The Latest in Forex News & Analysis.

Nov 20 week

By | November 17, 2017 4:36 pm | 0 Comments

Data/Event schedule for the week (All times are EDT)

Monday 1930: RBA minutes

Tuesday 1000: US Existing home sales, 1800: Fed Chair Yellen speaks

Wednesday 0830: US Durables, 1000: Michigan, 1400: FOMC Minutes

Thursday US Thanksgiving Holiday 0200: GER GDP, 0430: UK GDP, 0830 CAN Retail

Friday 0400: GER IFO, 0945: US Manufacturing PMI

Overall expect a quiet week with US Thanksgiving holiday, US equity and bond market are closed on Thursday, Commodities, Futures & CFDs will close early, FX to stay open as usual but activities should be limited.

EUR$ back onto 1.18 handle

By | November 14, 2017 5:46 pm | 0 Comments

EURUSD made some impressive rally today from mid 1.16 to 1.1805, first triggered by stronger than expected German 3Q GDP, followed by slightly better ZEW, then accelerated the surge on technical factor, breaking back above the “Head-and-shoulder” neck line at around 1.1680 then trendline resistance from September high comes in at around 1.1730.

Next resistance levels are seen at 1.1825 50% retracement and 1.1880 high seeen in October.

Market awaits US CPI number tomorrow.

Reserve Bank of New Zealand

By | November 8, 2017 5:37 pm | 0 Comments

RBNZ kept policy rate unchanged at 1.75%.

Statement was mixed to slightly hawkish sending Kiwi dollar 50 pips higher from 0.6920 to 0.6970.

  • Policy will remain accommodative for considerable period.
  • Numerous uncertainties remain, policy may need to adjust.
  • Forecast rates rising in 2Q 2019 vs 3Q 2019
  • Falling NZD if sustained will lift tradables inflation.
  • Inflation slowing to low of 1.5% in 1Q 2018.
  • Inflation reaching 2% in 2Q 2018 vs 1Q 2019.
  • CPI projected to remain near mid point of target range

RBNZ Governor Spencer’s press conference was rather optimistic saying outlook is very positive and the new government’s policy is a positive stimulus to aggregate demand of about 0.5% of GDP.

AUDNZD broke below 1.1000 for the first time since mid October, nZD$ next upside target seen at around 0.7020.

 

New Zealand Labor market data

By | October 31, 2017 6:05 pm | 0 Comments

Third quarter New Zealand employment data came out strong,  employment change +1.1% qoq vs 0.8% expected, unemployment rate improved to 4.6% from 4.8% prior.

Kiwi dollar jumped up 50 points form 0.6840 to 0.6890, although not certain if this rally is sustainable after the recent political mess and dovish comments from new finance minister.

Good news for EUR

By | 7:07 am | 0 Comments

EUR GDP Q3 came out at 2.5% vs 2.1% expected. Unemployment rate decreased about 0.1% in September (from 9.0%). Definitely good news for EUR bulls.

Despite it, EUR is floating on the 1.16 level waiting for Consumer Confidence data in USA (later today) and Fed meeting schedule for tomorrow.

 

US GDP

By | October 27, 2017 10:54 am | 0 Comments

US GDP Q3 came out at 3% vs 2.5% expected. Definitely a good news for the USD bulls given the immediate market reaction, which extended the move started yesterday with the ECB interest rate decision.

Real consumer spending also increased to 2.4% vs 2.2%. Solid inflation still needed to complete the big picture.

ECB Interest Rate Decision

By | 8:41 am | 0 Comments

ECB leaves benchmark Interest Rate at 0%.

QE to continue at 60B/month until December 2017 and then at 30B/month from January to September 2018.

President Draghi said that QE might run until inflation has substantially adjusted, leaving an option to extend QE if the outlook worsens.

This decision anyway was not unanimous. Rumors of tapering have calmed down after the press conference. EUR/USD experienced a significant correction in the hours following the decision and press conference, going from 1.1820 to 1.16.

Inflation, wage growth and political stability in the Euro Area remain key indicators to better understand the next move of the ECB.

BoC Interest Rate Decision

By | October 25, 2017 10:33 am | 0 Comments

BoC left interest rate unchanged at 1%. The decision did not surprise the market as much as the verbiage in the Rate Statement. It seems that going forward BoC might be more cautious in its interest rate hike cycle.

The pair USD/CAD is currently trading at 1.2755, on a key resistance area.

GBP GDP

By | 4:54 am | 0 Comments

UK GDP beats expectations with 0.4% vs 0.3% forecast (Q3). This number continues the positive streak of recent reading on the British economy driven by the devaluation after Brexit. The pair GBP/USD remains stable in area 1.3160

The market is not pricing an higher probability of interest rate rise in November.

Australian Inflation Data

By | October 24, 2017 8:58 pm | 0 Comments

Australia 3Q CPI came out lower than the forecast, 0.6% qoq and 1.8% yoy vs 0.8%, 2.0% expected, Australian bond yields coming lower across the curve weighing on the currency.

AUD$ dropped 30 pips immediately and continue trading soft now approaching 0.7723 low seen earlier this month.

Market is now pricing in about 60% chance of 25bp hike before Sept 2018 by the RBA, lower from over 70% prior to the number.

AUD$ Levels to watch

  • 0.8125 ytd high
  • 0.7897 Oct high
  • 0.7830 100d MA
  • 0.7723 previous low
  • 0.7694 200d MA
  • 0.7643 50% retrace of Low-High ytd.

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