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AceTraderfx
09-23-2013, 09:13 AM
AceTraderfx Sept 23: Dollar rises against yen on hawkish comments from Fed's Bullard

Market Review - 22/09/2013 23:24GMT

Dollar rises against yen on hawkish comments from Fed's Bullard

The greenback strengthened against yen on Friday after St. Louis Fed President James Bullard said it is possible to taper stimulus measures in October, depending on U.S. economic data.

Versus the Japanese yen, although the greenback dropped briefly to 99.17 in Asian session, the pair traded narrowly in Europe but then pierced through Thursday's high at 99.63 to 99.67 in New York morning due to the comments from Fed's Bullard as he said policy changes were possible at the Fed's October meeting depending on U.S. economic data.

St. Louis Fed President James Bullard said 'the transparency cat is out the bag" for the Fed; increase in rates over the summer was "a surprise" for many FOMC; don't want to lose the focus on inflation; we should defend our inflation target from the low side; October meeting is live, policy changes possible depending on U.S. economic data.'

The single currency traded narrowly in Asia as several centres in the Far East were closed for holiday. Although price edged higher briefly to 1.3549 in European morning, euro then ratcheted lower to 1.3507 in New York morning, price later dropped to session low at 1.3498 in New York morning on dollar's broad-based strength before cross-buying of euro lifted price back to 1.3537.

Although the British pound edged higher from Thursday's low at 1.6022 in Asia and climbed to 1.6067 in European morning, renewed cross selling of sterling versus euro and yen pressured the pair below 1.6022 to 1.5990 and then marginal lower to 1.5986 in New York morning before staging a recovery to 1.6027 later in the day.

In other news, BoJ governor Kuroda said 'BoJ will maintain aim of QE for as long as needed to stably achieve 2% inflation'; 'hope to offset upward pressure on JGB yields from Japan's economic improvement; Japan's domestic demand likely to remain strong, economy steadily heading toward meeting BoJ price goal.' Italy Economic Minister Saccomanni said 'lower yields depend on political stability, continued reforms; important slight overshoot in 2013 deficit is corrected quickly; risks to growth recovery are fiscal slippage, lack of reforms, high yields, political instability.'

On the data front, U.K. PSNB and PSNCR came in at 11.5B and -3.0B, versus the forecast of 11.09B and 5.2B respectively. Eurozone consumer confidence came in at -14.9, weaker than the forecast of -14.5.

Data to be released next week :

China HSBC manufacturing PMI, France service PMI, manufacturing PMI, Germany Service PMI, manufacturing PMI, EU service PMI, manufacturing PMI, U.S. Chicago Fed index, Markit PMI on Monday. Japan's financial markets will be closed due to public holiday.

U.K. BBA mortgage approvals, Germany IFO business climate, current assessment, Canada retail sales, U.S. retail sales, house price index, S&P house price index, consumer confidence on Tuesday.

New Zealand trade balance, exports import, Japan machine tool orders, Swiss consumption indicator, France business climate, Italy consumer confidence, U.K. CBI distributive trades, U.S. durable goods, new home sales on Wednesday.

France consumer confidence, U.K. current account, GDP, U.S. GDP, PCE core, jobless claims, personal consumption, pending home sales on Thursday.

Japan CPI, U.K. consumer confidence, business barometer, France GDP, Swiss leading indicator, EU business climate, economic sentiment, consumer confidence, Germany CPI, HICP, U.S. personal income, personal spending, PCE , University of Michigan consumer confidence on Friday.

AceTraderfx
09-24-2013, 02:13 AM
Market Review - 23/09/2013 22:10GMT

Euro weakens on weaker-than-expected manufacturing PMI

The single currency opened higher and rose to an intra-day high of 1.3555 at New Zealand open after voters in Germany gave Angela Merkel a third term as Chancellor in elections held on Sunday. Price retreated in Asian morning and traded sideways before falling to 1.3508 in European morning after the release of weaker-than-expected Germany and EU manufacturing PMI data. Euro remained under pressure in New York morning and dropped to a session low at 1.3480 before stabilising.

Germany manufacturing PMI (flash) in September came in 51.3, worse than the forecast of 52.2. EU manufacturing PMI (flash) in September came in 51.1, worse than the forecast of 51.8.

Versus the Japanese yen, the greenback remained under pressure in Asia and retreated to 98.86 in European morning on continued expectations that the Fed will not taper its bond purchases anytime soon. Price dropped to an intra-day low at 98.65 after Federal Reserve Bank of New York President William C. Dudley said policy makers must “forcefully” push against economic headwinds.

The British pound traded with a firm undertone in Australia and strengthened to 1.6032 in Asian morning before rising to an intra-day high at 1.6073 due to cross-buying of sterling vs euro (eru/gbp fell from 0.8475 to 0.8404). However, price pared intra-day gains and retreated to 1.6017 in New York morning before stabilising.

In other news, ECB's Draghi said 'expects recovery to continue in current quarter despite weak industrial production in July; underlying price pressures in Euro zone expected to remain subdued; inflation risks are broadly balanced; ECB monetary policy stance will remain accommodative for as long as necessary.'

On the data front, U.S. Markit PMI preliminary (Sep) came in at 52.8, vs the forecast of 54.0. U.S. Chicago Fed index (Aug) came in at 0.14, vs the forecast of -0.05, previous reading is revised to -0.43.

Data to be released on Tuesday :

U.K. BBA mortgage approvals, Germany IFO business climate and current assessment, Canada retail sales, U.S. retail sales, house price index, S&P house price index and consumer confidence.

AceTraderfx
09-25-2013, 01:53 AM
Market Review - 24/09/2013 22:13GMT

Euro slips on concerns over economic recovery in euro zone

The single currency weakened against the greenback on Tuesday after German sentiment data came in slightly below expectations and comments from ECB officials saying they were prepared to do more to keep interest rates low.

Although the single currency traded sideways in Asia and rose briefly to session high at 1.3519 in early European morning, euro retreated after the release of weaker-than-expected German business climate and dropped to an intra-day low at 1.3464 after comments from ECB's Coeure. However, euro pared intra-day losses and rebounded to 1.3497 in New York morning before stabilising.

Germany Ifo business climate (Sep) came in at 107.7, versus the forecast of 108.0, previous reading is revised to 107.6

ECB's Coeure said 'ECB is committed to make sure liquidity will remain ample; LTRO is part of ECB's instruments.'

Versus the Japanese yen, the greenback rose to session high at 99.18 in European morning after comments from Fed's Dudley yesterday increased speculation that the Federal Reserve could still taper its bond purchases this year. However, dollar met renewed selling there and dropped sharply to an intra-day low at 94.48 in New York morning but only to climb back to 99.01 later in the day due to renewed cross-selling of yen.

The British pound remained under pressure in Asia and dropped sharply in early European morning after the release of weaker-than-expected U.K. mortgage approvals. Price eventually fell to an intra-day low at 1.5955 at New York open, however, cable pared intra-day losses and rebounded to 1.6016 in New York morning.

U.K. BBA mortgage approvals (Aug) came in at 38.2K, vs the forecast of 39.0K, previous reading is revised to 37.4K.

In other news, BoE's Miles said 'degree of slack in U.K economy means monetary policy won't quickly return to normal; market sees unemployment reaching 7% threshold more quickly than he considers likely; idea that guidance has backfired because of better data is "Alice in wonderland, upside down logic"; more confident about path to recovery than at any time since he joined MPC in 2009.'

On the data front, U.S. consumer confidence (Sep) came in at 79.7, worse than the forecast of 80.0, previous reading is revised to 81.8. U.S. Redbook retail sales came in at -0.4% m/m n 3.6% y/y.

Data to be released on Wednesday:

New Zealand trade balance, exports and import, Japan machine tool orders, Swiss consumption indicator, France business climate, Italy consumer confidence, U.K. CBI distributive trades, U.S. durable goods, and new home sales on Wednesday.

AceTraderfx
09-26-2013, 02:33 AM
Market Review - 25/09/2013 22:19GMT

Dollar weakens broadly on U.S. government shutdown fears

The dollar weakened across the board on Wednesday, weighed down by worries about gridlock in Washington on the U.S. budget that could lead to a government shutdown next week.

Although the single currency briefly retreated to 1.3462 in Asian morning, euro rallied to 1.3520 in European morning on dollar's weakness. Later, despite a pullback to 1.3494 in New York morning, renewed buying lifted the pair and price rose to session high at 1.3538 at New York midday before easing.

The British pound dropped to session low at 1.5980 in Asian morning, however, dollar's broad-based weakness lifted the pair and cable rallied in European morning, helped by the release of better-than-expected U.K. CBI distributive trades and eventually hit an intra-day high at 1.6088 in New York session before trading sideways. U.K. CBI distributive trades (Sep) came in at 34, better than the forecast of 23.

Versus the Japanese yen, the greenback remained under pressure in Asia and weakened to an intra-day low at 98.38 in European morning on concerns over U.S. budget negotiations. Dollar later pared intra-day losses on renewed cross-selling of yen and staged a recovery to 98.82 in New York morning before falling near New York close.

In other news, ECB's Asmussen said 'ESM treaty will have to change before it can be used for bank recapitalization.'

On the data front, U.S. durable goods (Aug) came in at 0.1%, versus the forecast of 0.0%, previous reading was revised to -8.1%; U.S. durable goods ex. transport (Aug) came in at -0.1%, versus the forecast of 1.0%, previous reading was revised to -0.5%; U.S. ex. defense (Aug) came in at 0.5%, previous reading was revised to -7.5%. In a separate report, U.S. new home sales (Aug) came in at 0.421M and 7.9% m/m, better than the forecasts of 0.420M and 6.6% m/m respectively.

Data to be released on Thursday:

France consumer confidence, U.K. current account, GDP, U.S. GDP, PCE core, jobless claims, personal consumption and pending home sales.

AceTraderfx
09-27-2013, 02:10 AM
Market Review - 26/09/2013 22:18GMT

Dollar rises against other major currencies on upbeat U.S. data

The greenback strengthened against majority of its peers on Thursday after data showed jobless claims dropped last week to a near 6-year low, this upbeat data increased speculation of the Federal Reserve will strat tapering its bond purchases at its October or December FOMC meeting.

The single currency remained under pressure in Asia and dropped to 1.3486 in European morning before trading sideways, euro staged a recovery to 1.3511 in New York morning. However, price met renewed selling there and later fell to session low of 1.3472 at New York midday.

Versus the Japanese yen, the greenback rallied in Asian morning to 99.11 on speculation of Japan's government will cut corporate taxes. However, price pared intra-day gains and retreated to 98.51 in European morning before rising to session high at 99.14 in New York morning, helped by the release of better-than-expected U.S. GDP data, jobless claims and pending home sales.

U.S. GDP annualised (Q2 final) came in at 2.5% versus the forecast of 2.6%. U.S. jobless claims came in at 305K versus the forecast of 325K, previous reading was revised to 310K. In a separate report, U.S. pending home sales (Aug) came in at -1.6% month/month, worse than the forecast of -1.0% m/m, previous reading was revised to -1.4% month/month.

The British pound edged higher to session high at 1.6096 in early European morning, however, cabled tumbled after release of trade data which showed deficits widened in Q2 and U.K. annual GDP showed economic growth was less than early estimate, damping optimism the U.K. recovery is gathering momentum. Price continued to drop in New York morning after the release of U.S. economic data to an intra-day low at 1.5999 (Reuters) before staging a short-covering rebound to 1.6043 in New York afternoon.

In other news, ECB's Constancio says 'easy for ECB to absorb excess liquidity in financial system, when desired; will keep key interest rates stable or lower for extended period of time; if there is upward pressure on short-term market rates, we still have tools to react.'

Data to be released on Friday :

Japan national CPI and Tokyo CPI, U.K. nationwide house prices, Gfk consumer confidence, business barometer, France GDP, Swiss KOF leading indicator, EU business climate, economic sentiment, consumer confidence, Germany CPI and HICP, U.S. personal income, personal spending, PCE , and University of Michigan consumer confidence.

AceTraderfx
10-02-2013, 02:43 AM
Market Review - 01/10/2013 22:10GMT

Dollar pares losses after ISM manufacturing data

The dollar weakened against other major currencies on Monday as concerns over the economic impact of a U.S. government shutdown weighed on investor demand for the greenback, however, data showed that the U.S. manufacturing sector expanded at the fastest rate since April 2011 last month and dollar pared earlier loss in New York trading.

U.S. government went into a partial shutdown after Congress failed to reach a deal on a budget for the new fiscal year. Republicans have insisted on delaying the implementation of President Obama's health care reforms as a condition for passing the budget.

During the day, although the single currency rose to a fresh near 8-month peak at 1.3588 in early European trading, profit-taking pressured price lower from there and euro dropped to 1.3535 after EU's release a lower than previous manufacturing PMI data, then 1.3517 in New York morning on dollar's broad-based rebound before stabilising.

In the eurozone, a report showed that the final reading of the bloc's manufacturing purchasing managers' index came in at 51.1 in September, unchanged from the preliminary estimate, but below August’s 26-month high of 51.4.

Versus the yen, dollar went through another volatile session against the yen on Tuesday. Despite an initial gain to 98.73 on the back of rising Nikkei 225 index in Asia, dollar's broad-based weakness pressured price to a session low of 97.65 in Europe before staging a strong rebound on short-covering. The pair later climbed back to 98.30 in New York morning after release of upbeat ISM manufacturing data before easing and then traded sideways for rest of the session.

The British pound strengthen after finding support at 1.6181 in Asia and then rose above Monday's high of 1.6203 to a fresh 8-1/2 month high of 1.6260 in early European trading before retreating, dollar's broad-based rebound later pushed price lower in New Yok morning and cable fell to 1.6190 before stabilising.

In commodity currency, the Australian dollar rallied after RBA kept monetary policy unchanged on Tuesday, surged from 0.9289 to 0.9435 before profit-taking emerged. RBA kept its rate unchanged at 2.50% and said 'monetary policy appropriate; lower A$ would help economy; see below trend growth continuing in near term; A$ still about 10% below its April level despite recent rise; unemployment rate has edged higher; pace of borrowing still subdued; sees improvement I household n business sentiment though too soon to judge how persistent this will be.'

In other news, BoE's Tucker said 'regular stress testing of U.K. banks would improve BoE supervision, confidence in banks; stress testing would improve BoE's accountability to parliament, create healthy debate about supervision objectives; Basel capital accord could be recast to differentiate between going-concern and gone-concern requirements; banking regulators should address international distribution of losses in a crisis.'

Data to be release on Wednesday:

Australia trade balance, building approvals, U.K. PMI construction, EU PPI, ECB rate decision, U.S. ADP employment.

AceTraderfx
10-03-2013, 01:59 AM
Market Review - 02/10/2013 22:14GMT

Euro strengthens to a fresh near 8-month peak against the dollar on Wednesday

The single currency rose to a fresh near 8-month peak against the dollar on Wednesday after Italy's prime minister survived a confidence vote, while comments by ECB President Mario Draghi also boosted the pair. Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday, after Silvio Berlusconi dropped his opposition to the coalition, in a surprise U-turn after announcing Saturday that he was pulling his ministers out of the government.

During the day, although euro edged lower from Tuesday's high of 1.3589 in early Asian trading, the pair found support at 1.3507 and then rebounded to 1.3539 in European morning. Later, euro briefly dropped to 1.3505 after ECB kept interest rate on hold at 0.50% but 'euro-supportive' comments by ECB's President Mario Draghi lifted price sharply higher to a fresh multi-month high at 1.3608 in New York morning before easing.

ECB's Draghi said 'underlying price pressures in Euro zone expected to remain subdued; confidence indicators confirm expected gradual improvement in economy; ECB monetary policy stance geared towards maintaining warranted degree of monetary accommodation; ECB monetary policy stance will remain accommodative for as long as necessary; ECB expects key interest rates to remain at present or lower levels for extended period; will remain particularly attentive to implications to monetary policy stance; 'inflation path is developing as expected; will have to look through medium-term inflation and decide about interest rates, or other steps'

Versus the yen, dollar remained under pressure in Asia on the back of decline in Nikkei 225 index and then fell to 97.26 before recovering, however, another round of selling on dollar due to a combination of political deadlock in the U.S. and a weak private sector jobs report weighed on greenback and dollar later dropped to a fresh session low of 97.15 in New York morning.

U.S. ADP in September came in at 166K, worse than the forecast of 180K.

Although the British pound initially fell to session low 1.6162 in Asian morning, cross-related buying of sterling versus euro lifted price to 1.6227 in European and cable later climbed higher in tandem with euro to 1.6252 (near Tuesday's 8-1/2 month peak at 1.6260) in New York morning on dollar's broad-based weakness after disappointing U.S. jobs data.

In other news, BoE's Fisher says 'unemployment could hit 7% a year earlier or later depending on small changes in assumptions; "extremely serious" if U.S. shutdown means debt interest paid; better to hold QE in reverse in case economy falters.'

Data to be released on Thursday:

China non-manufacturing PMI, Italy service PMI, France service PMI, Germany service PMI, U.K. service PMI, EU service PMI, retail sales, U.S. jobless claims, factory orders, ISM non-manufacturing, durable goods on Thursday. China and Germany financial market is closed due to public holiday.

AceTraderfx
10-07-2013, 03:15 AM
Market Review : Oct 7, 2013

Data to be released this week:

Monday : Japan Leading indicators, BOJ's monthly economic report, Germany WPI, EU Sentix investor confidence, Canada Building permits. China financial market is closed due to public holiday.

Tuesday : Australia NAB business condition, NAB business confidence, Japan Current account, Economic watch DI, China HSBC Markit Service PMI, Swiss Unemployment rate, CPI, retail sales, UK BRC retail sales, RICS house prices, Germany Trade balance, current account, export, import, factory orders, France trade balance, Canada housing starts, trade balance, exports, imports, US trade balance, redbook retail sales.

Wednesday : Australia Westpac consumer confidence, Japan Machine tools orders, UK Industrial production, Manufacturing production, trade balance, Germany Industrial production, U.S. Wholesale inventories, Wholesale sales, FOMC minutes.

Thursday : New Zealand PMI, Australia Employment change, Unemployment rate, Japan Tertiary industry index, Machinery orders, Consumer confidence, UK BOE asset purchase target, MPC rate decision, Germany Import price index, France industrial production, manufacturing production, Italy Industrial production, Canada New housing price index, U.S. Import price index, export price index, jobless claims, Fed budget.

Friday : Japan Domestic CGPI, Germany CPI, HICP, France current account, Italy CPI, HICP, Canada Unemployment rate, U.S. PPI, retail sales, University of Michigan consumer confidence, business inventories.

Dollar rebounds on weekend short-covering

Dollar strengthened broadly against the major currencies as investors locked in their profits on Friday, although concerns over the partial U.S. government shutdown still weighed on the greenback.

During the day, the single currency traded in a relatively narrow range below Thursday's near 8-month peak at 1.3646 in Asia and then came under pressure in Europe on long liquidation. Euro dropped to 1.3580 in New York morning and intra-day decline accelerated once support at 1.3577/87 was penetrated due to dollar's broad based rebound at European closing, price tumbled to session low of 1.3538 before stabilising in New York afternoon.

Versus Japanese yen, the greenback initially rebounded to 97.40 in Asian morning and then retreated after the Bank of Japan decided to hold its monetary policy unchanged, dollar dropped to 96.96 in European morning but greenback's broad-based rebound in New York trading lifted price. The pair later climbed to a fresh session high of 97.49 in New York afternoon and closed near its day's high.

Bank of Japan’s governor Haruhiko Kuroda says 'BoJ will take policy response if overseas tail risks threaten Japan's recovery; current BoJ easing is enough to meet BoJ's policy target; government stimulus package will give significant boost to Japan's GDP growth.’

The British pound briefly recoevred to 1.6179 in Asian midday following Thurday's decline but cross-selling of sterling (especially versus euro and yen) quickly knocked price lower. investors continued to lock in their recent profits and sent cable tumbling to a one-week low of 1.6006 near New York close.

In other news, Fed's Fisher said 'the decision not to taper bond-buying in Sep was a "close call"; I personally feel the effectiveness of buying treasuries "isn't that high" and costs are large; I don't believe we would dare default; a default would disturb the entire financial market.' Fed's Lacker said 'Fed policy actions cannot necessarily counteract the effects fiscal policy uncertainty, falling productivity growth; recent recovery has shown "significant limits" on power on monetary policy to affect real economy.'

On the data front, Canada Ivey PMI (Sep) came in at 51.9, worse than the forecast of 52.9; EU PPI (Aug) came in at 0.0% m/m n -0.8% y/y, vs the forecast of 0.1% m/m n -0.6% y/y, previous reading is revised to 0.2% m/m n 0.0% y/y. Germany PPI (Sep) came in at -0.1% m/m n -0.5% y/y, vs the forecast of 0.1% m/m n 0.1% y/y.

AceTraderfx
10-08-2013, 01:47 AM
Market Review - 07/10/2013 22:19GMT

Data to be released on Tuesday :

Australia NAB business condition, NAB business confidence, Japan Current account, Economic watch DI, China HSBC Markit Service PMI, Swiss Unemployment rate, CPI, retail sales, UK BRC retail sales, RICS house prices, Germany Trade balance, current account, export, import, factory orders, France trade balance, Canada housing starts, trade balance, exports, imports, US trade balance, redbook retail sales on Tuesday.

Dollar weakens as U.S. political deadlock continues

The greenback weakened broadly against other currencies on Monday as the U.S. government shutdown entered a second week with few signs of a resolution in sight, fuelling fears over the risk of a possible U.S. debt default.

The single currency ratcheted higher from New Zealand low at 1.3553 against the dollar in Asia and climbed to 1.3591 in European morning, however, cross-selling of euro pressured the pair from there and price retreated after the release of weaker-than-expected EU Sentix investor confidence (6.1 versus the forecast of 8.5), euro dropped to session low at 1.3543 in New York Morning but only to rebound to 1.3585 later in the day due to broad-based weakness in greenback in New York afternoon.

The British pound also rose in tandem with euro at New Zealand open and ratcheted higher from at 1.6014 to 1.6048 in Asia and then eased to 1.6026 but renewed buying interest there lifted price higher in European trading. Cable later climbed higher again in part due to cross-buying of sterling versus euro and rose to 1.6101 in New York morning before easing.

Versus Japanese yen, the greenback remained under pressure in Asian trading due to the drop in Nikkei 225 index and then edged lower in European trading, price fell to 96.81 in New York morning before recovering. Later, dollar staged a brief bounce to 97.22 on short covering but only to weaken to a fresh one-month low of 96.67 near New York close.

In other news, ECB's Praet says 'Europe has problem of collective action; euro-area GDP won't return to 2007 level until post-2015; monetary policy alone can't create sustainable growth ; Europe's banking sector hasn't regained full trust; ECB has taken very little term risk on balance sheet; ECB has taken on relatively little credit risk; OMT program is different as is off balance sheet.' ECB's Asmussen says 'single bank supervision and resolution mechanisms should start at roughly the same time; Italy so far does not qualify for OMT programme; Italy's main problems is low growth potential, needs to continue with consolidation; OMT programme still ready to be activated if needed.' White house's Sperling says 'president has made clear he is willing to negotiate with congress, but not under threat of default.'

In the data front, Japan leading indicators (Aug) came in at 106.5, vs the forecast of 106.6. Canada building permits in Aug came in at -21.2%, worse than the forecast of -7.4%, previous reading is revised to 21.4%.

AceTraderfx
10-09-2013, 02:48 AM
Market Review - 08/10/2013 22:19GMT

Data to be released on Wednesday:

Australia Westpac consumer confidence, Japan Machine tools orders, UK Industrial production, Manufacturing production, trade balance, Germany Industrial production, U.S. Wholesale inventories, Wholesale sales, FOMC minutes.

Dollar ends mixed as U.S. political gridlock continues

The greenback fluctuated widely on Tuesday as hopes began to sprout that lawmakers will end a budget impasse that closed the government and threatened to derail efforts to lift the country's debt ceiling and avoid default.

The single currency initially retreated to 1.3558 in Asian trading before edging higher in European morning. The pair rose above Monday's high at 1.3591 to session high of 1.3607 in New York morning on greenback's broad-based weakness partly due to the comment from IMF’s chief economist Olivier Blanchard, however, euro later dropped back to 1.3571 as hopes began to build that parties from both sides may be willing to return to the negotiating table to find a way to fund the government as well as lift the debt ceiling and avoid default.

IMF's chief economist Blanchard says 'U.S. default could cause financial trauma, turn what is now a U.S. economic recovery into a recession.'

Versus the Japanese yen, despite initial selloff to 96.55 in Australian morning, the pair ratcheted higher in Asian trading, rose to 97.19 in Europe and then further to 97.25 in New York morning before retreating. Later, renewed cross-buying of yen pushed the pair lower and price retreated to 96.83 before stabilising.

Although the British pound edged lower from Asian high of 1.6099 and then tanked to 1.6019 in European morning, active cross-buying of sterling lifted price sharply higher and cable later penetrated Monday's high of 1.6101 to 1.6124 in New York morning before retreating on dollar's based rebound, dropped to 1.6070 in New York afternoon.

In other news, Fed's Plosser says 'the time has come for an expeditious phase-out of the purchase programme; disagreed with decision to delay tapering at September timing; delay in Tapering of asset purchases without clear justification undermines Fed credibility, efficacy of forward guidance; sees U.S. economy expanding 2.5% this year, 3% in 2014’ Fed's Pianalto says 'wanted to reduce asset purchases in September; very supportive monetary policy remains essential to support economy; it pays to be cautious with expanding QE3’ German government official says 'exiting expansive monetary policy will be a topic for central bank at G20/IMF meeting; exit from expansive monetary policy is necessary and should be communicated well.’

On the data front, German factory order in August came in at -0.3% m/m and 3.1% y/y, worse than the expectation of 1.0% and 4.0%, previous reading revised to -1.9% and 2.3%. China HSBC Markit Service PMI (Sep) came in at 52.4, versus previous month reading of 52.8. Canada housing starts in September came in at 193.6K, better than then expectation of 185.0K, previous reading revised to 184.0K.

AceTraderfx
10-10-2013, 02:19 AM
Market Review - 09/10/2013 22:26GMT

Data to be released on Thursday :

New Zealand PMI, Australia Employment change, Unemployment rate, Japan Tertiary industry index, Machinery orders, Consumer confidence, UK BOE asset purchase target, rate decision, Germany Import price index, France industrial production, manufacturing production, Italy Industrial production, Canada New housing price index, jobless claims.

Dollar strengthens broadly on Yellen's nomination as next Fed chief

The greenback rose against other major currencies on Wednesday amid relief buying on news that Federal Reserve Vice Chair Janet Yellen will replace Ben Bernanke as the head of the U.S. central bank.

Although the single currency briefly climbed to 1.3605 in Australian morning, dollar's broad-based firmness after news of Yellen's nomination as next Fed chief pressured price from there and the pair ratcheted lower in Asian trading. Euro traded sideways ahead of European opening and then fell to 1.3516 in Europe before recovering to 1.3536 on better-than-expected German industrial production (1.4% m/m and 0.3% y/y, versus forecast of 1.0% and -1.4%). Later, the pair dropped again in New York trading and tumbled to session low of 1.3486 after the release of mildly hawkish Fed's minutes.

Minutes of Sept meeting stated 'U.S. Fed decision not to reduce bond buying 'a relative close call for several voting members; most participants judged it would likely be appropriate to stat to taper QE3 this year, end it in mid-2014; concerns raised about effectiveness of FOMC communication given market expectations for reduction of QE; all FOMC member but one wanted more evidence of sustainable economic progress before trimming QE; a numbers stressed contingent, data-dependent nature of QE; members worried tighter financial condition could slow economy, labour market; participants discussed difficulties of explaining cut to QE in coming absent clearly stronger economic data; a few participants preferred to cut only treasuries buys when time comes.'

The British pound initially bounced to 1.6122 against the dollar ahead of Asian opening on Wednesday and then retreated in Asia. The pair continued to move lower in Asia and then tumbled below 1.6000 level in Europe after release of weaker-than-expected U.K. industrial production and manufacturing production data. Later, cable dropped further in New York trading and fell to 1.5916 in New York afternoon before recovering.

U.K. industrial production in August came in at -1.1% m/m n -1.5% y/y, vs the forecast of -0.4% m/m n -0.6% y/y, previous reading revised to 0.1% m/m n -1.1% y/y. U.K. manufacturing production in August came in at -1.2% m/m n 0.2% y/y, versus the expectation of 0.4% m/m n 1.0% y/y, previous reading revised to -0.3% y/y.

Versus Japanese yen, the greenback found support at 96.83 in Australia morning and then ratcheted higher in Asian session due to dollar's broad-based rebound. The pair climbed to 97.47 in European trading but renewed cross-buying of yen versus other currencies pressured price to 97.12 in New York morning. Later, dollar briefly rose to a session high at 97.65 in New York afternoon after relese of FOMC minutes before retreating near New York close.

In other news, ECB's Asmussen says 'don't have an exchange rate target, but look at its impact on economy; we still have room to move on interest rates; still have whole array of non-standard measures available.'

AceTraderfx
10-11-2013, 01:51 AM
Market Review - 10/10/2013 22:24GMT

Yen weakens broadly on improved risk appetite

The Japanese yen weakened broadly on Thursday as risk appetite increased due to hope for a breakthrough on an agreement to end the U.S. government shutdown and the raising of the debt ceiling, ahead of a deadline to avoid a sovereign debt default, and comment from Bank of Japan's governor Haruhiko Kuroda.

White House official said 'willing to look at House Republican debt proposal, wants debt limit extended for as long as possible; Obama is willing to negotiate on broad budget issues, but only after Congress ends shutdown, debt ceiling.'

Bank of Japan's governor Haruhiko Kuroda said '"premature" to discuss additional BoJ measures; BoJ prepared to do anything necessary on deflation; no target for exchange rate, monetary policy aimed at domestic policy of raising inflation to sustainable 2% level.'

Dollar found support at 98.26 versus the yen in Australian morning Thursday and ratcheted higher to 97.89 European morning. Later, the pair briefly dropped to 97.62 due to weaker-than-expected jobless claim data (374K vs the forecast of 310K) before rising to a session high at 98.28 on the comment from Bank of Japan's governor Haruhiko Kuroda in New York morning.

The single currency met renewed selling interest at 1.3528 in Australian morning and then dropped to 1.3588 in Asian trading. However, failure to penetrate Wednesday’s low at 1.3586 prompted short-covering and the pair rebounded to 1.3533 in European morning after European Central Bank (ECB) and the People's Bank of China (PBOC) agreed to establish a bilateral currency swap arrangement. Euro later climbed to 1.3547 in New York morning in part due to cross-buying of euro (especially versus yen) and weak U.S. job data and then moved in a choppy fashion for rest of the session. Eur/jpy rallied from 131.52 to as high as 132.95 before easing.

The European Central Bank (ECB) and the People's Bank of China (PBOC) have agreed to establish a bilateral currency swap arrangement to purchase and subsequently repurchase Chinese yuan and euro from each other. The swap agreement, which will be valid for three years, will have a maximum size of 350 billion Yuan when Yuan are provided to the ECB and of 45 billion when Euro are provided to the PBC.

Similarly, although British pound dropped below Wednesday’s low at 1.5916 to a 3-week low of 1.5914 in Asia, lack of follow-through selling prompted short-covering. Cable climbed higher in Europe after BOE kept its key rate at 0.5% and maintained asset purchase total at 375 billion sterling, price rose to 1.5973 after disappointing U.S. jobs data. Later, the pound briefly dropped to 1.5929 but only to ratchet higher to 1.5979 in New York afternoon.

In other news, ECB's president Mario Draghi says ' euro area outlook for nascent economy recovery; euro area pace of recovery subdued, uneven, fragile; euro area risks titled to downside; inflation expectation are firmly anchored; credit dynamic remains weak; it will be some time before credit creation spurred; monetary policy has to be supportive; ECB has adopted explicit communication on rates; ECB has committed to low rates for extended period; inflation will stay subdued in medium term; ECB counteracted and removed unwarranted breakup fears; forward guidance doesn't mean ECB is at lower bound; rate guidance focuses attention on mid-term inflation outlook; guidance helped anchor market expectations; rate expectation must not endanger economic recovery; path of policy rates conditional on inflation outlook; recovery remains in its infancy.’

Data to be released on Friday :

Japan Domestic CGPI, Germany CPI, HICP, France current account, Italy CPI,
HICP, Canada Unemployment rate, U.S University of Michigan consumer confidence on Friday.

AceTraderfx
10-15-2013, 01:50 AM
Market Review - 14/10/2013 22:20GMT

Dollar weakens on concerns over U.S. default

Dollar weakened against other major currencies on Monday as potential of U.S. sovereign default after U.S. lawmakers and the White House over the weekend failed to agree on a spending package needed to reopen the government and lift the debt ceiling continued to weigh on demand for the greenback. Trading volume was thin in American session due to U.S.'s Columbus Day holiday.

Although euro opened higher to a session high at 1.3566 against the dollar in New Zealand morning then climbed marginally higher to 1.3569 in Asian session, cross-selling of euro versus sterling pressured price and the pair dropped to 1.3546 in European morning. Later, dollar's broad-based weakness on concerns over U.S. default lifted price in New York morning and euro surged to a high of 1.3598 before retreating to 1.3560 on hopes for reaching agreement on debt ceiling.

The British pound also opened higher at 1.5981 in New Zealand and then rose to 1.5989 in Asian trading but retreated in tandem with euro and fell to 1.5955 in European morning. However, renewed buying interest emerged there and cable later rose to 1.6015 and then further to 1.6018 in New York morning before retreating to 1.5979 in part due to the comments from Bank of England deputy governor Designate Cunliffe.

BoE's Deputy governor Designate Cunliffe said on Monday that 'forward guidance mitigates risk of premature expectations of tighter monetary policy; unusual amount of uncertainty about potential for firms to increase output without talking on additional employees; abrupt normalization of interest rates could threaten financial stability; U.K. property market will be a key area of financial policy committee's domestic focus; expects firms to use up existing capacity before starting to hire when demand recovers; assets; do not agree we entering into a housing bubble; house prices need to be watched very carefully, should be dealt with if threatens financial stability; BOE may need loan to value powers in future, but stiff test first to see if only way to deal with house prices; second stage to help buy scheme may possibly create risk housings borrowing too much; need to keep a very close eye on lending standards under help to buy.'

Versus Japanese yen, dollar opened lower at 98.09 in New Zealand before rising Nikkei 225 index lifted price in Asia. Dollar rebounded to 98.35 and then traded sideways in Europe but cross-buying of yen pressured price to 98.09 again in New York morning but only to rise to 98.48 at New York midday on speculation for reaching agreement on U.S. debt ceiling.

In the other news, ECB's Asmussen said 'rolling over Greek gov't bonds would infringe ban on monetary financing of governments.'

On the data front, EU industrial production (Aug) came in at 1.0% m/m and -2.1% y/y, better than the forecast of 0.8% m/m and -2.4% y/y, previous reading revised to -1.0% m/m and -1.9% y/y.

Data to be released on Tuesday:

Australia RBA minutes, Japan industrial production, Capacity utilisation, France HICP, CPI, UK CPI, RPI, PPI, ONS house price, EU ZEW economic sentiment, Germany ZEW current condition, ZEW economic sentiment, U.S. Empire state manufacturing, Redbook retail sales, Canada existing home sales.

AceTraderfx
10-16-2013, 01:47 AM
Market Review - 15/10/2013 22:04GMT

Dollar trades mixed after suspension of U.S. Senate debt talks

Dollar traded mix versus major currencies on Wednesday as hopes for a deal to raise the U.S. debt ceiling and end the government shutdown diminishing. U.S. Senate Durbin said in New York afternoon that 'U.S. Senate fiscal negotiations suspended until House Republicans work out plan to proceed on debt limit, government funding.'

The single currency found support at 1.3550 in Asian trading and then rose to session high at 1.3571 in European morning. However, a growing optimism on U.S. debt ceiling deal pushed euro lower to a fresh 2-week trough at 1.3479 in European midday before stabilizing. Euro later rebounded to 1.3536 near New York close on news that U.S. Senate fiscal negotiations had suspended.

The British pound swung from gains to losses, Price initially dropped below Monday's low at 1.5955 to 1.5952 in Asian morning and then rebounded to 1.6010 in European morning after the release of higher-than-expected CPI data, which came in at 0.4% m/m and 2.7% y/y, versus street forecast of 0.3% and 2.6% respectively. However, cable met selling pressure there and price tumbled to a session low of 1.5915 in European midday. However, active broad-based buying of sterling in New York session helped price to recoup intra-day losses and cable climbed back to as high as 1.6000 near New York close.

Versus Japanese yen, despite a brief rise to 98.71 in Australia following rally in previous session, the greenback retreated on renewed cross-buying yen and dropped to 98.37 shortly after European open. Later, dollar rebounded to 98.69 but failure to penetrate said intra-day high prompted profit-taking. Price retreated to 98.39 and then tumbled to an intra-day low at 97.99 near New York close.

In the other news, BoE's Weale said 'considerable slack in U.K. labor market is exerting downward pressure on inflation; clear movement of half a percentage point in inflation expectation would be significant; 'forward guidance if not carefully designed can raise inflation expectation; my concerns about inflation expectations are forward guidance remain.'

On the data front, Fed's Empire state index in October came in at 1.52, vs the forecast of 7.00, the lowest since May. EU ZEW economic sentiment (October) came in at 59.1.Germany ZEW current condition (October) came in at 29.7, worse than the forecast of 31.3.Germany ZEW economic sentiment (October) came in at 52.8, better than the expectation of 49.6.

Data to be released on Wednesday :

New Zealand CPI, Australia Westpac leading economic index, U.K. claimant count, ILO unemployment rate, Average earnings, Swiss ZEW index, EU trade balance, CPI, U.S. CPI and net LT TIC.

AceTraderfx
10-17-2013, 02:41 AM
Market Review - 16/10/2013 22:19GMT

Dollar pares early gain after Senate deal

Dollar strengthened against other major currencies on Wednesday but this gain was limited after U.S. Senate reached a bipartisan deal. U.S. Senate majority leader Reid said 'bipartisan compromise reached in Senate to raise debt limit and reopen government.’

Although euro rose from 1.3506 in Asia and ratcheted higher in European trading, it climbed to a session high at 1.3567 in New York morning, dollar's broad-based rebound on optimism that the U.S. debt ceiling pressured price sharply lower and euro tumbled to a fresh 2-week low of 1.3472 before stabilising.
Later, the single currency rebounded after U.S. Senate reached a bipartisan deal and it climbed back to 1.3550 in New York afternoon.

With Japanese yen, the greenback retreated after rising to 98.63 in the Asian morning and then dropped to 98.25 in Europe. However, dollar's broad based rebound lifted price and the pair penetrated Tuesday's high of 98.71 in New York morning, then it surged to a session high at 98.98 before easing. Dollar later retreated to 98.60 in New York afternoon after Senate reached a bipartisan deal before stabilising.

Although cable rebounded after finding renewed buying interest at 1.5966 in Asia, it posted a brief rally to a session high of 1.6064 in Europe due to the release of better than the forecast U.K. job claimants data (-41.7K in September versus forecast of -25.0K). With active cross-selling of pound versus euro pressured price sharply lower from there and cable later tumbled on the back of greenback's broad-based rebound, it dropped to a fresh near 4-week low at 1.5894 in New York morning. But the British pound rose in tandem with euro in New York afternoon and it climbed back to 1.5970 before easing.

In other news, Bank of England's Spencer Dale said that '7% unemployment rate is not a target for Bank of England but a convenient point to consider on whether to raise rates; forward guidance increases monetary policy's effectiveness by making it more predictable. The U.K. economy looks set to grow even more quickly in H2 2013 than in H1 & the latest indicators suggest U.K. economy growing at annualized rate of 3-4%; with the levels of output and employment, not the growth rates, are the things that matter for monetary policy.
' The beige book from Federal Reserve stated 'U.S. economic activity continued to expand at a modest to moderate pace through September to early October but business contacts cautiously optimistic on outlook of the government shutdown, debt ceiling had increased uncertainty.'

On the data front, eurozone CPI for September came in at 0.5% m/m, & is as the expectation of 0.5%.
U.S. NAHB housing market index in October came in at 55, is worse than economists' expectation of 57.

Data to be released on Thursday:

ANZ consumer confidence index.
Australia NAB business confidence.
Japan machine tools orders.
EU current account; U.K. retail sales.
U.S. housing starts, building permits, jobless claims, industrial production, capacity utilization and Philadelphia Fed survey.

AceTraderfx
10-18-2013, 03:15 AM
Market Review - 17/10/2013 22:19GMT

Dollar weakens broadly despite U.S. budget agreement deal

The greenback tumbled broadly on Thursday as concerns over the effects of the U.S. government shutdown on the nation's economy weighed on the currency, despite news of a budget agreement to raise the debt ceiling, averting a default.

The single currency found support at 1.3516 in Australia and then ratcheted higher in Asian trading, price penetrated Wednesday's high at 1.3567 in Europe on speculation of U.S. government shutdown will damp growth and prompt the Federal Reserve to postpone tapering its stimulus program. Euro eventually rose to a fresh 8-month peak at 1.3682 in New York morning before easing due to some profit-taking.

Versus Japanese yen, although dollar briefly rose to 99.01 in Asian morning, cross-buying of yen pressured price there and dollar dropped to 97.81 in Europe due to greenback's broad-based weakness and then further to 97.74 in New York morning.

The British pound found support at 1.5940 in Australia and rallied across Asia and Europe due to dollar's broad-based weakness on worries over U.S. economy. The release of stronger-than-expected U.K. retail sales pushed price higher to 1.6097 and cable later rose further to 1.6173 in New York session before easing. U.K. retail sales (September) came in at 0.6% m/m and 2.2% y/y, better than economists’ forecast of 0.4% and 2.1% respectively.

In other news, Federal Reserve Bank of Dallas's President Richard W. Fisher said 'Fed can't deliver on full employment mandate unless U.S. congress, president fix fiscal "mess"; Wednesday's deal to end U.S. debt crisis does not solve fiscal problems, only postpones them; there is little remaining tolerance for U.S. fiscal malfunctioning; looking to Fed to solve U.S. economic ill could make situation worse; bond market starting to show United States the "back of it hand"; Fed will take "all appropriate measures" to preserve money market stability in times of acute stress; any Fed action to prevent market disruptions should not be seen as a fiscal fix; no amount of Fed bond-buying can offset U.S. fiscal "rot".'

On the data front, U.S. initial jobless claims came in at 358K, worse than the expectation of 335K, previous reading is revised to 373K. Philadelphia Fed index in October came in at 19.8, better than the forecast of 15.0.

Data to be released on Friday:

China GDP, industrial production, retail sales and fixed asset investing urban, Canada CPI.

AceTraderfx
10-21-2013, 01:50 AM
Market Review - 19/10/2013 00:51GMT

Dollar weakens broadly on dimming hopes of Fed tapering

The greenback fell against it peers on Friday as the negative impact of the two-week U.S. government shutdown sparked speculation that the Federal may not scale back its bond purchases in the near future.

The single currency traded narrowly in Asia following previous day's rally. Price then rose above Thursday’s high at 1.3682 to a fresh 8-1/2 month high of 1.3704 in European morning on dollar’s broad-based weakness. However, failure to re-test 2013 peak at 1.3711 (February) prompted profit talking, the pair briefly retreated to 1.3669 in New York morning and then euro rebounded to 1.3699 before trading narrowly in New York afternoon.

Versus Japanese yen, although the greenback staged a recovery initially at Tokyo open to 98.15, renewed selling interest there pushed price lower in Asian session. Dollar fell to session low of 97.55 at European midday on dollar's broad-based weakness before rebounding to 97.92 in New York afternoon.

