Posts Tagged ‘basics of forex trading’

TODAY’S FOREX REPORT 7/aug/2013

MARKET HEADLINES

Rupee hits all-time low of 61.80; recovers sharply after RBI seen intervening

The rupee recovered sharply on Tuesday from a record low hit earlier after the Indian central bank was seen selling dollars via state-run banks starting at around 61.45 levels, according to three traders.The partially convertible rupee was at the day’s high of 61.03/05 per dollar at 16:45 India time (1115 GMT), recovering sharply from the record low of 61.80 hit earlier in the session. The unit had closed at 60.88/89 on Monday.Unless Prime Minister Manmohan Singh’s coalition government announces substantial reforms, or resorts to raising debt abroad to attract rapid capital inflows, the rupee is likely to fall further, traders said.

 Swiss franc falls vs dollar on US services growth

The Swiss franc drifted lower against the dollar on Tuesday as the greenback gained some ground on data showing the pace of growth in the US services sector accelerated in July with new orders at their highest in five months.The Institute for Supply Management (ISM) said its services index rose to 56 from 52.2 in June, easily topping economists’ expectations for 53 and supporting views the Federal Reserve could trim its bond-buying programme earlier than expected. The franc was softer against the euro, trading above the 1.23 per euro mark ahead of German data on industrial orders, due at 1000 GMT, and Swiss National Bank data on foreign currency reserves to be released on Wednesday.Swiss data due later in the week are expected to show inflation remains weak, with consumer prices for July seen flat year on year and 0.4 per cent lower on the month.

The franc fell 0.2 per cent against the dollar compared to the New York close to trade at 0.9294 francs per dollar by 0653 GMT. The franc fell 0.2 per cent against the euro to 1.2316 per euro.

FOREX REPORT UPDATES

MARKET HEADLINES

Hapless Rupee sinks to new low: Closes at 61.10 as policymakers’ rescue measures fail to yield results

The Indian rupee slumped to its lowest closing amid investor jitters that measures to cure the currency’s ills are hardly working. Fears that the economic slowdown may worsen in the wake of rising interest rates and portfolio outflows due to rising yields in the US are aggravating the currency’s fall.Despite the Reserve Bank of India curbing speculation by international investors, the currency continued its decline as better returns in the US – S&P 500 is at an all-time high and yields at 2.7% on treasuries yield more than 8.3% on Indian bonds, adjusted for hedging currency risk.The rupee fell 1.1% to 61.10 per dollar, worse than its previous closing low of 60.44. Its intra-day low was at 61.21 on July 8.

Sterling rise, gilts fall on strong UK construction PMI

Sterling rose on Friday after a survey revealed a strong rise in UK construction activity and added to signs the UK economy began the third quarter on a strong footing.Data showed UK construction activity rose far more than expected in July to hit its highest level in over three years.This followed data showing UK house prices grew at their fastest rate in nearly three years and a strong UK manufacturing activity survey on Thursday.But analysts said concerns that the Bank of England, under new governor Mark Carney, could point to lower interest rates for a prolonged period when it presents its Inflation Report next Wednesday would cap sterling’s gains.

US jobs data due at 1230 GMT could also push the pound back down against the dollar. If strong they would suggest the US Federal Reserve will have room to begin scaling back monetary easing soon.

Sterling was up 0.2 per cent on the day at $1.5152, recovering from an earlier two-week low of $1.5104. Renewed falls, however, could see it drop towards the July 15 low of $1.5028.

TODAY’S FOREX REPORT 2/july/2013

MARKET HEADLINES

Rupee off lows as RBI tightens hedging rules for foreign investors

Rupee fell on Thursday, but staged a strong rebound from intra-day lows as the Reserve Bank of India continued to bolster its currency defence by tightening rules for curbing speculation by foreign investors, and on rumoured central bank intervention.The RBI stipulated on Thursday that foreign institutional investors would require a mandate from participatory note holders to hedge on their behalf.The move pulled rupee back to the day’s high of 60.25 to a dollar, briefly turning positive on the day, as the central bank notification led to large dollar selling by foreign banks.

