Investor confidence roiled by a Greek financial tragedy
The forex trading week saw European majors and investor confidence roiled by a Greek financial tragedy, mixed fundamental data, and thin liquidity all aiding USD strength.
Australia’s 3Q2009 GDP printed 0.2% q/q, half market expectation, and 0.5% y/y. RBA meeting minutes were mixed and hinted of further losses in employment even as 3Q2009 housing starts surged 9.4% q/q. AUD/USD dropped through the lower trendline of its consolidation triangle, best seen on daily charts; it lost 2.7% in the week, respected support at 0.8808, and closed at 0.8906.
The FOMC left rates at 0.0–0.25%, as expected, and outlined the timetable for expiry of extraordinary financial system support measures. November PPI rose much more than anticipated, including core prices ex-food and energy, although CPI printed inline with core slightly weaker. November industrial production rose 0.8% m/m, capacity utilisation to 71.3%. NAHB December housing market index slipped lower although housing starts improved, and both continuing and initial jobless claims increased.
The December Eurozone ZEW survey fell to 48.0 from 51.8 previous and 3Q2009 employment declined −0.5% q/q, −2.1% y/y. November CPI printed 0.1% m/m, 0.5% y/y, and core 1.0% y/y. December PMIs at first estimate are 51.6 manufacturing, 53.7 services, and 54.2 composite. In Germany, economic sentiment via the December ZEW survey decreased although the current situation reading improved, November PPI was weaker than expected, and the Ifo survey improved slightly across the board. EUR/USD lost 2.0% in the week, falling hard to close at 1.4335.
The U.K. claimant count fell for the first time since February 2008, the claimant rate held steady at 5.0%, and the ILO rate rose slightly to 7.9%. November CPI rose more strongly than expected, retail sales decreased −0.3% m/m, and government borrowing rose massively, but not as massively as anticipated. GBP/USD slammed through support at 1.6216, losing 1.2% and closing at 1.6140. EUR/GBP fell 1.1%, closing at 0.8878 and sitting on the MA-200 on daily charts.
Canada’s November CPI printed 0.5% m/m, 1.0% y/y, and core 0.4% m/m, 1.5% y/y, all higher than expected. USD/CAD closed at 1.0657, continuing its two-month consolidation between 1.0420 and 1.0750, best seen on daily charts. AUD/CAD went straight down for much of the week, closing at 0.9489.
New Zealand’s NBNZ December business confidence, and Westpac 4Q2009 consumer confidence, both declined. NZD/USD lost 2.3% in the week as it consolidated between 0.7050 and 0.7300 for the fourth consecutive week, closing at 0.7107. AUD/NZD lost slightly to close at 1.2522.
The BoJ left rates on hold at 0.10%, left their economic assessment unchanged, and vowed to fight deflation to the last. 4Q2009 Tankan survey results improved with the exception of non-manufacturing outlook, which didn’t decline as far as expected, while capex declined more than anticipated. Final economic data from October remained inline with previous readings, with the notable exception of capacity utilisation, which reading was decreased dramatically. USD/JPY rose 1.4% but could not breach 91.00, closing at 90.33. EUR/JPY could not force through resistance at 130.60, falling as low as 127.40 before closing at 129.48. AUD/JPY tested support at 80.40 until it was breached, then turned and tested it as resistance, falling as low as 78.56 before closing at 80.44.
resWeek ending 18 December 2009
The forex trading week saw European majors and investor confidence roiled by a Greek financial tragedy, mixed fundamental data, and thin liquidity all aiding USD strength.
Australia’s 3Q2009 GDP printed 0.2% q/q, half market expectation, and 0.5% y/y. RBA meeting minutes were mixed and hinted of further losses in employment even as 3Q2009 housing starts surged 9.4% q/q. AUD/USD dropped through the lower trendline of its consolidation triangle, best seen on daily charts; it lost 2.7% in the week, respected support at 0.8808, and closed at 0.8906.
The FOMC left rates at 0.0–0.25%, as expected, and outlined the timetable for expiry of extraordinary financial system support measures. November PPI rose much more than anticipated, including core prices ex-food and energy, although CPI printed inline with core slightly weaker. November industrial production rose 0.8% m/m, capacity utilisation to 71.3%. NAHB December housing market index slipped lower although housing starts improved, and both continuing and initial jobless claims increased.
The December Eurozone ZEW survey fell to 48.0 from 51.8 previous and 3Q2009 employment declined −0.5% q/q, −2.1% y/y. November CPI printed 0.1% m/m, 0.5% y/y, and core 1.0% y/y. December PMIs at first estimate are 51.6 manufacturing, 53.7 services, and 54.2 composite. In Germany, economic sentiment via the December ZEW survey decreased although the current situation reading improved, November PPI was weaker than expected, and the Ifo survey improved slightly across the board. EUR/USD lost 2.0% in the week, falling hard to close at 1.4335.
The U.K. claimant count fell for the first time since February 2008, the claimant rate held steady at 5.0%, and the ILO rate rose slightly to 7.9%. November CPI rose more strongly than expected, retail sales decreased −0.3% m/m, and government borrowing rose massively, but not as massively as anticipated. GBP/USD slammed through support at 1.6216, losing 1.2% and closing at 1.6140. EUR/GBP fell 1.1%, closing at 0.8878 and sitting on the MA-200 on daily charts.
Canada’s November CPI printed 0.5% m/m, 1.0% y/y, and core 0.4% m/m, 1.5% y/y, all higher than expected. USD/CAD closed at 1.0657, continuing its two-month consolidation between 1.0420 and 1.0750, best seen on daily charts. AUD/CAD went straight down for much of the week, closing at 0.9489.
New Zealand’s NBNZ December business confidence, and Westpac 4Q2009 consumer confidence, both declined. NZD/USD lost 2.3% in the week as it consolidated between 0.7050 and 0.7300 for the fourth consecutive week, closing at 0.7107. AUD/NZD lost slightly to close at 1.2522.
The BoJ left rates on hold at 0.10%, left their economic assessment unchanged, and vowed to fight deflation to the last. 4Q2009 Tankan survey results improved with the exception of non-manufacturing outlook, which didn’t decline as far as expected, while capex declined more than anticipated. Final economic data from October remained inline with previous readings, with the notable exception of capacity utilisation, which reading was decreased dramatically. USD/JPY rose 1.4% but could not breach 91.00, closing at 90.33. EUR/JPY could not force through resistance at 130.60, falling as low as 127.40 before closing at 129.48. AUD/JPY tested support at 80.40 until it was breached, then turned and tested it as resistance, falling as low as 78.56 before closing at 80.44.
