AceTraderFx: Intra-Day Market Moving News and Views

[AceTRaderForex]

Fed Rosengren stressed the central bank needs to ratchet down last Dec's economic forecasts

17 Feb 2016 02:38GMT

USD/MAJORS - Boston Fed President Eric Rosengren earlier who commented that the Federal Reserve should be "unhurried" as it considers when to again raise interest rates given problems overseas and financial market volatility that will likely dampen already low U.S. inflation.
Going a step further than cautious comments he made last month, & stressed that the U.S. central bank would need to ratchet down economic forecasts it made in December because oil prices have continued to fall amid turbulent markets and a global economic slowdown.

The Fed raised rates in December for the first time in nearly a decade, Rosengren a voter on policy this year and an influential dove at the Fed. said that a more gradual approach is an appropriate response to headwinds from abroad that slow exports and financial volatility that raises the cost of funds to many firms.
The comments reinforce the view among investors that U.S. central bankers have been spooked by a world selloff in stocks and oil based on fears of a broader slowdown, despite a relatively solid economic performance in the United States.

The Fed in mid-December published forecasts suggesting four more rate hikes would come this year. But Rosengren said those would likely be adjusted at the U.S. central bank's mid-March policy meeting because weak energy prices and a strong dollar would depress U.S. inflation into the spring. Persistently low prices may even indicate that Americans' inflation expectations are "becoming less well anchored," a red flag for any central bank.

Even while core U.S. inflation is 1.4 percent, below the 2 percent target, a relatively new measure of expectations tumbled to its lowest ever levels last month. Rosengren further said that while it is likely that much of the fourth-quarter weakness is due to temporary factors ... if more pronounced global weakness were to materialize and be transmitted to the U.S., he personally believe there would be little need to raise rates until the economy was growing closer to its potential rate.

[redacted]

 

[AceTRaderForex]

AceTraderFx Feb 18: U.S. Federal Reserve is "not remotely close" to needing to consider negative interest rates

Intra-Day Market Moving News and Views
Feb 18 02:38GMT

Last night at St. Louis, Fed President James Bullard said that the U.S. Federal Reserve is "not remotely close" to needing to consider negative interest rates and despite rising global risks, the U.S. economic outlook remains reasonably strong. There is not a need of the negative rates being used in Europe and Japan to try to encourage growth.
Even as Bullard suggested Fed rate hikes may proceed more slowly than expected, US are just not in the situation sitting here today where we would be thinking about those kinds of moves.

More on his comments, Bullard stressed that there is no advantage in choosing a higher inflation target, with the too-big-to-fail banks that remain an issue, there is a "long way to go" to fix these problems. The effort to curb this too big to fail should focus on ways to limit leverage.

Bullard continued to suggest that it is 'unwise' to continue hiking rates amid falling inflation expectations. The recent decline in equity and corporate bond markets decreases risk of asset bubbles, giving Fed 'more leeway' in its rate hike decisions. With the drop in inflation outlook and financial volatility that have undercut some of the core assumptions around which Fed's December rate hike was based.
The quarterly interest rate path projections of Fed officials may be counter productive, giving markets the sense that rates are on a set path rather than data dependent.
He expects U.S. and global growth to strengthen in 2016, with lower longer-term interest rates providing a boost.

 

[AceTRaderForex]

AceTraderFx Feb 18: Intra-Day Market Moving News and Views (EUR/USD)

Intra-Day Market Moving News and Views
18 Feb 2016 06:01GMT

EUR/USD - ..... Euro trades comfortably above yesterday's 1-week low of 1.1106 made in New York morning.
Although the pair bounced briefly back to 1.1157 after release of mildly dovish FOMC minutes, sellers emerged and pressured price back down to 1.1118/18 just ahead of Asian open, however, euro quickly rebounded to 1.1146 and later moved sideways.

Consolidation above 1.1106 is expected to continue in early European trading.
Today is the start of the 2-day EU leader summit meeting. So looks like big moves are unlikely to be seen.

Reasonably good bids are reported at 1.1120-00 area with stops below there.
Offers are tipped at 1.1150/60 and more above with stops touted above 1.1200.

 

[AceTRaderForex]

AceTraderFx Feb 19: Daily Outlook (USD/JPY) & data to be released today

Intra-Day Market Moving News and Views
19 Feb 2016 03:25GMT

USD/JPY - ..... Dollar is nursing loss during Tokyo lunch session after extending o/n decline to 112.71 as a gap-down open in the Nikkie do to a late retreat in U.S. stocks prompted another wave of broad-based yen-buying on risk aversion, price easily penetrated o/n NY low of 113.14 at Asian open, triggering stops below 113.00.

