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Forex - EUR/USD dips as market awaits US September jobs report - Investing.com

Forex - EUR/USD dips as market awaits US September jobs report - Investing.com | AP Macro Goon Squad | Scoop.it
DailyForex.com
Forex - EUR/USD dips as market awaits US September jobs report
Investing.com
Forex - EUR/USD dips as market awaits U.S. September jobs report. By Investing.com | Forex News | Oct 21, 2013 03:52PM GMT | Add a Comment.
Zach Brown's insight:

One of the pairings that our hedge fund is currently invested in is the EUR/USD pairing. This article explains why the Euro is appreciating againnst the dollar. The primary reason is the government shutdown. First of all, the exchange rate steadily rose during the 16 days of no govenment. As the article mentions, there is also recoil from the shutdown in the form of less government expenditures and reduced GDP. In class, we have learned about the mulitiplier effect. Although it's not as powerful as the examples we use in class, it still exists and is what will cause a slight lag in economic growth for the months to come. 

-Luke Nicholson

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Hopes GDP figure will rise again - Belfast Telegraph

Hopes GDP figure will rise again - Belfast Telegraph | AP Macro Goon Squad | Scoop.it
Belfast Telegraph
Hopes GDP figure will rise again
Belfast Telegraph
Buoyant survey data from a number of sectors has led some economists to predict gross domestic product (GDP) may have grown by nearly 1% in the three months to the end of September.
Zach Brown's insight:

The UK has been experiencing some growth recently, in which several data shows the GDP inreasing by 1% over the past three months. The retail sales have been more unstable, rising in July, dropping in August, then coming back to recover on September. They predict an increase of .8% , which seems reasonable. In the coming months, the retail sales will probably come to be more stable, since the heatwave in July is over. Their predictions will likely happen as the GDP hasn't been showing any signs of drastically decreasing.

-Erica Cuasay

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Philippine Peso Advances on Fed Tapering Outlook; Bonds Decline

Philippine Peso Advances on Fed Tapering Outlook; Bonds Decline | AP Macro Goon Squad | Scoop.it
The Philippine peso gained for a second day after U.S. jobs data reinforced speculation the Federal Reserve will proceed at a cautious pace in reining in monetary stimulus that fueled demand for emerging-market assets.
Zach Brown's insight:

This article is a clear demonstrator of the fact that currencies are all relative to one another. Although isn't particuarly strengthening or weakening, speculation that it will do better than the dollar has investors like the ones at AP MACRO GOON SQUAD excited. Also, it's a perfect example of how speculation without any quantitative evidence to back it up can dictate markets so that the speculation comes true.

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Back on Top: British Pound Surges After 2Q GDP Beats, More Gains Ahead? | Forex Profit Tips

Back on Top: British Pound Surges After 2Q GDP Beats, More Gains Ahead? | Forex Profit Tips | AP Macro Goon Squad | Scoop.it
Back on Top: British Pound Surges After 2Q GDP Beats, More Gains Ahead? http://t.co/9NFC3SalsH
Zach Brown's insight:

I think that although the British Pound has seen a slight revival, it will be short lived depending on what the fed. desides to do with the QE situation.

 

Sari

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Alberta flooding, Quebec strike behind expected dip in GDP

Alberta flooding, Quebec strike behind expected dip in GDP | AP Macro Goon Squad | Scoop.it
Downturn is likely short-lived, economists say (RT @globeandmail: From @GlobeQuebec: Alberta flooding, Quebec strike behind expected dip in GDP http://t.co/LFoFYd3RKL)...
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Forex - Dollar broadly higher ahead of US jobs data - Investing.com

Forex - Dollar broadly higher ahead of US jobs data - Investing.com | AP Macro Goon Squad | Scoop.it
Forex - Dollar broadly higher ahead of US jobs data
Investing.com
Forex - Dollar broadly higher ahead of U.S. jobs data. By Investing.com | Forex News | Oct 22, 2013 01:39AM GMT | Add a Comment. Investing.com.
Zach Brown's insight:

Across the board, the USD is trading higher than its currency pairs. This is due to an increase in investor confidence with the upcopming jobs report. However, things may change as the US jobs report is released later today. Also, it talks about the EUR/USD pair taking adip in value, signifying an appreciaction of the dollar. Another major report that is coming out in the next few days is Europe's GDP report. They are predicting about a 1% increase in overall GDP. This could appreciate the EUro against the dollar.

