Forex Forum to Share, Discuss, Communicate and Trade Forex

September/23/2011- Comments and forex-analytics from FBS

Dive deeper into the fundamentals of the market. If you come across any major Forex related news item or wish to share your opinions and ideas related to the local or global economy, this forum is the place for you. Share the news and views about Fundamental Analysis and economic events here.
Image

September/23/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 23, 2011 11:25 am

BNY Mellon, RBS: ECB will soon cut rates

The Federal Reserve has announced this week the Operation Twist – the measure aimed to lower long-term rates and spur US economy.

Some analysts say that now it’s the turn of the European Central Bank to do something referring to the quantitative easing.

Currency strategists at Bank of New York Mellon think that there are strong odds that the ECB cuts its benchmark interest rate again returning the borrowing costs to the 1% level where they were six months ago reversing April and June increases by 25 basis points each.

Economists at the Royal Bank of Scotland are looking forward to 50-basis-point cut already at the next ECB meeting on October 6 and, if not, then by the central bank's November 3 meeting at the latest.

Image

G20 spurred risk-on sentiment for some time

The Group of 20 has managed to encourage the markets: the nations pledged “strong and coordinated” response to the problems of the global economy, among which G20 named such factors as “heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment”, says the statement released in Washington.

The comments of the world’s largest economies have improved investors’ confidence and risk sentiment. The single currency advanced from the 10-year minimum versus Japanese yen. Euro has also risen from the 8-month minimum versus the greenback on the rumors that Asian central banks bought EUR/USD. Australian and New Zealand dollars found support and rebounded encourages by rising Asian stocks.

At the same time, analysts at Standard Chartered point out that no concrete steps were actually announced, so the market’s optimism might soon fade. In their view, there has to be some kind of mechanism that will allow European Financial Stability Facility (ESFS) to expand, which seems unlikely at the moment.

Now it’s necessary to watch the IMF-World Bank Annual Meetings take place on September 23-23.

Image
User avatar
vanvirtue
Senior Member
 
Posts: 630
Joined: Tue Jun 28, 2011 9:29 am

Re: September/23/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 23, 2011 11:43 am

BarCap: Canadian dollar is down versus the greenback

Canadian dollar slumped yesterday to 11-month minimum versus its US counterpart – the pair USD/CAD got above the parity and surged to 1.0361.

Loonie was affected by the discouraging US economic prospects and the sings of China’s and Germany’s slowdown. As a result, investors were actively using American debt and currency as a refuge. Canada’s economy has performed rather well in comparison with other developed nations, but it won’t be able to keep showing bright dynamics while the US economy, it biggest trading partner, is weakening.

Technical analysts at Barclays Capital claim that the trend for the pair is ready to switch upwards. In their view, the greenback will be able to rise to 1.0675. Support for US dollar lies at 1.0140. If the pair falls below this level, the outlook will turn bearish.

Image
User avatar
vanvirtue
Senior Member
 
Posts: 630
Joined: Tue Jun 28, 2011 9:29 am

Re: September/23/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 23, 2011 4:59 pm

Credit Suisse about the possibility of euro collapse

Analysts at Credit Suisse estimate the possibility of the euro area break up by only 10%. In their view, it would be much cheaper for the member nations to stay in the monetary union bailing out the indebted peripheral economies.

If euro collapses and the euro area disintegrates, the peripheral currencies would fall by around 50% pushing net foreign liabilities to 200%-250% of GDP for the periphery ex Italy, resulting in a 40% default on both sovereign and private loans. The economies will contract by about 9%.

The bank proposes to boost the EFSF for a TARP-like facility. According to them, the ECB has to keep purchasing peripheral bonds. In addition, Credit Suisse thinks that soft quantitative easing and weaker euro are also needed.

Image

MIG Bank: EUR/USD will keep declining

Technical analysts at MIG Bank claim that as the single currency went down below $1.3800 and then slid even lower getting under $1.3495, it will keep falling. In their view, EUR/USD is poised down to $1.2860. The specialists note that there’s large bearish flag on the daily chart.

Image
User avatar
vanvirtue
Senior Member
 
Posts: 630
Joined: Tue Jun 28, 2011 9:29 am


Return to Dive Deeper - Forex News and Fundamental Analysis

 

Who is online on Forum

Registered users: Baidu [Spider], Bing [Bot], Google [Bot]