GAINSY Hottest Forecasts

ECB Currency De-valuation by Stealth
(GAINSY Fundamental Analysis)

The G20 is in full swing and to kick things off the host nation Russia called for a stronger stance regarding currency manipulation and said it wanted more "specific" language opposing exchange rate interference by governments and central banks. Today has been an interesting day for the FX market - the yen (enfant terrible of the FX world) has continued to rise sharply, while the euro (self-appointed victim of the currency wars) has fallen sharply. ...

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EUR Unglued By Ugly GDP Assault
(GAINSY Fundamental Analysis)

A reading of global GDP reports has revealed another litany of woes. Contraction is no longer a vulgar economic word. It seems to be a staple amongst the maturing or cyclical economies defined under economics 101. The emerging economies, or new world order, are currently not in the same position to reproduce such damaging data. They are not the countries actively guiding or cajoling their currencies to underperforming levels. The claustrophobic growth squeeze remains healthy amongst the G7. ...

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Daily Statement: JPY Steady as BoJ on Hold, GDP Unexpected Contracted in Q4
(GAINSY Technical Analysis)

The Japanese yen remains steady in range against dollar and euro in Asian session today. BoJ left rates unchanged at 0-0.1% on unanimous vote as widely expected. The stimulus programs were also left unchanged. The central bank noted that "Japan's economy appears to stop weakening" and pace of export decline has slowed as international "investors' risk aversion has abated" and the global economy has shown "signs of picking up". The Japanese economy is expected to "level off more of less for the time being". CPI is expected to "turn negative" due to reversal of energy prices but would then be back around 0% again. BoJ pledged to "pursue aggressive monetary easing" but emphasized that it aims to "achieve price stability on a sustainable basis", that is, achieving it's 2% inflation target at the earliest possible time. ...

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Intraday Statement: Euro Dived as Data Showed Deepening Recession
(GAINSY Technical Analysis)

Euro decreased broadly today as data unexpectedly showed deepened recession in Eurozone. Q4 GDP contracted by -0.6% qoq versus expectation of -0.4%. That's also the third consecutive quarter of contraction and the situation was even worse considering that the best of the last five quarter of 0% growth back in Q1 2012. And, Q4 also the worst quarter since Q1 of 2009. More worrying was that Germany, France, and Italy all recorded disappointing results. German economy contracted -0.6% qoq comparing to expectation of -0.5% qoq. France contracted -0.3% qoq versus expectation of -0.2% qoq. Italy contacted for the sixth quarter by -0.9% qoq comparing to expectation of -0.5% qoq. ...

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U.S. Initial Claims Fell in the Week Ending February 9
(GAINSY Fundamental Analysis)

US initial claims fell by 27,000 to 341,000 in the bank week ending February 9, 2013. The sizable decline in the latest bank week follows a modest drop from 371,000 to an upwardly revised 368,000 in the previous bank week (initially reported as 366,000) and reverses a large portion of the 41,000 jump from the recent low of 330,000 reported for the bank week ended January 19, 2013. The four-bank week moving average of initial claims ticked higher to 352,500 from 351,000 the previous bank week. Continuing claims for the bank week ending February 2, 2013 fell by 130,000 to 3,114,000. ...

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Daily Statement: JPY Recovers Further ahead of G20
(GAINSY Technical Analysis)

JPY recovers today as traders continue to pare short positions ahead of G20 meeting. There were much confusing messages from world leaders regarding the issue of recent depreciation in yen and it's uncertain whether G20 officials would issue a strong statement regarding the topic of "currency war". Outgoing BoJ governor Shirakawa defended yesterday that BoJ is "conducting monetary policy to achieve stability in Japan's economy" and pledged that it will continue to do so. Meanwhile Shirakawa declined to comment whether Japan would buy foreign bonds. Russian finance minister Siluanov, who holds G20's rotating presidency this year, said yesterday that "G-20 countries have always held the position that currency policy should be based on market conditions" and he urged or "more specific stance" on this issue. And, he emphasized that G20 should "move from general phrases to more specific measures." ...

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EUR/USD: Euro Weakened On Poor GDP Data In Europe, Trading Tad Higher This Morning
(GAINSY Fundamental Analysis)

In the Euro-zone, the seasonally adjusted gross domestic product (GDP) contracted 0.6% (QoQ) in the Q4 FY2012, compared to a 0.1% decline in the previous quarter. Market had expected GDP to contract 0.4%. Meanwhile, German GDP eased 0.6% in the Q4 FY2012, against the expected 0.5% drop, while French GDP fell 0.3% in the Q4 FY2012, wider that the expected 0.2% drop. Additionally, Italian GDP contracted 0.9% in the Q4 FY2012, against the expected 0.6% drop. ...

