Morning Briefing
The Morning Briefing is prepared daily at the start of the European Trading session by RTFX’s trading desk. It presents a roundup of the major news headlines occurring within the global economy that may affect the forex market. This news bulletin also includes a view of our forex calendar for the day, highs and lows achieved in the previous sessions from the forex market, global indices and commodities and brief commentary about the economic headlines.
Morning Briefing for Tuesday, 14 Feb 2012 (Updated 09:12:29 CET)BOJ adds stimulus; Moody’s cuts several euro zone nations
What’s new:
Forex: Yen dips broadly after more easing by BOJ
Forex: Euro under pressure after Moody’s downgrades
Global Markets: Shares weighed by a warning of top-rated sovereign ratings by Moody’s
Moody’s: Lowers outlook of Aaa rated UK, France and Austria
Japan: BOJ keeps rates unchanged, expands QE
Euro zone: Moody’s cuts ratings of several European countries including Italy, Spain
Forex rates in Asia and Indices:
EUR/USD: 1.3192 - 1.3127
USD/CHF: 0.9198 – 0.9162
GBP/USD: 1.5771 - 1.5686
USD/JPY: 78.07 – 77.36
EUR/CHF: 1.2090 – 1.2074
EUR/JPY: 102.67 – 101.83
DowJones: 12'874.04 +0.57%
NASDAQ: 2'931.39 +0.95%
S & P 500: 1'351.77 +0.68%
Nikkei: 9’052.07 +0.59%
Shanghai: 2’344.77 -0.30%
Gold: $ 1’719.00
Crude Oil: $ 100.60
Comments:
The Bank of Japan added to its monetary easing program on Tuesday, reaffirming its resolve to fight deflation and its commitment to support an ailing economic recovery. In a surprise move the Japanese central bank announced it added 10 trillion yen to its current QE program with the aim to spend all of this exclusively on JGB purchases before year-end. The BOJ also set its annual inflation target at 1 percent.
Risk appetite was under pressure on Tuesday after Moody’s cut sovereign ratings on six euro zone countries and more importantly lowered the outlook to negative from stable of France, Britain and Austria’s Aaa ratings. The countries downgraded by Moody’s include Italy, Spain, Portugal, Slovakia, Malta and Slovenia. The move by Moody’s boosted demand for safer assets including the dollar and weighed on Asian shares.
The euro fell against the dollar after Moody’s announcement while riskier currencies including the Australian and New Zealand dollars were also under pressure. EUR/USD fell to 1.3127 overnight, and is down a quarter percent at the time of writing. AUD/USD declined more than half a percent to 1.0663, approaching key support represented by the 20-day moving average now at 1.0643 and last Friday’s low at 1.0640.
USD/JPY rose to its highest since January 25th, at 78.07 after the BOJ’s announcement. The pair broke higher than a recent bear trend line off the highs from May and July 2011, and January 2012, but stalled exactly ahead of its 200-day moving average at 78.08.
Good day,
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