The Latest in Forex News & Analysis.

RBA minutes

By | September 18, 2017 9:56 pm | 0 Comments

Minutes from September 5 RBA monetary policy meeting;

  • -Solid employment growth, domestic data positive
  • -AUD$ rise in large part reflect USD decline
  • -Need to balance risks of high household debt and low CPI
  • -Recent domestic data consistent with gradual pickup in growth
  • -Further rise in AUD$ would weigh on growth and inflation

 

Overall positive tone on its economic assessment but not satisfied with slow inflation and didn’t forget to add usual comment against further currency appreciation.

AUD$ trading rather choppy went 90 paid then 70 given after the release.

Australia Q2 house price index was out at the same time +1.9% vs 1.1% forecast.

Yen jumps on N Korea missile launch

By | September 14, 2017 6:45 pm | 0 Comments

$JPY drooped to 109.55 low in a blink on the back of a headline North Korea launched another missile flew over Japan landed 2000 kms to the east of Hokkaido. Japanese officials warned residents to take shelter.

US Stock futures traded lower in tandem with $JPY but so far little reaction in Gold and Swiss Franc.

Details of missile are yet to be known but earlier today North Korea made a threatening to sink Japan and reduce the U.S. to ashes and darkness.

US CPI and Jobless claims

By | 12:51 pm | 0 Comments

US Core CPI YoY came out higher than expected at 1.7% vs 1.6% forecast. Core CPI MoM August 0.2%.

Initial Jobless Claims at 284k vs 300k forecast. Bad news for real earnings at -0.6% vs -0.2% forecast.

It might seems a step in the right direction towards the 2% inflation target that the FED tries to achieve. The discussion for another rate hike by year end remains open for debate.

 

BoE Interest Rate Decision

By | 9:16 am | 0 Comments

BoE leaves rates unchanged at 0.25%, confirming the stimulus package currently in place. The internal vote within the MPC came out as expected 7-2.

The British Pound went higher on the back of a more hawkish tone in the minutes. Officials confirmed that, under the right circumstances, it might be needed a reduction of the expansionary measures. Inflation is growing and now there is a risk of overshooting that BoE wants to avoid.

 

 

Australia Job Data

By | September 13, 2017 9:40 pm | 0 Comments

Australia August employment rose 54,000 vs 20,000 forecast and 29,000 previous month, while unemployment rate stayed unchanged at 5.6%.

AUD$ immediately higher by over 30 points from 0.7975 before the number to 0.8010 paid.

Full-time employment was the main contributor for this strong number rising 40,000 vs decrease of 20,000 in prior month.

AUD$ support now seen at around 0.7960 while 0.8050 high this week should offer decent resistance.

UK Average Earning Index

By | 12:31 pm | 0 Comments

UK average earnings Index stays stable at 2.1% confirming the previous reading even if it falls short on expectations of 2.3%.

With the unemployment rate slightly coming off (4.3% vs 4.4%), this reading shows a mixed but stable situation in the UK.

Tomorrow the BoE will announce its Interest Rate decision, but all the eyes will be on the meeting minutes.

UK CPI

By | September 12, 2017 10:38 am | 0 Comments

UK CPI for the month of August came out at 2.9% vs 2.8% forecast and 2.6% previous reading.

Inflation in UK is clearly rising on the back of a weaker Pound, which is still extremely far from pre-Brexit levels. Last time that inflation was so high in the UK, Interest rates were at 0.5% (July 2013).

This represents a challenge for BoE since inflation is picking up on the back of weaker currency, but wages (even if growing at 2.1%) are not able to keep up with inflation growth rate.

Tomorrow BoE will release its Average Earnings Index which at this point is a key indicator to predict the next move for BoE. A rate increase by year end is now priced with 34.7% chance compared with 24.5% we had yesterday.

Bank of Canada, What next?

By | September 8, 2017 12:51 pm | 0 Comments

Bank of Canada surprised the market by raising rates last Wednesday to 1%.

The economic scenario improved significantly in 2017 and brought the Central Bank to act accordingly. The only indicator lacking a bit behind is Inflation. As today’s reading shows, the labor condition is improving and, as many expects, should support inflation in Canada. With participation rate stable, the unemployment rate came off to 6.2% and 22.2k jobs were added in the month of August.

Another rate hike chance in October is currently price with 41.9% chance.

Fed comments and Japan Data

By | September 7, 2017 9:14 pm | 0 Comments

NY Fed president Dudley made somewhat dovish comments pushing USD lower across;

  • -Inflation has come off SHARPLY this year which is certainly a surprise
  • -Not clear if weak inflation is temporary or long lasting

 

Kansas City Fed president George speech was rather neutral to more optimistic in some areas bringing USD back up a bit;

  • -US under full employment
  • -Gradual hike is appropriate
  • -It is time to continue rate hikes
  • -Inflation is relatively mild
  • -Low inflation helps consumer

 

In the meantime Japan Q2 GDP was out slightly weaker than expected at 2.5% annualized vs 2.9% expected.

Japan July Current Account surplus was higher than expected mainly due to increasing trade balance surplus, which should weigh on $JPY,  Nikkei trading lower on weak GDP as well.

ECB IR decision and press conference

By | 10:11 am | 0 Comments

ECB leaves rates unchanged as expected at 0%.

All eyes on the press conference to understand, and eventually anticipate, the next Central Bank move that should be announced in October.

Uncertainty raised on conflicting messages from the President Draghi. On one hand GDP was revised up for the years 2017-2018-2019. On the other anyway, Inflation was revised down for the same period. One of the main causes of this is the EUR/USD exchange rate that has been strengthening for the past few months. The Central Bank anyway remains confident on inflation because of the improving scenario in the labor market across the EU.

October meeting will clarify what will be the monetary policy adopted in 2018. All options are on the table, from tapering to QE extension in 2018.

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FXDD Now provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FXDD Now specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD Now expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.