Rumors from Iran Central bank said that the management had decided to diminish EURO reserves to 20-25 percent from 50 percent and then convert the euro currency into the Dollars and Gold. It is also heard in the market that the sales of the first stage is begin and its target seems to be 15 billion was expected to be finish off till the end of September. EUR 45 billion is expected amount for the whole sales. Iran is expected to reduce its cost of oil sales in euro. While buying seems to be low and USD stays tight against all the major currencies of the Forex online trading market. Prime Minsiter of Japan has announced its resignation leads to the Japanese currency Yen in the soft order in the market. This announcement of resignation is just come before week and now the currenct finance minster of Japan is the successor as the market expects for the chair of Prime Minsiter.

According to the report presented by the Challenger, Gray the US planned to dropped layoff early makes a fall of 65 percent in the month of May where as eurozone PPI rises to 0.9 percent mom. Aussie GDP reaches to a high of 0.5 percent qoq and 2.7 percent yoy in the first quarter of this year that is 2010. While Swiss retail sales rises to 1.3 percent yoy in the month of April. Monetary base roses to 3.7 percent yoy in the end of the may month. Although the Japan currency is not going as good because of the political uncertainity where as apart from this the US currency is gaining as the demand of risky assets rose.

We have seen that the currency pair USD/JPY reaches to the high level of 92.36 first time after the eigteenth of may where as the currency pair EUR/JPY reaches to 113 level as anticipated in the market after the recovery of the US labor market. In the market rumuors are going on about the next leader of Japan that was expected to the current finance minster will take the vacant position of the Prime Minster of Japan that ultimately leads the Yen currency to lag behind in the market from some past days. Th finance minister of Jpana suggested the BOJ to do not look steady at the market try to fight against the deflation to stop it. While rise is seen in the Asia Pacific of 2.4 percent and the Nikkie embedded the goodness in the stocks by rising 2.46 percent more. The stocks seems to be rebound and also triggers the risk appetite because of the japanese investors amendment foriegn bond net purchases to the most expected till the month of September.

There was a advancement shown in the currency pair of AUD/USD that seems to be rises to 0.5 percent and the currency pair NZS/USD rises to 0.4 percent in the consecutive second day at the Forex market. This is all due to the strong economic data that comes from US while the Aussie demands for the risk appetite. Where as the trade balance of the Australian trade adds the surplus in the month of April as there was a high jump shown in the iron ore exports that is of 25 percent more from the past, coal shipments rises to 40 percent more where as the exports also rises to 11 percent as comapred to the April month. RBA has forecasted that the boom of Asia srocks may lag the Australias’s trade in the coming time.

The currency pair EUR/USD seems to be in good path as it seems to be rises from 1.2111 to 1.2281 on first june. It gets the support from the stocks rise in the starting of this month. While as about the US economy it was predicted yesterday that the US comapnies are ready to launch 70,000 jobs as the intial jobless came fells to 455,000 from the previous 460,000. In this week there was a meet fixed between the Finance minsters with central bankers of G20 in Bussan that was in South Korea which decides about the current situation of EURO debt crisis. The currencty finance minster of Japan mentioned in his one of the interview that the european debt crisis leads an adverse effect on the Global economic growth of the country merely because of the leading trading countries that is China, india and Brazil are still ready to fight against the deflation as they are robust enough.

From http://forextradingguru.blogspot.com

After getting a support from China, Euro zone countries debt and State Administration of Forex online market acknowledges by China that- “Euro zone is one of the major market for investments among all the nations”. This cause the risk sentiments to get a strong recovery in the week. There was a recovery shown in the past week Friday in DOW also. It closed at the level above 10000 and reached above from the intraday low of 9774 to 10136 level. Crude oil reached to the 73.97 level and breached to the level above 75. Nevertheless, the improvement in risk sentiments does not make any changes in the level of euro and it closes at low point on the late Friday. Since, euro gets failed against recovery of major currencies that is Dollar and Japanese Yen.

