Swiss franc should strengthen slightly against USD

Crowds detail Trade Forex are effectively neutral dollar (ticker: USDOLLAR) against the Swiss Franc, giving little reason to expect large gatherings or weakness by the Exchange in the short term. Wider calls for the USD declines in the short term however leave the recent USDCHF trend intact.
Indeed, we see the scope of the weakness of the modest USDCHF at the end of the month, while seasonal trends indicate that July could be the beginning of a new trend.
How to interpret and exchange with the SSI? Watch a FXCM Expo presentation which explains the SSI.

BoE Minutes Show 8-1 Vote Against Stimulus, Low Short-Term Growth Projections

THE TAKEAWAY: BoE Voted 8-1 to keep QE unchanged -> Further stimulus is a future possibility -> Cable drops leading up to BoE release
8 out of 9 Bank of England members voted against raising quantitative easing, keeping the bond-purchase program at 325 billion pounds, according to the minutes from their May 9-10 meeting. For the second month in a row, David Miles was the only member of the Monetary Policy Committee who voted for a 25 billion increase of the asset purchase program.
‘Further monetary stimulus could be added if the outlook warranted it,’ read the minutes from the meeting. The minutes also mentioned that economic growth will be weak in the long term, following the previous quarter’s onset of a double dip recession, and the euro-debt crisis remains a threat to the UK.
However, the Bank of England also said that consumer price index outlook doesn’t call for further QE, as inflation is projected to slow to the target 2.0% rate by 2013. Yesterday’s UK CPI rate came in slightly lower than expected, further supporting the lower inflation target.
Also reported this morning were UK retail sales, which fell the most in two years during April. Retail sales dropped an unexpected 2.3% from March, versus a revised 2.0% growth during the previous month. The drop in demand was attributed to rainfall that curbed clothing and fuel sales according to the Office for National Statistics.
The drop in sales comes as another sign of a slowing economy in the UK, and that combined with the lower than expected inflation supports those who hope to see further stimulus.
The expectation for further stimulus has a mixed effect on the sterling. Further QE would lower interest rates, which is usually currency-negative. However, if the stimulus is seen as effectively boosting growth, it could be considered currency positive.

Cable fell to 1.57000 in the hour before the release of the BoE minutes and the retail sales, and then briefly continued its drop following the news before retreating to the 1.5700 level. The next major support comes in at 1.5600.

~~$ Dollar rises against commodity currencies as March Factory Orders fall

02 May 2012 14: 29 GMT  THE TAKEAWAY: [U.S. factory orders fall in March] > [Despite cooling in factory orders, stronger April ISM manufacturing figure indicates slump may be short-lived] > [USD gains vs.] [AUD]Orders to U.S. factories fell in March for the second month in the last three, due largely to a pullback in demand for aircraft. Bookings declined by 1.5 percent in March, while February's figure was revised downwards to a 1.1 percent rise from its initial reading of 1.3 percent. The median forecast of 61 economists polled in a Bloomberg News survey had called for a 1.6 percent decline.
According to a report released by the U.S. Department of Commerce today, orders for capital goods excluding aircraft and military equipment, a measure of future business investment, fell by 9.9 percent after rising 1.8 percent the previous month. Shipments of capital goods, which are used in calculating gross domestic product (GDP), climbed by 2.6 percent after rising by 1.5 percent in February. Meanwhile, demand for down goods, including petroleum, rose by 0.5 percent for a second month, while a 0.4 percent increase in unfilled orders signaled a pickup in production.
The factory orders report follows yesterday's release of the ISM Manufacturing Index for April, which showed that manufacturing in the U.S. probably expanded at the fastest pace in almost a year. Despite last month's drop in factory orders, the ISM figure indicates that the slump may be short-lived.
AUDUSD 1-minute Chart: May 2, 2012

Chart created using Strategy Trader - Prepared by Tzu - Wen Chen
Following the data release, the greenback strengthened against the higher-yielding currencies such as the Australian, Canadian and New Zealand dollars. The US dollar advanced as much as 16 pips against the Aussie in the first few minutes as the slump in factory orders pared risk appetite and sent investors back towards the safe haven currency. At the time of this report, the greenback was trading at $1.0289 against the Aussie.

