Market news by Solforex

[limyeeshin]

Edition 40｜January 25, 2016​

The euro fell against the U.S. dollar after rebounding in oil prices eased concerns for emerging markets. The oil price rebounded 10% on Friday, largest daily rallies ever. Also, the European Central Bank Governor Mario Draghi added that it is possible that the Eurozone to take changes for monetary policy further weakened the euro. Chinese Central Bank also reaffirmed continuous monitoring and intervention on stock prices, eased the insecurity in Chinese stocks. The stabilization in those concerns toward emerging markets and China led economy slowdown, weakened the euro and yen, the biggest participators in quantitative easing programs. EUR/USD fell -0.72%, traded at 1.0796 late Friday, with week losses of 1.12%.

The Japanese yen also fell as the concerns for emerging markets are eased from sharp rebound in oil prices and stabilizing in Chinese stock markets. Also, the yen increased its loss further after Bank of Japan Governor Kuroda mentioning that the additional asset buying will be extended through various means on Friday. Japan’s December trade balance is due on Monday with surplus of ￥100 billion expected. Forecast sees that exports to fall 6.8% and imports to decline 16.4%. USD/JPY gained 1.19% to 118.77 at its two weak highs.

Canadian dollar rose to one and a half week highs against the greenback with support from rebound in oil prices. Oil prices rallied above $31 per barrel on Friday due to weather conditions with freezing temperatures and snowstorms across East Coast and parts of Europe. Canadian dollar gained 1.01% and USD/CAD pair hit 1.4140, the pair’s lowest since January 11 before consolidating at 1.4142.

Overall, the main pairs showed up and downs. The greenback rose +0.52%, EUR/USD fell 0.72%, USD/JPY gained 1.19%, and the pound gained 0.32% against the dollar.
Currencies for emerging and commodity related markets generally stabilized. The Russian ruble rallied 4.91%, south African rand retreated 0.60, Norway crone gained 0.70%, Brazilian real was up 1.50%, and Australian dollar slightly gained by 0.09%. The exceptions were New Zealand dollar, falling 0.64% and the offshore yuan, down 0.20%.

In the coming week, investors will be looking ahead to Federal Reserve’s policy announcements on Wednesday for indication of future rate hike pace this year. Also, Friday’s data on U.S. GDP growth for fourth quarter will be closely watched.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, January 25
Japan is to release its trade balance.
Australia is to publish NAB business confidence report.
In Germany, IFO institute is to report on business climate.
European Central Bank Governor Mario Draghi is to speak at an even in Frankfurt, Germany.

Tuesday, January 26
Markets in Australia are shut for public holiday.
The Bank of England Governor Mark Carney is to testify on the Financial Stability Report to the Treasury Committee.
The U.S. is to publish data on private sector housing prices and consumer confidence.

Wednesday, January 27
Australia is to release data on consumer confidence.
Germany is to publish data on GfK consumer confidence.
China is to release data on public business profits.
The U.S. is to publish data on new home sales.
Also, the Federal Reserve is to announce the benchmark rate and rate statement from the recent FOMC meeting.

Thursday, January 28
The Reserve Bank of New Zealand is to announce its latest monetary policy decision followed by the trade balance release.
Japan is to publish data on retail sales.
Australia is to release data on importing prices.
Germany is to release data on consumer price inflation.
The U.K. is to publish its GDP growth for the fourth quarter.
The U.S. is to produce data on durable goods order, initial jobless claims, and pending home sales.

Friday, January 29
Japan is to release data on household spending, consumer inflation, and unemployment rate.
Bank of Japan is to release minutes on its recent monetary policy meeting followed by a press conference on prospect outlook.
Germany is to release data on retail sales.
The Eurozone is to publish data on consumer price inflation.
In the U.S., data on GDP growth for the fourth quarter, the manufacturing in Chicago region, and consumer sentiment index are due.

 

[limyeeshin]

Thursday 28 January 2016​

U.S. dollar drops after Fed keeps rates unchanged

The U.S. dollar dropped against the euro as the Federal Reserve leaves the interest rates unchanged after the Federal Open Market Committee meeting. The U.S. dollar hit 98.7 ahead of Fed statements amidst the expectations being low for Fed to raise the rate any sooner. On the same day, the U.S. new home sales were greatly improved at 544,000 units, up 10.8%, much above 500,000 units expected. Also, the new home sales in November were revised up 1,000 units to 491,000. The dollar shortened its loss slightly after the upbeat data release. However, the Federal Reserve froze the benchmark rate at 0.25-0.50% and added that the federal funds rate will be likely to remain for some time, and only be gradually increased based on global economic and financial developments, kept the dollar lower. The greenback fell 0.40% itself, and EUR/USD gained +0.19% at 1.0893.

Kiwi holds steady after RBNZ keeps the rate at 2.5%

The New Zealand dollar slid against the U.S. dollar on Wednesday after the Reserve Bank of New Zealand decided to hold the official cash rates at 2.5%. The RBNZ froze the rate but also indicated that further rate cut may be necessary, weakened the currency. NZD/USD hit 0.6472 in late Asian trade, down 0.28%. AUD/NZD also gained after the RBNZ statement, up 0.61% at 1.0843. Meanwhile in Australia, the consumer price index rose 0.4% for the fourth quarter, slightly higher than 0.3% seen, up 1.7% in yearly basis.

Sterling falls against the greenback as U.K. pushes Brexit

The British pound slid lower against the U.S. dollar after the announcement that U.K Prime Minister David Cameron and Germany Prime Minister Merkel agreed on the progress of Brexit negotiation. David Cameron is to make a last-ditch appeal to Jean-Claude Juncker to save his EU renegotiation after talks became deadlocked over the issue of migration and benefits. GBP/USD fell 0.73%, traded at 1.4244.

Oil prices settles and supports Canadian dollar

The commodity-related Canadian dollar retreated against the dollar as the oil prices rebounded above $32 a barrel on Tuesday. USD/CAD traded at 1.4098, down 0.13%.
Elsewhere, Japanese yen recovered loss created from the oil prices drop after the U.S. Federal Reserve decided to keep the fund rate for quite some time. USD/JPY was up 0.19%, traded at 118.64. Market participants were attentive ahead of the conclusion of the Bank of Japan’s meeting on Friday.

 

[limyeeshin]

Edition 41｜February 2, 2016


The Japanese yen slumped as the Bank of Japan announced to adopt negative deposit rate on Friday as a part of effort to combat deflation. By adopting negative interest rates, commercial lenders are better to lend out excess reserves they keep with the central bank. The BoJ said that it had not ruled out deeper cuts, but it could cut further into negative territory if necessary. It also added that continuous quantitative easing will be implemented together with the negative rates until reaching the inflation goal. USD/JPY hit 121.68 before settling at 121.12, up 1.95% after the announcement.

The dollar rose against other major currencies on Friday after the U.S. gross domestic product data release that broadly met expectation. The unexpected decision by the Bank of Japan to shift the deposit rate to negative territory supported the dollar’s gain. But the dollar trimmed its gain on Monday after the slow growth in manufacturing disappointed investors for the next rate hike which likely to be in a slower pace. The personal income rose 0.3% as expected but the expenses were 0.0% lower than the previous month’s figure. PCE prices also fell 0.1% and core parts shrank to 0.0%. The manufacturing also stayed lower than the expectation at 48.2. Fed vice chair Stanley Fisher added that it is uncertain for how Federal Reserve to take next decision amid the global outlook being uncertain from structural reformation in China.

