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  • Kiwi Remains Soft After A Hawkish RBNZ Hike, Eurozone Watchers Watch Closely

    Kiwi Remains Soft after a Hawkish RBNZ Hike, Eurozone Watchers Watch Closely

    GBP/USD currently trading at about 1.6800 the figure as we review most brokers, GBP/EUR is about 1.2150, with GBP/EUR coming at a little bit lower than where it was this time on Wednesday and the GBP/USD is roughly the same kind of price. We didn't see too much news yesterday, it seems that the main currency pairs (the G10 currency pairs) are waiting on data that is due over the course of the next fortnight or so.

    Euro watchers are waiting for Eurozone CPI (the advanced CPI) for April to see if deflation is good or further move towards deflation have continued (that's throughout next Wednesday). Dollar watchers are waiting for Payrolls on May 2nd, Yen watchers are waiting for any news to show that the increases in taxes from the Japanese government on retail goods would have hurt the consumer sector through the course of the month of April (that's obviously not going to come until May), Sterling watchers are looking for GDP next week and also the Bank of England inflation report in May as well. There's a lot of things further on down the line for currency watchers to wait on and hence why we're seeing a fairly dull situation at the moment where boundary binary trades are winning a high percentage.

    Yesterday we did see a couple of things for instance the Eurozone PMI (35-months composite high) kept EUR/USD closer to 1.4000 than the ECB would have wanted, Mario Draghi speaks today at 10:00 BST in Amsterdam, but we'll wait and see whether he gets out more aggressive language against the single currency. If it's a dull speech (if he doesn't say anything), the Euro is going to push higher towards 1.4000 and we do see a beat on that inflation figure next week, then 1.4000 in EUR/USD terms is almost guaranteed. So GBP/EUR coming back down towards the 1.2000 level over the course of next week and could be seen especially if the ECB isn't viewed as aggressive enough against the strong Euro - Draghi speaks at 10:00 BST.

    Bank of England minutes, the Bank of England did not mention Sterling yesterday as well as it did not mention the strength of the Pound. It set it up around 10% on a trade weighted basis compared to where it was this time last year. The BoE didn't say anything about the strength of the Pound and what's doing to inflation in the UK, it went on to talk about slack and really how they don't have a clue as to how much slack is in the UK economy, but it hasn't really affected our rate expectation. In view of timeline, we're not expecting any movement on interest rates in the UK for another 12-months.

    The US data was poor yesterday with new home sales falling by 14.5% mom, this was a big shift but didn't really affect the USD too much. Overnight the big moves at binary forex brokers has been the New Zealand dollar after the Reserve Bank of New Zealand hiked rate by 25bps. That was expected, as the apex bank said they were looking for a 125bps of rises over the course of the year in interest rates in New Zealand. They have already done 50bps last month and we are expecting those rate to increase this month given the falloff that we've seen in inflation in New Zealand and even so the NZD/USD pushing higher over the course of the Asian session.

    Looking into the day's data, we have German IFO at 09:00 BST and the battle between those good PMIs that we saw yesterday and obviously the fears of the Ukrainian situation and just how that would affect business confidence in the industrial heartland of the Euro zone. We've also get initial jobless claims in the United States at 13:30 BST and they've been very good of late. Hopefully we expect those trend to continue and maybe if Draghi can't weaken the EUR/USD, then maybe good data out of the US can this afternoon.

    Apr 24 9:24 AM | Link | Comment!
  • Global Foreign Exchange Market News Update

    Global Foreign Exchange Market News Update

    We get underway with not a huge amount in terms of data today. I think most of the focus still remains on Crimea and Putin has recognized Crimea as a sovereign state. Russia has recognized their referendum to be independent and it seems to be the first steps down to road of annexation potentially by Russia. There's a speech by Putin this morning where he may even signal that.

    The response from the West (Obama in particular), has been very muted, so they are taking some sanctions against some Oligarch and the people involved in the action within Crimea, which doesn't seem to have had much effect on Russia. Generally, for the wider market it is viewed as fairly weak sanctions unlikely to really generate any further escalation in the tensions. I think in the more medium term that might not be the case if Russia fails (that they're able to walk in and carry on with Crimea) and the other Eastern states of Ukraine, potentially coming into focus. So we are watching this and how's likely to affect the market, depending on what we see.

