The Euro-zone 3Q GDP figures revealed that the region’s economy had entered a recession. The decline met economist predictions despite France surprising with growth of 0.1% as Germany’s 0.5% drop dragged down the overall region. The region also saw the final reading for consumer prices remain at 3.2% which was a decline from September’s 3.6% reading.
The financial crisis continues to wreak havoc on the world's major economies, with official data showing the 15-nation euro zone economy had shrunk by 0.2 percent for the second quarter in a row. The United States is probably already in recession, most economists agree, but official data showing that will not come out until January. In this survey we make a quick analysis on how the recession it’s expanding across the world, hearting the strongest economies and threatening some others.
The second largest in the world’s economy fell into recession for the first time since 2001 as Japan's GDP fell an annualized 0.4 percent in Q3. This was the second consecutive contraction, and with a global economic slowdown impairing demand for foreign goods, this export-dependent nation will likely feel the pain. Nevertheless, the Japanese yen still has bullish potential as volatility remains high, leaving risk aversion in play. On the other hand, positioning is neutral for most currencies, suggesting that the US dollar may continue strengthening as recession continues its expansion across the world. Australia faces the risk of recession at the beginning of next year as the Westpac leading index plunged to the lowest in 23 years. The Euro and British Pound remained range-bound in overnight trading.
The USD continues to trade between 1.2500-1.2800 against the EUR, and the pair seems to be moving without direction in anticipation of the next big event to hit the news. Risk aversion continues to give the Dollar strength and that is likely to continue until we see signs of stabilization. Testifying before Congress yesterday, Federal Reserve Chairman Ben Bernanke said massive demand for the USD means it remains unrivaled as the world's reserve currency.
As for today, a batch of data is expected from the U.S. economy. These figures are expected to set the tone for the USD's pairs and crosses. Special attention should be given to the U.S. Building Permits which is expected to fall to 0.77M. Traders pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar. Also today, the Core CPI is scheduled which should also have an impact on the market because if it delivers unfavorable figures, it will validate a problematic U.S. market, and the USD is likely to weaken as a result.
Sentiment in the U.S. economy has brightened in the past week following better-than-expected news. However, the EUR is still showing signs of resilience as it traded in a relatively close range yesterday even though there was a little volatility throughout non-EUR crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., European and Japanese economies will affect their positions.
There are no economic data releases expected from the Euro-Zone today; however there will be a nice batch of data from the U.S. which will affect the EUR's major counterparts. Traders should pay close attention to the response of equity markets to determine how to continue with EUR positions as well as to pay attention to the news from the United States to place their transaction accordingly with today's developments.
The financial crisis continues to wreak havoc on the world's major economies, with official data showing the 15-nation euro zone economy had shrunk by 0.2 percent for the second quarter in a row. The United States is probably already in recession, most economists agree, but official data showing that will not come out until January. In this survey we make a quick analysis on how the recession it’s expanding across the world, hearting the strongest economies and threatening some others.
The second largest in the world’s economy fell into recession for the first time since 2001 as Japan's GDP fell an annualized 0.4 percent in Q3. This was the second consecutive contraction, and with a global economic slowdown impairing demand for foreign goods, this export-dependent nation will likely feel the pain. Nevertheless, the Japanese yen still has bullish potential as volatility remains high, leaving risk aversion in play. On the other hand, positioning is neutral for most currencies, suggesting that the US dollar may continue strengthening as recession continues its expansion across the world. Australia faces the risk of recession at the beginning of next year as the Westpac leading index plunged to the lowest in 23 years. The Euro and British Pound remained range-bound in overnight trading.
The USD continues to trade between 1.2500-1.2800 against the EUR, and the pair seems to be moving without direction in anticipation of the next big event to hit the news. Risk aversion continues to give the Dollar strength and that is likely to continue until we see signs of stabilization. Testifying before Congress yesterday, Federal Reserve Chairman Ben Bernanke said massive demand for the USD means it remains unrivaled as the world's reserve currency.
As for today, a batch of data is expected from the U.S. economy. These figures are expected to set the tone for the USD's pairs and crosses. Special attention should be given to the U.S. Building Permits which is expected to fall to 0.77M. Traders pay close attention to this figure as it has a strong correlation with the value of the U.S. Dollar. Also today, the Core CPI is scheduled which should also have an impact on the market because if it delivers unfavorable figures, it will validate a problematic U.S. market, and the USD is likely to weaken as a result.
Sentiment in the U.S. economy has brightened in the past week following better-than-expected news. However, the EUR is still showing signs of resilience as it traded in a relatively close range yesterday even though there was a little volatility throughout non-EUR crosses. It will be crucial for traders to identify how the preceding economic indicators from the U.S., European and Japanese economies will affect their positions.
There are no economic data releases expected from the Euro-Zone today; however there will be a nice batch of data from the U.S. which will affect the EUR's major counterparts. Traders should pay close attention to the response of equity markets to determine how to continue with EUR positions as well as to pay attention to the news from the United States to place their transaction accordingly with today's developments.
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