The euro gained against the dollar on Monday after disappointing U.S. manufacturing data bringing uncertainty to when Federal Reserve to hike interest rates. The manufacturing slowdown in China and the U.S. spurred concerns on emerging markets and turned the euro bullish. The euro limited its gains after the European Central Bank Governor Mario Draghi mentioning that emerging market risks are increasing and the additional stimulus QE may be necessary due to low inflation in the Eurozone. EUR/USD gained 0.55% at 1.0538 on late Monday.

The Australian dollar traded weaker on Tuesday in Asia as the Reserve Bank of Australia held the interest rates as expected. The central bank held the cash rate at a record low 2% on Tuesday, indicating scope for easier policy if future economic data requires to. AUD/USD traded at 0.7117, down 0.08% after the announcement. Elsewhere, the British pound shortened its loss on Monday with great improvement in manufacturing index. GBP/USD was up 0.43% at 1.4304.

In the coming week, investors will be looking ahead to central bank meeting announcements in the U.K. and Australia as well as U.S. job report to indicate strength in the labor market

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Tuesday, February 2
The Reserve Bank of Australia is to announce the benchmark rate and give rate statement.
The Eurozone is to release data on unemployment rate and producer price index.
The U.K. is to release survey data on construction.
The U.S is to publish data on auto-sales.

Wednesday, February 3
New Zealand is to release its quarterly employment report. The RBNZ Governor Graeme Wheeler is to speak at an event.
Australia is to publish data on trade balance and building permits.
China is to release Caixin PMI manufacturing index.
In Japan, Bank of Japan Governor Kuroda is to speak at an event followed by data release on consumer sentiment.
In the Eurozone, data on service sector and retail sales are to be published.
The U.S. is to produce data on ADP non-farm payroll, PMI service sector, and ISM non-manufacturing sector.

Thursday, February 4
In the Eurozone, ECB governor Mario Draghi is to speak at an event.
The Bank of Japan is to announce the recent monetary policy statements and benchmark rates.
The U.S. is to release data on initial jobless claims, productivity and factory orders.

Friday, February 5
The Reserve Bank of Australia is to publish its monetary policy statement followed by the data release on retail sales.
Germany is to release data on factory orders.
Canada is to produce monthly employment report follow by the trade balance data.
The U.S. is to publish bundle of data on non-farm payroll, unemployment rate, average hour income, trade balance, and consumer sentiment.

 

[limyeeshin]

Edition 45｜February 15, 2016


The dollar rose against other major currencies after improved economic data and rebound in oil prices supporting the expectation that the Federal Reserve is likely to tighten the pace for next rate decision. The retail sales for January rose 0.2%, above 0.1% increase seen. Retail figures excluding cars, fuel, building materials and food services rose 0.6%, rebounding from 0.3% decline in previous month. Also, the upbeat U.S. stocks spurred the preference toward risk assets, rebounded the oil prices by 12%. Solid data boosted the dollar against the yen, changing hands with 0.7% gain at 113.21. The dollar was also higher against the euro with EUR/USD declining 0.6% at 1.1254. The dollar itself rose 0.4% at 95.99 but still ended the week down 3.19% with ongoing concerns over slow global growth.

In the Eurozone, data on Friday showed that the economy only grew 0.3% in the fourth quarter with no improvement. The weaker than expected data increased the expectations that the European Central Bank to ramp up its quantitative easing program as ongoing woes on global outlook persist. EUR/USD traded at 1.1225, declining 0.27% in the latest trade.
Japanese yen held weaker on Monday as gross domestic product data from Tokyo showed weakness in the fourth quarter. The yen still gained against the dollar in a weekly base by 3.19% with increased safe asset preference over ongoing concerns on global outlook from the effects of negative rates on banks. But Japan’s GDP contracted 0.4% quarterly and -1.4% yearly with sluggish consumer spending with slow wage recovery, reduced yen’s gain. USD/JPY changed hands on Monday at 113.57, up 0.32%.

On Monday, China reports trade data for January with consensus showing exports to decline 1.9% annually and imports to shrink 0.8% with balance of $58.85 billion. However, retail sales, industrial output and fixed asset investment figures are excluded this week as the timing of Lunar New Year that distorts the data to have less accurate comparisons.

Investors will also be looking ahead to inflation data in U.S. for better indication of rate hike pace that the Federal Reserve will take. Also Canada and the U.K are to release their monthly inflation data.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, February 15
Markets in the U.S. and Canada are closed for national holidays.
Japan is to release preliminary fourth quarter GDP growth and industrial production figures.
Australia is to publish data on new auto sales.
China is to release its trade balance data.
Eurozone is to produce data on trade balance. Later the day, ECB Governor Mario Draghi is to speak at an the European Parliament’s Economic and Monetary Affairs Committee in Brussels

Tuesday, February 16
New Zealand is to publish data on retail sales and inflation outlooks.
Bank of Australia is to release minutes on its recent monetary policy meeting.
China is to release data on initial loans and monetary supply.
The U.K. is to release bundle of prices data on consumer and producer price inflation, retail prices and housing prices.
In the Eurozone, ZEW institute is to report on economy outlooks in Germany and business climate.
Canada is to release data on manufacturing sales.
The U.S. is to publish data on New York state manufacturing and housing market index.

Wednesday, February 17
Japan is to publish data on core machinery orders.
China is to report on foreigners direct investments.
The U.K. is to release data on average earnings, new unemployment claims and rates.
The U.S. is to release string of data on building permits, new starts, producer prices inflations, and industrial productions.
The Federal Reserve is to release its recent FOMC meeting minutes later the day.

Thursday, February 18
Australia is to release its monthly employment report.
China is to publish data on producer and consumer price inflations.
Eurozone is to release its recent ECB monetary policy meeting minutes.
Canada is to produce data on wholesale sales.
The U.S. is to report on Philadelphia region manufacturing and initial jobless claims.

Friday, February 19
Germany is to release data on producer price inflation.
The U.K. is to publish data on retail sales.
Canada is to release data on consumer price index and retail sales.
The U.S. is to release data on consumer prices.
The Eurozone is to round up the week with consumer price index.

 

[limyeeshin]

Thursday 18 February 2016


Dollar holds steady after mixed U.S. data

The U.S. dollar slightly fell against other major currencies after the release of U.S. economic data showing mixed figures. The U.S. Commerce Department said that housing starts fell 3.8% at 1.099 million units last month from December’s 1.143 million units, disappointing expected 2.5% rise to 1.170 million. Also, the building permits declined 0.2%, below 0.1% drop expected. The U.S. producer prices however scaled up 0.1% last month, much better than 0.2% drop seen and after 0.2% decline in December. The core producer price index moved up by 0.4% in January. Investors were more focused to the Federal Reserve’s meeting. The Federal Reserve said that industrial production beat the expectations by increasing 0.9%, indicating improvement in the economy that the central bank could accelerate the pace of tightening in near future. The greenback fell 0.02% to 96.88.

The yen gains despite lower trade balance

In Japan, the trade balance for January came in at ¥646 billion, below the ¥680 billion expected with imports falling 18% and exports dropping 12.9%. Bank of Japan board member Koji Ishida said on Thursday that the prolonged financial market turmoil would impact on real economy, although risk aversion is unlikely to trigger a global financial crisis as in the past. USD/JPY changed hands at 113.87, down 0.20%.

Aussie falls after disappointing employment report

The Australian dollar fell against the dollar on Thursday after the employment data showing declines in most sectors. The jobs fell by 7,900 jobs after 15,000 jobs added in January. Also, the unemployment rate was increased at 6.0%, worse than 5.8% expected. The Capital Economic noted that the decline in employment in Australia could be a continuous movement of data to reality after strong gains last year rather than impact from concerns over global economy. AUD/USD eased 0.28%, traded at 0.7164.

