Yen hits the floor, Online Forex Investors and Daily FX Traders Fears

The Yen has suffered as of late and it was evident on Wednesday as investors tested their risk tolerance once again in response to some positive signals coming out of the EU and US. After profiting from a near panic over the Swine Flu stories coming out of Mexico and other countries, the Yen has given back all of those gains and had fallen negative against most currencies as of Wednesday. Insiders and forex online traders fear the Japanese Economy is not showing any significant signs of recovery - even mild signs like the US and EU. The Japanese Economy relies heavily on Exports which are still a sour spot for most countries right now.

Looking at the daily fx update at 11:20PM GMT, the Yen was down 1.1% to the US Dollar to 97.45, down 1.92% tot he Euro to 129.14, down 2.1% to the Sterling to 143.94, down 1.6% to the Swiss Franc to 85.68 and down 4% to the Australian Dollar to 70.67.

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Stress Test Results in Adding Just More Stress

Rumor has it that US Regulators have told the two largest US Banks, Citgroup and Bank of America, that the results of their "stress test" show that will require further capitalization. What this means in simple terms is that the banks are not ok - they have so much debt, bad debt at that, and they are in need of more money to help them stay afloat.

We all knew that Citigroup was a zombie bank, a bank that is dead, bankrupt, kaput, but is being sustained by the generosity of the US taxpayer (with the help of the Chinese treasury Bill holders, of course). But after the results of Treasury Secretary Tim Geithner's test on bank stability - aka The Stress Test - we are witnessing the fact that the US has no intention of following through on their plan to fix the banking sector. It was said that the results will determine the fate of the banks - if they show that they are in fact needy of further capitalization, the US would either systematically disassemble the banks in an orderly manner, or let them fail outright.

The problem is, when the plan was announced, if you remember, it was amidst much criticism that the US did not really have a plan - that they were being too soft on banks with severe problems for fear that their bankruptcy would cause a panic. So Geithner came out with the stress test idea and said that banks that do not pass, will be reorganized (A nice way of saying taken over). But now the outcome has changed - and it seems that the US banks that are at the heart of this whole credit mess will be getting more money to run their failing operations. It looks like the whole plan was to get these results out AFTER President Obama's first 100 days, the yardstick that sets the tone for the presidency.

Is it not ironic that these results were planned for Obama's 101st day?

Wednesday looks like it is shaping up to be a tough one for the US Dollar as risk appetite returns for a bit. I call it profit taking - it will be short lived.

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The Swine Flu Virus Spread, The Mexican Peso at the Heart of this Epidemic

Finally, something to take our minds off of the economic crisis and all that goes with it, a health crisis - or pandemic as they are calling it. Yesterday, the World Health Organization upgraded the threat to a 4 on a scale of 1-6, 6 being global - out of control - rampant infection. But the crisis is affecting more than just border crossings - it is contributing to the downfall of some of the worlds most fragile economies, the emerging markets.

As news of the Swine Flu virus spread, the Mexican Peso, the currency at the heart of this epidemic, fell over 5% to the US Dollar and similarly to many other majors. This is just another blow that the Mexican economy has endured and it threatens to collapse the country's economic system. Although it is a small market, online Forex traders should be keeping an eye out for this, as what happens south of the US will no doubt affect the US.

Meanwhile, traders in the Euro were given another treat of two Central Bank members holding arguments with each other through the media. The disagreement came when Nout Wellink said the rate cut should go further than 25 basis points and Alex Weber said it should not - very exciting news. But, as online Forex pros, you should know that it was all a staged event to distract from the real concerns, whether or not the stimulus that the ECB will unveil next week will be enough to please the street and help the economy.

With the Taliban about to take control over the nukes in Pakistan, the Flu set to overload the healthcare systems of the world and China calling for a new reserve - the EU should lighten up and not be so tightfisted with the money they spend. You only live once they say.

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The Final War is Near

China opened up the week with a bang that is sure to send the Forex markets in every unfavorable direction. On Sunday, Li Yong, the Vice Finance Minister said “We should attach great importance to reform of the international monetary system…a flawed international monetary system is the root cause of the crisis and a major defect in the current international economic governance structure.” Basically, Mr. Li was openly calling for the removal of the dollar as the primary reserve currency, a call that had been alluded to several times in the past but not directly said. As Dylan once put it, “oh, the times they are changing.”

