By FXEmpire.com
Analysis and Recommendations:
The EUR/USD broke below 1.20 again today to trade at 1.2088 at this writing. The pair had dipped as low as 1.2078. Global currencies and commodities traded sharply lower on continued concerns about the European debt crisis weighed on the market. The Spanish media reported on Monday that up to six regions may seek aid from the central government after Valencia asked for funds on Friday. This sent the yields on Spanish 10-year debt over 7.5%.
Adding to investor pessimism was renewed concerns over Greece’s future within the euro zone ahead of the visit to Athens by a group of international lenders on Tuesday. They must decide if the government has done enough to qualify for further rescue payments and avoid default. Germany’s weekly news magazine Der Spiegel reported the International Monetary Fund indicated it would no longer provide financial aid to Greece.
An interesting side note from Japan today, the idea of monetary easing, but purchasing foreign sovereign bonds was suggested by the BoJ. This is a concept that Chair Bernanke has referred to in earlier speeches. It would be an aggressive tool, partially aimed at seeking relief through currency depreciating, and accordingly a significant USD negative. Accordingly, that BoJ member Sato commented today that for the BoJ, the buying of foreign bonds would be an option.
We are likely still a long way from any central bank buying foreign sovereign bonds; however just the concept highlights that there are still aggressive policy tools left, the question is really whether or not the current backdrop is severe enough to justify using them. What exactly would happen if Japan began to buy foreign bonds and what effect it would have on the USD is unknown, as they need to reduce the strength of the JPY
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports
Economic Data July 24, 2012 actual v. forecast
|
Date |
Currency |
Event |
Actual |
Forecast |
Previous |
|
Jul. 24 |
CNY |
Chinese HSBC Manufacturing PMI |
49.50 |
48.20 |
|
|
AUD |
RBA Governor Stevens Speaks |
||||
|
EUR |
French Manufacturing PMI |
43.6 |
45.5 |
45.2 |
|
|
HUF |
Hungarian Retail Sales (YoY) |
-2.50% |
-2.00% |
-2.80% |
|
|
EUR |
German Manufacturing PMI |
43.3 |
45.3 |
45.0 |
|
|
EUR |
Manufacturing PMI |
44.1 |
45.3 |
45.1 |
|
|
GBP |
BBA Mortgage Approvals |
26.3K |
31.4K |
29.6K |
|
|
Core Retail Sales (MoM) |
0.5% |
0.2% |
-0.4% |
||
|
CAD |
Retail Sales (MoM) |
0.3% |
0.5% |
-0.6% |
Upcoming Economic Events that affect the CHF, EUR, GBP and USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jul 25 |
8:00 |
EUR |
105.3 |
|
|
8:30 |
GBP |
-0.3% |
||
|
10:00 |
GBP |
-11 |
||
|
13:00 |
EUR |
-13.2 |
||
|
14:00 |
USD |
369K |
||
|
14:30 |
USD |
|||
|
Jul 26 |
6:00 |
EUR |
5.8 |
|
|
8:00 |
EUR |
2.9% |
||
|
12:30 |
USD |
0.7% |
||
|
12:30 |
USD |
|||
|
14:00 |
USD |
5.9% |
||
|
Jul 27 |
27th-31st |
GBP |
-0.6% |
|
|
All Day |
EUR |
-0.1% |
||
|
7:00 |
CHF |
1.16 |
||
|
12:30 |
USD |
1.9% |
||
|
13:55 |
USD |
72.0 |
Government Bond Auctions
Date Time Country
Jul 25 09:30 Germany
Jul 25 15:30 Italy
Jul 25 17:00 US
Jul 26 00:30 Japan
Jul 26 09:10 Italy
Jul 27 09:10 Italy
Jul 27 17:00 US
Click here for updated EUR/USD News.
Originally posted here
