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Fundamental Analysis
Fundamental updates by Solid ECN
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[QUOTE="SOLIDECN, post: 208230, member: 80239"] [JUSTIFY][img]https://i.ibb.co/jR3T7KK/morning-market-review-2.png[/img] [B]EURUSD[/B] The European currency showed weak growth against the US dollar during the Asian session, correcting after a sharp decline the day before, as a result of which the single currency updated record lows for the instrument since January 2017. EUR/USD is trying to consolidate above 1.0400, but so far there are clearly not enough drivers for the growth of the single currency. During the day, investors will pay attention to the publication of statistics on the dynamics of Industrial Production in the eurozone for March, but the current forecasts of analysts do not suggest that the euro will be able to get any support for them. However, the instrument may show growth solely on technical factors, given that the macroeconomic calendar from the US is also neutral. The dollar is still in high demand in the market amid concerns about the prospects for growth in the global economy. US consumer inflation data released on Wednesday indicated that prices may be peaking but still high enough to prevent the US Fed from easing monetary tightening pressure. [B]GBPUSD[/B] The British pound shows an uptrend in trading, correcting after another decline the day before, as a result of which GBP/USD updated its lows since May 2020. The growth of the pound on Friday is due to the strengthening of technical factors, while the fundamental picture changes slightly and still contributes to the further weakening of the British currency. The macroeconomic data released the day before in the UK turned out to be disappointing, which increased fears of a possible recession in the national economy. In March, the country's GDP fell by 0.1%, while analysts expected it to increase by 0.1%. In quarterly terms, growth slowed down from 1.3% to 0.8%, which was also worse than forecasts at 1.0%, while in annual terms, the economy is still showing positive dynamics and, according to the latest data, strengthened from 6.6% to 8.7%, only a little short of the expected value of 9%. The pace of Industrial Production in the country in March showed a decrease of 0.2% after falling by 0.3% a month earlier, although preliminary market estimates suggested a positive trend at the level of 0.1%. [B]AUDUSD[/B] The Australian dollar is showing active corrective growth against the US dollar during the morning session, recovering from a strong decline the day before, as a result of which AUD/USD hit its record lows since June 2020. Investors fix short positions, which leads to a technical correction, while the fundamental picture of the instrument changes slightly. The US dollar is still in high demand in the market as a safe-haven currency, as investors fear a further slowdown in the global economy, which may be exacerbated by the "hawkish" policy of the world's leading central banks. The latest data from the US indicated that consumer inflation may be at its peak, but so far its slowdown is slower than analysts' expectations. There is no need to count on a quick change in the vector of the US Federal Reserve's monetary policy, and as the interest rate rises in the future, the growth prospects of the American economy are likely to decline. In turn, pressure on the positions of the Australian currency today is exerted by weak macroeconomic statistics from Australia. HIA New Home Sales fell 1.2% in April after rising 3.9% in March. [B]USDJPY[/B] The US dollar shows corrective growth against the Japanese yen in Asian trading, correcting after a sudden decline the day before, which led to the renewal of local lows from April 27. The Japanese yen is one of the few currencies on the market against which the dollar showed a negative trend on Thursday. Among other things, analysts attribute this behavior to the "hawkish" policy of the US Federal Reserve, which in the foreseeable future may lead to a slowdown in economic growth in the country. In its turn, the Bank of Japan still maintains a wait-and-see attitude and has not yet launched a cycle of raising the interest rate. Existing inflationary risks have quite a positive effect on the Japanese economy, which is fairly prone to deflationary phenomena, which makes the yen quite an attractive safe-haven currency, despite the growing gap in Japanese and US interest rates. The yen was additionally supported yesterday by optimistic macroeconomic statistics from Japan. In April, Eco Watchers Current Situation index rose from 47.8 to 50.4 points, and Eco Watchers Outlook strengthened from 50.1 to 50.3 points. [B]XAUUSD[/B] Gold prices are recovering during the Asian session, retreating from the local lows of February 7, updated at the opening of Friday's trading. The growth of quotes is facilitated by technical correction factors, while the fundamental picture still supports the further strengthening of the US currency. US inflation statistics published in the past few days indicated that prices are still demonstrating an alarming increase, despite the passage of its peak. This may require the US Federal Reserve to strengthen measures aimed at curbing price growth, including through an increase in interest rates. The risks of a 75 basis point increase during the June meeting of the regulator are still quite low, but one should not forget that the US Federal Reserve has other leverage. In particular, the department may accelerate the launch of the quantitative tightening program.[/JUSTIFY] [/QUOTE]
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