{"id":13163,"date":"2011-09-05T11:00:00","date_gmt":"2011-09-05T10:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/etfworld.co.uk\/index.php\/2011\/09\/05\/forex-markets-the-key-event-for-the-forex-markets-in-august-was-the-fomc-meeting\/"},"modified":"2011-09-05T11:00:00","modified_gmt":"2011-09-05T10:00:00","slug":"forex-markets-the-key-event-for-the-forex-markets-in-august-was-the-fomc-meeting","status":"publish","type":"post","link":"https:\/\/www.etfworld.com\/co.uk\/forex-markets-the-key-event-for-the-forex-markets-in-august-was-the-fomc-meeting\/","title":{"rendered":"Forex markets: The key event for the forex markets in August was the FOMC meeting"},"content":{"rendered":"<p style=\"text-align: justify;\">In August the key theme for the forex markets was the fear of serious   slowdown in global growth. Compounded by the outcome of the FOMC   meeting, this translated into generalised dollar weakening. The euro   undeservedly benefited, but the ECB meeting and the imminent review of   Greece might \u201cfinally\u201d drive it down.. .<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\">&nbsp;<\/span><\/strong><span lang=\"EN-GB\">&nbsp;<\/span><span lang=\"en-GB\">&nbsp;<\/span><span lang=\"en-GB\"><\/span><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<hr \/>\n<p style=\"text-align: justify;\"><span style=\"font-size: 10pt;\"><span style=\"font-family: arial,helvetica,sans-serif;\">Sign up for our weekly Newsletter and receive the latest ETF and ETC news.<\/span><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 10pt;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=1016\"><strong>Click here to register for your free copy<\/strong><\/a><\/span><\/span><\/p>\n<p> <a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=1023\"><strong>&nbsp;<\/strong><\/a>  <\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><strong>For professional investors and advisers only<\/strong><\/p>\n<hr \/>\n<div style=\"text-align: justify;\">A  still tougher task is to effect a reversal in the yen, which has risen  to new all-time highs thanks to its now anachronistic status as a safe  haven currency. Sterling exposed to possible falls: the BoE has adopted a  sort of easing bias.<\/div>\n<div style=\"text-align: justify;\"><strong>DOLLAR<\/strong> \u2013 The key event for the forex markets in August was the FOMC meeting at  the start of the month, at which the Fed pledged to keep rates on hold  through to 2013, in order to offset the downside risks to growth. This  switched the focus to the risks of a global slowdown, which has become  the main theme for the forex markets.<br \/>The net effect was dollar  weakening in nominal effective exchange rate terms. And it is thiswhich  explains the upward trend of EUR, which has risen from 1.40 to 1.45  EUR\/USD \u2013 despitegrowing concerns over the sovereign debt issues  (Greece, and Italy too).<\/div>\n<div style=\"text-align: justify;\">This also explains the consolidation of JPY, which has steadily \u201cflattened\u201d not so much within a<br \/>range as at a very strong point level of 77 USD\/JPY. Even EUR however, despite having some<br \/>directionality, has moved within a narrow range of 1.40 &#8211; 1.45 EUR\/USD.<br \/>While  the dynamics are similar, the roles of these two currencies are very  different: (a) the strength of yen is due to generalised risk aversion  on fears of a sharp global slowdown, while (b) the firming of EUR is the  virtually symmetrical result of USD weakening caused by the prospect of  US rates virtually at zero out to 2013.<\/div>\n<div style=\"text-align: justify;\"><strong><br \/><\/strong><\/div>\n<div style=\"text-align: justify;\"><strong>EURO<\/strong> \u2013 In the euro\u2019s case the global slowdown theme has overshadowed local  themes (sovereign debt problem), which should have overburdened it;  instead EUR has held up well remaining firmly above 1.40 EUR\/USD.<br \/>This  situation is not likely to continue for long. Next week brings (1) the  review of Greece, on the outcome of which will depend the release of the  next tranche of aid, and (2) the ECB meeting. Fears of some setback and  the uncertainty pending the verdict on Greece and the likelihood that  Trichet will remove any residual expectations of further rate hikes put  downside risks on EUR which, in a downtrend, technically would have  scope to correct to at least 1.38 EUR\/USD.<\/div>\n<div style=\"text-align: justify;\"><strong><br \/>YEN<\/strong> \u2013 Next week also brings the BoJ meeting. Any further expansionary  measures and\/or declarations regarding the excessive strength of the yen  might however not be enough to reverse JPY.<br \/>The role of safe haven  currency at times of acute risk aversion \u2013 where the common threat of a  serious global slowdown is compounded by specific or local issues \u2013  makes JPY insensitive at this time to domestic developments.<br \/>The  trigger for a downward reversal is more likely to come from an  unexpected improvement in the US growth outlook, via data which surprise  on the positive side, or any \u201cfavourable\u201d statements from Bernanke  (speech scheduled for Thursday).<\/p>\n<p><strong>STERLING<\/strong> \u2013 Thursday also  brings the Bank of England meeting, although expectations are for rates  to be left on hold at 0.50% with no change in the APF.