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FOREX: US Dollar Poised to Extend Gains After Greek Bailout Delay

By , Currency Strategist
16 February 2012 07:15 GMT

Talking Points

  • US Dollar, Yen Outperform as EU Officials Delay Greek Bailout Deal
  • S&P 500 Index Futures Decline, Pointing to More Risk Aversion Ahead
  • ECB Monthly Report Eyed to Guide Rate Cut Bets as Growth Falters

The US Dollar and Japanese Yen rose against their major counterparts in overnight trade as stocks declined, boosting demand for the go-to safe haven currencies. The MSCI Asia Pacific regional benchmark equity index fell 0.8 percent after Eurozone officials delayed a final decision on the second Greek bailout at least until February 20. The New Zealand Dollar underperformed, weighed down by disappointing economic data. Manufacturing sector growth slowed in January according to data from Business NZ while consumer confidence dropped 2.4 percent to mark the largest drawdown in three months.

Looking ahead, S&P 500 stock index futures are pointing sharply lower in late Asian hours, hinting continued risk aversion is likely to continue driving safe-haven currencies higher in the coming session. February’s ECB Monthly Report headlines the economic calendar, with traders keen to establish how the central bank intends to meet its mandate of securing price stability as growth falters in the single currency area. Sluggish performance is likely to weigh on prices, presumably calling for additional accommodation and applying downward pressure on the Euro. The markets are pricing in a 61 percent probability of a rate cut at the next policy meeting on March 8.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

21:00

NZD

ANZ NZ Job Advertisements (MoM) (JAN)

-2.7%

-

-2.6% (R-)

21:30

NZD

Business NZ PMI (JAN)

50.5

-

51.6 (R-)

0:00

AUD

Consumer Inflation Expectation (FEB)

2.5%

-

2.8%

0:00

NZD

ANZ Consumer Confidence Index (FEB)

113.3

-

116.1

0:00

NZD

ANZ Consumer Confidence (MoM) (FEB)

-2.4%

-

7.1%

0:30

AUD

RBA FX Transactions (A$) (JAN)

383M

-

737M

0:30

AUD

Employment Change (JAN)

46.3K

10.0K

-35.6K (R-)

0:30

AUD

Unemployment Rate (JAN)

5.1%

5.3%

5.2%

0:30

AUD

Full Time Employment Change (JAN)

12.3K

0.0K

24.0K (R-)

0:30

AUD

Part Time Employment Change (JAN)

34.0K

7.5K

-59.6K (R-)

0:30

AUD

Participation Rate (JAN)

65.3%

65.3%

65.2%

4:00

JPY

Tokyo Condominium Sales (YoY) (JAN)

32.6%

-

8.5%

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

7:00

EUR

EU 25 New Car Registrations (JAN)

-

-6.4%

Low

9:00

EUR

Italian Trade Balance (Total) (€) (DEC)

-

-1581M

Low

9:00

EUR

Italian Trade Balance Eu (€) (DEC)

-

-386M

Low

9:00

EUR

ECB Publishes February Monthly Report

-

-

High

10:00

EUR

Italian Current Account (€) (DEC)

-

-3448M

Low

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.2953

1.3157

GBPUSD

1.5634

1.5730

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak

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16 February 2012 07:15 GMT