Chinese yuan gains with improved prices data

In China, consumer prices rose 0.5% in January as expected at the same level as December. For a year-on-year basis, the consumer prices gained 1.8%, near 1.9% increase expected and above 1.6% in previous month. Producer prices fell 5.3%, improving from 5.9% decline in previous month and 5.4% drop expected. Analysts noted that pickup in inflation last month is mostly seasonal, such as food prices rising sharply ahead of Chinese New Year. The Chinese yuan traded higher against the dollar at 6.5152 on Thursday.

 

[limyeeshin]

Edition 45｜February 22, 2016​

The dollar and yen gained amongst major currencies with fresh falls in oil prices and equities, increasing safe asset preferences. The dollar itself eased 0.23% on Friday but still gained 0.65% in weekly basis. The dollar found support with greatly improved U.S. data earlier in the week giving hopes to investors that the Federal Reserve is likely to step on a tightening path this year. On Friday, the U.S. consumer price rose 1.4% in January, above 1.3% increase seen. Core inflation excluding food and energy rose larger than expected 2.2%. The dollar however fell against safe haven yen with USD/JPY pair trading at 112.66, down 0.53% on Friday.

The euro edged up against the dollar on Friday with oil prices drops. EUR/USD traded at 1.1130, up 0.22%, but still ended the week lower by 0.83%. On Thursday, the European Central Bank’s recent meeting reinforced expectations that the central bank is going to take further easing next month with continuous risks on growth and inflation. EUR/JPY also hit lows of 125.00 before settling at 125.36.

British pound boosted with increased expectations that European Union members would reach an agreement for Britain to remain in the union. The currency was also supported by the upbeat U.K. retail sales that was stronger than expected. GBP/USD gained 0.47%, traded at 1.4405.

On Saturday, China replaced China Securities Regulatory Commission Chair Xiao Gang to Liu Shiyu, chairman of the Agricultural Bank of China, likely as a response to failure in employing circuit breaker in the stock market. It also grew speculation that the central bank will seek to cut in the reserve ratio in medium term to stabilize market expectations. China also readjusted the consumer prices for food, tobacco, and alcohol by lowering 3.4% while increasing other goods to reflect consumption patterns.

Elsewhere, the commodity linked currencies such as Canadian dollar, New Zealand dollar, and Australian dollar were generally lower with impact from fresh slide in oil prices.

In the week ahead, investors will be looking to Eurozone’s business activity data for better indication of improvement in the economy. Thursday’s U.S. report on durable goods order will be also watched for hints on manufacturing sector.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, February 22
Japan is to release data on manufacturing.
In Germany, data on GDP growth and IFO’s report on business climate are due.
The U.K. is to publish data on industrial production.
The Eurozone is to release data on manufacturing and service sector.
The U.S. is to release data on manufacturing and a separate manufacturing report in Chicago region.

Tuesday, February 23
Germany is to release data on GDP growth and IFO institute’s report on business sentiment.
The U.S. is to release bundle of data on consumer sentiment, town house prices, existing home sales, and Richmond region manufacturing.

Wednesday, February 24
Australia is to release data on construction completions and wage prices.
Japan is to release data on business service prices.
The U.K. is to publish data on mortgage approvals.
The U.S. is to release data on mortgage claims, PMI service sector, and new housing sales.

Thursday, February 25
Australia is to release data on capital expenditures.
Germany is to publish data on consumer prices followed by GfK’s report on consumer trend.
The U.K. is to publish data on revised GDP for fourth quarter and service activities.
In the Eurozone, data on consumer prices, monetary supply, and personal loans are due.
The U.S. is to release data on durable goods order, weekly initial jobless claims and housing prices.

Friday, February 26
New Zealand is to release data on trade balance.
Japan is to release data on consumer prices.
China is to publish data on housing prices.
In the Eurozone, bundle of data on consumer survey, sentiment, and inflation are to be released followed by reports on industrial forecasts and service sector.
The U.S. is to release data on revised fourth quarter GDP, personal earnings and expenses and consumer sentiment.

 

[limyeeshin]

Thursday 25 February 2016


Pound sharply falls with risks related to Brexit

The British pound fell to seven-year lows on Wednesday, extending its loss as IMF (International Monetary Fund) cautioned the risks from Brexit. On Friday, U.K Prime Minister David Cameron reached an agreement with European Commission that granted Britain special status in the European Union. The IMF head Christine Lagarde said that the steady growth achieved by the nation could be threatened in the months leading up to June vote. HSBC also warned that a potential Brexit could cause pound to decline 20% further, creating sharp rise in imports and spiraling inflation, which could force the central bank to raise rates. It could also lead to heightened risk of contagion in the Eurozone if other nations decide to follow the case. GBP/USD traded at 1.3922, falling 0.71% further at the late trading.

Dollar shortens gains with disappointing economic data

The U.S. dollar fell from three week highs after the release of downbeat home sales data. The U.S. Commerce Department reported that new home sales plunged by 9.2% at 494,000, further below expected 4.4% drop to 520,000. Sales in the West region for new housing market collapsed 32% on the month. New home sales in the West, South, and Midwest areas have fallen into negative sector. Meanwhile, the PMI for service sector dropped to 49.8 in February, hitting lowest level since October 2013, much below 53.7 seen. The downbeat figures shortened the dollar’s gain, the currency index dropped to 97.51. Investors are looking ahead to the GDP and Core PCE data release on Friday for further indication for the monetary tightening path.

Yen gains with increased demand for safe haven

Japanese yen traded higher with oil price drops in early trading with increased inventory. The oil price slipped below $32 a barrel on Wednesday after Saudi Arabia’s oil minister said the production cuts will not happen. The Brexit risks in Eurozone and disappointing figures in U.S. economic data also spurred the preference toward safe asset and supported strength of the yen. In the late trading, rebound in oil price with increase in supply reduced the gap of gains against the dollar. SUD/JPY traded at 112.00, down 0.17% in latest trading.

Aussie declines despite upbeat spending data

The Australian dollar fell in Asia despite improved data on capital spending. The national building capital expenditure for the fourth quarter rose 1.2%, much higher than 4.7% monthly decline expected. Also plant and machinery capital expenditure rose 0.1% from 8.5% decline in previous reading, and private expenditure also rose 0.8%, above 3% drop seen. AUD/USD however fell 0.36%, traded at 0.7171.

 

[limyeeshin]

Edition 45｜February 29, 2016


The dollar turned bullish against other major currencies on Friday after improved U.S. economic reports that spurring expectations that the Federal Reserve will step on a tightened monetary path this year. The Commerce Department reported that gross domestic product grew at an annual rate of 1.0% in the fourth quarter, above 0.7% growth estimated, while GDP growth was expected to be revised down 0.4%. Also, separate report of consumer spending and inflation rose in January by 0.5% with Core PCE prices surging 1.7% from its previous month reading. The dollar rose 0.71% itself to a three-week highs of 98.13 with week gains of 1.63%.

The euro plunged against the dollar on Friday hitting its lowest level in three weeks after the U.S. core inflation reached its highest annual percentage in three years, adding views that the U.S. recovery is on track. EUR/USD pair traded between 1.0912 and 1.1069, before settling at 1.0932, falling 0.78% on the session. The euro has closed lower against the dollar in eight of the last ten sessions, and fell more than 3.2% since November.

The British pound also fell sharply against the dollar, falling to fresh seven-year lows at 1.3870 in late session. Since the U.K. received special statues in the European Union for the Brexit issue last week, the pound has plunged more than 3.2%. GBP/USD hit 1.4020 in the European morning trade but the gain was capped with continuous concerns over a potential Brexit. Several members of Conservative party mentioned that they will be backing the campaign to leave the EU. EUR/GBP also retreated in the earlier session to 0.7855.

