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September/01/2011- Comments and forex-analytics from FBS

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September/01/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Thu Sep 01, 2011 8:46 am

Mizuho: risk aversion eased, yen weakened

China’s Manufacturing PMI rose from 29-month minimum of 50.7 in July to 50.9 in August.

Currency strategists at Mizuho note that investors’ risk aversion has decreased. That made Japanese yen weaken versus the majority of its counterparts. The pair USD/JPY reached week’s maximum at 77.23 yen. The MSCI Asia Pacific index of regional shares is rising during the 6th day in a row.

According to the data of Japan’s Ministry of Finance, last week Japanese invested 146.3 billion yen ($1.9 billion) overseas. That’s the most since last September.

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Wells Fargo: bullish middle-term forecast for NZD/USD

In August New Zealand’s dollar weakened versus its US counterpart falling from the August 1 maximum at 0.8841 to end the month in the 0.8500 area. However, analysts at Wells Fargo are still bullish on NZD/USD in the medium term.

Among the positive factors for kiwi the specialists cite recovery in the country's economic activity and higher inflation that increases the possibility of the RBNZ rate hike.

The specialists expect New Zealand­­­­'s dollar to recover paring last month’s decline. In their view, in the first half of 2012 the pair will trade at record highs in the 0.9100 region.

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Re: September/01/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Thu Sep 01, 2011 12:10 pm

Daiwa Securities: Japan can’t conduct interventions frequently

According to the government survey of 61 large manufacturers, 63% of respondents are calling for sustained currency market intervention to weaken yen. The participants of the survey see the average rate of USD/JPY in a fiscal year through March 2012 at 81.10 yen and EUR/JPY – at 112.80 yen.

Never the less, analysts at Daiwa Securities claim that it’s difficult for Japanese monetary authorities to conduct currency interventions frequently. There are political obstacles as such moves would be criticized by other leading nations. In addition, it’s very hard to reverse the market that keeps regarding yen as a safe haven against the global growth concerns and euro zone’s debt crisis.

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BMO Capital expects good NFP data

US August Non-Farm Payrolls data are released tomorrow at 4:30 pm (GMT+4).

Economists surveyed by Bloomberg project that the number of jobs in the United States increased in August by 75K after gaining 117K in July. The unemployment rate is seen unchanged at 9.1%.

ADP report showed that the number of employed in American private sector rose by 91K versus 109K in July.

The Federal Reserve’s Chairman Ben Bernanke claimed in Jackson Hole that the nation’s economic growth was insufficient to achieve sustained reductions in unemployment.

Analysts at BMO Capital believe that the data may surpass the expectations. The specialists advise investors to take risk selling US dollar versus its Canadian counterpart in the short term targeting 0.9520 and stopping at 0.9920.

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Re: September/01/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Thu Sep 01, 2011 3:58 pm

Barclays Capital sees potential for pound’s advance

Analysts at Barclays Capital believe that if Switzerland and Japan manage to stop appreciation of their national currencies, British pound may strengthen.

The specialists say that there are several reasons for that. Firstly, exports don’t account for a big part of UK GDP, secondly, sterling’s advance doesn’t tend to affect stock markets and, finally, pound may be undervalued. In addition, the investors won’t expect UK government to stem pound’s growth.

Barclays underlines that the pair GBP/CHF showed better results than EUR/CHF when the SNB Vice President Tomas Jordan said on August 11about the possibility of pegging franc to euro. Pound also performed well when Japan intervened on August 4.

The strategists say that the only potential negative effect on pound may come from Britain’s economic weakness.

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ING: SNB rate outlook

Economists at ING think that the Swiss National Bank won’t lift up interest rates until the middle of 2012.

The specialists note that strong Swiss franc has seriously affected the national economy: according to the data released today Switzerland’s economic growth slowed down from 0.6% in the first 3 months of the year to 0.4% in the second quarter. In their view, the same pressure will be seen on the figures for the third quarter.

The effect of SNB's recent rate and liquidity injections will be seen in the final quarter of the year. Never the less, ING believes that the central bank won’t be able to ensure 2% growth rate in 2011.

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Re: September/01/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Thu Sep 01, 2011 4:17 pm

UBS: we face the crisis of capitalism

George Magnus, economist at UBS regards the current crisis in the developed nations as the crisis in capitalism: companies seeking for greater profits and productivity are cutting jobs. As a result, income inequality in the US approached the highest level since the 1920s.

The specialist advises the policymakers to turn to Karl Marx for the possible solutions. In his view, it’s necessary to lower employer payroll taxes and to create fiscal incentives to encourage companies to hire people, to allow eligible households restructure mortgage debt and to ease capital adequacy requirements for well-capitalized and well-structured banks so that they could credit smaller companies.

Magnus proposes European creditors to extend the lower interest rates and longer payment terms proposed for Greece. According to the analyst, instead of QE programs central banks should target nominal GDP growth rate.
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