Waiting On The ECB

Daily Forex Fundamentals | Written by AC-Markets | Sep 03 09 08:36 GMT |

Market Brief The Greenback fell yesterday despite stocks continued falling for the fourth consecutive day on concerns that economy still under big pressure, as reports from U.S. on job losses and factory orders came worse than expected. The Yen was higher against most major currencies closing almost on a seven weeks high against the dollar and euro, as Nikkei Index dropped for a second day, boosting demand for the safe haven currency, and could be also supported by indication the new government would not worry on appreciating yen, and would not intervene in currency markets. The Aussie gained against the Dollar and Yen, supported by GDP report, which showed economic growth for Q2 came higher than expected at 0.6% QoQ from 0.4% in Q1. Canadian Dollar still weak as crude oil prices remained below $70 per barrel. The Pound was able to find support at 1.61 levels, to rally more than 150 pips closing at 1.6264. Australia released their trade balance report today, coming at -1.56 B as exports decreased and imports increased. Exports declined by 1% whereas imports increased by 4% with oil imports jumping 21%. Overall the Asian session is seeing little movements in the market, with most major currencies just trading close to their opening, while focus turns today into European Retail Sales and ECB minutes. ECB will keep its refinancing rate unchanged at 1%, but focus will be on the press conference 45 min after the decision. Investors are mainly looking into two aspects from the meeting. First, would there be any signal of increasing the interest rate in the near term, and second whether GDP forecast had been upgraded from June. I don't believe the ECB will even signal any increase in rates for 2009 and I believe it will remain at 1% at least till Q1 2010. Regarding the GDP forecast could be revised upward, while inflation outlook may remain subdue for some time. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.