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| Forex Analytics : Bank of England Slashes Interest Rate to 50-Year Low |
By: mayster  9 November 2008 view: 9
Bank of England Slashes Interest Rate to 50-Year Low
The Dollar surged on Thursday helped by a 50 basis point rate cut by the European Central Bank. Although this cut was expected, traders are already factoring in additional cuts which may take the Euro Zone key interest rate down to 2.5% by April. After the cut was announced ECB President Trichet stated that the Euro Zone economy had "weakened significantly." He also alluded to the intense turmoil that the markets have been going through, suggesting that global and Euro Zone demand should continue to fall. Additional pressure was placed on the Euro when a report showed that Euro Zone manufacturing had dropped in October. The long-term outlook is for the EUR USD to remain under pressure as the European Central Bank is well behind the U.S. and the U.K. in terms of interest rates. Many traders feel that Trichet has acted too slowly in recognizing the deteriorating Euro Zone economy. One positive is that inflation fell to 3.2 percent. This is very close to the ECBs target of 2.0%. Short-term, the Euro may find some support if the U.S. Non-Farm Payroll report comes out worse than the projected 200,000 job loss or if the unemployment rate exceeds 6.3%.
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| Forex Analytics : U.S. Jobless Rate Soars; Markets Price in 1% Cut |
By: mayster 9 November 2008 view: 10
U.S. Jobless Rate Soars; Markets Price in 1% Cut
Investors received further confirmation that the U.S. is heading into a deepening recession when the government reported that the October Non-Farm Payrolls Report showed a decrease of 240,000 jobs and the unemployment rate rose to 6.5% Pre-market guesses were for a decrease of 200,000 jobs and a rise to 6.3% from 6.1% in September. Most markets reacted by selling the Dollar, the exception being the Japanese Yen, which fell as the U.S. stock markets rallied. Pressure was put on the Dollar because the weak report means that the Fed is going to have to cut its key interest rate again in December. Financial markets in Chicago are already pricing in a 1.0% cut by the Fed at its next meeting on December 16.
For the week the EUR USD posted an inside range pattern with a lower close. The trend is still down, but the close has the market in a position to change the trend to up on the daily chart. The European Central Bank cut interest rates for the second consecutive session. More cuts were indicated by ECB President Trichet because the intense turmoil in the markets is indicating that demand for goods produced in the Euro Zone should continue to fall. The next cut may be more aggressive than 50 basis points as the U.S. and U.K. central banks are cutting with more passion than the ECB.
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| Forex Analytics : Dollar rises against euro as global markets sink |
By: admin 11 October 2008 view: 30
Dollar rises against euro as global markets sink
Lowered interest rates, drops in stock market help propel greenback versus 15-nation euro.
FRANKFURT, Germany (AP) -- The euro fell against the dollar Friday as world markets retreated further on worries that strains in the financial system would persist and growth would suffer.
The 15-nation euro bought $1.3532 in European morning trading, down from the $1.3661 late Thursday in New York.
Asian stocks were battered Friday, and Australian market watchers called it "Black Friday."
The Australian benchmark S&P/ASX200 plummeted 8.34%, or 360.2 points, to close at 3,960.7, its biggest one-day percentage loss.
Both Germany's DAX and Wall Street began Thursday in positive territory on a coordinated central banks rate cut, and news that the Bush administration was considering taking part ownership in a number of U.S. banks.
But the German market closed in negative territory and the Dow Jones industrials plunged more than 675 points to end below 9,000, its lowest level in five years... >
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