Forex News

The Greek deposit contagion

As is so often the case, it is usually an accelerated flow of money in a particular direction that forces the hand of policy-makers and elected officials. Lire la suite

17/05/2012 @ 09:57 GMT

Slowing pace of gold demand

The data on Q1 gold demand from the World Gold Council - although a little dated - makes for interesting reading nevertheless, especially in light of the latest price developments. It’s the official sector purchases that are of most interest, given that these tend to be more volatile than the more stable investment and jewellery demand, which is driven primarily by India and China. Lire la suite

17/05/2012 @ 08:53 GMT

Fed on heightened alert re further easing

Notwithstanding the more reassuring recovery signs evident thus far in 2012, asset markets are far too complacent regarding the need for additional monetary accommodation from the Fed in the second half of this year. Firstly, there is the deepening crisis in the eurozone which is permeating through Asia and dampening demand for US products. The most recent FOMC Minutes for the April 24-25 meeting cited Europe as one of the major risks for the US economic outlook. Lire la suite

17/05/2012 @ 08:31 GMT

Beware falling BRICs

With the dollar making all of the running over recent weeks, it has been interesting to observe just how much pressure the currencies of the BRIC economies have been under. Elsewhere, we have remarked upon the recent decline in the Chinese yuan, a function of domestic financial weakness and accelerated capital outflow. The Brazilian real has been hit hard as well, down 4.4% for the month to date, while the Russian ruble has dropped 5%. Lire la suite

16/05/2012 @ 09:46 GMT

RMB continues to lose ground

Overnight the Chinese currency has continued to lose ground against the dollar, with yuan forwards declining to a four-month low. The explanation for the continuing softness in the renminbi is twofold – the dollar is in high demand at a time of enormous uncertainty over Europe’s future, and domestic economic conditions in China have been much weaker than expected. Twelve month NDFs are trading at a 1% discount to the onshore spot rate, which implies that the forward market expects a depreciation of the yuan over the next year. Lire la suite

16/05/2012 @ 09:17 GMT

Italy back in intensive care

After a two-month respite from financial turmoil at the start of this year, Italy unfortunately is back in intensive care. The 10yr yield touched 6.0% this morning for the first time since early March; in the past two months the yield has risen by 130bp. Certainly, the very problematic situation in Greece is not helping – bond yields for all of Europe’s fiscal miscreants are climbing sharply at present. Lire la suite

16/05/2012 @ 08:47 GMT

Turbulent time for commodities

With the bulk of Europe in recession and China clearly slowing more rapidly than anticipated, it is no surprise to see commodity prices under sustained downward pressure. Lire la suite

15/05/2012 @ 10:20 GMT

The shifting eurozone growth debate

As Europe pushes back against austerity, and the new pro-growth French president Hollande is sworn in, never before has there been such a focus on the growth numbers across Europe. The good news is that there is something for everyone. The optimists (and headline writers) can rejoice at the fact that Germany grew five times faster than expected at 0.5% QoQ (it’s a good job the market was not expecting zero quarterly growth…). We have to wait until next week for the more detailed breakdown of the principle drivers. Lire la suite

15/05/2012 @ 09:58 GMT

More vengeance from Europe’s bond vigilantes

Europe’s bond vigilantes are wreaking further havoc in the markets today, with the weak and vulnerable sovereigns being castigated mercilessly at the expense of the fiscally responsible. In general terms, it is the bond markets of those electorates rebelling against austerity that are taking a beating. Spain is being singled out for particularly harsh punishment, the 10yr yield climbing 30bp to around 6.25% and 5yr CDS at a record high of 540bp. Italy is also being spanked, the 10yr yield 25bp higher at 5.75% with the spread to Bunds wider by 35bp. Lire la suite

14/05/2012 @ 11:06 GMT

Dollar benefits from global financial suffering

May has been very kind to the greenback, with a gain of nearly 2% in the dollar index. Indeed, given the rapid re-intensification of concerns regarding the eurozone and clear signs that China is experiencing a very bumpy landing, it could be argued that the dollar ought to be performing better than it has done. After all, Q1 growth in the eurozone (due to be released tomorrow) is expected to show a decline in comparison to the solid growth registered in the US in the quarter. For dollar bulls, they will be eyeing a sustained break of the mid-January high around 81.50. Lire la suite

14/05/2012 @ 09:19 GMT

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rédactionnelle FxPro

Michael Derks

Responsable Stratégie

Simon Smith

Responsable Economiste