The British pound traded narrowly in Asian morning and met buying interest at 1.6142. Cable then climbed at European open and rose to intra-day high of 1.6225 in European morning due to active cross-buying of sterling versus euro. However, long liquidation pressured price lower, cable retreated to 1.6159 at New York midday and moved sideways.

In other news, Bank of Japan’s Governor Haruhiko Kuroda said 'effects of BoJ policy firmly emerging in economy; see positive trends of economy and prices; Japan economy is recovering moderately; Japan economy will continue moderate recovery; will continue with QE as long as necessary to maintain inflation target in stable manner; annual gains in CPI will rise gradually with improvement spreading to broad items.'

Bank of England Chief Economist Spencer Dale said ‘interest rate not on hold for "fixed period"; rate depends on growth and inflation outlook; BoE's QE plan has supported real output; BoE-stimulus to be unwound "with great care"; subdued wages and low housing transactions make BoE forward guidance knock outs not that likely just yet; very unlikely that we will raise bank rate in 2014, we need to see sustained period of strong growth'

On the data front, China GDP year-to-date in Q3 came in at 7.7%, same as the forecast. China industrial production in September came in at 10.2% y/y, same as the expectation. China retail sales in September came in at 13.3% y/y, worse than the economists’ forecast of 13.4%. Canada CPI in September came in at 0.2% m/m and 1.1% y/y, more than the forecast of 0.1% and 1.0% respectively.

Data to be released next week :

Japan import, export, trade balance, all industry index, leading indicators, U.K. Rightmove house prices, Germany PPI, U.S. Chicago Fed index, existing home sales, Canada wholesale sales on Monday.

Swiss trade balance, U.K. PSNCR, public sector net borrowing, Canada retail sales, Delayed release of September U.S. non-farm payrolls, private payrolls, unemployment rate, average hourly earnings and Redbook retail sales on Tuesday.

EU consumer confidence, France business climate, U.K. BOE releases MPC minutes, BOE MPC vote, BBA loans for house purchase, U.S. house price index, Canada BOC rate decision on Wednesday.

New Zealand Trade balance, exports, imports, China HSBC Flash manufacturing PMI, France PMI manufacturing, PMI service, Germany PMI manufacturing, PMI service, EU PMI manufacturing, PMI service, Italy consumer confidence, U.K. CBI industrial trend, U.S. jobless claims, Markit PMI, new home sales on Thursday.

Japan national CPI, Tokyo CPI, Germany Ifo current assessment, Ifo business climate, U.K. GDP, U.S. durable goods, ex. Transport, ex. Defense, University of Michigan consumer confidence on Friday.

AceTraderfx
10-23-2013, 02:03 AM
Market Review - 22/10/2013 20:11GMT

Dollar tumbles after disappointing U.S. jobs report

Dollar fell broadly against its major peers after the release of delayed U.S. September's jobs report which showed 148,000 jobs were added to the market, fewer than the economists' expectation of 180,000, adding speculation that the Federal Reserve will delay its tapering measures.

U.S. non-farm payroll in September came in at 148K, worse than the expectation of 180K, previous reading was revised to 193K. U.S. unemployment rate in September dropped to 7.2%, better than the forecast of 7.3%.

The single currency traded narrowly in Asian session and found support at 1.3665 in European morning. Euro jumped to 1.3749 after the release of weaker-than-expected U.S. non-farm payrolls, and then climbed to near 2-year high at 1.3792 in New York afternoon before easing.

Versus Japanese yen, the greenback rose to 98.37 in Asian trading and then moved marginally higher to 98.40 in European morning. Dollar tanked to 97.86 after release of disappointing U.S. jobs data, however, renewed buying interest there lifted price to an intra-day high of 98.48 in New York morning before retreating to 97.99 in New York afternoon.

The British pound initially retreated to 1.6116 in Asian session but renewed buying interest there lifted price higher in European session. Later, cable jumped to 1.6213 after U.S. job data and then rose to a session high at 1.6248 in late New York.

In other news, ECB's Luc Coene says 'further drop in inflation might warrant policy action; but too early now for ECB action; narrowing ECB interest rate corridor could limit volatility in market rates; do not see immediate tapering by the U.S. Fed.'

Bank of England's Deputy Governor Charlie Bean says 'business surveys point to U.K. growth close to 2% for H2 2013; U.K. recovery sustainable because banks now well-placed to lend and euro area no longer in existential crisis; market interest rates have risen more in U.K. than U.S. or euro zone due to stronger economic data here; fact that U.K. yield curve has steepened far less recently than past recoveries would suggest may indicate that forward guidance has had some effect on short end.'

On the data front, data to be released on Wednesday :

EU consumer confidence, France business climate, U.K. BOE releases MPC minutes, BOE MPC vote, BBA loans for house purchase, U.S. house price index, Canada BOC rate decision.

AceTraderfx
10-24-2013, 02:36 AM
Market Review - 23/10/2013 20:48GMT

Japanese yen rises broadly on renewed risk aversion

The Japanese yen rose broadly against major currencies on renewed risk aversion after short-term borrowing costs for Chinese banks jumped by the most since July.

The greenback met selling interest at 98.19 against the Japanese yen at Tokyo open, price tumbled to 97.26 in Asian session due to the increase in China's seven-day repurchase rate. U.S. dollar further fell to 97.15 in European morning before rebounding to 97.49 in New York morning.

Although the single currency rose marginally above Tuesday's high at 1.3792 to 1.3793 in Asian trading, profit-taking pressured price in Europe and euro weakened to a session low at 1.3741 ahead of New York open. Euro later ratcheted higher to a fresh near 2-year high at 1.3794 in New York afternoon before stabilizing.

The British pound rose above Tuesday's high at 1.6248 to 1.6258 in Asian session, however, selling interest quickly emerged below Oct's near 9-month peak at 1.6260 and cable tumbled in European morning due to active cross selling in sterling. The pound fell to a session low at 1.6119 after the release of minutes from Bank of England in European morning. The minutes stated policy makers were unanimous in rejecting hiking interest rate and keeping their quantitative-easing target at 375 billion pounds. Cable then rebounded to 1.6183 in New York midday.

Bank of England's minutes showed 'probable that unemployment will be lower and output growth faster in H2 2013 than forecast in Aug; bank staff expect H2 GDP growth of 0.7% a quarter or a little higher, recent news suggests robust recovery; risk that U.K. recovery might be less well balanced towards exports than ultimately needed due to global outlook; usually hard to gauge slack in U.K. labour market, MPC has range of views on productivity, too early to draw conclusions; sterling strength may reflect stronger data, lower U.K. financial system risk; will help lower inflation; indicators point to further house price rises, this will boost households' collateral and help growth.'

In the other news, Bank of Japan's governor Kuroda says 'Japan is making steady progress toward meeting 2% inflation goal; expect prices to continue rising as negative output gap narrows energy costs is not the only reason behind gains in Japan CPI.'

On the data front, euro zone consumer confidence in October came in at -14.5, same as expectation. U.S. home price index in August came in at 0.3%, worse than the forecast of 0.8%, previous reading was revised to 0.8%.

Data to be released on Thursday :

New Zealand Trade balance, exports, imports, China HSBC flash manufacturing PMI, France PMI manufacturing, PMI service, Germany PMI manufacturing, PMI service, EU PMI manufacturing, PMI service, Italy consumer confidence, U.K. CBI industrial trend, U.S. jobless claims, Markit PMI and new home sales.

AceTraderfx
10-25-2013, 01:47 AM
Market Review - 24/10/2013 23:29GMT

Euro strengthens on speculation that Fed will delay tapering stimulus

The single currency rose to a fresh near 2-year high at 1.3826 on concerns the Federal Reserve will delay plans to start tapering bond buying programme outweighed soft euro zone data.

Eurozone PMI manufacturing in October came in at 51.3, worse than the forecast of 51.4.Euro zone PMI service in October came in at 50.9, worse than the expectation of 52.4.

The single currency found renewed buying at 1.3775 in Australia and then climbed to 1.3822 at European open before retreating to session low at 1.3764 due to weaker-than-expected German Service PMI (52.3 versus forecast 53.9). However, renewed cross-buying of euro especially versus sterling lifted price and euro rose to a fresh near 2-year high at 1.3826 in New York morning and later traded sideways in New York afternoon.

Versus Japanese yen, the greenback fell to 97.17 in Asian trading but failure to penetrate Wednesday's low prompted profit-taking and the pair rebounded to intra-day high of 97.62 ahead of European open partly due to Japan's Prime Minister Shinzo Abe's comments. However, renewed selling interest pushed price lower in European trading, price later retreated to 97.23 in New York morning.

Japanese Prime Minister Shinzo Abe said 'wages fell further than prices amid deflation; will continue to ask companies to raise wages; will refer to various indices in deciding on 10% sales tax; wants to make an appropriate decision on 10% sales tax; sales tax decision will take into account 2014 3Q growth.'

The British pound rose to 1.6223 at European open but selling interest met there and pressured price lower. Cable later fell to a session low at 1.6138 in New York morning before staging a strong rebound to 1.6211 in New York afternoon.

In other news, ECB's executive board member Yves Mersch said 'new long-term LTRO might not be necessary; all options are open, have very extensive toolbox; national backstop necessary but some countries have limited means’

On the data front, U.S. Markit PMI in October came in at 51.1, weaker than the forecast of 52.5. U.S. initial jobless claims came in at 30K, worse than the economists’ forecast of 340K, previous reading was revised to 362K. U.K. CBI industrial trend in October came in at -4, lower than the expectation of 10.

Data to be released on Friday:

Japan national CPI, Tokyo CPI, Germany Ifo current assessment, Ifo business climate, U.K. GDP, U.S. durable goods, University of Michigan consumer confidence, wholesale sales and wholesale inventories.

AceTraderfx
10-28-2013, 02:02 AM
Market Review - 26/10/2013 01:21GMT

Euro hovers near a 2-year high on tepid U.S. economic data
Euro hovered near a two-year high at 1.3833 on Friday due to the growing speculation on tepid U.S. economic data that the Federal Reserve will refrain from tapering its stimulus program this year continued to weigh on the greenback.

U.S. University of Michigan consumer confidence in October came in at 73.2, worse than the expectation of 75.0. U.S. durable goods in September came in at 3.7%, better than the forecast of 2.0%.

The single currency found support at 1.3785 in Asian morning and rose to a fresh near 2-year high at 1.3833 before Europe opening, however, profit-taking offers there capped euro's upside and pushed price lower in Europe. Euro later fell to a session low of 1.3774 in New York morning before rebounding to 1.3814.

Versus Japanese yen, the greenback went through a roller-coaster session Friday. The pair met selling interest at 97.43 in Australian morning n dropped to fresh 2-week low of 96.94 ahead of European open due to renewed cross-buying in yen on risk aversion especially against aussie due to a near 3% drop in the Nikkei. Dollar found support there and recovery in the Nikkei future in European session lifted price. Dollar pared intra-day loss and later climbed to session high of 97.49 in New York afternoon.

Although the British pound rose above Thursday's high at 1.6223 to an intra-day high of 1.6248 in Asian trading, renewed selling interest there pushed price lower ahead of European open. Cable staged a brief rebound to 1.6239 after the release of U.K. GDP before coming off in European. Sterling ratcheted lower to a session low at 1.6150 in New York morning b4 recovering. U.K. GDP in Q3 came in at 0.8% q/q n 1.5% y/y, same as the forecast.

In other news, ECB's Executive Board member Jorg Asmussen said 'ECB asset review precondition for revived lending; has no "specific worry" on euro exchange rate; ESM could be temporary backstop for resolution body; his intention is to fulfill term at ECB.'

Japan Finance Minister Taro Aso said 'need more time for Japan to escape deflation; Japan 2014 July-Sept GDP data will be key in deciding if to proceed with next sales tax hike to 10% in 2015.'

On the data front, Germany's Ifo business climate in October came in at 107.4, weaker than the expectation of 108.0. Ifo current assessment in October came in at 111.3, worse than the forecast of 111.6.

Data to be released next week:

U.K. Hometrack housing survey, CBI distributive trades, Germany import price index, retail sales, U.S. industrial production, capacity utilisation, pending home sales on Monday. New Zealand financial market is closed due to public holiday.

Japan unemployment rate, household spending, retail sales, France consumer confidence, U.K. mortgage approvals, Halifax house prices, U.S. PPI, retail sales, Redbook retail sales, S & P/CS home price, consumer confidence, business inventories, Canada PPI on Tuesday.

Japan industrial production, Swiss UBS consumption indicator, KOF indicator, Germany unemployment change, unemployment rate, U.K. Lloyds business barometer, EU business climate, Economic sentiment, consumer confidence, U.S. ADP employment, CPI, Fed FOMC rate decision, Germany HICP, CPI on Wednesday.

New Zealand rate decision, ANZ Business confidence, Australia import price index, export price index, building approvals, Japan manufacturing PMI, BOJ rate decision, housing starts, construction orders, Germany Gfk consumer confidence, France PPI, Italy unemployment rate, CPI, HICP, PPI, EU PPI, unemployment rate, CPI, Canada GDP, U.S. jobless claims, Chicago PMI on Thursday.

Australia PPI, China manufacturing PMI, HSBC Markit manufacturing PMI, Swiss PMI, U.K. manufacturing PMI, U.S. Markit manufacturing PMI, ISM manufacturing and construction spending on Friday. France financial market is closed due to public holiday.

AceTraderfx
10-29-2013, 02:12 AM
Market Review - 28/10/2013 22:00GMT

Cable tumbles on weak U.K. retail sales data

The British pound weakened on Monday after the release of CBI distributive trades, which came in at 2, much weaker than the economists' forecast of 32. Moreover, Bank of England chief economist Spencer Dale said 'option of expanding QE still on the table; tightening will be slower than in previous recovery.'

The British pound ratcheted higher from New Zealand's low at 1.6162 and rose to a session high at 1.6208 in European morning. However, cable tanked to 1.6136 due to the release of much weaker-than-expected CBI distributives sales and then dropped to intra-day low of 1.6124 in New York morning.

The single currency traded narrowly during Asian trading and met selling interest below 1.3818 (Asia) in European morning. Euro later fell to intra-day low at 1.3775 in New York morning.

Versus Japanese yen, the greenback opened higher and rose to 97.78 in Australia before retreating to 97.44 in Asian session. However, dollar found support there and rebounded in European session. The pair later rose to a session high at 97.79 in New York morning.

In other news, president of the Eurogroup, Jeroen Dijsselbloem said 'Spain has turned a corner; Spain is now on the road to recovery; don't think ESM exit discussions will be very tough; balance sheets of Spanish banks have improved; banking union to be completed on schedule; not easy to regain pre-crisis growth rates; have to break open our labor markets; further reform of the labor markets is crucial.' ECB's Executive Board member Beniot Coeure said 'Europe out of danger zone, must get act together.'

On the data front, U.K. Hometrack housing survey in October came in at 0.5% m/m n 3.1% y/y. U S. pending home sales in September came in at -5.6%, worse than the forecast of 0.0%.U.S. industrial production in September came in at 0.6% m/m, better than economists’ forecast of 0.4%. U.S. capacity utilization in September came in at 78.3%, stronger than the expectation of 78.0%, previous reading was revised to 77.9%.

Data to be released on Tuesday:

Japan unemployment rate, household spending, retail sales, France consumer confidence, U.K. mortgage approvals, Halifax house prices, U.S. PPI, retail sales, Redbook retail sales, S & P/CS home price, consumer confidence, business inventories and Canada PPI.

AceTraderfx
10-30-2013, 02:05 AM
Market Review - 29/10/2013 21:46GMT

Dollar strengthens broadly ahead of FOMC

U.S. dollar strengthened broadly against major currencies on Tuesday as investors awaiting the outcome of Wednesday's FOMC policy meeting that the Federal Reserve will maintain its bond-buying program in coming months.

The single currency traded narrowly in Asia on Tuesday and fell to 1.3754 in European morning. Euro then staged a brief but strong rebound to 1.3813 in New York morning on euro-positive comments from ECB’s Nowotny. However, renewed selling interest together with active profit-taking capped euro's upside. The pair then tanked to 1.3736 in New York afternoon.

ECB's Governing Council member Ewald Nowotny says 'ECB unlikely to cut benchmark or deposit rate; policy makes 'have to live with' strong euro; "no realistic prospect" of rate cut.'

Versus Japanese yen, although the greenback initially dropped to 97.46 in Asia before ratcheting higher in Europe. Dollar rose above Monday's high at 97.79 to 98.00 in New York morning and climbed further to an intra-day high of 98.28 in New York afternoon.

The British pound tumbled to 1.6063 at Asian open before rebounding to 1.6119 ahead of European open. Cable later edged lower in European session and then fell to 1.6056 in New York morning. Sterling dropped further to a session low at 1.6022 in New York afternoon.

In other news, EU's Olli Rehn says 'Europe economic reform must continue for stronger growth; "clearly premature" to declare Europe's crisis over; tight credit conditions holding back European growth; "we paid dearly" for bank supervision deficiencies; see "some improvement" in Ireland's job market; clearer Fed policy outlook would benefit global economy.'

On the data front, U.S. retail sales in September came in at -0.1% m/m, weaker than the forecast of 0.1%. U.S. producer price index in September came in at -0.1% m/m and 0.3% y/y, lower than the expectation of 0.2% n 0.6% respectively. U.S. consumer confidence in October came in at 71.2, weaker than the forecast of 75.0, previous reading was revised to 80.2.

Data to be released on Wednesday:

Japan industrial production, Swiss UBS consumption indicator, KOF indicator, Germany unemployment change, unemployment rate, HICP, CPI, U.K. Lloyds business barometer, EU business climate, Economic sentiment, consumer confidence, U.S. ADP employment, CPI and Fed FOMC rate decision.

AceTraderfx
10-31-2013, 02:18 AM
Market Review - 30/10/2013 21:11GMT

Dollar rallies broadly after FOMC

Dollar strengthened broadly against major currencies on Wednesday after the Fed Reserve left its key benchmark lending target, the Fed funds rate, unchanged at 0.25% and kept its 85USD billion monthly asset-purchasing program in place.

U.S. Federal Reserve stated 'to keep buying $85 billion in bonds per month, split as $40 billion MBS and $45 billion Treasuries; Fed makes no change to it forward guidance on interest rate; data since Sept meeting generally suggests economy continue to expand at moderate pace, recovery housing slowed somewhat in recent months; indicator have showed some further improvement but unemployment remains elevated, fiscal policy restraining growth; repeats that downside risks to outlook have diminished on net since last fall; inflation running below Fed's goal but longer-term expectations stable; to keep Fed funds at 0-0.25% as long as jobless rate above 6.5%, projected inflation no more than 2.5% vote in favor of policy was 9-1; George dissented from concern over potential imbalances and future inflation.'

The single currency found support at 1.3733 in Asian session and then rose to 1.3768 in European morning. Euro moved higher to 1.3778 in New York morning after the release of weaker-than-expected U.S. ADP unemployment change (130K versus forecast of 150K) and then 1.3787 in NY afternoon before tumbling to a session low at 1.3696.

Versus the Japanese yen, the greenback traded narrowly in Asian and European session before retreating briefly to 98.08 in New York morning due to release of weaker-than-expected U.S. ADP unemployment change and then 98.06 before rallying to 98.69 after the Fed policy statement.

The British pound fell briefly 1.6025 in Asian session, however, failure to penetrate Tuesday's low at 1.6022 prompted short-covering and lifted price higher in European session. Cable further rose to 1.6079 in New York morning before nose-diving to a session low at 1.5999.

On the data front, U.S. CPI in Sep came in at 0.2% m/m n 1.2% y/y, same as expectation. Germany unemployment change in October came in at 2K, versus the forecast of 0K, previous reading was revised to 24K. Germany Unemployment rate in October came in at 6.9%, same as expectation.

Data to be released on Thursday:

New Zealand rate decision, ANZ Business confidence, Australia import price index, export price index, building approvals, Japan manufacturing PMI, BOJ rate decision, housing starts, construction orders, U.K. Gfk consumer confidence, nationwide house prices, Germany Gfk consumer confidence, France PPI, Italy unemployment rate, CPI, HICP, PPI, EU unemployment rate, CPI, Canada GDP, U.S. jobless claims and Chicago PMI.

AceTraderfx
11-01-2013, 01:47 AM
Market Review - 31/10/2013 17:37GMT

Euro tumbles on sharp fall in euro zone inflation and record high unemployment

The single currency tumbled against other major currencies on Thursday due to weak euro zone data showing that inflation in the euro zone declined sharply to the lowest level in four years in October together with the record high unemployment rate in September, adding speculation that the European Central Bank may ease monetary policy.

Euro zone unemployment rate in September came in at 12.2%, higher than economists' forecast of 12.0%, previous reading is revised to 12.2%; euro zone CPI estimate in October came in at 0.7% y/y, lower than the forecast of 1.1%.

The single currency met selling interest at 1.3739 in Asian session and ratcheted lower in European session after the release of weak euro zone data. Euro tumbled to 1.3632 ahead of New York open and weakened further due to dollar's broad-based strength after the release of stronger-than-expected Chicago PMI (65.9 versus forecast of 55.0). The pair nose-dived to a session low at 1.3575 near New York afternoon.

Versus Japanese yen, the greenback met selling interest at 98.57 in Australia and then ratcheted lower in European session. The dollar further dropped to a session low at 98.08 in New York afternoon before recovering.

Although the British pound dropped to a session low at 1.6006 ahead of European open, failure to penetrate Wednesday’s low at 1.5999 prompted profit-taking. Cable ratcheted higher in European session and rose to a session high at 1.6070 on short-covering in New York morning.

In other news, Bank of Japan's semiannual report stated 'Japan's economy likely to continue to expand at pace exceeding its potential; BoJ to maintain its QE programme until needed to stably achieve 2% inflation; BoJ ready to make necessary policy adjustments while scrutinising upside, downside risks to economy, prices; CPI likely to reach BoJ's 2% target around end of fiscal 2014 through fiscal 2015.’

On the data front, U.S. initial jobless claim came in at 340K, worse than the forecast of 339K. Italy unemployment rate in September came in at 12.5%, worse than the forecast of 12.2%, previous reading was revised to 12.4%. Germany Gfk consumer confidence in November came in at 7.0, versus the forecast of 7.2.

Data to be released on Friday:

Australia PPI, China manufacturing PMI, HSBC Markit manufacturing PMI, Swiss PMI, U.K. manufacturing PMI, U.S. Markit manufacturing PMI, ISM manufacturing and construction spending on Friday. France financial market is closed due to public holiday.

AceTraderfx
11-04-2013, 02:56 AM
Market Review - 02/11/2013 01:41GMT

Dollar strengthens broadly on strong U.S. data

Dollar strengthened broadly against its major peer currencies on strong U.S. Markit PMI and ISM manufacturing data, which fuelled speculation that the Fed may start tapering stimulus sooner than expected.

U.S. ISM manufacturing in October came in at 56.4, stronger than the economists' forecast of 55.0. U.S. Markit PMI in October came in at 51.8, better than the expectation of 51.1.

The single currency met selling interest at 1.3590 in Asian trading and ratcheted lower in European session. Euro later tanked to a session low at 1.3478 (Reuters) in New York afternoon due to strong U.S. economic data.

Versus Japanese yen, the greenback initially fell to a session low at 97.80 in Asian trading but renewed buying interest there lifted price higher in European session due to the rebound of Nikkei futures. Dollar further rose above Thursday's top at 98.69 to session high at 98.86 in New York morning after the release of strong U.S. economic data before stabilizing.

The British pound met selling interest at 1.6046 in Australian morning and then tanked to 1.5953 in European session in part due to the release of weaker-than-expected U.K. manufacturing PMI in October which came in at 56.0, worse than the forecast of 56.4, previous reading was revised to 56.3. Cable later fell to an intra-day low of 1.5908 in New York afternoon due to dlr's broad-based strength on strong U.S. economic data.

In other news, Federal Reserve Bank of St. Louis's President James Bullard says 'any decision to scale bank bond buying will be data-dependent; likelihood of tapering will continue to rise as labor market continues to show cumulative improvement; would like to see inflation come back up toward target before tapering bond buying; inflation continues to run very low in the U.S. economy; will not speculate on a taper decision in December, says Fed should keep its options open at every meeting.'

Federal Reserve Bank of Philadelphia's Charles L. Plooser says 'could support setting a limit for bond-buying program; could announce a dollar size to QE3 that would halt it soon; "very high" hurdle for increasing rate of bond buying.'

Data to be released next week:

Australia retail sales, house price index, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, EU manufacturing PMI, Sentix investor confidence, U.K. construction PMI, U.S. factory orders, durable goods on Monday. Japan financial market is closed due to public holiday.

Australia RBA rate decision, China HSBC Markit service PMI, Swiss CPI, U.K. BRC retail sales, service PMI, EU PPI, Canada trade balance, exports, imports, U.S. Redbook retail sales, ISM non-manufacturing on Tuesday.

New Zealand unemployment rate, employment change, Australia trade balance, U.K. BRC shop price index, industrial production, manufacturing production, Italy service PMI, France service PMI, Germany service PMI, factory orders, EU service PMI, retail sales, Canada building permits, Ivey PMI, U.S. leading indicators on Wednesday.

Australia employment change, unemployment change, Japan leading indicators, U.K. Lloyds employment confidence, BOE rate decision, BOE asset purchase target, Germany industrial production, ECB rate decision, U.S. GDP, personal consumption, PCE core, jobless claims on Thursday.

China trade balance, export, import, Swiss unemployment rate, retail sales, U.K. trade balance, Germany current account, export, import, trade balance, France current account, trade balance, industrial production, manufacturing production, Canada housing starts, net change in unemployment, unemployment rate, U.S. personal income, personal consumption, PCE index, PCE core, non-farm payrolls, private payrolls, unemployment rate, average hourly earnings, University of Michigan consumer confidence on Friday.

AceTraderfx
11-05-2013, 02:17 AM
Market Review - 04/11/2013 21:33GMT

Euro rebound fom 6-week low on short-covering

The single currency finally cut 6 consecutve days of losses and rebounded from a fresh 6-week low on Monday. Earier in Asia, although euro penetrated Friday's low at 1.3478 after meeting renewed selling at 1.3502 and fell to 1.3442 in thin Asia session lunch session after tripping stops below 1.3462, profit-taking together with active short-covering lifted the pair. Euro ratcheted higher in European session on stronger-than-expected Germany's manufacturing PMI and later climbed to a session high at 1.3525 in New York afternoon.

The British pound strengthened on Monday after the release of strong U.K. construction PMI data which showed that activity in the U.K. construction sector expanded at the fastest rate in six years in October continued to support demand for sterling. U.K. construction PMI in October came in at 59.4, stronger than the forecast of 58.7.

Although cable dropped in tandem with euro to a session low at 1.5904 in Asian trading, buying interest there lifted price and cable continued to climb higher in European session after the release of strong U.K. construction PMI. The pound then rose to intra-day high of 1.5979 in New York morning before stabilizing.

Versus Japanese yen, the greenback firmed to intra-day high at 98.85 in quiet Asian trading as financial markets in Japan were closed for a national holiday, however, failure to penetrate last Friday's top at 98.86 prompted long liquidation. Dollar edged lower in European session and later weakened to a session low at 98.57 in New York afternoon.

In other news, the president of St. Louis Federal Reverse James Bullard said 'bond buying is data dependent, policy-makers will look at the evidence at every meeting; labor markets have made substantial progress, but inflation is low; not seen much evidence on inflation heading higher; "what is the hurry" to decide on tapering, would like to see inflation heading to 2%; 'asset bubbles are a serious concern, but not seeing anything of magnitude of housing bubble; Fed does not want to be in position of supporting fiscal recklessness; recent rise in bond yields has eased his concern that bond market showing bubble characteristics.'

Governor of Federal Reserve Jerome H. Powell said 'U.S. monetary policy is likely to remain highly accommodative for some time; timing of when Fed will trim pace of bond buying is necessarily uncertain, depends on evolution of economy; Fed policy makers committed to communicating as clearly as possible about policy aims, intentions.’

On the data front, euro zone Sentix investor confidence in November came in at 9.3, better than the expectation of 6.2. U.S. factory orders in September came in at 1.7%, same as expectation.

Data to be released on Tuesday :

China HSBC Markit service PMI, Australia RBA rate decision, Swiss CPI, U.K. BRC retail sales, service PMI, EU PPI, U.S. Redbook retail sales,
Construction spending, New home sales,
ISM non-manufacturing index.

AceTraderfx
11-06-2013, 01:49 AM
Market Review - 05/11/2013 22:13GMT

Euro falls ahead of ECB meeting

The single currency met selling interest at 1.3522 in Asian trading and then dropped to 1.3478 in European morning before rebounding to 1.3511 partly due to EU commission's forecast on euro zone GDP growth. However, euro weakened again on growing speculation that the European Central Bank may signal easier monetary policy or even cut interest rates at its policy meeting on Thursday.

Euro fell to an intra-day low of 1.3449 in New York morning on strong U.S. October's ISM non-manufacturing index, which came in at 55.4, stronger than the economists' forecast of 54.0.

EU commission forecasted euro zone GDP growth at -0.4% for 2013, +1.1% for 2014, +1.7% in 2015 and EU GDP growth at 0.0% for 2013, +1.4% for 2014, +1.9% in 2015.

Versus Japanese yen, the greenback met selling interest at 98.68 and fell to 98.24 in Asian trading on Tuesday. Dollar fell to an intra-day low at 98.16 in European morning and then rebounded to 98.64 in New York session.

The British pound traded narrowly in Asian trading and retreated to 1.5949 in European morning, however, buying interest quickly emerged in Europe after the release of stronger-than-expected U.K. service PMI, which came in at 62.5 for October, better the forecast of 59.8. It was also the sharpest rise in activity since May 1997. Later, cable jumped to a session high at 1.6063 in New York morning b4 retreating.

In other news, Federal Reserve Bank of Boston President Eric Rosengren says 'expects Fed funds rate quite low for quite some time; expects better economic data, U.S. GDP growth closer to 3% early next year.'

ECB's President Mario Draghi says 'we are gradually recovering from the financial crisis; overall economic situation has slightly improved.'

Data to be released on Wednesday:

New Zealand unemployment rate, employment change, Australia trade balance, U.K. BRC shop price index, industrial production, manufacturing production, Italy service PMI, France service PMI, Germany service PMI, factory orders, EU service PMI, retail sales, Canada building permits, Ivey PMI and U.S. leading indicators.

AceTraderfx
11-07-2013, 02:16 AM
Market Review - 06/11/2013 21:44GMT

Euro rebounds on short-covering ahead of ECB rate decision

The single currency rebounded on Wednesday due to active short-covering ahead of ECB's rate decision on Thursday as the release of stronger-than-expected German industry orders affirmed markets' expectations that the European Central Bank will not cut interest rates this week despite a steep fall in inflation.

Euro found renewed buying interest at 1.3469 in Asian session on Wednesday and price jumped to 1.3522 due to active short-covering together with cross buying versus the Japanese yen (eur/jpy rallied fm 132.55 to 133.72). Price rose further to 1.3533 in European morning partly due to the release of stronger-than-expected service PMI data and Germany factory orders. The single currency further strengthened to a session high at 1.3548 in New York morning before stabilizing.

Germany factory orders in September came in at 3.3% m/m n 7.9% y/y, much stronger than the forecast of 0.5% n 5.6% respectively. Germany Services PMI in October came in at 52.9, higher than the forecast of 52.3. Euro zone Services PMI in October came in at 51.6, better than the expectation of 50.9.

Versus Japanese yen, the greenback rose to a session high at 98.76 in Asian trading due to the rise in Japan's stock markets (Nikkei-225 index closed up by 112 points at 14337). Dollar later retreated to 98.47 in European morning before rebounding to 98.74 in New York morning.

The British pound rose to 1.6097 in Asian trading before retreating to 1.6063. Cable later jumped to an intra-day high at 1.6118 after the release of stronger-than-expected U.K. industrial and manufacturing production before stabilizing in New York session.

U.K. industrial production in September came in at 0.9% m/m n 2.2% y/y, stronger than the forecast of 0.5% n 1.8% respectively; manufacturing production in September came in at 1.2% m/m n 0.8% y/y, better than the expectation of 1.1% n 0.7% respectively.

On the data front, U.S. leading index in September came in at 0.7%, better than the forecast of 0.6%. Euro zone retail sales in September came in at -0.6% m/m and 0.3% y/y, worse than the forecast of -0.4% and 0.7%, previous reading was revised to 0.5% and -0.2% respectively. Canada Ivey PMI in October came in at 62.8, much stronger than the expectation of 52.0.

Data to be released on Thursday:

Australia employment change, unemployment change, Japan leading indicators, U.K. Lloyds employment confidence, BOE rate decision, BOE asset purchase target, Germany industrial production, ECB rate decision, U.S. GDP, personal consumption, PCE core and jobless claims.

AceTraderfx
11-11-2013, 02:13 AM
Market Review - 09/11/2013 02:13GMT

Dollar rallies after U.S. payrolls beat estimates

Dollar strengthened against other currencies on Friday after the release of stronger-than-expected U.S. non-farm payrolls fuelled renewed speculation the Federal Reserve could soon begin tapering its stimulus program. U.S. non-farm payroll in October came in at 204K, much higher than the economists' forecasts of 125K, previous reading was revised higher to 163K from 148k.

The single currency retreated to 1.3389 ahead of European open due to the downgrade of France sovereign credit rating by S&P, however, price quickly rebounded and ratcheted higher to 1.3432 in European morning. Euro briefly climbed to 1.3438 in New York morning. The pair tanked to session low of 1.3318 after release of stronger-than-expected U.S. jobs report, however, active short-covering above Thursday's 7-week low at 1.3295 lifted the pair in New York afternoon. Euro last traded around 1.3370 near New York close.

S&P lowered France sovereign credit rating to AA from AA+. S&P revised France sovereign credit outlook to stable from negative.

Versus Japanese yen, the greenback traded narrowly in Asian and European morning sessions. Dollar later retreated to 97.97 in New York morning and then jumped to an intra-day high of 99.22 on strong U.S. job data before stabilizing in New York afternoon.

The British pound traded narrowly in Asian session and then fell to 1.6060 in European morning. Cable later tumbled to intra-day low at 1.5957 in New York morning after release of strong U.S. jobs report.

In other news, French President Francois Hollande said economic policy his government is pursuing is the only one that can ensure France's credibility; government will take all necessary saving measures without endanger France's Welfare model; low market interest rates are testament to France's credibility.

On the data front, University of Michigan confidence in November came in at 72.0, weaker than market forecast of 74.5. France industrial production in September came in at -0.5% m/m and -0.9% y/y, versus the expectation of 0.1% and -0.9%, previous reading was revised to 0.7% n -2.0% respectively. France manufacturing production in September came in at -0.7% m/m and -1.3% y/y, stronger economists’ forecast of 0.4% n -1.1%, previous reading is revised to 0.9% and -2.7% respectively.

Data to be released next week :

Japan current account, Economic watch DI, Australia home loans, Italy industrial production on Monday. Financial markets in France, Canada and U.S. will be closed due to public holiday.

Australia NAB business condition, NAB business confidence, Japan tertiary industry index, consumer confidence, machine tools orders, U.K. RICS house prices, CPI, RPI, PPI, ONS house price, Germany CPI, HICP, Italy CPI, HICP, U.S. Chicago Fed index, Redbook retail sales on Tuesday.

Australia Westpac consumer confidence, Japan machinery orders, domestic CGPI, U.K. claimant count, ILO unemployment rate, average earnings 3 months, BoE releases quarterly inflation report, EU industrial production, U.S. Fed budget on Wednesday.

New Zealand business PMI, ANZ consumer confidence, Japan GDP, industrial production, capacity utilisation, France GDP, Germany GDP, France HICP, CPI, Italy GDP, U.K. retail sales, EU GDP, U.S. jobless claims, Canada new housing price index, trade balance, exports, imports on Thursday.

Italy trade balance, current account, EU CPI, U.S. export price index, import price index, Empire State manufacturing, industrial production, capacity utilisation, wholesale inventories, wholesale sales and Canada existing home sales on Friday.

AceTraderfx
11-12-2013, 01:48 AM
Market Review - 11/11/2013 19:39GMT

Euro rebounds on active cross-buying

The single currency strengthened against other currencies on Monday due to active short-covering together with cross buying in euro. However, trading was relatively thin due to public holidays in U.S. and France.

Euro found support at 1.3345 in Australia morning and ratcheted higher in European session on active-cross buying euro versus other currencies (eur/jpy rose from 132.21 to 133.16, euro/gbp gained from 0.8339 to 0.8396). The pair climbed to an intra-day high at 1.3416 after European closed.

Versus Japanese yen, the greenback met selling interest at 99.24 in New Zealand and then retreated to 98.93 in European morning as Nikkei index futures pared early Asian gains. However, renewed buying interest there lifted price higher and climbed to a session high at 99.30 in New York morning on active cross-selling yen versus euro before moving sideways after European market closed.

The British pound traded narrowly in Asian trading and met selling interest at 1.6022 in European morning due to active cross-selling sterling versus euro. Cable fell to a session low at 1.5964 after European markets closed before recovering.

In other news, EU's Olli Rehn urged Germany to remove bottlenecks to domestic demand and said ‘increase in German domestic demand has been "modest".' EU spokesman Simon O'Connor said 'Portugal program on track; Portugal program set to conclude in spring of next year; doesn't have "specific" Portugal interest rate in mind.'

On the data front, Italy's Industrial production in September came in at 0.2% m/m and -3.0% y/y, versus the expectation of 0.3% and -3.6% respectively.

Data to be released on Tuesday:

Australia NAB business condition, NAB business confidence, Japan tertiary industry index, consumer confidence, machine tools orders, U.K. RICS house prices, CPI, RPI, PPI, ONS house price, Germany CPI, HICP,WPI, Italy CPI, HICP, U.S. Chicago Fed index and Redbook retail sales.

AceTraderfx
11-13-2013, 02:05 AM
Market Review - 12/11/2013 21:52GMT

U.S. dollar rises versus Japanese yen on Fed tapering expectations

U.S. dollar rose to a 1-month high at 99.80 against the Japanese yen on rising speculation that Fed will sooner tapering its economic stimulus program next month.

The single currency edged lower in Asian trading and then fell to a session low at 1.3359 in European morning, however, renewed buying interest there lifted price higher due to the comment from ECB's Nowotny. The pair later climbed to an intra-day high of 1.3456 in New York morning before stabilizing.

ECB Governing Council member Ewald Nowotny said 'Deflation not imminent, must be on minds of central bank; there is a lot of nervousness in markets; Rate cut has to be seen in line with forward guidance; Price stability means close to but not above 2%; ECB has to fight both inflation and deflation; Debate was on timing, not substance of measures; Stagnation not inflation is real risk now; Forward guidance helps to stabilize markets.'

Versus Japanese yen, the greenback found support at 99.11 in Australian morning and then ratcheted higher in Asian session due to the rally of Nikkei index. Dollar later rose to intra-day high at 99.80 in European morning before stabilizing in New York trading.

The British pound met selling interest at 1.5992 in Australian morning and then dropped to 1.5965 in Asian trading. Cable later tumbled to session low at 1.5854 in European morning on weaker-than-expected U.K. CPI data which came in at 0.1% in October versus economists' forecast of 0.3%. However, lack of selling through prompted short-covering and cable rebounded strongly to 1.5946 in New York morning before retreating.

In other news, U.S. Treasury Secretary Jack Lew says 'data shows core strength of U.S. economy is continuing; calls recent U.S. economic data "quite encouraging"; U.S. economy ending year with "great optimism" Oct. debt-limit tactic likely won't be used again.'

On the data front, Germany CPI in October came in at -0.2% m/m and 1.2% y/y, same as expectation. U.K. RPI in October came in at 0.0% m/m n 2.6% y/y, weaker than the expectation of 0.4% n 3.0% respectively. U.K. ONS house price in September came in at 3.8%, previous reading is revised to 3.7%.Chicago Fed index in September came in 0.14, worse than the forecast of 0.15, previous reading was revised to 0.13.

Data to be released on Wednesday:

Australia Westpac consumer confidence, Japan machinery orders, domestic CGPI, U.K. claimant count, ILO unemployment rate, average earnings, BoE releases quarterly inflation report, EU industrial production and U.S. Fed budget.

AceTraderfx
11-14-2013, 01:47 AM
Market Review - 13/11/2013 22:27GMT

Dollar falls on Yellen's dovish comments

U.S. dollar tumbled broadly against major currencies on Wednesday after Federal Reserve Vice Chair Janet Yellen said the U.S. economy was performing 'far short' of potential, suggesting the central bank is in no rush to withdraw its stimulus.

The single currency rose to 1.3453 in Asian trading and then retreated to 1.3408 in European morning. Euro rose to 1.3554 in New York morning before falling to a session low at 1.3390 after the comment from ECB's executive broad member Peter Praet. However, renewed buying interest there lifted price to an intra-day high at 1.3471 in New York afternoon and then 1.3496 after the release of dovish remarks fm Fed's vice chairman Janet Yellen.

ECB's executive board member Peter Praet, quoting from Wall Street Journal, said 'central banks can use balance sheet capacity to lift inflation, including outright asset purchases; ECB still has room in standard measures, including deposit facility.'

Versus Japanese yen, the greenback edged lower in Asian and European Sessions on downbeat comment from Bank of Japan’s Ryuzo Miyao, who said 'Japan's economy is recovering moderately; Focusing somewhat more on downside risks to Japan economy; Japan so far on track to meeting BOJ's 2% price target’. Dollar fell to 99.30 in New York morning and further dropped to an intra-day low of 99.19 in New York afternoon.

The British pound traded narrowly in Asian trading and found support at 1.5879 in European morning. Cable rose to 1.5942 after the release of stronger-than-expected unemployment data and then jumped to 1.6003 due to upbeat Bank of England’s inflation report before retreating to 1.5939. However, renewed buying interest lifted price higher in New York morning and climbed to 1.6048 in New York afternoon n then 1.6067 due to the dovish remarks fm Fed's vice chairman Janet Yellen.

U.K. jobless claims in October came in at -41.7K, better than the forecast of -30.0K, previous reading was revised to -44.7K. U.K. unemployment rate in Sep came in at 7.6%, same as expectation.

Bank of England November inflation report stated 'U.K. recovery has finally taken hold, economy growing robustly but significant headwinds remain; MPC intends to keep exceptionally simulative policy stance until slack has reduced substantially; unemployment likely to fall more quickly than forecast in August, hitting 7% threshold will not necessarily trigger rate rise; MPC sees 41% chance of 7% unemployment at end-2014, 57% at end-2015, 68% at end-2016 based on market interest rates; mean unemployment forecast above 7% through to Q4 2016, based mean unemployment forecast falls to 7.0% in Q4 2014, based on constant interest rate (Aug inflation report: above 7% through to Q3 2016; sees greater than 50% chance unemployment will reach 7% at some point before end of Q3 2015 based on market interest rates; sees 50% chance unemployment will reach 7% at some point before end of Q4 2014, based on constant interest rates (Aug forecast: Q2 2016; shows inflation to first fall below 2% target in Q1 2015 (Aug forecast Q3 2015), based on market rate expectation; forecast shows around one in three chance inflation will exceed 2.5% knock-out in 18-24 months (Aug forecast C.40%); mean growth forecast sees GDP in 2013 +1.6% (Aug +1.4%), 2014 +2.8%% (Aug +2.5%), 2015 +2.3% (Aug +2.3%).'

Data to be released on Thursday:

New Zealand business PMI, ANZ consumer confidence, Japan GDP, industrial production, capacity utilisation, France GDP, Germany GDP, France HICP, CPI, Italy GDP, U.K. retail sales, EU GDP, U.S. jobless claims, Canada new housing price index, trade balance, exports and imports.