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GBP/USD: GBP Trading Higher Ahead Of The UK Retail Sales Data Due Today
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, GBP fell 0.30% against the USD and closed at 1.5485, as investor risk appetite decreased after reports indicated that economies across the Euro-zone contracted more than expected in the fourth quarter of 2012.

In the Asian session, at GMT0400, the pair is trading at 1.5518, with the GBP trading 0.21% higher from yesterday’s close.

The pair is expected to find support at 1.5484, and a fall through could take it to the next support level of 1.5449. The pair is expected to find its first resistance at 1.5543, and a rise through could take it to the next resistance level of 1.5567. ...

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USD/JPY: Japanese JPY Trading Higher In The Asian Session
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, the USD weakened 0.30% against the JPY and closed at 92.95.

In the Asian session, at GMT0400, the pair is trading at 92.27, with the USD trading 0.74% lower from yesterday’s close.

The pair is expected to find support at 91.77, and a fall through could take it to the next support level of 91.27. The pair is expected to find its first resistance at 93.25, and a rise through could take it to the next resistance level of 94.23.

The currency pair is trading below its 20 Hr and 50 Hr moving averages. ...

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USD/CAD: Loonie Trading Higher This Morning, Canadian Manufacturing Shipments Data Awaited
(GAINSY Fundamental Analysis)

For the 24 hours to 23:00 GMT, the USD declined marginally against the CAD to close at 1.0011.

In the Asian session, at GMT0400, the pair is trading at 1.0004, with the USD trading marginally lower from yesterday’s close, as investors remain cautious ahead of a meeting of finance ministers from the G20.

The pair is expected to find support at 0.9991, and a fall through could take it to the next support level of 0.9977. The pair is expected to find its first resistance at 1.0022, and a rise through could take it to the next resistance level of 1.0039. ...

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Glimmers Of Hope Seen Splintering Off U.K. Retail Sales In January
(GAINSY Fundamental Analysis)

The United Kingdom will release its final economic data for the bank week, with January Retail Sales being closely watched for it will provide more clues following the release of hectic fundamentals this bank week, particularly the Bank of England’s quarterly inflation report two days ago.

Data are forecasted to offer a brighter picture for the British economy, as the Office of National Statistics (ONS) will likely show that Retail sales advanced in January after a disappointing performance back in December 2012.

However, with U.K. inflation rate holding at 2.7 percent for three months in a row, and unemployment rate sky-high at 7.7 percent, expectations are running low for retail growth to carry on early 2013. ...

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Euro Strengthens On Weidmann Comments
(GAINSY Fundamental Analysis)

The euro (EUR) moved higher versus the US dollar (USD) touching 1.3379 as the European markets open. The President of the German Bundes bank, Jens Weidmann, stated that the he is against any devaluation of the euro to support growth in the Eurozone. Previous statements made by key European politicians such as French president Francois Hollande had previously stated that the high euro may restrain growth. Looking ahead we expect the upcoming G20 meeting taking place in Russia to be the first battle in the upcoming “currency wars' ...

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Euro Correction Extended After Poor Q4 EMU GDP
(GAINSY Fundamental Analysis)

Intraday, EUR/USD was captured by a negative spiral from the onset of trading in Europe as the French and German Q4 GDP reports came out below expectations. Italian and EMU Q4 GDP were very weak, too. So, the EMU economy is still facing serious headwinds which won't disappear from one day to another even as more timely indicators suggest some improvement. Markets apparently concluded that a too strong currency would only make things worse. EUR/USD extended the decline that started after Wednesday's temporary short squeeze and the pair decreased to the 1.3350/25 support area. Just after the publication of the EMU, there were headlines from ECB's Constancio. He said that negative interest rates are possible. He also repeated that the ECB is looking at the impact of the currency on inflation. As such, this was not really big news. Nevertheless, the comments were another indication that the euro is becoming more important in the ECB's assessment. EUR/USD reached an intraday low at 1.3315. European equities developed a similar trading pattern. The decline in EUR/USD and of equities slowed going into the US trading session. The US jobless claims were better than expected but the market reaction was limited and short-lived. The euro remained in the defensive, but the decline halted as (US) equities showed only limited losses. EUR/USD closed the session at 1.3363, still substantially lower than the 1.3452 close on Thursday ...

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G20 Meeting In Moscow
(GAINSY Fundamental Analysis)

Asia closed the bank week by a mitigated trading session ahead of G20 meeting, starting today in Moscow. The 'currency wars' should be in closer focus during the next two days. ECB's Weidmann said that there will be no rate cut in the Euro-Zone, while Norges Bank's Olsen warned to be ready for further rate cuts to counter NOK gains.

The currency markets remain dominated by JPY strengthening, in reaction to expectations that Japan will be under guns in front of World's leading finance officials regarding the recent heavy depreciation in JPY. JPY gained against all of its major counterparts. USDJPY retreated to 92.25 early in the session. More stops are seen under 92.15 and 92.00. Similarly GBPJPY fell under 143.20, while EURJPY hit 123.20. ...

