Finotec News Archive - January 28 2010
Sterling rises while the Euro plummets as the BOE eyes a halt to QE
The GBP/USD is currently trading at $1.6208 as of 7:03am, GMT, with a bullish trendTammy Wally 
28 January 2010
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| EUR/USD | USD/JPY | GBP/USD | USD/CHF | |
|---|---|---|---|---|
Resistance | 1.4195(M) 1.4096(M) 1.4040(M) | 91.88(M) 90.55(M) 90.50(M) | 1.6295(M) 1.6285(M) 1.6245(M) | 1.0620(M) 1.0600(M) 1.0559(M) |
Support | 1.3930(M) 1.3875(M) 1.3830(M) | 89.23(M) 89.14(M) 88.83(M) | 1.6108(M) 1.6077(M) 1.5900(M) | 1.0432(M) 1.0368(M) 1.0325(M) |
The British pound rose against the greenback and the euro on Wednesday after comments on inflation by a Bank of England policymaker, in-turn that has spurred speculation that the central bank may end the quantitative easing program next week. BoE policy board member Andrew Sentance said it may be difficult to keep inflation on target if import and services prices keep rising. He also said that the British economy, which on Tuesday was shown to have just made it out of recession, was facing opposing pressures which the central bank would have to consider in its Inflation Report next month.
The market took the comments to suggest an imminent end to the BoE's 200 billion pound asset-buying plan, but analysts said they did little to change the view that interest rate rises will not follow until the second half of the year at the earliest."We think that as ever, the BoE will have a 'steady-as-it-goes' policy," said Phyllis Papadavid, currency strategist at Societe Generale in London. The GBP/USD is currently trading at $1.6208 as of 7:03am, GMT, with a bullish trend.
The dollar gained against yen and the euro after U.S. President Barack Obama proposed tax incentives to generate growth in the world’s biggest economy, damping the demand for Japan’s currency. “The dollar-yen will be supported as long as Asian stocks hold up after U.S. stocks went up a bit and the Federal Open Market Committee meeting caused the dollar to be bought back,” Akane Vallery Uchida, a currency strategist at Royal Bank of Scotland Group Plc in Tokyo, wrote in a research note today. President Obama was delivering his first State of the Union address on Wednesday in which he called for an extension of tax incentives worth $38 billion over this year and encouraged businesses to accelerate equipment purchases and eliminate capital gains taxes on small business investments. The USD/JPY is currently trading at 90.33 as of 7:42am, GMT, with a bullish trend.
The greenback rose against the euro on Thursday on signs the Federal Reserve is feeling confident about a recovery, while Asian equities were on a high after a consistent losses last week. One hawkish Fed member surprised the market by dissenting to a decision to remove a phrase from a statement saying rates would be kept low for an "extended period." Some in the market are convinced that the Fed will keep rates low for an extended period of time yet on the other hand, there will be a few economists taking signals that within the Fed a gradual movement towards a more normal monetary policy stance is starting to emerge. The EUR/USD is currently trading at $1.4025 as of 7:51am, GMT, with a bullish trend.
Finotec Analysis Team
28 January 2010
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Time  |
Event |
Currency/Country
|
Period | Previous | Forecast |
Significance
|
Actual | |
|---|---|---|---|---|---|---|---|---|
| 28-01-2010 23:50 | Unemployment Rate | Japan | 5.2 |  | ||||
| 28-01-2010 23:50 | Household Spending (Y-o-Y) | Japan | Yearly | 2.2 | | |||
| 28-01-2010 23:50 | Job-To-Applicant Ratio | Japan | 0.45 | 0.46 | | 0.46 | ||
| 28-01-2010 23:50 | Industrial Production (M-o-M) | Japan | Monthly | 2.2 | | |||
| 28-01-2010 23:50 | Industrial Production (Y-o-Y) | Japan | Yearly | -4.2 | | |||
| 28-01-2010 23:30 | CPI (Y-o-Y) | Japan | Yearly | -1.9 | -1.7 | | ||
| 28-01-2010 23:30 | Core CPI (Y-o-Y) | Japan | Yearly | -1.0 | -1.1 |  | ||
| 28-01-2010 23:30 | Tokyo CPI (Y-o-Y) | Japan | Yearly | -2.3 | -2.1 | | ||
| 28-01-2010 23:30 | Tokyo Core CPI (Y-o-Y) | Japan | Yearly | -1.9 | -1.8 | | ||
| 28-01-2010 23:00 | Conference Board Leading Index | Australia | -0.3 | | ||||
| 28-01-2010 23:00 | Leading Index | Australia | -0.3 | | ||||
| 28-01-2010 23:00 | Coincidence Index | Australia | 0.1 |  | ||||
| 28-01-2010 21:45 | Trade Balance | NZ$/New Zealand | -269 | -99 | | 2 | ||
| 28-01-2010 21:45 | Exports | NZ$/New Zealand | 3.07 | | ||||
| 28-01-2010 21:45 | Imports | NZ$/New Zealand | 3.34 | | ||||
| 28-01-2010 21:45 | Building Permits (M-o-M) | New Zealand | Monthly | 11.7 | | |||
| 28-01-2010 20:00 | Interest Rate Decision | New Zealand | 2.50 | | ||||
| 28-01-2010 15:30 | EIA Natural Gas Inventory (Cubic Feet) | United States | 2607 | | ||||
| 28-01-2010 13:30 | Durable Goods Orders (M-o-M) | United States | Monthly | -0.4 | 2.0 | | 0.3 | |
| 28-01-2010 13:30 | Durable Goods Orders Ex. Defence (M-o-M) | United States | Monthly | 0.0 | | |||
| 28-01-2010 13:30 | Durable Goods Orders Ex. Transporation (M-o-M) | United States | Monthly | 2.1 | 0.3 | | 0.9 | |
| 28-01-2010 13:30 | Initial Jobless Claims | United States | 478 | 450 | | 470 | ||
| 28-01-2010 13:30 | Continuing Claims | United States | 4659 | 4600 | | 4602 | ||
| 28-01-2010 10:00 | Business Climate Indicator | Eurozone | -1.22 | -1.1 | | -1.12 | ||
| 28-01-2010 10:00 | Consumer Confidence Index | Eurozone | -16 | -15 | | -16 | ||
| 28-01-2010 10:00 | Economic Confidence Index | Eurozone | 91.3 | | ||||
| 28-01-2010 10:00 | Industrial Confidence Index | Eurozone | -16 | -15 | | -14 | ||
| 28-01-2010 10:00 | Services Confidence Index | Eurozone | -3 | -3 | | -1 | ||
| 28-01-2010 08:55 | Unemployment Change | Germany | -3 | | ||||
| 28-01-2010 08:55 | Unemployment Rate | Germany | 8.1 | 8.2 | | 8.2 | ||
| 28-01-2010 05:00 | Housing Starts (Y-o-Y) | Japan | Yearly | -19.1 | -18.8 | | -15.7 | |
| 28-01-2010 04:00 | Official Foreign Reserves | NZ$/New Zealand | 21.82 | | ||||
| 28-01-2010 04:00 | Vehicle Production (Y-o-Y) | Japan | Yearly | 0.5 | |