Forex News: Dollar Posts Biggest Weekly Rally in 6 Months

RELATED QUOTES

SymbolPriceChange
^USDOLLAR11,917.86-0.43
EURUSD=X1.1224+0.0008
GBPUSD=X1.3014-0.0003
USDJPY=X101.4830+0.767

  • Dollar Posts Biggest Weekly Rally in 6 Months
  • Euro Struggles Before ECB Adds Weight
  • Japanese Yen Crosses Extend Rally to New Highs
  • Canadian Dollar: FX Traders Pay Little Heed to Strong Jobs Numbers
  • British Pound Excessive Tumble May Spur Rebound
  • Swiss Franc: Safety Flows and SNB Reserves Still Issues
  • Gold Drops For Sixth Week, Longest Slide in 8 Years

New to FX?Watch thisVideo; For live market updates, visitDailyFX’s Real Time News Feed

Dollar Posts Biggest Weekly Rally in 6 Months

Market conditions can supersede both fundamentals and technicals – a truism we witnessed this past week. Typically, the dollar’s position as the preferred reserve currency would have leveraged a selloff with the S&P 500 posting its biggest rally in 13 months. In fact, the Dow Jones FXCM Dollar Index (ticker = USDollar) enjoyed its strongest advance in six months over the same period and closed at its highest level since July 25. This unusual correlation between underlying risk trends and the safe haven dollar was facilitated by both the extremely low levels of speculative participation through the passage of the holiday period as well as an intense focus on the on the outcome of the US Fiscal Cliff.

Though pushing the decision beyond the technical deadline, the US government managed to hammer out a solution to the impending doom of automatic tax hikes and spending cuts. Naturally, removing the risk of a sure push into recession for the world’s largest economy lifts a serious cloud of uncertainty and bolsters risk appetite – thereby driving equities and other ‘riskier’ assets higher. However, the dollar also benefits from this turn as the threat of a critical sovereign credit rating downgrade (a move that hits at the dollar’s core value as the benchmark currency) evaporates as well. That being said, the positive correlation between risk trends and greenback is unlikely to last for long. A relief rally for the dollar via reduced rate cut fears has an exceptionally short shelf life. That doesn’t mean we should expect the dollar to simply tumble into a new bear trend though. The ‘solution’ offered up for the Fiscal Cliff, was merely a band aid that carries us over to the bigger threat of a standoff on raising the debt ceiling. The Treasury runs out of extraordinary means for preventing the US to breaching its debt cap sometime in mid-February and the so-called ‘sequestration’ – or $110 billion in automatic spending cuts – is set for March 1. This can easily set risk trends on fire once again and thereby benefit the safe haven status of the dollar. The deciding factor is whether investors look ahead or enjoys the brief calm.

As we establish the next phase of the US fiscal crisis, there are other considerations for risk and dollar traders to consider. Though not fully engaged, there is a shift in comfortable expectations for Fed stimulus to remain a driving force for years into the future. After the Fed minutes this past week showed growing support for the $85 billion-per-month QE purchases of MBS and Treasuries by or before the end of 2013, the tepid growth outlook and extreme lows in investment returns look far more daunting to the long-term investor. For a more concise time frame, we will watch the reaction to the beginning of the 4Q earnings season with Alcoa reporting on Tuesday and Wells Fargo on Friday.

Euro Struggles Before ECB Adds Weight

A rebound in risk appetite often has a forgiving influence for currencies or assets that maintain a questionable fundamental outlook. We have seen the general rise in sentiment tides lift the troubled euro numerous times in the past, but the currency showed little of that strength over the past week. Aside from EURJPY, the euro lost ground against all of its freely-floating, major counterparts. This may be a sign that the relief of Greece avoiding catastrophe has been spent. Another consideration that is often overlooked – the euro’s benchmark Libor and Treasury rates are lower than its US counterparts’, which may actually drive carry interests away from the euro. Looking to the week ahead, there is plenty of event risk in sentiment measures (investor, consumer, economy), an ESM bond sale, a number of meetings for officials and Greece unemployment. Most euro traders’ top concern though is the ECB rate decision Thursday. The risk is for further cuts to rates or growth forecasts.