Japanese yen retreated against the dollar on Friday, with USD/JPY gaining 0.9% to 114.00. But the yen was still supported with higher demand for the safe asset currency boosted by the concerns over the global growth and steep decline in oil and stock prices. The yen still have gained 5% against the dollar so far this year. An update shows that the yen gained in Asia on Monday with increased provisional industrial production by 3.7%, while retail sales falling 0.1%.

In Australia, the MI inflation gauge fell 0.2% monthly in February, while business inventories fell 0.4% quarterly. Company gross operating profits also dropped 2.8% in the fourth quarter. However, housing credit and private sector credit rose 0.5% in January. The Australian dollar eased against the greenback after the mixed data, with AUD/USD trading at 0.7125.

In the week ahead, investors will be focusing to surveys in manufacturing and service activity in the U.S. and China. Also, Friday’s U.S. nonfarm report for fresh would hint the strength in the labor market. The pound is still remained under heavy selling pressure with uncertainty over the U.K’s status in the Euro bloc. A referendum is to be held on June 23 for Britain to decide whether to stay or exit in the Eurozone.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, February 29
Japan is to release data on retail sales and housing permits.
Germany is to release data on import prices and retail sales.
The Eurozone is to publish data on consumer price inflation.
Canada is to release data on raw material price inflation.
The U.S. is to release data on pending home sales and manufacturing in Chicago and Dallas region.

Tuesday, March 1
Australia is to publish data on building approvals and current account. As well, an AIG report on manufacturing is due.
Japan is to release data on household expenditure, unemployment rate and PMI manufacturing.
China is to publish PMI data on manufacturing and non-manufacturing sector followed by Caixin manufacturing index.
In the Eurozone, PMI data on manufacturing and unemployment rate are to be produced.
The U.K. is to release the findings on the PMI manufacturing sector.
Canada is to publish monthly GDP report.
The U.S. is to release data on new auto sales, ISM manufacturing and construction expenditure.

Wednesday, March 2
Australia is to release fourth quarter growth figures.
The U.K. is to publish PMI data on construction.
Eurozone is to release data on producer price inflation.
In the U.S, ADP is to report on jobs creation.

Thursday, March 3
Australia is to release data on trade balance.
In China, Caixin is to report on non-manufacturing.
Germany is to release PMI service sector index.
The Eurozone is to release data on retail sales.
The U.K. is to release PMI data on services sector.
The U.S. is to release weekly initial jobless claims followed by data on factory orders, PMI service sector, and ISM non-manufacturing index.

Friday, March 4
Japan is to release data on overtime allowance.
Australia is to publish data on retail sales.
The U.S. is to report on non-farm payroll, unemployment rate, and average hourly earnings. Also, the trade balance is to be published.

 

[limyeeshin]

Thursday 3 March 2016


Dollar remains supported near one-month highs

The U.S. dollar remained supported after the release of firm employment data adding confidence on the health of the economy. The dollar traded near one-month highs against other major currencies, with index at 98.52, up 0.17%. ADP reported that non-farm private employment increased by 214,000 last month, much above expected rise of 190,000. The continuous upbeat national data added optimism over the strength of the economy and spurred expectations for the Federal Reserve to accelerate monetary tightened path for the next rate hike.


The euro hits 3 week lows against greenback

The euro fell against the dollar in the late trading, hitting fresh three-week lows after the upbeat U.S. employment data. EUR/USD traded between 1.0825 and 1.0881 and settled at 1.0869, falling 0.06% for the session. The euro has plummeted by almost 4% against the U.S. counterpart since February 11. Meanwhile, the traders continued to evaluate downbeat euro zone inflation as they await next week’s rate decision by the European Central Bank. The ECB is widely expected to lower its deposit and lending rates and extend the scope of quantitative easing program to improve the economic growth.


Sterling goes bullish despite the Brexit concerns

The British pound turned bullish against the dollar despite slowed data on construction amid concerns continued on Brexit issues in the Euro bloc. The Markit construction purchasing managers’ index fell to 54.2 from January’s 55, disappointing expected rise to 55.5. The housebuilding expanded at the slowest pace since 2013 with overall output slowed to ten-month lows. The previous report on manufacturing sector also slumped to the lowest in almost three years. GBP/USD traded at 1.4064, up 0.78%.


Aussie goes stronger after upbeat GDP

The Australian and New Zealand dollars turned bullish against the U.S. counterpart on Wednesday late trading. The Aussie surged 1.18% at 0.7260 after the data showing that Australian gross domestic product grew 0.6% in the fourth quarter, above 0.4% rise seen. The Australian economy grew 3.0% in the fourth quarter on annual basis, beating expectations for 2.5%. NZD/USD also edged up 0.11%, traded at 0.6635.


Major pairs

USD/JPY ↓0.08% 113.92
EUR/USD ↓0.37% 1.0827
USD/CAD ↑0.32% 1.3451
GBP/USD ↑0.78% 1.4062
USD/CHF ↑0.30% 1.0005
AUD/USD ↑1.18% 0.7260
NZD/USD ↑0.11% 0.6635

 

[limyeeshin]

Edition 46｜March 7, 2016


The dollar fell broadly against other major currencies on Friday after the release of mixed U.S. labor data for February. The Labor Department reported that the U.S. economy added 242,000 new jobs last month, way above the forecast of 190,000. The unemployment rate was in line with the expectation at 4.9% at an eight-year low rate. But the average hourly earnings dropped by 0.1% and it lowered the yearly gain in earnings to 2.2% from 2.5% in January. The weak wage dampened the expectation for the Federal Reserve to raise interest rates again in short term. The trade balance for January also came in lower at -$457 billion with 2.1% drop in export and 1.3% drop in import. Fed policy makers are watching inflation closely for the determination of their monetary path. The U.S. dollar fell 0.85% weekly at 97.34. EUR/USD rose by 0.45%, traded at 1.1004. USD/JPY stayed flat, traded at 113.76.

Commodity linked currencies were generally bullish with rally in commodity prices. Canadian dollar hit three-month highs, supported from solid domestic trade that reduced ongoing expectations for the Central bank to lower the rate. The Australian dollar and New Zealand dollar also rose more than 1%. But the Australian dollar fell in early Asia on Monday after the release of disappointing construction data. The AIG construction index came in at 46.1 for February from 46.3 in previous month. AUD/USD dropped by 0.28%, traded at 0.7417.

In the week ahead investors will be focusing on Thursday’s European Central Bank meeting. The ECB disappointed expectations for the quantitative easing program with smaller than expected stimulus move in December. Also, Bank of Canada and Reserve Bank of New Zealand will hold monetary policy meeting.

In the weekend China is to release bundle of data followed by the trade balance on Tuesday. Investors will be attentive to the figures for indicating outlook for global economic health amid concerns for the world’s second largest economy is on bumpy landing.


Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, March 7
Japan is to release composite leading index.
In Australia, AIG is to report on construction activities.
Germany is to publish data on factory orders.
In the Eurozone, Sentix is to report on investor confidence.
The U.S. is to release labor market conditions index.
Federal Reserve members Lael Brainard and Stanley Fischer are to speak at an event in Washington.

Tuesday, March 8
In Australia, NAB is to report on business confidence.
Japan is to release data on finalized fourth quarter GDP growth followed by data on consumer confidence and bank loans.
China is to produce its trade balance.
Germany is to publish data on industrial production.
Eurozone is to release revised fourth quarter GDP growth.
Canada is to release data on building permits.
The U.S. is to publish the red-book followed by data on small business confidence.

Wednesday, March 9
Australia is to release data on home loans and NFIB’s report on consumer sentiment.
The U.K. is to publish data on industrial productions.
Bank of Canada is to hold monetary policy meeting and announce its benchmark rate and give rate statements.
The U.S. is to release data on mortgage applications and wholesale inventory.