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European Stocks Mixed As Investors Await G-20 Meeting Updates
(GAINSY Fundamental Analysis)

European stock market opened mixed on Friday, as investors cautiously anticipate 'Currency War' updates from the Group of 20 nations` two-day meeting in Moscow.

Investors are laser-focused onthe G-20 forum, with currencies the primary issue, as many nations rush to devalue their currencies in a bid revive exports and economic growth accordingly.

however, a potential 'currency war' is fuleing concerns should major nations fail to ease this conduct. Host Russia announced that a true stand should be taken and approved by the majority of the members against currency manipulation. ...

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U.K. Retail Sales Unexpectedly Drop In Jan. On Snowfall, GBP Slides
(GAINSY Fundamental Analysis)

U.K. retail sales unexpectedly decreased in Jan. to add to worries consume spending is still weak and the British economy may remain in contraction.

Retail sales with auto fuel slipped 0.6% in Jan. from the revised 0.3% drop, compared with forecasts of 0.5% pick up, as the heavy snow prevented consumers from buying.

The annual reading plummeted 0.6% from the revised of 0.1%.

The reading excluding auto fuel decreased 0.5% on the month from a revised of -0.4% and soared 0.2% on the year from the revised of 0.8%. ...

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Further JPY Consolidation Ahead Of G20
(GAINSY Fundamental Analysis)

Today's key event is the G20 meeting starting in Moscow today. The markets expect some reference to 'currency wars' as the competitive FX devaluations became the most popular theme over the recent years. Japan will probably be under guns in front of World's leading finance officials and central bank governors, regarding its heavy depreciation since November 2012.

In Europe, ECB's Draghi rejects to enter in a 'currency war', while Norges Bank's Olsen stated that he is ready to cut rates further to counter the NOK appreciation. ...

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JPY Seeks Green Light From G20
(GAINSY Fundamental Analysis)

All investors seek is clarity. How difficult can that be? Despite being on the same side, sometimes it's been near impossible to get the 17-member Euro-zone policy makers to sit down and agree. So achieving consensus from the G20 meeting commencing today and ending tomorrow in Moscow is a tall order.

At stake is how much to support Japan's use and interpretation of Abenomics to boost its economy from a decade and a half of deflation without signaling support for a weaker JPY. The danger of favoring one currency over another usually hurts neighboring exporters. Ever since Shinzo Abe and his policies arrived on the scene, yen has managed to depreciate 12% outright. How does one stop the hurt? By fighting loose monetary stimulus with a 'trade war' and something the policy makers are trying to avoid. By Sunday, investors should be in a position to understand how comfortable all the other members are with the new weaker yen landscape. ...

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Intraday Statement: JPY Weakens but Stays in Range
(GAINSY Technical Analysis)

JPY weakens again in early US session but stays in range in general as G20 finance leaders meet in Moscow today. Eyes are on what the group would said regarding the topic of so-called "currency war". Russian finance minister Siluanov, who holds G20's rotating presidency this year, said yesterday that "G-20 countries have always held the position that currency policy should be based on market conditions" and he urged or "more specific stance" on this issue. And, he emphasized that G20 should "move from general phrases to more specific measures." However, Siluanov was also quoted saying that the statement would have the same intent as the G7 statement released earlier this bank week even though the language might differ. Meanwhile, Russian deputy finance minister Storchak was quoted that while the discussion of the draft statement proved difficult, the final text wouldn't single out Japan and said that "what's happening is market reaction to exclusively internal decision making." Some analysts believe that recent trends in the FX market will resume if the G20 statement doesn't differ much from the G7 statement. ...

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G20 meeting kills rally in USDJPY
(GAINSY Fundamental Analysis)

The G20 meeting is in full swing and comments from various officials are flowing thick and fast. Japan's central bank governor Shirakawa has said he wants to "explain" the BOJ's current policy stance, while Brazil's finance minister Mantega, who first touted the idea of currency wars in 2010, said that Brazil won't allow over-appreciation in the real. This is sure to keep currency markets volatile as we move towards the end of the bank week.

In the G10 FX sphere the yen continues to be the biggest mover on the back of the G20 meeting. It has continued to appreciate today as the global political focus shifts to its rapid deterioration in recent months. USDJPY has been hovering around 92.50 so far today, which is 200 pips lower than where it was earlier this bank week. The yen was also helped by two other factors: 1, speculation that Toshiro Muto would be elected as the next governor of the Bank of Japan and he is considered less dovish than other candidates; and 2, the BOJ upgraded its economic outlook in its monthly economic survey, and said that "Japan's economy appears to stop weakening". This compares with January's statement: "Japan's economy remains relatively weak." ...

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