With the Nikkei index expected to come under pressure in post-lunch session, selling dlr on recovery is favoured.
Offers are tipped at 113.10 n more at 113.30/40 with stops above there.
Initial bids are noted at 112.80-70 with some stops below there.

Pay attention to release to key U.S. inflation data at 13:30GMT. In addition, later today at 15:00GMT, after last week's testimony by Fed Chair Yellen on Capital Hill, Yellen will deliver Fed's semi-annual Monetary Policy Report to the Congress, she will also answer questions from U.S. lawmakers, so any comments on future rate decision will affect dlr's movement.

Data to be released on Friday:
Japan all industry activity index, Germany producer price index, U.K. retail sales, public sector net borrowing, CB leading economic index, Eurozone consumer confidence, U.S. CPI, core CPI, Canada CPI, core CPI and retail sales.

 

[AceTRaderForex]

AceTraderFx Feb 19: Intra-Day Market Moving News and Views (EUR/USD)

Intra-Day Market Moving News and Views
19 Feb 2016 04:36GMT

EUR/USD - ...... Euro pares overnight losses n staged a modest short-covering bounce to 1.1129 after hitting a 2-week trough of 1.1071 in New York morning. Although euro briefly climbed above New York high of 1.1123 after tripping some stops above there, lack of follow-though buying suggests range trading is in store ahead of European open.

Some bids are noted at 1.1100-1.1090 n more below with fairly large stops touted below 1.1060.
Some offers are tipped at 1.1130/40 n more near 1.1150 with stops reported above 1.1180, however, more stops are touted above 1.1200.

The only data due out today in Europe is German Jan PPI, street forecast is looking for a M/M reading of -0.3 vs previous month's figure at -0.5% n Y/Y is expected to come in at -2.0% vs previous reading of -2.3%.

 

[AceTRaderForex]

AceTraderFx Feb 12: Latest News on Japan Manufacturing Purchasing Managers Index (PMI)

Intra-Day Market Moving News and Views
22 Feb 2016 2:15GMT

USD/JPY - ...... Dlr showed muted reaction to release of downbeat Japan's data. Reuters reported growth in Japan's manufacturing activity slowed sharply in February as new export orders contracted at the fastest pace in three years, a worrying sign that overseas demand is deteriorating rapidly as China's economy slows, a preliminary survey showed on Monday.

The Markit/Nikkei Flash Japan Manufacturing Purchasing Managers Index (PMI) fell to 50.2 in February on a seasonally adjusted basis from a final 52.3 in January.
But it remained above the 50 threshold that separates contraction from expansion for the 10th consecutive month.
The sub-index for new export orders fell to a preliminary 47.9 from 53.1 in January, which would indicate the biggest contraction since February 2013 if confirmed in final data.

Exports in January tumbled by the most since the global financial crisis, in a clear indication that financial market turmoil and slowing emerging market economies have eroded demand abroad.

Under pressure from faltering global demand, total new orders from customers at home and overseas also changed direction and contracted, while job creation cooled to a five-month low.

Companies cut selling prices for the third month in a row, and more sharply than in January, likely reflecting both falling commodity prices and sluggish demand.
Japan's economy contracted more than expected in the fourth quarter due to weak household spending and exports.

While analysts expect a moderate recovery this year, stagnant wages, depressed consumer prices and faltering global growth have raised fresh doubts about Prime Minister Shinzo Abe's cocktail of stimulus policies aimed at re-energising the economy and quashing years of deflation.

More data to be released.

 

[AceTRaderForex]

AceTraderFx Feb 22: Intra-Day Market Moving News and Views GBP/USD

Intra-Day Market Moving News and Views
22 Feb 2016 06:02GMT

GBP/USD - 1.4284.. Cable languishes near intra-day low of 1.4235 despite Fri's intra-day rally from New York low of 1.4247 to as high as 1.4411 neat the close as market optimism of Britain clinching a deal with the EU triggered broad-based buying of sterling.

However, news came out in European afternoon on Sun that U.K.'s political heavyweight Boris Johnson surprised the market by giving his support for the 'Brexit' camp (see 01:15GMT update) triggered broad-based selling of the pound at NZ open, cable tanked from 1.4360 (vs Fri's close of 1.4405) to 1.4235. Despite a minor short-covering recovery to 1.4307, price retreated n swung inside a 1.4258-1.4603 range.

