$ Dollar falls into weekend – character of What’s come Monday?

$ Dollar falls into weekend – character of What’s come Monday?
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Having worked so hard to finally overtake resistance that had capped bullish ambitions for an entire month, you’d think the dollar would have won some respite from the sentiment-based headwinds. That said, Friday ended with a sizable decline for the Dow Jones FXCM Dollar Index (ticker = USDollar) back below that closely-watched 10,190 level. Once again, we are reminded of the critical difference between a breakout and break with follow through. The immediate reversal from the greenback is perhaps a little more surprising given the initial move was supported by a general slide in risk trends. That said, when we are confronted with technical boundaries like the midpoint of the EURUSD’s historical range and the fact that there are few fundamental catalysts to actively drive capital towards safe havens that provide no (or even negative) yield, the lack of follow through becomes a little more comprehensible. Can we jump start a trend for the dollar – whether bullish or bearish?
If you were looking for fundamental cues from the fundamental event risk from the final 24 hours of this past week as guidance for where we will go heading forward, you may be disappointed. The Chinese 2Q GDP figures (setting the tone for global growth expectations amongst investors) printed below expected with a 7.6 percent annual pace of expansion – the weakest pace in three years but not enough of a surprise to stir concern. Closer to home, JPMorgan started the ball rolling for the US earnings season with a view into the closely-monitored financial market. A massive $4.4 billion loss via the CIO debacle didn’t seem to materially hamper adjusted earnings. As dubious as corporate earnings are (as a gauge for capital gains and yields for the equities market – the favored investment of retail trader), we cannot ignore it if the market is placated by the figures. The earnings season continues next week with Bank of American, Citigroup, Goldman Sachs, Apple and Google amongst other notables. Watch it with a mind to how the masses read the numbers. Though it is difficult to see any, individual fundamental event as a potential catalyst to truly drive risk appetite forward; Fed Chairman Bernanke’s monetary policy report will always carry the possibility of an announcement of intentions for further stimulus. To what degree markets are still holding out hope (and thereby possibly be disappointed) remains to be seen.
Euro Faces Another Round of Disappointment, May Still Rebound
The euro has dropped sharply over the past two weeks, so a correction is not difficult to wrestle from overexposed bears. From a medium-to-long term fundamental perspective, uncertainty and lack of a solid safety net for another wave of Euro panic leaves the currency and region exposed. Yet, we have seen far too many instances were underwhelming or incomplete efforts have bought the euro time - whether through an easily soothed Euro market or simply an improvement in underlying sentiment is debatable. The media and analysts punched holes in the EU Summit’s vows almost immediately after they were issued, but that baton seems to have been dropped. In the upcoming week, we will nevertheless be reminded of the situation. On Wednesday, the EU will release a report on the public finances of the Euro Zone; but the bigger headline will be Friday’s Finance Ministers meeting, where they are supposed to finally agree on Spain’s rescue terms and potentially touch on Greece and the bigger terms of using the ESM to participate in the ongoing stability effort. Though it doesn’t draw much immediate market reaction, it is also worthwhile to keep an eye on important bond auctions. Spain, Greece and Portugal are all on deck to sell debt; and the rates that they draw (more than the aggregate demand, which can be national banks) reminds us of the market’s expectations.
British Pound Receives a Significant Boost from BoE Lending Details
Though it was somewhat lost in the general advance for most risk-based currencies, the sterling managed to rally against everyone of its major counterparts – safe havens, high yield carry currencies and euro alike. Clearly there was an additional fundamental factor, and that came from the Bank of England. The policy authority issued details on its lending program whereby banks can borrow T-Bills to use as collateral for loans. The program could boost credit as much as 80 billion sterling. Next week, keep an eye on the BoE minutes and jobs figures.
Australian Dollar Looks to Sentiment as its Yield Continues its Drop
Wherever risk trends head, the Australian dollar will inevitably follow (the AUDUSD’s 20-day rolling correlation to the S&P 500 is currently 0.89 percent). That said, there will be a question as to whether the Aussie shows greater sensitive to a rise or a fall in sentiment. The RBA has already delivered a string of cuts against heavy projects of easing. There would imply that there is some relief available from over-extended dovish forecasts, but the 12 month rate forecast is actually heading lower again (now calling for more than 100 bps of cuts again). Furthermore, the benchmark 10-year Australian government bond yield is at 5-week lows – very near the record low set in early June.
Canadian Dollar: BoC Rate Decision on Tap, Reminder of Loonie’s Unique Position
It seems that whenever there is a lull in serious calendar event risk, that the Canadian dollar steps in to fill the void with its own offerings. That will be the case in the coming week. On deck we have a few important readings. The Bank of Canada’s rate decision carries the most flash. Though they won’t alter policy, they will likely retain their neutral to hawkish lean that draws such a stark contrast to global counterparts (especially recently). The Monetary Policy report will follow shortly after along with an expected rebound in inflation pressures on Friday.
Swiss Franc: Bond Yields Plunge into Negative Territory, Will Investors Waver?
The yields on the short-end of the Swiss yield curve were already in negative territory, but the pressure significantly increased this past Friday. The 2-year note’s rate closed at -0.402 percent - a record low. Swiss authorities have repeatedly threatened negative interest rates as a further deterrent against an appreciating franc, but this is clearly not an option. That leaves a floor raise or capital curbs if they have to act.
Gold Rallies Against Euro, High Yield Currencies on Risk-Positive Session
A tumble for the US dollar is good enough reason for gold to find some traction, but to see the precious metal rally against higher yielding currencies is something else. For a risk-positive day, we would expect capital to move away from alternative stores of wealth and into something with higher (any) yield. Such a situation can often times be a sign that risk trends are flimsy and likely to fall apart.
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**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar
ECONOMIC DATA
Next 24 Hours
Indicator of confidence in China’s economy
NZD Performance Services Index
CHF Industrial Production (QoQ)
Last month was the first retracement in a 3 month decline.
CHF Industrial Production (YoY)
EUR Euro-Zone Consumer Price Index - Core (YoY)
Many EU countries have already reports a decrease in inflationary pressure during June.
EUR Euro-Zone Consumer Price Index (MoM)
EUR Euro-Zone Consumer Price Index (YoY)
EUR Euro-Zone Trade Balance s.a. (euros)
Germany’s trade balanced declined during May.
EUR Euro-Zone Trade Balance (euros)
CAD International Securities Transactions (Canadian dollar)
June Vehicle sales beat expectation.
May Wholesale inventory growth rate slowed down.
USD Retail Sales Ex Auto & Gas
IMF to Release Updated Growth Forecasts
Q2 Earnings – Morgan Stanley and Citigroup
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
INTRA-DAY PROBABILITY BANDS 18:00 GMT