This was bound to happen. China and Russia have been on a mission – until now a subliminal mission – to overthrow the dollar as the main reserve currency. While they will not admit it, the reason is clear, and I touched upon this last week. Fact: The US Dollar is the most widely held currency by foreign government banks. Fact: The US Dollar is used to set prices for most commodities including oil, gold, silver, wheat and even other currencies. Fact: The US of A has committed them to spending 12 Trillion Dollars even though there is only 820 Billion US Dollars in circulation as of 2007. This means that the debt role the US is planning on will take it close to 90% of the US GDP. And one final fact: a country who has much of its resources invested in one thing, is forced to continue supporting that investment or risk having that investment devalued beyond acceptable levels.

Did you get that? China and Russia and all the countries that hold tons of US money, in hard cash form or debt form, have been increasing their investments through the purchase of debt so as not to allow the Dollar to fall, because, if the dollar bottoms out, the world as a whole will lose Trillions of dollars. The situation will spiral into the worst global economic situation EVER seen. Heard about the Depression? Think ten times that and then square the number – this is the result of a worthless dollar. Remember how the world came out of the depression? They called World War I the “war to end all war’s” - they called World War II “The great war” – they will call this one “The final war.”

This is real, I am not an alarmist – but I am certainly alarmed and so should everyone be, because there is power to destroy out there that can wipe out cities with one blow – and there are thousands of them. All it takes is enough desperation and despair. History is there for us to learn from it and we have not. There is a solution and it is to remove the Dollar as the reserve, but do so in an organized and equitable manner – that requires compliance – can our leaders be man enough to provide it? Let us hope.

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Online Forex Update: US Dollar Trading Flat Today

Existing home sales figures showed a 3% fall in March to a less than expected annual rate of 4,570,000 units. Pundits who had thought that the housing market has hit a bottom woke to a realization that the situation is growing deeper. The dollar which had been up most of the day retreated after the report was released. As the market looks forward, forex online investors are waiting for the results of the US government stress tests for banks, a release that could shed great light on the actual state of the US economic environment.

At 11:45 GMT, the Dollar was trading flat to the yen at 98.0, down .04% to the British Pound to 147.06, up .07% tothe Canadian Dollar to 1.2235, up .14% to the Australian Dollar to .7135 and up .11% to the Kiwi to .5609

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EURO & CAD Forex online updates and Chart Analysis EUR/JPY

EUR

A surprising data release out of Germany was the spark for a Euro rally against the Yen and Dollar on Tuesday although continued worries over next months European Central Bank tempered the Euro's run against the other majors. The German ZEW poll of German Economic Sentiment, which measures investor confidence showed a very surprising increase. The report came in at +13 after falling to -3 in March. It was expected that the report would show a fifth straight month of decline and put the index closer to -10. At this time the Eurozone will take whatever good news they can get, and today's was good enough to push the Euro off of a month low versus the Dollar.

Year to date the Euro is down more than 7 percent to the US Dollar and the prevailing thought is that this trend will continue until the ECB implements a more aggressive monetary policy - a route they have until now been unwilling to take. For now, investors are weary of what "unconventional" plan the Central bank will announce on May 7th, speculating that it will still be too soft and ineffective. For now it is a wait and see market for the Euro - take whatever good news in stride and wait for the big news next month.

At 10:15PM GMT, the Euro was trading up .4% to the USD to 1.2944m up 1.1% to the Yen to 127.88, down .75% to the Sterling to .8823, down 2% to the Australian Dollar to 1.8182 and up .35% to the Swiss Franc to 1.5112.

CAD

The Canadian Dollar went back and forth Tuesday after the Bank of Canada lowered interest rates to an all time low of .25%. This was met with a rush of selling until the Bank President announced that on Thursday the BOC will announce their stimulus plan which is said to include the purchase of corporate securities and government debt with newly created money. This unorthodox and aggressive approach by a generally conservative and tempered Central Bank was greeted with enthusiasm in the Forex market and helped the Canadian Dollar rebound.

The monetary policies that Canada is thought to be proposing is a sign of the times. Historically, a Central Bank buying its own governments debt is a risky proposal as it can lead to inflation, hyperinflation or worse, stagflation. However after the US and England have tempted fate on historical levels (the US has committed close to 20% of GDP to this method), many other countries are following suit. In cutting interest rates Tuesday, Sweden's Riksbank also announced that they too are prepared to resort to "other measures" should their economy continue to decline.

