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Australia on the verge of a sharp economic recession
Wed, Aug 20 2008, 07:39 GMT
by Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from Hamburg and welcome to the Varengold Daily FX Report. The weather in Hamburg has gotten better and it seems to be a sunny week after the wonderful sunrise this morning. However, we wish you a nice day and good luck in trading.
Market review
According to the Westpac Institutional Bank-Melbourne index, Australia’s economy is on the verge of going into a sharp economic recession in the next three to nine months, attributed to tense financial conditions, weak U.S. industrial production data, and diminishing household wealth. The annualized development of the index slowed to 2% in June from 2.4% in May. The low in June was the slowest pace since July 2001 and well under the long-standing trend of 3.9%. The slowdown supports the case for the RBA to reduce rates at the next policy meeting in September.The USD/JPY reached a session high of 109.91, due to the Japanese importer buying before the Tokyo fix at 01:00 GMT. Some Japanese traders have been stepping in to sell at these highs, which has influenced it to recover back down to 109.85. The EUR/USD lost around 50 pips from its high to a low of 1.4756. According to some traders, the decrease in the EUR/USD is limited, as Euro zone would need more evidence of growth slowdown to lead to larger losses. Other traders say the EUR/USD may increase a bit more together with commodities as a near-term return from the high sell-off, but the loss is intact. However the dollar index jumped up a little to 76.822, as gold’s and crude oil’s gains are unchanged.
GBP/USD
Since the beginning of August the GBP/USD has been trading in a downward trend channel. As the market left its bearish trend, it started to trade in a horizontal channel with a support level of 1.8551 and a resistance level of 1.8701. If the market breaks trough the resistance, we should anticipate a recovery from its bearish history.USD/JPY
Since the 15th of August the USD/JPY has been trading in a decreasing trend channel. Since yesterday, the market has been trading close to its old level from the 14th of August. If the pair breaks through the upper trend line, we could expect upside potential.Published on Wed, Aug 20 2008, 07:43 GMT
Archive
- The JPY gained against a basket of major currencies
Published On Mon, Dec 1 2008, 11:44 GMT - The USD headed for its biggest weekly decline in almost three years against the EUR
Published On Fri, Nov 28 2008, 09:09 GMT - The EUR/USD was back again above the 1.29 level
Published On Thu, Nov 27 2008, 09:08 GMT - The JPY has gained against the EUR
Published On Wed, Nov 26 2008, 08:37 GMT - Yesterday the EUR/USD rose 2.8 %
Published On Tue, Nov 25 2008, 09:49 GMT
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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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