UK Pound Mixed in Forex Trading

Earlier today, the UK pound was falling in Forex trading. A drop by the FTSE 100, as well as concerns about bank capitalization, were among the factors causing losses for the sterling. Now, though, things have turned around a bit — at least against some currencies. Concerns about the eurozone had been weighing on the sterling against the US dollar, but new prospects for stability in the euro region are helping the situation.

The Bank of England has moved a little closer to another round of quantitative easing, which would help boost the British economy. Additionally, Monetary Policy Committee members are considering that a little more flexibility might be needed in bank capital requirements. This would help ensure that needed liquidity remains in the economy, and provides some support.

Even though the UK pound was lower against most major currencies earlier, now sterling is higher against some of them, offering mixed results. At 13:41 GMT, GBP/USD is at 1.5641, a gain over the open of 1.5632, and an improvement over the session low of 1.5606. EUR/GBP is an exception, with the euro gaining at 0.8702, up from 0.8690, and GBP/CAD is at 1.5994, up from 1.5939.

Euro Continues Its 4-Day Rally on New Prospects for Stability

The euro is rising for the fourth day in a row on the Forex market today, following the successful pass of the anti-crisis vote in Greece, “stability bonds” talks in eurozone and a possible revival of the corporate bond market in Europe.

Lately, the single European currency is a major headliner of the Forex market news, as the European debt problems are a major headliner of the financial news nowadays. The euro is currently demonstrating its fourth day of growth in a row against the US dollar and the first one after 3 days of losses against the British pound.

The currency benefits from the yesterday’s victory of Greek Prime Minister George Papandreou‘s party in the vote for the property tax, which will help reducing public debt in the country, decreasing the chance of the credit default. Additionally, the markets are filled with the optimism, as European Commission President José Manuel Barroso talked today about introducing “stability bonds” in the eurozone — a kind of joint EZ bonds with shared responsibility. Such bonds may become available to the investors only when the union will reach a certain level of ”integration and discipline”.

The stock market has also played its role in the euro’s growth today as it recovered from the early morning fall. Stock market optimism is supported with the news of increase of the collateral bonds usage in the European corporate sector, which may give a second breath to that bond market.

EUR/USD rose from 1.3586 to 1.3613 as of 9:42 GMT today. EUR/GBP increased from 0.8692 to 0.8713 today, while EUR/CHF (although it isn’t a part of the ”free” Forex market) is demonstrating a rise from 1.2178 to 1.2203.

Euro Finds Support on Assumption that Sovereign Debt Crisis will be Contained

The euro is finding support on the assumption that the sovereign debt crisis will be contained. Many forex traders seem to think that European leaders are serious about finding a solution to the debt crisis, and that it will be contained.

Even though there doesn’t appear to be plans to expand the EFSF, there is an expectation that European leaders will do something to prevent the spread of sovereign debt contagion before it can bring down Italy, Spain, and possibly France. Right now, efforts to require recapitalization for banks appears to be in the works, as well as a focus on protecting the ECB from problems stemming from the amount of Greek debt it is exposed to.

Right now, these considerations don’t seem to be causing a lot of disquiet, though. At 13:51 GMT, EUR/USD is higher at 1.3615, a change of 0.0083 above the open of 1.3533. EUR/JPY is also higher, 104.05 rather than 103.33. EUR/GBP is virtually unchanged from the open at 0.8693.

Yen Weaknes as Risk Aversion Fades on Eurozone Expectations

The Japanese yen fell against all of its major counterparts today, including the US dollar, as the optimism regarding the European debt troubles situation changed the risk-averting mood of the markets to positive. While the current state of the FX market can be viewed as a simple technical correction, the optimism is also seen in other markets — European stocks are rising today. The yen fell against the pound for the second day and decreased against the greenback for the first day today. The most significant drops were registered against the ”commodity dollars” — AUD, NZD and CAD — which are feeling great as the commodity markets are seen recovering. The Greece situation is nearing its climax according to the market analysts. The German lawmakers will vote on the new programs for the $440-billion rescue fund for the Mediterranean country. And Prime Minister George Papandreou is meeting with Angela Merkel (Germany’s Chancellor) today to discuss the new aid program. USD/JPY rose from 76.37 to 76.44 as of 12:26 GMT today. GBP/JPY advanced from 118.78 to 119.40, while NZD/JPY surged from 59.54 to 60.25 today

Germany: Greens and SPD Vow to Support Euro

One of the difficulties associated with making progress on the sovereign debt crisis, and bailing out countries like Greece, has been foot-dragging from Germany. Angela Merkel, the conservative German chancellor, has seen divisions over the matter of eurozone bailouts in her coalition government. Some German politicians are loathe to use their resources to provide bailouts for other eurozone countries. Germany is already a huge player in supporting the euro on the FX market, since the German economy is the largest in the eurozone — and probably the most solvent. However, in order to appear more statesmanlike — and possibly undermine support for the political parties that make up the Merkel government — two allies are vowing to support the euro. The Greens party is leading the charge, and is supported by the Social Democratic (SPD) party. Recent state elections have provided some clout for these parties, and now the Greens are talking up their eurocentric tendencies. Merkel is in a tough position, especially if the vote, scheduled for September 29, on the European Financial Stability Facility, doesn’t go as she would like. So far, the news that an opposition government with support for the euro could soon be in power hasn’t done much for the euro against the U.S. dollar. As of 19:50 GMT, EUR/USD is down to 1.3402 from the open at 1.3519. EUR/GBP is at 0.8678 from 0.8732, and EUR/JPY is down to 103.19 from 103.39

Pound Rises Amid European Crisis and Run from Risk Markets

The British pound grew strong amid the European debt crisis and the downfall of the stock markets and commodities, falling against only two out of sixteen most-traded currencies today.
The pound has reached the highest level against the euro in almost two weeks today and also rose from for a second day against the US dollar. The British currency also recovered from the all-time low versus the Japanese yen. The GBP declined against the Norwegian krone and the Swedish krona today.
The pound continues to benefit from the financial uncertainty raging through the Eurozone. It’s currently providing the highest interest rates among the safest currencies and still can boast a high level of liquidity unlike the Scandinavian currencies. At the same time, pound is safely away from the Greek defaults and the Italian downgrades.
The high inflation in the United Kingdom guarantees the comparably high yields on the government bonds. The attractiveness of the pound grows even more as the global investors are seeking an alternative to euro as the alternative to the US dollar (which may sound confusing, but is completely reasonable if you mind the foreign exchange reserves diversification).
GBP/USD rose from 1.5473 to 1.5534 as of 19:14 GMT today. EUR/GBP fell from 0.8725 to 0.8680, while the GBP/JPY currency pair is now trading at 118.79 after closing at 117.03 yesterday.