At 10:45PM GMT, the CAD was trading up .3% to the Euro to 1.5998, up .4% tot he US Dollar to 1.2362, up .2% to the Australian Dollar to .8786 and down .5% to the Sterling to 1.8131.

Gaining a Perspective Part 2- Chart: EUR/JPY 1-Year

As we saw with the EUR/JPY chart yesterday, the bottom has seemed to fall out of the Euro. With all of Japan's problems, from disastrous export numbers to severe unemployment to it's fall from grace as a safe-haven currency, it still has managed a near 50 YEN gain against the Euro. A comparison of the EUR/JPY from yesterday will even show similar patterns - eerily similar so again I ask the question, is the Euro's fall a result of bad policy on the part of the ECB? Tomorrow we will try and answer this nagging question.

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Forex Online Story: The Cat has Come Out of the Bag

The funny thing about statistics is that they can be manipulated to tell a story that is contrary to the actual truth. The fact is that for the past few weeks we have been seeing data coming out from government agencies and corporations that provide investors a glimmer of hope that the economic situation is changing. While international organizations like the IMF warn of trouble ahead, companies like General Electric, Citigroup, Goldman Sachs along with various governmental statistical divisions provide the online Forex world with “positive” numbers. I became suspicious of these numbers when Citigroup, a recipient of “bailout” money only three months ago, and only a few weeks ago considered a “zombie” (dead but living on the fat of the US government) announced a pretty healthy profit expectation. It was reinforced when they announced that sales figures in the EU shot up drastically in January.

Well, the cat has come out of the bag. Forex traders and brokers who have been watching this happen and acting on the data will be happy to know that the reason for all of this good news is the result of number manipulation. Let’s start with the sales data, which showed a 30% rise in January. The reality here is that until January, they used to report the numbers YOY or year over year, reflecting the performance of one month against the same month in the previous year. Now this number is reported month over month – meaning January sales rose 30% against one of the worst months for sales in recorded history.

Next, this past weekend I read in the Wall Street Journal that the Goldman Sachs profit increase from 4th quarter 2008 to first quarter 2009 excluded the miserable month of December that Goldman had – thus making the losses in Q4 of 2008 much less. This was allowed because in the change of status that the bank made from investment bank to “savings” bank in order to qualify for federal deposit insurance protection. Because the change was made mid-December, they were allowed to omit Decembers numbers from the report. Nothing changed other than the legal classification of the bank, but it resulted in a major change to its on-paper bottom line.

This week as the world begins to digest this, we will see some volatility and signs that things are slowing down again. The euphoria has left the building along with Elvis and reality is creeping in again. It can be seen on the unemployment lines and in the empty shelves of stores going out of business and on the foreclosure signs lining the streets of what was once thought to be prosperous neighborhoods.

Trade well – and don’t believe the hype until you know the full story.

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Forex Update of This Week

EURO Update:

Data released on Thursday showed that industrial output in the Eurozone had plummeted by a record 18.4 percent year-over-year in February while inflation fell by half to an all-time low. This reinforced expectations that the Eurozone economy is deteriorating and that interest rates may fall more at the upcoming European Central Bank policy meeting. In addition, it raised expectations that the much talked about "non-conventional" policies that the ECB will announce might be very aggressive in nature.

At 10:40 PM GMT, the Euro was down .4% to the US Dollar to 1.3183, down .5% to the Yen to 130.89, up .1% to the Pound, up .08% to the Canadian Dollar to 1.5931 and up .9% to the Aussie to 1.8302.

Summary of the Week:

To reiterate that risk aversion seems to be back, The Yen has seen some gains without any new developments to warrant it while the overall net sales of Aussie and Kiwi Dollars has grown. As well, as a commodity reliant economy, the Canadian Dollar has seen a boost as of late.

Investor appetite for risk has picked up over the past month as a rally in stocks and better-than-expected bank earnings fueled expectations that the financial sector and global economy may be past the worst. But this week saw caution return to the market as optimism over the global economy faded and the U.S. corporate earnings season went into full swing.

