daily forex news january 23rd 2013

Daily Forex News January 23rd 2013The Japanese Yen remained firm in the Asian session today as post Bank of Japan Meeting recovery continues. It's clear that investors are dissatisfied with the Bank of Japan's lack of action this year while it only planned the open-ended asset purchase next year. This is also reflected in the Nikkei's fall of over 140 points today. Nonetheless, the profit taking triggered a pull back in Japanese stocks and a recovery in yen which are both expected to be limited. A key fact to consider is that Bank of Japan governor Shirakawa is going to end his term in April. Prime minister Shinzo Abe is expected to choose a policy dove to succeed Shirakawa and help him implement his ‘Abenomics’. If Shirakawa would be there for another year of two, the pull back would be much deeper. But for now, it should just be mild as markets will quickly reposition themselves into policy easing again after locking at current profits.

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Daily Forex News January 23rd 2013The Aussie is the relatively big mover today after C-P-I data disappointed. C-P-I rose point 2% quarter on quarter and 2.2% year on year in Q4 versus expectation of point 4% quarter on quarter and 2.4% year on year. Treasurer Wayne Swan said the C-P-I result was "further evidence that there has been no significant broad-based increase in consumer prices as a result of the carbon price". The Aussie weakened in the Asian session today as the data should give the Reserve Bank of Australia room for a further rate cut if necessary. So far, interest rate swaps are pricing in a less than 50% chance for the Reserve Bank to cut another 25 base points to a record low of 2.75% in February. But after all, another 25 base point cut is still generally expected within the next 12 months.


Daily Forex News January 23rd 2013In Europe: European Central Bank president Draghi said yesterday that "the darkest clouds over the euro area subsided" on "resolute actions by euro area governments and European institutions". Draghi hailed that "countries renewed their commitment to reforms" and noted that the Eurozone began 2013 on a "more confident note precisely because significant progress was made during 2012." And urged Eurozone leaders to have "continued ambition" to "fix the structural flaws in the governance framework of the euro area." The E-C-B's Outright Monetary Transaction bond-buying program has yet to be activated and focus has so far been on Spain. However, European Economics Commissioner Rehn said that O-M-T could indeed pave the way for "market financing for Ireland or indeed for Portugal" when they exit the bailout program.


Daily Forex News January 23rd 2013In the UK, it's reported that prime minister Cameron will announce a national referendum by 2017 on whether the country should remain in the European Union, if his party wins the next election. Cameron will note in his speech that disillusionment with the EU is "at an all-time high". After the next general election in 2015, Cameron will renegotiate the relationship with the E-U and he noted there should be a simple "in-out referendum" after the new settlement. Though, he will caution against an immediate referendum "before we have had a chance to put the relationship right.


Daily Forex News January 23rd 2013Looking ahead, Bank of England meeting minutes and UK job data will be the major focus in European session and Switzerland will release Z-E-W expectations. Bank of Canada will announce it's rate decision today and is expected to leave rates unchanged at 1%. The US will release the house price index.


daily forex news january 23rd 2013

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