The partially convertible rupee closed at 60.43/44 per dollar compared with 60.40/41 on Wednesday. It fell to 60.90 early in session, within striking distance of its life low of 61.21 seen on July 8.

Sterling falls versus dollar on BoE caution

Sterling fell against the dollar on Thursday before a Bank of England policy announcement when it may reaffirm a commitment to low interest rates for a prolonged period.The pound recovered from an earlier 4-1/2 month low against the euro, however, ahead of a UK manufacturing activity survey due at 0828 GMT that may give the currency a brief boost if it comes in strong.

However, traders were wary that the BoE, under new governor Mark Carney, is set to lay out plans for giving “forward guidance” on monetary policy which could weigh on sterling.

The purchasing managers’ index for manufacturing is expected to rise
to 52.8 in July from 52.5 in June.Sterling fell 0.3 per cent against the dollar to $1.5159, nearing a two-week low of $1.5125 hit on Wednesday.

TODAY’S FOREX REPORT 1/aug/2013

MARKET HEADLINES

Rupee kept off record lows by RBI intervention fears

The rupee continues to be kept off record lows by the prospect of central bank intervention after state-run banks were spotted selling dollars on its behalf earlier in the day. The pair at 61.07/08, off 61.17 intraday high, 60.47/48 last close.The pair still remains close to record high of 61.21 hit on July 8. US dollar demand from foreign banks and month-end oil demand also pushing up the pair.

The rupee bears bolstered by RBI comments that cash tightening steps may be temporary

 

Sterling down vs dollar as BoE meeting looms

Sterling fell to a 4-1/2 month low against the euro on Wednesday on steady demand for the single currency from a sovereign buyer for month-end requirements, traders said.While the buying is routine, many traders were caught short by the sustained nature of the order and were left scrambling to buy euros to cover positions, traders added. As a result, sterling remained broadly under pressure before a Bank of England meeting on monetary policy. The BoE’s monetary policy committee may reaffirm its commitment to lower interest rates following its meeting on Wednesday and Thursday.

The euro rose to 87.27 pence, its highest level since mid-March, extending gains into a seventh session.

 Euro rises to 4-1/2 month high vs sterling on month-end demand

The euro extended gains to hit a 4-1/2 month high against the British pound on Wednesday, mainly due to month-end demand from a euro zone sovereign buyer, traders said.

The euro rose to 87.20 pence, up 0.15 percent on the day and extending its winning streak into a seventh straight session. Sterling was also down 0.2 percent against the dollar at $1.5209.

TODAY’S FOREX REPORT 31/july/2013

MARKET HEADLINES

Rupee falls below 60/dollar after RBI policy

The rupee on Tuesday weakened below the psychological level of 60 per dollar in the absence of any concrete action by the RBI. The rupee was at 60.09/10 after falling to 60.21. It closed at 59.4150/4250 on Monday.Rupee weakened after RBI shied away from stronger measures to boost currency. The central bank said it will roll back its recent cash tightening steps in calibrated manner if the currency stabilises. RBI’s comments raised questions about it’s resolve in sustaining cash-draining measures that have sent bond yields surging and threatened to raise borrowing costs across economy.The RBI in its first quarter review of monetary policy kept both the repo rate and Cash Reserve Ratio ( CRR) unchanged. Maintaining a cautious stance, RBI also cut the GDP growth forecast for FY14 to 5.5% from 5.7% earlier.

 
Sterling hits 3-year high vs Aussie, subdued against US dollar, euro

Sterling hit a three-year high against the struggling Australian dollar on Tuesday and was flat against the US dollar and the euro before the Bank of England and other major central banks meet this week.The BoE’s monetary policy committee is likely to reaffirm its commitment to lower interest rates for a prolonged period following its meeting on Wednesday and Thursday.

The pound rose 1.6 per cent on the day against the Australian dollar at A$1.6922 after Reserve Bank of Australia chief Glenn Stevens left the door open for another rate cut and said he would not be surprised if the currency fell more.