Cable is expected to trade above 1.4235 until European open as market awaits reaction from London traders after the surprise news of Jonhson's decision to move to the "Brexit" camp.

 

[AceTRaderForex]

AceTraderFx Feb 23: BOJ's Haruhiko Kuroda :expansion of base money alone won't immediately push up prices

Intra-Day Market Moving News and Views
23 Feb 201602:02GMT

USD/JPY - ......Breaking news: In the Parliament Bank of Japan Governor Haruhiko Kuroda's comment that the expanding base money alone will not immediately lead to price rises and a heightening of inflation expectations.
-expansion of base money alone won't immediately push up prices, inflation expectations
-key transmission channel of QQE is to push down real interest rates
-it's true inflation expectations have been somewhat weak recently
-in long run, inflation expectations are rising
-must continue QQE with negative rates until inflation is sustainably above 2 pct

While the Economy Minister Nobuteru Ishihara said he expects Group of 20 finance ministers to debate on how to cooperate in response to the recent turmoil in global financial markets, and Japan was not engaged in competitive currency devaluation and that major economies share an understanding that competitive currency devaluation is undesirable.
-recent market moves are somewhat volatile
-expect G20 to debate how to cooperate in response to recent market moves
-G20 also likely to discuss oil price volatility
-Japan is not engaged in competitive currency devaluation
-G7, G20 share understanding that competitive currency devaluation not desirable

 

[AceTRaderForex]

AceTraderFx Feb 23: Intra-Day Market Moving News and Views EUR/USD

Intra-Day Market Moving News and Views
23 Feb 2016 04:09GMT

EUR/USD - 1.1042.. Euro gained respite in Monday's New York afternoon session n staged a minor short-covering rebound in Asia today after tripping stops above 1.1040, price climbed to 1.1046.

Yesterday's selloff in the pound dragged euro lower as market interpret Britain's exit from the EU would result in a major shake up in the euro zone, leading to more countries opting out of the 28-country bloc.
Offers are tipped at 1.1045/55 and more above with some stops reported above 1.1070, however, more selling interest is noted at 1.1100/10.
Some bids (profit-taking) are noted at 1.1010-1.1000 with stops touted below there.

Expect range trading and pay attention to release of German Q4 2015 GDP data and then key German IFO business sentiment for Feburary at 09:00GMT.

 

[AceTRaderForex]

AceTraderFx Feb 24: IMF is making huge demand on Greece in the pension reform

Intra-Day Market Moving News and Views EUR/USD
24 Feb 2016 02:30GMT

EUR/USD - .....Earlier Reuters reported that the International Monetary Fund is making a big demand on Greece in the pension reform which required to complete its first bailout review.
Negotiations between the heads of the EU/IMF mission reviewing progress on Greece's pensions overhaul, fiscal targets and the handling of bad loans, took a break earlier this month.
It is unclear when the lenders will return to Athens and whether the latest impasse can be broken.

Greece finance minister Euclid Tsakalotos said that the IMF is pushing them far too much. It's not socially sensitive, and is asking them to do more than they had agreed in the summer.
Under a third bailout of up to 86 billion euros ($95 billion) signed last summer, Greece was asked to cut pension spending by 1 percent of gross domestic product this year. Athens has refused to cut pensions and says it will increase social security contributions instead.

But IMF's director for Europe, Poul Thomsen, has said that Greece will need to implement extra measures worth about 9 billion euros to meet its fiscal targets by 2018 and that the Fund could not see how Athens could do so without major savings on pensions.

Without the lenders' acknowledgement of the reforms, the government cannot start relief talks it needs to show austerity-weary Greeks their sacrifices are paying off.

 

[AceTRaderForex]

AceTraderFx Feb 24: Intra-Day Market Moving News and Views USD/JPY

Intra-Day Market Moving News and Views
24 Feb 2016 03:03GMT

USD/JPY - ...... Dlr trades with a soft bias in Asia on Wednesday. Despite initial 1-tick fall below yesterday's New York low of 111.77 due to initial gap-down open in the Nikkie, intra-day recovery in the N225 index lifted the pair back to 112.08, however, traders are buying the yen vs euro, gbp and aud on risk aversion, suggesting sideways trading would continue ahead of European open.

Offers are tipped at 112.10/20 and more above with some stops reported above 112.40.
Some bids are reported at 111.75-65 with stops below 111.55. There is market chatter of fairly large stops building below Febuary's 15-month trough of 110.99.