Japanese Yen Crosses Extend Rally to New HighsThe yen’s tumble continued with little check this past week. Though the foundation of risk trends were somewhat dubious, the safe haven and carry funding currency didn’t shy away from a hearty drop against all of its counterparts. Between a 1.3 percent drop against the Euro (a weakened currency) and 4.0 percent plunge versus the New Zealand currency, this tumble is extremely stretched. The implications of a natural correction would find serious leverage should a bout of risk aversion kick in. If fear rises, there isn’t much carry to in these crosses to buffer it.

Canadian Dollar: FX Traders Pay Little Heed to Strong Jobs Numbers

Once again, the Canadian docket would impress on employment. The payrolls figure roundly beat consensus with a 39,800- position increase and the jobless s rate unexpectedly dropped its lowest level since December 2008 (7.1 percent). However, this times, the Canadian dollar (‘loonie’) paid little mind to the positive report. The NFPs report at the same time offered some distraction, but there is further an issue that the market is growing acclimated to ‘beats’ by this data series. Once again, loonie traders must focus on risk trends and symbiotic USD trends.

British Pound Excessive Tumble May Spur Rebound

Over the past three days, the sterling has enjoyed the worst performance amongst the majors. Whether against high yielding counterparts or safe havens like the dollar, the pound was the most afflicted of its counterparts. This intense decline has some grounding in data (like the Services PMI) and the lagging pace of government bond yield growth; yet it is still arguably overdone. Be careful of a speculative reversal.

Swiss Franc: Safety Flows and SNB Reserves Still Issues

Though the panicked drive behind the flight to safety for European capital has let up, the franc is still a shining beacon for investors and citizens that realize the larger issues are far from resolved. The SNB’s report of its foreign currency reserves this coming week will be interpreted for its influence on keeping the franc suppressed. Traders should keep a vigilant eye on EURCHF for any serious changes in interpretations.

Gold Drops For Sixth Week, Longest Slide in 8 Years

Thanks to a late-day rebound this past Friday, gold closed out the week with a mere 0.01 percent decline. Nevertheless, that puts the metal in the red and notches up its consecutive bearish tally to six - its longest tumble in eight years. Futures volume behind the decline is still light, which means the move isn’t panicked (and thereby prone to reversal). The US dollar and debt ceiling will be necessary drivers moving forward.

**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar

ECONOMIC DATA

GMT

Currency

Release

Survey

Previous

Comments

23:50

JPY

Monetary Base (YoY) (DEC)

-

-

BoJ easing should swell monetary base in coming months.

23:50

JPY

Loans & Discounts Corp (YoY) (NOV)

-

0.30%

Corporate deleveraging should keep figure near zero.

0:01

GBP

Lloyds Employment Confidence (DEC)

-

-42

Gradually improved over 2012, but still pessimistic job prospectus.

5:00

JPY

Vehicle Sales (YoY) (DEC)

-

-3.30%

Global growth could help exports; hit 2012 low during Sept. at -9%.

8:00

CHF

Foreign Currency Reserves (DEC)

-

424.8B

FX reserves on upward terror since 1.2 EUR peg. Expect more of same

9:30

EUR

Euro-zone Sentix Investor Confidence (JAN)

-

-16.8

Been improving since -30 low on August 2012.

10:00

EUR

Euro-zone Producer Price Index (MoM) (NOV)

0.10%

0.10%

Wholesale price inflation slowing confirms regional flag.

10:00

EUR

Euro-zone Producer Price Index (YoY) (NOV)

2.40%

2.60%

15:00

CAD

Ivey Purchasing Managers Index s.a. (DEC)

47.5

Just entered below 50 level in Nov. may find support at 47.

22:30

AUD

AiG Performance of Construction Index (DEC)

37

Been contracting since May 2010, but improving since Sept 2012.

