims for the week ended August 27 and continuing claims for the week ended August 20 will be available at 12:30 GMT, followed by ISM manufacturing for August, as of 14:00 GMT, which is predicted to show contraction to 48.5 from the prior 59.0 expansion. Manufacturing data from all major economies will be closely watched as it will provide clues about the extent of slowdown in the third quarter, where jobless claims data may give some evidence before the release of the awaited non-farm payrolls report on Friday.  

USD/CAD Daily Fundamental Analysis for September 1, 2011

The USD/CAD pair fell on Wednesday after GDP figures from Canada showed mixed results, where the Canadian economy contracted during the second quarter worse than expectations, while growth in June topped estimates. Moreover, worse than expected data from the ADP employment report fuelled expectations of QE3, which boosted demand for higher yielding assets, and accordingly, the CAD was able to gain against the USD, pushing the USD/CAD pair to the downside. Traders will be eyeing more data from the U.S. labour market with the weekly jobless claims, in addition to the ISM manufacturing, and if the data signals more weakness, traders are likely to increase their bets of QE3, which should put the USD under more pressure, and accordingly the USD/CAD pair is likely to drop further in that case. Thursday August 01: From the United States the data will start at 12:30 GMT with the weekly jobless claims after they rose 417 thousand last week. The ISM Manufacturing is due at 14:00 GMT for August and expected to contract with a drop below 50 at 48.5 from 50.9.

USD/CHF Daily Fundamental Analysis for September 1, 2011

On Wednesday trading, the Swiss franc advanced against majors as the SNB did not announce any new measures to curb the franc’s rally as the bank used to announce new measures in the firs three Wednesdays of August. The rise caused the pair to edge down where the franc advanced from five week low versus the dollar. However, the SNB may announce further monetary measures in the coming period to continue its battle to curb the franc’s runway that hurt Swiss exporters. The concerns that global recovery may falter increased after the release of downbeat UK consumer confidence, stall of euro zone unemployment and decline in U.S. ADP employment change to 91 thousands from the revised 109 thousands, yet the sentiment was mixed with slight hopes as the Fed minutes gave hopes that policy makers may introduce a third round of stimulus to boost growth, which all boosted the franc as a favourite safe haven due to the improvement in the Swiss economy relative to other major economies. On Thursday, the Swiss economy release a wave of important data, led by GDP for the second quarter which will be out at 05:15 GMT, followed by retail sales for the year ended July at 07:15 GMT then PMI manufacturing for August at 07:30 GMT.  The data is predicted to affect the franc’s movements as it will determine the latest development in the Swiss economy amid the sluggish global growth and the franc’s appreciation. On the other hand, the U.S. economy will release initial jobless claims for the week ended August 27 and continuing claims for the week ended August 20 will be available at 12:30 GMT, followed by ISM manufacturing for August, as of 14:00 GMT, which is predicted to show contraction to 48.5 from the prior 59.0 expansion. Also, the U.S. data will be carefully watched as it may provide some clues whether the Fed would announce further bond purchases planes to reinforce the fragile recovery.

 

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