Alan’s Forex Blog

After Excessive trading volatility conditions contained the forex market on the news of the fed new temporary program which can solve the liquidity problems of the sub-prime mortgages in compensate of treasury bonds, the market started back to reevaluate the conditions lowering the effect of the package impact pushing the single currency up to a new all times low at 1.5573 and the yen lower than 101 for the first time since 1995. the joint action can give back some stability and trust after

The news that BOC, BOE, ECB, SNK and the Federal Reserve have announced measures to ease inject funds in the financial markets as what has happened in last December and January in the money markets. Such coordinated central bank action to shore up liquidity can give back some trust to the equity market which can trigger a new carry trade wave supporting the greenback and the other high yielding currencies versus the Japanese yen which pushed up above 103 after the news. The US trade deficit

ECB President Trichet comments that he was concerned by excessive moves in foreign exchange and excessive volatility and disorderly forex movements are undesirable. He mentioned too that US strong dollar policy is in US interest. The comments could tackle the single currency appreciation at the beginning of the week which is still containing a lot of waited data to move the currency market. It is important to watch today’s ZEW for further European growth clues after the better than expected

The single currency tried yesterday to make a new high but another profit taken wave dragged it lower back again to 1.52 level among gold selling reached 957$. The market is still await of series of data to take new decisions.   Ben Bernanke came with no new yesterday calling mortgager lender to avoid further exposure but the news that bond insurer Ambac is close to  a bailout package, eased credit  worries given some support of the USD versus gold  and the Japanese yen

The market has started to price on weak ISM manufacturing release today and a spreading out recession to all parts of the US economy after the disappointing Chicago PMI which reached was 44.5 and the continued weak consuming data as the US University of Michigan sentiment survey in February came to 70 level. The market can wait what worse this week as the ISM data and the non-farm payroll which can put pressure on the USD versus the Japanese yen which get benefits from the equity market slump

As what was expected Bernanke repeated his dovish comments that the consuming and labor market are suffering negatively affected by the slump of the housing market which is expected to be continued and the PCE is to go down between 2.1% and 2.4. Bernanke semi-annual Congressional testimony come after Kohn’s dovish comments yesterday to increase the market expectation of .5% cut next 18 March After a series of weak consuming and labor data amid high inflation rates this month as US Jan PPI was

After Kohn Fed’s Vice president downplayed the threat of inflation expecting it to go down comparing with the growth serious position indicating the needs of further interest rate cuts in US. The single currency was already boosted by from yesterday upbeat IFO and the greenback was already negatively impacted by the continued series of US consuming weakness as the US Consumer confidence came severely low at 75 following the US UN Michigan advanced reading of Jan to ensured Kohn’s view and to

“In my view, the adverse dynamics of the financial markets and the economy have presented the greater threat to economic welfare in the United States,” These what Kohn Fed’s Vice president said to add to the greenback woes. The single currency get boosted from today’s upbeat IFO data underpinned versus the US dollar by a continued series of US consuming weakness as the US Consumer confidence came magnificently low following the US UN Michigan advanced reading of Jan to ensured Khon view and to