Thursday, March 10
Japan is to publish data on producer price inflation.
Australia is to release data on MI inflation for February.
The Reserve Bank of New Zealand is to hold monetary policy meeting and announce its benchmark interest rate and give rate statements.
China is to release data on consumer and producer prices inflation followed by data on initial loans.
Germany is to report on its trade balance.
In the Eurozone, the European Central Bank is to hold monetary policy meeting and determine its stimulus asset buying.
The U.S. is to release its weekly initial jobless claims.

Friday, March 11
Germany is to release data on consumer price inflation.
The U.K. is to publish report on trade balance.
Canada is to release its monthly employment report.
The U.S. is to publish data on import and export prices.
In the weekend, China is to release data on industrial production and retail sales.

 

[limyeeshin]

Thursday 10 March 2016


U.S. dollar trims gains ahead of ECB meeting

The dollar trimmed gains broadly against other major currencies on Wednesday, falling near two-week lows. The market participants turned their attention to the European Central Bank’s policy meeting for further stimulus purchasing as the global economic health is still in concerns. The ECB is widely expected to extend its asset purchasing program to combat ongoing low inflation in the euro area. The bank is also expected to cut rates further into negative boundary at the policy review on Thursday. The dollar dropped itself by 0.16% to 97.37. EUR/USD traded at 1.0974.


NZ dollar falls on a rate cut by RBNZ

The New Zealand dollar fell after the Reserve Bank of New Zealand cut the official cash rate by 25 basis points to 2.25%. The rate cut was unexpected to most analysts and the market participants and lowered kiwi by 0.27%. The central bank also indicated that there might be further easing to ensure future inflation settles near the middle of the target range. It also noted that the rates will soon be cut to 2.0% and there is a possibility that it can go below 2.0%. NZD/USD traded at 0.6634 on Thursday, while AUD/USD trading at 0.7472, down 0.16%.


Yen eases after upbeat China CPI

Japanese yen eased in Asia after the release of upbeat consumer price index in China. Consumer prices in China have grown in a faster pace than the expectation in February. The CPI for February rose 1.6%, higher than 1.1% gain expected. Also, the yearly pace was faster at 2.3%, above 1.9% seen, while producer prices fell 4.9% in yearly basis. Meanwhile in Japan CGPI fell 0.2% monthly and 3.4% year on year decline, matching expectations. USD/JPY gained 0.22%, traded at 113.59.


Major pairs

USD/JPY ↑0.44% 113.78
EUR/USD ↓0.24% 1.0974
USD/CAD ↑0.23% 1.3278
GBP/USD ↓0.13% 1.4198
USD/CHF ↑0.03% 0.9976
AUD/USD ↓0.11% 0.7477

 

[limyeeshin]

Edition 47｜March 14, 2016


The euro reversed on Friday after a strong gain on Thursday with European Central Bank President Mario Draghi announcing that the rate won’t fall under negative territory. The comments came after the ECB delivering a package of stimulus measure stronger than expected. ECB also cut interest rates across the Eurozone to the lowest level in history and augmented the quantitative easing program. The ECB Council member Erkki Liikanen added on Friday that the bank has not run out of tools to recover the economy and it will be supported until reaching 2% inflation target. EUR/USD pair reversed 0.27% to 1.1148 in late trade but still gained 1.43% for the week.

The U.S. dollar fell broadly against other major currencies on Friday after the Central Bank of China increased the fixed rate of yuan which boosted risk appetite. The central bank lifted yuan’s fixed rate following a sharp rebound in the euro after the European Central Bank meeting. Mario Draghi’s announcement that the rates will not be cut deeper into negative boundary boosted commodity prices and commodity linked currencies, making the dollar broadly fall. The dollar itself fell 1.2% for the week at 96.23, near one-month lows of 95.94.

In the weekend, China released bundle of data showing that factory output is in the slowest pace since November 2008. Industrial production also rose below the expectation at the annual rate of 5.4% following the gain of 5.9% in the previous month. The concerns were added that the economy is still under ongoing slowdown that requires more support from the government to boost the economy.

Japanese yen eased in Asia after a big boost in machinery orders in Japan. In Japan, core machinery orders for January hiked by 15%, much above the 3.0% increase seen for the month. The yearly gain was seen as 8.4%, far outpacing the expectation of 3.6% decline. USD/JPY traded at 113.95 on Monday, up 0.11%.

Elsewhere, commodity linked currencies were generally bullish, with AUD/USD gaining 1.48% at 0.7563 and NZD/USD advancing 1.14%, trading at 0.6743. USD/CAD pair also fell by 0.98% at 1.3214 with rally in oil prices beating slowed employment report in Canada.

In the week ahead, investors will be looking ahead to Wednesday’s Federal Reserve’s monetary policy meeting. It is broadly expected that the Federal Reserve will freeze the rates after the hike in December. Also, there will be central bank’s policy meetings in Japan and Switzerland.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, March 14
Reserve Bank of New Zealand Governor Graeme Wheeler is to speak at an event in Auckland.
In Japan, the data on core machinery orders will be published. Also, Bank of Japan is to start the monetary policy meeting for two days until 15th.
Eurozone is to release data on January’s industrial production.

Tuesday, March 15
The Reserve Bank of Australia is to release the minutes of its recent monetary policy meeting.
In Japan, the Bank of Japan will publish the minutes on its latest meeting and announce its benchmark rate and give rate statement for the indication of economic conditions. Data on industrial production and industrial activity will be released subsequently.
Eurozone is to publish data on number of movements in employment for the fourth quarter.
The U.S. is to release string of data on producer price inflation, retail sales, New York state manufacturing, and housing market index.

Wednesday, March 16
The Reserve Bank of Australia is to publish a report on financial stability.
The U.K. is to release data on average income, inflation rate, and changes in unemployment benefits.
Canada is to produce data on manufacturing sales.
In the U.S., the Federal Reserve is to release its recent monetary policy meeting minutes and announce benchmark rate and rate statements.
The bundle of data will be released subsequently, on mortgage applications, consumer prices, housing starts, building permits, and industrial production for February.

Thursday, March 17
New Zealand is to publish data on its gross domestic product.
Japan is to release its trade balance.
Australia is to report on employment changes and unemployment rate.
Bank of England is to hold monetary policy meeting and announce its rate decisions.
The Eurozone is to release data on February’s consumer prices and its trade balance.
The U.S. is to produce data on weekly initial jobless claims and Philadelphia state manufacturing.

Friday, March 18
Japan is to release its latest monetary policy meeting minutes.
China is to release housing price index.
Germany is to release data on producer price inflations for February.
Canada is to publish data on retail sales and inflation.
The U.S. is to release data on consumer sentiment.

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[limyeeshin]

Thursday 17 March 2016


U.S. dollar drops with Fed’s dovish moves

The dollar turned bearish after the Federal Reserve lowered expectations for the rate hike this year at the Federal Open Market Committee on Wednesday. In earlier trading, the dollar was stronger with wide expectations that the meeting will be hawkish. But Fed Chair Janet Yellen showed dovish stance indicating cautious movements toward future rate hike, lowered the dollar. The Fed lowered future outlook on GDP, price inflations and dot plots. Such cautious moves came days after the ECB unveiled a comprehensive easing measures laws week. EUR/USD surged to one-month high by gaining 0.99%, trading at 1.1217 on the session.

Yen falls with narrower than expected trade balance

Japanese yen changed hands against the dollar on Thursday after the adjusted trade balance for February came in lower than the expectation. The trade balance came at a surplus of ￥170 billion, below ￥240 billion seen. Exports fell 4.0% on annualized rate, more than 3.1% decline seen, and imports dropped 14.2%, under 15.2% expected. Earlier on Tuesday, Bank of Japan held its benchmark interest rate steady at negative -0.1%. USD/JPY traded at 112.85, up 0.26%.