Sterling earlier hit A$1.6940 -its highest level since Sept. 2010

TODAY’S FOREX REPORT 30/7/2013

MARKET HEADLINES

Rupee snaps 3 days of gain ahead of RBI rate decision
The rupee fell for the first session in four on Monday on the back of dollar demand from oil importers and caution ahead of a central bank policy review that may give cues about its stance after recent measures to defend the currency.The Reserve Bank of India is widely expected to keep rates and the cash reserve steady when it unveils monetary policy on Tuesday. Forex dealers will keenly watch, instead, if the central bank indicates more measures to stabilise the currency or gives a timeframe for its current action.After trading hours, the central bank Msaid in a report that the priority for monetary policy was to restore stability in the forex market.The rupee has strengthened to as much as 58.69 since the RBI first unveiled its measures on July 15, but has never closed below 59 since then, and still remains within sight of a record low of 61.21 hit earlier this month.The partially convertible rupee closed at 59.4150/4250 per dollar compared with 59.04/05 on Friday.

Dollar slumps, hits 1-month low against the yen
The dollar fell to a one-month low against the yen on Monday, and a five-week trough against a basket of currencies on expectations the Federal Reserve intends to keep interest rates low for some time.The dollar’s losses underpinned the euro, which was holding near fiveweek highs as spreads between US 10-year Treasury yields and German Bunds narrowed.The spread widened to its highest since late 2006 earlier in July helping the dollar. But with doubts growing over when the Fed will start withdrawing stimulus, the gap has narrowed. The Fed starts a two-day meeting on Tuesday.The dollar index, which shed 1.2 per cent last week for its third straight weekly loss, was trading flat at 81.63 while dollar/yen was down 0.35 per cent at 97.91, having fallen to 97.635 yen – its lowest since late June. The euro was flat at $1.3275, not far from a five-week high of $1.32975 struck on Friday.

FOREX REPORT

MARKET HEADLINES

Rupee hits 5-week high, yields rise at bond auction

The rupee rose to a five-week high as the Reserve Bank of India’s aggressive monetary tightening to defend the currency showed some signs of success, while bond market investors demanded higher yields at a government bond auction on Friday.RBI has tightened money supply and pushed up short-term interest rates to try to generate demand for the rupee, which hit a record low on July 8, but that has forced the government to pay abnormally high yields to sell its debt – including 11 per cent on three-month paper earlier this week.At Friday’s auction of Rs 15,000 crore of bonds, the shortest with a maturity of just above 2 years and the longest a 19-year bond, RBI was forced to set yields about 50 to 80 basis points higher than they would have bid two weeks ago.A bond maturing in December 2020 was sold at a cut-off yield of 8.67 per cent, far higher than the 8.12 per cent coupon on the bond.

Swiss franc holds 5-wk high vs dollar after German data

The Swiss franc traded close to a five-week high against the dollar on Friday after tracking the euro higher against the greenback in the previous session on the back of better than expected business climate data from Germany.The greenback’s recent downtrend against major currencies continued as investors trimmed U.S. dollar positions amid caution before next week’s Federal Reserve policy meeting.The franc was little changed against the dollar compared to the New York close, trading at 0.9296 per dollar by 0646 GMT.The franc was steady against the euro at 1.2340.

TODAY’S FOREX REPORT 26/JULY/2013

MARKET HEADLINES

Rupee hits 5-week peak, but off highs on importer dollar demand

The rupee strengthened to a five-week high on Thursday as the RBI’s
measures to drain liquidity started to show impact, although demand for the greenback from importers towards late trade meant the unit closed just marginally stronger.The rupee has now gained for a second session following the Reserve Bank of India’s additional cash draining measures on Tuesday, after its initial steps on July 15 to defend the rupee had failed to have much of an impact.The RBI also paid high yields in its Rs 5,200 crores sale of cash management bills on Thursday, which followed a Rs 12,000 crores sale of treasury bills on Wednesday, showing the central bank’s commitment to drain cash.The partially convertible rupee closed at 59.11/12 per dollar compared with 59.13/14 on Wednesday. The unit rose as high as 58.76, its strongest since June 19.

