The Latest in Forex News & Analysis.

Australian Data

By | September 6, 2017 9:37 pm | 0 Comments

Australia July Retail sales came out flat  vs 0.3% fcst and 0.3% prior.

July Trade balance was surplus of A$460mio vs A$875mio fcst.

AUD$ immediately lower by 20 pips to 0.7990 while Australian stock market is pretty much unchanged.

 

Overall the Australian currency has been trading firmly these days despite the Central Bank’s concerns over strong OZ dollar, fundamentals in Australia is sound with strong GDP growth and recent rally in commodities including Iron Ore, the country’s biggest export.

 

In the meantime, $JPY traded down to 108.89 briefly on the back of a headline South Korea Prime Minister said North Korea may fire missile on September 9.

BOC Rate Announcement

By | 11:00 am | 0 Comments

BOC caught market by surprise, rising rates from 0.75% to 1%.

Before the announcement, expectations for the outcome were split 50/50, a typical situation in which, generally, central banks opt for the status quo rather than a big surprise in order to keep price stability on the affected asset classes.

USD/CAD dropped more than 2 big figures on the announcement, from 1.2406 to 1.2140. The reason of the hike was stronger than expected growth. GDP is surging at record levels, 3.7%, a number that is even more impressing if we consider that initial expectations for 2017 were set at 2%.

On the other hand anyway, Governor Poloz has to deal with a still weak inflation (around 1.2%) and subdued wage pressures. The market will be extremely keen in this Q4 in evaluating and pricing every single word from BOC as expectations for another hike in 2017 are split again at around 50%.

 

Risk off accelerates

By | September 3, 2017 6:44 pm | 0 Comments

$JPY opened around mid 109 gap lower from 110.20 Friday close on the back of the news that North Korea tested Hydrogen Bomb over the weekend, followed by another shocking headline that South Korea fired ballistic missile in show of force against North.

Gold opened up gap higher at $1335, $10 higher from Friday close and Asian bourses are lower across the board, as well as S&P futures as Geopolitical risk increases.

USDJPY 1 minute chart

US NFP and ECB Statement

By | September 1, 2017 10:22 am | 0 Comments

US NFP were disappointing for the month of August. The reading was 156k vs 180k forecast. Also the prior number was revised down to 189k from 209k. The average hourly earnings were also weaker than expected, 0.1% vs 0.2 forecast, down from the 0.3% of the previous month. Participation rate stayed the same and unemployment up 4.4% from 4.3%. Not a good news for the USD bulls apparently.

After a first USD selling against all the other major Currency pairs anyway, news regarding ECB policy came out reversing the price action. The ECB said that the monetary policy for 2018 is not set yet and it might be communicated few weeks before the December meeting.

With the market currently looking at any hints of tapering from the ECB, this news pushed expectations a bit further fueling uncertainty over the 2018 ECB monetary policy.

 

CAD GDP

By | 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 | 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%.

Separate ways AUD$ and NZD$

By | August 29, 2017 9:47 pm | 0 Comments

strong econ data in Australia pushing AUD$ higher while RBNZ Governor Wheeler’s comment sent NZD lower at the same time, AUDNZD cross as a result jumping up 50 points to 1.1015 highest level since March.

Australia Q2 Construction work +9.3%qoq vs 1.0% expected, July building approvals -1.7%mom vs -5.0% expected, AUD$ higher to 0.7970-75 from 0.7940-45.

RBNZ Governor Wheeler at the same time making comments saying “Lower NZD is needed”, NZD immediately lower by 30 points.

North Korea fired missile

By | August 28, 2017 5:38 pm | 0 Comments

Headline news out North Korea fired missile that has passed over Japan.

$JPY dropped quickly down 40pips  to 108.85, $CHF and EURCHF are lower as well as market buying safe haven currencies. Metals are closed at the moment but expect Gold to open up higher.

Week of August 28

By | August 27, 2017 6:46 pm | 0 Comments

EUR$ traded higher to 1.1965 before the official open, opened around 1.1950 vs 1.1930 close on Friday,

$JPY opened around 109.20, 10 pips lower from Friday close.

North Korea launched another missile test during the weekend, could be the reason behind $JPY’s move lower.

BOJ Governor Kuroda in Jackson hole said 4% growth unlikely to be sustained, monetary policy to stay accommodative.

The last week of August could stay relatively quiet until US NFP on Friday, market remain focused on the EUR$ to see if we can break key 1.20 level.

Data this week

  • Mon: JPN Unemployment
  • Tue: US Consumer confidence
  • Wed: US ADP
  • Thur: GER Unemployment, EU CPI, CAN GDP
  • Fri: US NFP

Japan Inflation data

By | August 24, 2017 7:49 pm | 0 Comments

Japan July National CPI came out in line with expectation at 0.4% yoy, Core CPI 0.5% yoy

Tokyo Aug CPI +0.5% yoy higher than 0.3% fcst and 0.1% prior month, Core CPI also higher at 0.4% vs 0.3% fcst.

 

Little reaction in $JPY stuck in 109.50-60 range since NY close, Nikkei futures trading firm suggesting higher open in N225 which may give some support to $JPY.

 

Talk of large 110.00 strike expiring tomorrow may offer decent supply near those levels.

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