USD at July highs as Dow falls for 6th straight Day-China GDP on tap

USD at July highs as Dow falls for 6th straight Day-China GDP on tap

 Der Greenback ist fester am Ende der North American Handel mit Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) Förderung von 0,29 % auf die Sitzung nach dem Umzug nahezu 100 % der seine tägliche durchschnittliche true Bereich. Die Gewinne kommen auf der Rückseite noch ein Ausverkauf an den Aktienmärkten, die die Mehrheit der kämpfen, um die frühen Verluste pare Sitzung ausgegeben. Stimmung bleibt fragil, nachdem gestrigen FOMC-Protokoll nicht Investoren, die eifrig eine Verschiebung im Ausschuss zu Gunsten weitere Lockerung von der Zentralbank Vorwegnahme wurden zu beeindrucken. Märkte bleiben am Rand vor dem heutigen 2Q chinesische BIP Print mit Analystenkonsensus beim Lesen von 7,7 % y/y, nach unten aus einer früheren Auflage von 8,1 % y/y gefordert. Die Daten würden die niedrigsten gelesen auf das chinesische Wachstum seit 2Q 2009 markieren und konnte Zurichs der letzten Ausverkauf in Gefahr. Es ist jedoch anzumerken, dass die Baisse Stimmung hinsichtlich dieser Druck hat sich im Laufe der Woche durchgesetzt und eine stärker als erwartet lesen Sie Märkte, die einen Teil des Niedergangs der Woche pare sehen konnte. Alle drei großen Aktienindizes waren im roten Ende des Handels in New York mit der Dow, S & P und NASDAQ Weg von 0,25 %, 0,50 % und 0,75 % beziehungsweise. Der Dollar brach über dem täglichen Widerstand bei den 78,6 % Fibonacci-Erweiterung aus der Oktober und Februar Tröge bei 10.180 vor der Begegnung mit Widerstand bei den 10.220 weiches Ziel genommen. Beachten Sie, dass der Bruch oberhalb der 28. Juni Hochs bei 10.193 Verletzung über den Hals ein umgekehrtes Kopf SKS-Formation mit obenliegender Beständigkeit Zielvorgaben bei 10.270 und die 100 %-Erweiterung 10.318 Augen darstellt. Tägliche Unterstützung bleibt unter der pro-Tiefs bei 10.134, die die Oktober-Höhen darstellen. Dieses Niveau bleibt nun vorrangig mit einer Pause unten einen Pullback auf die wichtige 61,8 %-Erweiterung 10.072 riskieren. Tägliche RSI Augen jetzt eine Verletzung über der 60-Marke, mit einem solchen Szenario bietet weitere Überzeugung auf unsere direktionale Voreingenommenheit.

 Eine stündliche Kopfhaut-Diagramm zeigt den Index erholt aus dem 100 % Fibonacci Verlängerung vom 20. Juni und 29. Tröge auf 10.216 vor Schließung knapp über weiche Unterstützung bei 10.200. Der Dollar hat sich innerhalb der Grenzen einer aufsteigenden Kanal-Formation mit einer Verletzung über einstweilige Widerstand betrachtete nachfolgende Ziele auf 10.235, 123,6 % Erweiterung an 10.255 und 10.270 weiter. Eine Bewegung unter 78.6 % Erweiterung an 10.180 macht die Kopf SKS-Formation mit einem solchen Szenario betrachtete nachfolgende Etagen auf 61,8 % Erweiterung an 10.152, 10.132 und 38,2 % Erweiterung an 10.112 ungültig.

Der Greenback erweiterte gegen drei der vier Währungen hervorgehoben durch einen 1,07 % Fortschritt gegenüber dem australischen Dollar. Enttäuschend Beschäftigungsdaten und einer anhaltenden Risiko-aus Umgebung haben stark den Aussie belastet die unterhalb der Kanal-Unterstützung aus dem 1.Juni Übernachtung Handel brach. Suchen Sie das Paar, das unter Druck bleiben, wie Erwartungen für weitere Lockerung von der RBA mit Credit Suisse über Nacht Swaps fassen jetzt factoring in 71 % Chance einen 25 Basispunkte auf der nächsten Sitzung der Politik geschnitten. Wir behaupten, dass unser Baisse Ausblick auf die AUDUSD vor der heutigen chinesischen Daten mit täglichen Zwischenziele auf 38,2 % Retracement genommen Form den Februar-Rückgang bei 1.0070 Augen.
Der japanische Yen ist die Top-Performer der Partie mit einen Vorschuss von 0,61 % echte positive Zinssätze in Japan erhöhen die Attraktivität des Yen als Wertaufbewahrungsmittel Reichtum inmitten wachsender Unsicherheiten im Hinblick auf die globalen Wachstumsaussichten. Suchen Sie die USDJPY, Unterstützung bei der 200-Tage gleitenden Durchschnitt knapp über die 79-Figur, mit einer Pause unter dieser Marke riskieren einen weitere erheblichen Rückzug auf den 15. Juni am 78.60 zu begegnen. Ruhetag, unser long-Position gestern für einen Gewinn von nur 20pips inmitten der laufenden Risiko-Sell-off mit der aktuellen Rückzug bietet günstige lange Positionierung unter den 79-Griff. Mit QE Hoffnungen abklingen, Look für breitere Marktstimmung zu Laufwerk-Preis-Aktion mit heute Abend die Daten Version wahrscheinlich Funke hinzugefügt Volatilität paarweise Dollar basiert.

The Euro extends decline as consumer confidence in the Euro area falls in July

The Takeaway: [Euro zone consumer confidence drops] > [could signal further economic recession] > [EURUSD down]
The confidence of consumers in the 17-nation eurozone fell slightly in June in the uncertainty in the head, to June 17 elections Greek and Spanish banking bailout of the sector. The Brussels-based European Commission, reported today that the indicator of consumer confidence flash in the block of the single currency fell slightly to-19.6 in June, after rising last month at-19.3. The consensus forecast 28 economists surveyed by Bloomberg News had requested a decrease of - 20.0.
With more contraction in the manufacturing and services sectors, the decline in the perception of household could report that the economic stagnation in the euro zone deepened in the current quarter.
Chart 1-minute EURUSD: 21 June 2012
Graph created with the scope of the market - prepared by Chen Wen - Tzu
The euro extended its fall against the greenback, as declining among consumers adds to an increased risk of contracting spending households and signals of slowdown of growth in the euro zone. At the time of this report, the EURUSD pair has less than US $ 1.2600 commercial.

News Forex: EURUSD falls below 1.26 as yields soar Spanish

Basic Articles
- Shortages of dollars Seen on $ 2 trillion Gap - Bloomberg
- The heads of Euro sign Greek austerity softening, such as looms Summit - Bloomberg
- Islamists in Egypt demand the presidency that the NEAR army control - Reuters
- Conservatives of Greece begin coalition talks - WSJ
- Overvoltages yields Spanish, Greek Relief Wanes - WSJ
Meeting summary Asia / Europe
Greek elections gave the surprising result of the victory of the New Democracy strong, with the rescue team to get enough votes to be able to form a coalition government with the rescue of the other major party, the PASOK. If this materializes, it will continue to fight the rescue party Syriza outside the main opposition party, but it is only likely to last long. Early reports indicate that PASOK will not form a coalition government without the inclusion of Syriza, whose leader Alexis Tsipras has already said his party will not join the new democracy in a "grand coalition" of all kinds.
In a bit of speculation on how this will develop the Greek drama, as a politician, Mr. Tsipras plays his cards right, because there seems to be in the game for the long term. So if Syriza had to win yesterday would have been only a very narrow margin, which would probably have deteriorated rapidly in case of Greece need another rescue under his command (it will be in about a month ). On the other hand, with a strong presence, Syriza is ready to get the majority support of a few months, when the Greeks return to the polls (assuming that the New Democracy and PASOK to form a government), the coalition of center will not do anything to change the material from the expected path of Greece outside the eurozone.
As a result of Greek elections were digested, it is now clear that the G-20 will not make the nuclear option to flood markets with hundreds of millions of dollars of liquidity to ensure price stability in the coming days. It was most of the reasons why the markets rallied in late last week, and without the promise of greater flexibility, most of the taste after the falling U.S. dollar has been stifled. This "rebound" to reality after the election has dragged on EURUSD from its highest level in three weeks back at 1.2600 1.2747 just before the U.S. equity cash open.
First, no smoothing along the way, investors have thrown in the mass Spanish debt, with the yield of the benchmark 10-year-emerges today 7.285% to 6.840 after the opening %. These are the highest yields of 10 years have seen Spanish since late April 1997. In the short end of the yield curve, the yield of 2-year Spanish note rose higher than 5.592%, its highest level since late November 2011.
Looking at European Credit, Italian debt is well under pressure, with 10-year notes containing 6.057% at the time of writing this report, after rising to 6.173% earlier in the day. The yield was over 10 years to 14 June, when it reached 6.342%. In the short end of the curve, Italian 2-year note rose 18.9 basis points give 4.522%.
Chart EURUSD 5 minutes: 18 June 2012

