Dukascopy Morning Forex Overview

“Spain is considered a far more attractive credit than Italy”
- Michael Leister, rate strategist at WestLB
Spain sold €6.03 billion of debt on Thursday, more than initially expected and at a lower rate compared to Italy, easing concerns the country may lose access to financial markets next year.

“We’re seeing improvement in labor-market conditions”
- Julia Coronado, chief economist at BNP Paribas
The number of Americans claiming for unemployment benefits tumbled to 366 thousand last week from 385 thousand the week before, said the Department of Labor on Thursday. Economists expected the reading to increase to 389 thousand.

“All in all, the picture for U.K. household consumption is not very encouraging”
- Annalisa Piazza, an economist at Newedge Group in London
U.K. month on month retail sales dropped in November, said the Office for National Statistics on Thursday. Sales fell 0.4 per cent the previous month after increasing 0.6 per cent in October. Economists expected the reading to decline 0.3 per cent.

CHF
“The improvement in sentiment in the industry is to be seen as positive”
- Viola Stork, an analyst at Helaba Landesbank Hessen-Thueringen
Swiss stocks edged higher on Thursday after better-than-expected reports on U.S. initial jobless claims and manuf acturing.

JPY
“The data are the latest showcase of Japanese companies getting hammered by the strong yen and weakening overseas economic growth”
- Norio Miyagawa, a senior economist at Mizuho Research and Consulting
Japan’s largest manufacturers became less optimistic on the outlook of the country’s economy amid crisis in Europe and after foreign investment in China slid for the first time since 2009.

 

“I do not anticipate further efforts by the Fed to address the potential spillover effects of Europe on the US, we will continue to monitor the situation closely”
- William C. Dudley (based on Bloomberg)
Currency pair’s bearish movement seems to be decelerating while approaching 1.2860. Test of this support might result in a near-term rally, although the longer-term study suggests continuation of a downtrend, down to 1.2089.

“S&P’s negative credit watch continues to hang over the euro zone bond market and negotiations on the Greek PSI are far from reaching a positive conclusion”
- BNP Paribas (based on CNBC)
While being capped by resistances at 102.49, 103.53 and 104.76 EUR/JPY is heading toward 100.77. In case the latter level does not hold the bearish pressure, current dip might extend down to 100.00. The initial support, however, is presently at 101.10.

“The weaker export performance reflects ongoing instability in the euro area, our [UK] biggest export market”
- CBI (based on WSJ)
Since a support located at 1.5415 has managed to repel GBP/USD’s attack, the pair is likely to recover for now. To maintain its upward direction the price will have to overcome resistance at 1.5746. Dips are not expected to wander far below 1.5415.

“It looks like we [US] have just hit a clear patch on the road to recovery, where things are going to speed up a little bit”
- Wells Fargo Securities (based on Reuters)
While being supported by a number of closely situated lines, at 77.29, 77.26/12 and 76.22, the currency pair is unlikely to show any weakness for the time being. It is anticipated to focus on resistances instead. The immediate one is at 78.27/29, while subsequent levels may be found at 78.18, 78.66 and 79.10.

“Even at the current rate, the Swiss franc is still high and should continue to weaken over time”
- Philipp Hildebrand (based on Bloomberg)
USD/CHF has rebounded from 0.9550 and now is likely to contract down to 0.9280 which should be able to reignite bullish momentum, while additional support will be provided by 0.9176. The long-term goal lies at 0.9776/84, ahead of 0.9950.

Monti Faces Confidence Vote to Approve Emergency Budget
Prime Minister Mario Monti will face a confidence vote in Parliament to speed passage of a 30 billion-euro ($39 billion) emergency budget plan aimed at spurring growth and convincing investors he can cut Europe’s second-biggest debt.

Deal reached to avert government shutdown
Lawmakers on Thursday reached a tentative deal to fund an array of government agencies through September 30 and avert shutting down many of Washington’s operations starting this weekend.

China likely to set 10% export-growth goal: report
China is likely to set its export growth target at 10% for next year, the 21st Century Business Herald reported Friday, citing a person familiar with the matter.