AceTraderfx
11-15-2013, 01:32 AM
Market Review - 14/11/2013 22:42GMT

Yen weakens beyond 100 on intervention remarks from Japan Finance Minister Taro Aso

Japanese yen weakened against dollar on Thursday, the pair rose above 100 for the first time since September, after earlier comments from Japan Finance Minister Taro Aso, who said "Japan must always be ready to send signal to markets to curb excessive, one-sided forex moves; Japan, as with any country, must set aside necessary reserves to conduct FX intervention when needed.".

The greenback found support at 99.14 against Japanese yen ahead of Tokyo open and then rose to 99.73 in Asian trading. Dollar rose above Tuesday's high at 99.80 to 100.04 in European morning, and then climbed to 100.15 in New York morning after the testimony by Fed's vice chairman Janet Yellen.

The single currency rose to a session high at 1.3499 in Australian morning due to the release of prepared dovish statements from Fed's Vice Chair Janet Yellen but profit taking below 1.3500 pushed price lower in Asian trading. Euro fell to intra-day low at 1.3418 in European morning after release of weaker-than-expected euro zone Q3 GDP, which came in at 0.1% Q/Q and -0.4% Y/Y, worse than the forecast of 0.2% and -0.3% respectively.
However, short covering lifted euro to 1.3489 in New York after Fed’s Janet Yellen testified to the U.S. Senate Banking Committee.

Fed's Vice Chair Janet Yellen said 'strongly committed to promoting robust economic recovery; long spells of unemployment are particularly painful for households; imperative to do what we can to promote strong recovery; expects to maintain highly accommodative policy for some time to come as QE winds down; there are dangers in ending QE too early, and in keeping it place too long; important not to remove bond-buying support when recovery is fragile; believes benefits of bond buying exceed costs; as recovery progresses, need to bring policy back to normal in timely fashion, have the tools; bond buying has made meaning contribution to growth, economic outlook; QE not on a set course, data dependent; QE will not continue forever; says for pace of QE, looking for signs of strong enough growth to continue progress in economy; no set time on determining when to reduce bond buying; weak demand for goods, services is major drag on economy.’

The British pound retreated to 1.6027 in Asian trading and then dropped to 1.5988 in European morning after the release of weaker-than-expected U.K. retail sales. However, renewed buying interest there lifted price higher in New York morning and climbed to a session high at 1.6101 on Fed's Janet Yellen’s comments.

U.K. retail sales in October came in at -0.7% m/m and 1.8% y/y, worse than the forecast of 0.0% and 3.1% respectively.

On the data front, Germany GDP in Q3 came in at 0.3% q/q and 1.1% y/y, same as the expectation. France GDP in Q3 came in at -0.1% q/q and 0.2% y/y, lower than the forecast of 0.0% and 0.3% respectively. U.S. initial jobless claim came in at 339K, worse than the forecast of 330K, previous reading was revised to 341K.

Data to be released on Friday:
Italy trade balance, current account, EU CPI, U.S. export price index, import price index, Empire State manufacturing, industrial production, capacity utilisation, wholesale inventories, wholesale sales and Canada existing home sales.

AceTraderfx
11-18-2013, 02:26 AM
Market Review - 16/11/2013 03:43GMT

Dollar falls broadly on weaker-than-expected U.S. data

Euro strengthened against the U.S. dollar on Friday after the release of weaker-than-expected U.S. economic data, fanning market speculation the Federal Reserve will maintain its stimulus program for the time being, the Dow Jones Industrial Index and S&P 500 both climbed to record highs on Friday following Fed Chair nominee Janet Yellen's dovish testimony before the U.S. Senate Banking Committee Thursday.

U.S. Empire State manufacturing index in November came in at -2.21, worse than the forecast of 5.00 whilst U.S. industrial production in October came in at -0.1%, weaker than street forecast of 0.2%, previous month's reading was revised from 0.6% to 0.7%.

Earlier in quiet Asian session, the single currency move narrowly and then retreated to 1.3433 in European morning, however, buying interest quickly emerged and lifted the pair. Euro later climbed to session highs of 1.3506 in New York morning after the release of weaker-than-expected U.S. economic data before stabilising in New York afternoon.

Versus Japanese yen, the greenback retreated from 100.31 in Asian trading to 99.93 ahead of European open. However, renewed buying interest there lifted price and the pair climbed to intra-day 2-week high of 100.43 in European morning on renewed cross-selling in yen before retreating to 100.10 in New York morning after the release of weaker-than-expected U.S. industrial production and Empire State manufacturing index.

The British pound ratcheted higher from 1.6052 (Australia) to 1.6090 in European morning before retreating briefly to intra-day low at 1.6048 due to active cross-selling sterling versus euro. Cable then quickly rebounded on renewed buying interest and climbed to a session highs of 1.6136 in New York morning after release of weaker-than-expected U.S. data and also comments from Bank of England’s policy maker Martin Weale.

Bank of England’s policy maker Martin Weale said 'guidance increased importance of CPI expectation; pound strength has lowered inflation; euro-area problems have become more manageable; pound has posted concern about balance of payments; U.K. consumer confidence has improved; BoE can't look the other way on CPI expectations; U.K. economy may grow faster than BoE has forecast; there has been "an upturn: in CPI expectation.'

In other news, ECB's executive board member Yves Mersch says 'we have the possibility, have other instruments to flood the economy with liquidity if necessary; we have to option to do outright purchases, but euro area doesn't have single sovereign signature so no surprise that we chose other instruments; we still reserve the right to do other measures in the futures.

Data to be released next week :

U.K. Rightmove house prices, EU current account, trade balance, U.S. net LT TIC flows, NAHB housing market index on Monday.

Australia RBA policy meeting minutes, Japan leading indicators, Germany ZEW economic sentiment, ZEW current condition, EU ZEW economic sentiment, U.S. Redbook retail sales on Tuesday.

Japan export, import, trade balance, all industry index, Germany PPI, U.K. BoE releases MPC minutes, Swiss ZEW index, U.S. CPI, retail sales, existing home sales, business inventories, FOMC minutes, Canada wholesale sales on Wednesday.

Japan BOJ rate decision, machine tools orders, China HSBC Manufacturing PMI, Swiss trade balance, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, consumer confidence, U.K. PSNCR, public sector net borrowing, CBI industrial trend, U.S. jobless claims, PPI, PCE, Markit PMI and Philadelphia Fed survey on Thursday.

Japan BoJ monthly economic report, Germany GDP, export, import, Ifo current assessment, Ifo business climate, Canada CPI and retail sales on Friday.

AceTraderfx
11-19-2013, 02:11 AM
Market Review - 18/11/2013 21:07GMT

Dollar and yen falls broadly on risk appetite due to China reforms

U.S. dollar weakened broadly against major currencies on renewed risk appetite after China announced its most sweeping economic and social reforms in nearly three decades.

China shares posted their biggest gain in more than two months on Monday. The China Enterprises Index of the top Chinese listings in Hong Kong soared 5.7%, the biggest daily gain since Dec. 1, 2011. European and U.S. stock markets also hit their highest levels since the start of 2008.

The greenback rose briefly to 100.39 against the Japanese yen in Asian morning before retreating to 99.78 in European morning on cross buying in jpy. The single currency continued to ratchet higher from November's low at 1.3295 to as high as 1.3542 in New York morning before retreating to 1.3496 in late New York after comments from the Federal Reserve Bank of New York, William Dudley.

The British pound also rose versus U.S. dollar to fresh near 3-week high at 1.6149 in European morning before retreating to 1.6082 in late New York on profit-taking. The Australian and New Zealand dollars rose against U.S. dollar to 0.9419 and 0.8407 respectively in European morning due to renewed risk appetite before retreating in late New York.

In other news, the Federal Reserve Bank of New York, William Dudley, an influential U.S. central banker who has been one of the staunchest supporters of easy-money policies, on Monday said he was "getting more hopeful" on prospects for the beleaguered U.S. economic recovery. William pointed to an improvement in the labor market last month and better-than-expected gross domestic product (GDP) growth in the third quarter. He predicted a rise in economic growth next year and in 2015. William added later that the Federal Reserve has not yet seen enough U.S. economic growth momentum to convince policymakers of a sustained improvement in the labor market outlook.

Charles Plosser, president of the Philadelphia Fed, said in remarks prepared for delivery to the Risk Management Association, "we cannot continue to play this bond-buying game by ear and risk the Fed's credibility while creating lingering uncertainty about the course of monetary policy;
Improved economic and labor market conditions suggest the U.S. central bank should set a fixed dollar amount on its current bond-buying program and end the program when that amount is reached.

Tuesday will see the release of Australia RBA policy meeting minutes, Japan leading indicators, Germany ZEW economic sentiment, ZEW current condition, EU ZEW economic sentiment, U.S. Redbook and retail sales data.

AceTraderfx
11-20-2013, 02:07 AM
Market Review - 19/11/2013 21:53GMT

Dollar falls broadly ahead of Wednesday's speech by Fed's Ben Bernanke

The dollar declined against majority of its peers on speculation Federal Reserve members will reiterate their pledge to keep monetary policy loose as Fed's Chairman Ben Bernanke will deliver speech on Wednesday at 00:00GMT.

Although the single currency traded sideways in Asia and spiked briefly to session high at 1.3543 in early European morning, price swiftly pared intra-day gains and fell to an intra-day low at 1.3488 at New York open. However, the pair later rose again n strengthened to 1.3548 in New York morning after Fed's Vice Chair Janet Yellen said in a letter to a U.S. lawmaker that a "strong majority" of Federal Reserve policymakers think its program of massive bond purchases has helped spur U.S. growth and hiring, but are aware of potential risks.

Versus the Japanese yen, the greenback came under heavy selling pressure in Australia and fell sharply to an intra-day low at 99.57 in Asian morning. However, renewed buying there lifted the pair n price rose to session high at 100.25 in late New York session.

The British pound traded sideways in Asia n despite brief spike to session high at 1.6128 in European morning, price pared its gains n retreated sharply to 1.6060 after a UK debt auction. However, cable later rallied to an intra-day high of 1.6138 in later New York.

On the data front, German ZEW economic sentiment rises to 54.6 from 52.8 previously whilst ZEW current conditions drops to 28.7 from prev. reading of 29.7.

In other news, ECB's Asmussen said 'our monetary policy will stay expansionary for as long as needed; too early to exit from loose monetary policy in Eurozone; can act again if inflation situation requires it; would be very careful to cut deposit rate below 0, don't want to rule out fundamentally; risks to price stability are balanced, no risks of deflation.'

Chicago Federal Reserve Bank President Charles Evans said 'the Federal Reserve should wait until next year, possibly until March, before beginning to wind down its massive bond-purchase program.' Evans added that "a couple more meetings to have greater assurance that the labor market improvement is sustainable would be quite welcome."

AceTraderfx
11-21-2013, 02:30 AM
Market Review - 20/11/2013 19:38GMT

Euro tumbles broadly on ECB's dovish news

The single currency tumbled broadly on Wednesday following reports in Bloomberg that sources close to the ECB said central bank will consider cutting deposit rates to below zero if more easing is needed.

During the day, although the single currency rose to session high at 1.3580 in Australia in reaction to Bernanke's comments, price pared gains in Asia and retreated to 1.3517 in European morning before recovering to 1.3547. Later, euro fell again in New York morning after news from Bloomberg said ECB would weigh -0.1% deposit rate if more easing needed. Price penetrated 1.3517 and eventually tumbled to low of 1.3415 after FOMC minutes before stabilizing.

Versus the Japanese yen, the greenback weakened in Asia and European sessions as an official said proposed reforms of Japan's government-run pension fund may take years to implement. Dollar fell to session low at 99.78 in European morning and then traded sideways before rebounding to 100.25 in New York afternoon after FOMC minutes.

The panel advising Japan's leaders on how to overhaul the 121 trillion-yen Government Pension Investment Fund said the world’s biggest manager of retirement savings should review its holdings of domestic bonds and diversify its investments into overseas assets.

Despite falling to session low at 1.6104 in European morning, the British pound rose to a fresh 3-week high at 1.6178 in New York morning as BoE's MPC minutes painted an upbeat picture of the country's economy, however, dollar's broad-based firmness in New York session pressured price sharply lower and cable retreated back to 1.6097 post FOMC minutes.

BoE stated in MPC minutes that 'MPC sees sustained recovery activity in UK, GDP likely to grow above long-term average in H2; MPC sees distinct upside and downside risks for UK growth after H2; external environment unlikely to drive UK growth, domestic fiscal consolidation to continue, so handover from household to business spending crucial for recovery; unclear about how much of sterling appreciation effect to be passed to consumer prices; MPC growth and inflation projections underline there cud be a case for not raising bank rate immediately when 7% threshold hit.'

Fed Oct minutes stated that 'many Fed members felt if economy warranted it could decide to slow bond purchases at one of its next few minutes; a couple of participants favored lowering the 6.5 percent unemployment rate threshold.
Many members continued to see downside risks to the economic outlook as having diminished at Oct meeting; a few participants inclined to set quantitative floor for inflation; committee met by video conference on Oct 16 to discuss contingencies in event Treasury not able to meet obligations.

Fed staff provided in video conference possible actions Fed could take if there were disruptions to market; Fed considered whether to note impact of government shutdown in Oct statement but decided this might overemphasize role of shutdown in policy deliberations.

Video conference participants saw no need to change Fed operations in case of delayed Treasury payments; most participants thought a reduction in interest paid on excess reserves worth considering at some stage.
Video conference participants generally agreed Fed would use prevailing market value of securities in all transactions if Treasury payments delayed; some participants suggested announcing a timetable for wind-down of bond purchases, or a total size for program.'

AceTraderfx
11-22-2013, 02:15 AM
Market Review - 21/11/2013 23:52GMT

Dollar climbs to a 4-month high against yen on Fed tapering and rising U.S. treasury yields

The greenback rose to a fresh four-month peak versus the yen on Thursday despite mixed U.S. economic data after the minutes of the Federal Reserve's latest meeting indicated that stimulus tapering could begin in the next few months. The benchmark U.S. 10-year treasury yield climbed to 2.8%.

Versus the Japanese yen, dollar traded with a firm undertone in Asia and rose to 100.85 in European morning, helped by BoJ stuck to its pledge to expand the monetary base at a policy meeting today. Price eventually rose to a fresh 4-month peak at 101.17 in New York morning after the release of better-than-expected U.S. jobless claims.

U.S. jobless claims came in better-than-expected at 323K versus forecasts of 335K. The Federal Reserve Bank of Philadelphia said that its manufacturing index fell to 6.5 in November, from 19.8 in October

Although the single currency remained under pressure in Asia and dropped to session low at 1.3400 in European morning due to weaker-than-expected French manufacturing and services PMI, price pared intra-day losses and rose to session high at 1.3477 ahead of New York open as European Central Bank President Mario Draghi dampened speculation of negative deposit rates. Later, euro moved marginally higher to 1.3487 before easing in New York afternoon trading.

France Manufacturing PMI in Nov came in at 47.8, worse than the forecast of 49.5. France Service PMI came in at 48.8, worse than the forecast of 51.0.

The ECB's President Mario Draghi said 'Don't try to infer anything from what I say, anything about the possibility of negative rates; this was discussed in the last monetary-policy meeting and there's no more news since then.'

Although the British pound retreated in tandem with euro in Asia to session low at 1.6072, price found buying interest there and rose to 1.6141 at New York open and then later above Wednesday's 1.6178 high to 1.6200 near the close.

In other news, German FinMin Wolfgang Schaeuble said 'monetary policy cannot be the only way out of crisis, ECB mandate must remain limited; monetary policy must not promote false stimulus.'

Data to be release on Friday:

Japan BoJ monthly economic report, Germany GDP, export, import, Ifo current assessment, Ifo business climate, Canada CPI and retail sales.

AceTraderfx
11-25-2013, 01:46 AM
Market Review - 23/11/2013 01:46GMT

Euro rises on upbeat German Ifo busiess confidence

The single currency gained against the U.S. dollar and yen after German business confidence climbed to its highest level since April 2012, damping early speculation the European Central Bank will reduce its record low interest rate anytime soon.

Earlier in Asia, despite trading sideways below Thursday's high of 1.3487, the single currency found buying interest at 1.3463 and started to ratchet higher at European open, euro jumped versus the U.S. dollar and yen after the release of better-than-expected German Ifo business confidence and climbed to 1.3539 in New York morning and later to sessions high of 1.3560 near New York, just below this week's high at 1.3580 on Wednesday. Euro also rallied to a fresh 4-year peak of 137.37 versus the Japanese yen.

German IFO business climate in November came in at 109.3, better than street forecast of 107.7.

The greenback remained firm against the yen on Friday, after positive U.S. economic reports on Thursday fuelled further expectations for the Federal Reserve to begin scaling back its stimulus program in the near future. Dollar resumed its recent ascent and rose to fresh 4-1/2 month high at 101.36 in Australia, however, price pared intra-day gains on profit-taking and retreated to session low at 100.96 at European open. Later, dollar found renewed buying interest and rebounded to 101.35 near New York close,

The British pound also traded sideways in Asia and briefly edged up to 1.6217 in European morning before trading in choppy fashion in New York morning. Later, cable rose in tandem with euro in New York afternoon trading and climbed marginally higher to 1.6219.

On the data front, German GDP in Q3 came in at 0.3% m/m n 1.1% y/y, same as expectation. German Ifo current assessment and expectation in November came in at 111.2 and 106.3 respectively, stronger than the forecast of 111.6 n 104.0 respectively. In other news, ECB President Mario Draghi said 'situation in euro area has improved greatly, still face challenges; need to secure recovery; price stability mandate works in both directions; interest rates are low because the economy is weak.'

Data to be released next week :

France business climate, U.K. BBA loans for house purchase, U.S. pending home sales on Monday.

Japan MPC minutes, Italy consumer confidence, U.S. housing start, building permits, S&P home price index, house price index and consumer confidence on Tuesday.

New Zealand trade balance, exports, imports, Swiss consumer confidence, France consumer confidence, Germany consumer confidence, U.K. GDP, CBI distributive trade, U.S. jobless claim, durable goods, Chicago Fed index, Chicago PMI, University of Michigan consumer confidence and leading indicators on Wednesday.

New Zealand ANZ Business confidence, Japan retail sales, Swiss GDP, U.K. Lloyds business barometer, EU Business climate, economic sentiment, consumer confidence, Germany HICP, CPI, unemployment change unemployment rate, Canada PPI. U.S. financial market is closed Thursday due to Thanksgiving Day holiday.

Japan manufacturing PMI, household spending, unemployment rate, CPI, industrial production, housing starts, construction orders, U.K. consumer confidence, Mortgage approvals, France PPI, Italy unemployment rate, CPI, HICP, EU unemployment rate CPI, Canada GDP on Friday.

AceTraderfx
11-26-2013, 02:07 AM
Market Review - 25/11/2013 23:01GMT

Yen falls to a fresh 6-month low against dollar on risk appetite

The Japanese yen fell to near 6-month low against the greenback on Monday due to improved risk appetite after an accord was struck to set limits on Iran's nuclear program.

Dollar found renewed buying at 101.14 at Asian open and rose to a 6-month high at 101.92 at European open, however, profit-taking pressured price from there and dollar later dropped to 101.64 in European morning and then 101.58 in New York morning after release of lower-than-expected U.S. pending home sales (October), dollar later weakened to 101.40 near New York close before recovering.

The single currency retreated after failure to penetrate last Friday's high of 1.3560 and remained under pressure in Asian session, dropped to 1.3508 in European morning. Despite a brief rebound to 1.3528 in New York morning, renewed cross-selling interest in euro capped recovery and price fell to session low at 1.3490 before staging a minor recovery in New York afternoon.

Although the British pound resumed its recent ascent and rose to a fresh 3-week high at 1.6241 in Australia, price retreated to 1.6184,
weighed by release of poor BBA mortgage approvals. Cable remained under pressure at New York trading and fell further to session low at 1.6134 before stabilizing.

BBA mortgage approvals came in lower-than-expected at 42.8K vs forecasts of 45.0K.

On the data front, France INSEE business climate (industry morale) in Nov came in at 98, better than the forecast of 97.

In other news, German Chancellor Angela Merkel said 'Germany will only benefit if Europe does well; Europe is more important than internal market; must't accept high unemployment in Europe.'

Data to be release on Tuesday:

Japan MPC minutes, Italy consumer confidence, U.S. housing start, building permits, S&P home price index, house price index and consumer confidence.

AceTraderfx
11-27-2013, 02:07 AM
Market Review - 26/11/2013 22:01GMT

Euro strengthens after weak U.S. consumer confidence

The single ended higher against the greenback on Tuesday after a weak consumer confidence report fanning ongoing expectations for the Federal Reserve to keep its dollar-weakening monetary stimulus programs in place through early 2014.

The single currency rebounded to 1.3541 in Asian morning and traded sideways until European open. Price found renewed buying in European morning and rose to 1.3571 before retreating in New York morning to 1.3521, however, release of weaker-than-expected U.S. consumer confidence data prompted another round of euro buying, price later climbed to sessions high of 1.3575.

The U.S. Conference Board reported on Tuesday that its index of U.S. consumer confidence declined to 70.4 in November from 72.4 in October, lower than the market's expectation of 72.6.

Versus the Japanese yen, although the greenback traded sideways in Asia and Europe after falling to 101.34 at Asian open, renewed selling interest capped intra-day recovery, price fell from 101.65 in New York morning to 101.15 after the weak U.S. consumer confidence report.

The British pound moved in volatile fashion on Tuesday. Despite a sharp rebound from 1.6146 to 1.6194 in European trading due to comments by BoE Governor Mark Carney, price pared gains n fell to session low at 1.6138 in New York morning but only to rise to a fresh intra-day high of 1.6219 in New York afternoon on dollar's broad-based weakness b4 easing.

On the data front, Italy consumer confidence in Nov came in at 98.3, vs the forecast of 97.5.

In other news, BoE's Carney in a parliament hearing, said 'has not seen evidence that businesses are confused by forward guidance; mkts have not priced in interest rate moves in UK that economic recovery might suggest in absence of forward guidance.

Data to be release on Wednesday :

New Zealand trade balance, exports, imports, Swiss consumer confidence, France consumer confidence, Germany consumer confidence, U.K. GDP, CBI distributive trade, U.S. jobless claim, durable goods, Chicago Fed index, Chicago PMI, University of Michigan consumer confidence and leading indicators.

AceTraderfx
11-28-2013, 01:39 AM
Market Review - 27/11/2013 21:11GMT

Euro rises to fresh 3-week high at 1.3613 before retreating on profit-taking

The single currency rose from session low at 1.3558 to 1.3600 in Asian morning on Wednesday, however, profit-taking pressured price to 1.3573 before rallying to an intra-day high at 1.3613 in European morning but euro retreated again in NY n fell to a low at 1.3559 before stabilizing.

Versus the Japanese yen, the greenback ratcheted higher in Asia and Europe due to active cross selling in Japanese yen. U.S. dollar rose to 101.90 n then 102.20 in New York morning after the release of unexpected drop in U.S. jobless claims, adding speculations that the Federal Reserve may start reducing stimulus next month. U.S. jobless claims fell to 316K from 323K previously.

Although the British pound traded sideways in Asian session, price rallied after a government report confirmed Britain's economic growth accelerated in the third quarter. UK GDP q/q and y/y for Q3 came in as expected at 0.8% n 1.5% respectively. Cable climbed above October's peak at 1.6260 to session high at 1.6331 in New York morning before retreating strongly to 1.6258.

On the data front, Germany Gfk consumer confidence in December came in at 7.4, better than the forecast of 7.1. France consumer confidence in November came in at 84, weaker than the forecast of 85.

In other news, Bank of England's policy maker Ian Mccafferty says 'Economy picking up, led by domestic factors; rates won't rise any time in near future; U.K export markets only growing slowly; 7% is threshold to take stock of economy; MPC sensitive to impact of rate changes.'

Data to be release on Thursday:

New Zealand ANZ Business confidence, Japan retail sales, Swiss GDP, U.K. Lloyds business barometer, EU Business climate, economic sentiment, consumer confidence, Germany HICP, CPI, unemployment change unemployment rate, Canada PPI. U.S. financial market is closed due to Thanksgiving Day holiday.

AceTraderfx
11-29-2013, 02:38 AM
Market Review - 28/11/2013 20:50GMT

U.S. dollar rises against Japanese yen on risk appetite

The Japanese yen resumed its recent losing streak and weakened against the U.S. dollar and euro on Thursday as U.S. markets were closed for Thanksgiving holiday.

Versus the Japanese yen, despite a brief pullback from Australian high at 101.28 to session low at 101.94 in Asian morning, renewed buying lifted the pair and the greenback rose above said top to an intra-day high at 102.37 at European midday on broad-based selling of the yen.

Despite brief rebound to 1.3588 ahead of European open, the single currency retreated to 1.3568 in European morning. However, euro rose once again to an intra-day high at 1.3618 before easing to 1.3588.

The British pound rebounded to 1.6326 in Asian morning before retreating, however, despite a brief spike above Wednesday's high at 1.6331 to
1.6346, price dropped to 1.6298. Renewed buying there lifted cable and the pair rose to a fresh 10-1/2 month high at 1.6358 after European closing, supported by comments from Bank of England Governor Mark Carney.

BoE's Carney said 'UK banks have bolstered capital positions by 20 billon sterling since June; MPC has judged that FLS changes will have no material impact on monetary policy; new measures will contribute to constructive evolution of housing market; FPC acting to create new macro prudential tool to vary affordability criteria mortgage borrowers must meet; by acting in graduated fashion on housing market, we reduce risk large intervention needed later.'

On the data front, Germany unemployment change in November came in at 10K, vs the forecast of 0K, previous reading was revised to 3K. Germany unemployment rate in November came in at 6.9%, same as the expectation. Swiss GDP in Q3 came in 0.5 Q/Q nand1.9% Y/Y, stronger than the forecast of 0.4% and 1.8% respectively.

Data to be released on Friday:

Japan manufacturing PMI, household spending, unemployment rate, CPI, industrial production, housing starts, construction orders, U.K. consumer confidence, Mortgage approvals, France PPI, Italy unemployment rate, CPI, HICP, EU unemployment rate CPI, Canada GDP.

AceTraderfx
12-02-2013, 02:15 AM
Market Review - 29/11/2013 22:01GMT

Euro rises to 1.3622 after data eases ECB concern before retreating on profit-taking

The single currency rose to a fresh near 4-week high at 1.3622 in Asian morning Friday as euro zone economic data dented speculation on further monetary easing by the European Central Bank at next week's monthly monetary policy meeting, however, profit-taking pressured price to a low at 1.3597 in European morning, weighed by the downgrade of Netherlands' credit rating. Euro further weakened to 1.3580 in late New York trading.

S&P lowered Netherlands rating to AA+ from AAA with a stable outlook and said 'Netherlands growth prospects weaker than expected; Netherlands real GDP per capita trend growth below peers.'

Versus the Japanese yen, although the greenback resumed its recent ascent and rose to a fresh 6-month peak at 102.61 at Asian open, price retreated to an intra-day low at 102.12 at European open and traded sideways in NY session.

The British pound edged higher to a fresh 10-1/2 month high at 1.6375 in Asian morning, however, cable pared intra-day gains and retreated to session low at 1.6315 in European morning before rallying above this year's high at 1.6380 (Jan) to 1.6385 in New York midday.

On the data front, Italy unemployment rate in Oct came in as 12.5% m/m, same as the expectation. Germany retail sales in Oct came in at -0.8% m/m n -0.2% y/y, weaker than the expectation of 0.5% n 1.4%, previous reading was revised to -0.2% n 0.3% respectively.

In other news, Italy PM Enrico Letta says 'will seek new confidence vote in parliament to reinforce reform programme.'

Data to be released next week :

Australia building approvals, Japan business capital expenditure, China HSBC manufacturing PMI, U.K. Hometrack housing survey, manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, Swiss PMI, Germany PMI, EU manufacturing PMI, U.S. manufacturing PMI, ISM manufacturing, and construction spending on Monday.

Australia retail sales, RBA rate decision, China non-manufacturing PMII, U.K, RBC retail sales, construction PMI, EU PPI and U.S. retail sales on Tuesday.

Australia GDP, China HSBC services PMI, Swiss industrial production, U.K. RBC shop price index, services PMI, Germany services PMI, France service PMI, EU GDP, retail sales, service PMI, U.S. ADP employment, Trade balance, ISM non-manufacturing, new home sales, Fed releases Beige Book, Canada trade balance, import, export and rate decision on Wednesday.

Australia trade balance, France unemployment rate, U.K. Lloyds employment confidence, BoE rate decision, EU ECB rate decision, U.S. jobless claims, GDP, personal consumption, PCE, durable goods, factory orders, and Canada Ivey PMI on Thursday.

Friday, Japan leading indicators, France trade balance, Swiss CPI, Germany factory orders, U.S. non-farm payrolls, private payrolls, unemployment rate, average hourly earnings, personal income, personal spending, PCE, University of Michigan consumer confidence and Canada unemployment rate.

AceTraderfx
12-03-2013, 03:11 AM
Market Review - 02/12/2013 23:34GMT

The Japanese yen weakens on speculation of further economic stimulus

Although U.S. dollar retreated briefly fm 102.59 in Australia Monday to 102.22 in Tokyo morning on news of Japan EconMin Akira Amari was being hospitalized for 3 to 4 days for some tests together with the retreat in Japanese stock markets, the greenback ratcheted higher and penetrated last Friday's high at 102.61 in European morning against the Japanese yen on speculation of further economic stimulus. U.S. dollar rose to a fresh 6-month high at 103.13 in New York before easing.

Japanese officials said 'BoJ working on contingency plans for further economic stimulus; options include major purchases of stock market linked funds; more radical idea is further JGB buying; financial markets see BoJ policy move possibly before April.'


Despite euro's brief rise to 1.3616 in European morning, the single currency failed to penetrate last Friday's high at 1.3622 high and euro nose-dived to 1.3526 on active profit-taking despite the release of stronger-than-expected eurozone PMI data.

On the data front, Italy Manufacturing PMI in November came in as 51.4, higher than the expectation of 50.9. France Manufacturing PMI in November came in as 48.4, higher than the expectation of 47.8. Germany Manufacturing PMI in November came in as 52.7, higher than the expectation of 52.5. Eurozone Manufacturing PMI in November came in as 51.6, higher than the forecast of 51.6.

The British pound traded with a firm undertone in Australia and quickly pierced through Fri's high at 1.6385 to a fresh 2-year peak at 1.6443 after tripping large stops abv 1.6400, however, active profit-taking knocked price lower. Although price jumped fm 1.6380 after release of the upbeat U.K. manufacturing PMI data n climbed back to 1.6427, cable later fell in tandem with euro on dollar's strength elsewhere and weakened to sessions low of 1.6343 before trading sideways. U.K. Nov Manufacturing PMI came in at 58.4, highest since Feb 2011, versus revised 56.5 in Oct.

Tuesday will see the release of Australia retail sales, RBA rate decision, China non-manufacturing PMII, U.K, RBC retail sales, construction PMI, EU PPI and U.S. retail sales.

AceTraderfx
12-04-2013, 02:10 AM
Market Review - 03/12/2013 22:05GMT

Dollar drops on Tuesday on long liquidation

The greenback turned broadly lower against the other major currencies on Tuesday, as market participants locked in profits after Monday's unexpectedly strong U.S. manufacturing data strengthened the dollar.

Versus the Japanese yen, although U.S. dollar rebounded from 102.83 in Asia and then penetrated Monday's high of 103.13 to a fresh 6-month peak at 103.38 on expectations that the Bank of Japan will have to expand its stimulus program in order to meet its target of 2% inflation by 2015, falling in Nikkei futures in European trading triggered broad-based liquidation in recent massive short yen positions and dollar later tumbled to 102.38 in New York morning and then further to 101.97.

During the day, the single currency dropped one-tick below Monday's low at 1.3526 to 1.3525 in Asian morning, however, active cross-buying of euro versus yen lifted price ahead of European open and euro later rallied to 1.3593 and then 1.3613 in New York session on dollar's broad-based weakness before easing. Eur/jpy rose above last Friday's high of 139.71 to a fresh 5-year peak at 140.03 before dropping to intra-day low of 138.70.

Although cable traded sideways inside a relative narrow range of 1.6347-1.6365 in Asia, price rose in tandem with euro in early European trading and then ratcheted higher to 1.6437 after data showed that activity in the U.K. construction sector expanded at the fastest rate in six years November, however, failure to penetrated Monday's 2-year peak at 1.6443 prompted long-liquidation and cable retreated to around 1.6390 in New York opening and then fluctuate inside 1.6390-1.6437 for rest of the session.

U.K. construction PMI rose for the seventh month in a row in November and came in at 62.6, versus expectation of 59.0 and 59.4 in October and was the highest level since August 2007.

In other news, Reserve Bank of Australia (RBA) left its benchmark interest rate unchanged at a record low 2.50% on Tuesday, in line with expectations. RBA Governor Glenn Stevens said in the statement 'policy setting appropriate; sees below trend growth persisting near term; A$ still uncomfortable high; lower A$ likely to be needed for economy; public spending to be quite weak; inflation consistent with medium term target; housing and share markets have strengthened, positive for investment; effect of past easing still coming through.'

Data to be released on Wednesday:

Australia GDP, China HSBC services PMI, Swiss industrial production, U.K. RBC shop price index, services PMI, Germany services PMI, France service PMI, EU GDP, retail sales, service PMI, U.S. ADP employment, Trade balance, ISM non-manufacturing, new home sales, Fed releases Beige Book, Canada trade balance, import, export and BoC rate decision

AceTraderfx
12-05-2013, 01:48 AM
Market Review - 04/12/2013 21:55GMT

U.S. dollar falls against Japanese yen on risk aversion

The greenback fell against the Japanese yen on renewed risk aversion on speculation that the Federal Reserve will reduce stimulus after the release of higher-than-expected ADP employment and new home sales data.

U.S. ADP employment came in at 215,000 vs forecast of 173K and previous reading of 130,000. U.S. Oct trade deficit $40.64 billion versus forecast of $40.0 billion n Sep deficit $42.97 billion. U.S. October new homes sale at end of October 183K units versus Sep 190K units; ISM manufacturing in November came in at 53.9 versus previous reading of 55.4.

U.S. dollar meet renewed selling interest at 102.84 against the Japanese yen in European morning on Wednesday and price tumbled to an intra-day of 101.82 in New York due to active cross buying in jpy. Euro, aussie and sterling fell sharply versus the Japanese yen from 139.59 to 138.45, from 93.72 to 91.80 and from 168.37 to 166.90 respectively.

The single currency fell from 1.3601 to an intra-day low at 1.3529 after the release of stronger-than-expected U.S. economic data and then rebounded strongly to 1.3606 in late New York. On the data front, Germany Service PMI in Nov came in at 55.7, higher than the forecast of 54.5. Eurozone service PMI in Nov came in at 51.2, higher than the forecast of 50.9.

Cable fell in European morning on Wednesday, in fact, sterling came under broad-based selling pressure at European open on long liquidation versus euro & yen. Some stops were tripped when the pound penetrated Asian low at 1.6378 n price quickly tanked to intra-day low at 1.6326 (Reuters) after U.K. Nov services PMI fell below market expectation of 62.0, actual reading came in at 60.0 versus Oct's 62.5 (16-year high), the data suggests growth in the important service sector is slowing. However, the British pound rebounded to 1.6405 in tandem with euro in New York.

Thursday will see the release of Australia trade balance, France unemployment rate, U.K. Lloyds employment confidence, BoE rate decision, EU ECB rate decision, U.S. jobless claims, GDP, personal consumption, PCE, durable goods, factory orders, and Canada Ivey PMI.

AceTraderfx
12-06-2013, 02:24 AM
Market Review - 05/12/2013 22:39GMT

Euro strengthens to a fresh 1-month peak after Draghi's comments

The single currency surged to fresh 1-month peak at 1.3677 against the dollar on Thursday after ECB kept key interest rate unchanged at 0.25% together with 'euro-supportive' comments by ECB President Mario Draghi at the news conference after the ECB's monthly policy meeting.

Mario Draghi said the bank's policy stance was to remain accomodative for as long as necessary and that key interest rates are likely to remain at current or lower levels for an extended period of time.

During the day, although the single currency penetrated last Friday's high of 1.3622 to 1.3640 ahead of European open, active cross-selling in euro pressured price from there and price tanked to an intra-day low of 1.3543 in New York morning on dollar's broad-based rebound after release upbeat U.S. jobless claims and GDP data. Later, euro-supportive comments from ECB President Mario Draghi at post-rate decision news conference dampened traders' hopes for more aggressive easing measures in the euro zone and euro swiftly surged to a fresh 1-month high at 1.3677 before easing.

U.S. preliminary GDP increased at a seasonally adjusted annual rate of 3.6% in the three months to September, above expectations for growth of 3.0% and up from a preliminary estimate of 2.8%. In a separate report, U.S. Department of Labor showed jobless claims fell by 23,000 to a seasonally adjusted 298,000, from 321,000 in the previous week whose figure was revised up from 316,000.

Versus the Japanese yen, despite a rebound from Wednesday's New York low at 101.82, dollar retreated after meeting renewed selling interest at 102.44 at early Asian trading and then dropped to 101.85 in European morning. Dollar briefly rebounded to 102.33 in New York morning after release of a slew of better-then-expected U.S. economic data and then nose-dived to an intra-day low at 101.62 in late New York.

Although cable traded closely with euro in Asia and touched an intra-day high of 1.6403 in European morning, active cross-selling in sterling pressured price after the Bank of England held its monetary policy and cable later tumbled to a fresh 1-week low at 1.6300 in New York morning after strong U.S. economic reports supported demand for the greenback.

The Bank of England kept monetary policy unchanged on Thursday, keeping its commitment to hold interest rates at a record low 0.5% and QE asset purchase total at 375 billion pounds until Britain's recovery is more firmly established.

In other news, Atlanta Fed President Dennis Lockhart said 'once the Federal Reserve finally trims its bond-buying program, it should then commit to an effective schedule that would wind it down completely; Fed should consider taking the first step in reducing its $85-billion monthly bond-buying program, known as quantitative easing, "in the coming meetings" of its Federal Open Market Committee given the overall positive economic activity of late.' Later, he added ''Q3 has a "strong quarter" given fresh reading but that doesn't make a trend; QE GDP does not suggest U.S. has had breakout in growth; estimates pretty low; undecided on question of lowering 6.5% unemployment threshold; adjusting forward rates guidance is on the table at Dec policy meeting; QE taper question should be on the table at December meeting.'

Data to be released on Friday:

Japan leading indicators, France trade balance, Swiss CPI, Germany factory orders, U.S. non-farm payrolls, private payrolls, unemployment rate, average hourly earnings, personal income, personal spending, PCE, University of Michigan consumer confidence and Canada unemployment rate.

AceTraderfx
12-09-2013, 01:50 AM
Market Review - 06/12/2013 22:24GMT

U.S. dollar rallies against Japanese yen on strong U.S. jobs report

U.S. dollar rallied to 102.97 against the Japanese yen on Friday after stronger-than-expected U.S. jobs data, adding speculation that the Federal Reserve may start tapering its bond buying program sooner than expected.

U.S. employers added 203,000 new jobs in November and U.S. jobless rate fell to a five-year low of 7.0%. U.S. University of Michigan consumer sentiment rose to 82.5 in December versus final reading of 75.1 in November.

The single currency briefly dropped to a session low of 1.3620 after the release of U.S. jobs data before rallying to a fresh five-week high of 1.3706 in late New York. ECB chief Mario Draghi, after a policy meeting on Thursday, said the bank was ready to take fresh action to support a fragile recovery. Draghi also noted that liquidity in the banking system had improved since the last long-term cash injection and attached conditions for any repeat.

The British pound fell initially to a session low of 1.6294 in New York morning on dollar's broad-based weakness after the release of robust U.S. jobs report, however, cable staged a strong rebound to 1.6393 in tandem with euro before retreating again in late New York due to cross selling in sterling. Euro rose against the sterling from 0.8348 to 0.8390.

In other news, Philadelphia Fed President Charles Plosser said 'the U.S. Federal Reserve should put a dollar cap and end date on its bond-buying program.' Plosser added "the sooner we end (the program) the better." Plosser suggested the central bank should convert its existing "thresholds" for raising interest rates to more predictable "triggers." The Fed has tied its first rate rise to future thresholds of 2.5 percent inflation and 6.5 percent unemployment.

Chicago Fed President Charles Evans said at symposium that 'the Federal Reserve should not worry too much if inflation temporarily rises above the Fed's 2 percent goal.' Evans added 'inflation is now running much lower than the Fed's goal, and Fed policies designed to push it back up may possibly overshoot; but the Fed's goals on inflation and on achieving maximum employment should be "symmetric," and the Fed should give them equal weight.' Evans also said he is not willing to used monetary policy to lean against the rise in stock prices that some see as a potential bubble.

Data to be released next week:

Japan current account, GDP, economic watch DI, China CPI, PPI, Swiss unemployment rate, retail sales, Germany trade balance, import, export, current account, industrial production, EU Sentix investor confidence, Canada housing starts on Monday

Australia home loans, business confidence, business condition, Japan Tertiary industry index, consumer confidence, , machine tools orders, China industrial production, fixed assets investing urban, retail sales, U.K. RICS house price, industrial production, manufacturing production, trade balance, France industrial production, manufacturing production, Italy industrial production, manufacturing production, GDP, U.S. retail sales, wholesale inventories, wholesale sales on Tuesday.

Australia consumer confidence, machinery orders, domestic CGPI, Germany CPI, HICP, France current account, U.S. Fed budget on Wednesday.

New Zealand rate decision, employment change, unemployment rate, France HICP, CPI, Swiss rate decision, EU industrial production, SNB rate decision, Italy CPI, HICP, Canada new housing price, U.S. import price index, export price index, jobless claims, retail sales, business inventories on Thursday.

New Zealand manufacturing PMI, consumer confidence, Japan industrial production, capital utilization, U.S. PPI on Friday.

AceTraderfx
12-10-2013, 02:13 AM
Market Review - 09/12/2013 21:15GMT

Euro rises to fresh 5-week high of 1.3748

The single currency rose to a fresh 5-week high of 1.3748 and a fresh 5-year high of 141.94 against the dollar and the Japanese yen respectively on Monday. U.S. dollar was broadly lower as the latest U.S. jobs report, released on Friday, dampened safe haven demand for the dollar and the yen.

During the day, euro followed Friday's rally on Monday and opened higher to a fresh 6-week high of 1.3748 against the dollar and extended recent upmove against the yen to 141.54 in New Zealand and then 141.94 in late New York. Euro retreated briefly to to 1.3695 and 140.99 respectively ahead of European open on profit-taking. Later, euro rebounded to 1.3746 in late New York due to active cross selling in jpy.

Versus the Japanese yen, dollar rose to 103.22 ahead of Asian open Monday and then retreated to 102.89. Later, U.S. dollar rose again to 103.35 in late New York on renewed cross selling in Japanese yen.

Although cable opened lower at 1.6316 in Monday's New Zealand trading, renewed risk appetite after last Friday's upbeat U.S. non-farm payrolls report for November continued to support the pair and sterling later ratcheted higher to 1.6393 in early European trading and then 1.6433 in later New York before easing.

On the data front, reports from German showed on Monday that industrial production in October dropped by 1.2% month/month versus median forecast of an increase of 0.8%.