Gold Losing Its Luster!

Gold has been hit extra-hard after the intense market sell-offs we saw last week as risk aversion and US dollar strength have reduced demand for the precious metal.
For some time, market participants have considered gold a “safe-haven”, though last week’s selling has shown gold for what it really is: an alternative currency.
Thus it has been trading more like a commodity and its tradtional role as a hedge against inflation is markedly different than a safe haven. With the Euro debt crisis in focus and weighing heavily on the markets, risk aversion has decreased fears of inflation and have in fact stoked fears of deflation as the global economy slows. Recent global grwoth forecasts have been cut by just about everyone.
As a result, we may continue to see more US dollar strength in the near-term, and this would be negative for gold. While gold has bounced this morning off of its daily S2 pivot support at around $1550, its upside potential may be limited to $1700 with possible further downside pressure to resume to $1425 if the Euro debt crisis continues to drag out.

Read more here

This Week in Europe – Greece Aid Decision, EFSF Votes, Inflation Data

This week we will continue to focus most of our attention on the euro zone situation.
Here are the big developments to keep an eye on:
Troika Returns to Greece - Greece continues to be in the spotlight as we do have the EU and IMF inspectors returning to the country to make their decision on whether to grant Greece its next installment of aid. Part of the slide recently has come as a result of the concerned that Greece would not secure this aid and would therefore fall into an unorderly default. Greece has committed to undertake further austerity measures and to accelerate recent measures in order to secure that aid which gives the market expectation that they will in fact get it. A positive resolution here bring some relief, while failure to extend aid will turn into a rout for risk appetite.

Hope for new approach in euro crisis buoys markets

Hopes that European leaders will consider new ways to fight the debt crisis, including a contained Greek default, reassured investors on Monday, though analysts said more specifics will have to emerge before a rally gains traction.
Over the weekend, European officials said Germany and other rich EU countries are pushing for a new strategy to the debt crisis, which is threatening to take down the eurozone's larger economies.
One proposal on the table is to ask banks and other private institutions that hold Greek bonds to take a far bigger loss on those holdings, slashing Athens' debt. Many observers have said Greece will not manage to pay down its debt even after taking into account the reduction agreed in July.
The new strategy could also see the firepower of the continent's euro440 billion ($590 billion) bailout fund multiplied several times.
It's not clear if these proposals will gain support but the fact that they were being considered spurred stock markets in Europe after a week of disastrous losses.
By early afternoon, France's CAC-40 was up 2.2 percent at 2,871, while the DAX in Germany rose 2.3 percent to 5,318. The FTSE index of leading British shares was 0.9 percent higher at 5,113.02.

Today there won't be a lot of posts

Today there won't be a lot of posts.
Because there are not a lot of Forex news and there are not other financial things.
So, today I had my confirmation (religious) and I madre a great party with relatives and other friends: the food was good, the drink (and the wine!!) were good and we was all happy! By the way, a lot of relatives gave me some bucks as a gift for my confirmation.
How much did I receive?

Bad Week for Global Economy, Good Week for Yen

This week was marked by risk aversion sentiment that hit markets hard and sent stocks, commodities and higher-yielding currencies tumbling down. The Japanese yen thrived in such an environment. There were plenty of negative news that hurt the outlook of Forex traders and caused them to seek safety of the Japanese currency. The concerns about Greece, the downgrade of Italy’s credit rating by Standard and Poor’s, the dovish statement of the Federal Reserve were just some the bad news investors endured. By the end of the week the meeting of the Group of Twenty nations’ leaders reduced pessimism on markets a little, but that was a small relief and the outcome of the meeting isn’t certain. The yen was rising unstoppably for almost the whole week. Only on Friday the rally stalled, ended by the G-20 meeting. The weekly gains were impressive and the Japanese currency can potentially rise further in case the meeting of the world’s biggest economies’ chief wouldn’t provide any solid result (and that’s quite possible). The yen perhaps is the most attractive of the safe currencies as the US Fed constantly debase the dollar, while the Swiss National Bank managed to weaken the franc considerably by pegging it to the euro. The danger is that Japan’s central bank may also intervene to prevent any further strengthening of the yen. For now, though, the yen is a place to which traders come in search of a refuge. USD/JPY opened at 76.93, dropped to 76.09, the lowest rate since August 19, and closed at 76.59 this week. EUR/JPY closed at 103.36 after opening at 105.47 and falling during the week to 102.21, the lowest price since 2001. GBP/JPY slumped from 121.11 to 118.11 during this week and touched the record low of 116.80.

Australian Currency Rebounds, Down Over Week

The Australian dollar pared its two-day decline as the leaders of the Group of Twenty nations pledged to resolve the problems of the global economy and prevent another worldwide financial crisis. The G-20 meeting had positive effect on commodity currencies, including the Aussie (the nickname of the Australian dollar). The confirmation of Australia’s AAA credit rating and the stable outlook issued by Standard and Poor’s also bolstered the currency. The future of the Australian dollar looks dim, despite the optimism brought by the G-20 meeting. The Aussie fell 5.4 percent over this week. The meeting itself hadn’t provided any noticeable result and it isn’t clear what news traders will hear after the weekend. Some analysts think AUD/USD would drop to 0.93 level. All in all, the Aussie’s rebound was more a sign to take profit than a signal for a reverse of the trend. AUD/USD rose from 0.9741 to close at 0.9783 after reaching 0.9668, the lowest level since November. EUR/AUD fell from 1.3818 to the closing price of 1.3796, while intraday it reached 1.3882 — the highest level since August 11. AUD/JPY rebounded from 74.25 to 74.88 and during the trading session the currency pair touched 73.63, the lowest price since August 2010.