We all heard about the latest news that Fitch has cut the Spain’s rating in the market from AAA to AA+ because of this On Friday there was a sharp fall noticed in the common currency which closes low at the end of past Forex session. Fitch also mentioned the fact that the Spanish economy get reduced because of the adjustments in the lower level of private sector along with external indebtedness. Euro zone nations still worried about the economic recovery after the recent downgrade in the Spain. The concerns about the recovery of austerity measures also added to the part of euro zone concerns about fiscal health. Ultimately these concerns impact on Euro and it shows a drop-down against the Aussie of 4.19 percent where as it drops to 2.83 percent against the Canadian Dollar. The Fitch assigned an stable outlook to the Spain by cutting its rating.

In June month there will be considered a two important developments will get the main focus that is first one is the development seen in the stocks. In last week there was a break out seen in the DOW even though it touches the low of Feb. in some past days. The buying of stocks leads to the rise again at the end of week. Where as the rise in CRB stocks are also shown and leads it to the level above 258. The recoveries was over as argues after the Friday’s sell-off and seems to be looked corrective as anticipated by the market experts. There are major events are scheduled by Canada and Australia as they may discuss about the crucial factors that is whether commodity currencies will be steady for long term or not. The market is still expecting a hike from the BOC even though it seems to be in volatile state as the Forex market.

In this week the market main focuses on rate hike of BOC since, the market were pricing only forty percent at only one point where as 25 bps rate hike in terms of BOC as anticipated for this week in the market. But it is seen that OECD has taken an strict action against the BOC and ordered them to remove all the policies that leads the investors to increment their betting as the stocks gets rebounded in past week. Therefore, at the end of the week it is noticed that market gets only a seventy percent rate hike since we all know that BOC rate hike is not a done deal in the market. It is seen that there was a recovery seen in the past week in the Canadian Dollar against the major currencies and commodities of the market. The market experts anticipated that the US and UK market is to be returned on Monday or Tuesday so traders have to be cautious while trading in the market.

In this week it was predicted that RBA may take meeting for giving details about the minutes of there “pause” taken in the month of may. There were seven meetings taken by the banks and issued the borrowing cost raising up to six times. Although this was expected from the starting of the May month before the intensification of the Euro zone financial crisis and also before the fall of the stock market. There was also a fall seen in the Australian market after fourth of May to 4194 from the high of 4753 index level. It seems to be a 12 percent low but again shows a rebound at the end of the month and reaches to 4479 level. But it is still at a low of 11 percent as compared to a high level of 5048 in the month of April. Overall it is expected in the market for a June hike that RBA should take a move that will ignore the previous statements of RBA, so is Aussie.

From http://forextradingguru.blogspot.com

Yesterday a low was seen in the EURO currency due to the news that Bank of Spain is now lead by the government reconstruction funds. This makes the euro to tumble down after hitting the high of $ 1.25. Since we have seen some earlier gain in the euro currency. There is rebound shown in the DOW after getting low in the morning it reaches to 11000 level so early. The Gold also gets rebounds and reaches to 1190 level where as crude oil is still below the 70 level. In US home sales annualized rate turns to 5.77 level as it rises more than expected but the economic data results in some downside in the Forex online market. But, it can be said that the EURO loss is limited that is the currency pair EUR/USD is selling above 1.23 level.

Despite the announcement of GBP 6 billion spending cutting the Sterling currency is trading in mixed range. This includes the budget cost cutting along with the freezing of public sector services and civil services recruitment, cost cutting on expenses of technology, advertising and travel. The Chancellor Osborne said that- the 500 million pounds cost cutting will results in number of useful projects growth. It can be predicted that this year the savings will contribute to the cost cutting deficit. In overnight trading it is seen that the Stock market also results in a low although it is standing straight within 3 months dollar OIS spread results in 25 basis point after nine months high.

There is a sharp low line graph is seen in the chart of the currency pair EUR/AUD and reaches to a rift of 1.49 level. There is drop-down shown at the level of 1.5455 which is said as a correction and there is a also a strong support anticipated from 55 days of EMA to remain in the downside trend. It was anticipated that there will be a rise seen towards 50 percent retraced at 1.6013. Canadian Dollar is on recovery side today but crude oil is still breaching at below level 70. There is a consolidation shown by USD and Japanese Yen versus major currencies since stabilization is shown by currencies risk sentiments. USD/CAD’s currency pair drop-down to 1.078 level that ultimately helps the Canadian dollar to sell-off in the downside. AUD/CAD currency pair is also shows drop-down although it is supporting Loonie in general terms. GBP/CAd is still trading below the medium trend falling trend line and 55 days of EMA.

