U.S stocks drop in volatile session on Fed murkiness; Dow down 0.84%

U.S. stocks fell on Wednesday in another volatile session marked by uncertainty over whether the Federal Reserve may scale back stimulus measures.

Monetary stimulus tools such as the Fed's USD85 billion monthly bond-buying program flood the economy with liquidity to spur recovery and keep borrowing costs low, a combination that sends stock prices rising as a side effect.

A lack of economic indicators and no second-quarter earnings reports due until July left investors with little to use as a weather vane, which fueled sentiments that volatility may be here to stay for a while.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.84%, the S&P 500 index ended down 0.84% as well, while the Nasdaq Composite index fell 1.06%.

Wednesday marked the first three-day losing streak for Dow Jones Industrial Average in 2013.

A Bank of Japan decision earlier this week to leave monetary policy unchanged after months of rolling out stimulus measures continued to roil markets on Wednesday but fanning uncertainty as to whether the Federal Reserve will follow suit.

Stocks rose in early trading though they quickly wiped out gains due to discomforting swings in currency markets.

The Fed has kept interest rates low since the recession and has rolled out three rounds of bond-buying in recent years to prop up the economy, and uncertainty as to whether the U.S. central bank will begin to taper its stimulus programs sent stocks on a wild ride, especially with no major economic indicators hitting the wire.

Leading Dow Jones Industrial Average performers included Hewlett-Packard, up 2.76%, Microsoft, up 0.43%, and Pfizer, up 0.07%.

The Dow Jones Industrial Average's worst performers included American Express, down 2.35%, Home Depot, down 1.55%, and IBM, down 1.36%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 0.62%, France's CAC 40 fell 0.44%, while Germany's DAX 30 finished down 0.96%. Meanwhile, in the U.K. the FTSE 100 finished down 0.64%.

On Thursday, investors will trade on U.S. retail sales and weekly jobless claims figures.

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Forex - GBP/USD gains on U.K. jobs data, Federal Reserve uncertainty

A better-than-expected U.K. jobs report for May sent the pound firming against the dollar to highs not seen since February on Wednesday.

In U.S. trading on Wednesday, GBP/USD was trading at 1.5684, up 0.25%, up from a session low of 1.5634 and off from a high of 1.5700.

The pair was likely to find support at 1.5496, Monday's low, and resistance at 1.5810, the high from Feb. 10.

In the U.K. earlier, official data revealed that the number of people claiming unemployment benefits fell to its lowest level in two years in May.

The Office for National Statistics said that the claimant count in the U.K. fell by 8,600 in May, better than expectations for a decline of 5,000 people.

The unemployment rate remained steady at 7.8% in April, in line with expectations.

The numbers sent the pound gaining while monetary uncertainty in the U.S. sent the greenback falling.

A Bank of Japan decision earlier this week to leave monetary policy unchanged after months of stimulus sparked concerns the Federal Reserve may follow suit, though uncertainty over such a possibility roiled markets and weakened the dollar.

The U.S. is to release weekly data on jobless claims on Thursday alongside official data on retail sales, and uncertainty as to what impact the numbers will have on expectations for the Federal Reserve to scale back stimulus programs also took its toll on the dollar on Wednesday.

The pound, meanwhile, was up against the euro and down against the yen, with EUR/GBP trading down 0.09% at 0.8502 and GBP/JPY down 0.06% at 150.16.

On Thursday, investors will trade on U.S. retail sales and weekly jobless claims figures.

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Forex - Dollar falls on monetary uncertainty, awaits key data

The dollar fell against most major currencies on Wednesday amid uncertainty over when the Federal Reserve will begin scaling back stimulus programs such as its USD85 billion monthly bond-buying program, which weaken the currency to spur recovery.

The Bank of Japan left monetary policy unchanged earlier this week, a move that came as a surprise to many that roiled markets by clouding outlooks possible Federal Reserve plans to follow suit.

In U.S. trading on Wednesday, EUR/USD was up 0.14% at 1.3333.