Aussie gains after unemployment rate drops
The Australian dollar gained on Thursday as overall employment data meets market sentiments. The unemployment rate in Australia came in at 5.8%, below the 6.0% expected with a gain of 3,000 jobs in February. AUD/USD traded at 0.7582, up 0.41%. Earlier, in near New Zealand, the fourth quarter GDP rose 0.9% quarter on quarter, above 0.6% increase expected. NZD/USD traded at 0.6750.

Major pairs

USD/JPY ↑0.13% 112.69
EUR/USD ↓0.04% 1.1220
USD/CAD ↓0.02% 1.3098
GBP/USD ↑0.05% 1.4266
USD/CHF ↑0.10% 0.9778
AUD/USD ↑0.70% 0.7605

 

[limyeeshin]

Edition 48｜March 21, 2016


The U.S. dollar rebounded from a five-month low against other major currencies on Friday after investors bought back dollars following a heavy selloff earlier of the week. The dollar found support from the increased expectation of price inflation by the recover in oil prices and the Fed’s dovish stances on growth forecast that instigates purchases of inflation-indexed government bonds. Fed president James Bullard also mentioned that low interest rates may be causing persistently low inflation, that the Fed’s current policy position remains extreme at its current level. The dollar still ended the week low by 1.09% at 95.07.

The dollar also edged up from 17 month lows against Japanese yen on Friday after Japanese Finance Minister Taro Aso mentioned that foreign exchange market moves are to be closely watched for the speculation. The Bank of Japan’s recent meeting minutes showed two proposals by policymakers, one to extend the bank’s measure of quantitative easing program and another to add negative rates to the asset purchases. The minute also had the BOJ’s final decision to adopt the negative interest rate. The dollar fell almost 2% against the yen in weekly basis, the steepest loss in five weeks. JPY/USD traded at 111.44.

The euro retreated from its five-week high gain against greenback on Friday after The European Central Bank Chief Economist Peter Praet mentioned that Eurozone’s interest rates could be even further lowered. Last week, the ECB approved a host of stimulus measures including lowering rates to negative territory and increasing the scope of quantitative easing program. EUR/USD traded in a wide range between 1.1206 and 1.1343 before settling at 1.1269, down 0.42%. The pair still gained more than 1% weekly, and 1.3% monthly against the dollar.

The Australian dollar held weaker in early Asia on Monday after parsing China policy views on prospects for monetary easing as Australia’s one of biggest trade partner China’s economic outlook is closely linked to the currency. On Friday, the Reserve Bank of Australia and Bank of Japan has reached an agreement for local currency swap to enhance the financial stability of the two nations. AUD/USD traded at 0.7594, down 0.18%. Meanwhile, the New Zealand dollar edged down against the dollar over the weekend to 0.6773 after hitting five-month high of 0.6874 on Friday.

In the week ahead, market players will be paying close attention to the U.S. fourth quarter GDP and durable goods orders to measure the health of economy for further indication of Fed’s rate hike this year. The Eurozone’s survey data for business activity will by also in focus to take the hint on region’s economy stability.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, March 21
Markets in Japan are shut for the national holiday.
The Eurozone is to release data on consumer sentiment followed by the data on current account.
The U.S. is to publish data on Chicago region’s manufacturing and national existing home sales for February. State Fed presidents are to speak at events throughout the day.

Tuesday, March 22
The Australia is to release fourth quarter’s housing price index. Also, Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in Sydney.
Japan is to publish data on PMI manufacturing and private sector on business activity.
In Germany, IFO institute is to report on business climate and ZEW institute is to publish March report on Germany and Eurozone’s business sentiment.
The Eurozone is to release data on manufacturing and service sector activity.
The U.K. is to publish bundle of data on consumer and producer price inflation, retail prices, and housing prices.
The U.S. is to release data on FHFA housing price index, preliminary manufacturing for March, and Richmond region’s manufacturing.

Wednesday, March 23
The U.S. is to release data on MBA mortgage applications, new home sales, and weekly report on oil inventories.

Thursday, March 24
New Zealand is to release its trade balance.
The U.K. is to publish data on retail sales.
In Germany, GfK is to report on consumer sentiments.
The U.S. is to release bundle of data on durable goods orders, core machinery orders, initial jobless claims, and PMI service sector.

Friday, March 25
Markets in New Zealand, Australia, U.K., Germany, Canada, and United states are shut for Good Friday.
Japan is to release data on core consumer prices.
The U.S. is to produce data on fourth quarter GDP growth final reading and business profits at the end of the day.

 

[limyeeshin]

Thursday 31 March 2016


U.S. dollar weakens with Fed’s dovish stance

The U.S. dollar fell to five month lows against other major currencies on Wednesday despite strong jobs report. The Federal Reserve Chair Janet Yellen commented at the Economic Club on late Tuesday that the global risks to the U.S. economy, including oil prices and uncertainty over China justifies a cautious approach to tightening monetary policy. The comments contrasted with recent hawkish statements from some of the Fed members who signaled the next rate hike could be as fast as next month. The ADP non-farm private employment however rose beyond expectation in February with 200,000 new jobs, compared to 194,000 forecasted. The greenback hit the lowest level since October at 94.64 by falling 0.57% and rebounded to 94.87 on Thursday.


Yen rises against greenback despite slowed production

Japanese yen rebounded against the U.S. counterpart despite huge drop in factory output as investors weighed more on Fed’s dovish statements. In Japan, provisional industrial production figures for February fell 6.2%, further drop from 6.0% expected. The Factory output posted the biggest drop in February since a massive earthquake and tsunami in 2011 hit the supply chain, giving fears toward risk of falling into a recession. Earlier on Tuesday, Japanese Prime Minister Shinzo Abe said he will proceed with planned sales tax hike in April unless the economy hits severe shock. The yen was broadly lower then rebounded after Fed’s dovish stances. USD/JPY traded at 112.47, slipping 0.20%.


Commodity currencies find support as oil prices rise

The commodity linked currencies found support from rebound in oil prices on a smaller than anticipated rise in crude oil stock piles. The fed’s dovish movements have also added gains to according currencies. CAD/USD rose 1.13% at 1.2923 and NZD/USD rallied 1.37% to a five month high of 0.6942. The AUD/USD pair hit 0.7702 and fell down to 0.7650 on Thursday after the disappointing home sales figure.


Euro extends its gains with faded expectations on U.S. rate hike

The euro added gains against the dollar as the extremely dovish comments from the Federal Reserve faded the expectations toward next rate hike in April. Meanwhile in the Eurozone, the European Central Bank Executive member Benoit Coeure emphasized that the negative rates are not the main tool as it looks for ways to boost sluggish inflation. He also added that it is unlikely that the ECB will begin offering direct cash to consumers as a way of bolstering economy. Earlier this month, the ECB has lowered its deposit rate further down negative territory. EUR/USD hit 1.1356, rising 0.59%.


Major pairs currently (Thursday update)

USD/JPY ↓0.08% 112.61
EUR/USD ↓0.22% 1.1313
USD/CAD ↑0.32% 1.3007
GBP/USD ↓0.31% 1.4333
USD/CHF ↑0.11% 0.9660
AUD/USD ↓0.35% 0.7645

 

[limyeeshin]

Edition 49｜April 4, 2016


The U.S. dollar closed the week with almost five-month lows against other major currencies on Friday despite stronger than expected economic reports. Investors weighed more to Federal Reserve’s dovish stances last week that the rate hike by Fed is less likely to be implemented in short-term. The U.S. Labor Department reported that the economy added 215,000 jobs last month, above the expectation of 205,000 jobs growth seen. The unemployment rate slightly went up to 5% from eight year low of 4.9% but it was seen as more people entered into the labor market. The average hourly earnings also rose by 7 cents following 2 cents drop in February. The ISM manufacturing index rose to 51.8 from 49.5 in previous month, showing first expansion in six months as new orders increased. The upbeat reports however did not alter investors’ expectations for Fed to remain cautious on monetary tightening as dovish comments were made by Fed members last week. The dollar itself closed the week down 1.65% with quarterly drop of 4.16%.