There is a rise in the opening session of Forex in European stocks today. The stocks high will provide support to risks which will lead to forex market consolidations. We hear the news of the BoC market that it will announce the interest rate hike on first June as anticipated by the market. Now it can be said about the currencies growth rate is mainly dependent on the Boc hike. CAD/JPY is still weak although it recovers from the past week’s sharp fall. The currency pair is still in the bearish trend even though the market holds a 86.26 minor resistance. In USD chart it is seen that some support is seen around 55 EMA in four hours. There was a break out shown by the currency pair EUR/GBP at 0.8618 level. If it break of at 0.8427 level then it will confirm the decline resumption.

In Asia there is a fall is shown in the EURO currency tumbles down to 1.2385 from 1.2370 level. This is due to the move in Bank of Spain also some austerity programs supported that has been launched in order to provide support to weaker euro zone’s member countries to get recover from the debt crisis. There was a big fall in EURO currency pair that is EUR/JPY is shown that is of 110.10 points. AUD/JPY falls to 73.50 from the 74 level and also a drop down shown in the USD/JPY to 90 level.

Overall it can be said that market is still in the consolidation state and there is a risk shown in the Dollar and Yen sell-off. The euro fall is limited to some extent as predicted in the Forex market. Due to solid economic data out in the US the Dollar gets the safe side flow and there is a dynamic move shown by the Gold in Asian market. These are all the latest update about the Forex market till now.

From http://forextradingguru.blogspot.com

Last week’s announcement of the Stabilization Fund leads the investors into the trouble. ECB has taken pledge for purchasing public as well as private bonds and also introduces various refinancing operations for providing benefits to the countries belongs to euro zone.

Market experts are saying that the stabilization fund only provides a temporary relief to the economy of euro zone. The cure is not the permanent, this news leds the market investors into the dilemma. Since majority of the market aspirants does not believe these auctions are beneficial for solving the fiscal
problems.

The Germany is the major contributor in the stabilization fund but the EU members of the other nation that has given their support is not happy because they are worried about the austerity plans that the government had announced for improving the fiscal health of the countries.

The austerity plans mainly affects the economic recovery which leads to the fall of EURO currency below the 2008 low. The EURO currency falls to 18 months low,now it is at 1.2333 points. The fall of EURO makes the USD demand higher among the currency investors of Forex market.

The euro zone countries that are going through debt crisis after the announcement of stabilization fund had formally announces about the austerity plans to reduce the fiscal deficits. These countries are Spain, Portuguese and Italy, since Greece also belongs to this category but it’s announcement is now in holding state.

However, after this announcement there is a slow down seen in the economic recovery in both the euro zone countries along with the whole world. Government has bought 20 billion EURO for providing short-dated bonds to euro zone countries are Greece, Spain and Portuguese.

Now the report on currency pairs how the rescue fund has affected the currency pair. The first shocking news is about the EURO as it falls to the 4 year low and reaches to 1.2334 point. Today’s opening of Forex session is at 1,2433 resistance intact. It is predicted that the EUR/USD pair can be further goes to
decline because of the continuous fall of EURO currency. it can be said about the market of EUR/USD currency pair that the break of 1.2329 subsides confirms about the rebound of 2008 fall in currency pair.

The recovery is seen in the GBP/USD after the Yesterday’s fall by touching the low of 1.4250 in the opening market. It is predicted about the GBP/USD currency pair that it can get benefited by the US dollars high. GBPUSD currently is in position of 1.44488 to 1.53010. It is noticed that the currency pair rose to 1.7043 from corrective rise to1.3503 and then falls from the 2007 high of
2.1161.

