Forex Analysis: No Green Light From ECB

The USD improved against the Euro ahead of the ECB press conference anchored by President Trichet. While signaling a potential rate hike in July, the ECB President in addition included that inflation appears prepared to moderate. This left investors with the perception that even if the ECB hikes its interest rate in July it is more likely to be a one off event and not repeated in the near future. Trichet will complete his term as the ECB President in October. Trichet also confronted challenging doubts about Greece and was not able to present a clear picture as to how exactly the debt crisis will be solved. Germany will publish inflation data today and this may prove interesting for traders, the Final CPI number from Germany is predicted to be unaffected with a result of 0.00%. The WPI from Germany is anticipated to gain 0.5%. The Euro is doing interestingly well the past two weeks taking into consideration the quantity of unpleasant reports that continues to come from Greece and other European countries which confront debt issues. Thursday’s trading might indicate the chance that investors had already accepted the concept that a rate hike may come from the ECB in July, but they did not get a pass for further hikes after that.

The USD although still trading in the weaker realms of its near term trend against the EUR did discover some backing. The Federal reserve has sent no indicators that it is likely to release another round of quantitative easing. Investors dread additional erosion in economic figures from the U.S. and the strain which could happen with certain politicians wondering to put yet another round of stimulus on the table. Weekly Unemployment Claims turned out disappointing yesterday coming in with a result of 427k compared to the estimate of 424k. Trade balance figures did come in far better for the States and many analysts said this is exactly what set off a positive streak on Wall Street. However, the major indexes have been struck hard the past month and a half and the gains on the major indexes yesterday might have been purely some bottom feeding occurring by speculative investors. Wall Street goes into today’s session with the likelihood of finishing lower its sixth week in a row. There will be no major economic data from the U.S. today and traders will have to count on existing sentiment as they make their moves prior to going into the weekend.

The Forex and Commodities markets turned out to be erratic on Thursday with the Central Bank anticipations from the ECB and BoE. The price of Gold is trading near 1541.00 USD at this moment. Crude Oil has also carried on to mount some gains in the wake of a lack of unity from OPEC concerning production goals. Commodity prices were likely speculative yesterday depending on prevailing ranges being verified. Predictions for the global economies are mixed at best presently and this means that physical resources and their higher values will be put to the test within the coming weeks.

The AUD performed particularly well yesterday as it obtained some of its lost ground from earlier this week, even so the Australian currency will continue to see a speedy market and it is sure to encounter continued strain if economic data slumps additionally. The JPY stayed locked in its consolidated range on Thursday and also this came in the wake of additional damaging reports from Japan concerning its potential.

The Sterling did encounter downward strain yesterday. The BoE amazed no one when it remained standing in place regarding its monetary policy. The U.K. will continue to deal with difficult questions like its counterparts relating to growth and austerity. Today the U.K. will distribute Manufacturing Production and inflation data. The manufacturing sector has shown deficiencies in vigor and today’s number is anticipated to be unchanged. The GBP remains in a rather range bound sphere against the USD. The real chance for traders can come from evaluating the Gbp against the Euro.