CAD Slows Decline, Posts Record Weekly Drop vs. USD

The decline of the Canadian dollar slowed today, but the currency still fell most in almost three year over this week, posting the biggest weekly drop since the global recession. Futures for delivery of crude oil, the biggest export of Canada, in November slipped 0.8 percent to $79.85 per barrel in New York, following the previous drop by 3.7 percent. The Standard & Poor’s 500 Index rose 0.6 percent after earlier it gained 1.1 percent. The loonie, as Canada’s currency is often nicknamed, fell 3 percent this year. The currency lost 5.1 this week in the biggest weekly drop since October 2088. One-month implied volatility of USD/CAD reached 15.6 percent, following the jump to 16 percent yesterday, the biggest level since May 2010. USD/CAD closed at 1.0280, little changed from the opening price of 1.0282. EUR/CAD rose from 1.3845 to close at 1.3873. CAD/JPY advanced from 74.07 to 74.42, following the drop to 73.59.

GBP Advances as G-20 Meeting Improves Outlook for Global Economy

Another currency that benefited from the meeting of the Group of Twenty nations chiefs was the Great Britain pound. The sterling reached the record low versus the yen yesterday. The G-20 leaders said their nations are “committed to a strong and coordinated international response to address the renewed challenges facing the global economy”. The Stoxx Europe 600 Index rose 0.6 percent, while the FTSE 100 Index climbed 0.5 percent. The number of the new mortgages approved for home purchase by the banks of British Bankers’ Association rose to 35,226 in August from 33,734 in July, compared to forecasts of 33,200. GBP/USD climbed from 1.5341 to 1.5445 after reaching the daily high of 1.5486, while GBP/JPY climbed from 116.91 to 118.13 as of 17:40 GMT today.

Euro Rebounds as Stocks Rises on Hopes for G-20 Meeting

The euro rebounded from yesterday’s drop to the eight-month low after global stocks advanced as the leaders of the Group of Twenty nations meet in Washington.
Investors hope the G-20 policy makers will discuss the global economic imbalances and find a way to help the Eurozone in dealing with its debt crisis. The Standard & Poor’s 500 Index rebounded 0.6 percent, following the drop by 0.7 percent. The index is still down 6.6 percent over this week.
EUR/USD rose from 1.3463 to 1.3498 and EUR/JPY advanced from 102.62 to 103.14 today as of 16:38 GMT.

US Dollar Rises Further as Traders Shun Risk

The US dollar continued its upward movement today as yesterday’s statement of the Federal Reserve continues to force Forex traders to shun risk and to seek safety. The yen outperformed the dollar as a safe currency.
The yesterday’s announcement of the Fed put the Forex market in the risk aversion mode and it’s still in place, bolstered by the signs of a slower economic growth in China. The greenback benefits from this situation as a refuge currency. The Dollar Index, tracking the US currency versus the currencies of six nation’s major trading partners, rose 1.4 percent to 78.447 after it touched 78.798, the highest level since February 14. According to the JPMorgan Chase & Co. index, the implied volatility for currencies of the Group of Seven nations climbed to 15.64, the highest level since May 2010.
Commodities, stocks and growth-related currencies, on the other hand, declined as traders ran away from risk. The Standard & Poor’s 500 Index dropped 3.2 percent, declining for the fourth session. The Standard & Poor’s GSCI Index erased gains of this year, tumbling 4.9 percent.
EUR/USD slumped from 1.3571 to 1.3471 today as of 22:22 GMT after touching 1.3382, the lowest level since January. GBP/USD dropped from 1.5498 to 1.5359 and reached earlier 1.5326, the lowest level in a year. USD/JPY fell from 76.44 to 76.26, while it jumped as high as 76.97 intraday.

CAD Falls Below Parity with USD After Fed Statement

Yesterday’s monetary policy statement of the Federal Reserve had a very negative effect on the Canadian dollar. The growth-linked currency posted the biggest decline since May 2010 today, dropping below parity with the US dollar for the first time since January 2011.
The Fed announced yesterday that it’s replacing its short-term debt with longer-maturity securities. The US central bank mentioned about “significant downside risks” to the US economic growth. Commodities and stocks plunged after the announcement and the loonie, being the ”commodity” currency, followed them in decline. The Canadian currency is often called “the loonie” for the image of the aquatic bird on the C$1 coin.
The Standard & Poor’s 500 Index dropped 3.3 percent. Futures for delivery of crude oil in November slumped as much as 6.7 percent to $80.13 per barrel in New York. The Thomson Reuters/Jefferies CRB Index of commodities slid 4.4 percent.
USD/CAD surged from 1.0081 to 1.0276 today as of 20:53 GMT and reached earlier 1.0360, the highest price since October 2010. EUR/CAD climbed from 1.3679 to 1.3834, following the advance to the intraday high of 1.3930, the highest since September 7. CAD/JPY tumbled from 75.79 to 74.08, while earlier it reached the lowest level since February 2009 — 73.56.

Aussie Below Parity with Greenback

The Australian dollar dropped below the parity level with its US counterpart as signs of slower manufacturing in China and falling stocks weakened demand for Australia’s currency. The HSBC preliminary manufacturing Purchasing Managers’ Index dropped to 49.4 in September from 49.9 in August. That’s the lowest level in two months. The MSCI Asia Pacific Index of stocks dropped as much as 4.1 percent, while the Stoxx Europe 600 Index lost 4.2 percent. AUD/USD dropped from 1.0043 to 0.9774 as of 15:50 GMT today after reaching the daily low of 0.9735.

NZ Dollar Drops as Economic Growth Stalls

The New Zealand dollar slumped today after the report showed that the nation’s economic growth almost stalled in the second quarter of this year.
New Zealand’s gross domestic product rose 0.1 percent in the second quarter of 2011. That’s compared to the median forecast of 0.5 percent and the 0.9 percent growth in the first quarter.
Reserve Bank of New Zealand Governor Alan Bollard signaled the central bank doesn’t feel need to raise the interest rates soon:

We do have a picture where we still do expect to have to push rates up. However, we don’t think there is any particular rush to do that.

NZD/USD dropped from 0.8011 to 0.7791 and NZD/JPY tumbled from 61.22 to 59.55 today as of 16:46 GMT.

Dollar Jumps as Fed Expands Bond Purchases

The US dollar jumped after the Federal Reserve announced it’s going to increase purchases of longer-term securities. The resulting surge of demand for safer currencies was beneficial for the dollar. The Federal Open Market Committee left the federal funds rate at 0 to 0.25 percent range. The FOMC wrote in its statement:

The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative.