Lists created by MarketScope - Prepared by Christopher Vecchio

The dollars of Australia and New Zealand are in the day, its appreciation against the dollar by 0.22 percent and 0.34 percent. The Canadian dollar is the worst performer and lost 0.42 percent against the dollar of the United States. Having to 0.88 percent of the trading EURUSD was 0.31 percent lower at the time of writing. USDJPY was a little firmer, gaining 0.22 percent on Monday so far.
24-Hour Price Action

Key Levels: 13:45 GMT


So far, on Monday, the Dow Jones FXCM Dollar (ticker: USD) is trading higher at 10,096.63 at the time of writing, after opening at 10,060.99 (index closed at 10,072, the 32 Friday). The index was mainly driven more in. high and low 10111.05 10060.88

%%%Dollar Falls on stimulus hopes in Asia, more of the same future reference

5 June 2012 strategist 07: 05 GMT Talking Points
Euro can be found Near-Term pressure of Final Round of PMI revisions US Dollar sold as Stocks rise on Fed stimulus hopes Asia Trade Aussie Dollar Gains as RBA offers a modest 25 bps cut speed S & P 500 Index Futures Point of recovery continued in revisions appetite of Final risk of services and data from the eurozone PMI composite of may are discussed in European hours. The impression of the region should confirm that activity in the manufacturing sector and services contracted at the fastest pace in almost three years. Separately, in the euro area retail sales and two German factory orders should show monthly declines in April. Taken together, the results can apply a bit of pressure down on the Euro: traders are beginning to build the expectations of ECB rate but support seems unlikely that the announcement policy just around the corner, suggesting traders will want to wait to push the euro down new concrete benchmarks Dove of Mario Draghi and company.
On the sentiment front, S & P 500 stock index futures contracts pointing more Asian trade, referring that the risk appetite is likely to continue to weigh on the refuge currencies in the next few hours. The gauge ISM Non-Manufacturing Composite comes in discussion later in the session. Median forecasts call for printing to 53.5 in may, matching result of April. With reading orders for the plant of yesterday, a result consistent with expectations is unlikely cause Fireworks, but a disappointing result may composed an on the Dollar downward pressure in the context of the theme there-led to play this week.
The US Dollar and the Japanese Yen fell against fellow top trade night Asian stocks advanced, sapping demand for currencies refuge go - to. The MSCI Asia Pacific regional reference index increased by 1.4%. As we have suspected yesterday, improving sentiment followed a printing us Factory Orders disappointing that stimulated speculation about a possible third round of Federal Reserve quantitative easing (there). The Australian Dollar was surpassed as expected after the RBA delivered a 25 bps rate coupled with a policy statement which gave no clear guidance on the future efforts of relaxation.
Asia session: What happened
AiG Performance of service Index (may)
Current account balance (was$) (1 q)
Net exports of the Australia of GDP (1 q)
Subject to the decision of the Australia rate Bank
Session of the euro: what to expect
The eurozone PMI composite (may F)
The euro Zone PMI services (may F)
Retail trade in the eurozone (MoM) (APR)
Retail trade in the eurozone (YoY) (APR)
German Factory Orders s.a. (MoM) (APR)
German Factory Orders n.o.s. (YoY) (APR)
Critical levels
-Written by Ilya Spivak, strategist of Dailyfx.com currency
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June 5, 2012 07: 05 GMT

?? European Investor Confidence Falls to 3-Year Low

04 June 2012 09: 02 GMT THE TAKEAWAY: Sentix investor confidence hits 3-year low, still better than expected-> European leaders continue to disagree over crisis fighting measures-> Euro sees slight bounce before today's trading
European investors' optimism for the Eurozone has reached a 3-year low according to a Sentix survey. The Sentix investor confidence for June came in at - 28.9, the lowest score since May 2009, but still better than analysts' expectations for a - 30.0 survey result. Back in March of this year, the survey reached a six month high at - 8.2, before the survey results declined for the next four straight months.
The Sentix survey reported a 3.5 point dip in investor confidence for the current situation to - 35.0, and expectations for the future also dropped over 5 points to - 22.5.
Eurozone worries weighed on economic sense as European leaders continued to disagree before the weekend on how to solve the debt crisis. German Chancellor Angela Merkel said that she would not agree to joint debt issuance under any circumstances. US President Barak Obama joined the ECB, Italy, and France in pressuring Merkel to take further steps to control the crisis contagion.
EUR/USD didn't move much following the better than expected investor optimism survey. After the close of a bearish month that saw a 7% decline for the euro against the dollar, the pair started June with a bounce back above 1.2400 from a fresh 2-year low below 1.2300 during Friday's trading.