USD/JPY is currently on mildest downside and the further drop-down is expected from 90.85 to lower point. The upside in the currency pair is expected to be of 93.62 but it is limited to 94.97 high. It can be assumed to be one short-term drop-down in this currency pair. After breaking from 88.13 it is seen that there ts support given at this point can favor the rise of the USD/JPY currency pair. If the pair breaks down at 94.97 then it will confirm that the USD/JPY will be in bullish case.

USD/CHF is given minor support intact after the Friday sell-off. The currency pair USDCHF is at 1.1210 level and estimated to reach to the level of 1.1273 and the resistance line is at 1.1396 level. It is estimated that the support given at minor level can bring temporary top level along with consolidations. But if there is some pull off at the point above 1.0922 then there will be a risk resumption.

There is drop down is seen at the AUDCAD currency pair is shown at the level of 0.8723. The overall fall will confirm that the currency will get medium-term support at point 0.8557.

These all are the market updates of today’s overall currency pair and affect of market stabilization fund on the currency pairs of the Forex market.

From http://forextradingguru.blogspot.com

“A man could bring the horse to the water, but he cannot make him drink”- same is the case with the Greece crisis. The European Monetary Union Ministers are providing support to the Greece by offering the rescue package but it is only a temporary relief.

The actual work of raising the economy can only possibly be done by Greece Government itself. They have to make better financial plans from before, it needs a lot of effort to be put in making workable plans.

Market aspirants are very much concerned about the fiscal outlook for Europe. The EURO rebounds from Monday’s high at $ 1.31 from the falling point below $ 1.27. The investors remains worried about whether weaker EURO economy can provide cost cuttings and increase in tax payments to manage their fiscal houses in order.

Market investors are still expecting a high of touching $ 1.15 by the Q3 from the EURO regardless of the last week’s fall of EURO to $ 1.2510. It is still down by 0.4 percent after trading at $ 1.2732 in the forex online market.

The major currency that stands out against the US session was Sterling. The Euro fells around 1.2 percent to 85.05 against the sterling. The US Dollar touches a high of 0.3 percent to 92.99 against YEN. The Euro shows a fall of 0.7 percent against the 118.45 YEN.

The chief Forex strategist Shaun Osborne said that- the rescue aid package to Greece is just a way of delaying the inevitable not the cure to the disease. The currency strategist at Standard Chartered Bank in New York, Mike Moran had presented their opinion about the fiscal outlook of Europe. He also specifies clearly about the near term outlook that is one of the ephectic term for the EURO currency.

The market focus shifts back to the debt problem of Greece and the halted aid package in euro zone. It may be assumed that the debt problem may increase in recent weeks since, the investors are focusing their attention towards the currency borrowing for other countries facing same problem such as Portugal, Spain and Ireland.

From http://forextradingguru.blogspot.com

The Euro tumbled to its weakest level against the U.S dollar in over a year amid growing concerns that Greece’s fiscal woes will spread to other indebted nations. The 16-nation currency hit a low of $1.27881 for the first time since March 2009 as Moody’s Investors Service placed Portugal’s Aa2 government bond ratings on review for another possible downgrade. In Greece, a nationwide general strike crippled the country, as protests against the government’s recently announced austerity measures turned violent, with a firebomb attack on a central Athens bank killing three people. The riots escalated as citizens of the debt-stricken nation halted flights and shut shops in a direct response Prime Minister George Papandreou’s plans to cut wages and pensions and raise taxes in return for a 110 billion- euro ($143 billion) rescue package. The Euro closed at $1.28126, down 1.17% from the day’s opening price and down 3.80% from the week’s opening price In the forex online market the EUR/JPY tumbled to a low of 119.935. The pair closed at 120.170, down 2.13% from the day’s opening. The Euro continued to fall against the Yen, touching on a low of 119.481 in this morning’s trading session.

President Jean- Claude Trichet will be fighting for the credibility of the ECB as well as the Euro today as he faces questions over the institution’s decision to throw away collateral rules for Greek debt. On Tuesday, Trichet altered the rules for the second time in a month to guarantee the ECB will keep accepting Greek government bonds as collateral for loans even though they had been downgraded to junk status. This move comes in a direct contradiction to the declaration made earlier this year by Trichet that the central bank would not alter its collateral rules for the benefit of a single country.

