Forex Trading News November 2009

Nunzio Notaro, managing director of Notaro Care Homes group, stated that the care home group is preparing an expansion in Weston, with a value of £5million, in order to ‘beat the slump’.

During the first trading sessions of this week, the Japanese Yen reached a 14-year record high against the US Dollar. Initially the central bank of Japan wasn’t concerned about the strength of the Yen, but at the end of this week’s trading session the BoJ feared that the high rates of the Yen may frustrate the economic recovery and damage the economy.

The Aussie, an informal term for the Australian Dollar, compensated some of yesterday’s losses on the back of bullish remarks from the RBA Deputy Governor, sturdy construction figures and record gold rates.
At the close of the Australian trading session, the Aussie was trading at $US0.9241, while it closed at $US0.9198 yesterday.

Consumer confidence in November improved unexpectedly, according to today’s figures by the Conference Board, as consumers were more optimistic about the employment and business environment prospects.

The central bank of Israel increased the lending rate, which was not only surprisingly but also the second time after the beginning of the worldwide recovery. The rate hike is the result of inflation climbing to the ceiling level of the government’s target and due to the economic expansion accelerating.

The Loonie, an informal term for the Canadian Dollar, posted this week’s trading session the weakest results in more than eight weeks on the back of falling equities and commodities, which have a major impact on the sentiment and rates of the Loonie, continuing its downtrend.

Senior US central bank officials have declared that inflation is not a direct threat, while gloomy expectations regarding employment and a flaccid economic improvement keep price pressures under control. The US economy is improving but there still remain several risks that could frustrate further growth, according to Richard Fisher, head of the Federal Reserve Bank in Dallas, and Charles Plosser, president of the Philadelphia Fed.

Europe's Single Common Currency continued its upward trend versus the majority of the most traded currencies through today’s early trading session in New York. European equities recovered this Wednesday and reached the highest levels in more than 13 months. Reports showed that US consumer prices rose in October, while housing starts in the US dropped.

The British inflation rate increased for the first time in eight months, exceeding economists’ estimations in October, on the back of rising air fares and fuels costs. The statistics office reported today that consumer prices climbed 1.5% in the yearly comparison, while they rose by 1.1% in September. On a monthly basis, consumer prices gained 0.2%.

The Brazilian currency gained this Monday on the back of positive domestic and international figures, as risk seeking increased globally, which resulted in the Brazilian Real posting the best results among the most popular currencies on the Forex market this year. Chile’s Peso rose on the back of rising demand for copper today.

Moneyfacts Group PLC, a financial information company, has stated today that during the last weeks several lenders, such as Leeds BS, Northern Rock, Abbey, Nationwide BS, Woolwich and Halifax, have moved to lower mortgage rates, as they are still far away from the low levels at the start of 2009.

Consumers in the US remain pessimistic about the sustainability of the economic improvement, proved by the University of Michigan/ Reuters consumer sentiment index published today. At the start of November, the consumer sentiment gauge dropped to 66.0, in comparison to 70.6 in October.

The Greenback gained versus Europe's Single Common Currency, in anticipation of crucial US figures, as Timothy Geithner, the US Secretary of the Treasury, stated that a strong Dollar was “extremely important” for the North American nation. He also emphasized the importance of the American economy and the US Dollar with relation to the global economy.

The Chinese retail sales and industrial production rose again in October and exceeded expectations, according to data by the National Bureau of Statistics of China. Domestic consumption remains a key engine for the Chinese economic improvement, while the demand for its exports is still weak.

The Pound Sterling declined against the majority of the 16 most popular currencies as Fitch Ratings, the international credit rating agency, stated that Great Britain’s monetary system is still one of the weakest among the industrialized countries, shunning investors away from Pound-priced assets.

French business sentiment rose for an eighth month on the back of government incentives and exports, while the French economy is expected to grow by 0.5% in the last quarter of this year, the French central bank reported. Earlier estimations showed a 0.3% growth for the fourth quarter.

Today’s figures published by the Federal Ministry of Economics and Technology demonstrated that German factory orders continued to rise in September. This was the result of increasing foreign orders, which posted a 3.7% month-on-month rise, while domestic orders declined by 2.3%.

The South African Rand posted the best results of the 16 most popular currencies in the Forex market, on the back of increasing demand worldwide for metallic commodities exported from South Africa, which led to higher prices and boosted the rate and popularity of the Rand.

The central bank of the United Kingdom decided to enlarge the Asset Purchase Facility to £25 billion, while £50 billion was forecasted. The Pound Sterling is favored by positive data this week, while less Pound issuing is better for the British currency.
The Bank of England left the interest rates unchanged at the record low of 0.5%, while an increase is not expected.

Neal Wolin, United States Deputy Secretary of the Treasury, commented today that the Group of Twenty Finance Ministers and Central Bank Governors (G20) will come up with a plan to withdraw the stimulus measures, taken in the last year.
Wolin said: “It will take some discussions to determine how to unwind the stimulus as governments consider a more stable and regularized period in which the stimulus packages will be less required.”

The Japanese Yen declined versus the Kiwi Dollar and South African Rand on the back of new optimism regarding the recovery of the international economy, increasing risk appetite. Japan’s currency pointed to another day of losses versus the New Zealand Dollar. Economists stated in an US report that factory orders rose in September, boosting demand for more profitable currencies.

Paul Krugman, American economist, liberal columnist and author, stated that the United States should raise stimulus spending, in order to prevent “an extensive period of high employment”, as it also would take ten years before full employment returns. Krugman, who won the Nobel Memorial Prize in Economics in 2008, said in a New York Times article: “The stimulus measures were positive but not sufficient. It certainly had a positive effect but it was too little.”

Despite hopes about a recovering Canadian economy, yesterday’s GDP figures demonstrated that it contracted by 0.1% in contrast to the previous month. Data provided by Statistics Canada, commonly called StatCan, showed zero growth in July, while economists believe that Augusts’ data don’t point to a crisis.