EU Market Update: Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months

Thursday, May 24, 2012 5:41:17 AM TradeTheNews.com EU Market Update: Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months***Economic Data***
- (RU) Russia Gold & Forex Reserve w/e May 18th: $514.3B v $518.8B prior
- (DE) Germany Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e; GDP WDA Y/Y: 1.2% v 1.2%e
- (DE) Germany Q1 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.3%e; Domestic Demand: -0.3% v 0.0%e; Capital Investment: -1.1% v -0.3%e; Construction Investment: -1.3% v -0.4%e; Exports: 1.7% v 0.9%e; Imports: 0.0% v 0.3%e
- (CH) Swiss Apr Trade Balance (CHG): 1.3B v 1.9Be; Real Exports M/M: -0.9% v +0.2%e; Real Imports M/M: 2.6% v 5.9% prior
- (FI) Finland Apr PPI M/M: -0.1% v +0.4% prior; Y/Y: 1.4% v 1.4% prior
- (FI) Finland Apr Preliminary Retail Sales Volume Y/Y: -2.0% v +5.3% prior
- (FR) France May Business Confidence: 93 v 94e; Production Outlook: -29 v -14 prior; Own-Company Production Outlook: -4 v -4 prior
- (FR) France May Preliminary PMI Manufacturing: 44.4 v 47.0e; PMI Services: 45.2 v 45.7e
- (CZ) Czech May Business Confidence: 6.0 v 7.5 prior; Consumer Confidence: -31.0 v -29.3 prior; Composite: -1.4 v +0.2 prior
- (HU) Hungary Mar Retail Trade Y/Y: +0.9% v -0.8%e
- (ES) Spain Mar Mortgages-capital loaned Y/Y: -41.5% v -49.6% prior; Mortgages on Houses Y/Y: -42.0 v -47.1% prior
- (DE) Germany May Advanced PMI Manufacturing: 45.0 v 47.0e (fastest rate of contraction since June 2009); PMI Services: 52.2 v 52.0e
- (NL) Netherlands Apr Unemployment Rate: 6.2 v 5.9% prior
- (NL) Netherlands May Producer Confidence: -5.0 v -3.3 prior
- (EU) Euro Zone May Advanced PMI Manufacturing: 45.0 v 46.0e (lowest reading since June 2009); PMI Services: 46.5 v 46.7e; PMI Composite: 45.9 v 46.6e
- (DE) Germany May IFO Business Climate: 106.9 v 109.4e (first MoM decline in 7 months); Current Assessment: 113.3 v 117.1e; Expectations Survey: 100.9 v 102.0e
- (UK) Q1 Preliminary GDP (Second reading) Q/Q: -0.3% v -0.2%e; Y/Y: -0.1% v 0.0%e
- (UK) Q1 Preliminary Private Consumption: 0.1% v 0.3%e; Government Spending: 1.6% v 0.0%e; Gross Fixed Capital Formation: -0.3% v -0.5%e; Exports: +0.1% v -0.3%e; Imports: 0.4% v 0.1%e
- (UK) Q1 Preliminary Total Business Investment Q/Q: +3.6% v -1.0%e; Y/Y: 14.2% v 9.2%e
- (UK) Mar Index of Services M/M: 0.5% v 0.3%e; 3M/3M: 0.1% v 0.2%e
- (UK) Apr BBA Loans for House Purchase: 32.4K v 32.0Ke
- (HK) Hong Kong Apr Trade Balance (HKD): -42.9B v -40.8Be; Exports Y/Y: 5.6% v 6.2%e; Imports Y/Y: 5.0% v 4.1%e
- (IC) Iceland May CPI M/M: 0.0% v 0.8% prior; Y/Y: 5.4% v 6.4% prior
Fixed Income
- (DK) Denmark sold approx DKK6.0B in I/L 2023 Bonds; Yield -0.14%, bid-to-cover: 1.78x
- (HU) Hungary Debt Agency (AKK) sold HUF50B v HUF45B indicated in 12-Month Bills; Avg yield 7.58% v 7.38% prior; Bid-to-cover: 1.81x v 2.12x prior
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Notes/Observations***
- China May HSBC Flash Manufacturing PMI registers its 7th consecutive contraction
- Major European PMI Manufacturing miss market expectations
- German IFO falls for the first time in 7 months
- UK Q1 GDP second reading revised slightly lower
- Speculation rising of a EU wide deposit guarantee plan to be endorsed by German Chancellor Merkel
- EU growth initiatives will be announced in June, but without abandoning fiscal prudence
***Equities*** >Indices: FTSE 100 +0.80% at 5306, DAX +0.30% at 6301, CAC-40 +0.60% at 3021, IBEX-35 +0.60% at 6481, FTSE MIB +0.75% at 13,057, SMI +0.40% at 5841
- In Europe, equities opened the session broadly higher amid gains in banks. However, markets have since pared gains following the release of weaker than expected EU manufacturing PMI and German IFO data. Additionally, the decline in China's May flash manufacturing PMI has weighed on markets. In terms of upcoming event risks, durable goods and weekly jobless claims data are due out of the US later today. Also, commentary is expected later today from the German Finance Minister Schaeuble, ECB's Prsident Draghi, Fed official Dudley and ECB/Bundesbank official Asmussen.
- In the UK shares of Mothercare [MTC.UK] and Cable & Wireless Communications [CWC.UK] have both traded sharply higher after releasing their respective full year earnings reports. Additionally, Thomas Cook [TCG.UK] has gained more than 5%, after naming a new CEO. SABMiller [SAB.UK] has moved between slight gains and losses, following the release of its full year earnings report. In Spain, Bankia is trading lower by approx. 1%, as Spain's government said the firm will require about ?7.1B to comply with the country's provisioning rules. Austrian bank, Raiffeisen [RIBH.AT] has gained over 1% after reporting higher than expected Q1 earnings. In Germany, sharers of SAP [SAP.DE] and Metro [MEO.DE] have been weighed down by ex-dividend factors. Bayer [BAYN.DE] has lost approx. 1.5%, as a US FDA panel voted against recommending XARELTO as a treatment for acute coronary syndrome.
Speakers: >- German IFO Economists commented that uncertainty in Euro Zone was impacting Germany's economy, but outlook remained above its long-term avg
- ECB's Nowotny: ECB has not used its whole arsenal and reiterated that non-standard ECB measures should not endanger mid-term price stability. The situation in Greece was particularly acute and overcoming imbalances was essential but would take time
- Bank of Japan (BOJ) Monthly Economic Report maintained its overall assessment of the economy that it would return to moderate recovery path
- Japan BOJ Gov Shirakawa commented ion Parliament that distrust in fiscal reform could push up long-term interest rates and weigh upon earnings of financial companies. He reiterated view that BOJ would pursue powerful easing. Risk aversion was the biggest factor in recent FX price movements. He added that there was no clear correlation historically between monetary base and JPY currency movement. The BOJ would strive to beat deflation using current asset buying program
- IMF China representative stated that a Greek exit from EMU would be a big shock to Chinese exports but China has fiscal room to sustain growth in the face of crisis
- BoE official Bailey stated that the UK banking sector's contingency plan for potential Greek exit from euro becoming more detailed
- Finland Fin Min Urpilainen commented that Europe's challenge was to find economic growth. Collateral payment from Greece rose to ?560M
- Ireland Dep PM Gilmore stated that categorically treaty would not be changed and reiterated the view that it wanted Greece to stay inside the EMU. Lastly he added that Ireland did not have contingency plan for a Greek exit.
- Sweden FSA's Cerps stated that the agency was monitoring banking sector to USD funding as Euro crisis deepens
- Poland Dep Fin Min Radziwill commented that the PLN currency was relatively stable with its weakness related to the Euro crisis. Poland currency sales would be similar to 2011 levels. He noted that debt markets were difficult at this time but would return to the market after it stabilizes as the country is in a comfortable situation. Domestic sales were seen covering most remaining needs for 2012
- Hong Kong Chief Executive Leung stated that it would seek stronger economic growth by diversification
- India Finance Ministry Official noted that the Gov't committee to meet on Friday to discuss raising diesel prices
- Philippines Central Bank Assistant Gov Amador commented that it would review CPI forecasts at June policy meeting and saw Inflation at a manageable as lower oil costs dampened pressures. To consider global economy and Euro Zone crisis during policy meeting and added the central bank would moderate sharp volatility in FX rates
- Indonesia Finance Ministry unveiled its mineral export tax regulation
- Iran official stated that there was no basis for new round of UN Counsel (P5+1) discussions
Currencies:
- The Euro initially tried to correct oversold levels but risk aversion sentiment again maintained the upper hand throughout the bulk of the European morning. Following China's lead, the European major PMI Manufacturing data came in softer than expectations and provided further headwinds for the Euro. Citigroup analyst added to sentiment when it issued a note forecasting ECB refi rate being cut to 0.50% and the central bank to resume its 3-year lending LTRO following any Greek exit from EMU. The EUR/USD approached the 1.2500 level for 22-month lows which provided some technical and psychological support. One analyst noted that 1.2530 level was 78.6% retracement of its 2010-2011 move.
-The hour ahead of the NY morning the markets encountered a bit of a reversal as European equity markets moved back into positive territory and peripheral spreads narrowed. The record low yields of safe-haven plays seemed to have ignited some asset reallocation back into equities. The EUR/USD was back around the 1.2560 area as the NY morning approached
- The EUR/CHF cross floor at 1.200 continued to note a 'massive' bid in its defense.
Political/ In the Papers:
- The Spanish government was said to be planning to nationalize CatalunyaCaixa and NovaGalicia banks due to the inability to find a buyer. Prior reports from late March suggested that the auction process for the banks would be slowed by Spain's government, as Spain's Deposit Guarantee Fund (DGF) needed to be strengthened. At that time it was estimated that the DGF had about ?2.0B in funds.
- Plans by the government to delay certain privatizations related to the energy industry have weighed on Russia's equity markets. On Wednesday, Russia's benchmark RTS index declined by 4.4%.
- The Telegraph's Ambrose Evans-Pritchard is critical of former Greek caretaker PM Papademos. He argued If Greece were to leave the Euro, then its fate would not have to be as dire as the situation recently described by Papademos. It could restructure its economy in a similar manner to Iceland.
- According to the FT US manufacturers argued against plans by JP Morgan to launch an exchange traded fund backed by copper as it would grossly and artificially inflate prices, and cause wreak havoc on the global economy.
***Looking Ahead*** >- (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to leave interest rates unchanged at 5.50%
- (AR Argentina May Consumer Confidence:
- 6:00 (IR) Ireland Apr Property Prices M/M: No est v 0.0% prior; Y/Y: No est v -16.2%e
- 6:00 (CZ) Czech Republic to sell 9-month Bills
- 7:15 (UK) BOE member Miles
- 7:30 (DE) German Fin Min Schaeuble
- 7:30 (TR) Turkey May Industrial Confidence: No est v 116 prior; Capacity Utilization: No est v 74.7% prior
- 8:00 (ZA) South Africa Central Bank Gov Marcus Rate Decision press conference
- 8:00 (BR) Brazil Apr Unemployment Rate: 6.2%e v 6.2% prior
- 8:00 (RO) Romania to sell RON500M in Bonds
- 8:30 (US) Apr Durable Goods Orders: +0.2%e v -4.0% prior (revised from -4.20%); Durables Ex Transportation: +0.8%e v -0.8% prior (revised from -1.1%); Capital Goods Orders Non-defense Ex-Aircraft: 0.8%e v -0.8% prior; Capital Goods Shipment Non-defense Ex-Aircraft: -1.0%e v +2.6% prior
- 8:30 (US) Initial Jobless Claims: 370Ke v 370K prior; Continuing Claims: 3.250Me v 3.265M prior
- 8:58 (US) May Preliminary Markit PMI:
- 9:00 (IT) Italy PM Monti
- 9:00 (EU) ECB's Draghi, Bank of Italy's Visco speak at Rome Conference
- 9:00 (DE) German Chancellor Merkel speaks at German Engineering Industry Convention
- 9:00 (BE) Belgium May Business Confidence: -11e v -10.7 prior
- 9:00 (MX) Mexico Q1 GDP Y/Y: No est v 11.0% prior
- 9:30 (DE) Germany Econ Min Roesler
- 9:30 (US) Fed's Dudley to speak on Regional Economy in New York
- 9:30 (EU) EFSF CFO Frankel in Rome
- 9:30 (BR) Brazil Apr Current Account: -$4.0Be v -$3.3B prior; Foreign Direct Investment (FDI): $4.9Be v $5.9B prior
- 9:30 (US) Commercial Paper data
- 10:30 (US) EIA Natural Gas Inventories
- 11:00 (US) May Kansas City Fed Manufacturing Activity: 5 v 3 prior
- 12:20 (DE) ECB member Asmussen in Poland
- 15:00 (AR) Argentina Apr Industrial Production M/M: No est v 1.9% prior; Y/Y: 1.5%e v 2.1% prior
- 19:30 (JP) Japan Apr National CPI Y/Y: No est v 0.5% prior; Ex-Food Y/Y: No est v -0.5% prior
 Legal disclaimer and risk disclosure All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