The euro hit fresh five-month highs against the greenback on Friday with Federal Reserve’s cautious movements. The EUR/USD pair hit 1.1437 before settling at 1.1389 in late trade with upbeat U.S. data. The euro has surged almost 5% against the U.S. counterpart as ongoing concerns on a sharp divergence in monetary policies are now fading. The euro shrugged off friction between the Greek government and the IMF on Monday, rising 0.09% to 1.1399. In the Eurozone, the manufacturing PMI rose to 51.6 in March from 51.4 in the previous month. The U.K. manufacturing rose to 51.0 in March, below the expected increase to 51.2. The euro was sharply higher against British pound, with EUR/GBP pair rallying 1.01% at 0.8004 on Friday.

The Australian dollar fell in Asia on Monday morning with disappointing economic data. In Australia, the MI inflation gauge for March was flat after 0.2% monthly drop in February. Also, building approvals for February jumped 3.1%, from the 2.0% gain seen monthly. The private house approvals dipped 1.2% in February and retail sales were also flat compared to 0.4% gain seen. AUD/USD traded at 0.7643, down 0.49. Elsewhere, the save haven yen rose against the dollar at 111.55 and Swiss franc also gained against the U.S. counterpart at 0.9580, up 0.38%.

In the week ahead, market players will be paying close attention to the Fed’s March meeting minutes giving insights how officials digest the economic outlook. Also, there will be trade, manufacturing and service sector report releases in the U.S for further indication on the health of the economy.


Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, April 4
Markets in China are shut for the national holiday.
Japan is to release data on reserve base.
Australia is to release data on MI inflation, building approvals and retail sales.
The U.K. is to release data on construction sector.
In the Eurozone, Sentix is to report on investor sentiment followed by data releases on producer prices and unemployment rate.
The U.S. is to publish data on labor market condition index and factory orders.

Tuesday, April 5
Japan is to release data on PMI service sector.
Australia is to publish data on service sector and trade balance, followed by the central bank’s recent meeting minutes.
Germany is to release data on factory orders.
The Eurozone is to publish data on PMI service sector and retail sales.
The Bank of England is to release its recent monetary policy meeting minutes.
The U.S is to produce bundle of data on trade balance, PMI service activity and ISM non-manufacturing index.
Canada is to release its trade balance.

Wednesday, April 6
China is to publish Caixin index on service sector.
Germany is to release data on industrial production, construction activity, and retail sales.
The Eurozone is also to publish retail sales data.
In the U.S., the Federal Reserve is to release its recent monetary policy meeting minutes.

Thursday, April 7
The Swiss National Bank is to release its foreign currency reserves.
Australia is to release data on construction activity.
The U.K. is to publish data on house price index.
In the Eurozone, the European Central Bank is to publish its recent monetary policy meeting minutes.
Canada is to release data on building permits.
The U.S. is to produce data on weekly initial jobless claims and consumer sentiments.

Friday, April 8
Japan is to release data on consumer sentiment.
Germany is to publish data on trade balance and current account.
The U.K. is to release data on manufacturing production.
Canada is to publish monthly report on employment and followed by data on new starts.
The U.S. is to close the week with the wholesale inventory data.

 

[limyeeshin]

Thursday 7 April 2016



Dollar edges down after Fed’s minutes
The U.S. dollar trimmed down further against other major currencies after the Federal Reserve’s recent monetary meeting minutes showed majority number members taken dovish stances. The minutes highlighted cautious approach toward future interest rate hikes. It also implied that the Federal Reserve appears less likely to raise the rates before June due to ongoing concern on global economic slowdown. The minutes also showed debate over whether it is appropriate to raise rates in April. The committee held steady for funds rate at 0.25% to 0.50% on a 9-1 vote. The dollar hit 18 month lows against the yen at 109.34 on Thursday before settling at 109.83, down 0.50%. The greenback itself fell 0.13%, to 94.49.


Aussie gains despite disappointing construction data
The Australian dollar gained against the U.S. counterpart in early Asia on Thursday as investors lowered their expectations for next rate hike in sooner period. In Australia, AIG construction index came in at 45.2, contracting from 46.1. The construction activity contracted consecutively and at a steeper pace with house-building falling sharpest in 14 months. AUD/USD pair rose 0.20%, traded at 0.7612.


Euro inches up against the greenback following the minutes
The euro also inched up against the dollar after the FOMC minutes release, debating appropriate timing of rate hike. EUR/USD pair traded in a tight range between 1.1327 and 1.1431 before settling at 1.1397. The euro rallied for five days laws week following the losing streak. EUR/USD closed above 1.13 for the sixth consecutive sessions. The euro as soared 2.4% since the Federal Reserve lowered its outlook for its long-term interest rate hike. The European Central Bank is to release its recent monetary policy meeting minutes today followed by the ECB Governor Mario Draghi’s speech.


Yen gains sharply after Kuroda’s comments
Japanese yen gained sharply on Thursday in Asia with safe-haven asset buying despite verbal warnings from Japanese officials against its appreciation. Earlier the week, the Prime Minister Shinzo Abe interviewed with Wall Street Journal that countries should avoid seeking to weaken their currencies with arbitrary intervention. Also, Bank of Japan Governor Haruhiko Kuroda remarked that he would act quickly to boost stimulus measures if necessary. Bank of Japan policymakers will likely to debate on further easing at their upcoming meeting on April 27. The yen hit highest level against the dollar since October 2014 at 109.17 on Thursday.


Major pairs currently (Thursday update)
USD/JPY ↓0.50% 109.24
EUR/USD ↑0.02% 1.1399
USD/CAD ↓0.14% 1.3074
GBP/USD ↓0.08% 1.4111
USD/CHF ↓0.02% 0.9555
AUD/USD ↑0.04% 0.7600
NZD/USD ↓0.02% 0.6822

 

[limyeeshin]

Edition 50｜April 11, 2016


Japanese yen rallied to fresh 17-month highs on Monday with little signs of abating despite comments by Japan’s finance minister aimed at weakening the currency. Chief Cabinet Secretary Yoshihide Suga announced that the government was closely monitoring the foreign exchange market, noting the yen moves were speculative and one-sided. The unwelcome gain in the yen increased the pressure on the authorities to take steps. The verbal intervention however has yet limited the impact on gains as the yen is hardly strong at current levels. Part of the reason for the yen’s rally also comes from reduced expectations on U.S. rate hike by Federal Reserve’s dovish stances. The U.S. dollar fell as low as 107.63, beating last week’s lows of 107.67 and extended last week’s sharp drop of 3.3%. The dollar has lost 10% against the yen this year. Also, EUR/JPY traded at 122.95 falling 3.1% last week, while GBP/JPY hit 2.5-year low of 151.88 on last Thursday.

The U.S. dollar has been hit with increased views that the Federal Reserve is likely to take a cautious approach on next rate hike in the coming months. The Federal Reserve Bank of Atlanta said that U.S. GDP has hardly grown during the first quarter. The first GDP grew, 0.1% below 0.4% forecasts and there were sharp declines in wholesale trade sector in February. Meanwhile, the Fed Chair Janet Yellen tried to reassure investors on Thursday that the U.S. economy remains on solid footing and the hesitancy of rate hike comes from increased global financial risks. The dollar index fell 0.3% at 94.22 late Friday.