-Zach

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FOREX-Dollar wobbles as Fed tapering expectations pushed back - Reuters

FOREX-Dollar wobbles as Fed tapering expectations pushed back - Reuters | AP Macro Goon Squad | Scoop.it
MSN NZ News
FOREX-Dollar wobbles as Fed tapering expectations pushed back
Reuters
Sun Oct 20, 2013 8:25pm EDT. * Dollar index near 8-month low. * Tuesday's US payrolls data in focus. * Euro within sight of 2013 high.
Zach Brown's insight:

Sari:

As the fed surprised world markets by announcing that they were not going to taper quantitative easing, it shook up markets and the price of the American dollar. In addition, the dollar is weakening not only because of the feds decision, but also because of the 16 day government shut down. Although the fed tapering was delayed, many economists still believe that the tapering will still continue even as early as December. I think that we should by short of the dollar becasue its value is depreciating and I dont think that it will bounce back quickly. 

 

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Canadian Dollar Slides to Lowest in 6 Weeks as Retail Sales Drop

Canadian Dollar Slides to Lowest in 6 Weeks as Retail Sales Drop | AP Macro Goon Squad | Scoop.it

Canada’s dollar fell to its lowest level in six weeks as a report showed retail sales shrank more than forecast in June, adding to evidence that economic growth is slowing.

The currency slid versus its U.S. peer for a fifth day, the longest slump in two months. The drop in sales, which rose in May the most since 2010, followed declines in Canadian wholesale and manufacturing sales in June and a surprise loss of jobs last month, along with the first contraction this year in the Ivey purchasing-managers index. Inflation stayed in July below the central bank’s target for a 15th month, data may show tomorrow.

“The retail sales are just icing on the cake for the loonie,” said Adrian Miller, director of fixed-income strategies at GMP Securities LLC, by phone from New York. “The retail-sales number along with the Ivey and jobs data and wholesale sales figures kind of suggest the Canadian economy faces headwinds, not unlike other developed-market economies, so that is going to be somewhat weighing on the loonie.”

The loonie, as Canada’s currency is nicknamed for the image of the aquatic bird on the C$1 coin, depreciated 0.4 percent to C$1.0516 per U.S. dollar at 5 p.m. in Toronto. It touched C$1.0531, the weakest intraday level since July 10. One Canadian dollar buys 95.09 U.S. cents.

Relative Strength

Canada’s currency approached a technical level that suggested it may soon strengthen. The 14-day relative-strength index versus the greenback decreased to 35, moving toward the 30 level some traders consider a sign an asset has lost too much, too quickly, and is about to change direction. The last time the loonie fell below 30, on March 6, it gained 1.9 percent in the next month.

The Canadian 10-year government bond yield declined one basis point, or 0.01 percentage point, to 2.74 percent after climbing three basis points earlier to a two-year high of 2.78 percent. The price of the benchmark 1.5 percent security maturing in June 2023 added 9 cents to C$89.44.

A Bloomberg survey forecast the yield would trade at 2.75 percent in March 2014 after ending 2013 at 2.60 percent. The estimates were the weighted averages of the projections of 22 analysts and economists. They also forecast the yield would rise to 2.89 percent by June and 3.21 percent by year-end 2014.

The Bank of Canada said it will auction C$3.4 billion ($3.2 billion) of five-year bonds on Aug. 28. The 1.25 percent securities mature in September 2018.

