The Latest in Forex News & Analysis.

US Retail Sales

By | August 15, 2017 1:15 pm | 0 Comments

The positive momentum of the US economy continues. US Retail Sales came out better than expected 0.6% vs 0.4% forecast. Also the prior reading was revised up 0.3% from -0.2%. this follows the hawkish comments from FED Dudley who yesterday said that another hike in 2017 (most likely December at this point), might be adequate.

The dollar strength anyway is also supported by alleviated geopolitical tensions, with Risk On sentiment coming on top for the past three days.

US Inflation

By | August 11, 2017 4:35 pm | 0 Comments

US CPI came out weaker than expected, 0.1% vs 0.2% MoM (Core), with the YoY reading at 1.7%. The inflation is still running below 2% as previously pointed out by the FED, fueling volatility around the greenback. Even if inflation is still below the target, the FED committed to shrink the balance sheet this year, remarking anyway that its policies are not on a pre-set course but instead are data driven.

It is interesting to see now what will happen if also the next reading will be disappointing like this one, putting the FED in a difficult position regarding its next move.

RBNZ rate decision

By | August 9, 2017 5:24 pm | 0 Comments

RBNZ rate decision

Reserve Bank of New Zealand left cash rate unchanged at 1.75% as expected.

Bulletpoint of policy statement as followings:

  • Policy to stay accommodative for a considerable period of time
  • Domestic economic growth is expected to improve
  • Inflation expectation remains well anchored at around 2%
  • Lower NZD is needed
  • NZD has risen partly due to weak US dollar
  • See OCR at 1.8% in Dec 2017
  • See OCR at 1.9% in Dec 2018
  • See OCR at 1.9% in Dec 2019
  • See OCR at 2.1% in Sep 2020

A quick move higher in NZD from 0.7340 to 0.7365 as the statement was less dovish and hinting a 5bp hike by the end of the year

The Dollar Trade

By | 10:34 am | 0 Comments

The USD scenario is currently mixed and unpredictable, especially in the short term.

On one side, you have the North Korea tensions that are fueling risk off moves across all asset classes. On the other hand anyway, it is important to remember that the strong reading on the US job market seen last Friday with NFP and yesterday with the JOLTs, are slowly convincing investors that inflation in the US might be on back on track.

JPY, CHF, Gold are up, with European and US Equity Indices down. The USD index anyway is on a 4 days positive streak which is not what market would expect on a typical risk off price action.

Asian session “Risk Off”

By | August 8, 2017 9:19 pm | 0 Comments

Typical Risk off move across the market in Far East after a rather aggressive comment by President Trump against North Korea, Nikkei down almost one percent breaking below 19800, US Dow futures also lower about to break below 22k, Japanese Yen so far is the biggest winner on this risk off move against the majors, $KRW making 0.8% rally while XAU traded higher from 1260 to 1267 before backing off to 1264.

AUD$ trading heavy on the back of weaker than expected Westpac Consumer Confidence number came out 95.5 vs 96.6 prior month, headline news of a magnitude 6.6 earthquake in China not helping the AUD$ either.

Japan current account

By | August 7, 2017 8:30 pm | 0 Comments

Japan current account balance for June came out 934.6bio yen vs 860.5b fcst, 1522.5b prior month.

Trade balance is 518.5b yen vs 571.5b fcst and -115.1b prior.

 

$JPY little changed sitting in tight 110.70-80 range for now, Nikkei hovering above 20k.

EUR$ in the meantime making a slow grind higher onto 1.18 handle.

Opening levels

By | August 6, 2017 5:30 pm | 0 Comments

Monday 8/7/2017 Sydney open levels  (Friday close)

  • $JPY 110.70   (110.65)
  • EUR$ 1.1773   (1.1770)
  • GBP$ 1.3033   (1.3040)
  • $CHF 0.9730   (0.9727)
  • $CAD 1.2654   (1.2649)
  • AUD$ 0.7915   (0.7928)
  • NZD$ 0.7398   (0.7403)

 

News over the weekend

  • China urges North Korea to be smart and drop its missile tests
  • Stephen Miller could take on a WH communications role

 

Looking ahead (EDT):

  • 2130 AUD ANZ Job advertisements
  • 2300 NZ inflation expectations
  • 0200 GER IP

US NFP

By | August 4, 2017 4:22 pm | 0 Comments

US NFP came out better than expected 209k vs 183k forecast. Particularly significant was also the revision of the previous reading to 231k up  from 222k.

All eyes were anyway on the average hourly earnings that for the past few months have been the main focus of the market as a main indicator to try to anticipate any uptick in the inflation. The earnings were up 0.3% as expected and up from 0.2%.

The market reacted with strong USD buying that is about to close the trading session up 0.73%, the first big correction in the USD Index in a month of declines.

Important now is to determine if this “hope” of inflation will be followed by more positive data.

 

RBA Statement, OZ Retail sales

By | August 3, 2017 9:42 pm | 0 Comments

RBA statement came out with rather mixed tone

  • Inflation forecast little change from May
  • CPI outlook slightly higher due to utility cost
  • Cuts 2017 GDP forecast by half point to 2-3%
  • Further AUD rise would lower economic growth and inflation

In the meantime Australia’s retail sales numbers were slightly better, June retail sales rose 0.3%mom vs 0.2% fcst, 2Q retail sales rose 1.5% vs 1.2% fcst

AUD$ fell from 0.7960 to 0.7940 before the data, back up to 50 then hovering around 40 currently.

 

 

BOE Interest Rate decision

By | 8:22 am | 0 Comments

BOE holds rates unchanged at 0.25%. Vote split 6-2 within the MPC.

Sterling immediately lower, mostly because of the statements that followed the rate announcement:

  • BOE cuts growth forecast
  • BOE is concerned with weak wage growth

The GDP for 2017 was revised 1.7% vs 1.9% prior. GDP for 2018 now expected at 1.6% vs 1.7% prior.

Uncertainty over Brexit talks is one of the main components on this UK economic slowdown.

 

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