The expansion of the long-term securities buying program and the prospect for the low interest rates over prolonged time suggests that the Fed has a very negative outlook for the US economy. The dollar, being a ”refuge” currency profited from the risk aversion that followed the FOMC statement. The Dollar Index gained 1 percent to 77.803 as of 17:00 in New York. EUR/USD fell from 1.3571 to 1.3552 as of 4:31 GMT today. GBP/USD dropped from 1.5498 to 1.5460, while USD/JPY rose from 76.44 to 76.75.

Pound Slumps as Confidence Falls, BoE Considers More Stimulus

The Great Britain pound plunged today as the minutes of the central bank’s policy meeting showed the policy makers considered boosting the asset purchasing program, while consumer confidence dropped further. The minutes of the Monetary Policy Committee meeting showed most members of the Committee thought the current monetary policy is appropriate. Yet the minutes also said:

Most of these members thought that it was increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point.

Nationwide Building Society reported the consumer confidence fell by 1 point to 48 in August, the lowest level since May. GBP/USD sank from 1.5735 to 1.5617 today as of 13:10 GMT and earlier reached 1.5590, the lowest price since January 2011. GBP/JPY slid from 120.25 to 119.22, following the drop to 119.07, the lowest rate since January 2009.

RBA Minutes Don’t Speak About Rates Cut, AUD Rises

The Australian dollar strengthened as the minutes of the central bank’s policy meeting showed that the policy makers are content with the current level of the interest rates, reducing probability of a borrowing costs cut. The Reserve Bank of Australia was less dovish than market participants expected, returning appeal of the Australian currency to carry traders, who profit for the relatively high interest rates in Australia compared to the rates in the developed nations. The RBA was moderately optimistic about the country’s economic growth:

Overall, the near-term growth outlook looked somewhat weaker than had been expected earlier, but the medium-term outlook still appeared positive, providing that the world economic outlook did not continue to deteriorate.

The minutes said the central bank’s “members considered that the current setting of monetary policy left the Board well placed to respond to evolving global and domestic economic conditions”. The MSCI World Index of equities gained 1 percent, while the MSCI Asia Pacific Index of shares advanced 0.2 percent. The Aussie, as the Australian currency is often nicknamed, gained on the previous trading session, but weakened somewhat at the start of today’s session. AUD/USD traded at about 1.0261 today as of 2:18 GMT, following the advance from 1.0220 to 1.0274 on the previous trading session. EUR/AUD traded near 1.3364 after it fell yesterday from 1.3386 to 1.3329. AUD/JPY traded at 78.33 after climbing from 78.27 to 78.54 yesterday.

IMF Lowers Growth Forecast for Canada

The Canadian dollar weakened as the International Monetary Fund cut its growth forecast for Canada, making the growth-related nation’s currency less attractive for investors.
The IMF revised its growth estimate to 2.1 percent from the June forecast of 2.9 percent.
The outlook worsened because of the slower global economic growth and the faltering economic recovery of Canada’s major trading partner — the United States of America.
The downgrade of Italy’s credit rating by Standard and Poor’s also had its negative impact.
 Bank of Canada Governor Mark Carney was also concerned about the economy of the US, as he admitted in his speech:

The United States is in the midst of the weakest recovery since the Great Depression, and the bank does not expect that to change at any time soon.

He also spoke about the possibility of higher interest rates:

Given current material headwinds, the policy rate can return to its long-run level after inflation is projected to reach the 2 percent target and output is projected to reach its potential.

USD/CAD traded at 0.9925 today as of 00:19 GMT after rising yesterday from 0.9904 to 0.9924. EUR/CAD traded near 1.3610, following yesterday’s advance from 1.3556 to 1.3595. CAD/JPY traded at about 76.94 after it fell on the previous trading session from 77.26 to 76.97.

Ringgit Falls as Europe Damages Growth Prospects for Asia

The Malaysian ringgit fell today as concerns about the troubles in Europe hurt the outlook for the economic growth in Asia and reduced appeal of the emerging market currencies. The yesterday’s cut of Italy’s credit rating by Standard and Poor’s spurred risk aversion on markets, reducing demand for assets of emerging economies. The Bloomberg-JPMorgan Asia Dollar Index dropped to the lowest level in six months. The Asian Development Bank cut this year’s growth forecast for Asia (with the exception of Japan) to 7.5 percent from the April forecast of 7.8 percent. USD/MYR advanced from 3.1175 to 3.1195 as of 16:23 GMT today, following the rise to 3.1435.

European Problems Have Negative Impact on Canada’s Currency

The Canadian dollar weakened today as the sovereign-debt crisis in Europe saps demand for riskier assets and drive commodity prices down, making the Canadian currency less attractive to Forex trading. The currency advanced against the euro. Crude oil, key export of Canada, fell as much as 2.3 percent to $85.92 per barrel in New York. December futures for copper delivery slid 3.8 percent to $3.7825 per pound on COMEX. The Standard & Poor’s 500 Index dropped 1 percent, while Canada’s benchmark S&P/TSX Composite Index went down 0.8 percent. Earlier market analysts speculated that the loonie behave like a safe refuge from the European crisis. As it turned out, the Canadian currency is still considered “commodity currency” and suffers from problems in Europe and other parts of the world. Yet Canada’s dollar outperformed the shared European currency. USD/CAD rose from 0.9904 to 0.993 as of 5:38 GMT today. EUR/CAD fell from 1.3556 to 1.3526, following the drop to 1.3500. CAD/JPY slipped from 77.26 to 77.00.

Swissie Weakens on Speculation About SNB Intervention

The Swiss franc fell against all but one of most-traded currencies today as Forex traders speculated the Swiss National Bank may adjust the set trading range for the franc in order to support the nation’s exporters. The SNB imposed the ceiling of 1.20 francs per euro on September 6 to support the exporters and protect the nation’s economy from the excessive currency’s strength. The central bank said “it is prepared to buy foreign currency in unlimited quantities”. The bank’s spokesmen Walter Meier decline to comment when asked by reporters about the possibility of changing the trading band for the frank. USD/CHF rose from 0.8818 to 0.8888 and EUR/CHF climbed from 1.2070 to 1.2141 as of 14:13 GMT today

EU Ministers’ Meeting Ends Without Result, Euro Slumps

The finance ministers of the European Union countries discussed the European debt problems, particularly the situation in Greece on the weekend, but the meeting ended without any noticeable result. The euro reacted very negatively to the indecisiveness of the European politicians. Greece should convince the EU leaders and the International Monetary Fund that the nation is eligible for the next round of the bailout. So far, it seems, Greece had little success. Sweden’s Finance Minister Anders Borg stated Greece hasn’t done enough to meet its budget targets. Germany’s Finance Minister Wolfgang Schaeuble, together with Bundesbank President Jens Weidmann, rejected the proposition to use the European Central Bank to boost the EU bailout fund. Schaeuble said:

We don’t think that real economic and social problems can be solved by means of monetary policy. That has never been the European model and it won’t be.