Though lower overall, the dollar enjoyed some support albeit in a choppy fashion from investors seeking safe-harbor amid uncertainty over when the Federal Reserve will begin scaling back monetary stimulus measures.

The U.S. will release weekly data on initial jobless claims on Thursday as well as official data on retail sales, which investors were hoping will provide a more readable weather vane for the markets.

Elsewhere, the single currency enjoyed support after official data revealed that the eurozone's industrial production index for the third consecutive month in April.

Eurostat said industrial production rose by a 0.4% in April from March, defying expectations for a 0.2% decline.

Year-on-year industrial production contracted by 0.6%, better than market calls for a 1.2% contraction.

The greenback, meanwhile, was down against the pound, with GBP/USDtrading up 0.22% at 1.5680.

In the U.K. earlier, official data revealed that the number of people claiming unemployment benefits fell to its lowest level in two years in May.

The Office for National Statistics said that the claimant count in the U.K. fell by 8,600 in May, better than expectations for a decline of 5,000 people.

The unemployment rate remained steady at 7.8% in April, in line with expectations.

The numbers sent the pound gaining.

The dollar was down against the yen, with USD/JPY down 0.34% at 95.70, and down against the Swiss franc, with USD/CHF trading down 0.36% at 0.9214.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.13% at 1.0204, AUD/USD up 0.80% at 0.9500 and NZD/USD trading up 1.38% at 0.7980.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.16% at 81.13.

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Asia stocks fall; Nikkei pares losses to end down 0.2%

Asian stock markets retreated for a second day on Wednesday, with shares in Japan coming under pressure as traders continued to eye movements in the yen and in the Japanese government bond market.

During late Asian trade, Australia’s ASX/200 Index ended 0.7% lower, Japan’s Nikkei 225 Index edged down 0.2% in choppy trade, while Hong Kong's Hang Seng Index remained closed for holiday.

In Tokyo, the Nikkei declined by as much as 2% earlier in the session as market players remained disappointed after the Bank of Japan refrained from implementing measures to ease volatility in the government bond market following its latest policy setting meeting.

The yen strengthened sharply against the U.S. dollar on Tuesday, withUSD/JPY falling by as much as 3% to hit a session low of 95.59, compared to the previous day’s high of 99.27.

Exporters declined after the yen strengthened, with Toyota and Honda slumping 1% and 1.65% respectively, while Sony and Sharp retreated 1.2% and 0.2% apiece.  

Japanese megabanks were lower, with shares in the nation’s largest lender Mitsubishi UFJ Financial Group falling 1.8%, while Mizuno Financial Group and Nomura Holdings lost 1% and 1.4% respectively.

Meanwhile, in Australia, the benchmark ASX/200 Index ended close to a five-month low as a weakened Australian dollar led to further selling in high dividend-yielding stocks such as banks.

A weakening Australian dollar makes the relatively high dividends paid by local firms less attractive to foreign investors.

The big four banks all fell, with Westpac Banking Group losing the most, down 1.3%, while ANZ Banking Group and National Australia Bank each shed 1.2%.

Miners retreated, tracking metal prices lower. Fortescue Metals Group saw shares drop 2.65%, while Newcrest Mining fell 0.8%.

Looking ahead, European stock market futures pointed to a mildly lower open.

The EURO STOXX 50 futures pointed to a loss of 0.4% at the open, France’s CAC 40 futures shed 0.4%, London’s FTSE 100 futures dipped 0.6%, while Germany's DAX futures pointed to a loss of 0.5% at the open.

The euro zone was to release official data on industrial production later in the day.

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Forex Trading Signal for 12th June 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.32916

T/P: 1.33300

S/L: 1.32500

 (2) SELL

E/P: 1.33014

T/P: 1.32700

S/L: 1.33400

GBP/USD

UP Trend:

(1) BUY

E/P: 1.56098

T/P: 1.56500

S/L: 1.55600

(2) BUY

E/P: 1.56452

T/P: 1.56600

S/L: 1.56000

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

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