<br \/>At last  month\u2019s meeting the BoE set out its new monetary policy stance. Through  to July there was a minority on the committee in favour of a rate hike;  now, not only does the majority recognise the predominance of downside  risks to growth but also reveals a sort of easing bias.<br \/>The data due  out next week are not expected to be positive. This, coupled with the  positive correlation with EUR, should drive GBP down vs. USD.  Technically, the completion of the recent<br \/>downtrend lies at 1.58-1.56 GBP\/USD.<\/div>\n<p style=\"text-align: justify;\">\n<p><strong><br \/><\/strong><\/p>\n<p style=\"text-align: justify;\"><strong> <\/strong><\/p>\n<hr \/>\n<p> <strong> <br \/><\/strong> <\/p>\n<p style=\"text-align: justify;\"><strong>Appendix<br \/>Analyst Certification<\/strong><br \/>The financial analysts who prepared this report, and whose names and roles appear on the first page, certify that: (1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect compensation has been or will be received in exchange for any views expressed. Specific disclosures: The analysts who prepared this report do not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both authorised by the Banca d&#8217;Italia, are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.<br \/>Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable for all investors. If you are in any doubt you should consult your investment advisor. <br \/>This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient\u2019s own judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report. <br \/>This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has formalised a set of principles and procedures for dealing with conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is clearly explained in the relevant section of Banca IMI\u2019s web site (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or their directors and\/or representatives and\/or employees and\/or members of their households, may have a long or short position in any securities mentioned at any time, and may make a purchase and\/or sale, or offer to make a purchase and\/or sale, of any of the securities from time to time in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167 New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a printed document and\/or in electronic form. Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FSA.<br \/>US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading Ideas are based on the market\u2019s expectations, investors\u2019 positioning and technical, quantitative or qualitative aspects. They take into account the key macro and market events and to what extent they have already been discounted in yields and\/or market spreads. They are also based on events which are expected to affect the market trend in terms of yields and\/or spreads in the short-medium term. The Trading Ideas may refer to both cash and derivative instruments and indicate a precise target or yield range or a yield spread between different market curves or different maturities on the same curve. The relative valuations may be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa Sanpaolo S.p.A. trading ideas are made in both a very short time horizon (the current day or subsequent days) or in a horizon ranging from one week to three months, in conjunction with any exceptional event that affects the issuer\u2019s operations. In the case of a short note, we advise investors to refer to the most recent report published by Intesa Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation methodology, earnings assumptions and risks. Research is available on IMI\u2019s web site (www.bancaimi.com) or by contacting your sales representative.<\/p>\n<p>Source: ETFWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n<p style=\"position: absolute; left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden;\" id=\"_mcePaste\">Normal 0 14       MicrosoftInternetExplorer4<\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In August the key theme for the forex markets was the fear of serious slowdown in global growth. Compounded by the outcome of the FOMC meeting, this translated into generalised dollar weakening. The euro undeservedly benefited, but the ECB meeting and the imminent review of Greece might \u201cfinally\u201d drive it down.. .&#8230;&nbsp;&nbsp;&nbsp;<\/p>\n","protected":false},"author":3,"featured_media":17000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[8],"tags":[],"class_list":["post-13163","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-currenciescommodities-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts\/13163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/comments?post=13163"}],"version-history":[{"count":0,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts\/13163\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/media\/17000"}],"wp:attachment":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/media?parent=13163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/categories?post=13163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/tags?post=13163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}