The Latest in Forex News & Analysis.

CAD GDP

By AG | August 31, 2017 10:24 am | 0 Comments

Canada GDP beats expectations with 4.5% vs 3.7% forecast (Q2). This number continues the positive streak of recent reading on the Canadian economy.

The pair USD/CAD is down 0.8%, more than a figure from the high of the day, also helped by a major recovery in the WTI that is up 2.7% on the day.

The market is pricing 50% chance of another rate hike for the 2017. USD/CAD is currently trading at 1.2530 which is not far from the low of the year at 1.2413.

US GDP

By AG | August 30, 2017 1:04 pm | 0 Comments

US Q2 GDP came out stronger than expected 3% vs 2.7% forecast. The US economy continues to grow with also Real Consumer Spending up 3.3% vs 3% forecast and 2.8% prior reading.

If these numbers were to be confirmed in the coming weeks we will most likely have more volatility by year end around the USD, as per now another rate hike for 2017 is only priced at 32.6%.

US Retail Sales

By AG | 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 AG | 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.

The Dollar Trade

By AG | August 9, 2017 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.

US NFP

By AG | 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.

 

BOE Interest Rate decision

By AG | August 3, 2017 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.

 

Service PMI UK

By AG | 5:13 am | 0 Comments

Service PMI in UK came out stronger than expected 53.8 vs 53.6 forecast. The reading suggests an expansion in the UK economy with the pair GBP/USD  trading higher at 1.3268.

All eyes now on the UK inflation report, interest rate decision and the press conference by BoE president Carney later today.

 

US GDP

By AG | July 28, 2017 10:56 am | 0 Comments

US GDP as expected at 2.6%. The market reacted with USD selling anyway because of the Employment Cost Index (0.5% vs 0.6% forecast) and Employment Wages (0.5% vs 0.8% prior), that raise question about the improvement in inflation.

Biggest mover was USD/CAD, also because of the CAD GDP MoM (0.6% vs 0.2% forecast) and the continued rally in the price of Crude Oil.

 

 

 

FED interest rate decision

By AG | July 26, 2017 2:36 pm | 0 Comments

The FED disappointed the USD bulls by saying that “balance sheet unwind will start relatively soon”, leaving too much room for uncertainty and timing of the operation. The market reacted immediately with USD selloff that continued steady bringing EUR/USD at 1.17 and pushing higher all the other currencies against the greenback.

Important to mention anyway are the bullish EUR comments by ECB Nowotny who stated (few minutes before the FED announcement) that with the risk of deflation gone in the euro area, the Central Bank has to consider the technical aspects of QE end.

 

 

 

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