Because of the Japanese economy strengthening the Yen continues weakening, making way for the stronger Kiwi, GBP and CAD. In addition, the Gold and Silver commodities present a plausible alternative for a somewhat frail market day.
Join Tom as he presents 5 recommendations for potential trades on the forex and commodities markets
UK to Release Unemployment Data
The report covering the employment situation in the United Kingdom for the month of August is set to be issued today 11 September 2013. Currently, most experts believe that the report will likely show unemployment to have fallen for a 10th straight month, lowering the number of jobless claims made to the the government.
Analysts are inclined to follow the general wisdom of the experts’ assessment, primarily based on the fact that indicators such as construction and sales have also been consistently rising in recent months as the British economy has clearly demonstrated that it is in the midst of a strong recovery.
In the lead up to the release of the report, the pound is reported to have shown little to no fluctuation in trading. Analysts believe that this minimal level of shifting can be construed as a marker for a high level of consumer confidence, As was noted in yesterday’s report concerning the UK’s rising housing market, it would appear as if consumers are feeling better about their economic situations as well as their job stability and are prepared to invest in bigger ticket items such as housing. Moreover, sterling has shown continued gains in recent weeks against many of its rivals, including the nearby Euro.
While analysts assess at this time that the GBP is unlikely to shift too radically in the coming days, traders are still advised to proceed with caution due to the ongoing shifts that are affecting haven currencies in relation to the current uncertainty concerning possible American lead intervention in Syria.
Commodities Fall on Syria Cool Down
High value commodities including both gold and crude are reported to have continued to fall as tensions brew over a potential American lead intervention in conflict ridden Syria. The most recent development in the ongoing saga of back and forth over what action should be taken against the regime of President Bashar al-Assad has been the reported acceptance of the embattled leader to hand over his chemical weapon stockpiles to a third party in an effort to avert strikes against his forces.
While the veracity of Assad’s supposed willingness to comply is questionable, the uncertainty has served to significantly affect the way that investors are approaching trading as they attempt to ascertain how the Syria situation will unfold.
As it stands now, with the outlook for strikes declining over the past two days or so, traders have witnessed a drop in both of the aforementioned products. Analysts believe that the price of crude has dropped primarily because of lower concerns over potential shortages of supplies coming from the Middle East, one of the world’s largest producing regions for the fuel. Therefore, as the fears over the supply have decreased, demand by those looking to snatch up reserves in the short term has fallen as well. Gold prices have also been susceptible to the fluctuations as investors have chosen to return to haven assets such as the USD and others.
Analysts foresee continued volatility in both of these commodities as the US and its allies decide on how to proceed with their intervention. As such, traders are advised to exercise extreme caution in approaching both of these assets in the coming days. Gold in general will likely continue its decline in the coming weeks and perhaps even months.
ECB Report to be Released Thursday
The monthly report covering the activities of the European Central Bank is set to be issued this Thursday 12 September 2013. The document will discuss the Eurozone’s primary financial institution for the month of August 2013.
Analysts note that the Eurozone remains somewhat volatile at this time despite recent progress made by some of its larger members including Germany and France as it struggles to support some of the weaker member countries. The ECB along with the richer countries have been involved in searching out solutions for returning states such as Greece, Portugal, and Spain back from the brink of failure and back into solvency in an effort to keep them within the monetary union. While countries such as Germany have beared the weight of the burden in the cash transfers to the poorer states, as a major manufacturer of goods, they are among those who profit by the absence of tariffs on trade within the EU and would therefore lose out should the struggling economies become totally insolvent and be forced to back out of the union.
For its part, the Euro has fluctuated consistently in recent weeks, especially against the British pound and the US dollar, both of which have generally held the upper hand in trading, beating out the Euro. These losses, even if relatively minor have come against increased interest in European based stocks which may help to boost up the European economy and give added energy to the Euro.
While the contents of the ECB report are unknown at this time, traders are advised to act with care as the market may respond unpredictably to the release of the report.