Analytics, News, and Forecasts for CFD Markets: currency news — 07-11-2012.

The dollar index rose to two-month high, as investors flocked to safer assets on concern that U.S. President Barack Obama will struggle to persuade Congress to avoid the so-called "financial cliff" after his historic re-election.

The euro fell to its weakest level in the last two months against the dollar after European Central Bank President Mario Draghi said that the crisis in the region affects Germany.

The U.S. currency weakened against the yen since Obama defeated Republican rival Mitt Romney, who is opposed to the current policy of the Federal Reserve System, which is based on stimulating the economy.

The euro fell against most major currencies, except the Norwegian krone against the fact that Greek lawmakers were ready to vote on the austerity measures required to receive international aid.

Also today, the European Commission said that the euro zone economy is likely to grow by only 0.1% in 2013, compared to the vulnerable forecast at 1% increase. The committee lowered its forecast for growth in Germany to 0.8% from 1.7%.

Switzerland franc rose against the euro and fell against the dollar after the central bank said the country's foreign exchange reserves declined last month, which was the first time since February. Also published data showed that consumer price index rose in October, much less than expected.

Canadian dollar handed position, won after the election, and decreased at the beginning of the U.S. session, as attention shifted from relief in respect of soft policy of the Federal Reserve to concerns about "financial cliff" and the debt ceiling.

On the one hand, an Obama victory means continuing to stimulate the economy and the dollar's decline. On the other hand, the balance of power in the Senate and House of Representatives, which is dominated by representatives of different parties, indicates that the market expects the uncertainty before the talks about "fiscal cliff" and the debt ceiling.

Later on Wednesday, the Greek Parliament will vote on a package of austerity measures and structural reforms, without which Greece is experiencing financial difficulties, it may be unable to access aid funds. Uncertainty about this vote on Wednesday is likely to increase the overall uncertainty in the market.

At the moment the pair USD / CAD rose to the level of 0.9950

Pair is testing the key level of Y80.00 for the second time in a day. Later today, Japan will release the set of indicators, including orders for machinery, foreign investment and trade balance.

Currently, USD / JPY traded at around Y79.92. The nearest support level - Y79.77 (Nov 1 low).

- See growth downturn lasting until year end

- Europe exports to benefit from stronger global growth

- Underlying domestic price pressures subdued

- Greece recovery seen in 2014

- See Portugal recession ending mid-2013

- Fiscal consolidation, reforms essential

- Need to boost public, private investment

- Lower pace of consolidation in Italy a 'concern'

- We focus on structural deficits not headline numbers

EUR/USD $1.2700, $1.2800, $1.2850, $1.2875

USD/JPY Y79.75, Y79.95, Y80.00, Y80.50

EUR/JPY Y104.00

GBP/USD  $1.5915, $1.6025

EUR/GBP stg0.8035

AUD/USD $1.0370, $1.0375, $1.0400, $1.0425, $1.0450

 08:00 Switzerland Foreign Currency Reserves October 429.3 432.0 424.4

08:15 Switzerland Consumer Price Index (MoM) October +0.3% +0.3% +0.1%
08:15 Switzerland Consumer Price Index (YoY) October -0.4% -0.2% -0.2%
10:00 Eurozone Retail Sales (MoM) September +0.2% 0.0% -0.2%
10:00 Eurozone Retail Sales (YoY) September -0.9% -0.8% -0.8%
11:00 Germany Industrial Production s.a. (MoM) September -0.5% -0.4% -1.8%
11:00 Germany Industrial Production (YoY) September -1.4% +0.2% -1.2%
12:10 Eurozone ECB President Mario Draghi Speaks -
 

The dollar fell against the yen on speculation Barack Obama’s re-election as president will boost chances the U.S. will maintain monetary stimulus policies that tend to weaken the greenback.

The U.S. currency was mixed versus its major peers as Obama defeated Republican challenger Mitt Romney, who disagreed with current Federal Reserve policy. Obama now faces the so-called fiscal cliff, $600 billion in tax increases and spending cuts set to be implemented in 2013.