Standard & Poor’s lowered Italy’s credit rating from A+ to A. The agency said in the statement:

Italy’s economic growth prospects are weakening and we expect that Italy’s fragile governing coalition and policy differences within parliament will continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges.

EUR/USD dropped from 1.3686 to 1.3608 as of 5:01 GMT today. EUR/JPY fell from 104.82 to 104.12.

GBP Falls for Fourth Week, Quantitative Easing Expected

The Great Britain pound posted the fourth straight weekly decline against the US dollar and the Japanese yen as the fundamental data signaled that the nation’s economy is stagnating, prompting the speculation the UK central bank will be required to embark on a quantitative easing. There was enough data this week to support the negative outlook for the future of Britain’s economy. The RICS UK Housing Market Survey showed 23 percent more surveyors recorded falling rather than rising prices in August, while the house price index of the Department for Communities and Local Government dropped 1.5 percent in July. The retail sales shrank 0.2 percent in August, according to the government report. The economy continues to feel the inflationary pressure as the inflation increased to 4.5 percent in August from 4.4 percent in the month before. Chancellor of the Exchequer George Osborne and Deputy Prime Minister Nick Clegg spoke about the possibility of increasing the monetary stimulus to support Britain’s economy. Bank of England policy maker Adam Posen said the central bank should purchase as much as £100 billion in securities over the next three months. Analysts think that the BoE may expand their asset purchase program, the policy known as a quantitative easing, as early as November. Currently the program worth £200 billion. GBP/USD fell from 1.5831 to 1.5786 during this week. GBP/JPY slipped from 122.62 to 121.19 and EUR/GBP rose from 0.8579 to 0.8740 over the week

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The New Zealand dollar jumped today after the Reserve Bank of New Zealand maintained its interest rates yesterday and signaled that the good health of the nation’s economy can lead to higher rates in the future. The RBNZ held the Official Cash Rate (OCR) unchanged at 2.5 percent yesterday. The central bank explained that “the New Zealand economy has performed relatively well”. Yet the outlook for the global economy, including the markets of the main nation’s trading partners, “has deteriorated markedly”. The RBNZ voiced concern about the strength of the nation’s currency:

Largely because the New Zealand economy has been doing better than many others, the New Zealand dollar has appreciated since the June Statement. The high level of the New Zealand dollar is having a dampening influence on some parts of the tradable sector and on imported inflation.

The bank predicted that the inflation will stay above the bank’s target range of 1 to 3 percent, but over time the growth of the consumer prices will slow. In the end, the RBNZ signaled that higher interest rates are possible in the future:

If recent global developments have only a mild impact on the New Zealand economy, it is likely that the OCR will need to increase.

NZD/USD climbed from 0.8235 to 0.8307 as of 18:16 GMT today. EUR/NZD fell from 1.6833 to 1.6578, while NZD/JPY jumped from 63.13 to 63.85

Canadian Securities Drive Canadian Dollar to Two-Week Record

The Canadian dollar jumped today, reaching the highest level in two weeks against its US counterpart and the Japanese yen, as foreign investors bought more Canadian securities than was predicted. The purchases of the Canadian securities by foreign investors rose by C$11.8 billion ($12 billion) in July. That’s much better than the median forecast of C$2 billion and a huge improvement over June decline by C$3.4 billion. The MSCI World Index of stocks gained 0.6 percent, advancing for the fourth consecutive session. The loonie (the nickname of the Canadian currency) advanced 1.9 percent over this week against the greenback, showing the biggest gain since July. The Canadian dollar rose even as fears about Europe intensified. Some analysts think that traders began to consider Canada’s currency as a haven from the crisis in the European Union. In such case the loonie can appreciate in times of uncertainty, even being “commodity” currency. USD/CAD slumped from 0.9833 to the closing price of 0.9779, the lowest level since September 2, while during the trading session the currency pair advanced to 0.9859. EUR/CAD tumbled from 1.3647 to 1.3493. CAD/JPY climbed from 77.91 to close at 78.45, while intraday it reached 78.52, the highest price since September 2.

Aussie Rises on Asian Stocks, Heads to Weekly Loss

The Australian dollar advanced today against the US dollar and the euro as the Asian stocks climbed, but the currency is still heading to a weekly decline as concerns about the European economy sapped appeal of higher-yielding currencies. The MSCI Asia Pacific Index of shares climbed 2.1 percent, while the MSCI World Index jumped 2.1 percent yesterday. Investors bet that Reserve Bank of Australia Governor Glenn Stevens will cut the interest rates by at least 75 basis points by December. Currently, the key rate in Australia stands at 4.75 percent. AUD/USD rose from 1.0326 to 1.0362 and EUR/AUD dropped from 1.3432 to 1.3290 as of 14:59 GMT

Rand Falls as Investors Shun South African Bonds

The South African rand dropped today as the optimism about the European banking system quickly waned, spurring investors to draw money out of riskier assets. The global funds sold $1.4 billion of South African bonds on September 13 and 14. That’s the biggest two-day selling since October 2008. Economists are concerned that the selling can lead to higher current account deficit in South Africa as the current account was finance for the most part by the bonds inflows. USD/ZAR rose from 7.376 to 7.3830 today as of 13:20 GMT. Today’s low was 7.3440 and high was 7.431

Mixed Fundamentals Leave Traders Uncertain, USD Fluctuates

The US dollar fluctuated as the mixed fundamental data left Forex traders uncertain will the US economy face recovery or recession. The currency was falling yesterday, but at the start of today’s trading session the dollar rebounded. There was plenty of good news. The consumer price index rose 0.4 percent in August, compared with the median forecast of 0.2 percent. The current account deficit decreased to $118.0 billion (preliminary) in the second quarter of 2011, from $119.6 billion in the first quarter, instead of widening to $122.0 billion as was expected. Industrial production advanced 0.2 percent in August. There were enough bad news, though. The jobless claims increased from 417,000 to 428,000 last week. The Empire State Manufacturing Survey and the Business Outlook Survey of the Federal Reserve Bank of Philadelphia showed that manufacturing conditions in the US worsened in September. EUR/USD fell from 1.3875 to 1.3852 today as of 2:32 GMT after it rose yesterday from 1.3754 to 1.3875. GBP/USD traded near 1.5794, following yesterday’s rally from 1.5770 to 1.5798. USD/JPY traded at 76.78 after opening at 76.68

SNB Maintains Rates at Zero, Franc Strengthens

The Swiss franc rose today even after the Swiss National Bank left the benchmark interest rate at zero at pledged to maintain the peg of the nation’s currency to the euro. The central bank wrote in the monetary policy assessment:

The Swiss National Bank will enforce the minimum exchange rate of CHF 1.20 per euro set on 6 September with the utmost determination. It is prepared to buy foreign currency in unlimited quantities. It continues to aim for a three-month Libor at zero and will maintain total sight deposits at the SNB at significantly above CHF 200 billion.

