Daily Forex News

The ifo business climate for Germany might have only stabilised in May, after its unexpected surge in April. However, the German ZEW economic sentiment and the US ISM manufacturing index have improved recently. German yield spreads have widened somewhat, as short-term interest rates have continued declining and long-term rates have…

We are expecting a small upward revision to US Q1 GDP in the second estimate based on a slightly more positive contribution from net exports. However, the depth of GDP contraction will have remained historically steep, see chart 1. Also this week, we are looking for a second consecutive monthly…

Speculation that the Fed may boost its asset purchase programme to reinvigorate economic growth and rising concerns about the credit standing of the US saw the dollar come under strong selling pressure this week. The dollar index, which measures its performance against its key trading counterparts, fell to its lowest…

Signs continue to emerge which suggest the rate of decline in economic activity is moderating. Real GDP will still likely post a decline in the second and third quarters but the drops should be considerably less than what we saw in the past two quarters. Job losses should also moderate,…

The US dollar took a beating this past week as safe-haven USD and US Treasury long positions continued to be unwound. The USD’s slide was exceptionally rapid and no doubt was exacerbated by relatively thinner liquidity conditions ahead of long-holiday weekends in the US and UK. The last phase of…

There were further signs of short-run stabilization in the global economy and financial markets this week. Largest among them was the ongoing rapid improvement in US LIBOR rates - the cost of interbank lending. The U.S. 3-month LIBOR rate is now at 0.45%, its lowest level since February 4, 2008,…

The Westpac-Melbourne Institute Consumer Sentiment survey included an extra question in May on consumer expectations for house prices over the next 12 months. Overall, a net 0.6% of respondents expected prices to decline with pessimists marginally outnumbering optimists. A third of respondents expected prices to stay the same, with 32.7%…

In currency trading, risk appetite was in the air early in the week, prompted by growing speculation that three big American banks would repay a total of $45B in government funds and also helped by the seventh consecutive month of improving German ZEW data. The resounding victory of the ruling…

The trend to generalised US dollar weakness was given a shot in the arm by Brazil’s President Lula who, in discussions with president Hu Jintao in China, suggested bilateral trade should be settled in their two currencies rather than the dollar. Major currencies joined in the move initiated earlier by…

The greenback was under massive pressure last week. Indeed dollar index peaked on Monday and at 83.22 and dived to as low as 79.81 on Friday without looking back. Selling in dollar started to intensify after FOMC minutes showed downgraded growth and employment outlook in revised projections and indicated that…