Top Forex Reviews

Czech Republic

The Czech koruna has decoupled from its regional PEERs and extended its gains since Tuesday. Interestingly, the koruna is firming despite ongoing dovish rhetoric coming from the CNB, which keeps rate-hike expectations very low. Currently no rate hike is priced in untill the end of this year in FRA contracts. In our view, these expectations are, however, very low, because headline and core inflation will pick in the second half of the year, so the real interest rate might decline even lower and more and more CNB Bank Board members will not be satisfied with this situation. Full post…

• Possible Marketmoving items: JP CPI, Household Spend, Ind Output. DE Retail Sales. EZ HICP. U.S. GDP. Chicago PMI,  Univ. of Michigan.

• The U.S. debt ceiling debate should drag on to Aug 2. The worst case  outcome would be a very shortterm extension that would give politicians me to dither. They only act react to a dropdead deadline.

• Equity markets stabilized Thursday following a rough Wednesday. Mos

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Further weakness anticipated while under 1.1892.

EUR/CHF has potentially registered a lower high at 1.1892 last week.

Yesterday’s break under 1.1610 now warns of a resumption of weakness with a return to 1.1374 now favoured.

The longer-term falling trend remains intact and while under 1.2080 we would favour a continuation of this larger trend.

We note, in the absence of further stresses from the Eurozone periphery, that a larger recovery would then become likely due to the probable extreme short positioning in this market.

I was on the Business News Network this morning talking about what could happen to currencies if the U.S. is downgraded. Click on the image to access the video

USDCAD Analysis. USDCAD stays in a falling price channel on 4-hour chart, and remains in downtrend from 0.9777, and the fall extended to as low as 0.9406. Resistance is at the upper border of the price channel, as long as the channel resistance holds, downtrend could be expected to continue, and next target would be at 0.9300. Only a clear break above the channel resistance will suggest that a cycle bottom is being formed, then consolidation of downtrend could be seen to follow.

USDCHF Analysis. USDCHF remains in downtrend from 0.8276.

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What happens when bad politics get in the way of good economics? Well quite simply you get what we’ve seen transpire over the course of the last 18/24 months. The Global Financial Crisis (GFC) gave the world the perfect opportunity to conduct the most comprehensive purge of poor economic practices and leave the world a cleaner place poised for staggered, slow and yet constructive economic progression for the foreseeable future. However, one rather important thing got in the way of what should have been a golden age for the global economy, politicians…

Let me explain. We’

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Although the U.S. government has never officially defaulted on its debt, it missed payments on some Treasury Bills in 1979. Then as now, Congress was playing a game of chicken with Republicans and Democrats bumping heads on raising the debt ceiling. The debt limit was a fraction of its current levels and at the time, the dollar only fell briefly. The 0.6 percent drop in the Dollar Index was so small that it was barely left an imprint. However less than a month later, double digit inflation and concerns about the outlook for the U.S. economy along with the security of the U.S.

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USDCAD Analysis. USDCAD remains in downtrend from 0.9777, the rise from 0.9423 is treated as consolidation of downtrend. Further fall to 0.9300 could be seen after consolidation, and a breakdown below 0.9423 could signal resumption of downtrend.

USDCHF Analysis. USDCHF broke below 0.8082 support and continued its downward move. Further fall could be seen in a couple of days, and next target would be at 0.7800 area. Resistance levels are at 0.8070 and 0.8100, as long as these levels hold, downtrend will continue.

USDJPY Analysis. USDJPY’s fall from 81.47 extended to as low as 77.89. R

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***Economic Data***

– (IN) India Central Bank (RBI) raises Repo and Reverse repo Rates by 50bps to 8.00% and 7.00% respectively; More than the 25bps expected; Maintain the Cash Reserve Ratio (CRR) at 6.00% (as expected)
– (GE) Germany Aug GfK Consumer Confidence Survey: 5.4 v 5.6e
– (FI) Finland Jun Unemployment Rate: 8.4% v 9.8% prior
– (SZ) Swiss Jun UBS Consumption Indicator: 1.48 v 1.88 prior
– (FR) France July Consumer Confidence Indicator: 86 v 82e
– (HU) Hungary May Retail Trade Y/Y: +0.7% v -0.4%e
– (SA) South Africa May Leading Indicator: 131.5 v 133.8 prior
– (SW) Sweden Jun PPI M/M: 0.1% v 0.2%e; Y/Y: -0.2% v -0.1%e
– (PD) Poland Jun Retail Sales M/M: 1.4% v 2.2%e; Y/Y: 10.9% v 11.8%e
– (PD) Poland Jun Unemployment Rate: 11.8% v 11.8%e
– (UK) Q2 Advanced GDP Q/Q: 0.2% v 0.2%e; Y/Y: 0.7% v 0.8%e
– (UK) May Index of Services M/M: 1.6% v 0.8%e; 3M/3M: 1.2% v 0.9%e

Fixed Income
– (NV) Netherlands Debt Agency (DSTA) sold total €2.75B vs. € Full post…

Moody’s downgraded Greece to Ca from Caa1 and there is only 1 more notch to go before the rating hits the rock bottom. This has coincided with a statement from the Institute of International Finance over the weekend which implied that they see the probability of a Greek default at virtually 100%. This follows last week’s announcement from the EU of a second package of assistance for Greece which, upon reflection over the weekend, doesn’t appear to have any substance in the markets.

The Euro closed the week on the front foot and with the talks in the US on raising the debt-ceiling breaking up on Friday with no agreement, the scene was set for a strong week for the Euro. Moody

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