Read Full Daily FX Market Analysis at: http://www.finexo.com/marketReview

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Deflation to Inflation: A Trend We Will Soon Witness

With all the money the US has spent, the fears on the street are that of inflation. History has proven that if you keep spending as a country, and you exceed a certain percentage of your GDP then you run the risk of rampant inflation. Take Zimbabwe for example, where a loaf of bread (if you can find any) costs the equivalent of three days pay for the average worker (again, if you can find any work). Now, I am not suggesting that the US is headed down Zimbabwe's path, however the spending bills they have come up with in the past three months alone total nearly 80% of their Gross Domestic Product.

Wednesday, the US released data that showed that deflation was rampant in the US and Forex Traders flooded to the dollar thinking this is the greatest thing that can happen. My online Forex friends though are not so naive. The fact is, it takes a while for these things to take affect. It is impossible to spent 12 Trillion Dollars in a few months, although give me a platinum card and I will try my best to do so.

The reality is that the US has had a deflationary issue which is why the recession is bad, and which is why the "pros" at the Federal Reserve and treasury think that insane spending can reverse it. I can guarantee you right here, right now, that they are right. The problem is they have gone too far and went crazy on their spending (mostly to fulfill political promises and appease labor unions), that they will find themselves in a hyper-inflationary mode once the spending and borrowing catches up. I talk about this often and I will not say I told you so when you see it.

Anyway, England also reported that the rate at which housing prices are falling has slowed. Many online Forex chatter is elated that a bottom to the housing bust in Britain is in sight, and all I can see is that it's still falling at a high rate. I mean, London property was so overpriced, and even with the year long slide in value it is still one of the most expensive cities to live in. It just shows you how much air was in the bubble. But I would not bet on a speedy recovery here either. Social spending has hampered the future for the UK just like the US and it will be to the detriment of the Sterling overall. Just wait.

Now the EU has it right. They are finally getting in on the bandwagon of spending to stimulate the economy - but they are mindful of the inflation factor in doing so. There is no "blank check" they are writing. They will announce a plan that is not indefinite, it has an end. In doing so they are not writing new laws that will see Billions spent each year to "prevent" this sort of crisis from happening again, it is a one off - one time only - lasting less than a year. They really are putting their money where their mouth is after being so vocal about beating down the US and UK's plans. Bravo Trichet - the Euro just might be the currency of the future yet.

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Surprise to all Crude Oil Forex Online Traders – Sharp decline below $50 per Barrel

The Crude is experiencing a sharp decline in the prices with the close of last Asian trading session. It plunged 4.2 percent to a close at 50.05 per barrel (an intraday lowest at 48.84) on Monday, when the International Energy Agency (IRA) revised its fall in 2009 demand on last Friday. After this forecast the Stock markets' were opened in negative sentiments and thus dragged down the oil price. Forex brokers and traders observed that in open Asian session, the black gold (Crude oil) extended its weakness and now it is trading at 49.6 per barrel.

According to the reports, IEA predicted that we may see a contraction in the oil consumption by 2.4M bpd to 83.4M bpd, which is the lowest level in last 5 year. Year 2009 is still expected to be seen as the global economic outlook sluggish and auto sales slumped (IEA also revised down global GDP growth to -1.4% from +0.5%). In developed nations the OECD demand is reduced by 760K bpd while that in developing countries the fall is seen for the first time since 1993 by 230K bpd.

Coming to the supply side, IEA expects non-OPEC supplies to witness a down fall of 360K bpd globally, of which 220K bpd is expected to be outside Brazil and the US. In addition, the report forecast over 1M bpd in investment cancellations or delays.

The Crude oil was closed stridently losing 2.11 dollars or 4 per to settle at $49.89. This move was momentous enough for all forex online brokers so it was no shock for them to see a cross below the 9 and 14 day MA. If we see technically crude oil is still in the range of $47.27 - $54.75 sideways which could only turn if we see a break on either side.

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Forex Online Currency Analysis – Overnight Session

These days Dollar is on its full mood. We could witness great recovery and continued strengthening against all major currencies. It is believed that the next volatility could be seen for the dollar in the U.S. session when the release of two important releases, PPI and retail sales, according to the forex online reviews. Looking at the Daily FX currency analysis:

The EUR/USD seen a resistance at the 20-day SMA in the early Asian session and dropped to 100 pips. The traders believe that the euro's decline was in sequence with the selling experienced in the other major pairs, as the dollar posted strong gains tonight on risk-aversion.