$ EURUSD Falls 1.2770 Greek Government after does not form

may 15, 2012 13: 36 GMT  who said that the Greece was not relevant? After becoming a little later of actors of the market for first months of the year, the May 6 elections catapulted the Greece to the stage of the world for what appears to be the last act of the saga of the Greek sovereign debt. With the Centre, pro-bailout parties, conservative party new democracy and PASOK left party, lost power in fringe, anti-bailout parties, mainly, the extreme-left Syriza, have raised concerns that the Greece could end up leaving the euro. Last week, each major party, first new democracy, then Syriza and PASOK, were given mandates to form a coalition Government. Each failed, leading to the final meeting one today.
However, all built hope that Greek leaders may find common ground was displaced. The rhetoric left and right was standoffish, at least, with the left (Syriza) calling for a moratorium on the debt and the Centre (ND and PASOK) are demanding further austerity measures to receive additional subsidies in the Euro area. Today, the worst fears were realized, when the Greek leadership, announced that no coalition Government was formed in a last-ditch effort, and that new elections could come. It is a low development of the experience of the Euro, as this probably means that the anti-bailout, primarily the Syriza parties, will gather sufficient support to form a coalition on their own. This could result in Greece by default on its debt and leaving the euro entirely - a frightening prospect but objectively possible nevertheless.
EURUSD chart of 1 minute: May 15, 2012
Graphing with Marketscope - prepared by Christopher Vecchio
Immediately after the news, the Euro has been violently in all, collapsing currency refuge, the Yen and the U.S. Dollar. In fact, against the later, we see that the EURUSD has fallen of 1.2841 for only 1.2770 in twenty minutes after the announcement. Although there was a small rebound, given the seriousness of the problems of the Euro area, it is likely that the continuous sale EURUSD should concerns hit the bond market (which they seem to be in Italian and Spanish yields note 2 years of climbing).

:: Sterling Falls as UK Trade Balance is Weakened by Euro Crisis

15 May 2012 09: 12 GMT THE TAKEAWAY: visible UK trade balance comes in worse than expected at - 8.56 billion pounds-> Lack of European demand for UK goods weakens trade balance-> Sterling falls
The UK visible trade deficit for March came in wider than expected at - 8.56 billion pounds, but still narrower than February's visible trade balance of - 8 billion pounds. February's deficit was revised lower from the previously thought - 8.77 billion, according to the Office for National Statistics. Trade balance to re-export narrowed to - 4.1 trillion pounds, better than the expected - 4.7 billon.
Import of goods from Europe was way up from 16.9 billion pounds to 17.6 trillion in March, while there was only a small rise in exports to Europe. Exports of goods to yield countries rose from 11.8 billion pounds to 13.2 billion. Therefore, the widening of trade deficit to Europe was offset by the narrowing of negative balance to re-export countries.
The euro-debt crisis has clearly curbed demand for British goods in Europe, which is the UK's biggest export market. As the pound continued to strengthen against the euro, as has been the trend over the past year, the trade deficit between the UK and Europe will continue to grow.
The lack of growth in European exports could be cited as one of the contributors to the fall in the first quarter UK GDP. Tomorrow, Bank of England Governor Mervyn King will hold a press conference to explain to the reason's behind the MPC's decision to not raise QE.
The narrower than expected visible trade balance was a bad sign for sterling. GBP/USD fell below 1.6100 and reversed gains the hand made over the past two days. EUR/GBP continued an earlier day uptrend back towards 0.8000.

! Loonie Falls Despite Surge in April Housing Starts To Fastest Pace Since 2007

THE TAKEAWAY: [Canadian housing starts accelerated in April for fifth straight month to fastest pace since September 2007] > [Continuing strength in housing market] > [CAD weakens vs. USD]
Housing starts in Canada unexpectedly accelerated in April for the fifth straight month to its fastest pace since September 2007. The Canada Mortgage and Housing Corporation reported a large jump to 244,900 housing starts at a seasonally adjusted annual pace in April, while March’s figure was revised slightly downwards to 215,200 from 215,600 originally reported. The median forecast of 21 economists surveyed by Bloomberg News had called for a slowdown to 204,000 housing starts in April. New starts soared by 28.8 percent in April from a year ago, compared with March’s year-on-year rate of 16.7 percent.
The pickup in housing starts in April was led by a surge in multi-family homes in urban areas, which recorded a 27.4 percent gain to 158,500 new starts. Meanwhile, housing starts in rural areas contracted by 19.0 percent from a month ago, reversing the 10 percent gain in March.
April's housing starts data follows yesterday’s news that the number of residential building permits approved had declined by 1.3 percent in March. This could indicate that we may see slight moderation in the coming months in the recent strength shown by the Canadian housing market, in what some analysts think is a housing bubble.
USDCAD 1-minute Chart: May 8, 2012

Chart created using Strategy Trader – Prepared by Tzu-Wen Chen
Despite the stronger-than-expected print, the Canadian dollar tumbled against the U.S. dollar in the minutes following the data release. The loonie fell as much as 20 pips in the first 15 minutes from pre-announcement levels, and despite a slight retracement, continued to trade weaker at C$0.9972 against the greenback at the time of this report.

