Currency Notes Against the Green Bucks

You can get a view on what the market is up to. Note the update of each pair of currency has its own story and how each support of each other versus the green buck.

EUR/USD: It is getting closer to 1.30 and starts climbing to the highest level since the big measures of Draghi. With a clear resistance at about 1.30, it is followed by 1.3050 while support is at 1.2960 is followed by 1.2920.

GBP/USD: The pair reached 1.63 but it reverted back to 1.6285. The growing notion of a No vote in Scotland is helpful to the pound. Just be sure to follow the timetable for the big day of the referendum.

USD/JPY: Green bucks and yen are losing 107; however, the move is more limited here. This seems to be a risk now that both “safe haven” currencies are together.

AUD/USD: The pair has already gone below 0.90 two times following the Chinese news later jumped to 0.91 and is now the level is a bit below.

NZD/USD: This pair stays above 0.82 as the OK milk auction has been supporting the duo.

USD/CAD: Sorry that the pair fell under 1.10, making ii a full round trip. Canada’s strengthening manufacturing sales gave the initial boost to the loonie.

The next schedule of Fed meeting looks bleak for the green buck.

ECB and People’s Bank of China Increase Liquidity

ufx.com - ECBThe European Central Bank and People’s Bank of China support liquidity to deal with abating growth. This underlines a disagreement in direction among the world’s largest economies even as the US moderates stimulus.

China’s central bank is infusing 500 billion Yuan or $81 billion into some of the biggest banks in the country.

Economists project that the US Federal Reserve Chair will declare a $10 billion reduction in its bond purchases every month after the policy meeting.

The credit expansion scheme of China works on directed measures to prop up growth while discontinuing mixed stimulus which was practiced in the United States.

In adopting a three-month period for its infusion, China opts for a regulatory process aimed at stimulating demand for credit in an economy burdened with debt.

The PBOC will channel 100 billion Yuan each to China’s five major banks for three months.

China’s financial policy is inclined toward quantitative easing which may go on throughout 2015.

Bank stocks recovered in Hong Kong. The Chinese currency stopped a four-day slip while the one year interest rate exchanges declined since June.

Recession in Russia

Russia has the tendency to slide into recession due to government’s failure in facilitating economic investments to withstand sanctions by the US and European Union.

This was revealed by ex-finance minister Alexei Kudrin who is a staunch backer of liberal reforms. He is the only one bold enough to give reservations about economic policies since the crisis in the Ukraine.

Kudrin anticipates the economy to decline in 2014 and deteriorate. Growth can be negative by next year which is less than government projections for an annual 0.5 percent growth this year. In fact, the economy may plunge by another three to four percent.

Russia has been entangled in a web of high inflation that has also stalled growth. The Russian Central Bank increased costs of borrowing thrice this year. It has singled out demographics as the long-term hindrance to the economy since the start of the second quarter following meetings to bring up interest rates.

On the other hand, the government’s forecast is that the $2 trillion financial system will get bigger 0.5 percent in 2014 after a 1.3 percent increase last year. This is quite far from the average of seven percent from 2000 until 2008. The possibility of a recession has gone up from 50 to 65 percent.

The medium-term goal of four percent by the central bank will anchor expectations of price increases and build the condition for savings and investment.

UK GBP versus USD and EUR

ufx.com - forex tradingThe UK currency was stable against the Euro and US Dollar regardless of the very unpredictable trading during the previous week.

The UK to Euro exchange rate was below the 1.26 level probably because of apprehensions brought about by the Scottish issue that weighed heavily on price movements of the Pound Sterling.

Meanwhile, GBP/EUR traded at 0.08 percent at 1.2536. This came from a high of 1.2683.

These movements back and forth between the two currencies are down from speculative trading from various highs and lows as traders continue to take profit while the referendum controls trading markets.

UK pound to dollar rate is negative 0.16 percent which is lower at 1.62322 GBP to USD.

Dollar to Euro conversion is positive 0.17 percent which is higher at 0.77297.

The recent poll showed that more than 50 percent of Scots choose to separate from the UK on September 18.
Many market traders project this week to be unstable for the pound.

On the other hand, the US dollar will be another volatile currency due to the forthcoming Federal Reserve policy meet. The FOMC is projected to verify US economy’s positive performance. It focuses on interest rates and present position on future fiscal policies.