Good morning from Hamburg and welcome to our Daily FX Report. Around the world some of the most established economist argues about a potential end of the global recession. But today in Japan worse economic data amazed. However, we wish you a successful trading day.
Market review
A today released Japan government report showed that the nation’s economy declined by a record in the last quarter amid an unprecedented collapse in exports and a drawdown of inventories. Japan’s gross domestic product fell annualized 15.2 % after 14.4 % in the last quarter of 2008, said the Cabinet Office. “There’s no doubt that Japan’s GDP figures are the worst ever, so it’s too early to say the economy has bottomed out”, commented Toshihiko Sakai, the head of FOREX trading of Mitsubishi UFJ, a unit of Japan’s largest bank. The JPY and the USD increased by damping optimism that the worst of the global recession may be over. The USD rose versus a basket of major currencies on speculation a German report may show today that producer prices contracted for the second month. The EUR/USD fell during the early Tokyo trading 0.2 %. Notwithstanding, the German investor confidence index rose more than forecast to a three-year high in May, to 31.1 points from 13 points in April. The GBP/USD climbed up to its highest level in 2009 at 1.5523 yesterday.
Australia’s consumer confidence weakened in May by 4.3 % from April to 88.8 points, having the government said it will push the nation into debt to counter the recession.
GBP/JPY
The currency pair traded in a sideway movement since the beginning of May, but last week it broke through the support at 147.84 and as a implication the GBP/JPY fell below its 144.00 level. At this level the GBP/JPY recovered and rose, close to a bullish trend-line, over its support at 147.84 again until a bearish-harami formation heralded a trend-reversal. Also the MA Oscillator indicate for an anew test of its support levels at 147.84 and 146.77.
USD/CHF
The USD/CHF has been trading near to a bearish trend-line since the end of April. After a short recovering on May 15th the currency pair extended its downward movement and crossed its resistance-lines at 1.1164 and 1.1125. Now it remains to be seen if the support at 1.1027 will be strong enough to stop the bears sustainable. The MA Oscillator suggests first rebound figures.