Looking ahead, pay attention to a slew of U.S. data during New York morning starting with Markit servics PMI for Febuary and January new home sales.

 

[AceTRaderForex]

AceTraderFx Feb 25: BOJ Takahide Kiuchi’s dissenting views on negaitive interest rates

Intra-Day Market Moving News and Views
25 Feb 2016 02:06GMT

USD/JPY - ...... Bank of Japan Takahide Kiuchi said in a speech to the business leaders on negative interest rates, resulting on Japan's financial system being destabilised by squeezing banks' margins and reducing returns on financial investment, and that BOJ should have save that for the future.
A former market economist, Kiuchi was among four of the nine board members who dissented to the BOJ's decision last month to adopt negative rates to prevent global market turmoil from delaying a sustained end to deflation. He has also been a lone proponent to taper the bank's massive asset-buying programme.

More on his latest speech :
-personally felt BoJ ought to save its options now instead of introducing negative rates last month
-don't think BoJ has no tools left to act if economic, financial environment deteriorates
-desirable for central banks to guide policy flexibly, comprehensively combining various means
-in event of crisis, BoJ should consider steps like offering temporary, ample liquidity to protect financial system
-2 pct inflation exceeds price level deemed appropriate in light of true strength of Japan's economy
-at present, hard to achieve 2 pct inflation stably with monetary policy alone
-Japan's economy continues to recover moderately
-Capex, wages are not rising as much as I hoped
-see global economic outlook, market developments as key risks to Japan's economy
-if exports show clear downtrend on weak overseas growth, that may hurt Japan's consumption, output
-tough to push up long-term inflation expectations with BoJ policy alone
-vigilant to various problems that may occur as BoJ buys and holds massive amounts of jgb, which could distort market function
-adopting negative rates risks destabilising BoJ's asset buying
-dissented to last month's decision as did not see need to expand stimulus with economic, price conditions stable

 

[AceTRaderForex]

AceTraderFx Feb 25: Intra-Day Market Moving News and Views (USD/JPY)

Intra-Day Market Moving News and Views
25 Feb 2016 03:11GMT

USD/JPY - ...... Dlr went through a coaster-roller ride in volatile Wednesday session. Price fell initially to 111.64 in Asia before staging short-covering rebound to 112.27 after BoJ Gov Kuroda's dovish comments but only to tumble to a 2-week trough of 111.04 as decline in global stocks triggered broad-based buying of yen and chf on risk aversion.
However, rally in the Dow & oil prices in New York afternoon resulted in a ferocious active short-covering in the dlr, price climbed back to as high as 112.21 in Australia, then marginally above there ahead of Tokyo lunch break.

The fact that USD managed to hold above February's 15-month bottom at 110.99 and staged a sharp bounce from 111.04 yesterday, suggesting further choppy sideways swings above 110.99 would continue and as long as global stocks continue to move sideways, then one can expect another try to the upside side in next few days.

Bids are noted at 111.90-80 and more below and a mixture of offers and stops is reported at 112.50/60 area, suggesting buying USD on dips is favoured today.

 

[AceTRaderForex]

AceTraderFx Feb 25: Intra-Day Market Moving News and Views (EUR/USD)

Intra-Day Market Moving News and Views
25 Feb 2016 04:05GMT

EUR/USD - ..... Euro trades narrowly in subdued Asian morning after yesterday's roller-coaster session.
Although price came under renewed selling due partly to active selling in eur/yen, price tumbled in Europe after tripping stops below Tuesday's 1.0990, the pair fell to a 3-week trough of 1.0957 at London midday before ratcheting higher to 1.1046 in New York on active short-covering after downbeat U.S. services PMI and new home sales data

Although euro has pared intra-day gain in New York afternoon, the fact that said yesterday's rally from 1.0957 signals a temp. low is made, broad sideways swings are in store and risk has tilted to the upside for more short-covering rise.
Offers are tipped at 1.1045/55 and more above with stops touted above 1.1075, however, there is market chatter of fairly large stops above 1.1100. Initial bids are noted at 1.1005-1.0990 area and more below with stops below 1.0950.

Pay attention to German Gfk consumer confidence for March and German inflation data at 07:00GMT and then Italy's consumer business and consumer confidence at 09:00GMT.

 

[AceTRaderForex]

AceTraderFx Feb 26: IMF at G20 will call for a coordinated stimulus programme to support a slowing global economy

Intra-Day Market Moving News and Views
26 Feb 2016 01:33GMT

G20 meeting is meet in Shanghai starting today to discuss ways to calm global markets and spur economic growth, and are likely to declare their readiness to take action if conditions worsen.
Chinese policymakers sought on Thursday to reassure trading partners that they can manage their economy and financial markets smoothly while driving structural reforms, following recent concern voiced by foreign officials and economists about Beijing's recent record.

