Market listens as Big Ben Chimes

Forex markets remained pretty subdued last week and frankly seem to offer little going forward at this stage.
The early part of the week was dominated by a slow slide in Equities but this was reversed sharply following comments by Federal Reserve Chairman Ben Bernanke.
Despite conceding recovery will only be at a modest pace he stated the Fed would do all it can to ensure the recovery and stands ready for further easing . These comments more than offset bad economic data and helped the Dow Jones recover almost 2%.
The biggest moves were provided by the USD/Yen which bounced from a 15 year low of 83.60 once again on speculation that there will be intervention any time soon. Prime Minister Kan continued to talk the talk on intervention and bold measures but it remains to be seen if any action is forthcoming.
I continue to believe the equity markets will hold the key to forex moves and with the jury still out on double dips we may need to see how the next months economic data pans out.

Narrowly mixed forex markets still await real trend

Markets remained pretty mixed last week. The US dollar once again benefitted from falls in equities later in the week as employment data spooked the markets once again. In Europe slightly dovish comments from ECB member Weber helped the Euro slip a wee bit. Elsewhere the Swiss Franc remained flavor of the week on the back of record trade surplus figures and continued belief the Swiss National Bank is on vacation at the moment as far as intervention goes. Sterling continued to hold up against the Euro and the Ausie dollar suffered as markets come to terms with the latest hung parliament country.
All in all though I would suggest that unless you are great trading narrow ranges that you keep your powder dry for a real trend move. The equity markets continue to edge lower but without too much conviction. Opinion on economic recovery double dips etc remains very divided and it may be some time before we see some clear trends for shares.
On a personal note thanks BHP. Mergers and Acquisitions seem to be on the up certainly size wise so some people believe that its a good opportunity to go shopping for cheap companies.
 

Dollar recovers sharply on weaker equity markets as Euro suffers most

It is business as usual in forex markets as an about turn in equity markets sparked a well earned rebound for the US Currency. The Dow fell over 3 % during the week as a combination of Fed announcements in Quantative Easing and economic outlook set the ball rolling together with a batch of weak data. Certainly equity markets seem to have had a reality check and technically look vulnerable at this point.
The Euro suffered most not just because of its long rally but also the release of 2nd Quarter GDP figures. These figures at plus 1 % overall were overshadowed by the individual breakdown. Germany had an amazing +2.2 % quarterlery growth compared to predictions of around 1.3 % while at the other end of the scale Greece -1.5% ,Spain +0.2 % and Italy 0.4% demonstrated the fragility of their economies.
This gap is something that will add to tensions within the Euro group and frankly what we know will continue.This could indeed be the prelude to a period of larger diversification of growth as austerity measures continue to dog the weaker countries. Last week I mentioned the bogey man waiting to appear in Europe and this could be the beginning. Another bout of credit market nerves could again be brewing and should be watched carefully.
Elsewhere the Yen hit a new 15 year low against the dollar and despite a late bounce on intervention fears the Japanese look to be in between a rock and a hard place as far as their currency is concerned.Intervention if it does occur will need to be concerted and this looks unlikely at this time.Concern amongst Japanese companies will possible exert more pressure on the Government and Bank of Japan.
in the UK improved 2nd quarter growth of 1.1% was considered to be influence by technical reasons and the Bank of England´s quarterly report downgraded growth and inflation targets.

Going forward I think we can expect more of the same with currency markets continuing in possibly well defined ranges as equity markets do likewise. Economic recovery remains pretty anemic in many areas with differences no better demonstrated than the Euro zone.

Aint no cure as summertime blues continue for US Dollar

The US dollar continued its poor run.Indeed the US Dollar index posted its 9th straight weekly decline to a low just above the physiological 80 level.
All in all though there was nothing too exciting for the forex markets to get its teeth into. Equity markets which benefited from positive data early in the week shrugged off Fridays Non Farm payroll figures which were worse than expected at -131 thousand and also saw last months revised to -221 from 125 thousand.
The Euro also benefited from ECB comments pointing to better than expected growth levels in the Euro zone which added to the anti dollar sentiment.
Difficult to get too excited about some volatility next week and if equity markets continue to edge higher then the dollar may continue to suffer.However, I continue to believe that out there somewhere lives another Euro bogey man waiting to give the markets some jitters. Maybe when the Greeks add up the summer takings it kicks off again.