The Latest in Forex News & Analysis.

Dollar rally on

By AG | May 18, 2017 2:20 pm | 0 Comments

Comey admitting that obstractions to investigations never happened just reversed the dollar path seen in the past two market sessions. USD index and stock market quickly reacted to the news.

Market Pre – NY Open

By AG | 8:05 am | 0 Comments

With European equity indices losing a bit of ground in the London session, US equity indices are set to open down 0.1-0.2%. This comes after the massive move seen yesterday on equity and the uncertainty that surrounds capital markets in general in this moment.

US political turmoil, escalation of the tension with North Korea, Crude Oil physical balance and number of FED rate hikes remaining are playing together a major role in amplifying the effects of risk off/on movements, with the VIX touching today the 2017 high.

OIL rig counts

By AG | May 12, 2017 12:16 pm | 0 Comments

US OIL rig count in 50 minutes.  WTI and Brent currently trading flat for the day. A slowdown in the rigs combined with the draw of crude stocks saw last Wednesday might further the price rally.

 

USD/CAD has been the pair most influenced for the past 2 weeks by crude oil moves.

US CPI / Retail Sales / earnings

By AG | 8:34 am | 0 Comments

US Core April CPI  0.1% vs 0.2%   expected

US Core Retail Sales 0.3% vs 0.5%  expected

US Earnings    0.5%  vs a prior of 0.4% (revised down from 0.5%)

 

The possibility of three more hikes this year might vanish with weak reading like this, even more regarding real earnings (earnings corrected for inflation) which has been a key point recently for the FED

UK monetary policy decision

By AG | May 11, 2017 10:19 am | 0 Comments

Uncertainty. When it comes down to BoE, the variables to look at to understand the next central bank action just multiplies.

Gov. Carney said that Inflation is overshooting because of the weaker pound. BoE is tolerating it and decided to wait to lift rates until job growth and job earnings pick up and stabilize.

BoE said to be close monitoring Brexit negotiations adding uncertainty over the timing of the next monetary policy actions.

The actual MPC vote was 7 – 1 confirming the same division within the MPC seen during the last interest rate decision.

GBP/USD came off from 1.2930 to 1.2853 following the speech, breaking the trend line at 1.2863 that was driving the rally since mid-April.

 

The next level to watch on the downside is

 

Support – 1.2830.

Support – 1.2757

Morning Data

By AG | 8:34 am | 0 Comments

US PPI (MoM – April) 0.5% vs 0.2% expected

US PPI YoY 2.5% vs 2.2% expected

Jobless claims slightly lower thank expectations at 236k.

CAD New Housing Price Index 0.2% in line with expectations

 

 

Crude oil, what’s next?

By AG | May 10, 2017 7:37 pm | 0 Comments

WTI and Brent  are about to close NY trading session approximately up 1.15% and 2.3%. The move was favored by bullish crude report this morning, showing higher than expected draw in US inventories. Despite the upward move, the physical market seems to still be worrying about a demand that doesn’t pick up and a US output that is outperforming every forecast done so far by international agencies.

 

USD/CAD is set to close lower 0.3% on a day where the USD in general strengthen against other currencies. The steep decline in the crude market has been one of the main drivers of the USD/CAD rally saw in the past two weeks. Today’s retracement has still to prove if the market is actually changing expectations regarding crude oil or this is just a temporary pause after an over extended move recently experienced.

For now, WTI recognized the resistance at 47.725 while USD/CAD bounced back from support at 1.3648

NY market recap

By AG | May 9, 2017 6:25 pm | 0 Comments

This week opened with Risk-on sentiment spreading across all asset classes:

  • DXY bouncing back from Friday’s close @98.575 (year low)
  • XAU continuing to hedge lower as risk appetite increases
  • US equity (Nasdaq 100 and S&P500) exploring new all-time highs.

 

The USD continues to strengthen against the EURO after the French election as the market “sells the fact” and takes profit on the rally seen last week. The attention is back now on the debate regarding the number of the FED rate hikes this year with the market currently pricing 50% chance of 2 more tightening intervention by the end of 2017.

 

JPY keeps grinding lower as the market is turning to risky assets and NIKKEI 225 closed up 0.5%. BOJ governor Kuroda also supporting this market move with his comments released yesterday, announcing that an aggressive easing policy is still necessary.

 

Commodities currency under pressure with Brent and WTI losing more than 1%. The continuation of the production cap deal by OPEC and NON OPEC countries seems to be a done deal but the market is currently looking the other way. Many factors to explain the down move:

  • China is currently through the process of deleveraging its domestic market and this is impacting negatively on the demand of many commodities.
  • The US shale production is increasing consistently and might offset the production cap deal signed by OPEC countries.
  • The “driving season” in the US is approaching with significant build up in gasoline stocks.

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