Technical Analysis: EUR/USD, GBP/USD, USD/JPY, and USD/CAD
ICM Brokers | Nov 18, 2011 06:02AM ET
The International Monetary Fund won’t release the next tranche of funding for Greece under a 110-billion euro ($148 billion) package with the European Union until there is broad political support for the measures attached to the loan, a spokesman said.“It’s important that the unity government now shares its commitment to the implementation of the economic program” and the decisions agreed by European leaders last month, IMF spokesman David Hawley told reporters today. “Once broad political support” for the measures “is assured, then we can proceed with completion” of the review and the release of the tranche. Greek Prime Minister Lucas Papademos, a former European Central Bank vice president, won a three-month mandate to implement budget measures and ensure a second bailout package from the IMF and euro nations that was agreed to last month. The Greek government is seeking the release of 8 billion Euros under the first rescue plan by the middle of December. The IMF, which will finance about 2.2 billion of the 8 billion-euro tranche, is seeking assurances of political support from Greece, Hawley said, while declining to describe what form those should take.
GBP/USD
U.K. stocks declined for a fourth day, their longest stretch of losses in six weeks, amid concern the euro-area’s sovereign-debt crisis is deepening and higher oil prices will hamper economic growth. Carnival Plc, the world’s biggest cruise-ship operator, declined 4.3 percent as crude traded near the highest price in more than five months. Pace Plc slumped 24 percent after cutting 2012 operating profit forecast. Vedanta Resources Plc tumbled 6.9 percent, leading commodity producers lower, as copper fell. The benchmark FTSE 100 Index slid 85.88, or 1.6 percent, to 5,423.14 at the close of trading in London, extending this year’s decline to 8.1 percent. Stocks fell yesterday as the Bank of England warned that the outlook for Britain’s economy has worsened and a report showed that unemployment increased the most since 2009. The gauge has fallen every day this week. “In Europe, there’s an 80 to 90 percent probability that we’ll see a recession,” Marino Valensise , the London-based chief investment officer at Baring Asset Management Ltd., said in a Bloomberg television interview today with Francine Lacqua. “There’s massive deleveraging and massive austerity. We are underweight equities and continue to be quite cautious.”Barings has 29.5 billion pounds ($46 billion) of assets under management.
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USD/JPY
Japanese stocks rebounded from a two-year low as Japan Petroleum Exploration Co. led energy companies higher after oil and metal prices rose.Japan Petroleum, Japan’s second-largest oïl explorer,advanced 3.6 percent. TDK Corp. soared 8.8 percent after agreeing to supply disk-drive heads to Western Digital Technologies. Olympus Corp. jumped as much as 19 percent after a report Japan’s top lenders said they would continue to support the scandal-hit company. The Nikkei 225 Stock Average increased 0.2 percent to 8,479.63 at the close, after falling as much as 0.7 percent. The Topix index rose 0.5 percent to 727.71. About nine stocks advanced for every five that declined. The gauge yesterday closed at its lowest level since March 12, 2009. “After the end of earnings season, the market has been yo-yoing with people reacting to news one day that they forget the next day,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “For today, people bought shares on high oil prices. Investors won’t be taking a firm position until we approach closer to the year-end when there’s a more concrete outlook on companies for next year.”More than 90 percent of the 1,663 companies in the Topix index have posted quarterly results so far. Some 730 reported earnings growth, while 794 said profit shrank, according to data compiled by Bloomberg.
USD/CAD
Canada’s dollar depreciated to the lowest level in five weeks as sovereign-debt turmoil in Europe and a decline in stocks and commodities overshadowed foreign investments in Canadian securities. The Canadian currency fell versus the U.S. dollar for a fourth day in the longest stretch of losses in more than a month on demand for a refuge. Spain’s 10-year yields rose to the highest level since before the euro’s 1999 debut. The loonie, as the currency is also known, rose earlier on reports the European Central Bank was buying Italian government bonds. “It’s not been a good day for risk,” Francois Belanger, director of foreign-exchange sales at Bank of Montreal’s BMO Capital Markets unit in Montreal, said in a telephone interview. “Equities are down, oil is down, and the Canadian dollar is following along. Many people looked at the story out of Europe and used that as an excuse to head for the sidelines.” The loonie declined 0.5 percent to C$1.0293 per U.S. dollar at 5 p.m. in Toronto. One Canadian dollar buys 97.15 U.S. cents. It touched C$1.0295, the weakest level since Oct. 12, and earlier rose 0.4 percent.
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