The euro erased gains as European Central Bank President Mario Draghi said the Europe’s crisis is affecting Germany.

Gains in the euro were tempered as Greek lawmakers prepared to vote on austerity measures needed to keep its international bailout on track.

The 238 pages of additional austerity plans, ranging from raising the retirement age to eliminating holiday payments for pensioners, will be debated by the Greek parliament today with a roll-call vote expected. Approval is the first of the parliamentary votes required by Nov. 12 to unlock a 31 billion- euro portion of international aid.

EUR/USD

Offers    $1.2880 

Bids  $1.2805/00, $1.2760/50, $1.2710/00

- Econ,fin situation in the EMU remains challenging

- EMU growth expected to remain weak in near term

- EMU unemployment is deplorably high

- Fiscal consolidation progressing well in most countries

- ECB OMT clear signal to mkt: EMU break-up fear baseless

- Unlimited omt does not mean uncontrolled

- OMT conditionality is important

- Fin union dsn't have to mean pooling deposit guarantees

Germany allotted E3.29bln of its 5-year benchmark 0.50% Oct 2017 Bobl issue Wednesday at an average yield 0.42% (0.53%) and bid-to-cover ratio of 1.5 times (2.2).

The dollar fell against most of the 16 most traded currencies against the fact that voters in the United States must now decide who will lead the world's largest economy within the next four years.

The dollar weakened on speculation President Barack Obama’s re-election victory will boost chances the U.S. will continue monetary stimulus policies that tend to weaken the currency. The dollar reversed earlier gains versus the euro after Obama defeated Republican challenger Mitt Romney, according to television network projections that show the president winning the electoral votes needed for re-election. Romney had said he disagrees with the Federal Reserve measures to stimulate the economy and would replace Chairman Ben S. Bernanke at the end of his term in January 2014.

Demand for the euro was limited as Greece headed for a vote on austerity measures needed to keep its bailout on track. In Greece, the 238 pages of austerity measures, ranging from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners, will be debated in the 300-seat Parliament from 10 a.m. Athens time with a roll- call vote expected after 8 p.m. today. Approval of the legislation is the first of the parliamentary votes required by Nov. 12 to unlock a 31 billion-euro ($40 billion) portion of international aid.

German industrial production probably fell for a second month in September, decreasing 0.7 percent from the prior month, according to the median estimate of economists in a Bloomberg News survey. A separate report may show euro-area retail sales slid 0.1 percent in September, according to another poll.

(pare/closed(00:00 GMT +02:00)/change, %)

EUR/USD $1,2813 +0,13%

GBP/USD $1,5995 +0,11%

USD/CHF Chf0,9427 -0,07%

USD/JPY Y80,35 +0,09%

EUR/JPY Y102,95 +0,22%

GBP/JPY Y128,51 +0,19%

AUD/USD $1,0434 +0,67%

NZD/USD $0,8269 +0,23%

USD/CAD C$0,9919 -0,43%

08:00 Switzerland Foreign Currency Reserves October 429.3 432.0

08:15 Switzerland Consumer Price Index (MoM) October +0.3% +0.3%

08:15 Switzerland Consumer Price Index (YoY) October -0.4% -0.2%

10:00 Eurozone Retail Sales (MoM) September +0.1% 0.0%

10:00 Eurozone Retail Sales (YoY) September -1.3% -0.8%

11:00 Germany Industrial Production s.a. (MoM) September -0.5% -0.4%

11:00 Germany Industrial Production (YoY) September -1.4% +0.2%

12:10 Eurozone ECB President Mario Draghi Speaks -

15:30 U.S. Crude Oil Inventories - -2.0

20:00 U.S. Consumer Credit September 18.1 10.1

21:45 New Zealand Employment Change, q/q Quarter III -0.1% +0.3%

21:45 New Zealand Unemployment Rate Quarter III 6.8% 6.7%

23:50 Japan Core Machinery Orders September -3.3% -1.9%