The CAD was struggling during the overnight session in order to break above the 1.2240 area, at same place it acted as a resistance during the last U.S. session. In the middle of the trading session, the sentiment of the traders for the Canadian dollar seems to have turned little bearish when the crude oil seen a strong declines lately.

Forex brokers and traders experienced that the Pound traded flat during the Asian session and believes hard that GBP/USD would attempt to break any higher as the session came to a close. Currently, the sterling pound is trading near the opening price of the today’s session. The daily chart shows that this pair is trading very close to a vital swing point, which would require tough force in order to break this level.

The Swissy was on top when it gained 100 pips during the last overnight session, retracing the decline seen yesterday. We noticed that the most gains of this pair came during the late Asian and early European trading hours as the pair gathered good momentum.

The AUD/USD dropped almost 80 pips during the overnight session in contrast with the major gains seen in the previous day of trading session. Moreover the good news is that the aussie crossed the highest valuation in the last half year when yesterday it moved very close to the 200-day SMA.

One of the major releases for today is the National Australia Bank business confidence report. It is seen in the report that Business confidence in Australia has improved to -13. It is an improvement of 9 points from last month's reading of -22.

Lastly, the Yen dropped to 70 pips during the last Asian session, but hit support at the level of 99.40 soon after the European market open. The Japanese yen strengthened overnight as the currency market was driven by risk aversion once again.

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You know you are in trouble when.....

There is a growing sense of unease that I have every time I read about the US Federal reserve buying US Treasury debt. It is like paying your Mastercard with your Visa, something we are told from early on in school is just jot a smart way to handle your money. I have written about this several times and am doing so again because last Friday, the US Fed policy maker warned that the US was flirting with severe inflation if it did not stop spending so much. Actually, the term that was used was the US needed to start "winding down" its spending habits or it runs the risk of "a hyper-inflationary surge."

Now, Forex traders and online Forex buffs know much about what hyperinflation can do to a country - just look at Zimbabwe. But for this to happen to the US would be devastating. The fact is that the US has spent nearly 12 Trillion Dollars so far this year, and their gross GDP is 14 Trillion. The question has to be asked, is it too late to stop the inflation or will we see it anyway. At the rate that the US has spent, and the means by which they have done it, specifically monetizing their own debt (probably because nobody else would at this point) and the fact that the US is the most significant player in the financial world, what would hyper-inflation look like there?

Another worrying trend for Forex traders and brokers to consider is the fact that China has just reached 1.9 Trillion Dollars worth of foreign debt holdings. That is to say, US debt holdings. That number is correct - China holds in their hands roughly 15% of the US GDP in debt form - this should trouble us all - especially when China is suggesting a new reserve currency for the world to use. Perhaps it would be the Yuan if they would stop tinkering with it to make their goods so cheap.

Late last week a large US bank that received 25 Billion Dollars in US aid in November 2008, announced they would be turning a profit of 3 Billion in the first quarter of 2009. One needs to wonder if that includes the 25 Billion they got from the US taxpayers - and if not, why did they need the money in the first place? With everyone thinking that the economy has turned a corner, no one is looking at the big picture. This is going to be a hectic week for the Forex - with the Dollar holding high against the Yen, watch the Euro and GBP in play.

And please. When you read a piece of good news - ask questions, don't just look at what is being said, look at what is not.

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Silence in the Online forex Market

We could all feel the silence today as the markets are closed for the Good Friday and Easter Season. Looking at the last Asian session, the Usd recovered in equity markets. The Eur/Usd was traded sharply, lowering from 1.3281 to 1.3091. While the Usd/Jpy pair was in a range bound between 100.70 and 100.21. As European and US markets are closed for a long weekend, we could expect forex online trading to be much lighter today with a continued consolidation in the majors currency pairs for the rest of this week till Monday.

The markets are closed today for Good Friday, but I think it would be interesting to watch some choppy action next week, because of the thin trading conditions. Next week the things I liked to watch will be 1.3050 ahead of 1.30 for EUR/USD. Also for GBP/USD I am expecting a good support level at 1.45 and will hold my position if another go towards 1.50. European and US Markets are Closed Today and Monday for Holidays.

