iFOREX Daily- December 17, 2012 - TRADERBASE Forex Trading ...

The U.S. Dollar declined against most of the majors as Friday?s reports showed that Consumer Inflation dipped 0.3 percent, bringing the annualized rate down to 1.8 percent. According to economists, the data supported the Federal Reserve?s decision to buy $45 billion worth of Treasuries every month. And now that Fed Chairman Ben Bernanke delivered the central bank?s statement indicating it would leave interest rates close to zero while buying more assets, investors have shifted their attention back to they lawmakers who continue to grapple over a plan to avert the looming fiscal cliff. $607 billion in tax increases and reductions in spending are set to go into effect at the beginning of 2013. In the meantime, the Canadian Dollar fell against the U.S. currency as poor Manufacturing reports out of Canada and concerns about the Fiscal cliff increased demand for safe havens. However, it?s worth noting that the greenback remained under pressure following the release of lackluster Consumer Inflation data on Friday.

The Euro traded at the highest level since May against the U.S. Dollar and rose versus the remainder of its peers after the Euro-zone?s Finance Ministers came to a consensus to make the European Central Bank the overseer of the area?s banks. The Euro was buoyed by optimism that regional leaders are making strides towards resolving the debt crisis. E.U. Minister also announced that they would releasing another tranche of aid for Greece to the amount of 49.1 Billion Euros after Greece revealed its plan to re-purchase debt from private investors. The British Pound advanced against the U.S. Dollar subsequent to the release of lackluster U.S. Consumer Inflation figures, but it slipped versus the Euro after the Standard & Poor?s suggested it may cut the U.K.?s AAA rating over the next two years.

The Yen extended losses for a fifth consecutive week against the U.S. Dollar as investors anticipate that once Shinzo Abe, leader of the Liberal Democratic Party, is deemed the winner of the December 16^th elections, he?ll pressure the Bank of Japan into implementing unlimited stimuli.

Lastly, the Australian Dollar traded at a three-month high versus the greenback as the Federal Reserve?s decision to buy $45 billion in Treasuries every month dampened appeal for the U.S. currency. The Aussie was also supported by a release which showed that China?s Manufacturing sector grew at the quickest pace in over one year this month. The New Zealand Dollar climbed to a fifteen-month high against the U.S. monetary unit as the announcement of soft Inflation figures supported the continuation of the Federal Reserve?s asset-purchasing program.

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EUR/USD- ECB Will Oversee Lenders

The Euro climbed against the U.S. Dollar subsequent to reports which showed that the U.S. Manufacturing Purchasing Manager?s Index rose to 54.2 this month, a release which improved demand for high risk assets. The Euro remained strong as the Finance Ministers agreed to have the European Central Bank as the overseer of the region?s banks, and after data revealed that the E.U.?s PMI increased slightly from 46.2 to 46.3 in December. Other figures indicated that German Manufacturing PMI slipped from 46.8 to 46.3 and the area?s Consumer Price Index did not change from the previous annualized rate of 2.2 percent. Lastly, Eurostat announced that the number of employed individuals dipped by 0.2 percent.

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GBP/USD- S & P Warns The U.K.

The British Pound rallied against the U.S. Dollar following the announcement of less than stellar U.S. Consumer Inflation figures which supported the Fed?s case for further monetary easing. The Sterling remained strong even after the Standard & Poor?s put the U.K. on notice warning that it may reduce its AAA rating in the next 2 years. In the days to come, the U.K. will report on Inflation; analysts believe a lower rate of inflation will prompt the Bank of England to expand its asset-purchasing program.

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USD/CAD- Canada Reports Weak Manufacturing

Canada?s Dollar dipped against the U.S. Dollar as demand for refuge made the greenback more appealing. The Loonie was also weighed down by poor Manufacturing figures showing that sales declined 1.4 percent in October following a flat release in September. October?s drop revealed that much of it was prompted by a dip in aerospace sales and lower vehicle sales.

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AUD/USD- Aussie Benefits From Chinese Data

Australia?s Dollar gained against the greenback on Friday as news the Fed intends to implement further easing dampened demand for the U.S. currency. The Aussie Dollar was also supported by data out of China which indicated that the Manufacturing activity rose at the quickest pace in over 12 months. According to official figures, HSBC Manufacturing PMI climbed from 50.5 to 50.9 in November. The better than expected metrics helped ease concerns about growth in the world?s second largest economy. Investors will pay close attention to the release of the Reserve Bank of Australia?s Monetary Policy Meeting Minutes due out this week.

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Today?s Outlook

Today?s economic calendar shows that the Euro region will report on the Trade Balance and Labor Cost Index. The U.S. will release data on the NY Empire State Manufacturing Index, and TIC Net Long-Term Transactions. Japan will publish the Monetary Policy Meeting Minutes.

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Source: http://traderbase.iforex.com/iforex-daily-december-17-2012/2469

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