Asian Market Update: Yen weakens, Singapore inflation falls and copper rebounds

- North America Semi Equipment Industry Feb Sales book to bill ratio: 1.01 v 0.95 Prior
- (SG) SINGAPORE FEB CPI M/M: -0.3% V +0.1%E; Y/Y: 4.6% V 4.9%E
- (CN) CHINA FEB CONFERENCE BOARD LEADING ECONOMIC INDEX M/M: 0.8% V 1.5% PRIOR
- (UK) UK FEB NATIONWIDE CONSUMER CONFIDENCE: 44 V 47E
- (JP) Japan investors sold ¥722B in foreign bonds last week v ¥367B bought in prior week
***Markets Snapshot (as of 04:30GMT)***
- Nikkei225 -1.1%
- S&P/ASX -0.1%
- Kospi unchanged
- Taiwan Taiex -0.1%
- Singapore Straits Times +0.4%
- Shanghai Composite -0.7%
- Hang Seng -1.0%
- S&P Futures +0.2% at 1,391
- April gold +0.1% at $1,644/oz
- May Crude +0.1% at $105.46
***Overview/Top Headlines***
- Markets continued their decline in today's session after China's 3rd largest bank, Agricultural Bank of China, reported a decline in net profit overnight which refueled fears of a slowdown in additional to yesterday's flash manufacturing PMI reading below 50. Copper gained 0.7% to $3.79, silver was up 0.5% to $31.49 while zinc gained over 1%. With a slow return of risk appetite and a reduction in demand for safe haven buying, USD/JPY reproached the ¥83 level. Bank of Japan (BoJ) Gov Shirakawa said that it will take time for impact of monetary easing to appear; Easing alone will not end deflation. Not appropriate to raise Japan's short term rates through US Fed style operations. Japan Fin Min Azumi confirmed yesterday's press speculation that Japan will draft a stop gap budget to fund spending through Apr 4th due to conflicts in Diet over passing FY12/13 budget. EUR/USD was mostly unchanged at $1.3190. ECB President Draghi said he remains opposed to Eurobonds as they run counter to taxpayers' interests, its still too early to consider Eurobonds. Heading into the weekend we will see an election in Germany. Fed's Bullard sees 2012 GDP at 3%. He also noted that if inflation takes off, it will be difficult to contain and that gas will need to hit $5/gallon before we have to worry about inflation in the US. Over night Hong Kong Monetary Authority (HKMA) released their half year monetary and financial stability report. The report indicated that tight monetary conditions in China will directly impact onshore loan demand being at least partly diverted to Hong Kong. Hong Kong will hold its elections for the next Chief Executive over the weekend.
***Speakers/Geopolitical/In the press***
- (JP) Japan DPJ Fujii: Monetary policy is not a driver of economic growth; Not in favor of changing BoJ law
- (PH) Philippines Central Bank Gov Tetangco: Inflation likely to be within target; Inflation is the main concern when deciding policy
- (KR) South Korea state-run think tank Korea Development Institute (KDI): Urges BOK to raise interest rates to regain market trust that it will ensure price stability - Korean press
- (CN) China NDRC sees 2012 trade +12-16% y/y to a surplus of $150B
- (NZ) New Zealand Labour Dept sees a slow and steady job growth; Expects unemployment to trend down to about 5.4% by Mar 2014 - NZ Press
***Equities***
- SAB.UK: Coca-Cola Amatil to acquire 89.6% stake in Foster's Fiji unit for A$58M and a 10.4% stake in Group Pacific
- China Construction Bank, 939.HK: Reports FY11 Net HK$1.5B v HK$1.4Be, Rev HK$16.40B v HK$11.98B y/y
- Agricultural Bank of China, 288.HK: No plans to raise funds this year since capital adequacy ratio in 2011 improved to 11.94% - China Daily
- 2317.TW: Foxconn Reports FY11 Net $72.8M v $28Me; Rev $6.4B v $6.6B y/y
- QRN.AU: Guides FY12 Underlying Net A$540-580M from A$578M - Australian press
- TCL.AU: Australia's Future Fund acquired 6.7% stake for A$193M, becoming its largest shareholder
**US Equities***
- MU: Reports Q2 -$0.23 v -$0.19e, R$2.07B v $2.0Be; -3.2% after hours
- EBAY: PRIMEDIA (private) to Acquire Rent.com unit; No terms disclosed; -0.5% after hours
- NKE: Reports Q3 $1.20 v $1.17e, R$5.85B v $5.8Be; +1.2% after hours >- ACN: Reports Q2 $0.97 v $0.86e, R$6.80B (before reimbursements) v $6.6Be; +1.8%
***FX/Fixed Income/Commodities***
- (IR) India Oil Min: To continue oil import from Iran without violating international law >- USD/CNY: (CN) PBoC sets yuan mid point at 6.2891 v 6.2997 prior close (new yuan high since the July 2005 revaluation)
- (NZ) Recent NZD weakness attributed to China raising its tariffs on whole-milk powder imports from New Zealand this month as part of trade agreement between the two nations - NZ Herald
- SLV: iShares Silver Trust ETF daily holdings falls to 9,727 tons from 9,753 tons (lowest since 9,715 on Feb 28th) - update as of Mar 21st

FOREX NEWS - Euro falls to 3-week low vs dollar on Greece delay

* Decision on Greek bailout off until at least Monday

* Traders unsure how Athens can redeem debt with no bailout

* Euro risks more falls; Dollar/yen hits 3-1/2 month high

* Swedish crown falls as central bank cuts rates

By Jessica Mortimer

LONDON, Feb 16 (Reuters) - The euro fell to a three-week low versus the dollar on Thursday as euro zone officials put off agreeing further aid for Greece, sparking fears of a chaotic default and leaving the euro vulnerable to more falls.

Frustrated by Greek political wrangling, euro zone finance ministers on Wednesday failed to reach agreement on a bailout package for Athens, delaying a decision on the matter until ministers meet on Monday.

Analysts said most in the market still expect Greece to avoid a disorderly default, and anything that shakes this conviction would trigger another wave of euro selling. The options market showed investors were increasingly looking to buy protection against further euro losses.

"The market is probably pricing in a better than evens probability that a near-term deal will be reached on Greece and avoid a messy default, which suggests there are more risks to the downside for the euro if there is no deal on Monday," said Adam Cole, global head of currency strategy at RBC.

The euro fell below psychologically key support and a reported options barrier at $1.30 to hit $1.2983, its weakest since Jan. 25, although technical analysts said support around $1.2965-75 may help stem losses. It was last down 0.6 percent at $1.2994.

Greece must repay 14.5 billion euros of debt on March 20, which it cannot do without the help of international aid. Analysts said failure to reach a deal on Monday could see the euro drop towards the mid-January low around $1.2624.

Risk reversals showed a jump in the premium charged to buy bets on the euro falling versus the dollar, with the one-month contract rising to 2.25 from 1.85 on Wednesday.

"There are no answers on how Greece will be treated ... If there is no resolution it poses risks for the euro," said Carl Hammer, chief currency strategist at SEB in Stockholm.

SEB have a forecast for the euro to fall to $1.25 by the end of the first quarter, but Hammer said it could reach this level sooner. A break below support around $1.29 would open up a move towards the lows hit in the middle of last month.

EU sources said the euro zone is examining ways of holding back parts or even all of Greece's second bailout funds while still avoiding a disorderly default next month.

Uncertainty over a bailout, and whether policymakers could hold back funds without triggering a messy default, stopped the euro benefiting from news that Greek party leaders have met the final two demands set by international lenders.

If the Greece situation is not contained fears will quickly grow that other highly indebted euro zone countries may follow.

DOLLAR FIRMS

Risk aversion due to the Greece worries buoyed the safe-haven U.S. dollar, with the dollar index hitting a three-week high of 80.078.