According to economists the central bank may have to extend that to other nations, renew a program of lending unlimited cash to banks for a year, and even start buying government debt if the €110 billion- ($146 billion) bailout plan for Greece fails to stop the euro’s slide. The ECB decision raises tough questions that will make Trichet’s monthly news conference “more than difficult,” wrote economists at BNP Paribas.

Today, the ECB will announce its minimum bid rate decision – the central bank is expected to hold its key interest rate at its current record low level of 1.0%.

The Euro’s weakness helped the dollar index hold on to its impressive gains this week. The index was up at 84.11, not far from a one-year high of 84.31 hit earlier in the session. The U.S Dollar got a boost from data showing U.S. private sector employers added 32,000 jobs last month, bolstering the view that U.S. interest rates will likely rise from record lows well before action on rates in the euro zone.

Companies in the U.S. added workers in April for a third month, according to data based on private payrolls. Data from the ADP Employer Service yesterday reported an increase of 32,000, following a revised 19,000 gain the prior month. The ADP figures were forecast to show a gain of 30,000 jobs. According to economists’ estimations, Friday’s highly anticipated Non-Farm Payrolls are predicted to show another month of strong gains – 197K. Last month, the NFP finally re-entered positive territory and recorded an increase of 162K in the number of employed.

Service industries in the U.S. expanded in April at the same pace as the prior month, indicating factories will drive any pickup in the economy. The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, held at an almost four-year high of 55.4 for a second month. Readings above 50 signal expansion.

Going into its election, the British currency traded near a nine- month high against the Euro, touching on 84.77 pence per euro yesterday afternoon. The GBP rose as the latest UK election polls pointed to a likely victory for the Conservative Party and in reaction to report of strong UK construction PMI and rising retail price inflation.

From http://forextradingguru.blogspot.com

The euro rose on Thursday, rebounding from a one-year low the previous day on hopes a bail-out plan for debt-stricken Greece would be finalized soon. Gains were limited, however, as details of the Greece package were thin, leaving uncertainties about the timing and implementation of any deal.

Germany’s largest opposition party said it would move quickly to approve German participation, while European Union Economic and Monetary Affairs Commissioner Olli Rehn said the European Union should complete talks “within days”. However, Rehn said he still could not provide details of the deal, which he said were “conditional on fiscal consolidation.”

Mr. Rehns speech he emphasis on “a multi annual program” has helped provide comfort to markets amid fears that the initial plan for a 45 billion euro package would only help meet Greece’s borrowing needs through the current year. IMF officials have reportedly indicated the package could total between €100 billion to €120 billion.

Greek and other peripheral Euro-Zone bond markets rebounded amid the comments and also took relief from a well-received auction of Italian government debt, the first test of the credit markets by a southern euro-zone country since this week’s downgrades of credit ratings for Greece, Portugal and Spain.

The International Monetary Fund and European Union are pressing Greece to take extra austerity measures that could yield more than €20 billion a year as a precondition for financial assistance. These new austerity terms, which could range from pension overhauls to wage cuts, come at the end of two weeks of talks between the visiting IMF negotiator, the European Central Bank and the European Commission. The IMF and the EU have said that they hope to reach an agreement with Greece on its budget deficit by the weekend, in order to pave the way for financial assistance for the debt-stricken nation.

During the European trading session in the forex online market, the EUR rose 0.4% against the USD to hit a high of $1.327771. It was comfortably above a one-year low of $1.311231 it hit on Wednesday after Standard & Poor’s cut Spain’s credit rating by one notch, a day after downgrades to both Greece and Portugal. The Euro closed at $1.32632, up 0.40% from its opening price of $1.32105.

Yesterday report showing that European confidence in the economic outlook improved to its highest level in two years as well as German unemployment fell signaling that the euro-area recovery is strengthening even as Greece’s fiscal crisis spreads across the region.
An index of executive and consumer sentiment in the 16 euro nations rose to 100.6 in April from a revised 97.9 in March, the European Commission in Brussels said yesterday; while in Germany, Germany’s unemployment rate fell to 7.8% in April from 8.0% in March, exceeding market expectations that it would not be able to repeat last month’s move. The net change in unemployment for Germany was -68,000 in April, versus an expected -11,000 – marking the largest drop since February 2008. Germany’s unemployment levels are now at their lowest levels since January 2009.

