British Pound Grows on April PPI Report

The Great Britain pound rose today against the U.S. dollar and the euro, partially recovering its losses from the last week, as the record high PPI growth added confidence that the Bank of England will not lower interest rates next time.

The prices for the British long-term securities declined today, while their yields increased, showing a higher inflation pressure for the economy of the United Kingdom.

The country’s producer price index increased 7.5 percent in a year-to-year comparison in April — the highest annual growth in a 24-year period, since the PPI record began. April to March gain in PPI was at 1.4 percent — also a record monthly growth rate.

EUR/GBP had a first significant drop this day since May the 1st as the currency pair declined from Friday’s close level 0.7923 to 0.7889 as of 11:51 GMT. GBP/USD had a first large growth since 30th of April today, it went up from 1.9506 to 1.9578 as of 11:51 GMT.

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Yen Weakening against Euro, Pound

The Japanese yen continued its fall against the high yielding currencies today, especially against a very strong bullish euro, and reached 3-month minimum value against it, as the stock market rallies spurred carry trade popularity on Forex.

The yen dropped also against the New Zealand and Australian dollars because of their high interest rate, which makes them the perfect counterparts for the so called carry trade versus the Japanese yen.

In carry trade Forex traders sell low interest currencies for high interest one in order to gain on the overnight rate difference. Carry trade has been becoming less popular since the Autumn 2007, when the subprime lending crisis in U.S. increased the global financial volatility. But these days, with the global stock markets looking more and more stable, carry trade may experience its second birth in this decade.

EUR/JPY reached 162.82 level today — the highest rate since the 2nd of January. GBP/JPY didn’t break any significant records today, but this currency pair reached its weekly high level at 201.46.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

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Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.

Chinese Yuan Closes Below 7 per Dollar

The Chinese yuan ended the domestic OTC trading session today below 7 yuan per U.S. dollar level — for the first time since the end of the peg to dollar in 2005.

After USD/CNY closed at 7.0016 yesterday, the exchange rate of the Chinese currency went up today and traded in the 6.9930-6.9907 boundaries on the OTC Forex market.

Since November 2007, China’s government is working to appreciate the yuan to keep down the rising national inflation.

The People’s Bank of China set the central parity rate for the yuan at 6.9920 today against 7.0025 yesterday.

That means a major break through the important psychological barrier for the dollar-yuan rate, which can open a way for the further possible depreciation of the U.S. dollar versus the Chinese currency. And the lower USD/CNY rate is very important not only to the U.S. exporting companies, but for the general health of the U.S. economy that can benefit from the lower international trade balance deficit.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

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Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.

Is the Dollar’s Recovery Here to Stay?

The US dollar hit a record low against the Euro this morning and came within striking distance of 100 against the Japanese Yen. However the new round of selling did not last long as the dollar quickly recovered its losses. US economic data was weak with the trade deficit increasing more than expected. Although the recent weakness of the US dollar led many people to believe that the trade deficit would narrow, we warned in yesterday’s Daily Fundamentals that the deficit could expand because of the deterioration in manufacturing ISM. Jobless claims improved but the Easter Calendar effect makes the number distorting, particularly since continuing claims remain at very high levels. Even US Treasury Secretary Paulson admitted that the economy has turned down sharply. Unfortunately there is no concrete explanation for the bounce in the US dollar other than the fact that stocks are higher, commodity prices are lower and currency traders do not seem to be satisfied with Trichet’s comments. Whether this rally will continue remains to be seen. Fundamentally, the US dollar should weaken further because retail sales, which are due on Monday, should contract for another month. However fundamentals do not seem to be the driving force behind the US dollar today as technicals and sentiment dominate. The triple top in the EUR/USD is looking particularly ugly and reminds us of the currency pair’s trading pattern between November and February, when it took the fourth test of 1.4968, the prior and 3 months before the currency pair managed to break 1.50. Therefore even though we still believe that the EUR/USD will break 1.60, a further correction before that happens would not be out of the ordinary. In fact, we expect import prices and the University of Michigan consumer confidence reports to be dollar positive because of the improvements in the weekly ABC consumer confidence reports and the sharp rise in commodity prices. As indicated by the leading story in today’s Wall Street Journal, inflation around the world is set to reach a decade high.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.

Market Today With ForexGen

After gapping down more than 100 points on Sunday night following the change in the G7 Statement the EURUSD erased most of its losses on the back of some bargain hunting and better than expected EZ Industrial Production data. The battle in the currency market continues to revolve around two key themes- decoupling and spillover. Euro bulls have consistently claimed that the EZ economy has separated itself from the troubles in US allowing the ECB to remain staunchly hawkish. So far they have been completely correct and the unit has benefited greatly from its interest rate advantage over the greenback which continues to expand.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

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ForexGen Announced Today That ( Dollar dropped lower after weaker than expected US jobs data)

Euro and Yen posted gains against the Dollar after the government said US employers cut 80k jobs in March, more than expected and the biggest monthly fall in five years. However, traders said the data did not come as a big surprise to a market that has long expected the Federal Reserve to cut interest rates again late this month.
Analysts said some traders were looking to trim bets in favor of the Euro ahead of a European Central Bank meeting on Thursday. The ECB is expected to hold interest rates at 4%, but a string of recent weak Euro zone data has traders waiting to see if President Jean-Claude Trichet softens his stance on inflation, which could signal a rate cut later this year. Steady euro zone rates at a time when the Fed has slashed US benchmark rates from 5.25% to 2.25% in recent months have boosted the Euro's appeal over the Dollar.
The deteriorating employment situation in the United States also remains a concern, particularly a jobless rate that the government's data on Friday showed jumped to 5.1% from 4.8%.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.

ForexGen In European Session

ForexGen were actively in European session as a few discrete events had traders scrambling.
First were the comments from BoE Governor Meryn King during MPC testimony to Treasury Select Committee who stated "[...] this is not an economy that has completely grounded to a halt but we are looking ahead and expect some slowing…." GbpUsd sold off as the market hurried to price in easing as early as April.

Second was the German IFO which caught the market completely off guard. Most participants had risk slanted to the downside but that was not to be. German IFO Current Assessment printed up to 111.5 vs. 109.5 exp while hit Expectations 98.4 vs. 97.8 exp. With the economic engine of the Euro zone still humming along in light of an elevated Eur and slowing global demand this was clearly a positive. An economy which is declining at a moderate pace will give the ECB greater maneuverability with interest rates and keep supporting the Eur.

And the final event was US durable Goods Order Feb which fell -1.7% vs. 0.7% exp on the back of weak Jan figure. This is just further indication that when an economy drops into recession things unwind very quickly. Watch for further Usd weakness.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.