GMT

Currency

Upcoming Events & Speeches

14:30

EUR

ECB Announces Bond Purchases

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table

CLASSIC SUPPORT AND RESISTANCE EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT

Currency

USD/MXN

USD/TRY

USD/ZAR

USD/HKD

USD/SGD

Currency

USD/SEK

USD/DKK

USD/NOK

Resist 2

15.5900

2.0000

9.2080

7.8165

1.3650

Resist 2

7.5800

6.1875

6.1150

Resist 1

15.0000

1.9000

9.1900

7.8075

1.3250

Resist 1

6.8155

5.9190

5.8200

Spot

12.7417

1.7825

8.5619

7.7513

1.2272

Spot

6.5374

5.7077

5.6038

Support 1

12.5000

1.6500

8.5650

7.7490

1.2000

Support 1

6.0800

5.5840

5.6000

Support 2

11.5200

1.5725

6.5575

7.7450

1.1800

Support 2

5.8085

5.3350

5.3040

INTRA-DAY PROBABILITY BANDS 18:00 GMT

Currency

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

GBP/JPY

Resist. 3

1.3172

1.6172

89.04

0.9317

0.9929

1.0559

0.8395

116.59

143.21

Resist. 2

1.3146

1.6147

88.82

0.9299

0.9915

1.0539

0.8376

116.25

142.82

Resist. 1

1.3121

1.6121

88.60

0.9282

0.9901

1.0519

0.8356

115.90

142.44

Spot

1.3069

1.6069

88.15

0.9246

0.9872

1.0480

0.8317

115.21

141.66

Support 1

1.3017

1.6017

87.70

0.9210

0.9843

1.0441

0.8278

114.52

140.88

Support 2

1.2992

1.5991

87.48

0.9193

0.9829

1.0421

0.8258

114.17

140.50

Support 3

1.2966

1.5966

87.26

0.9175

0.9815

1.0401

0.8239

113.83

140.11

v

--- Written by: John Kicklighter, Chief Strategist for DailyFX.com

To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at https://www.twitter.com/JohnKicklighter

Sign up for John’s email distribution list, here.

Additional Content:Money Management Video

Trading the News Video

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • UBS CEO says clients remained risk averse in third quarter Reuters - 12 minutes ago

    ZURICH (Reuters) - UBS (UBSG.S) Chief Executive Sergio Ermotti said on Thursday political uncertainty and concerns over global growth meant clients remained cautious about the market in the third quarter. ... … More »

  • Chinatown shophouses for sale at $23 mil
    Chinatown shophouses for sale at $23 mil The Edge Property - 17 minutes ago

    A pair of shophouses at 22 and 23 Mosque Street have been put up for sale by expression of interest. The indicative guide price for 22 and 23 Mosque Street is in the region of $23 million, which translates to about $2,950 psf on the existing gross … More »

  • From robots to websites, British firms curb spending due to Brexit Reuters - 20 minutes ago

    Heavy machinery whirrs and clanks on the factory floor of precision metalworking firm Robert Bion & Co, where a planned three-metre robotic arm would have been speeding up output by now, if Britain had not voted to leave the European Union. "We're … More »

  • Bank of Finland cuts Europe growth forecasts on Brexit, Italy problems Reuters - 21 minutes ago

    Finland's central bank cut on Thursday its forecast for economic growth in Europe for next year, citing impacts from Britain's vote to leave the EU as well as weakened economic prospects in Italy. The Bank of Finland slightly lifted its 2016 growth … More »

  • Planned global banking rules not balanced, need changes - EU's Dombrovskis
    Planned global banking rules not balanced, need changes - EU's Dombrovskis Reuters - 40 minutes ago

    A planned reform of global banking rules being discussed by the United States, Europe, Japan and other major economies risks negatively affecting European banks and needs to be changed, the EU financial services commissioner said on Thursday. The … More »

  • Mount Anvil to preview Hampstead Manor in Singapore
    Mount Anvil to preview Hampstead Manor in Singapore The Edge Property - 41 minutes ago

    Award-winning London developer Mount Anvil will launch for sale its latest development, Hampstead Manor, in Singapore at the Four Seasons Hotel over the weekend of Oct 1 and 2. Knight Frank has been appointed the marketing agent for the project. … More »

  • Bugis Point on the market for $59.5 mil
    Bugis Point on the market for $59.5 mil The Edge Property - 47 minutes ago

    Bugis Point, a six-storey commercial building at 530 North Bridge Road, has been put up for sale by public tender. According to CBRE, the appointed marketing agent, the property has a guide price of $59.5 million. Bugis Point is located directly … More »