In other news, ECB's Mersch said at a financial conference in Frankfurt on Monday that 'euro zone inflation to remain very subdued; sees no deflationary risks; have necessary tools for further monetary policy measures; could buy government bonds, but this would have immense political, juridical and economic challenges; buying private instruments could be problematic as would shift risk to tax payers; risk that negative deposits rates would increase borrowing costs; monetary policy can only buy time for reforms, if this time is not used, monetary policy cannot help.'

Data to be release on Tuesday :

Australia home loans, business confidence, business condition, Japan Tertiary industry index, consumer confidence, , machine tools orders, China industrial production, fixed assets investing urban, retail sales, U.K. RICS house price, industrial production, manufacturing production, trade balance, France industrial production, manufacturing production, Italy industrial production, manufacturing production, GDP, U.S. retail sales, wholesale inventories, wholesale sales.

AceTraderfx
12-11-2013, 02:10 AM
Market Review - 10/12/2013 22:34GMT

U.S. dollar drops versus the Japanese yen on retreat in U.S. treasury yields

U.S. dollar retreated especially against the Japanese yen as U.S. treasury yields and stock markets eased on a growing view that the Federal Reserve will decide to scale back its economic stimulus unless more robust U.S. economic data coming out.

The greenback traded with a firm undertone in Australia on Tuesday and climbed briefly above last Tuesday's 6-month high at 103.38 to 103.40 in Asian morning, however, active profit-taking there together with cross-unwinding in Japanese yen (eur/jpy fell sharply to 141.29 after rising to a fresh 5-year peak at 142.18) capped dollar's upside and the pair retreated to a session low at 102.58 in New York. Japan Finance Minister Taro Aso said 'can't say if FY14 new bond issuance will exceed FY13 level.' Source from Kyodo told reporters that Japan plans 2-step tax increases for high income earners.

Euro continued last week's rally and maintained a firm undertone on Tuesday. The single currency rose to a session high at 1.3795 in New York before retreating on profit-taking together with cross selling in euro versus the Japanese yen.

ECB's Draghi said 'central banks should concentrate on price stability over medium term; must strengthen financial system by increasing capital, liquidity buffers; creation of banking union essential step in increasing resilience of euro area; high trust by citizens most important guarantee of central bank independence; central banks must get used to closer scrutiny, especially with use of non standard tools; credibility is closely connected to staying with mandate; ECB has consistently delivered on its price stability mandate; medium term inflation expectations remain firmly anchored; several reasons why situation in euro zone stability different from that of Japan 20 years ago; delivering price stability has been more challenging in recent years due to financial fragmentation in euro zone; ECB has gained time for other actors to play their part in delivering reform; crucial that European countries complete structural economic reforms.'

ECB's Makuch said 'does not see strong deflation pressures, does not see deflation ahead; ECB has enough tools to adjust policy if needed, no need to discuss individual tools; inflation to return toward target in longer term.'

The British pound continued Monday's rally due to sterling-supportive comments by BoE Governor Mark Carney in a conference at the Economic Club in New York. BOE's governor Mark Carney said 'concerned U.S. fiscal policies posing difficulties in short term without longer-term benefits; Europe situation vastly improved, still lacks dynamism stimulus; true recoveries beginning after core of system repaired; stimulus can create risks including in housing market; needs to provide a lot of stimulus to U.K.' Cable strengthened to 1.6468 in Asian morning on Tuesday and then retreated to 1.6420.

In other news, a senior Senate Democratic aide said 'the U.S. Senate is likely to vote next week on President Barack Obama's choice of Janet Yellen to be the next chief of the Federal Reserve.' Yellen, the Fed's vice chair, is widely expected to win Senate confirmation, which would make her the first woman to lead the U.S. central bank. Last month, the Senate Banking Committee approved her nomination on a 14-8 vote. Yellen would replace Fed Chairman Ben Bernanke when his term ends on Jan. 31.

Wednesday will see the release of Australia consumer confidence, machinery orders, domestic CGPI, Germany CPI, HICP, France current account and U.S. Fed budget.

AceTraderfx
12-17-2013, 01:30 AM
Market Review - 16/12/2013 21:33GMT

Dollar mixed against other major rivals ahead of Fed’s meeting

Dollar traded mixed against other major currencies on Monday as market participants turned their attention to the Federal Reserve's upcoming policy meeting later in the week.

During the day, although the single currency moved sideways after rising to 1.3761 in Asian morning and then dropped briefly from 1.3762 to 1.3737 in European morning, the pair ratcheted higher after the upbeat euro zone data and rose to 1.3800 before retreating in New York morning on renewed dollar's broad-based rebound, dropped to 1.3743 in late New York.

The eurozone's composite output index rose to a three month high at 52.1 in November, indicating that European Central Bank policymakers will not need to step up stimulus measures. It was the fastest increase since April 2011, meanwhile, a separate report showed German's manufacturing index rose to a 30-month peak at 54.2.

Versus the Japanese yen, although dollar continued to move lower from last Friday's 5-year peak at 103.92 in Asia and dropped from 103.32 to 102.65, rebound in Nikkei futures lifted price in European trading and the pair later climbed back to 103.16 before moving around 103.00 level in New York session.

Cable moved sideways in tandem with euro in Asia before rising to 1.6335 in European morning, however, active cross-selling of sterling, especially versus the euro pressured price to 1.6290 before ratcheted higher to 1.6349 ahead of New York open. The pair later dropped again in New York morning on dollar's broad-based rebound and cabel fell to 1.6291 and then moved sideways later in the day.

The Federal Reserve Chairman Ben Bernanke, in prepared remarks to an event celebrating the Fed's centennial, said 'the U.S. central bank's legitimacy and independence relies on two-way communication with the public and The Federal Reserve must clearly explain its decisions to Americans and convince them that the policies are in their interest. Bernanke said 'without specifically discussing monetary policy or the U.S. economy.'

In other news, ECB's Draghi spoke at European parliament and said 'economy recovery is fragile; might experience long period of low inflation; money policy will remain accommodative for as long as needed; governing council ready and able to act, if needed; underlying price pressures are subdued; see modest growth in Q4; accommodative ECB money policy stance will support recovery; growth risk are on downside; governing council expects key ECB interest rates to remain at present or lower levels for extended period; monitor money market conditions closely, ready to consider all available instruments; we are fully aware of downward risk that protracted period of low inflation entails; see no risks of financial imbalances related to low interest rate environment; sovereign bonds will be treated risks-free in AQR, will be stressed in EBA stress tests; concerned that SRM decision making may become overly complex, financing arrangements may not be adequate; we are aware of complications of running a scheme akin to funding for lending; do not see deflation in euro zone.'

Data to be release on Tuesday:

Australia RBA minutes, Japan machine orders, U.K. CPI, PPI, RPI, Ons house price, EU Zew economic sentiment, CPI, Germany Zew economic sentiment, Zew current condition, U.S. CPI, current account, retail sales and NAHB housing market index.

AceTraderfx
12-18-2013, 03:39 AM
Market Review - 17/12/2013 21:54GMT

The Japanese yen strengthened on risk aversion ahead of Wednesday's U.S. rate decision

The greenback rose initially against euro before rebounding in late NY on short-covering on Tuesday as market sentiment remained subdued ahead of the outcome of the Federal Reserve's two-day policy meeting on Wednesday, amid ongoing uncertainty over when the bank will announce a reduction in the pace of its USD85 billion-a-month asset purchase program.

During the day, the single currency rebounded from Asian low at 1.3752 and then climbed to 1.3782 in European morning after reports showed that the ZEW index of German economic sentiment rose to the highest level since April 2006 at 62.0 in December from November's reading of 54.6, however, dollar's broad-based rebound together with cross-selling of euro versus yen pressure price lower later in the day and euro dropped to a session low at 1.3723 in New York before rebounding strongly to 1.3775 on short-covering ahead of important Wed's FOMC rate decision..

Versus the Japanese yen, dollar moved in a relatively narrow range of 102.87-103.12 in Asia n Europe and then tumlbed to a session low at 102.50 on renewed risk aversion on Tuesday due to concerns that the subdued inflation outlook could prompt the Fed to keep its stimulus program in place for longer. Later in the day, reports showed U.S. CPI came in at 0.0% month/month and 1.2% year/year in November.

Although cable rebounded after finding support at 1.6290 in Australia and then rose in tandem with euro in Asia to an intra-day high of 1.6336 in European morning, price fell after data showed that the annual rate of inflation in the U.K. fell to a four year low in November and eased pressure on the Bank of England to tighten monetary policy. Cable later dropped to a fresh 3-week low at 1.6256 ahead of New York before staging a brief recovery but only to fall to a session low at 1.6214 but buying interest above 1.6200 level lifted price to 1.6281 in late New York.

Bank of England's Carney says 'inflation within a hair's breadth of 2% target, recovery has taken hold; return to growth is not yet a return to economic normality; business people understand forward guidance well; FPC paying particular attention to housing market risks, "graduated and profortionate" steps reduce need for larger actions in future.

On the data front, U.K. Office for National Statistics reported the annual rate of CPI in the U.K. rose by 2.1% in November, slowing from 2.2% the previous month. It was the smallest increase since November 2009, while CPI rose 0.1% in November from a month earlier, below expectations for a 0.2% increase.

In other news, RBA minutes stated 'A$ remains uncomfortably high, lower level needed for balanced growth; see further signs that past rate cuts are stimulating economy; expects below-trend economic growth over next year, pick up thereafter; mining investment to decline over next few years; sees other business investment rising from current weak levels but will take time; labor market remains soft but there are tentative signs of a stabilization; household consumption growth looks to have picked up a little since Q3; Chinese economy appeared a bit stronger in H2 versus H1.' Australian Treasurer Joe Hockey added later that 'government determined to fix problems Government inherited; Australia government will deliver stronger economy; deterioration in budget not just a short-term problem; spending reform will require "difficult choices"; Transition to non-resource sector slower than expected.'

Data to be release on Wednesday:

New Zealand current account, business confidence, business confidence, Australia Westpac leading economic index, Japan trade balance, export, import, Germany Ifo business climate, current assessment, expectation, U.K. MPC minutes, claimant count, unemployment rate, average earning, CBI distributives trade, Swiss Zew index, Italy current account U.S. housing starts, building permits and Fed rate decision, Canada wholesale sales.

AceTraderfx
12-19-2013, 02:01 AM
Market Review - 18/12/2013 14:58GMT

U.S. dollar fluctuates wildly after the Fed decides to taper bond purchases

U.S. dollar fluctuated wildly after the Fed decided to taper bond purchases, reducing the QE toal to 75 billion from 85 billion. Euro rose to 1.3799 before retreating strongly to 1.3702. U.S. dollar dropped to 102.71 versus Japanese yen b4 rallying strongly to 103.67. The British pound tumbled to 1.6344 before rallying to 1.6486.

Fed said ‘to reduce bond buying to $75 billion per month, split as $35 billion MBS and $40 billion treasuries; will hold rates near zero as long as jobless rate above 6.5%, projected inflation not more than 2.5%; likely will keep Fed funds rate at 0-0.25% well past the time jobless rate falls below 6.5%, especially if projected inflation below 2 percent; will likely further reduce pace of asset purchases in measured steps if data shows ongoing improvement in labor market, inflation moving toward long-run objective; fiscal policy restraining economic growth, extent of restraint may be diminishing; risks to economic outlook, labor market have become more nearly balanced; inflation persistently below target could pose risks to economy, monitoring inflation developments carefully for evidence inflation will move back toward its objective. Fed vote in favor of policy was 9:1, Rosengren dissents because believes unemployment rate still elevated, inflation rate well below target; to reduce bond buying to $75 billion in bonds per month, split as $35 billion MBS and $40 billion treasuries.’

The single currency edged higher against the dollar in Asia and hit an intra-day high of 1.3778 in European morning before cross-selling of euro (especially versus sterling) pressured price lower to 1.3732 in New York morning, however, renewed risk appetite lifted price again later in the day and euro climbed back to 1.3799 before FOMC rate decision. Price later retreated briefly to 1.3702 and then rallied above 1.3811 to a fresh 6-month high at 1.3812 before tumbling to 1.3674 near New York close.

Versus the Japanese yen, dollar traded sideways in Asia after rebounding strongly from Tuesday's New York low of 102.50 to 103.03 due to a 2% gain in Nikkei 225 index. The pair found support at 102.82 in European morning on cross-selling in yen and then briefly rose to 103.28 in New York morning after the upbeat U.S. housing starts data. The pair later retreated briefly to 102.71 after FOMC and then penetrated last Friday's 103.92 peak to a fresh 5-year high at 104.35 near New York close.

U.S. housing starts rose to 1.09 million units last month, from 0.89 million in October, highest since February 2008 and posted a largest rise since January 1990, increased by 22.7%, however, U.S. building permits fell 3.1% to 1.01 million units in November, from 1.04 million units the previous month.

Cable edged higher after finding support at 1.6262 in Australia and then rallied in European morning after data showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low in the three months to October, price rose to a high of 1.6370 and then retreated to 1.6344 in New York trading after FOMC before rallying to a high of 1.6486.

U.K. unemployment benefit claimant fell by 36,700 in November, better than expectations for a decline of 35,000. October’s figure was revised to a drop of 42,800 people from a previously reported decline of 41,700. A separate report from ONS showed U.K. unemployment rate fell to 7.4% in the three months to October, the lowest level since April 2009.

Bank of England said on Wednesday 'recent sterling strength reflects better data but further substantial appreciation may hurt recovery; recent data suggest burgeoning recovery; some signs of greater investment but net trade weak; government steps to limit energy price rises may lower CPI by 0.15% if fully passed on by utilities; CPI inflation now seen at or near 2% target in early 2014, depending on timing of energy price changes; lack of productivity improvement despite stronger growth is puzzling, data may be misleading; too soon to draw conclusions about response of supply capacity to greater demand; forward guidance remains in place as inflation expectations well anchored, CPI outlook lower, FPC not concerned on stability.'

Data to be released on Thursday:

New Zealand GDP, Japan all industry index, leading indicators, Swiss trade balance, EU current account, U.K. retail sales, U.S. jobless claims, Philadelphia Fed survey, existing home sales, leading indicators..

AceTraderfx
12-20-2013, 02:29 AM
Market Review - 19/12/2013 21:04GMT

Dollar maintains a firm undertone after Wed's tapering by Fed

U.S. dollar extended rally against other major currencies on Thursday following the Federal Reserve's decision on Wednesday to start tapering its economic stimulus program.

The Federal Reserve announced on Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. In his last press conference as Fed Chairman Ben Bernanke said the economy was continuing to make progress.

During the day, although euro recovered after dropping further to 1.3650 in Thursday's Asian trading, renewed dollar's broad-based rebound capped intra-day gain at 1.3691 in European morning and price later tanked to 1.3658 in New York morning before stabilizing.

Versus the yen, dollar extended Wednesday's rally to a fresh 5-year peak at 104.37 in Australia but only to retreat to 103.78 in Asia on profit-taking. Later, dollar's broad-based rebound lifted price again in Europe and price edged higher to 104.35 in New York trading before easing.

Although cable found support at 1.6365 in Asia and then recovered to 1.6388 in European morning, dollar's broad-based rebound together with cross-selling of sterling pressured price again in New York morning and price extended losses from Wednesday's fresh 2-year peak at 1.6486 to 1.6335 before recovering.

On the data front, U.S. initial jobless claims rose for the second consecutive week last week and hit a 9-month high during the year-end holiday season, increased to 379K in the week ending December 14 from a revised 369K the prior week. A separate report later in the day showed U.S. existing homes in November declined for the third straight month, fell 4.3 percent to an annual rate of 4.90 million, the weakest pace since December 2012.

In other news, European Central Bank President Mario Draghi told Reuters as he arrived for the EU leaders summit that 'the European Central Bank welcomed on Thursday a deal among EU finance ministers to set up an agency and network of funds to close troubled banks in the euro zone; it's an important step towards completion of our banking union.'

Data to be released on Friday:

Bank of Japan rate decision, U.K. consumer confidence, current account, GDP, PSNCR, public sector net borrowing, Germany PPI, consumer confidence, France business climate, EU consumer confidence, U.S. GDP, personal consumption, PCE, Canada CPI and retail sales.

AceTraderfx
12-23-2013, 02:41 AM
Market Review - 20/12/2013 20:24GMT

Dollar turns lower against major currencies on long liquidation

The dollar turned lower against other major currencies on Friday on long liquidation, erased early gains on upbeat U.S. economic growth data and the Federal Reserve's decision to begin tapering its stimulus program.

During the day, although euro remained under pressure in Asia and fell to 1.3625 after Standard & Poor's cut its supranational long-term rating on the European Union to AA+ from AAA, cross-related buying of euro lifted price to 1.3663 in early European trading before dropping back to 1.3632 in New York morning on upbeat U.S. gross domestic product data. Later, dollar's renewed broad-based weakness lifted price again and price subsequent rallied to 1.3710 after report showed improving euro zone consumer confidence in December before retreating, last seen around 1.3667 near New York closing.

On the data front, report showed U.S. gross domestic product advanced 4.1 percent in third quarter, the fastest in two years and the second biggest since the country's steep recession officially ended in mid-2009.

Versus the Japanese yen, dollar edged higher in Asia and briefly rose to 104.59 before easing, price later strengthened to a fresh 5-year peak at 104.64 in New York morning after release of better-than-expected U.S. GDP and personal consumption, however, lack of follow through buying prompted long liquidation and price subsequent tumbled to 103.85 before stabilising.

Cable tracked euro's movement closely on Friday, although price penetrated Thursday's low at 1.6335 in European morning to 1.6319 and then rebounded to 1.6369, price fell again and hit a fresh session low at 1.6315 in New York morning but only to rallied to 1.6395 before easing.

Earlier, official data showed that the U.K. current account deficit widened to 20.7 billion pounds in the third quarter, from 6.2 billion pounds in the three months to June, while a separate report showed that the U.K. gross domestic product expanded by 0.8% in the third quarter, in line with market expectation.

In other news, BOJ's Governor Kuroda said on Friday that 'Fed's start of tapering reflects steady recovery in U.S. economy; correction in excessive yen strength has been positive for Japan's economy; no chance to view japan to steadily head towards 2% inflation despite economic fluctuation from sales tax hike; correction in yen strength has boosted corporate profits and improved sentiment; BOJ's existing two loan schemes have played key roles, will mull if to extend deadlines; BOJ monetary policy not aimed at forex markets; Japan consumer inflation to slightly exceed 1% by year end; don't expect April sales tax hike to cause big problem.'

Data to be released next week:

Swiss UBS consumption indicator, Italy consumer confidence, Canada GDP, U.S. Chicago Fed index, personal income, personal consumption, PCE, University of Michigan consumer confidence on Monday. Japan financial markets are closed due to public holiday.

France GDP, U.K. BBA mortgage approvals, U.S. durable goods, Redbook retail sales, house price index, New home sales on Tuesday

No economic data is released on Wednesday. Australia, New Zealand, France, U.K., Swiss, Germany, U.S. and Canada financial market are closed due to Christmas day.

Japan manufacturing PMI, BOJ MPC minutes, housing starts, construction orders, U.S. jobless claims. on Thursday. Australia, New Zealand, Germany, France, U.K. Canada financial markets are closed due to boxing day.

Japan household spending, unemployment rate, CPI, industrial production, retail sales, France PPI on Friday.

AceTraderfx
12-24-2013, 01:51 AM
Market Review - 23/12/2013 21:46GMT

Euro moves moderately higher against the dollar in thin trading volume

The single currency edged moderately higher against the dollar on Monday after the release of tepid U.S. data as market participants locked in gains ahead of Christmas holiday after the greenback's rally last week following the Federal Reserve's decision to begin tapering its stimulus program in January.

During the day, euro rebounded after finding support at 1.3668 in New Zealand and price edged higher to 1.3695 in Asia before trading sideways in early European session. Later, euro jumped to 1.3717 in New York morning after release of a slew of U.S. economic data and then hovered around 1.3700 level for rest of the session.

U.S. personal spending rose 0.5% last month, in line with expectations, while personal income rose 0.2% in November, missing consensus forecast of a 0.5% increase. In a separate report, University of Michigan's said its index of overall consumer sentiment held at 82.5 this month, unchanged from an initial estimate.

Versus the yen, dollar met selling interest at 104.10 in Asia and then traded with a soft bias in Europe. The pair extended losses from last Friday's 2-year peak at 104.64 to 103.77 but cross-selling in yen on risk appetite lifted price in New York morning. Later, usd/jpy climbed back above 104.00 level to 104.12 before easing.

Although cable rebounded after meeting renewed buying interest at 1.6324 in Australia and then ratcheted higher to 1.6375 in European morning, active cross-selling of sterling versus euro pressured price lower to 1.6329 in New York morning before recovering to 1.6366.

In other news, Dallas Federal Reserve President Richard Fisher said on Monday that the U.S. central bank had taken an important psychological step when it announced a reduction in bond buying at its policy meeting last week, but he favored even bolder action.


Data to be release on Tuesday:

France GDP, U.K. BBA mortgage approvals, U.S. durable goods, Redbook retail sales, house price index and New home sales.

AceTraderfx
12-27-2013, 01:55 AM
Market Review - 25/12/2013 01:32GMT

Dollar firms broadly in thin pre-X'mas holiday trade

U.S. dollar strengthened against the euro in holiday-thinned trade on Tuesday, after stronger-than-expected U.S. durable goods data added to the view that economic recovery is gaining momentum. Later, although new home sales fell by 2.1% to a seasonally adjusted 464,000 units last months, the data was still higher than expectation of an increase of 445,000.

During the day, although euro rose briefly to 1.3714 in Australia morning on Tuesday, cross related selling interest of euro pressured price in Asian and European sessions and the single later dropped to 1.3655 in New York morning after the release of better-than-expected U.S. economic data before stabilizing.

Versus the Japanese yen, dollar initially climbed higher to 104.41 in Asia on risk appetite but retreated later in tandem with the pullback in Nikkei 225 index. The pair dropped to 104.14 in early European trading before broad-based rebound in greenback lifted price back up to 104.36 in New York morning. Dollar settled at 104.20 near New York close.

Cable edged lower from Asian high of 1.6357 to 1.6323 in European morning, however, cross buying of sterling especially versus euro emerged ahead of Friday's low of 1.6316 and price later lifted to a fresh intra-day high of 1.6383 in New York before easing.

On the data front, report from INSEE showed French gross domestic product contracted at an 0.1 per cent quarter-on-quarter clip during the three months ended in September. In a separate report, mortgage approvals in the U.K. rose 45,000 in November from October's revised total of 43,300, more-than-expected and hit the highest level since December 2009.

No major economic data is released on Wednesday. Australia, New Zealand, France, U.K., Swiss, Germany, U.S. and Canada financial market are closed for Christmas Day holiday.

Japan manufacturing PMI, BOJ MPC minutes, housing starts, construction orders, U.S. jobless claims. on Thursday. Australia, New Zealand, Germany, France, U.K. Canada financial markets are closed due to boxing day.

Japan household spending, unemployment rate, CPI, industrial production, retail sales, France PPI on Friday.

AceTraderfx
12-30-2013, 01:41 AM
Market Review - 28/12/2013 02:38GMT

Euro hits 2-year high and then retreats sharply in New York session

Euro rallied to a fresh 2 year high at 1.3994 (EBS) against the dollar in Europe after comment from European Central Bank Governing Council member Jens Weidman, who said 'low inflation pressure does not give a license for arbitrary monetary easing; must be sure to raise rates in time should inflation pressure mount.'

Earlier in the day, the single currency found renewed buying interest at 1.3687 in Australia and ratcheted higher in Asia. The pair then rallied above October's peak at 1.3833 to 1.3894 in thin holiday trading conditions at European midday after hawkish comments from ECB's Jens Weidman, however, profit-taking pressured price in New York morning and price later fell sharply to 1.3732 ahead of New York close.

Versus Japanese yen, although the greenback rose to 105.05 ahead of Tokyo open, renewed selling interest pressured price from there and price retreated to 104.65 in European morning. Dollar later rebounded to 105.01 in New York morning and then rose further to a fresh 5-year peak at 105.19 in New York afternoon.

Cable tracked euro's intra-day move closely on Friday. The pair found support at 1.6406 in Australian session and then rallied to a fresh 2-year peak at 1.6578 in European morning before retreating. The pound later fell sharply to 1.6458 ahead of New York close.

In other news, Bloomberg news reported Japan Vice Economic Minister Yasutoshi Nishimura said ‘'wants to quickly cut corporate tax rate below 30%; want bolder corporate tax cuts in special zones; want to show tax cut direction in revised growth plan; may be hard to declare in 2014 Japan deflation end; revised growth strategy planned for June 2014; 'hopes BOJ will deal appropriately with impact of sales tax hike; BOJ's Kuroda, PM Abe to hold regular dialogue to deal with sales tax hike impact; weak yen is positive for Japan's macro economy; wage hikes are biggest issue for Japan's economy in 2014; not so easy to declare that deflation has been beaten.'

On the data front, France PPI in November came in at 0.5% m/m and -0.6% y/y, higher than the forecasts of -0.1% and -1.2%, previous reading was revised to -0.3% and 1.3%.respectively.

Data to be released next week:

U.K. hometrack housing survey, Italy PPI, U.S. pending home sales on Monday.

U.K. Lloyds business barometer, U.S. Redbook retail sales, S&P home price, Chicago PMI, consumer confidence on Tuesday.

China manufacturing PMI on Wednesday. New Zealand, Australia, Japan, Hong Kong, Switzerland, Germany, France, U.K., U.S., Canada financial markets closed due to public holiday.

China HSBC manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, EU manufacturing PMI, EU manufacturing PMI, U.K. manufacturing PMI, U.S. jobless claims, manufacturing PMI, ISM manufacturing PMI, construction spending on Thursday. Financial markets in New Zealand, Japan, China and Switzerland will be closed due to public holiday.

AceTraderfx
12-31-2013, 01:28 AM
Market Review - 30/12/2013 22:52GMT

Dollar retreats broadly on improved market sentiment

Dollar retreated broadly against other major currencies on Monday, as market appetite improved before the year end. In addition, thin trading volumes due to many investors closing books before year end reduced liquidity in the market and increased volatility, which helped to exaggerate market moves.

The single currency retreated after meeting renewed selling at 1.3770 in Australia and dropped to 1.3729 in Asian trading, however, improved risk appetite lifted price from there and euro ratcheted higher in European trading. Euro later rose to 1.3819 near New York afternoon before easing.

Versus Japanese yen, although the greenback rose to fresh 5-year high at 105.41 in Tokyo morning, profit-taking pressured price from there and the pair later fell to 105.12 in near European midday and then further to 104.97 after release of weaker-than-expected U.S. pending home sales before recovering.

U.S. November pending home sales came in at 0.2% m/m, lower than market expectation of an increase of 1.0%.

Cable traded sideways in Asian trading and then retreated to 1.6460 in European morning. Later, the British pound rose in tandem with euro on the back of dollar's broad-based softness and climbed to a high of 1.6533 in New York trading.

In the other news, German Finance Minister Wolfgang Schaeuble said 'low rate policies can't last forever; sees 1st signals of European money supply declining.'

On the data front, Italy PPI in November came in at -0.1% m/m n -2.3% y/y, previous reading was revised to -1.0% n -2.5% respectively.

Data to be released on Tuesday:

U.K. Lloyds business barometer, U.S. Redbook retail sales, S&P home price, Chicago PMI, consumer confidence on Tuesday.

AceTraderfx
01-02-2014, 02:21 AM
Market Review - 01/01/2014 02:37GMT

Dollar ends mixed on last trading day in 2013

The dollar traded mixed against major currencies in subdued holiday trade on Tuesday, as market sentiment improved ahead of the year end although the greenback remained supported on dips.

Earlier in Asia, the single currency retreated after meeting renewed selling interest at 1.3812 and price dropped to 1.3760 in European morning. Later, despite a brief bounce to 1.3794, release of better-than-expected consumer confidence data in New York morning pressured euro and price weakened to sessn lows of 1.3740 near New Yok close

U.S. consumer confidence improved to 78.1 in December from 72.0 in November, beating consensus forecasts for a 76.0 reading.

Versus the Japanese yen, U.S. dollar traded in a choppy fashion near Monday's 5-year peak at 105.41 on Tuesday. Despite an initial drop from Australian high of 105.15 to 104.86 in Asian trading, the pair found support in New York trading as robust U.S. consumer confidence data sparked demand for the greenback amid hopes for U.S. recovery to gain steam in 2014. Dollar later rose to a fresh intra-day high of 105.36 near New York close.

Although cable remained under pressure in tandem with euro in Asia and fell to 1.6475, active cross-buying of sterling versus euro gave support to the pair and British pound later ratcheted higher above last Friday's 2-year peak at 1.6578 to 1.6580 in New York afternoon before easing.

On the data front, U.K. Lloyds Business Barometer dropped to 48 in December from 50 in previous month. U.S. S&P/Case-Shiller home price index in October came in at 1.05% m/m and 13.61% y/y, better than the forecast of 0.95% and 13.45% respectively.

Data to be released on Wednesday:

China manufacturing PMI on Wednesday. New Zealand, Australia, Japan, Hong Kong, China, Switzerland, Germany, France, U.K., U.S., Canada financial markets closed due to public holiday.

AceTraderfx
01-03-2014, 02:02 AM
Market Review - 02/01/2014 22:30GMT

Euro weakens on economic recovery concerns

The single currency weakened against the dollar on Thursday, as the release of mixed manufacturing activity reports from the euro zone added to concerns over the strength of the economic recovery in the region.

During the day, despite euro's initial rise to 1.3776 in Asian morning, renewed selling interest capped intra-day gain there and price later fell to 1.3716 in European morning and then further to 1.3630 on risk aversion in New York trading before stabilizing.

France's manufacturing PMI fell to a 7-month low of 47.0 in December, from 47.1 in November, compared to expectations for the index to remain unchanged. A separate report showed Germany's manufacturing PMI rose to a 30-month high of 54.3 in December, from a reading of 54.2 the previous month.

Versus the yen, U.S. dollar traded sideways in Asian session and before rising above Monday's high at 105.41 to a fresh 5-year high at 105.45 near European midday, however, profit-taking pressured and risk aversion on falling U.S. equity markets pressured price lower in New York trading and price dropped to 104.55 before stabilizing.

U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending December 28 declined by 2,000 to a seasonally adjusted 339,000.

Although cable rose to fresh 2-year high at 1.6605 in Asian trading, lack of follow through buying prompted profit-taking and the British pound later dropped to 1.6540 after the release of weaker-than-expected U.K. manufacturing PMI before tumbling to 1.6410 in New York morning on broad-based strength in greenback.

U.K. manufacturing PMI came in at 57.3 in December, weaker than the forecast of 58.1.

Data to be released on Friday:

China non-manufacturing PMI, Swiss KOF indicator, PMI, U.K. construction PMI, mortgage approvals, CPI, HICP on Friday. Financial markets in Japan and China will be closed due to public holiday.

AceTraderfx
01-06-2014, 02:36 AM
Market Review - 04/01/2014 01:19GMT

Euro falls broadly on broad-based demand for USD

The single currency fell to a one-month low against the U.S. dollar on Friday due to renewed broad-based demand for the safe-haven dollar despite positive Spanish unemployment data released earlier in the trading session.

Earlier in the day, euro edged lower after meeting selling interest at 1.3673 in Australia and price briefly penetrated Thursday's low at 1.3630 to 1.3629 in European morning before staging a minor recovery. However, active cross-selling of euro on risk-aversion in New York session pressured price again and the single currency subseqeuntly weakened to a fresh 1-month low at 1.3582 and price traded near 1.3590 at New York close.

Versus Japanese yen, dollar tumbled from 104.87 to as low as 104.08 in Asian trading due to a 2% decline in the Nikkei futures. Later, dollar recovered to 104.54 in Europe as Nikkei futures turned positive. The greenback later pared all its intra-day loss in New York session and climbed to 104.89 near New York close.

Although cable found support at 1.6422 in Asian trading and then rebounded to 1.6474 in European morning after mixed U.K. economic reports, renewed cross-selling of sterling pressured price lower ahead of New York open and pound later fell further to 1.6395 in New York morning.

The Market U.K. construction PMI for December came in at 62.1 versus forecast of 62.0 but down from November's reading of 62.6. A separate report showed that the number of new home loans approved in the U.K. reached the highest monthly total in November in more than five years to 70,758, while the amount of mortgage lending in money terms declined from previous month's 1.22 billion pounds to 0.91 billion pounds (lowest since May).

In other news, Fed's Plosser says 'despite cut to bond-buying, Fed balance sheet still growing "at fairly rapid clip"; need to return balance sheet to predominantly all treasuries portfolio; concerned more with too-high inflation than too-low given $ 2.4 trillion in excess bank reserves; warns interest rates could rise "fairly quickly" if banks quickly release reserves; very hard to know accumulated distortions of ultra low rates for up to 6 years.'

Data to be released next week :

China HSBC services PMI, Germany export, import, trade balance, service PMI, CPI, HICP, Italy service PMI, EU Sentix investors’ confidence, France service PMI, U.K. service PMI, U.S. durable goods, factory orders, ISM non-manufacturing index, Canada PPI, CPI on Monday.

Australia trade balance, France consumer confidence, Germany unemployment change, unemployment rate, EU PPI, CPI, U.S. trade balance, Redbook retail sales, Canada trade balance, import, export, Ivery PMI on Tuesday.

U.K. BRC retails sales, Germany trade balance, export, import, CPI, current account, Italy unemployment rate, EU retail sales, unemployment rate, Germany factory orders, U.S. ADP unemployment change on Wednesday.

Australia retail sales, building approvals, France trade balance, U.K. trade balance, industrial production, BOE rate decision, EU business climate, economic sentiment, consumer confidence, ECB rate decision, Canada housing starts, building permit, new housing price index, U.S. jobless claim on Thursday.

Japan leading indicators, U.K. RBC retail sales, industrial production, manufacturing production, France industrial production, manufacturing production, Swiss unemployment rate, CPI, Canada unemployment rate, U.S. non-farm payrolls, private payrolls, unemployment rate, average hourly earning, wholesale inventories, wholesale sales on Friday.

AceTraderfx
01-07-2014, 03:32 AM
Market Review - 06/01/2014 22:46GMT

U.S. dollar retreats after weak ISM PMI data

The single currency turned higher on Monday on short-covering together with dollar's broad-based weakness as data showed service sector activity in the U.S. slowed unexpectedly in December, led lower by a drop in new orders.

During the day, although the single currency remained under pressure in Asia and penetrated Friday's low at 1.3582 to a fresh 1-month trough at 1.3572 ahead of European opening, lack-of-follow through selling prompted short-covering and euro later rebounded to 1.3622 in European trading and then further to 1.3653 in New York morning after weak U.S. data.

The Institute of Supply Management said its non-manufacturing purchasing manager's index declined to 53.0 in December from 53.9 in November, worse than the forecast of an increase to 54.5.

Versus the Japanese yen, dollar tumbled in Asian trading after an initial rise to 104.95 with sharp falls in Japan equities market bolstering safe haven demand for the yen (Nikkei 225 index close down by 2.35% to 15,908.88). Dollar dropped to as low as 104.15 but failure to penetrated last Friday's low at 104.08 prompted short-covering and dollar later climbed back to 104.84 in New York before falling to 103.91 again after disappointing U.S. economic reports.

Cable ratcheted lower in Asia after penetrating Friday's low at 1.6395 and dropped to a fresh 1-week low at 1.6337 in European morning after data showed Markit/CIPS Services Purchasing Managers Index declined to a six month low of 58.8 in December from 60.0 in November, however, renewed weakness of dollar versus European currencies lifted price later in the day and cable rose above New Zealand high of 1.6420 to 1.6434 in New York morning before easing.

On the data front, euro zone showed the bloc's services PMI came in at 51.0 in December, unchanged from the preliminary estimate and down slightly from 51.2 in November. Separate reports showed that activity in Spain's private sector expanded at the fastest rate in 77 months, but activity in France and Italy contracted last month.

In other news, data over the weekend showed that activity in China's services sector slumped to the weakest level since August 2011 in December, fueling concerns over the outlook for growth in the world's second largest economy.

Data to be release on Tuesday:

Australia trade balance, France consumer confidence, Germany unemployment change, unemployment rate, EU PPI, CPI, U.S. trade balance, Redbook retail sales, Canada trade balance, import, export and Ivey PMI.

AceTraderfx
01-08-2014, 02:20 AM
Market Review - 07/01/2014 21:37GMT

Dollar strengthens after upbeat U.S. trade data

Dollar rose against its major peers on Tuesday after a report showed that the U.S. trade deficit shrank to the lowest level in four years in November, however, gain was limited as investors were eyeing Wednesday's minutes of the Federal Reserve's December meeting and Friday's U.S. jobs report for December for further indications on the possible timing of reductions in Fed stimulus.

Versus the Japanese yen, dollar retreated after a brief rise to 104.62 in Asia in part due to cross-buying in yen, however, gains in the Nikkei futures gave support to the pair and dollar rose from European morning low at 104.25 to 104.74 in early New York trading after upbeat U.S. trade data.

U.S. Bureau of Economic Analysis said that the U.S. trade deficit narrowed to a four-year low of USD 34.25 billion in November from a deficit of USD 39.33 billion in October, whose figure was revised from a previously reported deficit of USD 40.6 billion.

Although euro rebounded after finding support at 1.3611 in early European trading and then rose to 1.3657 ahead of New York open, broad-based rebound in greenback after release of strong U.S. trade balance data pressured price lower to session low at 1.3596 in New York morning, however, euro pared intra-day loss in New York afternoon to 1.3640 before easing near the close.

Earlier, report showed that the annual rate of inflation in the euro zone slowed to 0.8% in December from 0.9% the previous month, fuelling fresh concerns over the threat of deflation in the currency bloc.

Similarly, although cable remained under pressure in Asia and then dropped to 1.6376 in European morning, price rose in tandem with euro ahead of New York open and penetrated Monday's New York high of 1.6434 to 1.6439 but only to tank to 1.6374 later in the day due to dollar's broad-based rebound.

In the other news, Fed's Rosengen says 'stimulus should be removed only gradually as economy continues to improve; Fed missing inflation, employment mandates by "fairly large margins"; inflation persistently below 2% a concern, leaves economy vulnerable; economic conditions improving; expects 3% growth in 2014.'

San Francisco Federal Reserve Bank President John Williams told reporters after a speech that "the Federal Reserve will make gradual cuts to its massive bond- buying program in coming months as long as the economy continues to improve, and only a significant deviation from those expectations would force it to change tack."

Data to be release on Wednesday:

U.K. BRC retails sales, Halifax house price Germany trade balance, export, import, current account, factory orders, Italy unemployment rate, EU retail sales, unemployment rate, n U.S. ADP unemployment change.

AceTraderfx
01-09-2014, 02:04 AM
Market Review - 08/01/2014 21:32GMT

U.S. dollar rises versus euro after Fed minutes

The greenback rose against the single currency on Wednesday after the release of minutes of the Federal Reserve's December meeting, which showed the U.S. central bank was on track to wind down its bond purchases at a steady pace.

The Fed minutes laid out the central bank's rationale for cutting purchases of Treasuries and mortgage-backed securities to $75 billion a month from $85 billion starting this month. The minutes showed showed many members of the policy-setting Federal Open Market Committee wanted to proceed with caution in trimming the asset purchases, and most wanted to stress that further reductions were not on a preset course.

Some of the 10 voting policymakers "expressed concern about the potential for an unintended tightening of financial conditions if a reduction in the pace of asset purchases was misinterpreted as signaling that the committee was likely to withdraw policy accommodation more quickly than had been anticipated."

During the day, the single currency retreated against the dollar after meeting renewed selling at 1.3635 in Asia in part due to cross-selling vs yen and sterling and dropped to 1.3581 in European morning despite the release of upbeat euro zone retail sales in November. Later, the pair fell further to 1.3568 in New York morning after release of better-than-expected U.S. ADP employment change in December but lack of follow through selling prompted short-covering and price rebounded to 1.3618 before falling to a fresh 1-month low at 1.3554 near New York close.

ADP non-farm payrolls rose by 238,000 in December, exceeded expectations for an increase of 200,000. November's figure was revised up to a gain of 229,000 from a previously reported increase of 215,000.

Versus the Japanese yen, although dollar rose in Asia due to the rally in Nikkei 225 index and extended gain from Australian low at 104.60 to 105.13 in European morning, falling Nikkei futures in Europe pressured price to 104.67. Dollar later staged a brief rebound to 105.01 in early New York morning after upbeat U.S. ADP employment change and rose marginally higher to 105.05 after the release of FOMC minutes before retreating.

Cable edged higher after meeting cross-related buying interest at 1.6377 in Asia and price later rose to 1.6434 ahead of New York open, despite a brief selloff to 1.6400 after U.S. ADP employment change, active selling in eur/gbp cross continued to support the cable and price later rose to 1.6472 in New York morning before easing.

On the data front, eurozone unemployment rate in the region came in unchanged at 12.1% in November. A separate report showed euro zone retail sales rose 1.4% in November, the biggest rise since November 2001, recovering from a 0.4% fall in October.

Thursday will see the release of Australia retail sales, building approvals, France trade balance, U.K. trade balance, industrial production, BOE rate decision, EU business climate, economic sentiment, consumer confidence, ECB rate decision, Canada housing starts, building permit, new housing price index and U.S. jobless claims data.

AceTraderfx
01-10-2014, 01:48 AM
Market Review - 09/01/2014 21:24GMT

Euro falls to a fresh 1-month low after ECB's Draghi comments

The single currency turned lower to a fresh 1-month low against the dollar on Thursday after European Central Bank President Mario Draghi reinforced the bank's forward guidance on rates and said the bank was still ready to take 'further decisive action' if needed. The ECB kept interest rate unchanged at 0.25% in January.

During the day, although euro rebounded after finding support at 1.3567 at Asian open and then ratcheted higher to 1.3634 in New York morning, price came under pressure as Draghi reiterated that 'monetary policy will remain accommodative for as long as is needed in order to assist the economic recovery in the euro area' during the press conference and euro penetrated Wednesday's low of 1.3554 to a fresh 1-month low at 1.3548, however, lack-of-follow through selling prompted short-covering and price later recovered above 1.3600 near NY close.

Against the Japanese yen, dollar's intra-day moves on Thursday were mainly driven by cross-trading of yen and price traded in a choppy fashion below Wednesday's high of 105.13. The pair rebounded from Asian low at 104.75 to 105.06 in European morning before falling to 104.77 and then to session low at 104.57 in New York morning.

Cable edged higher from Asian low at 1.6441 to 1.6480 in European morning and then further to 1.6497 in New York morning after Bank of England announced no change to monetary policy following its first meeting of the year, however, euro's intra-day selloff pressured price here and the pair later dropped to 1.6452 and then traded in a choppy fashion for the rest of the New York session.

The Bank of England left rates on hold at 0.5% and announced no change to the size of its GBP 375 billion asset purchase program, as was widely expected. No statement after monetary policy decision.

On the data front, U.S. Labor Department said Thursday the number of people who filed for unemployment assistance last week fell by 15,000 to 330,000 from the previous week's revised total of 345,000. A separate report earlier showed U.K. trade deficit narrowed to GBP 9.44 billion from a downwardly revised deficit of GBP 9.65 billion in October.

In other news, BOJ's Shirai said 'it is possible to aim for 2%inflation at slower pace than 2 yr time frame if burden on households and companies become excessive; currently there is a lot of uncertainty around the time frame for the BOJ's 2% inflation target; would not hesitate to ease further if big downside risks economy, prices emerge; disinflationary trend is somewhat of a concern in euro area but rather limit in U.S.'

Kansas City Federal Reserve Bank President Esther George told the Wisconsin Bankers Association that 'the Federal Reserve's efforts to provide markets with so-called "forward guidance" on its interest rate policy could result in the Fed keeping interest rates too low for too long, to the detriment of the economy'.

