The Latest in Forex News & Analysis.

US GDP

By AG | 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 AG | 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 AG | 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.

Australia Labor Data

By AG | October 19, 2017 12:34 pm | 0 Comments

 

Strong Australian Job data, employment rose 19.8k vs 15.0k estimate, unemployment rate improve3d to 5.5% vs 5.6% prior month. AUD$ immediately higher from 0.7845 to 0.7870 paid, dragging AUDNZD cross back towards 1.10.

 

In the meantime $JPY trading marginally lower on the back of BOJ Deputy Governor Nakaso comment saying BOJ can control Yield Curve even with smaller JGB purchases

UK CPI

By AG | October 17, 2017 9:35 am | 0 Comments

UK CPI YoY came out at 3% matching market expectations. This reading confirms a positive streak for UK CPI as last month reading was 2.9%. Last time inflation hit 3% in UK it was 2012.

The rate hike in November is almost a done deal with market pricing it with a chance of 81.8%. It still remains unclear if the BoE will be required to take further actions after this hike. For any future step anyway it might be important to evaluate the wage growth and the pound strength.

 

GBP surges on Brexit Talk

By AG | October 12, 2017 2:19 pm | 0 Comments

GBP/USD surged after a German paper reported that Michael Barnier, Chief EU Negotiator, might offer UK a 2 year transition period in the EU, if UK meets its exit obligations.

GBP/USD trading at 1.3280 after touching a daily low of 1.3120

FED Minutes

By AG | October 11, 2017 5:41 pm | 0 Comments

FED minutes released today show that this December rate hike was a close call. Some FED voting members believe that inflation might stabilize below 2% without showing great confidence for the future. The market reacted with USD selling on multiple asst classes.

EUR CPI

By AG | September 29, 2017 9:15 am | 0 Comments

EUR Core CPI YoY 1.1% vs 1.2% forecast and 1.2% prior reading. CPI YoY 1.5% vs 1.6% expected.

First decline for Core CPI in this quarter as we approach the deadline for ECB October meeting when President Draghi will communicate the monetary policy path and QE decision for 2018.

Considering that ECB has single mandate (price stability), we are currently far from the 2% target. Main concern is still that a single solution has to satisfy a multi-speed region like EU (Italian CPI MoM -0.3% vs -0.1% expected) .

End of Day Recap

By AG | September 27, 2017 4:55 pm | 0 Comments

US Core Durable Goods MoM 0.2% vs 0.2% forecast. US Durable Goods Mom 1.7% vs 1%. A positive reading for the US with a USD that strengthened on the day (USD Index + 0.43%).

Risk on across may asset classes, with equities up (new all time high for S&P500)  and metals down (XAU breaking a key support and now trading at 1283).

BoC Poloz with a dovish tone in his press conference sent USD/CAD to 1.2482, up 0.91%. A cloud of uncertainty over the next Central Bank move, considering also a weaker USD (compared with the beginning of the year) that might not help exports.

RBNZ rate announcement. Interest Rates unchanged with dovish comments. Lower NZD might be needed to support recovery and inflation growth.

Draghi Press Conference

By AG | September 25, 2017 10:50 am | 0 Comments

A cautious Mario Draghi reiterated on Monday that downside risks in EU are mostly tied to geopolitical factors. Growth is still in place but ECB should pay attention to not halt recovery.

Final decision on QE will be taken in October, as previously anticipated.

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