Forex-Metal Daily Analysis -13/07/2012

Market review for 12.07.12: The Bank of Japan unexpectedly extended the size of its fund for purchasing the assets.


Asian and European trading sessions:

Euro: The EUR / USD pair fell below $ 1.22 for the first time since July 2010 in connection with the intention of investors to get rid of risky assets. The report on Euro zone’s Industrial Production the result of which unexpectedly rose in May, provided some support for the currency. In details, the volume of output of the manufacturing and energy sector changed by 0.6% in monthly term and exceeded analysts’ average forecast, who assumed it unchanged.

U.S. Dollar: The dollar rose against almost all major traded currencies on background of published yesterday protocol of the minutes of the United States FOMC’s meeting from June 19-20. According to this document, the members of the committee decided to leave monetary policy unchanged for 1 month.

Japanese Yen: The unexpected decision of the Bank of Japan of extending the size of its fund for purchasing the assets from 40 trillion yen to 45 trillion yen made troubles for some Yen’s holders. Indeed, many analysts did not forecast any change in the policy of the Central Bank of Japan. Although, the growth of the currency had corrected after the publication of the decision, the yen continued to rise against most of all its competitors. The Central Bank of Japan also decided to keep its key interest rate unchanged at 0-0.1 %, and 
the loan program was, however, reduced from 25 trillion yen to 20 trillion yen. The USD / JPY pair fell during the Asian session to the Y79.29 level.

Australian dollar: The Australian dollar fell against the backdrop of negative statistics in Australia. The unemployment rate in Australia in June was 5.2% versus 5.1% in May and matched analysts’ forecast of 5.2%. Also, the negative result of government report which showed that employers cut payrolls in June put pressure on currency trading dynamics. The Australian dollar showed one of the biggest drop in the last three months.

American trading session:

British Pound: The Pound was decreasing throughout all session. The GBP/USD pair suffered big intraday loss, reaching the lows of the beginning of June, the levels of $1.5392.

U.S. Dollar: The dollar corrected by slightly decreasing after the publication of data on U.S. federal budget which came out better than expected.

Gold: The August Gold futures on the COMEX declined today falling by more than 1 % to the lows of $ 1555.8 per troy ounce. The market participants have not found in the minutes of the last Fed meeting the signs of additional measures to stimulate economic growth. The protocol of minutes showed that the Fed is not yet ready for the next QE program, however, can increase the purchase of treasury bonds to stimulate the economy.

Silver: The August Silver futures hit the lows of $ 24.67 per troy ounce today on the COMEX.

Oil: The WTI August futures fell by fell $ 1.52 and recorded this low at the $ 84.24 per barrel level. The reduced investor’s demand in commodities due to the fact that the recovery of the global economy started to show signs of slowing down caused a drop in oil prices.