Market news by Solforex

[limyeeshin]

Thursday November 5 2015



Dollar rises with Yellen’s hawkish statements

The U.S. dollar was boosted broadly against other major currencies after Federal Reserve Chair Janet Yellen’s hawkish comments toward December rate hike at House Financial Services Committee on Wednesday. In testimony before the Committee on Wednesday morning, Yellen implied improvement in the U.S. economy amid solid increases in domestic spending and fading of global economy slowdown. The FOMC also expects long-term inflation to move toward its target goal of 2% as low energy prices settle. Greenback itself rose up to +0.98% after Yellen’s comments and settled at +0.78%.

EUR/USD dips to 3 month low

The euro dropped sharply against the dollar reaching its lowest in three months after Yellen’s statements. The European Central Bank Governor Draghi also commented on likelihood of Eurozone’s QE program extension, mentioning policymakers would re-examine the degree of monetary stimulus program, further dropped the euro. The euro fell 0.98% against the dollar, traded lowest at 1.0844 and settled at 1.0863.

Sterling shortens gains after hawkish FOMC stance

The British pound edged higher against greenback after the data on U.K. service sector rebounded from its previous month. U.K. services purchasing managers index reached 54.6 in October from its 2 years low of 53.3 in September, also above 45.5 expected. GBP/USD gained highs of 1.5445. Also EUR/GBP went down 0.4% at 0.7079 after the data. But GBP/USD pair changed hands after Yellen’s hawkish comments on rate hike, by falling 0.24%. It was yet limited fall ahead of BoE monetary policy meeting.

USD/JPY gains with rate hike cards

Japanese yen also dropped against the dollar after FOMC’s increased expectation of interest rate rise in December. USD/JPY gained 0.41%, traded at 121.37 before settling at 121.18. Investors are looking ahead to U.S. nonfarm payrolls on Friday for indication of rate hike in December.

Market Movements

Emerging markets and commodity linked currencies were generally low against the dollar after Yellen’s comments on hawkish stance of FOMC. Norway Crone fell 1.76%, Russian Ruble fell 0.80%, South African Rand dropped 1.76%, New Zealand dollar fell 1.23% and Australian dollar dropped down 0.64%.

 

[limyeeshin]

The U.S. dollar was boosted against other major currencies after robust U.S. jobs report on Friday showing strong figures than expected, reinforcing expectation for December rate hike by Federal Reserve. The U.S. economy added 271,000 jobs last month, far above the 180,000 jobs expected, showing greatest increase within the year. Unemployment rate also fell to 5.0% which is lowest rate in seven years. The solid jobs data increased the possibility for the Federal Reserve to raise interest rates next month, which would make the dollar more yield return investment. Greenback’s strength was up 1.23% in late trade, strongest level since April with week gains of 2.31%.

The euro fell against the dollar after increased possibility of rate hike by Federal Reserve supported by solid economy data. Earlier the week, the euro showed strength after ECB policy member and Austria Central Bank Governor Nowotny mentioning that additional asset purchasing program needs further circumspection. But after Fed Chair Yellen’s statement that stronger upcoming U.S economy data will support rate hike execution followed by the strong jobs data on Friday, turn the euro bearish. EUR/USD fell 1.31%, hit 1.0708 before settling at 1.0740. The pair fell 2.43% for the week.

The Australian dollar fell in Asia after slowed China’s weekend trade data. China trade surplus came in at $61.64 billion, slightly above $60.34 billion in September, but exports fell 6.9% and imports collapsed 18.8%. The surplus was due to steep drop in imports rather than stronger exports and therefore was not interpreted well in terms of trade improvements. AUD/USD traded at 0.7028, down 0.23% as the Aussies are closely related to China’s trade economy.

Japanese yen also fell against the dollar despite upbeat wages data due to stronger expectation of Fed’s rate hike. Japan average cash earnings for September rose 0.6%, better than 0.5% gains expected. Yet, USD/JPY traded at 123.45, up 0.24%.

Overall week pairs review
GBP/USD -2.47%, traded at 1.5047
AUD/USD -1.28%, traded at 0.7046
USD/CAD +1.76%, at 1.3306
USD/JPY +2.09, at 123.13
EUR/JPY -0.29%, at 132.35
AUD/JPY +0.67%, at 88.62

In the week ahead, investors will be looking ahead to China’s inflation and industrial production data for determining easement of China-led global economy slowdown. Also, U.S. data on retail sales, producer prices and consumer sentiments will indicate likelihood of rate hike next month. Eurozone’s preliminary data on GDP is to be also closely watched.


Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, November 9

Japan is to release data on average cash earnings.

Germany is to publish data on trade balance.

In the Eurozone, Sentix is to report on investment sentiment.

Canada is to release figures housing starts.

The US is to produce labor market condition index and OECD composite leading indicator.


Tuesday, November 10

Japan is to release data on current account.

Australia is to publish data on NAB business confidence and data on home loan.