Anyways let me wish everyone a wonderful long weekend and happy Easter and let us try to forget the current economic turmoil during the festive season no matter how gloomy market outlook seems. My forex broker always advices the best way in the gloomy market is to avoid long term positions, as things can change on a daily basis, so 'get in and get out' should be our current motto!

Happy Easter! Enjoy

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Worsen Situation in Australia: Unemployment Rate Rises to an unexpected level of 5.7%

Australia's economy was shaken today with the news of unemployment rate going to an unexpected level, according to the reports. The Australia Bureau of Statistics reported reports show that Australia lost more jobs than it was expected in March, causing the unemployment rate to soar. Statistic shows that the Australia's labour force lost 34.7k, boosting the unemployment rate to 5.7% from 5.2% last month. With the release of this data, Ms Gillard said in a statement that “Australia is battling a global recession that is resulting in falling growth and rising unemployment right around the world.'' In fact she is expected this rate can go up to 7% later in the year.

Looking at the online forex figures, AUD/USD was weakened today by 0.70% after the release of government report showing alarming figure of the unemployment rate going to a five-year high. It can be observed that the AUD fell for the fifth day in a row, according to the forex broker analysis this fall is the longest negative period since January 2009. The charts continue to show a weak signal, the support can be seen around 0.7037. Analyst believe breaking of support can pave way for 0.6900 (cluster EMA’s ). My forex broker Finexo recommends to look for entering long position only at around .6875 to 6910 levels for achieving a target of 100 pips.

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Weak corporate earnings and more bad European data helps the Dollar

USD

The US Dollar gained broadly on Tuesday as stocks worldwide dropped in advance of what is expected to be a dismal corporate earnings season. The flight from equities helped the dollar as investors continued Monday's push toward the safe-haven greenback. Investors will learn more about the recession's toll on U.S. corporate profits in the comings weeks. It is expected that first-quarter earnings for the biggest companies will fall by almost 37 percent versus last year as global demand slumps.

As of 11:30PM GMT, The Dollar was up almost 1/2% against the Yen to 100.62, keeping above the important 100 level. Up 1/4% to the British Pound to 1.4737, down .1% to the Canadian Dollar to 1.2364 and up 1/4% to the Swiss Franc to 1.1427.

EUR

The European Union revised earlier data that showed a 1.6% contraction in the EU economy, .1% worse than originally reported. This news sent the Euro down on Tuesday as investors were also trying to digest a report that showed England's 12th straight month of manufacturing production decline as well as a staggering 50% decline in German steel output in March. As signs of the recession reappear, investors are nervous as to when they will finally see a turnaround.

At 11:45 PM GMT, the Euro was trading down 2% to the Yen to 132.90, down 1.1% to the US Dollar to 1.3255, down 1/2% tot he British Pound to .9005 and down .3% to the Canadian Dollar to 1.6412.

Other Happenings

The Australian dollar was back and forth all day against the USD after the Reserve Bank of Australia dropped interest rates by another 25 basis points to a record low 3.0 percent.

The Bank of Japan said it would leave interest rates at 0.1 percent for now. This was expected although they surprised the market by announcing additional steps to ease credit strains, saying they would start lending against a wider range of municipal debt to support ailing regional banks.

Read More Forex Online Happenings at: http://www.finexo.com/marketReview

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Better than feared, but worse than expected is good enough for the Dollar

USD

The US Non-Farms Payroll on Friday showed a higher than expected, but less than feared number of newly unemployed Americans. The 663,000 was more than the 650,000 that was expected and less than the 700,000 that was anticipated. For the American economy, this number was significant because it showed that the rate of unemployment was flat, not growing, which led many to believe that a bottom to the downturn is near. Coupled with better than expected data in housing and auto sales earlier in the week, and surprising earnings reports from some major companies, sentiment towards the US economy, and by default the dollar, was up.

At the close on Friday, the dollar closed up .1% to the Japanese Yen to 100.1 after hitting 100.37, a five month high. The dollar fell to the Euro slightly to close at 1.3483, up .21% to the Canadian Dollar to 1.2297 and up .04% to the Australian Dollar to .7151. The dollar also fell .2% to the Swiss Franc to 1.1297 and was unchanged versus the New Zealand Dollar to close at .5857.