    Asides this, on the Sterling side forex signals are quiet, very much quite as it hovers around the 1.6600, finding support in GBP/USD and GBP/EUR right about 1.1930 continuing to look pressured by the Euro strength. We've got three big things out tomorrow the MPC, the employment numbers and the budget, all of which are going to have a bigger impact than anything today. Then at the end of today is speech by Governor Carney, at the Cass Business School. There he will talk about future operational changes at the Bank of England, apart from that there will be no significant Sterling news.

    On the Euro side, we're limited to German ZEW numbers, which is likely to be affected by what's going on in Ukraine, by general sentiments, by the wider European sentiments and as such we're likely to expect see some small decrease there. This is unlikely to have impact on the Euro though, because we have continued to see Euro strengthen partly as a safety place. So a lot of investors are moving out of the emerging markets and so again we're quite expected to see more than fourteen breach. Well, that's unlikely to see further moves above that, on the back of Draghi's comment and the ECB being concerned about Euro strength.

    The Reserve Bank of Australia has held on to its neutral stance in March and held cash rate unchanged at 2.5%. The apex bank basically disregarded the slide in the US dataflow, which was blamed on the weather. On the home front, analysts are critical that unemployment might rise further and a possible slide in mining capex, with USD binary options effected. The RBA seems more confident that lower rate will aid in attaining balance growth, even as we see the currency stay high on historical grounds. The RBA also made comments in connection to the housing market, as it noted that there have been remarkable surge over the last couple of years.

    On the U.S. sides, we've got mixed data out on Monday, and Wednesday will be key as Yellen is expected to testify before Senate in her first testimony and the Fed meeting. Otherwise, it's just the CPI out today, and it's expected to drop to 1.2% and we've got housing stats - that will be weather affected.

    Mar 18 9:28 AM | Link | Comment!
  • What Is Going On In The Forex Market Today? Good Question.

    What Is Going On In The Forex Market Today? Good Question.

    GBP/USD currently trading at about 1.6060, GBP/EUR is 1.1930, so Sterling lower than was seen this time on Monday. Lower than expected mortgage approvals unexpectedly falling in the month of October, took Sterling lower on Monday, but also maybe some profit taking pre that GDP figure Wednesday morning. This is the second assessment of third quarter GDP and as we said on Monday, we'll get the internals of it (private consumption, government spending, imports, exports, etc.), we'll see exactly where the growth is coming from.

    We'll also see the Bank of England's governor Mark Carney, as well as other members of the MPC testifying to the treasury select committee at 10:00 am BST on the latest inflation report - they may have been some profit taking pre that as well, as they continue to emphasize that even if unemployment hit 7% sooner rather than later, we may not see a cut in interest rates.

    The key news on Monday was out of the Eurozone, Ardo Hansson, who's the governor of the Estonian Central Bank and obviously therefore a member of the ECB talked about how the rate cut in the Eurozone is unlikely to be done, but we're still looking at negative rates and no tools are off the table - that took the Euro lower over the course of the session.

    We didn't see too much movement on Monday; obviously everyone was still focusing on the deal out of the Iranian nuclear programme, so the impact on oil markets was fairly heavy. We saw a $2 move lower, which was regained over the course of the day, as obviously opposition to the deal in various political capitals around the world came to the forefront.

    The key with this oil/Iranian deal is that lower oil prices are going to have disinflationary effect across the world. We're going to see that in the UK, US and the Eurozone as well. The key would be just how Central Banks starts to manage a lower oil prices. A lot of them would have forecasted oil prices as part of their CPI forecast, and if it goes wrong as a result of what's going on in the Middle East, then obviously they're going to have to change their expectations of where price increases are going to be seen over the course of the coming years.

    Elsewhere, US data - consumer confidence out today, now, this is the consumer confidence which takes part of the shutdown. So we're starting to see the previous figure that was good, continued expansion in spending, consumers were very happy with how things were going. With the shutdown, we haven't seen it affect data negatively; we've actually seen it affect data positively so far, we've seen a good non-farm figure, a good retail sales figure, and we're starting to see whether it's going to affect the consumer confidence positively.

    The only real thing coming out this morning is the Italian consumer confidence and that testimony from the MPC about the inflation and it is likely to be once again a fairly quiet day on the forex signal market.

    Nov 26 2:39 PM | Link | Comment!
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