From http://forextradingguru.blogspot.com

Greece is currently negotiating the details of an emergency joint rescue package from the euro zone and International Monetary Fund.

The Greek government has said it wants to reduce the deficit to 5.6% of GDP in 2011 and 2.8% of GDP in 2012. But spending cutbacks measures being introduced by Athens to restore its finances are being resisted. Yesterday tens of thousands of Greek civil servants staged a 24-hour strike in protest against the austerity measures.
The Bank of Canada yesterday continued to keep financial markets guessing about when policy rate increases may begin, but said their time has come. Likely dates are June 1st or July 20th for the first of a series of increases.

Canada’s dollar traded near a 22- month high against its US counterpart in the forex online market as the central bank signaled an increase in interest rates and reiterated that the need for economic stimulus is fading. The currency hit a high of CAD 0.99606 before dropping back to close just below parity at CAD 1.00061.

The Bank only provided detail in a Monetary Policy Report to outlines given Tuesday when it maintained the year-long rock-bottom overnight rate target at 0.25%. It said the need for such extraordinary stimulus is over and it is time “to begin to lessen the degree of monetary stimulus.” However, the timing and size of rate increases “will depend on the outlook for economic activity and inflation.” And here, on economic activity and recovery from recession, the Report is laced through with cautions.

Inflation is expected to remain anchored at around the 2% target through 2012, with the Bank evidently little concerned about it. Looking at growth, though there was a strong 5.8% recovery in the first quarter of this year, and 3.8% expected GDP increase in the present quarter, this recovery is “front-loaded,” the Bank says. Growth will diminish to 3.5% in the second half and more rapidly in 2011, down to just +1.9% in the two final quarters of next year.

From now on, Canadian growth “will revert more quickly to trend,” in the Bank’s assessment. From the present second quarter this year through all of 2011, growth slows because policy stimulus measures had brought forward “considerably more expenditures” late last year and early this year than expected. Moreover, the Bank expects “a somewhat weaker outlook for US economic growth starting in the second half of 2010.” Another drag is “the higher assumed level for the Canadian dollar.”
The Bank bases its assessments in part on a Canadian dollar averaging 99 cents against the US dollar over its projection period (through 2012). The Canadian dollar was at parity with the US dollar Wednesday.

On an average annual basis, Canadian GDP is expected by the Bank to grow by 3.7% this year, against just 2.9% expected in the January Monetary Policy Report. Then, growth slows gradually to 3.1% in 2011 (3.5% expected last January), and down to 1.9% in 2012.

From http://forextradingguru.blogspot.com

The Euro snapped five days of gains against the greenback as concerns begin to grow that the European Union’s latest rescue plan for Greece- a €45billion bailout package – won’t be enough to restore the single currencies value. The European Union’s single currency fell sharply against all but 2 of its 16 most traded currency counterparts, as the extra yield investors demand to hold Greek 10-year bonds instead of benchmark German bunds rose above 400 basis points for the first time since Greece’s bailout package was announced last Sunday. The EUR/USD hit a fresh weekly low of $1.3515.

The yield on Greece’s 10-year notes advanced 0.02 percentage point to 7.09% on concern Greece’s won’t get the fund it needs to fund a deficit that is 12.9% of gross domestic product, the biggest in the Euro’s history. The Parliaments of Germany, France and Ireland must first vote on whether to contribute their share of the EU loans.

This morning (1000GMT), Eurostate will release the annual Consumer Price Index for the entire continent. The market expects that the annual adjusted inflation will continue to increase at 1.5%, and that core CPI is expected to be revised from 0.8% to 0.9% – however, only a substantially rise in this figure will push the ECB to contemplate a rate hike.