Canada’s dollar slid yesterday after minutes of the Federal Reserve’s last meeting showed most policy makers were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to start reducing monetary stimulus this year if the economy improves.

Greenback Strength

The American central bank’s asset purchases, which fueled growth in riskier assets, have raised concern they would lead to inflation and debase the U.S. dollar. Investors are betting slower bond buying will cause the greenback to strengthen against its Canadian peer.

“We saw a selloff across risk assets,” said Mazen Issa, Canada macro-strategist at Toronto-Dominion Bank’s TD Securities unit, by phone from Toronto. “It fits into our general expectation for just a weaker Canadian dollar.”

The loonie fell today against the majority of its 16 most-traded peers as Statistics Canada said retail sales dropped 0.6 percent to C$40.1 billion ($38.2 billion). Flooding in Alberta and a construction strike in Quebec contributed to the slide, the agency said. Economists surveyed by Bloomberg News forecast a 0.4 percent decrease. Sales rose a revised 1.8 percent in May.

Economy ‘Stumbled’

“This is the third straight significant miss on the June activity numbers, setting us up for next week’s June GDP and second-quarter GDP numbers, and obviously the Canadian economy stumbled pretty significantly at the end of the quarter,” said David Watt, chief economist at the Canadian unit of HSBC Holding Plc. The Bank of Canada may be “locked on the sidelines for an extended period of time.”

The central bank has kept its benchmark interest-rate target at 1 percent since September 2010 to support the economy.

Canada’s gross domestic product increased 1.6 percent in the second quarter while slipping 0.5 percent in June, economists forecast before data due Aug. 30. Consumer prices rose 1.4 percent last month from a year earlier, a Bloomberg survey forecast before a report tomorrow. The central bank’s inflation target is 2 percent.

The loonie weakened even as futures on crude oil, Canada’s largest export, gained 1.3 percent to $105.20 per barrel in New York, after touching an almost two-week low yesterday.

Options traders were the most bearish on the Canadian dollar in six weeks. The three-month so-called 25-delta risk reversal rate, which measures the premium charged for the right to buy the U.S. dollar against its Canadian counterpart versus contracts to sell, rose to 1.65 percent, the highest level on a closing basis since July 8. The 2013 average is 1.25.

Higher Volatility

Implied volatility for three-month options on the Canadian dollar versus its U.S. counterpart increased to 7.9 percent, the highest since July 16. Implied volatility is used to set option prices and gauge the expected pace of currency swings. The average for this year is 6.8 percent.

The loonie fell 0.8 percent in the past week against nine other developed-nation currencies tracked by the Bloomberg Correlation Weighted Index. The New Zealand dollar and the Norwegian krone dropped more, losing 2.6 percent and 2.4 percent. The U.S. dollar gained 1.2 percent.


Via Stéphane Bisaillon
Zach Brown's insight:

Due to the fall in retail sales, the Canadian dollar has been of weaker worth. It has only been recently when the currency has experiences some fall, so I think they will eventually bounce back little by little.

 

-Erica

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BSE Sensex extends gains by 290 pts as Indian rupee rebounds to 65-level ... - Financial Express

BSE Sensex extends gains by 290 pts as Indian rupee rebounds to 65-level ... - Financial Express | AP Macro Goon Squad | Scoop.it
Indian Express
BSE Sensex extends gains by 290 pts as Indian rupee rebounds to 65-level ...
Zach Brown's insight:

The Indian Rupee is bouncing back when compared to the dollar. This is probably due to the new RBI governor instigating new economic policy to tighten their inflation free fall. However, this rebound wont last long because the Federal Reserve's tapering of quantitative easing will freeze most of their economic growth.

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US housing down, UK growth up; USD underperformed; data light on EU holidays | FreshPips.com

The NZD also declined relative to the AUD on Friday, with the cross ending the week around 0.8650. This week looks to be relatively low-key on the loc...
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