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September/30/2011- Comments and forex-analytics from FBS

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September/30/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 30, 2011 5:26 pm

Fitch and S&P downgraded New Zealand

New Zealand’s dollar fell to the 6-month minimum versus the greenback at $0.7626 after Standard & Poor’s and Fitch Ratings downgraded the nation’s debt from AA+ to AA with stable outlook.

The agencies explained their decision by New Zealand’s high external debt and its persistent current account deficit. Strategists at Citigroup underline that Fitch’s and S&P’s move seems surprising as everyone has been aware about these problems for a long time.

It’s also necessary to note that the survey conducted by ANZ National Bank that was released today showed that New Zealand’s business sentiment has worsened: only 30.3% of companies expect the economy will improve during the next 12 months compared with 34.4% in August. In addition, China, New Zealand’s second-biggest export market, reported the longest contraction of the PMI (Purchasing Managers Index) in 2 years.

Analysts at Westpac note that the global outlook remains rather discouraging, so commodity currencies like Aussie and kiwi will likely stay under pressure. In the view, New Zealand’s dollar may slide to $0.7500.

The pair NZD/USD lost 10% in September, while AUD/USD dropped by 8.8%.

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Commerzbank: comments on GBP/USD

Technical analysts at Commerzbank believe that British pound has finished its upward correction versus the greenback from 1-year minimum at $1.5325 hit on September 22 as it reached this week the levels in the $1.5700 area.

The specialists think that GBP/USD will resume its decline. In their view, the sell-off of sterling will be triggered when it dips below $1.5500.

According to the bank, support for the pair is found at $1.5297. In the longer term, British currency is poised down to the 2009-2011 uptrend line at $1.4973.

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Re: September/30/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 30, 2011 5:29 pm

MIG Bank: comments on USD/CHF

The greenback’s decline from Monday’s maximum in the 0.9185 area was limited by the support in the 0.8915/25 zone.

Technical analysts at MIG Bank are positive on the USD/CHF prospects. In their view, as US dollar has managed today to return above 0.9000, it will be able to return up to 0.9185.

According to the bank, the bearish pressure on the pair will activate if it slips below 0.8880. The larger correcting will be triggered if American currency tests the levels below 0.8647.

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Mizuho: USD/JPY will fall to 60 yen in 2013

Currency analysts at Mizuho Corporate Bank say that the greenback may fall to 60 yen in 2013 basing their conclusions on USD/JPY dynamics during the past 40 years.

The specialists note that US dollar has bottomed out around 30% below the preceding minimum on four occasions since 1971 experiencing slumps by 100, 80, 60 and 40 yen.

US currency was at 360 yen until the gold standard was ended in 1971. Then it slid to 254.45 yen in 1973, 177.05 yen in 1978, 121.25 yen in 1987 and 79.75 yen in 1995.

According to Mizuho, in 2 years this will happen for the fifth time: USD/JPY will fall by 20 yen from the previous minimum at 79.75 yen hit on August 19.

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Re: September/30/2011- Comments and forex-analytics from FBS

Postby vanvirtue » Fri Sep 30, 2011 5:34 pm

SNB pledged to keep franc from appreciation

The Swiss National Bank’s President Philipp Hildebrand claimed yesterday that the central bank is firm in its decision to defend franc’s peg to euro.

Hildebrand didn’t unveil the amount of foreign currency purchases the SNB has to make in order to keep EUR/CHF above 1.20 and prevent the national currency from excessive strengthening that affected the nation’s exporters and posed recession risks. According to him, this measure is “totally credible.”

The single currency hit the record minimum versus franc of 1.0065 on August 9. The SNB announced the ceiling for franc on September 6.

Next week the SNB will release currency holdings for September. At the end of August the central bank’s reserves accounted for 253.4 billion francs ($280 billion).

Hildebrand said that though Swiss economic growth will weaken in the second half of the year, the cap will help to lower the threats of recession and deflation. In his view, franc is strongly overvalued.

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