Finance Minister Lou Jiwei and People's Bank of China Governor Zhou Xiaochuan will likely hammer home the message that Beijing has everything under control when they speak this morning.
Global economic malaise and wobbly markets overshadow the meeting of the finance minister and central bank governors of the Group of 20 (G20) major economies on Friday and Saturday.

G20 financial leaders are likely to push for better implementation of the already agreed reforms and an assessment of where implementation is lacking and why. But many economists and officials are sceptical that much would come from the G20.
A report published by IMF called for a coordinated stimulus programme to support a slowing global economy.

Still, an official with the European Union said G20 policymakers recognise elevated risks and likely will declare readiness to act if global economic conditions worsen.
G20 financial leaders are likely to push for better implementation of the already agreed reforms and an assessment of where implementation is lacking and why.
The International Monetary Fund's Christine Lagarde, German Finance Minister Wolfgang Schaeuble and Bank of England Governor Mark Carney are also scheduled to speak later today.

 

[AceTRaderForex]

AceTraderFx Feb 26: Intra-Day Market Moving News and Views (USD/JPY)

Intra-Day Market Moving News and Views
26 Feb 201603:11GMT

USD/JPY - ...... Despite initial rise above o/n New York high of 113.02 on higher open in the Nikkie (N225 index climbed to 2-1/2 week high of 16472) following yesterday's rally in the Dow, however, the pair pared intra-day gain on a surprise rise in the euro vs usd, price later retreated to 112.68.

Looks like dlr would consolidate below said Asian high due to broad-based usd's weakness until European open.
Offers are tipped above 113.00/10 and more above with stops reported above 113.40.
Initial bids are noted at 112.70-60 with some stops touted below there, however, more buying interest is reported at 112.30-20.

Data to be released on Friday:

New Zealand imports, exports, trade balance, Japan CPI, U.K. consumer confidence, Germany import price index, CPI, Harmonised index of consumer prices, France producer prices, consumer spending, GDP, Italy wage inflation, Eurozone consumer confidence, services sentiment, business climate, industrial sentiment, inflation expectation, selling price expectation, U.S. GDP, personal consumption expenditures, personal income, personal spending, good trade balance, adjusted consumption and Reuters/University of Michigan consumer sentiment index.

Pay attention to release of important preliminary U.S. Q4 GDP at 13:30GMT as the pair reacted to yesterday's upbeat U.S. durable good order n rallied after the data.

 

[AceTRaderForex]

AceTraderFx Feb 29: G20 financial leaders to inform each other ahead on policy decisions that could devalue currencies

Intra-Day Market Moving News and Views
29 Feb 201600:52GMT

On G20 meeting, Reuters reported that the financial leaders of the world's 20 biggest economies agreed to inform each other in advance about policy decisions that could lead to devaluations of their currencies.
This move is an addition to the traditional declaration in G20 communiques that countries will refrain from competitive evaluations, Dijsselbloem said in Shanghai. The decision was prompted by concerns among some of G20 financial leaders about the possibility of competitive devaluations in Japan or China, he said.
At the same time the communique said the G20 would better monitor capital flows and identify associated risks.

Dijsselbloem said in cases where devaluation is a consequence of monetary policy motivated by real macroeconomic domestic reasons, then members must make sure to inform each other in advance to avoid surprises and this is an extra commitment between the G20 countries that they will refrain from competitive devaluations.

On USD Reuters reported speculators pared bullish bets on the U.S. dollar for a ninth straight week, as net longs fell to their lowest level since the third week of May 2014, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position sank to $5.75 billion in the week ended Feb. 23, from $8.31 billion the previous week. It was the second straight week that net dollar longs came in below $10 billion.

The decline in oil and stocks as well as a slowdown in China have pushed back expectations for an interest rate hike by the Fed to some time next year. That's a negative for the dollar, prompting investors to liquidate most of their net long positions on the greenback.
So far on the year, the dollar index has been down 0.6 percent, after posting gains in excess of 9 percent in 2015.

In other currencies, investors pushed net long positions on the yen to their highest level in four years. The expectation is that the Bank of Japan won't do as much quantitative easing as the market expected.

