Forex-Metal Daily Analysis -.03/08/2012

Market review for 02.08.12: Markets were disappointed with the results of the ECB meeting.


Asian and European trading sessions:

Euro: Today, the Standard & Poor’s international rating agency downgraded the long-term sovereign credit rating of Cyprus, the one of the members of the Euro Union. The rating was downgraded from ‘BB +’ to ‘ BB’ and placed on CreditWatch with possible further downgrade. This news provoked a negative reaction of the markets and the Euro currency came under pressure. However, the same Standard & Poor’s agency affirmed the stable outlook for Germany’s highest “AAA” rating. Also, the market participants expected the results of today’s auction of Spanish bonds maturing in 2014, 2016 and 2022 for the first time since stated promises of ECB President Mario Draghi in doing everything possible to protect the euro. After the announcement of the ECB decision on interest rates, which remained at the same level, the EUR / USD pair surged to the new highs of $1.2402 yet fell in a deep downtrend due to the fact that the ECB refrained from declaring the new measures for stimulating the Euro zone economy.

U.S. Dollar: The U.S. dollar was trading with an increase against its competitors after on Wednesday, the U.S. Federal Reserve refrained from further monetary policy’s easing measures. The dollar became more expensive after the Fed did not announce a new stage of bonds’ purchases.

British Pound: The reason why the pound fell against the other major traded currencies was the fact that the Committee of the Bank of England’s has kept its interest rate unchanged as well as the volume of bonds purchase program. The GBP / USD pair rose sharply to $ 1.5680 at the beginning, however, fell into the level of $ 1.5529, to its session lows.

Japanese Yen: On the statements of the representatives of International Monetary Fund about the Japanese national currency which was titled as “moderately overvalued”, the yen fell against other traded currencies. The IMF comments will encourage the Japanese authorities to take additional measures to intervene to markets in order to reduce the high rate of the Yen. The USD / JPY pair rose to a weekly maximums during the Asian session then fell sharply on the next following session.

Australian dollar: The result of the report on Australian balance of foreign trade, which came out positive thus reinforced the view that the central bank will keep unchanged the key interest rate at the next week meeting provided support for the Australian dollar.The currency grew up after the publication of positive macro statistics.

Swiss franc: The Swiss franc showed strong growth today against the dollar after the publication of positive data on retail sales and the index of business activity.

American trading session:

Euro: Against the backdrop of comments of Mr.Draghi the euro fell against all its competitors. Markets were disappointed with the results of the meeting where the ECB refrained from declaring new stimulus for Euro zone economy. The key interest rate was kept at the same level at the 0.75 %, however Mr. Draghi noted the presence of high levels of uncertainty and downside risks as well as the situation with Eurozone’s economic very weak growth. The EUR / USD pair fell into the $1.2133 area.

Gold: During the announcement of the results of the today’s meeting the Gold has committed a surge in prices, however dropped below the lows of the previous session to $1583.8 per troy ounce.

Silver: The cost of the August Silver futures on the COMEX today grew to 27.8 dollars per troy ounce then dropped to 26.96 dollars per ounce.

Oil: The cost of the September futures of U.S. light crude oil (WTI) fell to $ 86.92 per barrel on the NYMEX on comments of ECB president.