|> Aussie continues to slip against the Yen as expectations Surge rate cut

Fundamental headlines
-Weidmann of the Bundesbank said that no politician wants to hear - Bloomberg
-Forecasts of rate 17 Fed can confuse more clarify - Bloomberg
-The Korea of North nuclear test ready "Soon" - Reuters
-The music stopped for Wall Street banks - WSJ
-United States saw high Cop as a candidate for risk of asylum - WSJ
Summary of European Session
Risk appetite was tempered in the night as the players in the market continued to digest the political developments of the weekend outside Europe, but overall, it seems that concerns have been pushed to the side, would it temporarily. Despite the negative sense of yesterday, major European stock indexes traded relatively unchanged otherwise positive before equity money U.S. open. The major development in the night, however, was the performance of the Australian Dollar in light of a low inflation reading.
Last week, the Reserve Bank of Australia has published the minutes of the meeting earlier in April. Essentially, the minutes said that "If the readings of inflation to disappoint, the RBA will be a reduction in the rate.". Well, Sunday, the quarterly producer price index showed deflation, while this index published earlier today showed little or no underlying price pressures. In light of these developments, I believe that it is all but guaranteed that there is a reduction of 25-points; but the question is to know if there is a reduction in rate 50 - bps.
Credit Switzerland Overnight Index swap, before inflation earlier today, there was already a 93 per cent of probability of a decline in the rate of 25 - bps; After printing, there was also great as a chance of 40% for a cut of 50 - bps (with a probability of 100% of a cut of 25 - bps). If the expectations of lower rates continue to thrust, where that share the Australian Dollar? Our model suggests that, if the expectation of the Japan and the Federal Reserve Bank rate remain the same (and no other stimulus was announced), we should the AUDUSD fall to parity (1.0000) and AUDJPY to fall below 81,000.
Take a look at credit, debt in the eurozone periphery has posted a modest rebound after the underperformance of yesterday, with the earnings leader Spanish 5.850% duty of 10 years, with its yield drop by base-9 points, 5. On the more short-end of the curve, there is a significant discrepancy between the sovereign debt of the periphery, with the Spanish note of 2-year gains (11, 5 - bps), Italian note 2 years unchanged and the Irish 2-year note behind the pack (+ 19, 3 - bps).

AUDJPY 5-min Chart: April 24, 2012

Graphing with Marketscope - prepared by Christopher VecchioOverall, the Japanese Yen was the best performing major currency against the Dollar, climbing from 0.12%. The Euro was the best-performing next major, up to 0.07% against the US Dollar, as the political woes of the Euro area apparently took the day off for a tempered optimism. The worst performer is the Australian Dollar, down 0.36%, after dismal inflation about earlier today.
4-Hour Price Action

Main levels: 12: 55 GMT

Key Levels: 12:55 GMT

So far, on Tuesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is higher, trade at 9933.68 at the time when this report was written, after opening at 9929.13. The index traded mostly higher, with the top at 9947.47 and at 9923.62.

*** Loonie, Sterling March Higher Against US Dollar on Strong Data

20 April 2012 14:00 GMT  Fundamental Headlines - Europe Urged to Fix Crisis as G-20 Warns of More Stress – Bloomberg
- Nine U.S. Banks Said to be Examined on Overdraft Fees – Bloomberg
- Global Growth Seen Subdued, Still Heavily Reliant on Asia – Reuters
- Poll Frames Rivals’ Strengths – WSJ
- Volume Equals Validity – WSJ
European Session Summary
Despite some risky headline events that have triggered swings in volatility throughout the week, price action was relatively muted in the overnight with most of the majors trading in narrow ranges against the US Dollar. The leg up in risk-tolerance really took off at the end of trading in Asia, when higher yielding currencies and risk-correlated assets, like the Australian and New Zealand Dollars, were trading near their session lows.
With the G-20 meetings ongoing in Washington, much attention has been drawn to how much additional funding the International Monetary Fund can collect from its members. While no official number has been reported, the early estimates suggest that an additional $400 billion will be donated to what has become the unofficial “save Europe” fund, a concern raised by Canadian Finance Minister Jim Flaherty.
Mr. Flaherty said that “Given that the major challenge here is a sovereign debt challenge in euro zone countries, and that euro zone countries are asking non euro-zone countries to contribute to resources at the IMF, our view is that there ought to be two votes.” Mr. Flaherty’s view is likely to be popular among the BRICS – Brazil, Russian, India, China, and South Africa – who are weighing whether or not to contribute to the fund and what size contribution. If Mr. Flaherty had his way, European countries would have less of a say and emerging market economies would have a greater representation.
Beyond the meetings, the notable performances in the Asian and European sessions go to the British Pound and Canadian Dollars, which have been riding a wave of strong data in recent days. For both currencies, this week marked a shift in policy seeing how both the Bank of England and the Bank of Canada have started to take on more hawkish positioning. The Bank of England has fewer members voting for more easing; and the Bank of Canada has suggested it may soon be time to withdraw stimulus from the market. Today, strong British retail sales data supported the Sterling, while inflation data has boosted the Loonie on rising rate hike expectations.
Taking a look at credit, the PIIGS were generally skewed to the downside, but for Portugal, whose 2-year note plunged 36.9-basis points to bring the yield down to 8.448 percent. Spanish borrowing costs were relatively higher, with the 2-year note fetching 3.389 percent. Irish debt was the worst performing on the short-end of the curve, losing 9.9-basis points to 4.525 percent on the 2-year note.
EURUSD 5-min Chart: April 20, 2012

Charts Created using Marketscope
Overall, the Swiss Franc (?) was the best performing major currency, tracking the highly correlated Euro which was the second best performer, each gaining 0.44 percent and 0.42 percent, respectively. All of the other majors, but for the Japanese Yen, which was down 0.06 percent, had rallied against the US Dollar through two sessions on Friday.
24-Hour Price Action
Key Levels: 12:55 GMT

Thus far, on Friday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading lower, at 9931.74 at the time this report was written, after opening at 9955.15. The index has traded mostly lower, with the high at 9965.33 and the low at 9928.29.