Data to be released on Friday:

Japan leading indicators, U.K. RBC retail sales, industrial production, manufacturing production, France industrial production, manufacturing production, Swiss unemployment rate, CPI, Canada unemployment rate, U.S. non-farm payrolls, private payrolls, unemployment rate, average hourly earning, wholesale inventories and wholesale sales.

AceTraderfx
01-13-2014, 01:31 AM
Market Review - 10/01/2014 21:06GMT

Dollar tumbles broadly after disappointing U.S. jobs report

Dollar weakened broadly on Friday after data showed that the U.S. economy added far less jobs than expected last month, although tapering of the Federal Reserve's stimulus program still lent some support.

Versus the Japanese yen, although dollar continued to edge higher from Thursday's New York low at 104.57 in Asia and Europe and then rose briefly to 105.40 ahead of the release of U.S. non-farm payroll data in New York morning, price tumbled sharply to 104.19 as data came in surprisingly weaker-than-expected and price later fell further below Monday's low at 103.91 to 103.83 before recovering due to short-covering ahead of the weekend.

U.S. official data showed that the U.S. non-farm payroll added 74,000 jobs in December, compared to expectations for a 196,000 increase, after an upwardly revised 241,000 rise the previous month. A separate report showed that the U.S. unemployment rate fell to 6.7% in December, from 7.0% in November.

The single currency rebounded to 1.3620 ahead of European opening on Friday but came in under pressure on active selling on eur/jpy cross, price fell to 1.3565 in New York morning and then rallied to 1.3687 on dollar's broad-based weakness after the disappointing U.S. jobs report before easing.

Cable traded in a relatively narrow range of 1.6472-1.6483 in Asia and then tumbled to 1.6403 in European morning as data showed that U.K. manufacturing production was flat in November, disappointing expectations for a 0.3% rise, after a downwardly revised 0.2% uptick the previous month. The pair later dropped further to 1.6381 in New York morning before rallying to 1.6518 on dollar's broad-based weakness on weak U.S. non-farm payroll data.

On the data front, official data showed that industrial production in France climbed 1.3% in November, exceeding expectations for a 0.4% rise, after a downwardly revised 0.5% decline the previous month

In the other news, Fed's Lacker said 'latest employment report showed dramatic fall in jobless rate, made substantial progress on unemployment; market expectations that interest rates will remain low may be bigger driver of market liquidity, equity prices than bond buys; healthcare act could have substantial economic impact, small business looking for how best to handle; Fed will be watching healthcare closely in next few years; wise not to cover-react to one month's employment report as a general principle; takes a couple of quarters to show a sustainable change in economic trends; would expect FOMC to discuss a similar reduction in bond buying pace at next meeting as the $10 billion agreed in Dec; markets have a good appreciation of FOMC's intentions, changes in forward curve more reflective of growth expectations.'

Data to be released next week :

Australia Home loans, Italy industrial production, U.K Lloyds employment confidence on Monday.

Japan current account balance, Economic watch DI, France current account, CPI, HICP, Italy CPI, HICP, U.K. PPI, CPI, RPI, ONS house price, EU industrial production, U.S. retail sales, import price index, export price index, Redbook retail sales, business inventories on Tuesday.

Japan machine tools orders, Germany GDP, Swiss retail sales, EU trade balance, US empire state mfg, PPI, Fed releases Beige Book report, Canada existing home sales on Wednesday.

Japan Tertiary industry index, machinery orders, domestic CGPI, Australia employment change, unemployment rate, U.K. RICS house prices, Germany CPI, HICP, Italy trade balance, EU CPI, U.S. CPI, Jobless claims, Net LT TIC flows, Philadelphia Fed survey, NAHB housing mrkt index on Thursday.

Japan consumer confidence, U.K. retail sales, U.S. housing starts, building permits, industrial production, capacity utilization, University of Michigan consumer confidence on Friday.

AceTraderfx
01-14-2014, 01:38 AM
Market Review - 13/01/2014 21:48GMT

Yen gains broadly on risk aversion

The dollar dropped below the 103 level to a three-week low of 102.85 against the yen on Monday, driven lower by expectations that Friday’s surprisingly weak U.S. jobs report for December will prompt the Federal Reserve to maintain loose monetary policy for longer and U.S. treasury yields will cotninue to fall.

Versus the Japanese yen, dollar fell after meeting renewed selling at 104.14 in Australia and tanked below last Friday's low of 103.83 to 103.26 in Asia. Later, despite a recovery to 103.57 in European trading, active cross-buying of yen pressured the dollar again in New York morning and price dropped further to a fresh 3-week low of 102.97 before stabilizing.

The single currency ratcheted lower after failure to penetrate last Friday's high of 1.3688 in Asia and price retreated from 1.3685 to 1.3638 ahead of New York open before recovering. Price later climbed back to 1.3661 in New York morning in part due to active buying in eur/gbp cross and then traded sideways for rest of the session. Euro's losses versus dollar were limited amid that Fed will adopt a more cautious approach to scaling back its stimulus program, after cutting it by USD 10 billion in December.

The British pound tumbled versus the dollar on Monday, despite a recovery to 1.6508 in Asia, active cross-selling of sterling versus yen and euro pressured price sharply lower to 1.6422 in European morning. Cable later climbed back to 1.6466 but another round of selling sent price further lower to 1.6347 in New York morning before stabilizing.

On the data front, Italian industrial output rose for a third consecutive moth in November, up 0.3% from a month earlier.

In other news, Atlanta Fed President Dennis Lockhart told reporters that "The Federal Reserve should clarify its future plans for raising interest rates now that U.S. unemployment has dropped to 6.7 percent, close to the central bank's stated threshold of 6.5 percent for considering tighter policy."

Data to be released on Tuesday:

Japan current account balance, Economic watch DI, France current account, CPI, HICP, Italy CPI, HICP, U.K. PPI, CPI, RPI, ONS house price, EU industrial production, U.S. retail sales, import price index, export price index, Redbook retail sales and business inventories.

AceTraderfx
01-15-2014, 01:48 AM
Market Review - 14/01/2014 21:42GMT

Dollar strengthens against the yen after upbeat U.S. retail sales

U.S. dollar rose against the Japanese yen on Tuesday after data showed that U.S. retail sales increased more than expected in December, bolstering the outlook for the economy going into 2014.

Versus the Japanese yen, dollar found support at 103.02 at Asian open on Tuesday and climbed higher to 103.52 after data showed that trade deficit in the Japan widened to 1,254.3 billion yen in November, price later dropped to 103.23 at Asian midday but only to rally to as high as 104.29 near New York close due to the release of better-than-expected U.S. retail sales data.

The Commerce Department said U.S. retail sales rose 0.2% last month, beating expectations for a 0.1% increase. Core retail sales, which exclude automobile sales, climbed 0.7% in December, above forecasts for a 0.4% increase.

The single currency traded sideways against the dollar in Asia and then dropped to 1.3649 shortly after European opening, however, 'euro-supportive' comments from European Central Bank Governing Council member Ewald Nowotny lifted price sharply higher to 1.3699 in European morning but profit-taking ahead of 1.3700 pressured price lower ahead of New York open. Later, euro briefly fell to 1.3658 after release of upbeat U.S. retail sales and then traded sideways for rest of New York session.

European Central Bank Governing Council member Ewald Nowotny said on Tuesday that 'there was a potential upside to the ECB’s growth forecast for this year. The ECB revised its growth forecast for 2014 slightly higher in December, saying it now expects growth of 1.1%.'

The British pound moved in a choppy fashion versus the dollar on Tuesday. Cable dropped to 1.6368 in early European trading and then rose sharply to 1.6447 in tandem with euro and active cross buying in sterling in European morning, price then swiftly tanked to 1.6396 after the U.K. inflation data but later rose further to 1.6465 in New York before retreating.

On the data front, U.K. reported that the annual rate of consumer inflation rose 2.0% in December, slowing from 2.1% in November. It was the first time since 2009 that the U.K. inflation rate was in line with the Bank of England’s official target of 2%.

In the other news, Fed's Plosser says 'prefers to end bond purchases before late 2014; economy 'on firmer footing than it has been for the past several years; expects 6.2% U.S. unemployment by year end; rise in inflation toward 2%; Dec jobs growth likely hit by cold weather; drop in workforce participation mostly driven by demographics.'

Philadelphia Fed President Charles Plosser said on Tuesday that "the droves of Americans dropping out of the work force may not be a problem that needs to be fixed with policies; the U.S. labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell 0.2 percentage point to 62.8 percent in December, returning to the more than 35-year low hit in October."

Data to be released on Wednesday:

Japan machine tools orders, Germany GDP, Swiss retail sales, EU trade balance, US empire state mfg, PPI, Fed releases Beige Book report and Canada existing home sales.

AceTraderfx
01-16-2014, 02:15 AM
Market Review - 15/01/2014 22:09GMT

Dollar strengthens broadly after upbeat U.S. data

The greenback rose further against the other major currencies on Wednesday after data showed that U.S. producer price inflation rose in December, while a separate report showed that manufacturing activity in the Empire state rose far more strongly than forecast in the current month.

Versus the Japanese yen, dollar rose above Tuesday's high of 104.29 to 104.47 in Asia and then traded sideways in Europe, however, price found support at 104.22 in New York morning and later rose to further to 104.70 near New York close on dollar's broad-based firmness after release of upbeat U.S. data.

U.S. producer price inflation rose 0.4% last month, the biggest increase since June, recovering from a 0.1% decline in November and was 1.2% higher from a year earlier. U.S. Core PPI was up 0.3% in December and rose 1.4% on a year-over-year basis, compared to expectations for a monthly increase of 0.1% and an annual gain of 1.3%. A separate report showed that manufacturing activity in the Empire State expanded at the fastest pace since May 2012 this month, Fed's general business conditions index jumped to 12.51 in January from an upwardly revised 2.22 in December.

The single currency fell below Tuesday's low at 1.3649 to 1.3627 in Asia. Despite a recovery to 1.3645, release of lower-than-expected Germany 2013 GDP pressured price again in European morning and price tanked to 1.3608 and then further to 1.3582 in New York morning after release of robust U.S. data before stabilising.

Germany's Federal Statistics Office said Wednesday the economy expanded by just 0.4% in 2013 after increasing by 0.7% in 2012, as the crisis in the euro zone acted as a drag on growth. Market had been expecting growth of 0.5%.

Cable traded in a choppy fashion on Wednesday but ended lower on dollar's broad-based firmness. Despite retreating from Asian high of 1.6443 in tandem with euro to 1.6377 in European morning, active cross-buying of sterling due to comments from British Financial Minister Osborne lifted price to 1.6437, however, renewed selling interest capped gain there and price later dropped further to a fresh 3-week low of 1.6323 in New York morning after upbeat U.S. data.

Britian's Financial Minister Osborne said Wednesday that 'stalling EU-US free trade deal would be a betrayal; open to idea of smaller number of EU states liberalizing trade in certain areas without overall EU agreement; worried that Eurozone countries could use their voting weight to rewrite EU rules, impose laws on UK's financial services industry; there's a "very real risk" that badly thought through EU laws will be imposed on the UK, says damaging city of London would be bad for all of Europe; non-euro states need their rights legally protected if countries like Britain are to remain in the EU; treaties are not fit for purpose; doesn't want Britain to be forced to choose between joining the euro and leaving the EU.'

Data to be release on Thursday:

Japan Tertiary industry index, machinery orders, domestic CGPI, Australia employment change, unemployment rate, U.K. RICS house prices, Germany CPI, HICP, Italy trade balance, EU CPI, U.S. CPI, Jobless claims, Net LT TIC flows, Philadelphia Fed survey and NAHB housing mrkt index.

AceTraderfx
01-17-2014, 02:07 AM
Market Review - 16/01/2014 22:17GMT

Dollar falls after lower than Fed's target inflation data

The greenback erased early gains and weakened broadly on Thursday after data showed U.S. consumer prices in December remained below the Federal Reserve's 2 percent target, supporting the central bank's pledge to keep rates at a record low.

During the day, although euro briefly dropped to 1.3586 against the dollar at Asian open, price climbed back to 1.3628 ahead of European opening on cross-buying of euro and then fell to 1.3597. The pair edged higher in early European trading as comments by European Central Bank governing council member Jens Weidmann lent support to the pair. Later, euro dropped again ahead of New York open but rebounded strongly from 1.3593 to 1.3649 as data showed U.S. inflation was still below Fed's 2% target.

ECB's Weidmann said on Thursday that 'agree with Draghi that have no reason to foster irrational inflationary fears; deflation risks in euro zone are limited; sees German economic upswing continuing this year and next; light at end of tunnel for most euro zone crisis countries; buying government bonds risks blurring line between monetary fiscal policy.'

U.S. December CPI came in at 0.3% m/m and 1.5% y/y, same as market's expectations.

Versus the Japanese yen, although dollar extended gain above Tuesday's high of 104.70 in to session high at 104.92, cross-buying of yen capped intra-day gain there and price later fell to 104.66 and the further to 104.15 in New York morning after U.S. inflation data.

Cable went trough another day of choppy trading on Thursday as despite falling from Asian high of 1.6375 to a fresh 4-week low of 1.6316 in European morning in part due to cross-selling of sterling, price rebounded to 1.6384 in New York morning on dollar's broad based weakness and then tanked to 1.6322 before trading sideways.

In the commodity currencies, the Australian dollar tumbled to a fresh 3-1/2 year low of 0.8777 on Thursday after data showed that the economy shed 22,600 jobs in December, compared to expectations for new jobs growth of 10,000. A separate report showed Australia's unemployment rate remained unchanged at 5.8%, in line with forecasts.

On the data front, Philadelphia Fed business conditions came in at 9.4 in January versus December 6.4. U.S. NAHB housing market index 56 in January versus revised 57 in December.

In other news, SNB Chairman Thomas Jordan said 'the Swiss National Bank's lid on the Swiss franc will remain at the centre of monetary policy for the foreseeable future, and the value of the safe-haven currency is still high."

Friday will see the release of Japan consumer confidence, U.K. retail sales, U.S. housing starts, building permits, industrial production, capacity utilization and University of Michigan consumer confidence.

AceTraderfx
01-20-2014, 01:47 AM
Market Review - 17/01/2014 20:18GMT

Euro falls to fresh 7-week low

The single currency tumbled to a fresh 7-week low at 1.3517 on Friday due to renewed dollar's strength after the release of stronger-than-expected U.S. industrial output, supporting the the view that U.S. economy is improving enough to keep the Federal Reserve's stimulus-reducing measures on track.

U.S. industrial output rose by 0.3%, its fastest clip in 3-1/2 years in the fourth quarter. U.S. New homes last month dropped 9.8%, the largest percentage decline since April, but housing starts were coming off a multi-year high in November. University of Michigan consumer confidence came in weaker-than-expected at 80.4 versus the economists' forecast of 83.5.

The greenback traded inside a tight range of 104.20-104.47 against the Japanese yen. However, the British pound rallied from intra-day low at 1.6309 to as high as 1.6459 after the release of unexpectedly strong U.K. retail sales data, which rose by 2.6% m/m and 5.3% y/y, better than the forecasts of 0.3% m/m and 2.5% y/y respectively with previous readings revised to 0.1% n 1.8%.

In other news, BoE's Broadbent said 'signs that headwinds facing wage growth are starting to abate; good reason to expect business investment growth to accelerate; highly unlikely we'll see anything like the relative price headwinds of past 4 years, opposite more likely; productive growth, euro zone will be key to determining UK recovery path.' Broadbent added later that "UK productivity doesn't look to have been good in H2 2013, but expect a pick-up."

Fed's Lacker says " tapering should continue and that recent data far fm what would be needed to change his view; deflecting monetary policy from price stability mission would be misguided."

Data to be released next week:

U.K. Rightmove house prices , China business climate, entrepreneur confidence, GDP, industrial production, fixed assets, retail sales, Japan capacity utilization, industrial production, Germany PPI on Monday. New Zealand, U.S financial markets are closed due to public holiday.

New Zealand CPI, Germany ZEW survey current situation, survey expectations, U.K. CBI industrial trend, Canada wholesale sales, U.S. IMF economic outlook on Tuesday.

Australia Westpac consumer confidence, CPI, Japan rate decision, all industry index, leading indicators, U.K. MPC minutes, claimant count, ILO unemployment rate, Avg. earnings, PSNCR, public sector Net knowing, Italy current account, Swiss Zew index, US Redbook retail sales, Canada BOC rate decision, on Wednesday.

New Zealand business manufacturing PMI, ANZ consumer confidence, China HSBC manufacturing PMI, Japan BOJ monthly economic report, France business climate, France manufacturing PMI, service PMI, EU current account, manufacturing PMI, service PMI, consumer confidence, U.K. CBI distributive trades, Canada retail sales, U.S. Chicago Fed index, jobless claims, markit PMI, house price, US existing home sales, leading index on Thursday.

U.K. BBA mortgage approvals, Canada CPI on Friday.

AceTraderfx
01-21-2014, 01:42 AM
Market Review - 20/01/2014 22:53GMT

Euro recovers from a fresh 7-week low in subdued trade

The single currency recovered from a fresh 7-week low against the dollar as investors closed their bet in subdued trade Monday due to closure of U.S. financial markets for Martin Luther King Day holiday.

Earlier in the day, although euro remained under renewed selling presure at 1.3546 at Monday's Australian open following last Friday's selloff and fell further to a fresh 7-week low of 1.3508 versus the dollar at Asian open, lack of follow- through selling prompted short covering and price later rebounded to 1.3562 in European morning due partly to cross-selling of euro and then edhed marginally higher 1.3568 near European closing before easing.

Versus the Japanese yen, dollar was under pressure in Asian trading on the back of falling Nikkei 225 index and price tanked to 103.86 before staging a rebound, dollar climbed back to 104.26 but renewed cross-buying of yen capped intra-day gain there and the pair later dropped back to 103.92 n then traded sideways for rest of the quiet North American session session.

Cable followed euro's move closely in Asia and fell to 1.6396 before climbing back to 1.6452 in European morning, however, renewed selling ahead of last Friday's high of 1.6459 capped intra-day gain and price later retreated to 1.6418 due partly to cross-selling of sterling before moving sideways.

On the data front, report showed that industrial production in Japan fell unexpectedly in November to a seasonally adjusted -0.1%, from 0.1% in the preceding month. A separate report stated that capacity utilization in Japan slipped by seasonally adjusted 0.5 percent month-on-month in November, compared to previous year, capacity utilization fell 2.8 percent.

In commodity currency, although Australian dollar fell initially to a fresh 3-1/2 year low of 0.8756 against the usd in Asian morning, the pair found support after data showed China's economy grew 7.7% on a year-over-year basis in the fourth quarter and rebounded to 0.8821 in European afternoon before easing.

Data to be release on Tuesday:

New Zealand CPI, Germany ZEW survey current situation, survey expectations, U.K. CBI industrial trend, Canada wholesale sales, and U.S. IMF economic outlook.

AceTraderfx
01-22-2014, 01:58 AM
Market Review - 21/01/2014 21:15GMT

Euro trades in a choppy fashion versus dollar after German ZEW

The single currency traded in a choppy fashion against the dollar on Tuesday after release of lower-than-expected German ZEW economic sentiment and amid expectations that the Federal Reserve will continue to scale back stimulus measures at next week's policy meeting.

During the day, although euro climbed higher from Asian low of 1.3537 to 1.3562 in European morning, cross-selling of euro versus yen and especially sterling pressured price from there and euro weakened to 1.3517 after a report showed that the ZEW index for German economic sentiment ticked lower in January. Failure to re-test Monday's 7-week low of 1.3508 prompted short-covering, the pair bounced back to 1.3545 in New York morning and then climbed to 1.3569 near New York afternoon before easing. Versus the British pound, euro fell below Jan's low of 0.8231 to a fresh 1-year low of 0.8215 on Tuesday before recovering.

The ZEW Centre for Economic Research said on Monday that its index of German economic sentiment ticked down to 61.7 in January from 62.0 in December. Market had expected an increase to 64.0.

Versus the Japanese yen, although dollar rose from Australian low of 104.16 to 104.69 in Asia on the back of rally in Nikkei 225 index and then further to 104.75 in European morning, renewed cross-buying of yen pressured price from there and dollar later dropped in New York trading to 104.03 on risk aversion due to the decline in U.S. equity markets.

Cable went through a roller-coaster session on Tuesday. Although price rebounded from 1.6408 to 1.6453 in European morning and then briefly weakened to 1.6400 after data showed that British factory orders fell in January, losses were limited as growth in new manufacturing orders was the strongest since April 2011 and cable later rallied above last Friday's high of 1.6459 to a fresh 1-week high of 1.6487 in New York morning, helped by active cross-buying of sterling versus euro before easing.

The Confederation of British Industry said its index of industrial order expectations fell to -2 this month from 12 in December, and below expectations of a reading of 10.

In other news, IMF said on Monday that it 'raises global forecast to 3.7% in 2014 fm 3.6% in Oct, sees 3.9% expansion in 2015; lifts 2014 forecast for advanced economies to 2.2%, seen increasing 2.3% in 2015; keeps 2014 growth forecast unchanged for emerging economies at 5.1%, sees 5.4% growth next year; sees new downside risk of very low inflation in advanced economies, could turn to deflation in negative shock to economic activity; advanced economies still have large output gaps, austerity remains; raises U.S. forecast for this year to 2.8%, expects smaller fiscal drag to boost domestic demand; hikes U.K. growth forecast to 2.4% this year from 1.9%, sees 2.2% growth in 2015; ECB should help repair bank balance sheets, provide targeted lending to boost demand, reduce financial fragmentation; hikes 2014 Japan GDP forecast to 1.7% from Oct's 1.2%, says fiscal stimulus should partly offset drag from higher consumption tax this year; raises China forecast for this year to 7.5%, predicts 7.3% expansion in 2015; China's recent growth driven by temporary investment boost, must do more to move economy away from investment towards consumption; financial conditions in advanced economies eased, but remain tight in emerging markets; stronger growth in India with structural policies to support investment; stronger exports main driver of growth in emerging markets, domestic demand weaker than expected; financial market, capital flow volatility still concern emerging markets, especially as Fed starts to taper.'

Data to be release on Wednesday:

Australia Westpac consumer confidence, CPI, Japan rate decision, all industry index, leading indicators, U.K. MPC minutes, claimant count, ILO unemployment rate, average earnings, PSNCR, public sector Net borrowing, Italy current account, Swiss Zew index, US Redbook retail sales and Canada BOC rate decision.

AceTraderfx
01-23-2014, 01:51 AM
Market Review - 22/01/2014 21:38GMT

Dollar trades mixed versus other major currencies on Wednesday

The greenback traded mixed against other major rivals on Wednesday as market participants were waiting for more signals whether that Federal Reserve's will reduce its quantitative easing program at the conclusion of its upcoming policy meeting on January 29 to USD65 billion from the current USD75 billion.

During the day, the single currency rose to 1.3580 in Asia and then dropped to 1.3535 in European morning due mainly to active cross-selling of euro versus sterling, however, cable's intra-day rally lent support to the single currency and price later rose further to 1.3584 in New York morning before easing.

Versus the Japanese yen, although dollar dropped briefly to 103.97 after the Bank of Japan kept monetary policy unchanged following its monthly policy meeting on Wednesday and maintained its assessment that Japan's economy 'has continued to recover moderately', renewed demand for greenback lifted price sharply higher to 104.57 ahead of European morning and later rose to 104.59 near New York close.

Bank of Japan report stated that 'keeps monetary policy steady by unanimous vote, pledges to increase monetary base as annual pace of 60-70 trillion yen; Japan core CPI expected 1.3% in FY2014/15 vs. 1.3% projected in Oct, excluding effect of sales tax hike in April 2014; Japan core CPI expected 1.9% in FY2015/16 vs. 1.9% projected in Oct, excluding effect of sales tax hike; BOJ board turns by 8-1 vote a proposal by Kiuchi to make 2 % inflation target a medium- to long-term goal; Japan GDP expected +1.4% in FY2014/15 vs. 1.5% projected in Oct; Japan GDP expected +1.5% FY2015.16 vs. 1.5% projected in Oct; Japan's economy recovering moderately with front-loaded increase in demand prior to sale tax hike being observed; Japan annual CPI growth likely to move around 1 to 1.5% for time being.'

The British pound rallied against the dollar on Wednesday after data showed that the rate of unemployment in the U.K. fell to 7.1% in November. During the day, although cable retreated after marginal gain above Tuesday's high of 1.6387 to 1.6492 in Asia, price found support at 1.6451 in European morning and surged sharply to 1.6553 due to a 'surprise' sharp drop in U.K. unemployment and BoE MPC vote outcome . Later, cable rose further to 1.6588 in New York morning before easing.

BoE showed MPC voted 9-0 to keep QE bond purchase total at 375 billion pounds and voted 9-0 to keep rates at 0.5%. BoE said in the statement that 'It was now likely that the unemployment rate would reach the 7% threshold materially earlier than previously expected," the minutes said, but officials "saw no immediate need to raise Bank Rate," the bank’s benchmark interest rate, "even if the 7% unemployment threshold were to be reached in the near future.'

On the data front, the ONS said the number of people claiming jobless benefits in U.K. fell by 24,000 in December, compared to expectations for a decline of 32,000.

In the other news, Bank of Canada left interest rates on hold at 1.00% and said 'downside risks to inflation have grown in importance; direction of next rate move to depend on data; sees inflation path lower than previous expected but still returning to the 2% target in about two years; stronger U.S. demand, recent C$ fall should help exports, business investment; no sign yet of rebalancing to export - and investment-led growth; fundamental drivers of growth and future inflation appear to be strengthening; output cap has shrunk by 1/4 point from Oct report to between 3/4% and 1-3/4%; sees soft landing in housing market; household debt/disposable income ratio to stabilize; risks from elevated household imbalances haven't materially changed; sees 2.5% growth in 2014 (prev. 2.3%) and in 2015 (prev. 2.6%); Q4 2013 and Q1 2014 2.5% (prev. 2.3%); core and total inflation to remain around 1% in H1 2014; total CPI at 0.9% Q4 2013 and Q1 2014 (prev. 1.3% and 1.2%); despite C$ depreciation, C$ remains strong and will continue to pose competitiveness challenges for non-commodity exports; C$ depreciation reflects improved U.S. growth prospects and reduced safe-haven effects; C$ depreciation will exert upward pressure on inflation.'

Data to be released on Thursday:

New Zealand business manufacturing PMI, ANZ consumer confidence, China HSBC manufacturing PMI, Japan BOJ monthly economic report, France business climate, France manufacturing PMI, service PMI, EU current account, manufacturing PMI, service PMI, consumer confidence, U.K. CBI distributive trades, Canada retail sales, U.S. Chicago Fed index, jobless claims, markit PMI, house price, US existing home sales and leading index.

AceTraderfx
01-24-2014, 02:29 AM
Market Review - 23/01/2014 21:52GMT

Euro rallies on Thursday as QE from ECB diminishes after data

The single currency strengthened against the dollar on Thursday as expectations for further monetary easing by the European Central Bank diminished after stronger-than-expected data on euro zone private sector activity.

During the day, although euro traded sideways after retreating from Wednesday's high of 1.3584 to 1.3530 at Asian open, price jumped sharply to 1.3647 in European morning as data showed recovery in the euro area is strengthening due to a larger than expected increase in euro zone private sector activity this month. Later, euro rose further to 1.3685 in New York morning after the number of continuing jobless claims in U.S. remained above the three million mark for the second successive week before easing. Price extended gain to 1.3699 near New York close due to the sell off in global stock markets.

Market reported on Thursday that the euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December, as growth picked up in Germany and the rate of decline eased in France. A separate report showed Germany's Manufacturing PMI expanded at the fastest pace since May 2011 in January , record at 56.3 versus 54.3 in previous month.

Versus the Japanese yen, despite dollar's initial bounce to 104.84 shortly after Asian opening, price came under pressure and retreated to 104.21 in European morning on declining Nikkei 225 index. The greenback later met another round of selling in part due to active cross-buying of yen and dropped to 103.49 in New York morning on poor U.S. jobless claims and manufacturing PMI data. The pair weakened further to 102.97 in near New York close due to the sell off in global stock markets.

U.S. initial jobless claims rose to 326,000, up from the previous week's revised total of 325,000. The number of people filing continuing unemployment claims rose to 3.056 million up from 3.022 million in the week to January 11. Another report showed that the U.S. manufacturing PMI declined to 53.7 this month from a final reading of 55.0 in December.

Cable rose in tandem with euro on Thursday after finding support at 1.6557 in Asia and price then penetrated previous high of 1.6605 (January 2nd) to a fresh 2-year peak of 1.6637 in New York morning n then 1.6644 near NY close on dollar's broad based weakness.

In other news, BoE's Fisher said on Thursday that 'output growing too slow to support rapid real wage rise and big fall in unemployment; inflation pressures diminishing but strong GDP growth not guaranteed; no immediate need to tighten when unemployment falls to 7%, must allow economy to grow strongly for some time; "still some way off" from raising interest rates, MPC must avoid choking off recovery.'

Data to be release on Friday:

U.K. BBA mortgage approvals and Canada CPI.

AceTraderfx
01-27-2014, 02:01 AM
Market Review - 24/01/2014 19:28GMT

Yen and Swiss franc rally on risk aversion

The Japanese yen and Swiss franc surged against U.S. currency on renewed risk aversion on Friday due to the selloff in global stock markets. Britain's FTSE 100, Germany's DAX, and France's CAC 40 closed down 1.7%, 2.6% n 2.9% respectively whilst Dow Jones index fell by more than 250 points to close below 16000. The greenback tumbled to as low as 102.00 and 0.8904 versus the Japanese yen and Swiss franc respectively.

The single currency traded with a firm undertone in Asia and then climbed to 1.3740 at European midday due to dollar's broad-based weakness before retreating briefly to 1.3669 in New York morning. Euro tumbled against Swiss franc to 1.2227.

The British pound rallied to a fresh 3-year high of 1.6668 against U.S. currency on Friday on continued speculation the Bank of England could raise interest rates before the end of the year, however, active profit-taking knocked price lower. Cable tanked to 1.6478 after BoE Governor Carney's downbeat comments. BOE's Carney said appreciation of sterling will hold back expansion of net exports.

In other news, European Central Bank President Mario Draghi told the World Economic Forum in Davos, Switzerland, that he did not see deflation in the euro area, which he said is experiencing a "weak, fragile and uneven" recovery. Draghi added that the ECB's "very accommodative" monetary policy is being passed into the euro zone economy; the other thing we are seeing in the last 3-4 months, is that both the improvement in financial markets and our very accommodative monetary policy in place since end 2011.

Data to be released next week :

Japan trade balance, Germany import price index, Ifo business climate, current assessment, expectations, U.S. new home sales on Monday. Australia. New Zealand financial market will be closed due to public holiday.

Australia NAB business confidence, France consumer confidence, Italy consumer confidence, U.K. GDP, U.S. durable goods, S&P home price, consumer confidence on Tuesday.

Australia Westpac leading economic index, U.K. nationwide house prices, Germany consumer confidence, Swiss UBS consumption indicator, U.K. FOMC rate decision on Wednesday.

Japan retail sales, China HSBC manufacturing PMI, Swiss KOF indicator, Germany unemployment rate, U.K mortgage approvals, EU business climate, economic sentiment, consumer confidence, Germany CPI, HICP, U.S. annual GDP, PCE core, personal consumption, jobless claims, pending home sales on Thursday.

New Zealand trade balance, Japan manufacturing PMI, household spending, unemployment rate, national CPI, Tokyo CPI, industrial production, housing starts, construction orders, U.K. Gfk consumer confidence, Lloyds business barometer, France PPI, Italy unemployment rate, PPI, EU CPI, Canada GDP, U.S. housing starts, personal income, spending, PCE, Chicago PMI, U. of Michigan consumer confidence on Friday. Financial markets in China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan and Vietnam will be closed for Chinese New Year holiday

AceTraderfx
01-28-2014, 01:59 AM
Market Review - 27/01/2014 21:28GMT

Euro retreats ahead of Fed meeting


The single currency traded with a soft bias against the dollar on Monday as expectations for a further reduction to the Federal Reserve's stimulus program after this Wednesday's FOMC meeting continued to support demand for the dollar.

During the day, although euro rebounded from 1.3669 in early Asia and then rose to 1.3716 in European morning due after data showed that German business confidence rose to the highest level in 2-1/2 years in January, renewed dollar's intra-day firmness pressured from there and the single currency later dropped to 1.3653 in New York morning before trading sideways.

The German research institute Ifo said on Monday that its business climate index rose to 110.6 in January, above expectation for a reading of 110.0 and up from 109.5 in December, indicating that businesses in the euro zone's largest economy had a strong start to the year.

Versus the Japanese yen, despite dollar's initial selloff below Friday's low at 102.00 to 101.77 on continued risk on continued risk aversion in thin trading conditions in early trading hours on Monday, lack of follow-through selling triggered broad-based short-covering and price rebounded to 102.41 at Asian open. Later, dollar climbed higher to 102.77 in European morning and then 102.93 but renewed cross-buying of yen due to risk aversion pressured price to 102.20 in New York morning.

Cable remained under pressure ahead of Asian open on Monday and dropped to 1.6471 but expectations that the Bank of England will raise interest rates sooner than anticipated after last week's U.K. unemployment data boosted demand for the British pound and sterling rose to 1.6571 in European morning and then 1.6588 in early New York trading before easing.

Some news over the weekend worth mentioning. Reuters reported IMF MD Christine Lagarde told the economic forum in Davos that Eurozone inflation is "way below target" and that deflation is a potential risk for the region. In response to this, ECB President Mario Draghi said ECB is ready to act if inflation went lower than forecast and reiterated that interest rates would remain low or go lower for an extended period of time.

Data to be release on Tuesday:

Australia NAB business confidence, France consumer confidence, Italy consumer confidence, U.K. GDP, U.S. durable goods, S&P home price and consumer confidence.

AceTraderfx
01-29-2014, 01:46 AM
Market Review - 28/01/2014 21:33GMT

Dollar trades mixed against other major currencies ahead of Fed's meeting

The greenback traded mixed versus other major rivals on Tuesday as investors turned their attention to the outcome of the Federal Reserve's two-day policy meeting on Wednesday. Market participants are expecting that Fed will cut its asset purchase program by another $10 billion, to $75 billion per month after December last year.

During the day, although the single currency retreated after meeting renewed selling interest at 1.3688 ahead of European open and then tanked to 1.3629 in tandem with cable in European morning, price rebounded strongly to 1.3686 in New York morning on dollar's broad-based selloff after disappointing U.S. durable goods orders reports. Later, euro stabilized around 1.3660 later and traded in a relatively narrow range for rest of the New York session.

U.S. the Commerce Department said on Tuesday that durable goods orders tumbled 4.3% last month, confounding expectations for a 1.8% gain. Orders for durable goods in November were revised to a 2.6% increase from a previously reported gain of 3.4%.

U.S. dollar rose against the Japanese yen after finding support at 102.49 in Australia on Tuesday and penetrated Monday's high of 102.93 to 103.25 in early European trading in part due to cross-selling in yen, however, broad-based weakness in greenback during the New York morning pressured price back to 102.63 before rebounding on short-covering.

Cable fluctuated widely on Tuesday. Despite extending gain from Monday's low at 1.6471 to an intra-day high of 1.6627 ahead of European open, price fell to 1.6536 in European morning after preliminary data showed that the U.K. economy grew in line with expectations in the fourth quarter but added to uncertainty over the Bank of England's forward guidance. Later, price climbed back to 1.6578 and then higher to 1.6615 in New York morning before easing.

Report from U.K showed that the economy grew 0.7% in the final three months of 2013, slightly down from growth of 0.8% in the previous quarter, and expanded 2.8% from a year earlier.

On the data front, the Conference Board said its index of U.S. consumer confidence improved to 80.7 this month from a downwardly revised 77.5 in December. Market had expected the index to rise to 78.9.

Data to be released on Wednesday:

Australia Westpac leading economic index, U.K. nationwide house prices, Germany consumer confidence, Swiss UBS consumption indicator and U.S. FOMC rate decision.

AceTraderfx
01-30-2014, 01:58 AM
Market Review - 29/01/2014 21:54GMT

Yen rises to a 7-week high on risk aversion after Fed cuts bond buying to 65B

Although U.S. dollar rose initially above Wednesday's high of 103.26 to 103.45 against the Japanese yen in Australia, active cross-buying of yen pressured capped intra-day gain there and price later tumbled to 101.99 in New York morning as concerns over global emerging markets lingered ahead of the Federal Reserve's policy statement. Later, the greenback dropped to a session low of 101.85 on renewed risk aversion due to the selloff in U.S. stock market after Fed kept interest rate unchanged n reduced bond buying to $65B as widely expected.

The Fed announced a further $10 billion reduction in its monthly bond buying to $65 billion as widely expected as it stuck to plans to wind down its extraordinary stimulus. The Dow Jones industrial average, S&P 500 and the Nasdaq Composite closed down 189.77 points (1.19%) to 15738.79, 18.3 points (1.02%) to 1774.2, and 46.53 points (1.14%) to 4051.43 respectively.

The single currency swung widely on Wednesday as despite rebounding from Asian low at 1.3648 to 1.3684 in European morning due to unexpected rise in Germany's Gfk consumer climate going into February, cross-selling of euro pressured price lower from there and euro tanked to a session low of 1.3603 versus dollar after European Central Bank council member Christian Noyer said 'any rise in the currency's exchange rate would be negative.' Later, the single currency rebounded strongly in New York morning to 1.3677 on short-covering and then stabilized.

On the data front, Germany's Gfk consumer climate rose to its highest level since August 2007 to 8.2, from 7.7 in the preceding month whose figure was revised up from 7.6.

Although cable traded sideways in Asia after finding support at 1.6561 in Australia, price rebounded to 1.6607 in tandem with euro in European morning but only to drop to 1.6526 in part due to renewed cross-selling of sterling versus euro in New York morning before recovering. Eur/gbp cross dropped briefly below Tuesday's low at 0.8223 to 0.8220 in Wednesday's New York morning and then recovered.

The New Zealand dollar nose-dived to 0.8177 after RBNZ kept interest rate unchanged at 2.5%. RBNZ said expects to start returning rates to more normal levels soon n will raise rates as needed to keep inflation near 2%. RBNZ said scale, speed of rate rises will depend on future data; high NZ dollar offsetting inflation but current levels unsustainable in long run; price pressures rising over next two years; housing market appears to be moderating; expects GDP to continue around 3.5% over coming year; sees uncertainty about stimulus with drawal by major economies, EM economies affected.

Data to be released on Thursday:

Japan retail sales, China HSBC manufacturing PMI, Swiss KOF indicator, Germany unemployment rate, U.K mortgage approvals, EU business climate, economic sentiment, consumer confidence, Germany CPI, HICP, U.S. annual GDP, PCE core, personal consumption, jobless claims and pending home sales.

AceTraderfx
02-04-2014, 02:41 AM
Market Review - 03/02/2014 18:16GMT

U.S. dollar tumbles versus Japanese yen after weak US ISM manufacturing data

The greenback tumbled against the Japanese yen after the release of much weaker-than-expected U.S. ISM manufacturing index which dropped to 51.3 in January versus economists' forecast of 56.0 and 56.5 in December. Dollar dropped from 102.41 to as low at 100.77 in New York before stabilizing.

Despite euro's early brief breach of last Friday's low of 1.3479 to a fresh 2-month low at 1.3477, short-covering lifted price and the single currency rebounded briefly to 1.3523 after the release of weak U.S. ISM MFG data and later rose to 1.3536 in thin New York session due to the sell-off in global stock markets.

Dow Jones index nose-dived by more than 300 points whilst UK's FTSE, Germany's DAX and France's CAC closed down by 0.8%, 1.3% and 1.4% respectively. Italy's FTSE MIB and Spain's IBEX tumbled by 2.5% and 1.8% respectively.

The British pound dropped after the release of U.K. Jan manufacturing PMI which came in lower-than-expected at 56.7, previous reading downwardly revised to 57.2. Cable fell sharply fm 1.6449 to 1.6290.

In other news, U.S. Treasury's Lew says "congress should act quickly; unnecessary delays or political posturing could trigger a crisis; U.S. would start missing payments on its obligations 'very soon' after extraordinary measures exhausted; once extraordinary measures exhausted, U.S. cash balance to decline faster than it would at other times of year; administration would exhaust extraordinary measures by end of Feb if debt ceiling not raised."

ECB's Constancio says "bank area front loading preparations for comprehensive assessment; banks with capital shortfall in stress test baseline scenario will have to raise capital in nearer term; capital shortfall from adverse scenario can be dealt with over more extended period."

Tuesday will release of Eurozone PPI, U.S. redbook retail sales, factory orders and durable goods.

AceTraderfx
02-05-2014, 01:51 AM
Market Review - 04/02/2014 18:25GMT

U.S. dollar rises versus Japanese yen as stock markets rebound

U.S. dollar fell initially against the Japanese yen to a fresh 10-week low at 100.76 in Asia as Nikkei-225 plunged by more than 4%, however, investors bought back U.S. dollar as global stock markets pared most of early losses.

Britain's FTSE 100 n Germany's DAX closed down by 0.2% n 0.6% respectively whilst France's CAC-40 closed up by 0.3%. Dow Jones index traded in +ve territory and rose by around 87 points to 15460 in NY midday. U.S. dollar rebounded strongly to 101.67 in New York.

The single currency traded inside a relatively narrow range of 1.3494-1.3539 as focus was on other currency pairs. The British pound rallied against the U.S. dollar from 1.6257 to 1.6353 after the release of much stronger-than-expected UK construction PMI.

The Australian dollar surged from 0.8730 to 0.8943, more than 2%, on Tuesday after Reserve Bank of Australia (RBA) dropped its easing bias toward interest rates and toned down its long-term call for the currency to weaken. New Zealand also rallied strongly from 0.8052 to as high as 0.8227.

In other news, Fed's Evan said there is uncertainty about sustainable rate of unemployment; believe 5-5.25% is attainable; a strongly growing economy will address many of the problems in the job market; Fed will eventually allow assets to roll off balance sheet during exit from super-easy policy; Fed's balance sheet will eventually be well south of $4 trln, but will be bigger than pre-crisis; Yellen will continue to improve Fed's communications, transparency; current pace of taper is a 'reasonable', 'modest' pace; took longer than expected for QE3 to kick in to jump start.

Wednesday will see the release of Germany's, Britain's and Eurozone PMI respectively; Eurozone retail sales; U.S. ADP employment and ISM non-manufacturing data.

AceTraderfx
02-06-2014, 02:09 AM
Market Review - 05/02/2014 18:33GMT

U.S. dollar rebounds as global stock markets stabilise

The greenback fell from Asian high at 101.77 to 100.77/80 in New York morning against the Japanese yen after the release of slightly less-than-expected U.S. ADP employment data, however, the pair jumped to 101.63 after the release of stronger-than-expected ISM non-manufacturing PMI data which came in at 54.0 versus economists' forecast of 53.7 and well above previous reading of 53.0.

Euro fluctuated wildly on Wednesday. Despite the brief bounce from European low at 1.3499 to 1.3555 in New York morning after the release of less-than-expected US ADP employment, the single currency dropped swiftly to 1.3504 before trading sideways later in the day.

On the data front, eurozone retail sales data which came in at -1.6% m/m n -1.0% y/y respectively versus economists' forecast of -0.7% m/m n 1.5% y/y with downwardly revised 0.9% m/m n 1.3% y/y increase in November.

The British pound weakened to a fresh 6-week low of 1.6252 after the release of weaker-than-expected U.K. services PMI which came in at 58.3 in January versus previous reading of 58.8 in December, however, cable rebounded to around 1.6333 on short-covering in New York.