The U.S. currency also rose to a 3-1/2 month high of 78.83 yen, breaking above reported stop loss orders above 78.80 yen, although traders said option-related offers ahead of 79 yen may cap gains.

The dollar was lifted versus the yen after a firm break above its 200-day moving average this week, though some analysts cautioned that it was premature to say whether there would be further gains in the dollar.

The minutes of the Federal Reserve's January policy meeting showed a few officials believed another round of quantitative easing, which is typically negative for the dollar, would be needed to support the U.S. economy.

The euro was steady against the yen at 102.45 yen , unable to clear important resistance including the 90-day average at 102.74 and Ichimoku cloud top at 102.79.

Elsewhere, the Swedish crown fell against the euro after the Swedish central bank cut interest rates by 25 basis points to 1.50 percent.

The Australian dollar was down 0.3 percent at $1.0665 , failing to benefit from strong Australian employment data as doubts over a Greek bailout undermined risky assets.

FOREX NEWS - Euro falls to 3-week low vs dollar on Greece delay

* Decision on Greek bailout off until at least Monday

* Traders unsure how Athens can redeem debt with no bailout

* Euro risks more falls; Dollar/yen hits 3-1/2 month high

* Swedish crown falls as central bank cuts rates

By Jessica Mortimer

LONDON, Feb 16 (Reuters) - The euro fell to a three-week low versus the dollar on Thursday as euro zone officials put off agreeing further aid for Greece, sparking fears of a chaotic default and leaving the euro vulnerable to more falls.

Frustrated by Greek political wrangling, euro zone finance ministers on Wednesday failed to reach agreement on a bailout package for Athens, delaying a decision on the matter until ministers meet on Monday.

Analysts said most in the market still expect Greece to avoid a disorderly default, and anything that shakes this conviction would trigger another wave of euro selling. The options market showed investors were increasingly looking to buy protection against further euro losses.

"The market is probably pricing in a better than evens probability that a near-term deal will be reached on Greece and avoid a messy default, which suggests there are more risks to the downside for the euro if there is no deal on Monday," said Adam Cole, global head of currency strategy at RBC.

The euro fell below psychologically key support and a reported options barrier at $1.30 to hit $1.2983, its weakest since Jan. 25, although technical analysts said support around $1.2965-75 may help stem losses. It was last down 0.6 percent at $1.2994.

Greece must repay 14.5 billion euros of debt on March 20, which it cannot do without the help of international aid. Analysts said failure to reach a deal on Monday could see the euro drop towards the mid-January low around $1.2624.

Risk reversals showed a jump in the premium charged to buy bets on the euro falling versus the dollar, with the one-month contract rising to 2.25 from 1.85 on Wednesday.

"There are no answers on how Greece will be treated ... If there is no resolution it poses risks for the euro," said Carl Hammer, chief currency strategist at SEB in Stockholm.

SEB have a forecast for the euro to fall to $1.25 by the end of the first quarter, but Hammer said it could reach this level sooner. A break below support around $1.29 would open up a move towards the lows hit in the middle of last month.

EU sources said the euro zone is examining ways of holding back parts or even all of Greece's second bailout funds while still avoiding a disorderly default next month.

Uncertainty over a bailout, and whether policymakers could hold back funds without triggering a messy default, stopped the euro benefiting from news that Greek party leaders have met the final two demands set by international lenders.

If the Greece situation is not contained fears will quickly grow that other highly indebted euro zone countries may follow.

DOLLAR FIRMS

Risk aversion due to the Greece worries buoyed the safe-haven U.S. dollar, with the dollar index hitting a three-week high of 80.078.

The U.S. currency also rose to a 3-1/2 month high of 78.83 yen, breaking above reported stop loss orders above 78.80 yen, although traders said option-related offers ahead of 79 yen may cap gains.

The dollar was lifted versus the yen after a firm break above its 200-day moving average this week, though some analysts cautioned that it was premature to say whether there would be further gains in the dollar.

The minutes of the Federal Reserve's January policy meeting showed a few officials believed another round of quantitative easing, which is typically negative for the dollar, would be needed to support the U.S. economy.

The euro was steady against the yen at 102.45 yen , unable to clear important resistance including the 90-day average at 102.74 and Ichimoku cloud top at 102.79.

Elsewhere, the Swedish crown fell against the euro after the Swedish central bank cut interest rates by 25 basis points to 1.50 percent.

The Australian dollar was down 0.3 percent at $1.0665 , failing to benefit from strong Australian employment data as doubts over a Greek bailout undermined risky assets.

FOREX MEWS - Yen falls on BoJ easing; euro cushioned by ZEW survey

* BOJ to boost asset buys by Y10 trln, to buy long-term JGBs
* Analysts say impact on dlr/yen may prove fleeting
* Moody's puts UK, France, Austria on negative outlook
* German ZEW survey eases pressure on euro
By Neal Armstrong
LONDON, Feb 14 (Reuters) - The yen fell on Tuesday as the Bank of Japan eased monetary policy by expanding its asset-buying scheme, but the impact on the currency may prove short-lived while nagging worries over the euro zone crisis keep it supported as a safe haven.
The BOJ boosted its asset buying and lending scheme by 10 trillion yen ($130 billion), to 65 trillion yen, with the entire increase to be used for purchases of long-term Japanese government bonds (JGBs).
The dollar rose to a near three-week high of 78.19 yen on trading platform EBS with gains of around 0.6 percent on the day. The euro rose 0.7 percent on the day to 103.10 yen .
"The knee-jerk reaction has been to sell the yen and that's understandable with the BoJ being a bit more active than it has been in the past," said Lee Hardman, currency strategist at BTM-UFJ.
"This certainly reinforces the recent yen-weakening trend but that trend rests on broader financial market stability remaining in place. There are still risks of a disorderly outcome in Greece which would derail current yen weakness," he added.
A rally in global equity markets this year has helped to weaken the low-yielding yen which tends to fall when risk sentiment improves. In such an environment investors typically use it as a funding currency to finance investments in higher-yielding alternatives.
One key topside level for dollar/yen in the near term lies near 78.29 yen, around its late January high and a peak hit in late November.
The dollar probed above its 200-day moving average at 78.05. A daily close above there for the first time since 2011 would be a clear positive sign. Support was back at the top of the daily Ichimoku cloud around 77.43.
"We think dollar/yen will struggle to get through the 80 yen area which has capped recent moves higher," said Lauren Rosborough, senior currency strategist at Societe Generale.
"Although the BoJ has announced another expansion, when put into context it is catching up with easing measures taken in the U.S.," she added.
EURO PARES LOSSES
The euro pared earlier losses against the dollar and hit a high of $1.3216 on EBS after a German survey of economic sentiment rose this month, defying expectations for a fall and adding to signs that the German economy is holding up in the face of the euro zone crisis.
The euro had fallen to session lows of $1.3127 after rating agency Moody's said it may cut its triple-A ratings of France, Britain and Austria while it downgraded six other European nations, including Italy.
Moody's move on euro zone sovereign ratings follows action by Standard & Poor's last month, when France and Austria lost their triple-A status while Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia were downgraded.
"Anyone observing the markets had to expect further rating agency downgrades and in the end Moody's only followed S&P's previous step," said Commerzbank analysts in a note.
The euro had been down about a cent from the previous day's high on worries about the remaining hurdles Greece faces in its bid to avoid a disorderly default.
The European Union has given the fragile ruling coalition of Prime Minister Lucas Papademos until Wednesday, when euro zone finance ministers are expected to meet, to specify how 325 million euros of the 3.3 billion euros demanded in budget savings will be achieved.
By the same deadline, Greek political leaders must give a written commitment to implement the terms of the deal.
"The market is dominated by Wednesday's Eurogroup meeting and there is still huge tail risk for the euro," said Rosborough.
© Thomson Reuters 2011. All rights reserved.
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Data of the work to the bat forecasts, unemployment still falls United States