The SNB set the ceiling to the franc at 1.20 per euro on September 6 and the Swiss currency weakened considerably since. But the Swissie started to rise last week and the monetary policy decision of the SNB hasn’t deterred the currency. The central bank predicted that the economic growth may stall in the second half of this year. The inflation forecast for the third quarter of 2011 was cut from 1.4 percent to 0.4 percent. USD/CHF fell from 0.8758 to 0.8706 as of 23:02 GMT today and touched the low of 0.8653 intraday. CHF/JPY climbed from 87.46 to 88.72 before trading at 88.10.

Rand Rebounds on ECB Efforts

The South African rand strengthened today as the European Central Bank announced it’s planning to lend dollar to the European bank in an effort to support the European banking system and to boost liquidity. The ECB announced it’s going to perform liquidity operations in tandem with the Federal Reserve, the Bank of England, the Japan of Bank and the Swiss National Bank. The effort of the central banks reduced concerns about the Eurozone banking system. Analysts think that the optimism may be short-live, but for now it bolstered riskier assets, including the rand. USD/ZAR fell from 7.3730 to 7.3710 as of 17:10 GMT. Today’s intraday high was 7.460 and the intraday low was 7.3120

Europe Helps Oil & Russian Ruble

The Russian ruble climbed today, rebounding from the lowest level in eight months against the US dollar, as crude oil gained and the European Central Bank announced its plans to boost liquidity, bolstering risk appetite. Crude oil jumped 1.4 percent to $90.02 per barrel in New York, rebounding for the previous drop to $88.01 per barrel. Crude is the major source of Russia’s export revenue. Futures on Brent crude oil rose 2.4 percent to $115.06 per barrel in London. Traders trimmed their bets that the ruble will weaken further. USD/RUB fell from 30.4465 to 30.4160 today as of 17:39 GMT. The daily low was 30.2345 and the daily high was 30.5719.

Le Borse europee volano, Milano +4%, l'euro schizza a 1,39

Wall Street apre in rialzo con il Dow Jones a +0,74%, l'S&P 500 a +0,8% e il Nasdaq a +.0,9%. Sui mercati finanziari c'è un clima di euforia dopo l'annuncio di un intervento concertato delle Banche centrali per fornire liquidità. Le Borse europee dei Paesi al momento più "interessati" all'intervento corrono. Milano e Madrid tirano la volata con indici in rialzo 3,5%. Euforia tra le banche di tutta Europa: a Piazza Affari Unicredit (+10,3% l'ultima variazione), Intesa Sanpaolo (+10,5%) e Banca Mps (+6%) sono entrate in asta di volatilità. L'euro schizza a 1,39 contro il dollaro, lo spread BTp-Bund scende a 357 punti. I mercati beneficiano anche del successo (forte domanda) per i titoli collocati oggi dalla Spagna.

Australian Dollar Drops on Interest Rates Outlook

The Australian dollar fell today on the speculation the revised method of the inflation calculation will cause the central bank to refrain from raising the interest rates. The Australian Bureau of Statistics changed its method of calculating the inflation of the consumer prices. The new method may show the consumer prices grew last quarter less than was previously estimated. Joaquin Vespignani, economist at Barclays, predicted that the Reserve Bank of Australia will have to reduce its inflation forecast and said:

This implies the RBA will have more reason to keep monetary policy unchanged for the rest of this year.

According to the Credit Suisse Index, investors are betting the RBA will cut its key interest rate by 155 basis points in the next 12 months, compared to the forecast of 140 basis points yesterday. The relatively high interest rates attracts carry traders to Australia, bolstering the nation’s currency. The prospect for an interest rate decrease reduces potential profit from such trades and, as a result, appeal of the Aussie. AUD/USD dropped from 1.0284 to 1.0239 today as of 2:18 GMT. EUR/AUD rose from 1.3368 to 1.3395. AUD/JPY went down from 78.80 to 78.54.

Canadian Dollar Within Cent of Parity with Greenback

The Canadian dollar fell today, trading within one cent of parity with the US dollar, as copper and crude oil prices declined on the signs the global economic recovery is faltering. Crude oil, the key Canadian export fell to $88.54 per barrel in New York, while copper dropped 1.6 percent to $8,630 per metric ton. Some other raw materials, including lead, tin and zinc, also declined. The retail sales in the US, the biggest trading partner of Canada, unexpectedly stalled last month, posting no change in August instead of the expected increase by 0.2 percent. The losses of the loonie (the nickname of the Canadian currency) may be trimmed as German Chancellor Angela Merkel and French President Nicolas Sarkozy stated after speaking with Greek Prime Minister George Papandreou by phone they’re convinced Greece will remain in the Eurozone. But for now the currency continue its downfall as prospects of slower growth in Asia added to concerns about the economies of the US and Europe. USD/CAD rose from 0.9891 to 0.9935 today as of 4:17 GMT. EUR/CAD advanced from 1.3604 to 1.3634. CAD/JPY fell from 77.41 to 77.12.

