The Latest in Forex News & Analysis.

BOJ Minutes

By | June 20, 2017 8:02 pm | 0 Comments

BOJ Minutes from April Monetary policy meeting is out, here is the bullet point.

  • -Momentum towards price goal not firm enough
  • -One member said stable LT rates show yield curve control is working
  • -Most members: No conflict between JGB buys, market op guidelines
  • -Many members: Pursuing current powerful easing appropriate
  • -One member: BOJ should cut asset purchases incrementally
  • -Risks to Japan economy are skewed to the downside
  • -A few members: CPI won’t reach 2% during projection period
  • -Size of JGB buying varies depending on market conditions

Little reaction in USDYEN currently hovering around 111.30-35

GBP drop on Carney’s comments

By | 10:41 am | 0 Comments

BoE governonr Carney, surprised the market early in the London session, announcing that the central bank is far away from raising rates. This comes after the first weakness signal start to show up, following the Brexit decision a year ago.

Important to mention that yesterday started the negotiations for the Brexit between EU and UK. Uncertainty over the outcome of the negotiations is still high and requires every market player, central banks included, to be extremely careful.

LOOK WHO`S TALKING

By | 3:08 am | 0 Comments

Both BOE and SNB heads will speak Today.

Carney Speech at Breakfast event at Mansion House (0830)
Chairman Jordan speaks at (11:00)

EURUSD back to the start

By | June 19, 2017 7:21 pm | 0 Comments

EURUSD is at a crucial level, it is clear from the beginning of the month. This level has been the starting point of the announced QE from ECB back in 2015. It is clear from the weekly chart below, how the market has always short EURUSD once this level has been tested, during the last 2 years. So, in terms of probability,  markets consider the range 1.13 to 1.115 as a selling range.

However, political environment have changed from January 2015; there is a new president in USA and  Europe is running without British. Those have shake the most liquid currency most of the time driving the EURUSD close to parity.

However, despite political uncertainty, economic figures have shown a recovery on both side from that time:

  • higher inflation for EU and lower Unemployment Rate,
  • lower Unemployment Rate for USA and stable inflation rate.

It is true that 6 months are still missing at the end of QE, however markets move from rumors.

Is that the time for EUR to go back on 2014 levels or political turmoils will move back the currency to its usual level seen during the last 3 years?

Japan Trade

By | June 18, 2017 8:04 pm | 0 Comments

Japan May trade deficit 203.4bio yen vs 43.3b SURPLUS expected.

Exports rose 14.9% yoy while Imports rose 17.8%yoy

 

$JPY up slightly from 110.70 to just shy of 111.

 

RBA Governor Lowe spoke earlier saying Australia’s economy likely to grow faster over the next couple of years.

Monday Open

By | 5:28 pm | 0 Comments

Opening levels

$JPY 110.91

EUR$ 1.1208

GBP$ 1.2765

$CHF 0.9732

$CAD 1.3217

AUD$ 0.7619

NZD$ 0.7254

 

Not much change from Friday close in G10 majors

 

Headline over the weekend

 

French parliamentary election update; President elect Macron’s party and his allies winning some 355-365 seats out of 577 in total, big victory for Macron.

 

Iran fired missile strike on Syria.

 

Trump lawyer: Despite Tweet, President is not under inquiry, NYTimes.

AUSTRALIA JOB DATA

By | June 14, 2017 9:37 pm | 0 Comments

Strong Australia May unemployment rate 5.5% vs 5.7% expectation, employment change was  also solid +42.0k vs 10k fcst, AUD$ pops up to 0.7625 high, 0.7750 ytd high is in scope now.

NEW ZEALAND Q1 GDP

By | 6:51 pm | 0 Comments

NEW ZEALAND Q1 GDP came out weaker than expected +0.5%qoq vs 0.7% expected, 0.4% prior.

GDP Annual average 3.0%, Q1 Expenditure 0.2% vs 0.1% prior.

NZD dropped quick 30 pips to 0.7230s.

AUD in the meantime rallying towards 76 cents pushing AUDNZD cross higher.

Similarities in action: does history repeats itself?

By | 12:14 pm | 0 Comments

Gold is trading back a the same levels of last year, depicting exactly same path that was back in May 2016. It is worth to find some similarities:

What happened last year? Further to rumors of hiking interest rates, which back in June 2016 have not been fulfilled, Gold has hit the high of $1374 a month later. Further to that, Gold has slowly reached the lowest value further to higher probability of a hike in December 2016 and stronger dollar during elections.

This sounds similar to what is happening lately. The Market is already discounting a hike with probability higher than 96%, and evaluating a third hike with a lower probability than the expected in January. Gold today is charting a first Heiken Ashi candle, further to a small retracement, exactly like last year.

Will a second candle open the doors for a new high?

One thing is certain:

Gold will go back to its highest level if the statement will show any shaky signal of third interest rate hike in USA and inflation expectation will not satisfy forecasts.

US CPI and Retail Sales pre-FED announcement

By | 10:32 am | 0 Comments

This morning economic data release was a big disappointment for the USD bulls.

Core CPI MoM 0.1% vs 0.2% forecast

Core CPI YoY 1.7% vs 1.9% forecast

Real earnings 0.3% with the prior reading revised down to 0.3% from 0.4%.

This is not all. The FED previously announced that it was willing to tolerate an overshooting in general inflation until the core component of inflation and the labor market would have sent more clear signals. Well, CPI (including food and energy) was 1.9% vs 2% forecast, down from the prior reading of 2.2%. Considering that the target is set at 2%, this is a huge hit for the USD bulls, who now have to deal with lower Core and general inflation, in a situation in which the job market is growing but not the real earnings.

Retail Sales MoM -0.3% vs 0.1% forecast.

All eyes now on the FED press conference today at 2:30PM EST. This hike seems a done deal regardless of this last economic reading. It will be extremely important anyway to understand how the FED will continue this hike cycle in 2017.

 

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