In other news, Philadelphia Fed President Charles Plosser warned of looming communications problems if the central bank keeps buying assets while, as he expects, the U.S. unemployment rate falls below 6.5% some time in the first half of 2014, from the current 6.7%. Plosser said 'the U.S. Federal Reserve should wind down its bond purchases faster than planned and end it before mid-year.'

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the year had begun with some momentum, despite the recent drop in stock markets, and further reductions in the pace of central bank asset purchases would be appropriate as long as the economy remained on track. Lockhart said 'the U.S. Federal Reserve will probably keep steadily dialing back its asset purchases and wind them down completely by late 2014 but should be patient on raising interest rates.'

AceTraderfx
02-07-2014, 02:14 AM
Market Review - 06/02/2014 18:10GMT

Euro jumps from 1.3483 to 1.3619 as ECB refraines from announcing any additional stimulus measures

Despite brief drop to 1.3483, the single currency jumped to as high as 1.3619 on Thursday after ECB's president Draghi said there is no eurozone deflation problem and need to wait for more data before taking action, following ECB kept interest unchanged.

The greenback rallied from 101.25 to 102.00 against the Japanese yen due to improved risk appetite (euro rose strongly against the Japanese yen from 136.80 to 138.80) as global stock markets rebounded.

On the data front, U.S. initial jobless claims fell by 20,000, bigger-than-expected, to a seasonally adjusted 331,000 last week. The U.S. trade deficit widened to $38.7 billion in December as exports fell and imports rose.

Despite early brief drop to 1.6272, the British pound rebounded after the Bank of England kept interest range unchanged at 0.5% as widely expected. BOE also left QE asset purchase total unchanged at 375 billion sterling. BOE makes no statement after monetary policy decision. Cable later rebounded to 1.6348 on short-covering in tandem with euro in New York.

Australian dollar extended gain to 0.8981 against U.S. currency after the release of Australia's trade data as the exports exceeded imports by A$468 million ($420 million) in December.

In other news, European Central Bank policymaker Christian Noyer told Les Echos daily in an interview to appear in its Friday edition that 'the euro zone's fragile economic recovery and low inflation is "not normal, but not alarming."

Friday will see the release of RBA policy statement, Japan's leading indicators, Germany's trade data, U.K. trade balance, industrial and manufacturing production, German industrial production, Canada's unemployment rate and the important U.S. non-farm payrolls.

AceTraderfx
02-10-2014, 02:25 AM
Market Review - 07/02/2014 18:31GMT

U.S. dollar rallies versus Japanese yen on the rise in global stock markets

U.S. dollar rallied to as high as 102.58 against the Japanese yen on improved risk appetite due to the rally in global stock markets.

Although the greenback retreated briefly and strongly from 102.53/58 to an intra-day low of 101.41 after the release of weaker-than-expected U.S. non-farm payrolls data which came in at 113,000 versus economists' forecast of 185,000 jobs added to the market, the pair rallied to 103.58 again due to the rally in U.S. stock markets.

Despite euro's brief retreat to 1.3553 in European session after German Constitutional Court said to refer ECB's bond-buying programme to European Court, the single currency rallied later to an intra-day high of 1.3648 after the release of weaker-than-expected U.S. non-farm payrolls data, however, profit-taking knocked price lower to 1.3576 before rebounding.

German Constitutional Court said 'to refer ECB's bond-buying programme to European Court; it will rule on legality of ESM bailout mechanism and fiscal pact on March 18; sees substantial reasons to suggest OMT programme exceeds ECB mandate and infringes ban on funding member states; it is possible however that limited interpretation of OMT could make it conform to law.' The complaint said the ECB's plan, which pumps money into the financial system much the same way as the U.S. quantitative easing program, oversteps its mandate and violates a ban on it funding governments.

The British pound fell briefly to 1.6301 after the release of weaker-than-expected U.K. industrial and manufacturing output which came in at 0.4% m/m (forecast 0.6%), 1.8% y/y n 0.3% m/m (forecast 0.6%) or 1.5% y/y, however, cable ratcheted higher in tandem with euro in New York.

In other news, Canada's Flaherty said asked if 2015-16 surplus could be bigger than C$3.7 bln predicted in November; when asked what he would do about price parity with the United States, says wait for budget; next week's budget will not show a balance for coming year; primary function of Tuesday's budget is to stay the course, not waver from path of fiscal responsibility; Jan job gains are very good but important to look at trend, which also is good. The Canadian dollar tumbled fm 1.1080 to 1.0968 after U.S. NFP data before rebounding on short-covering.

AceTraderfx
02-11-2014, 02:03 AM
Market Review - 10/02/2014 22:57GMT

Dollar remains under pressure ahead of Fed's chairman Yellen first testimony

The greenback traded mixed but with a soft bias against the other major currencies in thin trade on Monday as last Friday's downbeat non-farm payrolls report continued to dampen demand for the greenback. Investors are reluctant to add bets ahead of Fed's chairman Yellen first testimony before Congress on Tuesday and Thursday.

During the day, although euro opened lower at 1.3609 in New Zealand on Monday and then traded sideways in Asia, price rebounded in European morning and rose above last Friday's high of 1.3649 to 1.3652. Later, selling in euro crosses together with the worse-than-expected French manufacturing production and Italian industrial production pressured price to 1.3623 before moving sideways in New York trading.

Official data showed that French industrial production fell 0.3% in December, compared to expectations for a decrease of 0.2%. Industrial production in November was revised down to a 1.2% increase from a previously estimated 1.3% rise. A separate report showed that Italian industrial production fell in December after three straight gains, with a decline of 0.9%, compare to consensus forecast of a reading of 0.0%.

Versus the Japanese yen, despite dollar initial rise above last Friday's high of 102.58 to 102.65 in Australia, active buying of yen crosses knocked price down to 102.07 in European morning and then lower to 101.99 in New York morning. However, price pared intra-day losses and recovered to 102.27 near New York closing.

Cable moved sideways in Asia and then rose above last Friday's high of 1.6418 to 1.6428 ahead of European opening. Price later dropped to 1.6384 on cross-selling of sterling versus yen and euro in European morning and then moved around 1.6400 level for rest of the day.

In other news, EU's economic chief Olli Rehn says 'ECB still has big bazooka with plenty of ammunition after German court ruling; appropriate that an EU court should have final says over ECB as an EU institution; ECB should take decisions to ensure it meets its inflation target, better supporting euro zone economy; current 0.8% euro zone inflation is "quite far from ECB's self-set target".'

AceTraderfx
02-12-2014, 01:52 AM
Market Review - 11/02/2014 20:51GMT

Dollar trades mixed after Fed's Chair Yellen remarks

Dollar chopped around against other major currencies after Federal Reserve Chairwoman Yellen remarks on Tuesday. She said that U.S. economy are far from recovered and expects there to be 'a great deal of continuity' in the central bank's policies.

Fed's Chair Janet Yellen said on Tuesday that 'pickup in economic activity has fuelled further progress in jobs market but labor market recovery far from complete; number of long-term unemployed, unemployed underscore importance of considering more than jobless rate when evaluating health of labor market; some of recent softness in inflation likely reflects transitory factors, cites oil and non-oil imports; FOMC believes at this stage recent volatility in global financial markets does not pose substantial risks to U.S. economic outlook; expects "great deal of continuity" in FOCM's approach to monetary policy, strongly supports current policy strategy; likely to reduce pace of asset purchases in further measured steps if labor market conditions, inflation continue to improve; crossing policy thresholds would not prompt automatic rate hike but would indicate it appropriate to consider whether broader economic outlook justified a hike; committed to helping return economy to full employment and ensuring inflation not persistently above or below 2%; Fed expects to report results from stress tests of largest 30 bank holding companies in March.'

During the day, although the single currency traded sideways in quiet Australian morning, price jumped at Asian open on dollar's broad-based weakness (caused mainly by rally in AUD) and rose to session high at 1.3678 after tripping stops above Monday's high at 1.3652. Later, euro rose marginally higher to 1.3683 in European morning but lack of follow-through buying pushed price back down to 1.3663 and further to 1.3629 in New York morning after Fed's Chairwoman Janet Yellen remarks before staging another rebound to 1.3680.

Versus the Japanese yen, although the greenback ratcheted higher after finding support at 102.08 in Asia and rose briefly to above Monday's high of 102.65 to 102.67 after Fed's Chairwoman Janet Yellen remarks, price swiftly tanked to 102.15 on renewed cross buying of yen climbing back to 102.56 n later rising marginally to 102.70 in New York afternoon session.

Cable rose above Monday's high of 1.6428 to 1.6434 in tandem with euro in Asia on Tuesday but lack of follow-through buying pressured price back down to 1.6492 in European morning, however, active cross buying of sterling lifted price from there and the British pound ratcheted higher against the dollar to 1.6471 in New York morning before dropping briefly after Fed's Chairwoman Janet Yellen remarks. Later, price rose further to 1.6488 before easing in New York afternoon.

In other news, Fed's Plosser says 'winter weather unusually disruptive, had negative impact on latest jobs data; winter weather making it difficult to asses underlying economic trends, could be months before a " better read" on U.S. economy; reiterates call for faster scaling back of Fed's asset purchases to reflect strengthening economy; New Fed Chair Janet Yellen delight to work with, capable and competent; anticipates some level of continuity from Bernanke period; easier to lower than raise interest rates history shows always pretty late in raising rates; central bank needs to communicate better how it will react to economic data as it meets thresholds for inflation and unemployment; harsh winter weather leaves him skeptical of current economic data, has not changed economic outlook for 2014; has opened door with communication thru forward guidance but has not perfected it yet; concern that Fed will resist raising interest rates for too long and be forced to chase financial markets.'

AceTraderfx
02-13-2014, 01:47 AM
Market Review - 12/02/2014 21:03GMT

The single currency weakens after ECB official comments

The euro fell sharply against the dollar on Wednesday after a senior European Central Bank official said the bank is seriously considering negative deposit rates. ECB Executive Board member Benoit Coeure said that '"the status of the OMT is not changed" after German court decision; OMT is ready to be used but it is highly unlikely it would be needed at the moment; ECB is considering negative deposit rate "very seriously"; but you should not expect too much of "it"; don't see deflation in the euro zone, see inflation slowly rising back to 2%; there is a risk of another wave of bank deleveraging after the AQR.'

During the day, although euro traded sideways in Asia on Wednesday and then bounced briefly to 1.3653 in European morning, active cross-selling of euro versus yen and sterling capped intra-day gain there and the single currency later tumbled after ECB official negative deposit rate talk
before staging a stabilizing to as low as 1.3563 in New York morning before recovering.

Despite cable's brief drop from 1.6475 to 1.6425 in early European trading, the British pound rallied again the dollar to a near 2-week high of 1.6558 after the Bank of England outlined a new forward guidance policy and upgraded its forecast for economic growth this year. Later, profit-taking pressured price down to 1.6511 before another round of fresh buying lifted price higher to as high as 1.6600 in New York.

Bank of England indicated that it will keep interest rates on hold at record lows of 0.5% for at least another year, despite upgrading the U.K. economic growth forecast for 2014 to 3.4% from 2.8%. The bank outlined new forward guidance, saying that it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it does not see happening until 2015. BoE Governor Mark Carney said the U.K. unemployment rate has fallen much faster than the bank anticipated, and will hit the initial 7% threshold 'in the spring'. In the six months since forward guidance was implemented the U.K. unemployment rate has fallen to 7.1% from 7.8%.

Versus the Japanese yen, dollar met renewed selling just below Tuesday's high of 102.71 in Australia and price fell from 102.68 to 102.42 in Asia and then further to 102.22 ahead of New York open due to active cross-buying in yen versus other currencies. Later in the day, price recovered to 102.60 in New York before trading sideways.

In other news, European Central Bank Governing Council member Ardo Hansson said 'There is no risk of deflation in the euro zone at present and it would take "a major shock" to the bloc's economy to create such a risk.' European Commission, U.S. CFTC say made significant progress on harmonizing new rules for trading swaps. ECB's Noyer says 'euro's strength is "curious" given that Eurozone's recovery is lagging the U.S.'


Data to be released on Thursday:

Japan's domestic CGPI, U.K. RICS house price balance, Australia's employment change and unemployment rate, Germany's CPI, U.S. retail sales and initial jobless claims.

AceTraderfx
02-14-2014, 01:52 AM
Market Review - 13/02/2014 20:11GMT

U.S. dollar drops versus euro and Japanese yen on weak U.S. retail sales data

U.S. dollar fell against the single currency and Japanese yen after the release of weaker-than-expected U.S. retail sales data and more-than-expected U.S. initial jobless claims.

The single currency ratcheted higher on Thursday after Wed's brief but strong pullback to 1.3563. Euro rallied to as high as 1.3692 whilst U.S. dollar tumbled to 101.70 versus the Japanese yen after the release of weaker-than-expected U.S. retail sales and more-than-expected U.S. initial jobless claims.

The British pound continued its recent winning streak on Thursday, following Wed's release of the BoE quarterly Inflation Report upgraded Britain's economic forecast as well as lifting market's expectation of a rate hike in the 2nd quarter of 2015 together with the hawkish comments from BoE Governor Mark Carney. Price strengthened to a fresh 2-1/2 year high at 1.6675 on dollar's broad-based weakness after the release of weaker-than-expected U.S. retail sales data before retreating. Sterling gained broadly esp vs the euro to 0.8180 in Asia, just abv eur/gbp's 1-year trough at 0.8168 in Jan.

Australian dollar nose-dived in Asian morning after the release of Australia's jobs growth in Jan came in at -3.7k versus market forecast of 15k whilst unemployment rose to 6.0% (highest since Jul 2003) versus forecast of 5.9%, price tanked from 0.9031 to as low as 0.8938 after the surprisingly weak jobs report and later 0.8928 before rebounding on short-covering in New York.

In other news, the Federal Reserve Bank of New York said 'market participants in a key short-term funding market are not addressing the risk of destabilizing "fire sales" of collateral in the event of a default by one of the market's big players, and regulators may be forced to step in to reduce that risk; the so-called tri-party repurchase, or repo, market is at particular risk of seizing up entirely, as it did in the 2008 financial crisis, because investors in the sector are "highly vulnerable" to liquidity pressures and credit losses that could force them to sell the collateral of a defaulted counterparty.'

Friday will see the release of China's PPI and CPI, Germany's and Eurozone GDP, U.K. GDP, U.S. import and export price, industrial production, capacity utilization, University of Michigan consumer confidence.

AceTraderfx
02-17-2014, 01:33 AM
Market Review - 14/02/2014 18:35GMT

Euro strengthens versus dollar on Friday after upbeat German and French GDP

The single currency strengthened against the dollar and rose to a fresh 2-1/2 week at 1.3715 on Friday after release of upbeat German and French economic growth data, while recent disappointing U.S. economic reports still weighed on demand for the greenback.

Despite euro's sideways trading below Thursday's high of 1.3692 in Friday's Asian session, price rebounded from 1.3674 and then rose to 1.3713 after better-than-expected German and French GDP in Europe and then marginally higher to 1.3715. However, lack of follow through buying prompted profit-taking and the single currency later retreated to 1.3683 in thin New York morning.

Preliminary data showed that German GDP rose 0.4% in the fourth quarter, exceeding expectations for a 0.3% expansion, and after a 0.3% rise in the 3 months to September. A separate report showed that French GDP expanded by 0.3% in the last quarter, compared to expectations for a 0.2% rise, after a 0.1% contraction in the third quarter.

Versus the Japanese yen, although dollar rose briefly to 102.40 in Asia after the announcement on implementation of Japan's stimulus program, active cross-buying in yen knocked price down to 101.57 before recovering to 101.99 in European morning. Later, dollar chopped inside the range of 101.57-101.99 for rest of the day.

Japan's ministry of finance said that 70% of country's JPY 5 trillion stimulus will be implemented by the end of June and 90% by end of September.

Cable found support at 1.6644 ahead of European morning and continued its recent rally after the Bank of England revised up its U.K. economic growth forecast for 2014 to 3.4% from 2.8% on Wednesday. Price rallied above Thursday's 2-1/2 year peak at 1.6675 to 1.6718 in European midday and then further to 1.6731 before easing.

On the data front, U.S. official data showed that U.S. industrial production fell 0.3% in January, compared to expectations for a 0.2% rise, after a 0.3% increase the previous month. Later, the University of Michigan said its consumer sentiment index remained unchanged at 81.2 this month, higher than expectations for a fall to 80.6.

In other news, RBA Assistant Governor Christopher Kent told the Committee for Economic Development of Australia in Sydney on Friday that the decline in the Australian dollar over the past year may lead to balanced growth. "The Bank has noted for some time that lower levels of the exchange rate, if sustained, will assist in achieving balanced growth in the economy and bring about a quicker return to trend growth,” he said while adding that, “it will also add a little to inflation, for a time.”

Bundesbank President Jens Weidmann said 'the Bundesbank feels encouraged by the decision of Germany's top court to ask the European Court of Justice whether a key European Central Bank crisis-fighting programme is compatible with EU law.' Weidmann said 'Germany's Constitutional Court broadly shared the German central bank's concerns in its decision last week to refer the complaint against the ECB's bond-purchase programme to the European court.'

AceTraderfx
02-18-2014, 02:04 AM
Market Review - 17/02/2014 22:51GMT

Euro climbs to 3-week high in subdued trade on Monday

The single currency rose to a fresh 3-week high at 1.3724 against the dollar on Monday, as Friday's better-than-forecast data on euro zone fourth quarter growth continued to underpin demand for the common currency, however, price later eased to 1.3693 in quite North American session as some investors took profit due to U.S. Presidents Day holiday.

Versus the Japanese yen, although dollar dropped initially below Friday's low at 101.57 to 101.39 at Tkyo open after official data showed that Japan's gross domestic product expanded 0.3% in the final three months of 2013 and grew 1.0% on a year-over-year basis, cross-selling of yen due to rebound in Nikkei index lifted price higher to 101.99 in European morning. Later, price moved in a narrow range of 101.83-101.99 for rest of the day.

Although cable continued its recent ascent in Asia on Monday and rallied to a fresh 4-year peak at 1.6823, lack of follow through buying and broad-based long liquidation of sterling pressured price lower to 1.6767 ahead of European open. Later, cable dropped further to 1.6720 and then 1.6694 in quite North American session.

On the data front, Rightmove said on Monday that the average selling price for houses in the U.K. was up 3.3% in February, from a 1.0% hike in January. On an annual basis, house prices spiked 6.9%, from an annual rate of 6.3% in January, the largest annual jump since February 2007.

In other news, ECB Governing Council member Ewald Nowotny said in London on Monday that 'ECB is not fulfilling its price stability goal; inflation forecast may show 2015 inflation may be below 2%; there might be good argument to wait and see on interest rates; ECB's OMT bond-buying programme "not that relevant" anymore because of improved European situation; negative deposit rate is one possible policy element but no decision made; sees improvements in real economy, need to discuss link to inflation rates.'

Data to be released on Tuesday:

Australia RBA minutes, Japan machinery tool orders, Italy trade balance, EU current account, UK CPI, RPI, Germany ZEW current situation, ZEW survey expectations, U.S. empire manufacturing, net long-term TIC flows, total net TIC flow and NAHB housing market index.

AceTraderfx
02-19-2014, 02:05 AM
Market Review - 18/02/2014 22:05GMT

Euro strengthens broadly and hits a fresh 1-1/2 month high against the dollar

The single currency rose broadly on Tuesday and rose to a fresh 1-1/2 month peak at 1.3770 against the dollar due to active cross-buying of euro, although a report showed that German economic sentiment deteriorated in January due to concerns that the economic recovery in the U.S. could lose momentum.

The ZEW Centre for Economic Research said that its index of German economic sentiment came in at 55.7 in February, down from 61.7 in January. Meanwhile, a separate report showed the current conditions index improved to 2-1/2 year highs of 50.0 this month from 41.2 in January.

During the day, despite euro's sideways trading below Monday's high of 1.3724 in Asia, renewed weakness in greenback lifted price to 1.3734 near European midday and the single currency later rallied to fresh 1-1/2 month peak at 1.3770 on active buying in euro crosses in New York morning before easing.

Versus the Japanese yen, although dollar staged a brief drop from 102.17 to 101.77 in Asian morning on Tuesday, price swiftly rallied to 102.74 after the Bank of Japan kept rates on hold, but extended a bank lending scheme in an attempt to boost the effectiveness of its monetary stimulus program. Later, profit-taking pressured price to 102.31 in European morning and then 102.24 in New York session.

Bank of Japan kept its monetary policy steady by unanimous vote on Tuesday and stated 'board turns down by 8-1 vote a proposal by Kiuchi to make 2% inflation target a medium-term goal; economic assessment unchanged, economy continues to recover moderately; improvement in job market and incomes have continued; exports have generally been picking up; domestic and external demand is increasing moderately; can see front loading in demand ahead of sales tax hike; inflation expectations appear to be rising on the whole.' The central bank is however likely to scale up its low-interest loan program for commercial banks that are investing in growth-oriented sectors. It may also extend the deadline for applying for the loans by one or two years.

Cable traded in a choppy fashion on Tuesday, despite a briefly rise to 1.6741 ahead of European open, release of lower-than-expected U.K. consumer price index reinforced the view that the Bank of England is unlikely to raise interest rates any time soon and triggered broad-based selling in sterling. Price extended fall from Monday's 4-year peak at 1.6823 to 1.6655 in European morning but climbed back to 1.6708 and then 1.6728 in New York morning.

Data showed that consumer price inflation in the U.K. fell back below the Bank of England’s 2% target for the first time since November 2009 in January. U.K. consumer prices fell 0.6% in January from a month earlier, while core CPI, which excludes food, energy, alcohol, and tobacco costs rose 1.6% in January, slowing from 1.7% in December.

On the data front, U.S. Fed's Empire state index came in at 4.48, much lower than economists' forecast of 8.5.

In other news, RBA released its February minutes and said ' period of stability in interest rates likely most prudent course; RBA board saw further signs policy stimulus was having its intended effects; RBA board felt Q4 inflation figures likely contained “some noise”, as well as signal; inflation puzzle could also reflect lower A$, lag in impact from slower wages; lower A$, if sustained, would be expansionary for economy; leading indicators of employment had stabilized, but pointed to only moderate growth; board recognized that labour market conditions tended to lag economic growth; recent data more positive on consumption, home building, business conditions and exports; liaison suggested retail sales through Christmas were reasonably good; possible household consumption could outpace income thanks to house, equity prices; reasonable prospects that growth in major trading partners would pick up in 2014; board noted conditions in some emerging markets had become more unsettled.'

Data to be released on Wednesday:

Australia conference board leading index, Japan leading index, UK BoE minutes, claimant count, ILO unemployment rate, U.S. housing starts, building permits and PPI.

AceTraderfx
02-20-2014, 01:56 AM
Market Review - 19/02/2014 21:43GMT

Euro eases from a fresh 6-week peak against the dollar on Wednesday

Although the single currency rose marginally above Tuesday's high at 1.3770 to 1.3773 shortly after Asian opening on Wednesday, cross-related selling of euro especially versus Japanese yen pressured price lower to 1.3739 in New York morning before rebounding. Later, euro fell briefly to 1.3725 after the release of FOMC minutes that suggested policymakers would keep up the pace of a withdrawal of monetary stimulus.

Dollar retreated versus yen after meeting renewed selling interest at 102.42 in Australia and the pair continued to edge lower in early European trading on active cross-buying of yen due to falling Nikkei futures. Price dropped further to 101.84 in New York morning and then rebound to 102.47 after the release of FOMC minutes.

Bank of Japan released its monthly economic report, which stated 'prices are rising moderately, first such description since Oct 2008; overall economic view unchanged, economy recovering moderately; rises view on exports; raises view on employment situation.'

Despite cable's brief rise to 1.6734 in European morning, the pair retreated sharply to 1.6662 after data showed that the U.K. unemployment rate unexpectedly ticked higher in the three months to December. Cable eventually fell to 1.6637 ahead of New York open but short-covering emerged and lifted price back to 1.6725 in late New York.

The Office for National Statistics said on Wednesday that the rate of unemployment in the U.K. ticked up to 7.2% in the three months to December from 7.1% in the previous three months. A separate report showed the claimant count fell by a seasonally adjusted 27,600 last month, compared to expectations for a decline of 20,000 people. December's figure was revised to a drop of 27,700 people from a previously reported decline of 24,000.

Bank of England released its February's meeting minutes and stated 'Carney did not ask MPC vote on new forward guidance policy on Feb 6; MPC judged there was scope to absorb spare capacity before raising rates, rates rises would be gradual; note FX strategists attribute recent sterling appreciation to stronger U.K. demand outlook; past month's news strengthens sense of momentum in U.K. economy, see 0.9% Q1 growth, similar in Q2; upside news about euro zone periphery must be balanced against heightened risks from emerging economies; CPI to be lower than expected due to sterling appreciation, low global inflation pressures, fading one-off effects; strong short-term bounce in productivity unlikely, but normalizing banking sector may help; MCP voted 9-0 to keep QE bond purchase total at 375 bln pounds; MPC voted 9-0 to keep rates at 0.5%.'

On the data front, U.S. showed that the number of building permits issued last month declined by 5.4% to a seasonally adjusted 937K units from December's total of 991K, while housing starts plunged by 16% in January to hit a seasonally adjusted 880K units from December's total of 1.048 million.

FOMC minutes stated 'several Federal Reserve policymakers wanted to drive home the idea that their asset-purchase program would be trimmed in predictable, $10-billion steps unless the economy's performance surprises them.' Beyond the expected cut to bond buying, the Fed at the meeting made no changes to its other main policy plank: its pledge to keep interest rates low for some time to come.

Data to be release on Thursday:

New Zealand PPI, consumer confidence, Japan trade balance, imports, exports, China manufacturing PMI, Germany PPI, manufacturing PMI, services PMI, France CPI, manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, UK CBI trends, U.S. CPI, jobless claims, manufacturing PMI, Philly Fed survey and leading index.

AceTraderfx
02-21-2014, 01:37 AM
Market Review - 20/02/2014 21:17GMT

Euro weakens on Thursday after weak PMI data

The single currency dropped against the dollar on Thursday after data showed that private sector activity in the euro area slowed in February. Euro dropped from Asian high of 1.3763 to as low as 1.3686 after the disappointing PMI reports before stabilizing. Later, the pair climbed back to 1.3729 in New York morning and then traded sideways in New York afternoon.

The French manufacturing PMI fell to a two month low of 48.5, while the nation's services PMI fell to a nine-month low of 46.9. Meanwhile, Germany's manufacturing PMI slowed to 54.7 from 56.5 in January, while the country's services PMI rose to 55.4 this month from 53.1 in January. Later, a separate report showed that the euro zone's manufacturing PMI fell to a two-month low of 53.0 from 54.0 in January, compared to expectations for an unchanged reading.

Dollar fluctuated wildly against the yen on Thursday, although the safe haven yen was boosted after data showed that the preliminary reading of China's HSBC manufacturing index fell to a seven month low of 48.3 this month, down from 49.5 in January and usd/jpy fell fm Asian high of 102.40 to 101.67 in European morning, renewed buying lifted price from there and dollar later rose to 102.42 in New York morning after reports showed that U.S. jobless claims fell last week, U.S. consumer prices rose broadly in line with forecasts in January, and U.S. manufacturing PMI expanded at the fastest pace this month since May 2010.

U.S. consumer prices rose 1.6% on a year-over-year basis in January, in line with expectations. Consumer prices were 0.1% higher from a month earlier, also matching forecasts. The number of people who filed for unemployment assistance in the U.S. last week fell by 3,000 to 336,000, slightly below expectations for a decline of 4,000.

Market research group Markit said that its preliminary U.S. manufacturing PMI increased to 56.7 in February from a final reading of 53.7 in January.

Cable moved closely with euro and dropped from Asian high of 1.6995, price briefly penetrated Wednesday low at 1.6637 to 1.6635 in European morning but active cross-buying of sterling limited intra-day losses there. Later, cable was lifted to 1.6700 in New York morning and moved in a choppy fashion for rest of the session.

In other news, BoJ board member Morimoto said on Thursday that 'Japan economic growth to exceeding potential despite impact of sales tax hike; important to average out swing caused by sales tax hike when making policy decision; Japan's economy is steady making progress towards 2% inflation target; needs to monitor impact of Fed tapering on capital flows n real economy; JGB yields may rise in a way derivating from economic fundamentals n trust in Japan's finances is lost.'

Data to be release on Friday:

UK retail sales, public sector net borrowing, Canada CPI and U.S. existing home sales.

AceTraderfx
02-24-2014, 01:56 AM
Market Review - 21/02/2014 21:06GMT

Euro strengthens against the dollar after disappointing U.S. home sales data

The single currency rose against the dollar on Friday after the release of disappointing U.S. existing home sales data which fell sharply to the lowest level in more than a year in January, the latest sign that the housing market in U.S. is buckling under higher mortgage rates and harsh winter.

During the day, although the single currency retreated after staging a brief jump to 1.3725 in Asia, renewed buying limited intra-day losses to 1.3702 and price later rallied to 1.3759 in New York morning after disappointing U.S. exiting home sales data but profit-taking knocked price to 1.3720 b4 recovering.

According to the National Association of Realtors, U.S existing home sales fell by 5.1% to a seasonally-adjusted annual rate of 4.62 million in January from 4.87 million in December, the lowest level since July 2012, when it stood at 4.59 million.

Versus the Japanese yen, dollar rose above Thursday's high of 102.43 to 102.71 in Asia after the BOJ monetary policy meeting minutes highlighted worries over the health of emerging economies together with the release of Japan's record trade deficit but cross-buying of yen knocked price down to 102.34 in European morning. Later, the pair rose again on renewed cross-selling on yen and the pair penetrated Tuesday's high of 102.74 to a fresh 2-week high at 102.83 in New York morning before easing.

Bank of Japan on Friday released the minutes of the meeting held on Jan. 21-22 and noted that, 'with regard to the emerging and commodity-exporting economies, many members said that the developments in these economies, some of which we're facing structural problems such as current account deficits, continued to warrant attention together with developments in the global financial markets.'

Cable fluctuated wildly on Friday as despite falling from Asian high at 1.6686 to a fresh 1-week low at 1.6610 in European morning after downbeat U.K. retail sales, price swiftly rallied to 1.6690 on short-covering. Later, cable retreated to 1.6656 but only to rally to 1.6725 in New York on dollar's broad-based weakness (except versus yen) after worse-than-expected U.S. existing home sales data before falling sharply to 1.6613 in New York trading.

Official data showed that U.K. retail sales dropped 1.5% in January, more than the expectation of 1% decline. Retail sales in December were revised down to a 2.5% increase from a previously estimated 2.6% gain. On a yearly basis, U.K. retail sales rose 4.3% last month, compared to expectations for a 5% increase, after a 5.3% advance in December.

A separate report showed that public sector net borrowing in the U.K. dropped by 6.4 billion pounds in January, confounding expectations for a 9 billion pounds decline. Public sector net borrowing for December was revised down to a 9 billion pounds increase from a previously estimated 10.4 billion pounds jump.

The Sydney G20 Finance Ministers and Central Bank Governors meeting will be held over the weekend of 22-23 February 2014, with the main meeting being held on the Sunday. Australia Treasurer Joe Hockey said earlier on Wednesday that 'Australia will use its presidency of the Group of 20 advanced and emerging economies to push for agreements on strengthening global growth and to generate ideas on funding public infrastructure.'

Data to be released next week:

UK house prices, Germany Ifo business climate, current assessment, expectations, import price index and EU CPI on Monday.

Germany GDP, exports, imports, Italy retail sales, consumer confidence, UK CBI trends, U.S. house price index and consumer confidence on Tuesday.

Germany Gfk consumer confidence, UK exports, imports, GDP, U.S. mortgage applications and new home sales on Wednesday.

New Zealand trade balance, exports, imports, Swiss GDP, France consumer confidence, Germany unemployment, CPI, HICP, EU economic confidence, consumer confidence, Canada current account, U.S. durable goods and jobless claims on Thursday.

Japan manufacturing PMI, jobless rate, CPI, industrial production, retail sales, housing starts, construction orders, UK Gfk consumer confidence, France PPI, Swiss KOF indicator, Italy unemployment rate, EU unemployment rate, Canada GDP, U.S. GDP, personal consumption, core PCE, pending home sales and U. of Michigan consumer confidence on Friday.

AceTraderfx
02-25-2014, 01:57 AM
Market Review - 24/02/2014 21:25GMT

Dollar rises broadly Monday on safe haven demand

The dollar strengthened against other major currencies on Monday as safe haven demand increased after data showed that Chinese home prices fell for the first time in 14 months in January and added to fears that the world's second largest economy is slowing as the government tries to tackle bad loans and weak lenders.

During the day, although euro rose to a session high of 1.3772 after reports showed German business confidence rose more than expected this month, investors shrugged off the upbeat data and long-liquidation in 'delayed' reaction to 'negative' deposit rate comments by ECB Visco pressured price below New Zealand bottom at 1.3729 to a fresh session low of 1.3709 in New York morning before rebounding.

Ifo German business climate index came in at 111.3 in February, the highest level since mid-2011, up from 110.6 in January, meanwhile, the future expectations component of the index ticked down to 108.3 from 108.9 in January, but was ahead of expectations for a decline to 108.1. A separate report showed that the annual rate of euro zone inflation came in at 0.8% in January, unchanged from the previous month and slightly higher than the preliminary estimate for 0.7%.

ECB Goverrning Council member Ignazio Visco (also Governor of Bank of Italy) said on Monday that 'if needed, we're ready to consider negative deposit rate, Danish experience with this was not bad.'

Versus the Japanese yen, dollar dropped extended losses from Friday's near 3-week high of 102.83 to 102.17 in Asia but traded higher in European session due to the rebound in Nikkei futures. Later, dollar rose to 102.61 in New York morning on dollar's broad-based firmness before easing.

Cable fluctuated wildly on Monday, despite a brief selloff below last Friday's low at 1.6610 to 1.6598 in European morning, lack of follow-through selling lifted price from there and price later rebounded strongly to 1.6679, helped buy active cross-buying of sterling. Later, dollar's broad-based firmness knocked price down to a fresh near 2-week low at 1.6583 in New York morning before rebounding to 1.6670 in late New York.

News over the weekend worth noting, Bloomberg reported Bank of England Governor Mark Carney on the sidelines of the weekend G20 meeting, gave an interview with Australian newspapers published Sun and said a new phase of forward guidance is intended to give assurance that officials will support the economic rebound. He said 'we will not take risks with the recovery,' and 'we are going to set the path of monetary policy in a way that ensures that we see sustainable growth in jobs n incomes n in spending.' Carney said the revised framework for forward guidance that he introduced earlier this month reflects the necessity for a 'more complex set of judgments' than was needed in the first phase, where there was a link to the unemployment rate. The bank changed its approach after the jobless rate fell faster than officials had forecast toward the 7% threshold for considering an interest-rate increase.

Data to be release on Tuesday:

Germany GDP, exports, imports, Italy retail sales, consumer confidence, U.K. CBI trends, U.S. house price index and consumer confidence.

AceTraderfx
02-26-2014, 02:14 AM
Market Review - 25/02/2014 21:32GMT

Dollar trades mixed against other major currencies after comments from Fed's top regulator

Although data showed that U.S. consumer confidence deteriorated in February on Tuesday, dollar rose from session lows versus other major currencies as comments from Fed's Daniel Tarullo prompted broad-based buying in greenback.

Fed's Board Governor Daniel Tarullo said on Tuesday that 'monetary policy a possible tool to deal with broad, sustained systemic risk; current financial risks do not warrant change to policy, cites high-yield corporate bonds, leveraged loans as risky areas; ad hoc supervisory actions have their limitations; supervisory tools, refinements to policy can reduce need to tighten in face of systemic risk; urges better framework to judge tradeoffs between financial stability, reduced economic activity; incorporating financial stability into monetary policy does not require new mandate; possible that interest rates will remain historically low for some time after Fed starts to raise them.'

During the day, the single currency moved narrowly above Asian low at 1.3729 in early trading on Tuesday and then rose to 1.3763 in European morning after data confirmed Germany's economy expanded in Q4. Later, euro edged marginally higher to 1.3767 in New York morning after European Commission revised up its growth forecast for the euro zone this year but lack of follow through buying prompted long liquidation and price retreated sharply to 1.3715 due to comments from the Federal Reserve's top regulator before stabilizing.

European Commission revised up its growth forecast for the euro zone to 1.2% this year, up from 1.1% in November, but cut its inflation forecast for 2014 to 1% from 1.5% in November and warned that debt levels in several countries will continue to climb.

Earlier, official data confirmed that Germany's economy grew 0.4% in the fourth quarter and expanded 1.3% on a year-over-year basis as strong overseas demand bolstered exports.

Versus the Japanese yen, the greenback rose briefly to 102.63 shortly after Asian opening but cross-buying of yen on risk aversion due to a sharply decline in China's yuan pressured price lower to 102.22 in European morning. Later, price fell further to 102.01 in New York morning after release of weaker-than-expected U.S. February consumer confidence before recovering.

The Conference Board reported that its consumer confidence index declined to 78.1 in February, down from 79.4 in January, amid concerns over the short-term outlook for business conditions, jobs, and earnings.

Cable found support at 1.6646 in Asian morning and price later rose above Monday's high of 1.6679 to 1.6707 in European morning after reports showed stronger than forecast data on U.K. mortgage approvals and retail sales. Later, the British pound rose to 1.6724 in New York morning and then retreated sharply to 1.6642 on dollar's broad based rebound before rising to another session high of 1.6728.

The British Bankers Association on Tuesday showed that mortgage approvals rose 57% in January from a year earlier to 49,972, hitting a 76-month high. A separate report by the Confederation of British Industry said U.K. retail sales rose at the fastest rate since June 2013 in February. The CBI distributive trades survey rose to 37, up from 14 in January and well ahead of forecasts for an uptick to 15.

Data to be released on Wednesday:

Germany Gfk consumer confidence, UK exports, imports, GDP, U.S. mortgage applications and new home sales.

AceTraderfx
02-27-2014, 01:44 AM
Market Review - 26/02/2014 20:32GMT

Dollar rises broadly after the release of robust U.S. new home sales data

The greenback rose against major currencies on Wednesday due to the upbeat U.S. new home sales data, shrugging off the Tuesday's poor consumer confidence data. Investors turned their attention to testimony by Federal Reserve Chair Janet Yellen on Thursday.

Official data showed that U.S. new home sales rose unexpectedly in January, surged by 9.6% to a seasonally adjusted 468,000 units last month, highest since July 2008. New home sales in December were revised up to 427,000 units from a previously reported 414,000 units.

Although the single currency rose to a session high of 1.3757 in European morning after data showed that Germany's forward looking Gfk consumer sentiment index ticked up to a seven-year high of 8.5 for March from 8.3 in February, cross-selling in euro knocked price down ahead of New York open and price later tumbled to 1.3662 in New York morning before staging a recovery.

Dollar traded sideways against the Japanese yen after a brief rise to 102.41 in Asia but active cross-buying of yen versus other currencies capped intra-day gains there. The greenback dropped to 102.11 in New York morning and later rose to 102.61. Eur/jpy, aud/jpy and gbp/jpy crosses all fell sharply from 140.79 to 139.66, from 92.37 to 91.60 and from 170.95 to 169.97 respectively on Wednesday before stabilizing.

Although cable traded sideways in Asia and then staged a brief rebound from 1.6661 to 1.6702 in European morning after data confirmed that the rate of fourth quarter economic growth in the U.K. was unrevised at 0.7%, but the annual rate of growth was revised slightly lower.

Two members of the Bank of England's monetary policy committee reiterated that the bank is planning to keep rates on hold for some time limited intra-day upside potential there and the British pound later dropped in New York morning on dollar's broad-based strength to 1.6622.

David Miles said recent falls in inflation meant there was less pressure to raise borrowing costs, while the bank’s chief economist Spenser Dale said it was not planning to raise rates any time soon. While Broadbent said 'BoE is not giving time specific guidance on when rates will rise; too much focus on specific date of when rates will rise first; timing of first interest rate rise has little bearing on average rate over next 5 years.'

In other news, Boston Federal Reserve Bank President Eric Rosengren said in remarks prepared for delivery to the Boston Economic Club that 'the recent drop in the U.S. unemployment rate overstates the health of the labor market and should not trigger any speedy reduction in the Federal Reserve's super-easy monetary policy; the high number of part-time workers who would rather work full-time, the still-high unemployment rate, and very low inflation suggest significant "slack" in labor markets and "call for a very patient approach to removing monetary policy accommodation, particularly given the softness in recent economic data.'

Data to be released on Thursday:

New Zealand trade balance, exports, imports, Swiss GDP, France consumer confidence, Germany unemployment, CPI, HICP, EU economic confidence, consumer confidence, Canada current account, U.S. durable goods and jobless claims.

AceTraderfx
02-28-2014, 01:42 AM
Market Review - 27/02/2014 23:16GMT

Dollar pares gains after mixed U.S. economic reports

The greenback backed off from session highs against other euro and pound on Thursday as data showed the number of people who filed for unemployment assistance in the U.S. last week rose more than expected, while a separate report said U.S. orders for long lasting manufactured goods fell less than expected in January. Fed Chair Yellen's prepared testimony to senate panel on Thursday was identical to testimony delivered to house of representatives on Feb 11.

U.S. Labor Department said the number of individuals filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week's total of 334,000. Market had expected a decrease of 1,000.

Meanwhile, the Commerce Department reported that durable goods orders declined by a seasonally adjusted 1% last month, compared to expectations for a 1.7% drop, while core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline.

During the day, although the single currency recovered to 1.3696 in Asia after Wednesday's sharp decline from 1.3757 to 1.3662, active cross-selling in euro on risk aversion due to rising geo-political tensions in Ukraine capped intra-day gain there and knocked price down to 1.3643 in European morning. Euro recovered to 1.3687 in New York morning on dollar's broad-based softness after release of mixed U.S. economic data before easing, the pair later rose to 1.3727 b4 easing.

Versus the Japanese yen, dollar edged lower after meeting renewed selling at 102.44 in Asia and then tanked to 101.72 in European morning on active cross-buying in yen versus other major currencies. Later, investors bought back the greenback to 102.21 in New York morning on short-covering and then traded in a choppy fashion for rest of the session.

Cable traded in a mixed tone on Thursday. Despite early retreat from Asian high of 1.6683 to 1.6617 in European morning on risk aversion due to geopolitical tensions between Russia and Ukraine, price staged a rebound to 1.6699 in New York morning on active cross-buying in sterling together with dollar's broad-based softness before moving sideways in thin New York afternoon.

In other news, Fed Chair Yellen said later in the day, 'since my appearance before last committee some data has been softer; hard to say how much due to weather; we will be attentive to signals on whether recovery is progressing in line with expectations.'

Data to be release on Friday:

Japan manufacturing PMI, jobless rate, National CPI, Toyko CPI, industrial production, retail sales, housing starts, construction orders, UK Gfk consumer confidence, France PPI, Swiss KOF indicator, Italy unemployment rate, EU unemployment rate and CPI, Canada GDP, U.S. GDP, personal consumption, core PCE, pending home sales and U. of Michigan consumer confidence.

AceTraderfx
03-03-2014, 01:35 AM
Market Review - 28/02/2014 21:26GMT

Euro rallies on eurozone inflation and downwardly revised U.S. GDP data

The single currency rallied from 1.3694 to as high as 1.3825 in New York after the release of eurozone inflation data and downwardly revised U.S. economic growth for the fourth quarter.