GBP

Data released in Britain on Friday showed a slowing rate of contraction in the services sector which helped boost interest in the Pound. The Chartered Institute of Purchasing and Supply, which conducts the PMI survey, said that March showed a higher than expected rate of growth, coming in at 45.5 which was higher than expected 43.5 and February's 43.2. This coming week will be a telling one for the Sterling as Manufacturing indicators will be released on Tuesday and Thursday and the Bank of England meets to discuss interest rates.

The Sterling closed up .3% to the USD to 1.484, above the psychological 1.48 level which it has struggled breaking for a while. The Pound also rose more than 1% versus the Euro to close at .9084, and was up .35% to the Swiss Franc to 1.6766. The Pound also finished a good week against the Yen, which currency did not, closing up more than 1/4% to 148.32.

Chart Analysis: EURGBP

EURGBP is at a very important inflection point here just after the ECB announcement and ahead of the ECB press conference, having broken initial 0.9150 support and now taking aim at the 55-day moving average and the rising trendline, not to mention the key 0.9000 pivot area. A move through there could help set up a structural top and a new down trend. Stay tuned.

Read more Market Analysis at: http://www.finexo.com/marketReview

Calculate Pivot tables at: http://www.finexo.com/pivotCalculator

View Detailed Economic Calendar at: http://www.finexo.com/calendar

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Worse than expected US Job Losses rattles the Dollar

JPY

The Yen had a slight rebound day on Wednesday as unemployment fears in the US and pre-G20 jitters took steam out of the US Dollar and Euro. Fundamentally, nothing has changed in Japan since Tuesday’s selloff after a dismal consumer confidence report in Japan, and the common thought is that Japan is still having major problems that will be difficult to overcome.

At 5PM GMT, the Yen was trading up .3% to the Euro to 131.07, up .1% to the USD to 98.82, down .2% to the British Pound to 142.0 and up .3% to the Swiss Franc to 86.57.

USD

Data released on Wednesday showed that the job losses in the US are increasing, however stagnation in the markets due to today’s G20 meeting and European Central Bank interest rate decisions stemmed the losses. Investors troubled by another 742,000 job losses in the US, more than analysts expected, were holding out hope that something positive could come from today’s meetings.

At 5:15 GMT, the dollar was trading down .15% to the Euro to 1.327, down .4% to the Pound to 1.4378, up .42% to the Canadian Dollar to 1.2652, down .4% to the Australian Dollar to .6939 and down .45% to the New Zealand Dollar to .5617.

G20

Today’s G20 is expected to be pivotal in the Forex online markets as French President Nicholas Sarkozy seeks to draft legislation regulating the financial markets including the Foreign Exchange. It is widely believed that President Obama will not push his and British Prime Minister Brown’s spending plan as it has not been met with kind words by most of the delegates in attendance.

As well, the Non-Farm Payroll numbers out of the US are due out on Friday. With dire unemployment numbers coming out on Wednesday this key indicator will be of vital interest to Forex traders holding USD positions.

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Yen takes a dive along with the Japanese economy

YEN

The Yen fell to a three-week low against the US Dollar and took a beating from other major currencies Tuesday after weak economic data out of Japan stifled recent safe-haven flows into the Japanese currency. Ahead of the highly anticipated G20 meeting in London this coming Thursday, newly released data has shown that the economic crisis has destroyed Japanese exports and is responsible for a sharp contraction in the fourth quarter. This reality is threatening to collapse the current government.

At 8:15 PM GMT, the Yen was trading down 2% to the US Dollar to 99.06, down 2 1/2% to the Euro to 131.62, down 2.6% to the British Pound to 142.01 and down 3.4% to the Australian dollar to 68.8.

EUR

Aside from the jump it took against the Yen, Gains in the Euro were limited as investors awaited the European Central Bank policy meeting on Thursday. There is a lot of uncertainty with how the meeting will go, given the many developments in recent days over monetary policy. German Chancellor Angela Merkel has been outspoken against additional stimulus spending while ECB President Jean-Claude Trichet has alluded to a more aggressive policy. Nonetheless, The ECB is expected to cut rates half a percentage point to 1 percent and possibly signal plans for some form of unconventional policy such as buying bonds to boost the money supply.

At 9:00 PM GMT, the Euro was trading up 1/2% to the dollar to 1.3269, flat to the GBP to .9246 after trading up 3/4% most of the day, up 1/2% to the Canadian Dollar to 1.6738 and down 1.19% tot the Australian Dollar to 1.9139.

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