The euro touched highest level since last October against the U.S. counterpart, soaring more than 2.6% in one month. While increased views on the U.S. Federal Reserve to take cautious steps for raising interest rates for the short term with dovish stances, the European Central Bank senior officials reiterated that further monetary stimulus measures will be implemented if necessary. EUR/USD settled at 1.1402, up 0.22% on late Friday session.

The commodity linked currencies generally strengthened with rally in oil prices. AUD/USD was up 0.67%, trading at 0.7555 and NZD/USD also rose to 0.6806, up 0.46%. The Canadian dollar also hit one week highs, supported by the strong Canadian jobs report. USD/CAD traded at 1.2978, falling 1.29%.

In the week ahead, market players will be paying close attention to upcoming inflation reports from the U.S., Europe and China. On Friday, Chinese first quarter growth will be also closely watched amid ongoing concerns on economy slowdown.


Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, April 11
Japan is to release data on core machinery orders.
China is to publish data on consumer and producer price inflation, and foreign direct investments.
Australia is to release data on home loans.


Tuesday, April 12
Japan is to publish data on bank loans and factory machinery orders.
In Australia, NAB is to report on business confidence.
Germany is to release data on consumer price inflation.
The U.K. is to publish data on consumer and producer price inflation, and retail price index.
In the U.S., data on import and export prices is to be released.


Wednesday, April 13
Japan is to release producer price index for March.
China is to publish its trade balance.
In Australia, Westpac is to report on consumer sentiments.
Eurozone is to release data on industrial production.
Bank of Canada is to hold monetary policy meeting and announce its benchmark rate with rate statements. It is widely expected to keep the rate at 0.50%.
The U.S. is to release bundle of reports on mortgage, retail sales, producer price inflation, and business inventory.


Thursday, April 14
Australia is to release its monthly report on employment.
The Eurozone is to publish report on consumer price inflation with revised core consumer prices.
The Bank of England is to hold monetary policy meeting and announce its benchmark rate with minute release.
Canada is to publish data on new housing prices.
The U.S. is to report on consumer price inflations followed by weekly initial jobless claims.


Friday, April 15
China is to release data on industrial production, retail sales, fixed asset investment, and first quarter GDP growth.
The Reserve bank of Australia is to report on financial stability.
Eurozone is to publish data on trade balance.
The U.S. is to report on New York state manufacturing, industrial production, and consumer sentiment.

 

[limyeeshin]

Thursday 14 April 2016



U.S. dollar rebounds despite slow economic reports

The dollar hit one-week highs against other major currencies despite disappointing U.S. economic data, recovering from sharp loss in previous week. In the U.S., March retail sales fell by 0.3% following 0.1% drop in earlier month and compared to 0.1% gain expected. Core retail sales also rose 0.2%, below the expectations of 0.4% rise. Another report of producer prices fell by 0.1% in March, disappointing 0.4% gain expected. The producer prices slipped 0.1% in yearly basis, below 0.3% increase seen. Core PPI also slipped 0.1%, compared to expected 0.1% uptick. The dollar however rebounded from its previous sharp loss from Federal Reserve’s dovish stance toward next hike last week. USD/JPY pair gained 0.51%, traded at 109.19. The dollar’s strength was up 0.67% against other major currencies at 94.65.

The euro drops sharply as dollar bounces

The euro fell sharply against the dollar, hitting its lowest level in two weeks as strong China exports buoyed slumping of the dollar. The release of strong economic data reduced the concerns against the global economy slowdown. The dollar boosted after the Chinese government reported that exports sharply rose by 11.5% in March, beating 2.5% gains seen and following 25% collapse in previous month. The upbeat report bolstered investor confidence and bolstered the dollar. The EUR/USD pair was affected by the dollar’s bounce and fell 0.93%, traded at 1.1277.

Aussie gains with limit despite improved jobs report

The Australian dollar was bullish in early Asia on Thursday ahead of jobs report as widely expected to improve. The Australian employment report came in at 26,100 jobs added, above 20,000 gains expected. The unemployment rate also fell to 5.7% from 5.9%. The Aussie shrugged off upbeat data as Singapore dollar eased that added concerns on Asian currencies growth. AUD/USD traded at 0.7647, down 0.08% from early trade.

Major pairs

USD/JPY ↑0.04% 109.38
EUR/USD ↓0.10% 1.1264
USD/CAD ↑0.28% 1.2852
GBP/USD ↓0.44% 1.4141
USD/CHF 0.00% 0.9669
AUD/USD ↓0.09% 0.7660

 

[limyeeshin]

Edition 51｜April 18, 2016


The U.S. dollar shortened its gain against other major currencies on Friday after the release of downbeat U.S. economic reports. The U.S. industrial production fell by 0.6%, worse than expected drop of 0.1%. Manufacturing sector fell by 0.3% and capacity utilization rate also fell to 74.8%, below 75.4% expected and from 75.3% in previous month. Another report from University of Michigan of consumer sentiment came in at 89.7 in April, compared to 91.0 in March and disappointing expectation of 92.0. Economy sentiment also fell to 105.4 from 105.6. The release of blunt reports supported the view that the Federal Reserve is likely to continue cautious stances toward future rate hike. The dollar itself fell 0.27% against other major currencies, but was still up 0.46% for the week. EUR/USD pair shortened its loss by 0.17%, but still ended the week down 1.06%. USD/JPY also slid 0.6% to 108.77, but with 0.44% gain on the week.

Commodity linked currencies slumped early on Monday after global oil producers failed to agree on an output freeze. A deal to freeze oil production by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia protested that all OPEC countries including Iran should join the agreement, but Iran did not join the meeting. The Failure in freezing agreement led the oil prices dropped over 6% with crude sliding to $37.68 a barrel, while Brent dropped to $40.18 per barrel.

Investor rushed to safe-haven yen and EUR/JPY pair hit three-year highs at 122.00 before settling at 122.25. Canadian dollar and Australian dollar both fell more than 1% in early trade. Previously, commodity linked currencies were generally higher with improved China’s economy. The Aussie rallied more than 2% with lowered views on rate cut by the central bank with improved data. NZD/USD also gained 1.5% for the week at 0.6916. In NZ, the first quarter consume report came in line with expectation on Monday, and slid 0.16% with the oil price impact.

In the week ahead, investors will pay attention to the European Central Bank’s monetary policy meeting on Thursday followed by data on private sector activity on Friday.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, April 18
New Zealand is to release data on consumer price inflation.
China is to report on housing prices.
The U.S. is to publish housing market index.
Canada is to release data on foreign securities purchases.


Tuesday, April 19
The Reserve Bank of Australia is to release its recent monetary policy meeting minutes.
In Germany, ZEW Institute is to report on economic sentiment in the Eurozone.
Eurozone is to release data on construction production.
The U.S. is to publish data on housing starts and building permits.
The Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in New York.


Wednesday, April 20
Japan is to publish data on trade balance and machinery orders.
In Australia, Westpac is to release composite leading index.
The U.K. is to report on unemployment rate and average weekly earnings.
Germany is to release data on producer price inflation.
Canada is to publish data on wholesale sales.
The U.S. is to release data on existing home sales.


Thursday, April 21
Australia is to release NAB economic sentiment report.
The U.K. is to publish data on retail sales.
In the Eurozone, the ECB is to hold monetary policy meeting and announce its policy decision followed by a press conference with President Mario Draghi.
The U.S. is to release data on initial jobless claims and Philadelphia and Chicago region manufacturing.


Friday, April 22
Japan is to release Nikkei manufacturing report.
Eurozone is to publish data on manufacturing and service sector.
Canada is to release data on core consumer price inflation and core retail sales.
The U.S. is to close week with release of PMI manufacturing index.