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Posted by upendra on April 29, 2008, 12:53 pm
wrote:
> It is the same market sentiment which contained the market and
> provided support to the greenback that there is =A0a close end of =A0the
> fed's easing cycle which started since the beginning on the sub-prime
> mortgage bad loan which followed by the credit crisis and loses of the
> financial market across the broad. The mistrust in the growth
> performance and the need of liquidity for covering loses and
> reinforcing the capitals put pressure on the fed to cut the interest
> rate from 5.25% to 2.25% until now while the inflation is still
> building up on the current high oil and commodities prices tackling
> the fed's efforts to spur demand. Actually, the consuming confidence
> data are coming lower month by month without a stop lowering the
> investments targets and spending as well.
>
> By God's Will, today, we are just waiting for the release of the
> consuming confidence of April which is expected to decline to 62 from
> 64.5 in March. The market wants to know whether there is a pause of
> the US disappointing consuming data or not. By the end of last week
> the US Michigan consuming sentiment survey declined again to 62.6 from
> 69.6 last month. The high oil and commodities prices are forming a
> real tackle of the consumers besides the current slowing down of
> demand and growth outlook.
> In the same time the housing slump is still looking for an end as last
> week we have had new weak new home sales decline by 8.5% in March too.
> The figure was the lowest since 1991 It is clear to the market that
> there are no signs yet for a close end of this continued slump. It is
> important to look into the fed's coming assessments words which will
> come out with its interest rate decision tomorrow to know how much
> they are worried about inflation currently.
>
> An optimistic wave helped the equity market recently on increased
> expectations that the biggest loses of the crediting crisis has come
> and there will not be this massive impact again. The Japanese yen was
> under pressure in spite of the high CPI data which has shown an
> increase by 1.2% while the core came .7% showing increased inflation
> pressure in Japan too which may change the BOJ language tone at their
> meeting later this week. The demand for Japanese yen increases at
> these cheering times of equity market as its lower cost makes it the
> favorite currency for carry trade transactions.
>
> The single currency was under pressure recently after disappointing
> IFO business climate figure which has fallen from 104.3 in March to
> 102.4 in April following the flash disappointing figure of April PMI
> manufacturing which came lower than the market expectations of 51.6 at
> just 50.8 increasing the market worries about the strong single
> currency negative impact on the manufacturers and the side effect of
> the slowing down demand from US but in an empty day of data the single
> currency got a support from The germane leading consuming indicator
> GFK Consumer Confidence which came up for May to 5.9 from 4.8 this
> month.
>
> The BOE 50 billion pound plan of exchanging mortgages back securities
> for governmental bonds could help the British pound last week but the
> mortgage approving data forced it to give back most of it gains. The
> British pound was under the pressure of a slump of the mortgage
> approvals last week showing further worries about the housing and
> crediting markets fueling the market expectations of further interest
> cuts to come. We have just the UK consuming credit of March to be
> watched which is expected to decline to 1.2bln from 2.353bln.
>
> Best wishes
>
> FX-Recommends
> FX Consultant
> Walid Salah El Din
> E-Mail: m...@fx-recommends.com
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