China is to release data on producer and consumer price inflation followed by data on initial loans.

Reserve Bank of New Zealand is to publish bi-yearly national financial stability report.

In the Eurozone, the finance ministers are to hold monetary policy meeting in Brussels.


Wednesday, November 11

In Australia, Westpac is to produce data on consumer sentiment.

China is to release data on industrial production, fixed asset investment and retail sales.

Germany is to publish data on wholesale prices.

The UK is to release monthly employment data on average wages, initial unemployment claims and unemployment rate.

Bank of England Governor Mark Caney is to hold a press conference after the data released commenting on quarterly inflation.

In the Eurozone, European Central Bank Governor Mario Draghi is to speak at an event in London.


Thursday, November 12

Japan is to release data on core machinery orders and producer price inflation.

Australia is to report on employment with figures of movement in employment and unemployment rate.

Germany and France is to release data on consumer prices inflation.

In the Eurozone, data on industrial production is to be published.

In the US, data on initial jobless claims is to be released followed by Fed Chair Yellen and Fed members’ statements.


Friday, November 13

Japan is to release data on industrial production.

In the Eurozone, data on trade balance and preliminary data on GDP growth is to be published.

The US is to publish data on producer prices, retail sales and consumer sentiments.

 

[limyeeshin]

SOLFOREX WEEKLY NEWS

Edition 30｜November 16, 2015

The U.S. dollar rose against other major currencies with grown expectations for rate hike by Federal Reserve next month as well as investors avoiding risky asset investments. Last week, the U.S’s solid employment data and declining trend of China’s trade balance pushed the dollar up but it shortened the gains in late trades from profit advancing arbitrage trades. But the hawkish statements from Federal members spurred investors’ expectation for rate hike in December, supported the dollar bullish. The dollar itself rose 0.33% in late trade.

Japanese yen was strengthened on Monday after disappointing third quarter GDP growth that emphasized on the lack of price pressure with an awash in liquidity. The third quarter preliminary data of GDP growth declined 0.2%, compared to 0.1% fall expected, while the yearly pace also slumped 0.8%, further down expected drop of 0.2%. USD/JPY changed hands at 123.37, dropping 0.19%. The Bank of Japan’s monetary policy meeting announcements will be in focus for further outlook.

In New Zealand, NZD/USD pair dropped despite the retail sales data in New Zealand for the third quarter rose 1.6%, above the 1.3% expected gain. The pair traded at 0.6529, falling 0.15% after the data released. AUD/USD also changed hands at 0.7104, down 0.36%.

The euro was also lower with continued expectation of Federal Reserve’s rate hike in next month. On Thursday, Fed Vice-Chair Stanley Fischer said that it may be appropriate for the Federal Reserve to initiate raising rate in December, supporting the dollar strengthening. EUR/USD pair dropped 0.39%, traded at 1.0773 in late trade.

In the week ahead, investors are looking ahead to monetary policy statements from G20 summit. The dollar’s bullish movements could be limited if the concerns on China’s economy being mitigated from the comments.

Upcoming U.S. data on manufacturing is expected to improve, may consolidate the expectations for rate hike by Fed next month.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Monday, November 16

Japan is to release preliminary data on GDP growth for the third quarter.

Australia is to release data on auto sales.

In the Eurozone, revised consumer price index is due and the European Central Bank Governor Mario Draghi is to speak at an event in Madrid.

In Germany, Buba monthly report is to be published.

Canada is to release data on manufacturing sales and foreign investment.

In the US, data on NY state manufacturing is to be published.


Tuesday, November 17

Australia is to release the minutes of its recent monetary policy meeting.

New Zealand is to release data on inflation expectations.

In the UK, bundle of data on consumer and producer price inflation, retail sales and housing prices are to be released.

In the Eurozone, ZEW is to report on economic sentiment.

The US is to release data on consumer price inflation, industrial production and housing market index.


Wednesday, November 18

In Australia, RBA vice governor Guy Debelle is to speak at an event. Also, CB composite leading index and wage index are to be published.

China is to release data on housing prices.

In the US, the NY fed President William Dudley and Atlanta Fed Dennis Lockhart is to speak at an event. Also, the FOMC meeting minutes are to be in focus for indication of further decision of rate hike by Federal Reserve.


Thursday, November 19

Japan is to release data on trade balance and release minutes on its recent monetary policy meeting.

The UK is to publish data on retail sales.

The European Central Bank is to publish the minutes on its latest meeting.

Canada is to release data on wholesale sales.

In the US, data on initial jobless claims and composite leading indicator are due.


Friday, November 20

Japan is to publish Bank of Japan’s monthly report.

Germany is to release data on producer price inflation.

In the Eurozone, the ECB governor Mario Draghi is to speak at an event in Frankfurt.

Also, Eurozone’s data on consumer sentiment is due later the day.

Canada is to release data on consumer price inflation and retail sales.