Eurozone CPI unexpectedly held steady this month as eurozone Feb inflation estimated came in at 0.8% y/y versus economists' forecast of 0.7%. Euro zone Feb CPI core was 1.0% y/y, higher than previous reading of 0.8%. Euro zone unemployment rate unchanged at 12.0% in January. The inflation cooled expectations the European Central Bank might ease monetary policy as early as next week. The single currency rallied from Asian low at 1.3694 to as high as 1.3825 before retreating briefly in late New York.

The greenback fluctuated wildly against the Japanese yen on Friday. Renewed selling interest at 102.20 ahead of Asian open pressured the pair lower n price dropped to as low as 101.55, weighed down by the decline in the Nikkei futures. However, active short-covering on the rebound in Asian stock markets lifted the pair. Dollar rose strongly to 102.30 in NY after the release of U.S. economic data. Chicago PMI came in at 59.8 in Feb versus 59.6 in Jan whilst U.S. University of Michigan consumer sentiment index final Feb was 81.6 versus prelim. reading of 81.2.

U.S. dollar nose-dived to 101.67 in late New York due to the brief but strong retreat in U.S. stock markets together with rising geopolitical tensions in Ukraine as Ukraine's acting president accused Russia of open aggression and said Moscow was following a similar scenario to the one before it went to war with Georgia in 2008.

The British pound also fluctuated wildly on Friday. Cable rose from 1.6677 to 1.6769 in tandem with euro after the release of eurozone inflation data, however, profit-taking knocked price lower to 1.6684 before rebounding to 1.6764 in New York.

In other news, Chicago Fed President Charles Evans told an audience of economic heavyweights in New York that 'the Federal Reserve's best bet for returning the United States to full employment and 2-percent inflation is to clearly and repeatedly state those goals and even be willing to overshoot them to get there quickly; under Fed Chairman Ben Bernanke, the Fed has used massive bond-buying programs and a promise to keep rates low as effective tools to provide monetary policy accommodation despite having already slashed the main policy rate to near zero.'

Data to be released next week:

Australia new home sales, China non-manufacturing PMI, HSBC manufacturing PMI, UK hometrack housing survey, house prices, manufacturing PMI, mortgage approvals, Swiss manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, EU manufacturing PMI, U.S. personal income, personal spending, PCE, manufacturing PMI, ISM manufacturing and construction spending on Monday.

Australia building approvals, RBA rate decision, EU PPI and U.S. ISM New York on Tuesday.

Australia GDP, China HSBC services PMI, UK shop price index, Italy services PMI, France services PMI, Germany services PMI, EU services PMI, GDP, U.S. ADP employment, ISM non-manufacturing and Canada BoC rate decision on Wednesday.

Australia trade balance, retail sales, Germany factory orders, UK BoE rate decision, EU ECB rate decision, Canada building permits, U.S. labor cost, productivity, initial jobless claims and factory orders on Thursday.

Japan leading index, Swiss unemployment rate, CPI, France trade balance, Italy PPI, Germany industrial production, Canada unemployment rate, labor productivity, U.S. non-farm payrolls, private payrolls, unemployment rate and avg. hourly earnings on Friday.

AceTraderfx
03-04-2014, 01:37 AM
Market Review - 03/03/2014 22:04GMT

Euro falls on risk aversion due to geopolitical tensions in Ukraine

The single currency fell against the dollar and the other major currencies on Monday as fears over the growing threat of war between Russia and Ukraine after Russian President Vladimir Putin's decision to send troops into the Crimea region over the weekend sparked a broad based selloff in assets perceived as risky.

Euro 'gap-down' opened in New Zealand on Monday after rising to a fresh 2-year peak at 1.3825 last Friday. Price fell to 1.3755 before rebounding to 1.3793 ahead of European opening on short-covering. Later, despite release of a mixed manufacturing PMIs from euro zone and its members countries, euro fell further versus dollar to 1.3726 in late New York on dollar's broad-based strength except versus the Japanese yen.

In euro zone, data on Monday confirmed that the region's manufacturing PMI declined to 53.2 in February from 54.0 in January. It was the first dip in five months, highlighting the fragile nature of the recovery in the euro area. Separate reports showed that the rate of decline in France's manufacturing sector eased in February, while activity in Germany's manufacturing sector rose for the eighth straight month.

Versus the Japanese yen, although dollar remained under pressure after opening lower from Friday's close of 101.80 to 101.32 in Monday's New Zealand due to broad-based buying of yen on risk aversion after Russian President Vladimir Putin's threat to invade Ukraine. Price briefly staged a short-covering rebound to 101.67 in Australia before falling further to 101.20 in Europe. Later, dollar climbed back to 101.57 after release of a slew of encouraging U.S. economic data in New York morning and then traded sideways in New York afternoon.

On the data front, U.S. personal income rose 0.3%, beating expectations for a 0.2% increase, after a flat reading in December. U.S. personal spending rose 0.4% in January, above expectations for an increase of 0.1%, however, December data was revised down to a 0.1% gain from a previously reported increase of 0.4%.

Cable traded in a choppy fashion on Monday. Although price moved closely with euro in Asia and rebounded from New Zealand low at 1.6710 to 1.6751, price retreated to 1.6698 (Reuters) in European morning and then rebounded to 1.6751 after data showed that the strong upswing in the U.K. manufacturing sector continued in February and more-than-expected mortgage approvals in January. Later, broad-based rebound in greenback pushed price lower again n cable nose-dived to 1.6652 in late New York after penetrating 1.6698 level.

The Markit U.K. manufacturing purchasing managers' index for February came in at 56.9, up from a revised 56.6 in January. Market had expected the index to tick down to 56.5. A separate report showed that the number of mortgages approved in the U.K. rose to 76,947 in February, the highest level since November 2007, from 72,798 in January.

In other news, ECB's President Mario Draghi gave testimony before the European Parliament's Committee on Economic and Monetary Affairs on Monday and said 'government bonds will be stressed according to stress parameters like all other assets in stress test; very important to reach swift conclusion on single resolution mechanism; financial linkages of Ukraine with euro zone are "rather small", economic impact likely to be limited; geopolitical dimensions of Ukraine could go beyond actual links of statistical numbers, must watch carefully; we have to find a way whereby the changes of our monetary policy will be passed to the real economy; start seeing some progress now in lending channels improving; funding for lending scheme is one of the instrument we could use; euro exchange is not our policy target, but it is important for price stability; premature to speculate about a debt relief for Greece, Greece should focus on programme implementation; looking at house price increases in some parts of euro zone with "great attention", too early to speak of bubble.'

Data to be released on Tuesday:

Australia building approvals, RBA rate decision, U.K. PMI construction, EU PPI and U.S. ISM New York.

AceTraderfx
03-05-2014, 01:45 AM
Market Review - 04/03/2014 21:17GMT

Yen weakens broadly on Tuesday as Ukraine-Russia tensions ease

The Japanese yen fell broadly against other major currencies on Tuesday on improved risk appetite after Russian President Vladimir Putin indicated that the use of force in Ukraine would be a last resort and ordered troops engaged in military exercises close to Ukraine's borders to return to base, however, market sentiment remained fragile, with Russian forces still maintaining a military presence in Ukraine's Crimea region.

During the day, despite euro's initial fall below Monday's low at 1.3726 to 1.3718 in Asia on Tuesday, short-covering limited intra-day losses there and price later rebounded to 1.3774 in European morning on improved risk appetite. The single currency then climbed higher to 1.3782 in New York morning, helped by active cross-buying of euro versus yen and Swiss franc before retreating to 1.3726. Eur/jpy and eur/chf crosses rose from 139.28 to 140.53 and from 1.2126 to 1.2187 respectively.

U.S. dollar moved higher against the Japanese yen on Tuesday on active cross-selling in yen as concerns over the crisis in Ukraine eased. Price rose from Asian low at 101.20 to 101.95 in European morning and then further to 102.29 in late New York.

In other news, BOJ Kuroda said 'foreign investors haven't become downbeat on Japan cos; change in expectations helping to boost demand for funds; exit strategy from QE is extremely important; too early to discuss QE exit now; will act appropriately when exiting QE.'

Cable rose in tandem with euro on improved risk appetite and price rallied from Asian low at 1.6640 to 1.6717 in European morning and then retreated to 1.6670 after data showed that activity in the U.K. construction sector slowed in February. Later, cable climbed back to 1.6705 in New York morning and then chopped inside 1.6640-1.6717 for rest of the session.

Markit U.K. construction purchasing managers' index fell to 62.6 in February from a reading of 64.6 in January, the highest level since August 2007. Market had expected the index to fall to 63.2 last month. The report said heavy rain and flooding in parts of the country had contributed to softer construction output growth in February, especially in house building.

In commodity currency, the Australian dollar fluctuated wildly after the central bank held its cash rate at a record low 2.5% as expected and indicated a continued stable outlook and the need for a weaker currency to help re-balance the economy. Aussie fell from 0.8970 to 0.8909 in Asia and then climbed back to 0.8967 in European morning before trading sideways.

RBA left its cash rate unchanged at 2.50% and said 'Prudent course is for stable rates; monetary policy appropriate to foster growth; inflation seen consistent with target band; signs of improvement in non-resources investment plans only tentative; labor demand remains weak; fall in A$ to date will help growth; wages growth down noticeably; A$ remains high by historical standards; unemployment to rise further before it peaks; monetary policy remains accommodating.'

In other news, Canadian Prime Minister Stephen Harper said on Tuesday that the Group of Seven leading industrialized nations are discussing whether to hold a meeting in the near future, a move that would pointedly exclude Russia.

Data to be release on Wednesday:

Australia GDP, China HSBC services PMI, UK BRC shop price index, Italy services PMI, France services PMI, Germany services PMI, EU services PMI, GDP, U.S. ADP employment, ISM non-manufacturing and Canada BoC rate decision.

AceTraderfx
03-06-2014, 01:31 AM
Market Review - 05/03/2014 21:16GMT

Japanese yen extends weakness on increasing risk appetite

The Japanese yen weakened broadly the second day on Wednesday as concerns over tensions between Russian and Ukraine continued to abate. Investors shrugged off weaker than expected data on U.S. private sector jobs growth and turned their focus on Thursday's monetary policy decision from Bank of England and European Central Bank.

Versus the Japanese yen, dollar rebounded after finding support at 102.12 in Wednesday's Asian trading and price later rose above Tuesday's high of 102.29 in European morning. Usd/jpy pair later climbed higher to 102.55 in New York morning before easing. Eur/jpy, aud/jpy and gbp/jpy crosses rose from 140.20 to 140.78, from 91.35 to 92.08 and from 170.15 to 171.40 on Wednesday respectively.

Euro remained under pressure after meeting renewed selling at 1.3745 in Australian session and despite release of upbeat reports on euro zone private sector activity and retail sales, the single currency fell below Tuesday low at 1.3718 to 1.3707 in European morning as investors remained cautious ahead of the ECB's monthly policy meeting on Thursday amid concerns that the bank could tighten monetary policy to help shore up the fragile recovery in the region. Later, euro traded in a choppy fashion inside 1.3707-1.3749 in New York session, ended around 1.3732 near New York closing.

On the data front, the final euro zone composite PMI was revised up to a 32-month high of 53.3 from a preliminary estimate of 52.7. The euro area services PMI rose 52.6 in February, from a final reading of 51.6 in January and higher than the flash estimate of 51.7. Meanwhile, Germany's composite PMI climbed to a 33-month high but France's fell to a two-month low of 47.7. Italy's service PMI soared to an almost three year high last month at 52.9.

Cable traded sideways above Tuesday's low at 1.6652 in Asian on Wednesday before active cross-buying of sterling versus yen and euro pushed price higher in Europe. The pair rose to 1.3734 in New York morning and then further to 1.6742 before easing in New York afternoon.

Bank of Canada (BoC) kept rate unchanged at 1.00% on Wednesday, repeated that timing and direction of next rate move to depend on how new data influence balance of risks. BoC said in the statement that 'with inflation expected to be well below target for some time, downside risks to inflation "remain important" roughly follow path outlined in January MPR; recent inflation readings slightly higher than expected; still expects underlying 2014 Canada growth of around 2-1/2%, Q1 2014 likely to be softer; risks associated with elevated household imbalances have not materially changed; exports a little stronger than previously thought but continue to underperform, overall business investment has yet to pick up; recent data support bank's expectation of soft landing in housing market, stabilizing debt-to-income ratios for households; fundamental drivers of growth and inflation in Canada continue to strengthen gradually, as expected; global economy evolving as anticipated, growth seen strengthen in 2014/2015; tensions in Ukraine have added to geopolitical uncertainty.' However, BoC statement did not mention of C$; in Jan it said weaker C$ should help boost exports, confidence and investment.

In other news, Fed Chair Janet Yellen said "the economy continues to operate considerably short of these objectives of maximum employment and stable prices; the economy is stronger and the financial system is sounder; we have come a long way, but we have farther to go."

Data to be release of Thursday:

Australia trade balance, retail sales, Germany factory orders, UK BoE rate decision, ECB rate decision, Canada building permits, U.S. labor cost, productivity, initial jobless claims and factory orders.

AceTraderfx
03-07-2014, 01:32 AM
Market Review - 06/03/2014 20:39GMT

Euro rallies to a fresh two-month peak after ECB raises inflation expectation

The single currency rallied to a fresh two-month peak at 1.3873 versus U.S. dollar on Thursday after the European Central Bank refrained from tightening monetary policy, and slightly upgraded its forecast for growth this year.

During the day, although euro traded sideways below Wednesday's high of 1.3749 in Asia and briefly dropped to 1.3722 in European morning, price rebounded after data showed German factory orders came in better-than-expected in January. Later, euro moved in a volatile manner shortly after the release of ECB's rate decision but eventually rallied to a fresh two-month peak at 1.3873 in New York as ECB President Mario Draghi confirmed the latest economic data indicating that 'the moderate economic recovery in the euro zone is proceeding.'

ECB President Mario Draghi confirmed that the bank left its benchmark interest rate unchanged at 0.5%, with the latest economic data indicating that 'the moderate economic recovery in the euro zone is proceeding.' The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December. The bank revised down its inflation forecast for this year to 1.0% from 1.1% in December. The bank expects inflation to pick up to 1.3% in 2015 and 1.5% in 2016, remaining below the bank's target of just under 2%. Draghi reiterated the ECB's forward guidance on rates and said that interest rates will remain at their present levels, or lower for an extended period. The ECB remains determined to maintain the high degree on accommodating monetary policy for as long as needed, and will take further actions as it sees fit.

Earlier, report showed German factory orders were up 1.2 percent over December, when adjusted for price, calendar and seasonal factors. The office also said it revised the previous month's decline of 0.5 percent to a decline of only 0.2 percent.

Cable fluctuated wildly on Thursday, as despite a brief rise above Wednesday's high of 1.6742 to 1.6753 after the Bank of England kept monetary policy unchanged in a widely anticipated decision, active cross-selling in sterling versus euro knocked price down to 1.6686 in New York morning. Later, cable rallied to session high at 1.6778 in New York afternoon before retreating to 1.6734 near New York closing.

The Bank of England voted to leave U.K. interest rates unchanged at their record low of 0.5%, and also left its quantitative easing program steady at 375 billion pounds.

Active cross-selling in Japanese yen due to increased risk appetite continued to lift usd/jpy pair higher on Thursday. Dollar rose from Australian low at 102.27 to 102.81 in European morning and then further to a fresh one-month peak at 103.17 in New York morning before easing due to some profit-taking.

On the data front, the Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 26,000 to 323,000 from the previous week's revised total of 349,000.

Data to be release on Friday:

Japan leading index, Swiss unemployment rate, CPI, France trade balance, Italy PPI, Germany industrial production, Canada unemployment rate, labor productivity, U.S. non-farm payrolls, private payrolls, unemployment rate, trade balance, and avg. hourly earnings.

AceTraderfx
03-10-2014, 01:33 AM
Market Review - 07/03/2014 20:34GMT

U.S. dollar rises on robust U.S. jobs report

U.S. dollar strengthened against major currencies after the release of higher-than-expected U.S. non-farms payrolls data. Employers added 175,000 jobs to their payrolls last month after creating 129,000 (upwardly revised) new positions in January. However, the unemployment rate rose to 6.7% from a five-year low of 6.6% as Americans flooded into the labor market to search for work. The data added speculations that the Federal Reserve will continue to reduce its monetary stimulus despite the icy weather that gripped much of the nation.

The single currency rose to a fresh 2-1/2 year peak at 1.3915 on signs that the European Central Bank's balance sheet was shrinking. On the data front, German Jan industrial production came in at 0.8% m/m n 5.0% y/y, vs the forecast of 0.8% n 3.9%, previous reading is revised to 0.1% n 3.4% respectively, however, euro pared all the gains after the release of robust U.S. jobs report. The pair retreated to 1.3853 before trading sideways in New York session.

U.S. dollar rallied to as high as 103.76 against the Japanese yen after the release of robust U.S. jobs report, however, profit-taking knocked price lower to 103.12 before trading sideways in New York session on mounting tensions over Ukraine led stocks in Europe and elsewhere to retreat, while U.S. shares traded near flat. The British pound strengthened briefly to 1.6787 on Friday before retreating to 1.6706 in New York afternoon.

In other news, former Federal Reserve Chairman Ben Bernanke said on Friday that the U.S. boom in onshore natural gas production has cut power prices and appears to be contributing to the "reshoring" of manufacturing jobs from overseas. "It's a terrific development. I don't want to overstate it but it's one of the bright spots in the economy," Bernanke said at the IHS CERAWeek energy conference in Houston.

Bernanke said "the jobs number we got this morning was consistent with a recovering economy; signs of less wrangling in Congress over the debt limit and the budget should help alleviate worries among investors." However, Bernanke added more needs to be done on "too big to fail" rules that would limit the risks financial institutions can take. He added that he feels relatively optimistic about the global economy.

Data to be released next week:

Japan trade balance, GDP, Eco watchers survey, France industrial production, manufacturing production, Swiss retail sales, Italy Industrial production, U.K. Lloyds employment confidence, EU Sentix investor confidence, Canada housing starts on Monday.

Australia NAB business confidence, NAB business conditions, Japan rate decision, U.K. sales like-for-like, industrial production, manufacturing production, Germany trade balance, exports, imports, current account, Italy GDP, U.S. wholesale inventories and wholesale trade sales on Tuesday.

Australia consumer confidence, home loans, Japan tertiary industry index, BSI large all industry, BSI large manufacturing domestic CGPI, consumer confidence, U.K. trade balance, EU industrial production, U.S. monthly budget statement on Wednesday.

New Zealand rate decision, Australia employment change, unemployment rate, Japan machine orders, China fixed assets exclude rural, retail sales, industrial production, U.K. RICS house price balance, France HICP, CPI, Italy HICP, Canada capacity utilization rate, new housing price index, U.S. retail sales, initial jobless claims, import price index, business inventories on Thursday.

New Zealand manufacturing PMI, Japan industrial production, capacity utilization, Germany CPI, HICP, U.S. PPI, university of Michigan consumer confidence on Friday.

AceTraderfx
03-11-2014, 01:54 AM
Market Review - 10/03/2014 22:57GMT

Dollar trades mixed against other major currencies on Monday

The greenback traded mixed versus other major rivals on Monday as poor Chinese trade data and downbeat economic reports from Japan weighed on sentiment.

Data released over the weekend showed that exports from China fell 18.1% on a year-over-year basis in February, confounding expectations for a 7.5% increase, following a rise of 10.6% in January. A separate report on Monday showed that Japan posted record current account deficit of 1.589 trillion yen in January and fourth quarter growth was revised down.

Versus the Japanese yen, although the greenback opened sharply lower on Monday to 102.83 in New Zealand morning from Friday's New York close near 103.25, renewed buying quickly emerged and lifted the pair higher to 103.30 at Asian open. However, dollar retreated again to 102.98 in Tokyo morning, weighed down by the release of weaker-than-expected Japan GDP data together with the decline in Nikkei-225 index and then further to 102.94 in European morning before rebounding to 103.40 due partly to cross-selling in yen. Later, dollar chopped inside 102.83-103.41 for rest of the New York session, ended around 103.27 near New York closing.

Japan's economy grew 0.2% in the final three months of 2013, in line with market expectation. On a year-over-year basis, the economy expanded by 0.7%, compared to an initial estimate of 0.9%.

The single currency found renewed buying at 1.3869 in New Zealand and strengthened to 1.3892 in early Asia. Price later rose marginally higher to 1.3897 in European morning, near last Friday's fresh 2-1/4 year peak at 1.3915, but broad-based rebound in greenback pressured euro to 1.3868 ahead of New York open in part due to risk aversion on falling major shares markets. Later, the single currency dropped further to 1.3662 in New York afternoon before trading narrowly.

The British pound tumbled against euro and U.S. dollar on Monday as unexpectedly weak trade data from China prompted concerns over the outlook for the global economic recovery. Cable retreated versus dollar after meeting renewed selling at 1.6745 in New Zealand and then dropped below Friday's low at 1.6706 to 1.6683 in European morning. The pair fell further to 1.6625 and then 1.6622 in New York morning after comments from BoE's Bean before stabilising.

In U.K., Bank of England Deputy Governor Charles Bean said 'Further sterling strength "would not be particular helpful" for U.K. exports; advises against "getting too hung up on precise date at which bank rate first rises"; likely to learn a lot about recovery between now and spring 2015 when market prices in rate hike; there is more scope for housing investment to continue driving growth; BoE keeping a "beady eye" on housing market, in case low housing supply and high mortgage lending creates risks; reasonable grounds to expect business investment to take over from household demand as driver of U.K. recovery; reasonable to believable U.K. to pre-crisis productivity growth, uncertain when; most obvious risk to U.K. recovery is euro zero clearly concerns about emerging markets; main domestic risk to U.K. recovery is that it runs out of steam, and possibility that housing market becomes over-exuberant; Scottish independence could at minimum create a period of uncertainty; important review of banks in euro zone is conducted well, in a way that enhances confidence; current level of sterling fine if it stays where it is; if sterling appreciates further, lower inflation pressures may keep policy looser for longer.'

ECB policymaker Christian Noyer said on Monday 'monetary policy should remark active because persistent low inflation threatens price stability; there are "permanent and deep forces" pushing inflation down at both the euro area and global level; there is no deflation in euro area today, inflation expectation are firmly anchored in positive territory; money market yield curve needs to remain lows; shrinking of ECB balance sheet "not a problem"; euro zone banks can always draw more liquidity.'

Chicago Fed President Charles Evans told reporters at Columbus State University that 'the Federal Reserve should revamp its so-called forward guidance by reinforcing that interest rates will stay low for "quite some time" and that much will depend on continued improvement in the labor market.' Evans said "It ought to be something that captures well the fact that (rates are) going to continue to be low well past the time that we change the language; Tick through the different labor market indicators: payroll employment, unemployment, labor force, vacancies, job openings and things like that; we somehow want to capture that general improvement in labor market indicators, but that is hard." Evans added "we're going to have accommodation for really quite some time."


Data to be released on Tuesday:

Australia NAB business confidence, NAB business conditions, Japan rate decision, Germany trade balance, exports, imports, current account, Italy GDP, U.K. sales like-for-like, industrial production, manufacturing production, U.S. wholesale inventories and wholesale trade sal

AceTraderfx
03-12-2014, 01:31 AM
Market Review - 11/03/2014 21:12GMT

U.S. dollar retreats versus Japanese yen on renewed risk aversion

U.S. dollar remained little changed against the euro and British pound on Tuesday and moved sideways versus the yen in light trade after the Bank of Japan kept monetary policy on hold and gave no sign that further easing is on the way. However, it later retreated against the Japanese yen on renewed risk aversion due to the weakness in U.S. equities. U.S. Dow Jones index closed down by 67 points to 16351.

The Bank of Japan maintained its pledge to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year. The central bank also kept the view that economic growth and inflation are proceeding in line with forecasts.

BoJ's Governor Haruhiko Kuroda spoke in press conference after rate decision and said 'sales tax hike unlikely to cause 1997-style recession; economy near full employment, pushing up wages, prices; no change in my view on price outlook; capex to continue to rise moderately as trend; positive economic cycle intact due to firm domestic demand; Japan economy to grow above potential rate as trend in fiscal year 2014 and 2015; core CPI likely to hit 2% around early 2015; Japan economy on steady track towards 2% price goal.'

During the day, although euro retreated after meeting renewed selling at 1.3879 in Australia and dropped to a session low of 1.3834 in European morning due to comments from European Central Bank Vice President Vitor Constancio who said that markets had missed some parts of its message on forward guidance last week. Short-covering lifted price from there and price later rebounded to 1.3875 in New York morning before easing.

ECB's Vice President Vitor Constancio said 'policy stance does not mean we are on hold in terms policy regardless of development of situation; forward guidance was made more precise on March 6 in relation to slack in economy; we have tools on the table, including rate cuts or QE; we are on hold in terms of policy regardless of the developments of the situation.'

Versus the Japanese yen, dollar moved in a narrow range on Tuesday due to thin market condition, despite 1-tick rise above Monday's high of 103.41 to 103.42 in Asia, price traded sideways in Europe and then dropped to 103.03 in New York morning. Meanwhile, euro and sterling weakened from 143.44 to 142.84 and from 172.11 to 171.37 before stabilising as market sentiment remained fragile.

Cable retreated after a brief jump to 1.6653 shortly after European open and dropped below Monday's low at 1.6622 after data showed that U.K. manufacturing output rose more than expected in January, but bad weather hampered the broader measure of industrial output. Later, price fell to a session low of 1.6596 after Bank of England Governor Mark Carney indicated that there is leeway for the bank to leave rates on hold for longer before short-covering lifted price to 1.6647 in New York morning.

According to the Office for National Statistics, U.K. manufacturing production rose 0.4% in January, above expectations for a 0.3% gain, while December's figure was revised up to a 0.4% increase from a previously reported gain of 0.3%. On a year-over-year basis, manufacturing production rose 3.3%, up from 1.4% in December. A separate report showed U.K. industrial output rose 0.1% in January, slowing sharply after a 0.5% increase in December and was up 2.9% from a year earlier.

Bank of England Governor Mark Carney said Tuesday during testimony on the inflation outlook to parliament's Treasury Select Committee that there was a range of views among the bank’s monetary policy committee members on the amount of spare capacity in the U.K. economy. He also said it was not unreasonable to think that interest rates may rise to 2.0% to 2.5% over the next three years. Carney also reiterated that when rate increases do come they will be gradual.

Data to be released on Wednesday:

Australia consumer confidence, home loans, Japan tertiary industry index, BSI large all industry, BSI large manufacturing, domestic CGPI, consumer confidence, EU industrial production.

AceTraderfx
03-13-2014, 01:36 AM
Market Review - 12/03/2014 20:31GMT

The single currency rises on Wednesday after ECB's official comments

The single currency rose against U.S. dollar on Wednesday and re-tested last Friday's 2-1/4 year high at 1.3915 after a senior European Bank official said there are no signs of deflation in the euro zone.

During the day, although the single currency retreated to 1.3844 in European morning, renewed cross-buying limited intra-day losses there and price later rose to 1.3915 (last Friday's 2-1/4 year peak) in New York on 'euro-positive' comments from ECB executive board member Benoit Coeure.

ECB's Coeure said on Wednesday that 'we don't see deflation in the euro zone; we see deflation as a risk, and we have to be ready to act; we may have situation where level of excess liquidity is not appropriate to monetary policy stance, would have to inject more liquidity; that is not the case now; different contingencies would call for different policy instruments; development of ABS market is probably beyond remit of monetary policy, European commission should lead it.'

Versus the Japanese yen, although dollar rebounded after marginal weakness below Tuesday's low at 102.84 to 102.79 in Australia on Wednesday, renewed cross-buying of yen due to risk aversion amid lingering concerns over the health of China's economy and escalating tensions over the crisis in Ukraine capped intra-day gain at 103.10 in Asia and the pair later fell further to 102.62, then 102.55 in New York morning before recovering.

Ukraine’s interim Prime Minister Arseniy Yatsenyuk was to travel to the U.S. to meet President Barack Obama on Wednesday, as diplomatic efforts to resolve the crisis continued.

Cable moved in a choppy fashion on Wednesday as despite falling from European morning high of 1.6636 to a fresh 2-week low at 1.6568 on risk-off trade ahead of New York opening, price rebounded strongly in tandem with euro to 1.6627 in New York before stabilizing.

On the data front, report showed that euro zone industrial production was down 0.2% in January from a month earlier, dragged down by a 2.5% drop in energy output. However, the underlying trend remained strong, with industrial output rising 2.1% on a year-over-year basis, after rising at an annual rate of 1.2% in December.

The Reserve Bank of New Zealand raised its benchmark cash rate by 25 basis points to 2.75%, as widely expected, and flagged a series of further increases to keep inflation pressures in check as the economy gains momentum.

Data to be released on Thursday:

Australia employment change, unemployment rate, Japan machine orders, China fixed assets exclude rural, retail sales, industrial production, U.K. RICS house price balance, France HICP, CPI, Italy HICP, Canada capacity utilization rate, new housing price index, U.S. retail sales, initial jobless claims, import price index, business inventories.

AceTraderfx
03-14-2014, 01:56 AM
Market Review - 13/03/2014 23:05GMT

Euro falls sharply from a fresh 2-1/4 year peak on increased Ukraine worries and ECB dovish remarks

The single currency rose to a fresh 2-1/4 year high at 1.3966 against the dollar on Thursday as diminished expectations on more easing by the European Central Bank bolstered demand for the euro.
However, gain was capped as investors remained wary due to the escalating tensions between Russia and the West ahead of Sunday's referendum in Ukraine's Crimea region, now controlled by pro-Russian forces.

During the day, despite euro's sideways trading in Thursday's Asian session after rallying to 1.3915 in previous session, this renewed buying at 1.3843 lifted price higher to a fresh 2-1/4 year peak at 1.3966 in European morning.
However dollar's broad-based rebound due to upbeat U.S. economic reports (retail sales and initial jobless claims) knocked price down to 1.3937 in New York morning.
Later, the single currency tumbled to 1.3846 due to active cross-selling in euro against the Japanese yen together with the sell-off in global stock markets on increased Ukraine worries, and with the dovish remarks from ECB's president Draghi. Dow Jones index closed down by 231 points to 16109.

ECB President Mario Draghi said that the European Central Bank has been preparing additional policy steps to guard against deflation taking hold in the euro zone as the strong euro weighs on prices

U.S. Commerce Department reported that retail sales rose 0.3% in February, ending two months of declines and better than market's expectation for an increase of 0.2%.
Meanwhile, core retail sales which exclude automobile sales, rose 0.3% last month, ahead of expectations for a 0.1% rise. A separate report from Department of Labor showed that the number of people filing new claims for unemployment benefits fell by 9,000 to a three month low of 315,000 last week, from the previous week's revised total of 324,000.

Cable found support at 1.6607 in Asia and price started to rise in tandem with euro during Tokyo afternoon. Price ratcheted higher to 1.6686 in European morning and then further to 1.6719 ahead of New York open before easing in New York morning. Later, cable nose-dived to 1.6607 due to dollar's broad-based rebound on safe-haven demand.

Versus the Japanese yen, dollar fell below Wednesday's low at 102.55 to 102.41 in Asia as lackluster data from China fuelled risk aversion and despite a brief rebound to 102.80 in New York morning after stronger-than-expected data on U.S. retail sales and initial jobless claims, renewed risk aversion due to the sharp sell-off in global stock markets triggered another round of cross-buying in yen and U.S. dollar tumbled to as low as 101.54 in late New York before recovering.

Chinese industrial production rose 8.6% in the first two months of 2014, according to data released on Thursday, missing market expectations for an increase of 9.5%, while Chinese retail sales rose by a smaller than forecast 11.8% in the same period.

In other news, ECB's Governing Council member Jens Weidmann said 'we have no Fx target; but euro appreciation can influence inflation outlook, which mean that we have to take this into account for monetary policy.
Watching German house price developments very closely, there is no systemic risk so far, and seeing normalization in money markets in recent months.
we have policy instrument at our disposal if needed to deal with low inflation, there is not much room let for further conventional measures, the need to discuss non-conventional measures together with the legal questions around these.'

Data to be released on Friday:

New Zealand manufacturing PMI, BoJ Feb meeting minutes, Japan industrial production, capacity utilization, Germany CPI, HICP, U.K. trade balance, U.S. PPI and University of Michigan consumer confidence.

AceTraderfx
03-17-2014, 01:37 AM
Market Review - 14/03/2014 11:44GMT

Japanese yen rises on risk aversion ahead of Sunday's outcome of the referendum in Crimea

The Japanese yen rose broadly against major currencies on Friday due to renewed risk aversion on increased tensions in Ukraine together with the fears about the health of the Chinese economy as Chinese Premier Li Keqiang warned on Thursday that the economy faced "severe challenges" in 2014 while expectations of more debt defaults kept alive worries about the state of its financial sector. However, trading was relatively thin on Friday as traders and investors are reluctant to add bets ahead of the outcome of the referendum in Crimea on Sunday.

The yen poised for its biggest weekly gains in more than a month against the euro and the dollar. Euro fell sharply fm Monday's high at 143.61 to as low as 140.46 whilst U.S. dollar tumbled from Tuesday's high at 103.43 to as low as 101.21 on Friday. Sterling also fell sharply from Monday's high at 172.87 to as low as 167.96 on Friday.

The single currency hit a 2-1/4 year high versus U.S. dollar on Thursday and then retreated to 1.3846 after European Central Bank President Mario Draghi raised concerns about the strength of the eurozone common currency, however, renewed buying at 1.3848 on Friday lifted price to 1.3938 in New York.

News from Reuters, the White House said that Russia's failure to take steps to ease the crisis in Ukraine is "regrettable" and the United States is ready to respond quickly following a referendum planned for Sunday on whether Ukraine's Crimea region should join Russia.

Despite cable's marginal weakness below Thursday's low at 1.6607 to 1.6587, the British pound rebounded strongly after "cable-positive" comments from BoE's Bean who said 'business surveys, employment growth suggests official overall economic growth figures may be an underestimate.' Cable rose to a session high at 1.6649 near New York close.

"We have obviously not gotten to a situation where Russia has chosen to de-escalate, where Russia has chosen a path of resolving the situation peacefully and through diplomacy. That is regrettable. We will have to see how the next several days unfold," White House spokesman Jay Carney told a briefing.

"We stand ready to respond should the referendum go forward on Sunday," Carney said. Asked how soon the response would come, he said, "I think without putting too fine a point on it, I'd say quickly."

Data to be released next week:

U.K. Rightmove house price, EU CPI, U.S. Empire manufacturing, net long term TIC, total net TIC flows, industrial production, capacity utilization, NAHB housing market index on Monday.

Italy trade balance, German ZEW current situation, ZEW expectation, EU ZEW expectation, U.S. CPI, housing starts, building permit, Redbook retail sales on Tuesday.

New Zealand current account, Australia leading index, Japan trade balance, import, export, all activity index, leading index, France current account, U.K. BoE minutes, jobless claim, average weekly earning, unemployment rate, employment change, Swiss Zew expectation, Canada wholesale sales, U.S. FOMC rate decision on Wednesday.

New Zealand GDP, Swiss trade balance, import, export, rate decision, Germany PPI, Italy current account U.K. CBI trend total orders, U.S. initial jobless claims, Philadelphia Fed business outlook, existing home sales, leading index on Thursday.

New Zealand consumer confidence, EU current account, consumer confidence U.K. public finance, Canada retail sales, CPI on Friday. Japan financial market will be closed due to public holiday.

AceTraderfx
03-18-2014, 02:05 AM
Market Review - 17/03/2014 20:40GMT

Euro rises against yen and U.S.dollar as Russia sanctions seen as modest

The single currency rose against the greenback on Monday after sanctions imposed by U.S. President Barrack Obama and EU on Russia improved risk appetite and triggered a rally in U.S. equities.

Earlier in the day, although euro remained under pressure in Asia and weakened to session low at 1.3879 ahead of European open, price rebounded to 1.3912 in European morning and then rallied to an intra-day high at 1.3948 in New York morning on increased risk appetite.

The White House said 'Obama freezes assets of Russian officials involved in incursion of Ukraine's Crimean region; Obama order imposes travel ban on Russian officials involved in Crimea incursion.'

Versus the Japanese yen, the greenback steadily gained throughout Asia and rose to session high at 101.88 in European morning before retreating to 101.56 in New York morning.

The British pound traded sideways in Asia and fell to session low at 1.6605 in European morning, due partly to active cross-selling of sterling vs euro. However, cable found support there and rose to an intra-day high at 1.6667 in New York morning on improved risk appetite before stabilizing.

In other news, BoE Deputy Governor Jon Cunliffe said 'biggest banks still couldn't be dismantled safely in a crisis; mutual trust between regulators needed to make financial reforms succeed, avoid unintended consequences; reforms like U.S. refinancing of foreign banks risks fragmenting global financial system.'

On the data front, U.S. NY Fed manufacturing came in below expectation at 5.61 vs forecast of 6.00.

Data to be released on Tuesday:

Italy trade balance, German ZEW current situation, ZEW expectation, EU ZEW expectation, U.S. CPI, housing starts, building permit, Redbook retail sales, long-term TIC flows.

AceTraderfx
03-20-2014, 02:29 AM
Market Review - 19/03/2014 22:56GMT

U.S. dollar rallies broadly on hawkish remarks from Fed Chair Janet Yellen

U.S. strengthens broadly against its major peers after the Federal Reserve continued to unwind its monetary stimulus as widely expected together with hawkish remarks by Fed Chair Janet Yellen who said the Fed will probably end its massive bond-buying program this coming fall, and could start to raise interest rates around six months later.

Despite euro's initial firmness in Asia after rebounding from Tue's New York low at 1.3880, the single currency retreated to 1.3905 in European morning on cross-selling of euro versus sterling before staging a brief recovery to 1.3930, however, renewed selling emerged and pressured the pair lower to 1.3899 in New York morning. Euro later tumbled sharply to 1.3810 after Fed's tapering move together with hawkish comments from Fed Chair Janet Yellen.

The British pound traded narrowly in Asia and strengthened in European morning, eventually rising to an intra-day high at 1.6655 ahead of New York open, helped by the upbeat economic picture painted by the Bank of England in its minutes. However, profit-taking there pressured price lower and cable retreated to 1.6608 in New York morning. Sterling later nose-dived to as low as 1.6508 after Federal Reserve cut its monthly bond-buying program and hawkish remarks by Fed Chair Janet Yellen.

BoE's minutes stated 'latest revisions to GDP data suggest UK recovery becoming more balanced but some way to go before sustainable; BoE notes 1.5% rise in sterling in month b4 Mar meeting, market contacts cite better UK growth outlook, Ukraine tension; stronger sterling has tightened UK monetary conditions, risk of further strength if UK growth outlook strengthens compared to other countries.'

Versus the Japanese yen, despite initial retreat to a session low at 101.30 in Asian morning, the greenback rebounded to 101.64 ahead of European open and then edged higher to 101.69 in European morning on dollar's broad-based strength. U.S. dollar jumped to as high as 102.69 (penetrated Tuesday's high at 101.94) after hawkish comments from Fed Chair Janet Yellen.

In other news, UK FinMin George Osborne said 'UK economy is recovering faster than forecast; country is borrowing too much, not exporting or saving enough; escalation of tensions in the Ukraine risk causing lower growth n higher inflation in UK; OBR have revised down UK underlying deficit in every year of forecast.'

On the data front, Japan all industry activity index came in at 1.0%, worse than the forecast of 1.1%, previous reading is revised to -0.3%.

Data to be released on Thursday:

New Zealand GDP, Swiss trade balance, import, export, rate decision, Germany PPI, Italy current account U.K. CBI trend total orders, U.S. initial jobless claims, Philadelphia Fed business outlook, existing home sales, leading index.

AceTraderfx
03-21-2014, 01:56 AM
Market Review - 20/03/2014 22:52GMT

U.S. dollar extends gain versus euro and cable after Wednesday's hawkish comments by Fed Chair Yellen

The greenback continued to strengthen against majority of its peers on Thursday after Yellen's message to the markets on Wednesday that interest rate hikes were not far away.

Although the single currency staged a short-covering rebound to 1.3845 at European open, renewed selling there pressured the pair lower and euro tumbled to an intra-day low at 1.3749 in New York morning on dollar's broad-based strength before stabilizing.

The British pound tracked euro's intra-day movements closely and edged higher to 1.6570 in European morning before falling to session low at 1.6480 in New York morning. Later, cable traded sideways for rest of the New York session.

Versus the Japanese yen, the greenback retreated to a session low at 102.21 ahead of European open, however, renewed dollar strength pushed the pair higher and dollar rose to a session high of 102.55 ahead of New York open before easing.

In other news, Germany Chancellor Angela Merkel said 'EU leaders will agree on further sanctions against Russia at summit beginning Thursday; current tension with Russia means G8 does not exist at present; EU leaders will make clear they are ready to go to 3rd stage of sections including economic measures if necessary.'

On the data front, SNB keep its rate unchanged at 0.0-0.25%.

The Department of Labor of U.S. reported that the number of people filing for initial jobless benefits in the week ending March 15 rose by 5,000 to 320,000 from the previous week's total of 315,000.

Data to be released on Friday:

New Zealand consumer confidence, EU current account, consumer confidence U.K. public finance, Canada retail sales, CPI. Japan financial market will be closed due to public holiday.

AceTraderfx
03-24-2014, 02:27 AM
Market Review - 23/03/2014 23:36GMT

Euro ends slightly higher on dollar's profit taking after Thursday's gain

The single currency ended the day slightly higher against the greenback on Friday as investors sought clarity on the Federal Reserve's stance on their monetary policy and pared some of Thursday's gains on profit taking.

Although the single currency traded sideways in Asia and edged lower to session low at 1.3766 in early European morning, price rebounded to 1.3805 ahead of New York open, as data showed a record Eurozone current account surplus. Later, euro rose higher to an intra-day high at 1.3810 in New York morning before stabilizing.

EU current account came in at 25.3 billion euros, up from previous figure of 20.0 billion euros.

The British pound tracked euro's intra-day movements closely and fell below Thursday's 1.6480 low to a fresh 1-month low at 1.6475 in early European morning before rebounding to 1.6515 and trading sideways for the remainder of the day.

Versus the Japanese yen, the greenback traded sideways and fell sharply to session low at 102.01 in early European morning on broad-based buying of jpy. However, dollar pared its losses and recovered to 102.41 at New York open before trading narrowly.

In other news, Fed's Kocherlakota said 'he dissented at March's FOMC meeting because guidance weakens Fed's credibility to target 2% inflation; new rate guidance suggests Fed sees inflation below 2% as acceptable outcome; Fed's new rate guidance does not communicate steps to move inflation rapidly up to 2%.'

Bank of England's Dale said "he doesn't know what will happen to interest rates in 6-12 months. BOE's Dale said central banks should communicate what they know, which is their 'reaction function'; central bankers should communicate state-contingent guidance, rather than time-contingent guidance."


On the data front, EU consumer confidence came in at -9.3, better than forecast of -12.3.

Data to be released next week:

China HSBC manufacturing PMI, France service PMI, manufacturing PMI, EU service PMI, manufacturing PMI, EU service PMI, manufacturing PMI, U.S. Chicago Nat activity index, Markit PMI on Monday

France business confidence, German IFO business climate, current assessment, expect, U.K. CPI, RPI, PPI, ONS house price, BBA loans for house purchase, CBI reported sales, U.S. Redbook retail sales, house price index, S&P house price, consumer confidence New home sales on Tuesday.

Germany Gfk consumer confidence, Swiss UBS consumption indicator, Italy retail sales, consumer confidence, U.S. durable goods on Wednesday.

New Zealand trade balance, exports, import, France consumer confidence, Italy business confidence, economic sentiment, U.K. retail sales, U.S. GDP, personal consumption, core PCE, initial jobless claims, pending home sales on Thursday.

