Asian markets rise on U.S. consumer Confidence; Euro and Pound hold at high levels

FXstreet.com (Barcelona) - Asian markets are going through gains on Wednesday buoyed by upbeat U.S. Consumer confidence figures and the improvement on Japanese merchandise Trade Data, which has diminished the impact of North Korean missile test. On the currency side, Euro and Pound remain floating at high levels.Japanese Nikkei Index adds 1.5%, as buy orders increased after Japanese trade figures were released. Hong Kong Hang Seng Index soared 4%. South Korean Kospi Index edges down 0.2% weighed by nuclear test by their northern neighbors.Investor's optimism increased considerably after U.S. consumer's confidence rose in May to itts highest level since September, showing that Americans start to feel more confident about the outlook of economy. Furthermore, Japanese exports rose 39.1% year on year in April, against market expectations of a 41.9% decline.Euro and Pound, consolidating at mid-term highsEUR/USD has remained moving in a range from 1.3950 to 1.400 after having recovered on yesterday's U.S. session from 1.3855 intra-day low. The Euro is trading at 5-month high after last week's rally from 1.3420.GBP/USD rose during Asian session to a fresh 6-month high at 1.5980. The Pound has been rallying continuously for the last month, and from 1.4397 low on April 22, the Sterling has risen to levels right below 1.6000.USD/JPY has finally broken above resistance area at 95.10/30 andfd the paitr trades at intra-week high at levels around 95.40 at the time of writing.

GBP/USD gains fresh high

FXstreet.com (Buenos Aires) – GBP/USD, fresh high for the pair in the first hours of Asia, corrective movements seem quite limited in the pair that looks decide to regain the 1.60, thus bigger time frames indicators are presenting divergences.“1.6000 first resistance above actual high, is followed by 1.6040 zone, where we could see the 38.2% retracement of the last monthly free fall from 2.0158 to 1.3502,” said Valeria Bednarik, collaborator at FXstreet.com. Level should offer some rebound at least as a first attempt. Despite divergences, downside correction don’t seem likely at this time. details at this site FXstreet.com

EUR/USD Daily Commentary for 5.6.09

The EUR/USD’s rally topped out yesterday as we expected, with the S&P futures hesitating at 900 while investors await Thursday’s flood of stress test news and economic data. Yesterday’s decline came on minimal volume, showing there is presently insufficient conviction behind the pullback to send the currency pair tumbling. The EUR/USD is stabilizing above Monday’s lows, and could bounce back a bit and trade sideway’s between now and the ECB’s meeting on Thursday. We maintain our bullish outlook on the EUR/USD since no key fundamentals were broken and the momentum remains to the upside with the currency pair trading comfortably above our uptrend lines.

Crude Daily Commentary for 5.6.09

Crude futures continued their consolidation yesterday on marginal volume. However, yesterday’s volume was substantially higher than Monday’s meaning we could see large activity and volatility today. The futures are attempting to position themselves for a rally as they realize April highs suddenly aren’t so far away. If the ADP Non-Farm Employment Change and crude inventories each beat analyst expectations, crude futures could push nicely above May highs towards our 3rd tier uptrend line.

Gold Daily Commentary for 5.7.09

Gold has surged higher in reaction to the surprise addition of funds to the BOE’s quantitative easing operation. In addition to the BOE’s decision, the ECB has announced the implementation of alternative liquidity measures of its own. The ramp up in liquidity around the globe is creating fear of future inflation, which in turn is boosting the price of gold.

GBP USD Technical Forex Analysis for Forex Traders

GBP/USD was trading in the range of 1.5150-1.4980 area early in this week .It is expected to make highly volatile moves today during the BOE and ECB interest rate announcement time and also during ECB press conference time.

GBP/USD is expected to break the initial high (1.5156) and low (1.5101) set for the day during European and US sessions. A low in the range of 1.4850-1.4900 could be formed during European session and a high of 1.5200-1.5270 could be formed during US session before tomorrow another big event NFP data release.

GBP/USD Daily Commentary for 5.7.09

The Pound is experienced relative weakness across the board after the BOE announced it will add $50 billion to its present quantitative easing operation to make a grand total of $125 billion. While analysts expected the BOE to keep its benchmark rate unchanged at .50%, the additional funds for quantitative easing caught investors a bit off-guard. Boosting quantitative easing could indicate that deflationary pressures are stronger than expected, meaning the British economy is still facing some unforeseen difficulties. The Cable pulled back from its rally on strong volume in response to the news.