  • Billionaire Li Takes Long-Term Bet on Newly Listed Postal Bank Bloomberg - 48 minutes ago

    The chairman of CK Hutchison Holdings Ltd., his three charitable foundations and his son Victor Li, hold a combined 11.62 percent of H-shares in the Chinese lender, according to an e-mailed statement Thursday. Postal Bank raised $7.4 billion in its … More »

  • Amoy Street shophouses up for sale
    Amoy Street shophouses up for sale The Edge Property - 52 minutes ago

    Adjoining shophouses at 77, 78, 79 and 80 Amoy Street have been put up for sale by public tender. According to CBRE, the properties have a guide price of $64.3 million, or $2,700 psf, based on the gross floor area. This is the second time CBRE has … More »

  • Gold pares gains as dollar recovers, equities rally
    Gold pares gains as dollar recovers, equities rally Reuters - 57 minutes ago

    Gold pared early gains on Thursday as the U.S. dollar recovered and global stocks rallied after oil producers agreed to curb output. The Organization of Petroleum Exporting Countries on Wednesday agreed modest oil output cuts in the first such deal … More »

  • Cash freeze squeezes Italy migrant centres to bursting point
    Cash freeze squeezes Italy migrant centres to bursting point AFP News - 58 minutes ago

    A steady flow of migrants arriving in the south has combined with the de facto closure of borders to the north to leave Italy's migrant reception centres bursting at the seams. Neither Renzi's office nor the finance ministry responded to an … More »

  • Expert panel warns Tokyo Olympics cost could top $30 billion
    Expert panel warns Tokyo Olympics cost could top $30 billion Associated Press - 59 minutes ago

    An expert panel commissioned by Japan's capital city has warned that the total cost for the Tokyo 2020 Olympics could exceed 3 trillion yen ($30 billion) unless drastic cost-cutting measures are taken. ... … More »

  • Did landmark laws from Congress enable high drug prices?
    Did landmark laws from Congress enable high drug prices? Associated Press - 59 minutes ago

    Lawmakers are venting outrage over high prescription drug costs, but if Congress is looking for culprits, it might want to look in the mirror. Republican- and Democratic-controlled Congresses, and presidents ... … More »

  • Three residential buildings near Orchard Road, two The Claymore units up for sale
    Three residential buildings near Orchard Road, two The Claymore units up for sale The Edge Property - 1 hour 0 minutes ago

    A group of investment holding companies has placed three residential properties near Orchard Road up for sale by public tender. The three properties are 3 Cuscaden Walk, 120 Grange Road and 8 Hullet Road. Completed in the early 1990s, 3 Cuscaden … More »

  • China’s Big Ball of Money Isn’t Going Anywhere Near Stocks (2) Bloomberg - 1 hour 2 minutes ago

    The Shanghai Composite Index will end the year at 3,075, according to the median forecast in a Bloomberg poll of 10 strategists and fund managers. That implies a 13 percent drop over the 12-month period, the steepest in five years, and a gain of 2.9 … More »

  • Asia stocks rally, energy firms soar on OPEC deal
    Asia stocks rally, energy firms soar on OPEC deal AFP News - 1 hour 8 minutes ago

    Energy firms led a rally in Asian stock markets Thursday, while high-yielding currencies advanced after OPEC's shock agreement to cut oil output sent crude prices soaring. The gains come after OPEC's "historic" announcement late Wednesday of a deal … More »

  • Governor to approve state-run retirement for private workers
    Governor to approve state-run retirement for private workers Associated Press - 1 hour 8 minutes ago

    Gov. Jerry Brown is scheduled to sign legislation Thursday to automatically enroll nearly 7 million people in a retirement savings account, an attempt to address growing fears that many workers will be ... … More »

  • Bridging the Gap: Hainan summit presents opportunity for Southeast Asian startups to test China
    Bridging the Gap: Hainan summit presents opportunity for Southeast Asian startups to test China e27 - 1 hour 9 minutes ago

    The event takes at Clear Water Bay on the island of Hainan and registration closes tomorrow   It is common knowledge in the startup world that the Chinese tech ecosystem is leading the East Asian region and has risen to rival that of Silicon Valley. … More »