The British Pound rose 0.6% to 87.77 pence against the euro after a survey showed the Conservative Party has extended its lead over the reigning Labour Party, easing concerns that next month’s election won’t produce a clear winner. The Sterling appreciated for a second day in a row against the single European currency after Britain’s Daily Telegraph published a poll showing that the Conservative party was in the lead with 43% support rate, compared to the Labour party’s 31% support. This poll signals that the U.K turbulent political situation is beginning to stabilize, which, according to analysts, is particular good news for the country’s currency which has recently suffered on concerns that U.K will not have a majority government following the next election. While early in the day during the European trading session, the pound dipped as low as $1.53840. However, the British currency managed recover during the U.S trading session, to reach a high of $1.5509. The GBP/USD closed the day at $1.55002 in the forex online market.

Across the Atlantic, the number of Americans filing claims for jobless benefits unexpectedly increased last week, indicating the improvement in the labor market will take time to unfold. Labor Department figures showed yesterday that Initial jobless applications rose by 24,000 in the week ended April 10; however a Labor Department spokesman said the rise in claims was due more to administrative factors reflecting volatility around Easter than economic reasons. None the less, the number of jobless names passed the market predicted vale of 439K, to reach 484K – the highest level since February 20th. Reluctances among some companies to hire is among one of the biggest challenges facing the economy as it recovers from what is considered the worst recession since the Great Depression. Employment gains are needed to help stimulate consumer spending, which accounts for about 70% of the economy. This disappointing figure comes one day after Fed Chairman Ben S. Bernanke told congress that high unemployment and weak construction are among the “significant restraints” on the pace of growth. However despite a worse than expected result, the U.S Dollar was up against the euro following the release of the joblessness claims, with the EUR/USD shedding 0.82% to reach 1.3441.

From http://forextradingguru.blogspot.com

More Americans unexpectedly filed first time claims for jobless benefits last week, in part reflecting difficulty in seasonally adjusting the data ahead of the Easter holiday. Initial jobless applications increased by 18,000 to 460,000 in the week ended April 3rd, Labor Department figures showed yesterday. The week leading up to Easter and the two weeks that follow are traditionally a “volatile time” for claims, a Labor Department analyst said.

Last week the US Labor Department reported that payrolls rose by 162,000 in March, the biggest gain in three years. The unemployment rate was 9.7% for a third month. It has not increased since reaching a 26-year high of 10.1% in October.

Some companies may be reluctant to expand payrolls until they see sustained increases in sales as the US emerges from recession. Federal Reserve Chairman Ben Bernanke said yesterday that joblessness, home foreclosures and weak lending to small businesses pose challenges to the economy.

Yesterday the US Dollar fell 0.14% against the Euro to close at USD 1.3359 in the forex online market. The US Dollar had climbed against the Euro during the previous four days. Against Sterling the US Dollar also dropped for the first time in three days, sliding 0.26% to close at USD 1.5273.

In the UK yesterday the Bank of England kept interest rates at a record low of 0.5% for the 13th consecutive month in its last decision before the upcoming general election. It also left its 200 billion-Pound asset purchasing program on hold.

The decision had been widely anticipated amid concerns that Britain’s recovery from a punishing 18-month long downturn remains fragile. The perilous state of the economy is expected to be a major factor in the general election scheduled for May 6th.

Both the ruling Labour Party and the main opposition Conservative Party are trying to convince voters that they have a clear plan to reduce the country’s massive budget deficit — but both also warn that Britons face a new age of austerity regardless of the election outcome.

Also in the UK yesterday, results of the latest Halifax survey showed that house prices rebounded in March after falling sharply in February. March house prices were up 1.1% on the month to stand up 5.2% on the year, following a revised 1.6% fall on the month in February. The 1.1% increase was the eighth monthly rise in house prices in the past nine months and the largest since November last year.

The 5.2% year-on-year rise was the largest since December 2007. House prices in the first quarter were up 0.6% on the fourth quarter. UK house prices were up 9.1% in March from their April 2009 trough, having fallen 23% from peak to trough.

Martin Ellis, Halifax’s housing economist, said increasing supply should curb house price inflation. “There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices,” he said.

From http://forextradingguru.blogspot.com