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Fundamental updates by Solid ECN
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[QUOTE="Solid ECN, post: 206702, member: 83167"] [HEADING=1][JUSTIFY]USD strengthens moderately against EUR and JPY but weakens against GBP.[/JUSTIFY][/HEADING] [JUSTIFY]The February data on industrial orders, published yesterday, were poor: the indicator fell by 0.5% after rising by 1.5% for January. In the future, the negative dynamics may continue to develop due to the uncertainty caused by the geopolitical crisis in Ukraine. During the day, traders will pay attention to the March data on the US ISM Non-Manufacturing PMI. The indicator is forecast to grow from 56.5 to 58.4 points, which may further strengthen the USD position. Investors are waiting for specifics on the further actions of the US Federal Reserve, which may be found in the minutes of the last meeting of the Open Market Committee published on Wednesday. So far, experts have not decided what outcome they fear more: a further gradual increase in the rate, which may not be enough to fight inflation, or a sharp increase by 0.50% or more, which may put pressure on economic growth.[/JUSTIFY] [HR][/HR] [HEADING=1]EUR is weakening against EUR and GBP but has ambiguous dynamics against JPY.[/HEADING] [JUSTIFY]Investors focus on the publication of the March Service PMI, which, contrary to forecasts, was positive: the EU index increased from 55.5 to 55.6 points instead of falling to 54.8 points, while the same indicator for Germany increased from 55.8 to 56.1 points instead of a decrease to 55.0 points. Experts note that positive values were due to the retreat of the coronavirus pandemic and an increase in demand for services from citizens. However, the protracted military conflict in Ukraine makes the further prospects for the sector as negative as in industry. Despite strong statistics, the euro remained under pressure as the market awaits the publication of a new package of anti-Russian sanctions, which could negatively affect the European economy. In particular, a ban on exporting Russian coal, which is 19.3% of the coal consumed in the bloc, may be imposed. However, its sales volume to European countries has already begun to decline over the past month. It is possible to introduce restrictions on the rental of aircraft, on the trade in aviation kerosene, steel products, and luxury goods.[/JUSTIFY] [HR][/HR] [HEADING=1]GBP is strengthening against its main competitors – EUR, JPY, and USD.[/HEADING] [JUSTIFY]The UK Service PMI was positive: the value increased from 60.5 to 62.6 points, significantly exceeding the market's preliminary estimates of 61.0 points. However, the future outlook for the sector is difficult to predict due to the continued rise in inflation, which could put pressure on household demand. According to the latest survey of purchasing managers, British service sector firms raised their prices at the fastest pace in at least 25 years last month, pushing down the cost of living. About 40% of companies increased prices in March, and only 3% reduced them.[/JUSTIFY] [HR][/HR] [HEADING=1]JPY is weakening against GBP and USD but has ambiguous dynamics against EUR.[/HEADING] [JUSTIFY]Today, Japan published a block of economic statistics. Service PMI for March rose from 44.2 to 49.4 points but remained in the stagnation zone. Experts believe it is due to the coronavirus pandemic, from which Japanese households have not yet fully recovered, which still curbs the strengthening of the sector. Also, further development prospects are overshadowed by the uncertainty caused by the Ukrainian crisis. In February, the Japanese household spending index fell by 2.8% MoM and rose by 1.1% YoY, well below the forecasted 2.7%. Citizens continue to be wary of spending due to the effects of the pandemic and soaring food and fuel prices. Today in the Japanese parliament, the head of the Bank of Japan, Haruhiko Kuroda, said that the recent fluctuations in the yen were too rapid, and the stability of the national currency is extremely important. The official reiterated that a poor yen is good for the economy as a whole, as it helps boost overseas profits for companies.[/JUSTIFY] [HR][/HR] [HEADING=1]AUD is strengthening against its main competitors – EUR, GBP, JPY, and USD.[/HEADING] [JUSTIFY]Investors focus on the regular meeting of the Reserve Bank of Australia. The regulator left the rate at the previous level of 0.10%, but the rhetoric officials became more “hawkish,” which strengthened the national currency. Namely, agency officials said they would evaluate inflation and wage data in the coming months to determine whether to proceed with raising interest rates. Previously, the market assumed that the tightening of monetary policy would begin in the fall, but now, many investors tend to the fact that the adjustment of indicators will begin in June. Meanwhile, Australia's March Service PMI was weaker than expected: the value fell from 57.4 to 55.6 points against the forecast of 57.9 points.[/JUSTIFY] [HR][/HR] [HEADING=1]Oil quotes move sideways.[/HEADING] [JUSTIFY]Several opposing factors influence prices. First of all, the instrument's position is strengthening due to the expectation of introducing new economic sanctions against Russia, which may further limit the entry of Russian raw materials into the market. It is assumed that the Eurozone may impose a ban on the purchase of coal, and German Foreign Minister Annalena Baerbock announced plans to abandon Russian oil and even gas. On the other hand, the growth of quotations is constrained by the possibility of concluding a nuclear deal with Iran, which State Department spokesman Ned Price reconfirmed. Investors are being held back by the coronavirus pandemic in China. Today, the Chinese authorities extended the quarantine in Shanghai, which covers 26M people. During the day, the market is waiting for the publication of a weekly report on the amount of oil reserves in the US from the American Petroleum Institute (API). The figure is forecast to fall by 1.558M barrels, strengthening the prices.[/JUSTIFY] [/QUOTE]
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