  • 'Mud Men' make rare foray outside Papua New Guinea
    'Mud Men' make rare foray outside Papua New Guinea AFP News - 1 hour 10 minutes ago

    The ghostly dance took place not in their native Komunive village, but at the Australian Museum in Sydney on Thursday. It was their first sojourn outside PNG to share their passion for crafting the "holosa" mud masks -- considered as one of the key … More »

  • TI Fluid Systems to raise 600 million euros in London debut Reuters - 1 hour 10 minutes ago

    The company said the offer would include a partial sale of shares held by funds advised by Bain Capital Private Equity, LP, members of the management team and other individual shareholders. TI Fluid said it would use the net primary proceeds to … More »

  • Gift Ideas for #TeamOffice
    Gift Ideas for #TeamOffice MoneyMax.ph - 1 hour 11 minutes ago

    Office Holiday parties are an eventuality, really. Some will go the Secret Santa route and exchange only one gift on the day of the party itself, with everyone’s code names and wish lists up on the bulletin board, or sent around via e-mail. Some … More »

  • Senior German lawmaker says no more aid for ailing banks Reuters - 1 hour 12 minutes ago

    Germany will not grant any more state aid for ailing banks, a senior lawmaker in Chancellor Angela Merkel's conservative bloc said on Thursday, a day after the government denied it was working on a rescue plan for Deutsche Bank, its biggest lender. … More »

  • European stocks rally at open after OPEC deal AFP - 1 hour 12 minutes ago

    Europe's main stock markets rallied at the start of trading on Thursday as energy share prices surged following OPEC's surprise deal to cut oil output. London's benchmark FTSE 100 index jumped 1.0 percent ... … More »

  • Cellphones spill into Yellowstone's wilds despite park plan
    Cellphones spill into Yellowstone's wilds despite park plan Associated Press - 1 hour 14 minutes ago

    Adventure seekers encounter untamed wilderness when they enter the backcountry of Yellowstone National Park. Howling wolves. Deadly grizzly bears. Steam-spewing geysers as seen nowhere else on earth. A ... … More »

  • Insight: From robots to websites, British firms curb spending due to Brexit Reuters - 1 hour 18 minutes ago

    Heavy machinery whirrs and clanks on the factory floor of precision metalworking firm Robert Bion & Co, where a planned three-meter robotic arm would have been speeding up output by now, if Britain had not voted to leave the European Union. "We're … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.159+0.008+5.30%
    N21.SI
    0.114+0.005+4.59%
    40E.SI
    0.29+0.01+5.45%
    5ME.SI
    0.132+0.010+8.20%
    A50.SI
    0.106+0.001+0.95%
    40F.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.35+0.05+16.67%
    AYV.SI
    0.13+0.02+16.07%
    BEH.SI
    0.119+0.015+14.42%
    A7S.SI
    0.325+0.032+10.92%
    BJE.SI
    0.395+0.045+12.86%
    BQF.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.178-0.020-10.10%
    M14.SI
    0.21-0.02-8.70%
    BXE.SI
    0.49+0.02+3.16%
    AWC.SI
    0.154-0.013-7.78%
    5WJ.SI
    0.16-0.01-5.88%
    5G1.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3633+0.0044+0.33%
    USDSGD=X
    1.5303+0.0064+0.42%
    EURSGD=X
    1.7743+0.006+0.34%
    GBPSGD=X
    74.3990+0.287+0.39%
    SGDJPY=X
    5.6864-0.0177-0.31%
    SGDHKD=X
    3.0174-0.0142-0.47%
    SGDMYR=X
    9,512.1279-49.4746-0.52%
    SGDIDR=X
    4.8926-0.0176-0.36%
    SGDCNY=X
    1.0461+0.0015+0.14%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,325.70+2.00+0.15%
    GCZ16.CMX
    19.23+0.11+0.57%
    SIZ16.CMX
    95.67+2.69+2.89%
    ^XAU
    2.190.00-0.02%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.13+0.02
    ^FVX
    1.57+0.01
    ^TNX
    2.29+0.01
    ^TYX