Japan overall household spending, jobless rate, CPI, retail sales, France PPI, Italy PPI, U.K. Gfk consumer confidence, GDP, Lloyds business Barometer, current account, EU economic confidence, consumer confidence, business climate, Germany CPI, HICP, U.S. personal income, personal spending, PCE, university of Michigan consumer confidence on Friday.

AceTraderfx
03-25-2014, 01:30 AM
Market Review - 24/03/2014 19:20GMT

Euro jumps to 1.3877 after Chinese President Xi urges a political resolution to the crisis in Ukraine

The single currency jumped to 1.3877 on short-covering after Chinese President Xi Jinping told U.S. President Barack Obama on Monday that a political resolution to the crisis in Ukraine would serve the interests of all sides. Investors bought euro on bets that tension over Ukraine won't escalate into military action.

Xi added that the United States should "distinguish right from wrong" on the issue of China's territorial disputes in the East and South China Seas.

Earlier in the day, although the single currency opened slightly higher in New Zealand to 1.3804 and traded sideways in Asia, price briefly rose to session high at 1.3827 in early European morning due to the release of better-than-expected France manufacturing and services PMIs. However, euro swiftly pared its gains and retreated sharply to 1.3769 and then lower to an intra-day low at 1.3760 ahead of New York open, weighed down by the release of weaker-than-expected German PMIs. Later, price rallied to 1.3877 in thin New York session after comments from Chinese President Xi Jinping.

On the data front, France Mar manufacturing PMI came in at 51.4, better than the expectation of 49.7. France Mar service PMI came in at 51.6, much stronger than the forecast of 47.5. German Mar manufacturing PMI came in at 53.8, worse than the forecast of 54.5. German Mar service PMI came in at 54.0, weaker than the forecast of 55.5.

Versus the Japanese yen, the greenback remained well bid in New Zealand and Australia and rose to 102.57 in Asian morning, helped by the rally in Nikkei. Despite a brief pullback to 102.34, dollar rose to an intra-day high at 102.65 in early European morning. However, price pared its intra-day gains and retreated to 102.13 in New York session on broad-based buying of Japanese yen before recovering.

Although the British pound opened lower to 1.6460 in New Zealand on Monday, price recovered to 1.6497 ahead of Asian open and traded sideways till European session. Cable briefly edged higher to session high at 1.6511 in European morning before falling again to 1.6466. Price later rebounded strongly to 1.6536 in thin New York session after Chinese President Xi Jinping's a political resolution to the crisis in Ukraine.

In other news, BoJ's deputy Governor Iwata said 'among negative factors of deflation was effect of strengthening yen's values, which hurt Japan export; not saying yen should be high or low, just saying policy makers must act if strong yen persists enough to cause job losses; BoJ is not aiming for inflation far exceeding 2%, instead aiming for stable inflation around 2%; risk of deflation will emerge if inflation runs below 1% for long period of time, which is why BoJ has 2% price target; 2% price goal doesn't necessary have to be met strictly in yrs but setting time frame helps to show BOJ's commitment vs price target.'

Data to be released on Tuesday:

France business confidence, German IFO business climate, current assessment, expect, U.K. CPI, RPI, PPI, ONS house price, BBA loans for house purchase, CBI reported sales, U.S. Redbook retail sales, house price index, S&P house price, consumer confidence New home sales.

AceTraderfx
03-26-2014, 02:07 AM
Market Review - 25/03/2014 18:45GMT

Euro drops on dovish comments from ECB policymakers before rebounding on short-covering

The single currency weakened against the greenback on Tuesday after comments from ECB policymakers Weidmann, Makuch and Draghi that triggered broad-based selling of euro, however, price rebounded on short-covering above last Thur's 2-week low at 1.3749 together with renewed risk appetite.

Although the single currency traded sideways in Asia and briefly edged up to session high at 1.3848 in European morning, price met renewed selling there and fell to an intra-day low at 1.3749 in New York midday, weighed by comments made from ECB's Weidmann, Makuch and Draghi. Later, the pair rebounded strongly to 1.3845 on active short-covering due to the rise in U.S. stock markets.

ECB Governing Council member Jozef Makush said 'ECB has many possibilities, one of them is adding liquidity; there are higher deflation risks in Eurozone, that's why we are preparing additional non-standard measures to avoid deflation environment; number of members of ECB Governing Council are ready to take decisive steps if needed.'

ECB's Weidmann said 'QE programme is not out of the question, must avoid monetary financing; must tighten monetary policy shud risks to price stability emerge, this shud be dominated neither by fiscal nor financial stability concerns.'

ECB President Mario Draghi said 'stands ready to take additional monetary policy measures to maintain price stability; urges banks to deal with balance sheet problems before health check results.' However, Draghi said later that "the European Central bank does not see any signs that consumers are putting off spending in anticipation that prices will fall, which is a key symptom of deflation." He added the ECB was carefully monitoring exchange rate developments because of their importance for price stability and economic growth.


The British pound edged lower to session low at 1.6481 at European open, however, price strengthened in European morning after the release of UK inflation data and rose to an intra-day high at 1.6550 in New York midday due partly to cross-buying of sterling vs euro.

UK CPI m/n and y/y came in as expected at 0.5% n 1.7% respectively. RPI m/m and y/y came in slightly higher at 0.6% and 2.7% vs forecasts of 0.5% and 2.6% respectively.

Versus the Japanese yen, despite a brief rebound to 102.35 in Asia, price retreated to session low at 102.10 in early European morning. However, renewed buying there lifted the pair and dollar rose to an intra-day high at 102.49 in New York morning, helped by the release of better-than-expected U.S. consumer confidence before falling sharply to 102.20.

U.S. consumer confidence came in better-than-expected at 82.3 vs forecast of 78.5.

In other news, Fed's Plosser said 'Fed has not changed its position; Yellen did not make a mistake with "six months comments".'

Data to be released on Wednesday:

Germany Gfk consumer confidence, Swiss UBS consumption indicator, Italy retail sales, consumer confidence and U.S. durable goods.

AceTraderfx
03-27-2014, 01:52 AM
Market Review - 26/03/2014 19:04GMT

Dollar strengthens versus euro on upbeat durable goods data

The greenback strengthened against the euro on Wednesday after upbeat U.S. durable goods data added to speculation that the Federal Reserve will continue to cut back its stimulus measures.

U.S. durable goods came in better-than-expected at 2.2% versus forecast of 1.0%.

The single currency remained under pressure in Asia and weakened to 1.3790 in early European morning. Price edged lower to 1.3782 at New York open after the release of better-than-expected U.S. durable goods. Later, euro fell further to 1.3776 in New York afternoon before trading sideways.

Versus the Japanese yen, the greenback retreated from Asian high at 102.40 to 102.26 before rising to an intra-day high at 102.48 at New York open on dollar's strength. However, renewed selling there pressured the pair lower and price retreated to 101.87 in New York due to the decline in U.S. stock markets.

Although the British pound retreated to session low at 1.6509 at European open, renewed buying there lifted the pair and price rose to 1.6557 in early European morning. Later, cable rallied to an intra-day high at 1.6597 in late New York, helped by active cross-buying of sterling vs euro.

In other news, Japan EconMin Akira Amari said 'BoJ still has role to play but all 3 arrows of Abenomics must be deployed to achieve its price target; aiming for surprise effect is one way BoJ can maximize its policy impact; Japan not manipulating FX as yen has only fallen back to pre-Lehman crisis levels; gov't to scrutinize Oct, Nov 2014 data as well as Q3 GDP in deciding whether to proceed with sales tax rise to 10% in Oct 2015.'

On the data front, Italy Jan retail sales came in at 0.0% m/m n -0.9% y/y, versus the forecast of 0.1% n -1.6%. Germany Apr Gfk consumer confidence came in at 8.5, same as expectation.

Data to be released on Thursday:

New Zealand trade balance, exports, import, France consumer confidence, Italy business confidence, economic sentiment, U.K. retail sales, U.S. GDP, personal consumption, core PCE, initial jobless claims, pending home sales.

AceTraderfx
03-28-2014, 02:25 AM
Market Review - 27/03/2014 18:46GMT

Euro weakens after the release of U.S. growth and jobs data

The single currency fell against the greenback on Thursday on cross-selling of euro versus sterling and on dollar's strength after the release of U.S. data.

Despite trading sideways in Asia, the single currency met renewed selling interest at 1.3796 and dropped to 1.3741 in European morning, weighed down by cross-selling of euro versus sterling. Later, price recovered to 1.3779 in New York morning before falling again to an intra-day low at 1.3728 in New York midday. Euro then moved sideways for rest of the session.

Versus the Japanese yen, although the greenback spiked down to session low at 101.71 at Asian open, price rallied to 102.29 ahead of European open due to the rise in Nikkei-225 index. Dollar briefly retreated to 102.00 in European morning before rising to an intra-day high at 102.43 after the release of U.S. data. However, price pared intra-day gains and dropped to 101.99 on disappointing U.S. pending home sales report before recovering.

U.S. GDP annualized came in slightly below expectation at 2.6% vs forecast of 2.7%. Initial jobless claims fell to 311K fm prev. reading of 321K. In a separate report, U.S. pending home sales index dropped by 0.8% last month, disappointing expectations for a 0.3% gain.

Although the British pound remained under pressure and dropped to session low at 1.6555 in early European morning, price rallied swiftly 1.6640 after the release of better-than-expected UK retail sales. Cabled traded with a firm undertone and edged higher to an intra-day high at 1.6648 in New York morning before easing.

U.K. retail sales came in at 1.7% m/m and 3.7% y/y, much better than forecasts of 0.5% and 2.5% respectively.

In other news, BoE releases statement from March MPC meeting, which stated 'risks from spikes in long-term interest rates and credit spreads at heart of FPC risk assessment; impact of tensions in Ukraine and China markets limited so far, but risk that markets not prepared for normal rates; notes increasing momentum in UK housing market, will be vigilant n take proportionate n graduated action if needed; UK banks will face extra stress test bases on house price fall n spike in interest rates as part of EU 2014 tests.'

Fed's William Dudley said while explicit policy coordination among the world's central banks is unfeasible, a more effective system should be developed to ensure they have access to foreign currency reserves in times of stress.

On the data front, France Consumer confidence comes in at 88, higher than forecast of 85.

Data to be released on Friday:

Japan overall household spending, jobless rate, CPI, retail sales, France PPI, Italy PPI, U.K. Gfk consumer confidence, GDP, Lloyds business Barometer, current account, EU economic confidence, consumer confidence, business climate, Germany CPI, HICP, U.S. personal income, personal spending, PCE, university of Michigan consumer confidence.

AceTraderfx
03-31-2014, 01:50 AM
Market Review - 28/03/2014 05:57GMT

U.S. dollar rallies versus Japanese yen on renewed risk appetite due to the rally in U.S. equities

The greenback rallied against the Japanese yen on Friday as the release of U.S. personal income and spending data together with the rise in U.S. equities boosted risk appetite.

U.S. personal income and personal spending, both came in as expected at 0.3%.

Versus the Japanese yen, the greenback traded sideways in Asia and rose to 102.38 in European morning. Dollar later rallied to 102.78 in New York morning on increased risk appetite after the release of U.S. data together with the rise in U.S. equities. The pair later climbed to an intra-day high at 102.98 before easing in late New York.

Although the single currency traded sideways in Asia and dropped briefly to session's near 4-week low at 1.3705 in European morning, euro pared intra-day losses and rebounded to intra-day high at 1.3774 in New York morning on improved risk appetite due to the rally in U.S. equities together with the release of German inflation data.

German CPI m/m and y/y came in at 0.3% and 1.0% vs forecasts of 0.4% and 1.1% respectively.

Although the British pound traded with a firm undertone in Asia, price edged lower to session low at 1.6599 in European morning, price pared intra-day losses and rose in tandem with euro to 1.6651 in New York morning.

In other news, ECB's Visco said 'signs of recovery in Italy encouraging but must be confirmed over next months and years, essential reforms continue.'

On the data front, EU economic sentiment and business climate rose to 102.4 and 0.39 from previous readings of 101.2 and 0.37 respectively.


Data to be released next week :

Australia HIA home sales, Japan manufacturing PMI, industrial production, construction orders, housing starts, U.K. hometrack housing survey, mortgage approvals, France GDP, Swiss KOF leading indicator, EU CPI, Italy HICP, Canada, GDP, average weekly earning, U.S. Chicago PMI on Monday.

Australia Rate decision, Japan Tanken large manufacturing index, Tanken non-manufacturing index, China manufacturing PMI, HSBC manufacturing PMI, Swiss manufacturing PMI, Italy manufacturing PMI, unemployment rate, France manufacturing PMI, Germany manufacturing PMI, unemployment change, unemployment rate, EU manufacturing PMI, unemployment rate, U.K. manufacturing PMI,, U.S. Markit PMI, ISM manufacturing, construction spending on Tuesday.

Australia building approvals, U.K. PMI construction, EU PPI, U.S. ADP employment change, ISM New York, factory orders on Wednesday.

Australia retail sales, trade balance, China non-manufacturing PMI, HSBC service PMI, Italy service PMI, France service PMI, Germany service PMI, EU service PMI, retail sales, rate decision, U.K. service PMI, Canada trade balance, U.S. trade balance, initial jobless claim, ISM non-manufacturing index on Thursday.

Germany factory orders, Canada employment change, unemployment rate, Ivery PMI, U.S. non-farm payroll, private payroll, hourly earning, unemployment rate on Friday.

AceTraderfx
04-01-2014, 02:06 AM
Market Review - 31/03/2014 22:53GMT

Dollar pares initial gains on dovish comments from Fed's Chair Janet Yellen

The greenback pared its initial gains after comments from Federal Reserve Chair Janet Yellen created some uncertainty surrounding the central bank's plans to further cut its stimulus measures.

Fed Chair Janet Yellen said 'extraordinary commitment to stimulus will be needed for some time, a view widely shared by fellow policymakers; economy still considerably short of Fed's goals; will take time to reach; considerable slack remains in economy, labor market; cuts to bond buying not a lessening of commitment, but reflection of some labor market progress; QE cuts show aid for the recovery need not grow as quickly; labor market slack has held down compensation; recovery still feels like a recession to many Americans.'

Versus the Japanese yen, although the greenback traded sideways in Asia, price rallied in European morning on cross-selling of jpy especially versus euro. Dollar eventually hit session high at 103.44 in New York morning, however, comments from Fed's Yellen triggered broad-based weakness in usd and the pair dropped to 102.90.

Despite trading sideways in Asia, the single currency fell briefly but sharply to session low at 1.3722 in European morning after the release of weaker-than-expected EU inflation data. However, euro swiftly pared its losses and rallied to an intra-day high at 1.3810 in New York morning before retreating to 1.3763.

Euro zone CPI in Mar came in at 0.5%, lower than the forecast of 0.6%.

The British pound also traded sideways in Asia and edged higher to 1.6656 in European morning before falling to session low at 1.6613 in New York morning. However, cable pared its losses and rose to an intra-day high at 1.6684 on cross-buying of sterling versus euro together with dollar's weakness.

In other news, BoJ Governor Haruhiko Kuroda said 'BOJ easing aimed at ending 15 years of deflation; Japan long-term yields are stable and low; Japan economy continues moderate recovery; too early to discuss QE exit policy; discussing exit policy too soon could cause confusion; should discuss exit specifics only after reaching 2%; must consider state of economy, markets when exiting.'

On the data front, U.S. Chicago PMI comes in weaker-than-expected at 55.9 vs forecast of 59.0. U.K. Feb mortgage approvals came in at 70.3K, lower than the forecast of 75.3K, previous reading is revised to 76.8K.

Data to be released on Tuesday:

Australia Rate decision, Japan Tankan large manufacturing index, Tankan non-manufacturing index, China manufacturing PMI, HSBC manufacturing PMI, Swiss manufacturing PMI, Italy manufacturing PMI, unemployment rate, France manufacturing PMI, Germany manufacturing PMI, unemployment change, unemployment rate, EU manufacturing PMI, unemployment rate, U.K. manufacturing PMI,, U.S. Markit PMI, ISM manufacturing, construction spending.

AceTraderfx
04-02-2014, 01:48 AM
Market Review - 01/04/2014 23:42GMT

Euro edges higher to 1.3815 on Tuesday

The single currency gained against the greenback on Tuesday as Monday's comments from Yellen continued to weigh on the dollar and due to the release of better-than-expected German unemployment data.

Despite trading sideways in Asia, the single currency rose to 1.3802 in European morning after German unemployment came in better-than-expected. Price edged higher to an intra-day high at 1.3815 at New York open on continued weakness in dollar after Yellen's dovish comments on Monday. Later, euro pared some of its gains and retreated to 1.3790 in New York morning before stabilizing.

Germany Feb unemployment rate came in at 6.7%, better than the forecast of 6.8%.

Versus the Japanese yen, the greenback traded with a firm undertone in Asia and continued to strengthen throughout European session on yen's broad-based weakness as Japan's sales tax rose today. Dollar eventually hit an intra-day high at 103.71 in New York afternoon.

Although the British pound traded sideways in Asia and edged higher to session high at 1.6675 in early European morning, price came under selling pressure after data showed a drop in U.K. manufacturing PMI in March and fell to an intra-day low at 1.6619 at New York open. However, cable pared intra-day losses and recovered to 1.6653.

U.K. manufacturing PMI came in at 55.3, lower than the forecast of 56.7.

In other news, Eurogroup's Dijsselbloem said 'Greece has an ambition not to ask for another bailout, but it is too early to say if this will be possible; France is well aware of its commitments, was already given more time, new French Cabinet will be aware of its obligations.'

On the data front, Italy unemployment rate came in at 13.0%, weaker than the forecast of 12.9%, previous reading is revised to 12.9%. Germany Mar manufacturing PMI came in at 53.7, weaker than the forecast of 53.8. U.S. ISM manufacturing rose to 53.7 from 53.2 previously.

Data to be released on Wednesday:

Australia building approvals, U.K. PMI construction, EU PPI, U.S. ADP employment change, ISM New York, factory orders.

AceTraderfx
04-03-2014, 02:00 AM
Market Review - 02/04/2014 23:06GMT

Euro weakens ahead of ECB rate decision

The single currency ended the day lower against the greenback due partly to an increase in U.S. ADP employment together with positions adjustment ahead of Thursday's ECB rate decision.

Although the single currency traded with a firm undertone in Asia and rose to session high at 1.3820 at European open, renewed selling interest capped euro's gain and price dropped to 1.3767 in New York morning on dollar's strength after data showed an increase in U.S. ADP employment change. The pair later dropped to an intra-day low at 1.3753 before recovering.

U.S. ADP employment rose to 191K from previously revised figure of 178K.

Versus the Japanese yen, the greenback resumed its recent ascent and rose to an intra-day high at 103.93 in Asian morning. However, profit-taking there knocked the pair lower and price retreated to session low at 103.58 at New York open before staging a recovery in New York afternoon.

The British pound traded sideways in Asia and rose to session high at 1.6665 in early European morning, however, renewed selling there pressured cable lower and price retreated to 1.6621 in New York morning.

In other news, IMF MD Christine Lagarde said 'sees emerging risk of low-inflation especially in Eurozone; Eurozone needs more monetary easing, including through unconventional measures; global growth was about 3% last year; global economic recovery is weak n too slow; sees risk of heightened market volatility due to taper of Fed's monetary easing; need cooperation among central banks, financial regulators to contain policy spillovers.'

On the data front, U.S. factory orders came in better-than-expected at 1.6% versus forecast of 1.2%. Euro zone Feb PPI came in -0.2% m/m and -1.7% y/y, lower than the forecast of 0.0% and -1.6% respectively.

Data to be released on Thursday:

Australia retail sales, trade balance, China non-manufacturing PMI, HSBC service PMI, Italy service PMI, France service PMI, Germany service PMI, EU service PMI, retail sales, rate decision, U.K. service PMI, Canada trade balance, U.S. trade balance, initial jobless claim, ISM non-manufacturing index.

AceTraderfx
04-07-2014, 01:45 AM
Market Review - 05/04/2014 00:49GMT

Dollar falls broadly on long liquidation after U.S. jobs data missed forecast

The greenback fell against the majority of its peers on Friday as the release of weaker-than-expected U.S. non-farm payrolls boosted speculation that the Federal Reserve would remain accommodative in its monetary policy.

U.S. NFP came in at 192,000, lower than forecast of 200,000 and a revised previous month's figure of 197,000. Unemployment rate remained unchanged at 6.7%.

Versus the Japanese yen, although the greenback traded sideways in Asia and Europe, price briefly rose to an intra-day high at 104.13 immediately after the release of U.S. NFP. However, dollar swiftly fell to 103.56 as traders interpreted the data as not good enough and later dropped to session low at 103.20 in New York afternoon.

The single currency met renewed selling interest at 1.3724 at Asian open and resumed its descent from Thursday to 1.3796 at European open. Price pared its losses and rose briefly to session high at 1.3732 at New York open after the release of U.S. jobs report, however, euro dropped sharply to an intra-day low at 1.3672 in New York morning before recovering.

The British pound spent a lackluster day on Friday and traded sideways in Asia and Europe. Despite edging lower to session low at 1.6554 ahead of U.S. jobs data, price rose to an intra-day high at 1.6606 in New York morning on dollar's weakness. Later, cable retreated to 1.6568 before recovering again in New York afternoon.

In other news, Fed's Fisher said 'at current rate of taper QE3 will terminate in October; forward guidance a complicated monetary tool; calendar-based commitment can be unsound; calendar-based commitments can lead to markekt instability by encouraging overshoot, as some markets appear to be at present; economic models largely guesswork, notes "rabid" focus on FOMC projection; clear to me U.S. has liquidity pool sufficiently deep and wide to finance job-creating capital expansion.'

On the data front, U.K. March Halifax house prices came in at -1.1% m/m n 8.7% 3m/y, vs the forecast of 0.6% n 9.4% respectively.


Data to be released next week :

Japan leading index, Germany industrial production, Swiss CPI, U.K. Lloyds employment changes, EU Sentix investor confidence on Monday. China financial market is closed due to public holiday.

Australia NAB business confidence, Japan current account, Swiss unemployment rate, retail sales, France trade balance, U.K. industrial production, manufacturing production, Canada housing starts, building permits on Tuesday.

Australia consumer confidence, home loans, U.K. shop price index, trade balance, Germany export, import, trade balance wholesale inventories, wholesale sales, FOMC minutes on Wednesday.

New Zealand manufacturing PMI, Australia employment change, unemployment rate, Japan machine orders, machine tool orders, France industrial production, manufacturing production, CPI, HICP, Italy Industrial production, U.K. BoE rate decision, asset purchase target, Canada new house price index, U.S. jobless claims, import price index, monthly budget statement on Thursday.

Japan domestic CGPI, China PPI, CPI , Germany CPI, HICP, France current account, U.S. PPI, U.S. University of Michigan consumer confidence on Friday.

AceTraderfx
04-08-2014, 02:05 AM
Intra-Day Market Moving News and Views

08 Apr 2014 01:30GMT
AUD/USD - 0.9273.. Australia March business confidence fell to 4 from 7 in Feb.
Australia March business conditions rose to 1 from 0 in Feb.


Japan FinMin Aso says 'Japan won't be able to meet primary balance target without structural reforms, including on fiscal spending; Japan's fiscal consolidation isn't too quick compared with tat of U.S., Europe, in response to U.S. view Japan should avoid "too rapid" fiscal consolidation.'


British Chamber of Commerce Q1 survey shows strongest growth in services export sale and orders since survey stated in 1989; biggest improvement in manufactures' domestic sales and orders, and investment inventions, since survey began.

AceTraderfx
04-08-2014, 02:23 AM
Market Review - 07/04/2014 22:39GMT

Euro rebounds on short covering after Friday's U.S. payrolls missed estimate

The greenback weakened against majority of its peers on Monday as the release of weaker-than-expected U.S. jobs data on Friday continued to weigh on the dollar.

The single currency traded sideways in Asia and rebounded to 1.3721 in early European morning. Price continued to trade with a firm undertone and rose to an intra-day high at 1.3748 in New York morning after comments from ECB policymakers signaled deflation risks within the Eurozone are contained.

ECB's Yves Mersch said 'QE is a theoretical concept, there is a long way to go to any practical steps; there is conventional room to ease policy; do not see imminent risk of deflation but ready to prepare for it.'

ECB's Vitor Constancio said 'possible that we will see an uptick in inflation in April, need to see if base-line scenario for inflation outlook has changed; we are in a situation of great concern about inflation.'

Versus the Japanese yen, the greenback remained under pressure in Asia and dropped to session low at 103.00 ahead of European open. Despite a rebound to 103.30 in European morning, renewed selling there knocked price lower to 103.00 again. However, dollar found support there and recovered to 103.27 in New York morning before stabilizing.

The British pound traded inside a narrow range in Asia and edged lower to session low at 1.6566 in early European morning. However, renewed buying lifted the pair and cable rose to an intra-day high at 1.6623 in New York morning.

On the data front, Euro zone April Sentix investor confidence came in at 14.1, better than the forecast of 13.9. German industrial production in Feb came in at 0.4% m/m n 4.8% y/y, better than the forecast of 0.3% n 4.7%.

Data to be released on Tuesday:

Australia NAB business confidence, Japan current account, BoJ rate decision, Swiss unemployment rate, retail sales, France trade balance, U.K. industrial production, manufacturing production, Canada housing starts and building permits.

AceTraderfx
04-09-2014, 01:27 AM
Market Review - 08/04/2014 18:08GMT

Japanese yen rallies broadly as Bank of Japan refrains from adding to stimulus

Versus the Japanese yen, the greenback retreated to 102.74 in Asian morning before staging a brief rebound to 103.06 after BoJ's decision to keep its rate unchanged at 0.1%. However, renewed selling quickly emerged there as the central bank refrained from additional easing and price dropped further after Governor Haruhiko Kuroda offered little indication that more stimulus was likely in the short term. Dollar eventually tumbled to an intra-day low at 101.55 in New York afternoon.

BoJ Governor Kuroda said 'positive cycle in works in economy driven by robust domestic demand; monetary policy must be flexible so not saying we will never take additional easing steps; what we're saying is that we see no need to ease now judging from current economy, near-term outlook; absolutiely not thinking of early reversal of QE as see no upside, downside risks materializing.'

The single currency gained against the greenback on Tuesday on dollar's broad-based weakness together with IMF's upgrade of the region's growth forecast.

Earlier in the day, euro traded sideways in Asia and found renewed buying at 1.3737 at European open and gained to 1.3774 in European morning due to the rally in gbp/usd. Price rose to an intra-day high at 1.3811 in New York morning as IMF upgraded the growth outlook of the region.

IMF sees Eurozone growth at 1.2% this year vs 1% forecasted in January.

The British pound traded in a narrow range in Asia before rallying to 1.6713 in early European morning after the release of better-than-expected UK industrial and manufacturing production data. Cable continued to trade with a firm undertone and rose to an intra-day high at 1.6755 in New York morning after IMF upgraded UK's growth forecast for the year.

U.K. Feb industrial production came in at 0.9% m/m n 2.7% y/y, stronger than the forecast of 0.3% n 2.2% respectively.

U.K. Feb manufacturing production came in at 1.0% m/m n 3.8% y/y, higher than the expectation of 0.3% n 3.1% respectively.

IMF hiked Britain's growth forecast to 2.9% this year from 2.4% previously.

In other news, Bundesbank said 'acknowledges IMF recommendations on monetary policy; notes ECB is monitoring inflation developments closely; Eurozone monetary policy already very accommodative; shud inflation stay low for too long, ECB has necessary instruments to act; however, the possible risks of a long-lasting low interest rate phase must be weighed; IMF/G20 meetings to address geopolitical uncertainties n their impact on global growth; IMF/G20 will also discuss normalization of U.S. monetary policy n impact on global economy; risks to world economy come fm geopolitical developments, finance conditions in some emerging economies.'

On the data front, Japan Mar Eco watchers survey came in at 57.9, better than the forecast of 53.3.

Data to be released on Wednesday:

Australia consumer confidence, home loans, U.K. shop price index, trade balance, Germany export, import, trade balance wholesale inventories, wholesale sales and FOMC minutes.

AceTraderfx
04-10-2014, 02:43 AM
Market Review - 09/04/2014 22:45GMT

U.S. dollar falls broadly after perceived dovish FOMC minutes

The single currency maintained a firm undertone on Wednesday and jumped to an intra-day high of 1.3866 on improved risk appetites after the release of perceived dovish FOMC minutes as U.S. stock market rallied.

Minutes of the U.S. central bank's March 18-19 policy-setting meeting, Janet Yellen's first as chair, did not reveal any discussion of keeping rates near zero for a "considerable time," as the Fed mentioned in a policy statement issued after the meeting.

Federal Reserve policymakers were unanimous in wanting to ditch the thresholds they had been using to telegraph a policy tightening, according to minutes of a meeting last month that shed little new light on what might prompt an interest-rate rise.

U.S. 3-year, 5-year, 7-year Treasuries yields touched fresh 3-week lows. U.S. interest rate futures, suggesting market players see less chance of Fed rate hike in first half year of 2013 after the release of March FOMC minutes.

U.S. dollar moved inside 101.70-102.16 range against the Japanese yen on Wednesday after Tuesday's cross-inspired selloff to 101.55. The pair rebounded briefly to 102.16 in European morning on short-covering and then retreated to 101.70 in New York session.

The British pound retreated briefly from Wednesday's high at 1.6755 to 1.6725 in Europe following the release of U.K. trade deficit which narrowed to -2919 from -3910 million pounds previously, however, renewed buying quickly emerged and cable jumped to as high as 1.6801 after the release of FOMC minutes.

In other news, U.S. Treasury Secretary Jack Lew said 'U.S. economy leading global economic recovery; U.S. economy has come a long way from a very bad place; housing values have returned in a fairly decent way; many parts of U.S. economy that cud improve; Europe's surplus nations need to boost demand; Europe needs to be alert to risk of low demand, deflation; Germany is obviously one of Europe's surplus nations.'

Thursday will see the release of New Zealand manufacturing PMI, Australia employment change, unemployment rate, Japan machine orders, machine tool orders, France industrial production, manufacturing production, CPI, HICP, Italy Industrial production, U.K. BoE rate decision, asset purchase target, Canada new house price index, U.S. jobless claims, import price index and monthly budget statement.

AceTraderfx
04-11-2014, 02:08 AM
Market Review - 10/04/2014 22:44GMT

U.S. dollar continues to weaken broadly on Thursday after Wednesday's dovish FOMC minutes

U.S. dollar dropped to three-week lows of 101.33 and 0.8749 against the Japanese yen and the Swiss franc respectively on Thursday after Wednesday's release of dovish minutes of the Federal Reserve's March meeting.

Despite staging a brief bounce to 102.14 in Asian morning on Thursday on short-covering, U.S. dollar weakened again in European session and fell briefly below Wednesday's low of 101.55 to 101.45 before trimming losses after the release of better-than-expected U.S. weekly jobless claims which fell to a seven-year low of 300,000, lower than the consensus forecast of 320,000. However, renewed selling interest quickly emerged at 101.97 due to renewed selloff in global stock markets. Dow Jones index dropped by more 200 points. U.S. dollar later dropped to a session low of 101.33.

Despite extending Wednesday's rally to 1.3871 in Asian morning on Thursday, following the release of dovish FOMC minutes, profit-taking below previous res at 1.3877 pressured price to 1.3836 in European morning before rebounding. The single currency later rose to an intra-day high of 1.3900 in New York due to renewed selling in U.S. stock markets.

The British pound extended Wednesday's rally to an intra-day high of 1.6821 in Asian morning on Thursday, however, profit-taking offers below Feb's 4-year peak of 1.6823 knocked price lower to 1.6754 b4 rebounding in New York in tandem with euro after the release of less-than-expected U.S. jobless claims. Bank of England kept its benchmark rate and QE total unchanged at 0.50% n 375 billion sterling respectively.

Bundesbank chief Jens Weidmann reiterated on Thursday that if there is a prolonged period of low inflation, the ECB will consider unconventional instruments. Last week, ECB chief Mario Draghi flagged the chances of quantitative easing.

In other news, IMF said 'unwinding large central bank balance sheets will be complex, could risk large spillovers via market n exchange rate volatility; calls for more cooperation between central banks and financial regulators; major emerging markets see room for more cooperation on spillovers from monetary policy; advanced economies shud calibrate pace of austerity to support recovery; reform fatigue could push global economy into prolonged slump.'

Friday will see the release of Japan domestic CGPI, China PPI, CPI , Germany CPI, HICP, France current account, U.S. PPI and U.S. University of Michigan consumer confidence.

AceTraderfx
04-14-2014, 02:21 AM
Market Review - 12/04/2014 00:57GMT

Dollar steadies on minor short covering ahead of 3-day IMF/World Bank spring meetings

The greenback pared intra-day losses versus its major peers as investors trimmed recent short dollar positions ahead of the 3-day IMF/World Bank spring meetings in Washington which began on Friday.

Although dollar briefly weakened to a fresh 3-week low of 101.32 at Tokyo open, bargain hunting by Japanese importers lifted the pair to 101.87 in Europe. Despite a brief retreat to 101.37, dollar maintained a steady undertone in NY session and last traded at 101.63 near Friday's close.

BOJ governor Kuroda said Japan only halfway through meeting BOJ's price target; told G20 Japan making steady progress toward achieving BOJ's price target with positive economic mechanism working; BOJ ready to adjust monetary policy as needed if achievement of its price target comes under threat.

Euro penetrated Thursday's high of 1.3900 and rose briefly to 1.3906 in European morning on Friday due to dollar's broad-based weakness, however, profit-taking pressured price to 1.3864 in New York morning before rebounding after ECB Governing Council member and Bundesbank President Jens Weidmann downplayed deflation concerns in eurozone.

Weidmann said 'the risk of broad deflation in the eurozone is very low; expects economy in eurozone to pick up n inflation rate to gradually increase; at the ECB we have made clear that we will react effectively to long-term low inflation; in the case of long-term low inflation, any unconventional monetary policy measures by the ECB would have to fulfill many conditions.'

The British pound weakened versus U.S. dollar after the release of lower-than-expected U.K. construction output, which came in at -2.8% and 2.8% versus forecasts of 2.1% and 5.7% respectively, together with the selloff in U.K. equities. FTSE-100 fell by 1.2% whilst Germany's DAX and France's CAC-40 closed down by 1.6% and 1.2% respectively. Cable declined from 1.6787 to 1.6717 on Friday before recovering.

Data to be released next week :

Italy HICP, EU industrial production, U.S. retail sales, business inventories on Monday.

Australia RBA's April minutes, U.K. BRC sales like for like, CPI, RPI, PPI, ONS house price, Germany Zew current situation, survey expectation, EU Zew survey expectation, trade balance, U.S. Empire manufacturing, CPI, Redbook retail sales, Net long term TIC, Total Net TIC, NAHB housing market index, Canada existing home sales on Tuesday.

New Zealand CPI, Australia leading index, China business climate, entrepreneur confidence index, retail sales, Industrial production, GDP, , Italy trade balance, current account, EU CPI, U.K. claimant court, weekly earning, unemployment rate, EU CPI, U.S. housing starts, building permits , industrial capacity utilization, Canada rate decision on Wednesday.

New Zealand consumer confidence, Australia Business confidence, Japan consumer confidence, Germany PPI, EU current account, Canada CPI, U.S. jobless claim, Philadelphia Fed Business outlook on Thursday.

No major economic data is released on Friday. New Zealand, Australia, U.K. Germany, Swiss France, U.S. and Canada financial markets are closed due to Easter Good Friday holiday.

AceTraderfx
04-15-2014, 02:18 AM
Market Review - 14/04/2014 22:48GMT

Euro falls after weekend's dovish remarks by ECB president Draghi and other policymakers

The single currency gaped lower at New Zealand open on Monday after European Central Bank President Mario Draghi said on Saturday that further appreciation in the currency would trigger more monetary stimulus. Euro later fell to an intra-day low at 1.3808 after U.S. retail sales rose in March by the most since September 2012.

Draghi said on April 12 that "I've always said that the exchange rate is not a policy target, but it’s important for price stability and growth. And now, what has happened over the last few months, it’s become more and more important for price stability." Draghi's statement was also echoed by other ECB officials in weekend meetings of the International Monetary Fund and World Bank in Washington.

U.S. retail sales in March increased 1.1%, much stronger than economists' forecast of 0.9% rise, following a 0.7 percent gain in February. Sales excluding receipts at gas stations were the strongest in four years.

U.S. dollar bounced briefly to 101.71 against the Japanese yen in New Zealand morning on Monday and then ratcheted lower to 101.42 in Tokyo, however, short-covering above last Friday's low at 101.32 lifted the pair and price rebounded to 102.02 on dollar's broad-based strength due to the release of robust U.S. retail sales data before retreating in late New York as U.S. equities pared some of early gains.

The British pound also opened lower to 1.6709 in New Zealand morning on Monday in tandem with euro. Cable weakened further to 1.6697 after the release of stronger-than-expected U.S. retail sales data before staging a brief bounce to around 1.6743.

In other news, German FinMin Schaeuble said 'Ukraine is the greatest geo-political risk facing the economy by a great margin; further euro strengthening could have negative effect on economy; Draghi made a convincing case at IMF meeting that Europe's low inflation rates hold no deflation fears; no signs at all of deflation spiral in Europe.' ECB's Noyer said 'euro appreciation is a drag on ECB's price stability objective; ECB can buy all sorts of securities if it wants to embark on QE, including both private and sovereign.'

After Monday's choppy moves, investors are waiting for the speeches from Bank of Japan Governor Haruhiko Kuroda and Fed's Chair Yellen respectively and also the release of China's gross domestic product data on Wednesday. China's GDP is expected to come in at 7.3% last quarter from a year earlier, the least since 2009.

Tuesday will see the release of Australia April minutes, U.K. BRC sales like for like, CPI, RPI, PPI, ONS house price, Germany Zew current situation, survey expectation, EU Zew survey expectation, trade balance, U.S. Empire manufacturing, CPI, Redbook retail sales, Net long term TIC, Total Net TIC, NAHB housing market index and Canada existing home sales.

AceTraderfx
04-16-2014, 03:02 AM
Market Review - 15/04/2014 22:42GMT

U.S. dollar ends mixed ahead of Wednesday's China GDP data

The Japanese yen rose initially versus most major peers in Asian session on Tuesday as Ukraine unleashed an offensive to dislodge militants from its eastern area and authorities in Kiev said Russian troops were sighted, fueling investor demand for safety.

However, Japan's currency pared gains versus the dollar after Nikkei said the government will downgrade its economic assessment in a report this week. U.S. dollar rebounded to an intra-day high of 101.99 in New York morning after the release of U.S. CPI data before falling to 101.50 due to the selloff in global stock markets.

Germany's DAX fell sharply by 1.7% or 165 points to close at 9174, however, U.S. Dow Jones index pared earlier more than 100 points decline and turned into positive territory in the afternoon.

The single currency dropped briefly below Monday's low at 1.3809 to 1.3790 in Europe after release of lower-than-expected Germany ZEW (The Centre for European Economic Research) economic expectations survey before rebounding to 1.3833 on short-covering partly due to the release of U.S. CPI. The ZEW Apr survey came in at 43.2 vs consensus of 45.0. The U.S. consumer price index m/m and y/y were higher than forecast at 0.2% and 1.5% versus expectations of 0.1% and 1.4% respectively in March. The so-called core CPI, excluding volatile energy and food components, also rose 0.2%. Another report on Tuesday showed confidence among homebuilders remained dour in April. The NAHB/Wells Fargo Housing Market index rose only a point to 47. The pair later traded sideways in quiet U.S. session.

The British pound proved quite tricky to trade on Tuesday. Despite an initial spike down to 1.6657 (Reuters) after data showed U.K. inflation fell to its lowest level in 4-years, traders quickly bought sterling as most investors feared the data would be much worse. Cable swiftly pared its losses and rose to 1.6731 in European morning and then 1.6749 in New York before retreating.

Australian dollar fell slid versus U.S. currency after minutes of the Reserve Bank of Australia's April meeting showed policy makers reiterated the most prudent course would probably be a period of steady interest rate together with China's money supply grew at the slowest pace on record.

In other news, Fed's Chair Janet Yellen said 'Fed considering additional measures to address remaining stability risks of wholesale funding market; some measures such as minimum margin requirements could apply on market-wide basis; new liquidity capital for banks do not fully address stability concerns of wholesale funding; standards do not focus on financial system as a whole, do not apply directly to shadow banks.'

Trading was relatively thin on Tuesday as investors are awaiting speeches from Bank of Japan Governor Haruhiko Kuroda and Fed's Chair Yellen respectively and also the release of China's gross domestic product data on Wednesday. China's GDP is expected to come in at 7.3% last quarter from a year earlier, the least since 2009.

Wednesday will see the release of New Zealand CPI, Australia leading index, China business climate, entrepreneur confidence index, retail sales, Industrial production, GDP, Italy trade balance, current account, EU CPI, U.K. claimant court, weekly earning, unemployment rate, EU CPI, U.S. housing starts, building permits, industrial production, capacity utilization and Canada rate decision.

AceTraderfx
04-17-2014, 07:45 AM
Market Review - 16/04/2014 22:44GMT

U.S. dollar ends little changed after Yellen says Fed committed to policies to support recovery

U.S. dollar showed muted reaction after Federal Reserve Chair Janet Yellen said Fed committed to policies to support recovery even as policy makers now see the economy reaching full employment by late 2016.

Yellen said in a speech in New York that 'the larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained; this approach underscores the continuing commitment of the FOMC to maintain the appropriate degree of accommodation to support the recovery.' Yellen also said wage gains are proceeding at a 'historically slow pace,' and the chances of inflation rising above the Fed's 2% goal were 'significantly below the chances of inflation persisting below 2 percent'. U.S. equities maintained gains after Yellen's comments.

U.S. dollar rose against the Japanese yen to 102.37 due to improved risk appetites. Bank of Japan governor Kuroda said 'inflation expectation rising as a trend while long-term rates moving stably due to BoJ's massive bond buying; want to pull end deflation at an early date by steadily continuing with current QE policy; BoJ has no intention of monetizing government debt, keeping JGB yields low just to ease fiscal burden and regardless of prices move; too early to debate exit from QE now but when time comes, will do so using most appropriate measure at the time; strongly hope government continues to proceed with efforts to restore fiscal health.'

The single currency ratcheted higher to 1.3851 in Europe on Wednesday partly on active cross buying in euro especially versus as global stock markets rebounded, however, profit-taking offers below previous daily res at 1.3864 knocked price lower to 1.3804 before trading sideways in New York.

The British pound traded in a narrow range in Asia on Wednesday as traders awaited the release of UK jobs data. Cable strengthened to 1.6763 in early European morning in tandem with euro and then rallied to an intra-day high of 1.6818 after the release of better-than-expected UK jobs report. UK unemployment rate fell to a 5-year low at 6.9% from previous reading of 7.2%. However, selling interest below Feb's 4-year high at 1.6823 capped cable's upside and price moved sideways in New York session.

On the data front, U.S. industrial production and capacity utilisation came in better-than-expected at 0.7% n 79.2% versus forecasts of 0.5% n 78.7% respectively. U.S. housing starts came in less than expected at 0.946M versus forecast of 0.973M.

Thursday will see the release of New Zealand consumer confidence, Australia Business confidence, Japan consumer confidence, Germany PPI, EU current account, Canada CPI, U.S. jobless claim and Philadelphia Fed Business outlook.

No major economic data will be released on Friday. New Zealand, Australia, U.K. Germany, Swiss France, U.S. and Canada financial markets are closed due to Easter Good Friday holiday.