The Latest in Forex News & Analysis.

Good news for EUR

By | October 31, 2017 7:07 am | 0 Comments

EUR GDP Q3 came out at 2.5% vs 2.1% expected. Unemployment rate decreased about 0.1% in September (from 9.0%). Definitely good news for EUR bulls.

Despite it, EUR is floating on the 1.16 level waiting for Consumer Confidence data in USA (later today) and Fed meeting schedule for tomorrow.

 

US GDP

By | 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 | 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 | 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.

GBP GDP

By | 4:54 am | 0 Comments

UK GDP beats expectations with 0.4% vs 0.3% forecast (Q3). This number continues the positive streak of recent reading on the British economy driven by the devaluation after Brexit. The pair GBP/USD remains stable in area 1.3160

The market is not pricing an higher probability of interest rate rise in November.

Australian Inflation Data

By | October 24, 2017 8:58 pm | 0 Comments

Australia 3Q CPI came out lower than the forecast, 0.6% qoq and 1.8% yoy vs 0.8%, 2.0% expected, Australian bond yields coming lower across the curve weighing on the currency.

AUD$ dropped 30 pips immediately and continue trading soft now approaching 0.7723 low seen earlier this month.

Market is now pricing in about 60% chance of 25bp hike before Sept 2018 by the RBA, lower from over 70% prior to the number.

AUD$ Levels to watch

  • 0.8125 ytd high
  • 0.7897 Oct high
  • 0.7830 100d MA
  • 0.7723 previous low
  • 0.7694 200d MA
  • 0.7643 50% retrace of Low-High ytd.

Opening levels – USDJPY higher

By | October 22, 2017 5:32 pm | 0 Comments

$JPY opening gap higher for the week at 113.85 on the back of the news of PM Abe and LDP’s landslide victory on Japan’s general election this Sunday.

LDP and coalition won over 2/3 of Lower House seats which would enable them to proceed long discussed Constitution reform. It also means Abenomics to continue for now to keep BOJ’s ultra-easy monetary policy which is obviously positive $JPY and Nikkei stocks.

 

Other major FX pairs are pretty much unchanged from Friday close;

  • EURUSD 1.1765-70
  • GBPUSD 1.3185-90
  • USDCAD 1.2620-25
  • AUDUSD 0.7810-15
  • NZDUSD 0.6945-50

US Senate passes budget resolution

By | October 19, 2017 10:39 pm | 0 Comments

US Senate adopts budget resolution in step advancing Tax reform, USD making strong rally across the board pushing $JPY onto 113 handle, GBP towards 1.3100, NZD below 70 cents for the first time since May.

US stock futures surging at the same time, Dow futures trading over 100 points higher, Treasury bonds lower pushing 10 year yield up to 2.35%.

 

Australia Labor Data

By | 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 | 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.

 

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