India’s Forex Reserves Declined By $1.39 Bn

The figures disclosed by the weekly statistical supplement released by the Central Bank (RBI) showed that India’s foreign exchange reserves for the week ended May 01 has declined by $1.39 billion to $251.702 billion.

It should be noted that the reserves came up by $631 million to $253.091 billion during the week ended April 24.

The reports said that the recent fall in foreign exchange reserves was mainly due to a revaluation of reserves and a reduction in price of gold assets held by RBI.

Dollar Falls to One-Month Low as Jobs Data Pare Safety Demand

May 8 (Bloomberg) -- The dollar declined to a one-month low against the euro as a government report showed U.S. employers cut fewer jobs last month than economists forecast, reducing demand for the safety of the greenback.

Canada’s currency advanced to the highest versus the greenback since November on the nation’s unexpected addition of jobs in April. The yen slid versus all but two of the 16 most actively traded currencies tracked by Bloomberg and touched a seven-month low against Australia’s dollar this week as evidence the recession is easing spurred demand for higher yields.

“The prevailing flow now is negative for the dollar, negative for the yen, positive for the commodity-linked currencies and higher yielders,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon in New York. “Right now the report is given a positive spin by the market. The market is grabbing on the green-shoot rally.”

The dollar lost 0.6 percent to $1.3473 versus the euro at 10:22 a.m. in New York, from $1.3390 yesterday. It touched $1.3516, the weakest level since April 6. The U.S. currency traded at 99.14 yen, compared with 99.12. The euro increased 0.7 percent to 133.64 yen, from 132.71.

The euro-dollar exchange rate rose today above its 200-day moving average for the first time since December.

Brazil’s real advanced as much as 1.6 percent to 2.0814 per dollar and the South Korean gained 1.5 percent to 1,245.50, the strongest levels since October, as signs the global slump may be ending encouraged investors to purchase emerging-market assets.

Dollar Index

The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.7 percent this week to 83.390.

U.S. companies eliminated 539,000 jobs in April after a decrease of 699,000 in the previous month, the Labor Department reported today in Washington. The median forecast of 70 economists surveyed by Bloomberg was for a drop of 600,000. The unemployment rate increased to 8.9 percent.

“Things are improving a little bit faster than people were expecting,” said Sebastien Galy, a currency strategist at BNP Paribas Securities SA in New York. “People have been so bearish on the euro in general. Indeed, what we’re seeing is euro-dollar breaking higher, and our recommendation is to buy the euro.” The euro may rise to $1.40 in two weeks, he said.

The dollar was headed for a third weekly decline versus the euro, weakening 1.6 percent in the longest losing streak this year. Against the yen, the dollar was little changed this week, while the euro rose 1.7 percent.

Hiring in Canada

The Canadian dollar increased as much as 1.1 percent to C$1.1572, the strongest level since Nov. 5, on the Canadian labor report. The currency was up 2.3 percent this week.

Employers in Canada added a net 35,900 workers in April after a reduction of 61,300 in the previous month, Statistics Canada said today in Ottawa. The median forecast of 24 economists surveyed by Bloomberg was for a drop of 50,000.

The yen dropped 4.3 percent to 59.08 versus the New Zealand dollar and 3.8 percent to 75.22 against the Australian dollar this week as a more optimistic global economic outlook prompted investors to get funds in a country with low borrowing costs and buy assets where returns are higher. The Bank of Japan’s target lending rate of 0.1 percent compares with 3 percent in Australia and 2.5 percent in New Zealand.

Japan’s currency touched 75.75 versus the Aussie yesterday, the weakest level since Oct. 7, and reached 59.51 against the kiwi, the weakest since April 6.

Yen and Toyota

The yen dropped 9 percent against the dollar this year after touching 87.13 in January, the strongest since 1995. Toyota Motor Corp., the world’s largest automaker, forecast today a second consecutive annual loss as the global recession curbed demand for new cars and the yen eroded the value of dwindling overseas sales.

The euro gained versus the dollar this week on speculation the European Central Bank’s plan to buy 60 billion euros ($80.5 billion) in covered bonds isn’t aggressive enough to debase the currency. President Jean-Claude Trichet told reporters yesterday in Frankfurt the purchase of debt is a “credit easing.”

Covered bonds, known as Pfandbriefe in Germany, are secured by property loans or lending to public-sector institutions and differ from mortgage-backed securities because they’re also supported by a borrower’s pledge to pay. They have traditionally been considered among the safest bonds available, allowing lenders to pay less interest.