Pound Falls On King’s Comments, Euro Gains On IFO Surprise
[U][B]Fundamental Headlines[/B][/U]
• [B]USDJPY [/B]– The Japanese merchandise trade balance reversed a -¥87.3B deficit resulting in a ¥970.0B surplus in February. Export growth unexpectedly accelerated 8.7% from a year earlier as demand from emerging markets offset a U.S contraction. Automakers were the primary beneficiary as Chinese and Indonesian consumers increased demand. Overall Asian demand increased to 13.9% as countries other than China are starting to make significant contributions. This will be welcome news for Japanese government officials, who have yet to agree on a new Central Bank leader. For more news and resources please visit our Japanese Yen Currency Room.
• [B]EURUSD [/B]– German businesses unexpectedly continue to gain confidence despite record oil prices and a strong Euro weighing on exports. The IFO survey reported an increase in confidence to 104.8 from 104.1 in February, despite predictions of a decline to 103.5. German companies have been able to remain competitive by reducing labor costs and becoming more efficient. China and Russia continue to be a source of growth for Europe’s largest economy, which has allowed it to remain resilient. Meanwhile, Eurozone industrial new orders rose 2.2% in January pulling the yearly gauge up to 7.3%. As the region continues to show strength, the prospect of an ECB rate cut in the near term are diminishing. Which was validated by President Jean Claude Trichet today, when he reiterated his focus on price stability in a speech to European Parliament . Discuss the topic and your trade ideas in the EUR/USD Forum.
• Stocks Tarnished By Lost Decade (link) – Wall Street Journal
• Big Task Digesting A Bear (link)– Wall Street Journal
• Hoarding By Banks Stokes Fears On Credit Crisis (link) – Financial Times
• King Says BoE Seeks ‘Longer Term’ Solution to Turmoil (link) – Bloomberg
• German Business Confidence Unexpectedly Rose In March (link) – Bloomberg