February 3, 5: 02 pm

The U.S. Bureau of Labor Statistics reported earlier than January pay data non-firm show 243 000 new jobs. Release before surveyed analysts were predicting an increase of only 150,000 new jobs. Data for December revised 203 000 new jobs. Including, the unemployment rate fell yet again, this time to 8.3%, same as the expectations of analysts for the rate remains unchanged.
On Wednesday, ADP reported that only 170,000 new agricultural non-exploitations jobs in December, well off the coast of 185,000 consensus forecast. Who, with the decision of the Federal Reserve to extend the duration of the ultra low rate of interest through 2014, has considerably weakened the Dollar for several days.
Some traders OpenBook were convinced that data from work today to continue its upward trend and meet or even beat expectations, and traders were short the EUR/USD pair in anticipation.
Just forward the announcement, sentiment on the OpenBook is bullish and the EUR/USD pair more rated 1.3172, took a quick dive a few minutes later to opening prices the day that their bounces back quickly. It took a full 20 minutes before the couple lost steam and directed in negative territory. This wording of the pair is trading less than 1.3103 and feeling turned down.
OpenBook guru pyruss, which had closed with profit of long positions of the data dissemination, closed with profit both long and short position once his targets had been met. Guru robepu was able to liquidate a long position at 1.3189 with a gain of 23.26% of the moments just after the announcement.

Vs dlr falls FOREX NEWS - euro on profit-taking; Greek talks eyes

LONDON, Jan 20 Reuters)-the euro retreat from to support a two-week high against the dollar on Friday as rally some investors took profits on short covering but can Greece cautious hope shortly before an agreement to avoid a chaotic debt saw standard set.

The single currency was last by 0.3 percent to $1.2920, falling from a peak of $1.2986 in early trading in London, but keep reached well above that last week 17-month low of $1.2624.

So far this week the euro has more than 2 percent, put them on the way to the largest of the increase in October after solid bond strengthened auctions in Spain and France on Thursday risk-taking won.

Analysts said that it was normal profit taking see, after a strong rally and the euro was stay probably short term supported to await the outcome of Greek negotiations as investors.

Greece and his private bondholders resume negotiations bond redemptions will pave Friday among signs that it closer to a deal that are inching fresh the way for an injection of aid from EUR 14.5 billion due in March.

A positive outcome of the talks could strengthen the euro, while restoring investors of bearish bets could see all negative messages.

"This is only profit-taking – rather, we had a linear rally since Monday morning." "On the other hand we could see more medals of championship points, but I think that we are between $1.2860, $1.30, hold", Geoff Kendrick, FX strategist at Nomura said.

"Because the result (the talks) is so binary, rather in market sentiment one way or another go." "We see on well there as more risk at the moment."

Investors betting against the euro stacked after rating agency standard & poor nine euro zone countries, including France and Austria last week downgraded.

Since then, the mood has improved, and some market participants said, that the resolution of these items can be euro another lift in the near future it pushing $1.30 by reported that offers from around, although further gains could be difficult.

"It is not only about Greece." We have a risk to definitely step and we know that there are a lot of euro-dollar shorts on the market. "I expect to $1.30 today but the steam run, if the rally goes much higher,", said Lutz Karpowitz, currency analyst at Commerzbank.

The euro was again against the yen by 0.3 percent to 99.70, that had a rest since is an 11-year low of 97.04 yen on Jan. 16.

Apart from the credit risk market participants see a chaotic Greek still downside risks to the euro in the coming year because of concerns the economy of which progress towards the consolidation of public finances in the region can slip euro zone into recession and limit.

SLOW CHINA MANUFACTURING

The euro and the Australian dollar risk-sensitive took in their purchase a survey result China manufacturer 2012 started in a slow mode.

The HSBC Flash: manufacturing purchasing manager index (PMI), which was the earliest indicator of China's industrial activity, is in January to 48.8 below the 50 area, the expansion from contraction.

The reading was the highest in three months, and finally was a slight improvement over the 48.7 for the December index.

The Australian dollar eased 0.1 percent to $1.0405, floating made in the vicinity one 11-week high of $1.0450 earlier this week.

The dollar slightly higher in comparison to a basket of currencies, 80.382, way from a two-week low of 79.99 earlier in the session taken.

The dollar rose against the yen 0.1 percent 77.18 yen, hovering close to the top of the range 76.30 yen 77.342 Yen seen so far in January.

FOREX NEWS - Euro falls vs dlr on profit-taking; Greek talks eyed

* Euro retreats from two-week high as investors book profit

* On track for biggest weekly rise in three-months, $1.30 eyed

* Cautious optimism on Greek debt swap talks

By Nia Williams

LONDON, Jan 20 (Reuters) - The euro retreated from a two-week high against the dollar on Friday as some investors took profits on a short-covering rally but cautious hopes Greece may be nearing a deal to avoid a chaotic debt default looked set to offer support.

The single currency was last down 0.3 percent at $1.2920, falling back from a peak of $1.2986 hit in early London trade, but holding well above the 17-month low of $1.2624 reached last week.

So far this week the euro has gained more than 2 percent, putting it on track for the biggest weekly rise since October after solid bond auctions in Spain and France on Thursday boosted risk appetite.

Analysts said it was normal to see profit-taking after such a strong rally and the euro was likely to stay supported in the short-term as investors await the outcome of the Greek talks.

Greece and its private bondholders resume negotiations on Friday amid signs they are inching closer to a deal that will pave the way for a fresh injection of aid before 14.5 billion euros of bond redemptions fall due in March.

A positive outcome to the talks could boost the euro, while any negative news could see investors re-establish bearish bets.

"This is just profit-taking - we pretty much had a straight-line rally since Monday morning. We could see another 40-odd points on the downside but I think we will hold between $1.2860 to $1.30," said Geoff Kendrick, FX strategist at Nomura.

"Because the outcome (of the talks) is so binary, market sentiment tends to go one way or the other. We certainly see it as more risk-on at the moment."

Investors stacked up bets against the euro after ratings agency Standard & Poor's downgraded nine euro zone countries including France and Austria last week.

Since then sentiment has improved, and some market players said the unwinding of those positions may give the euro a further lift in the near-term, pushing it through reported offers around $1.30, although further gains could be difficult.

"This is not only about Greece. We have definitely had a risk-on move and we know there are a lot of euro/dollar shorts in the market. I expect we will breach $1.30 today but run out of steam if the rally goes much higher," said Lutz Karpowitz, currency analyst at Commerzbank.

Against the yen, the euro was down 0.3 percent at 99.70, having rebounded since hitting an 11-year low of 97.04 yen on Jan. 16.

Aside from the risk of a messy Greek default, market players still see downside risks to the euro in coming months, due to concerns that the euro zone economy may slip into recession and limit progress toward fiscal consolidation in the region.

SLUGGISH CHINA MANUFACTURING

The euro and the risk-sensitive Australian dollar took in their stride a survey showing China's manufacturers started 2012 in a sluggish mode.

The HSBC flash manufacturing purchasing managers index (PMI), the earliest indicator of China's industrial activity, stood at 48.8 in January, below the 50 level that demarcates expansion from contraction.

The reading was the highest in three months, however, and was a slight improvement on the 48.7 final figure for the December index.

The Australian dollar eased 0.1 percent to $1.0405, hovering near an 11-week high of $1.0450 hit earlier this week.

The dollar edged higher versus a basket of currencies to 80.382, moving away from a two-week low of 79.99 hit earlier in the session.

Against the yen, the dollar rose 0.1 percent at 77.18 yen , hovering near the top end of the 76.30 yen to 77.342 yen range seen so far in January.

© Thomson Reuters 2011. All rights reserved.

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