 

[AceTRaderForex]

AceTraderFx Mar 1: Japanese capital investment rose slower & corporate profits fell

Intra-Day Market Moving News and Views (USD/JPY)
01 Mar 2016 01:15GMT

USD/JPY - .....Earlier Japanese Finance Minister Taro Aso said he is not considering to compile additional fiscal spending to prop up the economy given that the budget for next fiscal year had not yet cleared parliament, and that the negative interest rate policy is already having positive effects.

Data are out by the Ministry of Finance, the Japanese capital investment rose at a slower pace in October-December and corporate profits fell for the first time in four years in a worrying sign that flagging business spending will weigh on economic growth. The data suggests that revised gross domestic product (GDP) due on March 8 may show Japan's economy contracted more than first reported, adding to the sense of pessimism surrounding the strength of domestic demand.

Japan's robust employment pattern continued, however, with seasonally adjusted unemployment falling in January to 3.2 percent, versus the median estimate for 3.3 percent. The jobs to applicants ratio rose to a 24-year high of 1.28, versus the median forecast of 1.27.

Separate data showed household spending fell more than expected in January, providing further evidence that uncertainty about the economy may be behind consumers cutting expenditure.
Decelerating capital investment and corporate profits are a worrying sign that the government may need to respond with more stimulus measures to prevent business and household activity from weakening further.

A preliminary estimate showed the economy contracted an annualised 1.4 percent in October-December as consumer spending and exports slumped. The 8.5 percent annual increase in capital expenditure in October-December was slower than an 11.2 percent annual gain in July-September.
Japan's household spending fell an annual 3.1 percent in January, more than the median estimate for a 2.7 percent year-on-year decline.

Japan's economy is expected to return to growth in the current quarter, but there are persistent doubts about the outlook. Economists say the government's reforms have not done enough to raise the potential growth rate.

 

[AceTRaderForex]

AceTraderFx Mar 1: Intra-Day News and Views (USD/JPY) & data to be released today

Intra-Day Market Moving News and Views
01 Mar 2016 03:32GMT

USD/JPY - ..... Dlr languishes above intra-day low at 112.16, price penetrated Monday's New York low at 112.66 in thin Australian morning after hitting stops below 112.60, price fell to 112.19, despite a short-covering recovery to 112.54 at Asian open, price fell again to 112.16 before stabilising.

The lack of a rebound from 112.16 suggests intra-day downside bias remains, offers are noted at 112.50/60 n more above with stop touted above 113.00.
Some bids are noted at 112.15-112.05 with stops reported below 111.90., suggesting selling dlr on recovery is favoured.

Data to be released today:

New Zealand term of trade, imports, exports, Australia AIG manufacturing index, building permits, current account, interest rate decision, Japan unemployment rate, jobs/applicants ratio, all household spending, MOF business Capex, manufacturing PMI, China, non-manufacturing PMI, manufacturing PMI, Swiss retail sales, manufacturing PMI, Italy manufacturing PMI, unemployment rate, France manufacturing PMI, Germany manufacturing PMI, unemployment rate, unemployment change, Eurozone manufacturing PMI, unemployment rate, U.K. manufacturing PMI, Canada manufacturing PMI, GDP, U.S. Redbook, manufacturing PMI and construction spending.

 

[AceTRaderForex]

AceTraderFx Mar 2: Australia's economy outpaced all forecasts at the fastest pace in almost two years

Intra-Day Market Moving News and Views (AUD/USD)
02 Mar 201602:38GMT

AUD/USD - ...... Aud maintains a firm undertone after jumping from 0.7166 to 0.7236 after release of upbeat AU GDP data. Reuters later reported Australia's economy outpaced all forecasts to grow at the fastest pace in almost two years last quarter as strength in consumer and government spending offset the heavy drag from a global mining slump.

Gross domestic product (GDP) expanded by 0.6 percent in the fourth quarter, from the previous quarter when it rose an upwardly revised 1.1 per cent.
That propelled growth for the year to 3 percent, well above the 2.5 percent that had been expected by both analysts and the Reserve Bank of Australia (RBA).
The central bank has held rates steady since May last year and just this week skipped a chance to ease, saying it saw "reasonable prospects" for growth.
RBA Governor Glenn Stevens did say there would be scope for further easing given that inflation looked set to remain low, and investors are still wagering he will have to move eventually given headwinds facing the global economy.

However, the timing has been pushed out with interbank futures now implying a 45 percent chance of a cut by May, compared to 60 percent before the data.
The RBA has made it clear it would prefer any further stimulus to come through a lower Australian dollar, but is being thwarted by the drastic easing of central banks elsewhere.