Yen Gains as China Imposes Conditions on Help to Europe

The Japanese yen advanced today against most major currencies as China set conditions for their aid to the indebted nations of the European Union. China’s Premier Minister Wen Jiabao said developed nations should cut their budget deficits and concentrate on job creation, instead of hoping China can bailout the whole world economy. Wen stated: Countries must first put their own houses in order. He added the Asian nation can offer “a helping hand” to the Western nations, but Europe and the US should open their market for investments. The yen surged on the news, but weakened afterwards and now trades below the opening level against the euro. USD/JPY fell from 76.92 to 76.80 today as of 10:57 GMT. EUR/JPY rose to 105.43, above the opening level of 105.23, after it earlier slipped to 104.54

Stocks & Crude Oil Add Strength to Loonie

The Canadian dollar rose today as stocks advanced and crude oil gained, reducing risk aversion on Forex market and improving prospects for growth-related currencies. The pessimistic outlook on markets receded somewhat. Most economists believe that it’s not for long and very soon riskier assets will again feel the weight of the pessimism, but for now traders again inclined to risk. Some analysts think that the current strength of the loonie (the nickname of the Canadian currency) is more a result of a weaker greenback than of good fundamentals. The Thomson Reuters/Jefferies CRB Index rose 0.5 percent, posting the first gain in three days. October futures for crude oil delivery advanced 2.6 percent to $90.52 per barrel in New York, the highest price since August 4, before trading at $89.79. Raw materials (including crude oil) are the source of about a half of Canada’s export revenue. USD/CAD traded at about 0.9850 as of 1:18 GMT today after it slumped from 0.9927 to 0.9857. EUR/CAD traded near 1.3488 after falling from 1.3578 to 1.3482. CAD/JPY traded at 78.02, following the advance from 77.71 to 77.98 on the previous trading session

NZD Follows Food Prices in Decline

The New Zealand dollar fluctuated against the US dollar and dropped against the Japanese yen after the report showed that food prices in New Zealand fell last month. The Food Price Index declined 1.3 percent in August. The decline followed the 2.0 percent increase in the previous month. Year-on-year, the prices rose 6.6 percent. Currently, the kiwi, as the New Zealand currency is often nicknamed, strives to regain its strength. NZD/USD traded near its opening level of 0.8230 as of 12:21 GMT today, following the drop to 0.8179. NZD/JPY rebounded to 63.31 after falling from 63.50 to 62.94

Optimism About Europe Evaporates, Euro Weakens

The optimism, caused by the speculation China is going to buy Italy’s debt, quickly wane and the euro fell after Italy auctioned its debt. The optimism, caused by the speculation China is planning to buy the Italian debt, was defeated by the skepticism that China alone won’t be able to prevent the spreading of the debt crisis to the European nation. The skepticism strengthened as the borrowing costs increased. Italy sold €3.9 billion of the new benchmark five-year bonds with the average yield of 5.6 percent. Last time the bonds with the same maturity was sold the yield was 4.93 percent. EUR/USD fell from 1.3679 to 1.3659 as of 11:52 GMT today, while touching the low of 1.3557. EUR/JPY dropped from 105.09 to 105.13 after it reached the daily low of 104.39.

CAD Rebounds from Parity with USD

The Canadian dollar rebounded as the speculation that China may help Europe to deal with the debt crisis eased concerns on markets and boosted stocks. According to the announcement of the Italian government, Italy discussed potential investment in the nation’s economy with China. This announcement eased concerns that the crisis would spread from Greece to Italy and Spain. The Standard & Poor’s 500 Index closed higher 0.7 percent over the day, erasing previous 1.6 percent drop. The MSCI World Index of stocks fell 1.1 percent, following the previous decline by 2.4 percent. The stock market affect the Canadian currency as rising stocks signal about economic growth and growth help the loonie. USD/CAD traded at 0.9918 as of 2:07 GMT today after it fell from 0.9972 to 0.9925, while intraday it reached the high of 1.0025. EUR/CAD traded near 1.3564 after falling from 1.3578 to 1.3527 today. CAD/JPY traded at about 77.71 after yesterday’s rise from 77.61 to 77.72.

I'll take a few days of holidays

Hi guys, I would like to tell you one thing: I'll be back ;D I'll be back on monday probably, but I'll post news on the day after. So enjoy this weekend!! Bye bye

South Korea Keeps Rates Unchanged, Won Down

The South Korean won fell today after the nation’s central bank decided to keep its main interest rates unchanged, signaling that the economic recovery is faltering. The Bank of Korea maintained its key Base Rate unchanged at 3.25 percent. The bank said in the statement:

Based on currently available information, the Committee considers that, while emerging market economies have shown favorable performances, the recoveries in major advanced economies including the US have exhibited signs of further weakening. Going forward, the Committee forecasts that the global economy will keep up its recovery albeit at a moderate pace; nevertheless, the Committee judges that the possibility has increased of such factors as the economic sluggishness in major countries, the sovereign debt problems in Europe, and international financial market unrest posing downside risks to the global economy.

USD/KRW climbed from 1,071.80 to 1,075.25 today as of 11:06 GMT. Earlier, it dropped to 1,068.60

Euro Advances as Stocks Rally. Future Still Looks Uncertain

The euro gained against the US dollar and the Japanese yen as equities advanced and on the speculation the European Central Bank won’t reduce interest rates, but gains of the shared European currency were limited because of concerns about the financial crisis in the region. Market participants speculate that ECB President Jean-Claude Trichet would refuse to cut borrowing costs, increasing supply of cash to bank of the Eurozone instead. Many economists are concerned about such possibility as they think that the current state of the European economy can’t allow the current level of lending rates and the rates should be decreased. Investors were relieved somewhat as European Union policy makers are delaying their plan to incur losses on holders of European shares, but the plan was merely postponed, not rejected. Stocks were rallying despite all the concerns, supporting the euro. The Stoxx 600 gained as much as 3.1 percent to 228.84. The UK’s FTSE 100 rose 3.1 percent, showing the biggest gain since May 2010, while Germany’s DAX rose 4.1 percent and France’s CAC 40 climbed 3.6 percent. EUR/USD jumped from 1.3993 to 1.4096 yesterday, but retreated today and traded at about 1.4071 as of 00:32 GMT. EUR/JPY on the previous trading session rose from 108.67 to 108.88 and remained near this level today.