Sterling dips, UK gilts pare losses after in-line GDP data

Sterling dipped on Thursday while gilts pared losses after data showed the UK economy grew 0.6 per cent in the second quarter of the year, in line with expectations and disappointing some in the market who had positioned for a better number.The pound fell to $1.5331 against the dollar, down from around $1.5371 before the figures were released and staying below Tuesday’s one-month high of $1.5393.Traders also pointed to the fact that the data showed UK gross domestic product remains 3.3 per cent below its peak in the first quarter 2008.British government bond futures pared losses by 20 ticks after the data to stand 4 ticks down on the day at 122.22 at 0831 GMT, erasiing earlier underperformance versus the equivalent German Bund contract. Bund futures pared losses to last trade 5 ticks down on the day at 142.67 compared with 142.58 just before the data.

TODAY’S FOREX REPORT 25/7/2013

MARKET HEADLINES

Rupee at one-week high on RBI measures
The rupee was trading at 59.20/21, after touching 59.1650, its weakest since July 17, and down from its close of 59.76/77 on Tuesday on the back of central bank measures to boost the local currency by
tightening liquidity.The Reserve Bank of India took new steps to support the rupee, by further reducing banks’ access to funds, signalling it will stay the course with its defence of the currency despite risks to economic growth.However, traders say state-run banks continue to buy dollars with importer demand staying strong.

China’s yuan steadies at one-week high, PMI checks gains

The Chinese yuan steadied at a one-week high against the US dollar on
Wednesday following a stronger daily fixing, but weak manufacturing
data and tighter money market conditions checked gains.By midday, the spot currency was trading at 6.1367 per dollar, slightly above Tuesday’s close of 6.1374.Activity in China’s vast manufacturing sector slowed to an 11-month low in July as new orders faltered and the job market weakened, a preliminary survey showed on Wednesday, suggesting the world’s second-largest economy was still losing momentum.On Wednesday, the PBOC fixed the daily yuan midpoint stronger versus the US dollar for a third consecutive day at 6.1695

US dollar rises in Asian trading
The dollar strengthened in thin Asian trade Wednesday, rebounding from losses in New York fuelled by a weak US manufacturing report, while a consumer confidence spike supported the euro.The greenback fetched 99.72 yen, compared with 99.48 yen in New York Tuesday afternoon although it is still well down from the 100-yen levels seen at the end of last week.The euro bought 131.73 yen and $1.3207, from 131.53 yen and $1.3222, after data showed eurozone consumer confidence jumped in July to its highest level in almost two years.

TODAY’S FOREX REPORT

MARKET HEADLINES

Rupee retraces gains to trade flat on day
The rupee gives up all gains to trade flat on the day at 59.70/71 versus Monday’s close of 59.72/73 as there are no fresh dollars inflows into the market, traders say.There is good demand for the greenback from importers and corporates, with both state-run and foreign banks seen buying the dollar, they added.

The pair is seen moving in a range of 59.40 to 59.90 during the rest of the session. The domestic share market will be watched for cues on foreign fund
flows.

Swiss franc steady vs euro, dollar as Q2 reports flow in

The Swiss franc was steady against the dollar and the euro on Tuesday, with few catalysts seen moving the franc sharply as one third of S&P 500 companies prepare to report second quarter numbers this week.

The franc continues to shadow euro movements closely, as it has broadly done since the Swiss National Bank capped the currency at 1.20 per euro almost two years ago to stave off a recession and deflation.The franc was little moved against the dollar compared to the New York close, trading at 0.9360 by 0710 GMT.

Dollar slips versus yen in Asian trade
The dollar weakened against the yen in Asia Tuesday after poor US
housing data raised the likelihood the Federal Reserve would not wind
back its stimulus programme in the near term.

The greenback fetched 99.46 yen in afternoon Tokyo trade, down from
99.59 yen in New York Monday afternoon and well off the 100-yen levels at the end of last week, while the euro bought 131.26 yen and $1.3198, from 131.33 yen and $1.3186.

On Monday the National Association of Realtors said home US sales fell 1.2 per cent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May. The average analyst estimate was for a rise to a 5.28 million pace in June.