Daily Forex News November 7th 2012

Daily Forex News November 7th 2012


The Dollar dropped sharply as Obama won the
U-S presidential elections. Strength is seen in European majors against
the Greenback and we could probably see the consolidations in in Euro U-S Dollar and British
Pound U-S Dollar: that started back in mid-September ending. Meanwhile, gold is seen staging a strong rebound
too as it’s back above the 1720 level, compared to the near term low of 1672.5 made on Monday. The stock markets are not too enthusiastic
on the election results as major Asian indices stayed nearly flat. Overall, it’s seen that Obama’s re-election
will ensure the continuation of the ultra-easing monetary policy and as the picture is being
cleared, the greenback could stay pressured in near term. Greece will now be a major focus on whether
the Euro could extend its rebound and breakout from recent range. The Greek parliament is set to vote on prime
minister Samaras’ 18.5 billion euros austerity and reform package today, which is a critical
condition for the country to receive the 31.5 billion euro tranche of bailout funds from
the E-U, E-C-B and I-M-F. The package includes a raise in retirement
age from 65 to 67, cuts of 5 to 10% in pensions, scrapping of civil servant’s 13th and 14th
month pay, and salary cuts on academics, hospital doctors, judges, diplomats and members of
the armed forces. The parliament will then convene again on
Sunday to vote on the 2013 budget, which targets to have 9 billion euros of savings to bring
the deficit to 5.2% of G-D-P in 2013, compared to 6.6% this year. The Reserve Bank of New Zealand said in its
biannual Financial Stability Report that “a period of further strength remains possible”
for the New Zealand Dollar, in particular, as “New Zealand’s relative growth outlook
continued to be perceived as favorable despite the lower terms of trade.” It said that the economy “has continued to
grow modestly” as credit begin’s to rise again. Reserve Bank Governor Wheeler said that there
is no factors that would lead to major depreciation in the exchange rate in near term. And there is “no easy solution” to depreciate
the New Zealand Dollar. Meanwhile, quantitative easing in New Zealand
is not something that deserves serious thought. On the data front, U-K B-R-C shop prices rose
1.5% year on year in October. Swiss foreign currency reserves and C-P-I
will be released in the European session, together with Eurozone retail sales and German
industrial production.

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