Australian Dollar Falls as Unemployment Grows

The Australian dollar fell today after the employment data came out much worse than was expected, prompting the speculation that the central bank will cut its interest rates. The number of employed persons in Australia decreased by 9,700 in August, being nothing near the median estimate of an advance by 10,700. July decline was revised from only 100 to 4,100. The poor employment resulted in the unexpected increase of unemployment rate to 5.3 percent. The bad data spurred the speculation the Reserve Bank of Australia will be forced to decrease its key cash rate that it has kept unchanged on September 6 for the ninth consecutive time. AUD/USD traded near 1.0632 today as of 9:57 GMT after falling from 1.0659 to 1.0571. AUD/JPY traded at about 82.22, rebounding after it dropped from 82.34 to 81.78

CAD Near Parity with USD

The Canadian dollar traded within a cent from parity with the US currency as decline of stocks and signs of global economic slowdown spurred speculation that the nation’s central bank will decrease its interest rates. The Bank of Canada will announce its decision about borrowing costs tomorrow. Investors’ viewpoints are split about evenly among those who believe that the bank will keep the key Overnight Rate unchanged at 1 percent and those who think that the current unfavorable economic conditions will force the bank to cut its target lending rate. The Standard & Poor’s 500 Index slumped as much as 2.2 percent. Market pessimism was tempered by the good new from the US, Canada’s biggest trading partner. The Services Purchasing Managers’ Index of Institute for Supply Management advanced from 52.7 to 53.3 in August, compared to the median forecast of 51.2. USD/CAD traded near 0.9910 as of 15:31 GMT today after jumping from 0.9904 to 0.9963. EUR/CAD climbed from 1.3960 to as high as 1.4100 before retreating to 1.3871. CAD/JPY rose from 77.50 to 78.05

Pound Falls as Retail Sales Decline. More Stimulus Ahead?

The Great Britain pound fell today, dropping to the lowest level in almost two months against the US dollar, after the report showed that UK retail sales declined in August, spurring speculation that Britain’s central bank will be required to stimulate the nation’s economy. British Retail Consortium reported today that UK retail sales values were 0.6 percent lower on a like-for-like basis from August 2010. The previous reading showed a 0.6 percent growth. Helen Dickinson, Head of Retail at KPMG, commented on the negative data: The weaker sectors are really struggling. For non-food, the picture is disheartening with one of the worst monthly results of the year thus far — toiletries, cosmetics, and menswear the only sectors showing growth. This week’s unfavorable macroeconomic reports made traders speculate that the Bank of England will announce a quantitative on its next meeting. BoE policy maker will meet on September 8 to discuss monetary policy and will announce its plan for asset purchases. The pound declined 6 percent from a year ago and was one of the worst-performing major currencies, second only to the dollar that dropped 9.7 percent. GBP/USD slumped from 1.6116 to 1.5936 as of 16:58 GMT today and touched 1.5920, the lowest price since July 13. GBP/JPY traded at about 123.59 after jumping from 123.87 to 125.05.

EUR/USD: Hold Short as Selling Accelerates

We initially sold EURUSD at 1.4328. The pair has now produced an Evening Star bearish candlestick pattern below the recent range top at 1.4535, the July 27 high and our stop-loss threshold (to be activated on a daily close above the level), and proceeded to break lower through rising trend line support. We will continue holding short, aiming for a soft target at 1.3976.

Euro Sinks After Merkel’s Party Loses Election

The euro plunged today, falling for the fifth consecutive session against the US dollar and the Japanese yen, after Germany’s ruling party lost election. German Chancellor Angela Merkel’s Christian Democratic Union lost election in all six German states. The results of the elections ignited worries that now Germany will be even more opposed to paying bailouts with money of its taxpayers. The Stoxx Europe 600 Index of shares lost 2.8 percent, falling for the second day. EUR/USD slipped from 1.4161 to 1.4121 and EUR/JPY fell from 108.92 to 108.56 as of 12:50 GMT today.

US Manufacturing Expands, Dollar Profits

The US dollar advanced today as the unexpected growth of US manufacturing spurred speculation the Federal Reserve won’t be required to stimulate the economy, debasing the US currency. The Institute for Supply Management Purchasing Managers’ Index was at 56.6 in August, little changed from July figure of 56.9. The index was expected to go down to 48.7. A figure below 50.0 indicates decline and above that value shows expansion. The positive data suggest that, perhaps, the economy on the US isn’t in a bad enough state to warrant new round of quantitative easing. Unemployment claims edged down from 421,000 to 409,000 last week, reducing concerns about employment to some degree. Other major reason for concerns of the Fed, the housing market, performed markedly worse as constructions spending hasn’t increased 0.2 percent, as was promised by forecasts, but slumped 1.3 percent. EUR/USD opened at 1.4374 and dropped to 1.4226 before trading near 1.4259 as of 22:57 GMT today. GBP/USD fell from 1.6249 to 1.6183, while reached the intraday low of 1.6130 earlier. USD/JPY advanced from 76.64 to 76.86 and earlier touched the high of 77.24.

Swedish Krona Falls as Manufacturing Declines

The Swedish krona fell as the report showed that manufacturing in Sweden contracted last month, reinforcing outlook that the nation’s central bank would cut interest rates. The Swedbank manufacturing index fell to 48.7 in August from 50.1 in July, while the average forecast was 49.8. A reading below 50.0 indicates decline. That was the first decline in two years. The unfavorable report supported the view that the Swedish economy is just too week to bear the current level of borrowing costs, let alone to survive with additional tightening. According to the Credit Suisse index the central bank will cut interest rates over the next 12 months. USD/SEK jumped from 6.3377 to 6.4127. The currency pair has recovered somewhat today, trading at about 6.3936 as of 1:45 GMT.

Australian Retails Sales Go Up, Aussie Follows

The Australian dollar advanced today versus the euro and the Japanese yen after the report showed retail sales grew in July more than predicted. Australian retail sales rose 0.5 percent in July, while growth by 0.3 percent was predicted. Retail sales fell 0.1 percent in June. The MSCI Asia Pacific Index gained 0.7 percent and the Standard & Poor’s 500 Index advanced 0.5 percent. EUR/AUD slipped from 1.3427 to 1.3349, while AUD/JPY climbed from 82.04 to 82.37 today as of 10:54 GMT.

Franc Rallies as SNB Doesn’t Intervene

The Swiss franc gained today for the second day, snapping yesterday its three-day downfall versus the US dollar and the euro, as the Swiss National Bank hasn’t announced new measures to curb franc’s strength. Previously, the Swiss currency was dragged down by the speculation the central bank would peg the franc to performance of the euro. Market participants expected the SNB would release some information about euro-peg or, perhaps, other steps for draining strength of the Swiss currency. There was none, prompting traders speculate that the Bank is content with the current rate of the franc in relation to the euro. USD/CHF fell from 0.8059 to 0.8001 and EUR/CHF dropped from 1.1585 to 1.1427 as of 10:38 GMT today.