 

[limyeeshin]

Thursday 19 November 2015

The dollar slightly drops after Fed minute release

The U.S. dollar slightly dropped after less hawkish than expected minutes of FOMC meeting. In early trades, the dollar kept bullish ahead of the minute release. The NY state fed president William Dudley said it is not a surprise thing to raise the interest rate. Cleveland state fed President Loretta Mester also added that current economic data can handle 25bp increase in rate. The hawkish statements by Federal Reserve members once brought the dollar index up to 99.82. But the minutes showed less hawkish comments by the Fed members with less certainty on rate hike next month and indications that it could be slowly proceeded. The dollar turned slightly lower and fell 0.04% after the minutes. EUR/USD hit 1.0623 and settled at 1.0659, down 0.08%.

Yen gains slightly ahead of BOJ announcement

The Japanese yen was lower against the dollar despite the dollar index’s fall after FOMC meeting minute release. Recent two straight quarterly declines with slowed economy brought investors’ expectations that it will be likely that dovish comments will be made by Bank of Japan. However, the yen gained in Asia on Thursday early trading after the trade balance showing surplus. The trade balance in Japan widened to a ¥112 billion surplus in October which is the first positive figure in seven months. Imports fell 13.4% while exports fell 2.1%. USD/JPY changed hands at 123.51, falling 0.10%.

Market movements

The emerging market and commodity market currencies were once bearish when the oil price hit below 40$ but the eased comments than expected by Federal Reserve meeting minutes turned the currencies bullish. GBP/USD gained 0.16% in relation to the greenback’s drop. South African rand gained 0.7%, Norway crone gained 0.17%, Russian ruble rose 0.28% and Brazilian real rose 1.18%. New Zealand dollar and Australian dollar slightly fell, by NZD falling 0.09% and AUD falling 0.15%.

 

[limyeeshin]

Tuesday 24 November 2015

The euro turned lower against the dollar last week with increased possibility of additional asset purchasing and the impact from terrorist attack in Paris. The single currency found some support with Eurozone’s composite purchasing index slightly rising from 53.9 to 54.4 and accelerated Germany’s private sector hitting three months high. But growth in France’s private sector fell to lowest level in three months especially the service sector declined steep from the terror incident.

On Friday, European Central Bank Governor Mario Draghi gave clear indication that ECB is ready to act on inflation boost in the Eurozone. The euro remained under pressure with increased expectations of quantitative easing program execution in December. EUR/USD pair hit seven month lows on Monday before paring the losses late in the session, settled at 1.0636, down 0.28%.

The U.S. dollar remained bullish broadly against other major currencies with strong expectation of rate hike next month. The currency stayed higher despite disappointing housing data with support from expectations of Federal Reserve’s rate hike in December. The existing home sales fell 3.4% to 5.36 million units from 5.55 million in September, falling further than expected fall of 2.3%. NY State Fed President William Dudley said on Friday that there is a strong case for raising interest rates in next month’s central bank meeting as economic data continues to improve. USD/JPY gained 0.12% at 123.16, AUD/USD fell 0.64% to 0.7193, USD/CHF gained 0.13% at 1.0201 and GBP/USD pair fell 0.18% to 1.5158.

The New Zealand dollar declined against its U.S. counterpart on Monday with increased expectations for U.S rate hike. NZD/USD fell to 0.6502 in Asian late trade, lowest level in a week. The pair settled at 0.6205, falling 0.93%.

In the week ahead, investors will be looking ahead to U.S and U.K’s revised GDP for the third quarter. The U.S. market will be closed on Thursday and half of Friday due to Thanksgiving holiday.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.


Tuesday, November 24

Japan is to release data on PMI manufacturing sector.

Germany is to publish revised data on third quarter GDP growth and IFO institute is to report on business climate.

The Reserve Bank of Australia Governor Glenn Stevens is to speak at an event.

In the U.S., the third quarter revised GDP is due and also Case-Shiller housing price index and data on consumer sentiment are to be published.


Wednesday, November 25

The Bank of Japan is to release its minutes on recent monetary policy meeting and announce its benchmark rate and rate statements.

The U.S. is to release bundle of data on durable goods order, initial jobless claims, personal income and expenses, housing prices and sales and PMI service sector.

New Zealand is to publish data on its trade balance.


Thursday, November 26

Australia is to release data on private capital spending.

The U.S. markets are closed for Thanksgiving holiday.


Friday, November 27

The U.S. markets are closing early for its Black Friday.

Japan is to release data on household spending, consumer price inflation and unemployment rate.

The U.K. is to publish GFK’s consumer sentiment index.

Germany is to release data on import prices.

 

[limyeeshin]

The euro falls with increased possibility for additional asset buying

The euro fell after the European Central Bank Vice president stating that negative rates in some European countries does not act adversely to the economy. It indicated some investors that it might bring down the rates further at next ECB monetary policy meeting. Thus the euro fell and the dollar was strengthened as a return. The arbitrage trades were inserted once the dollar index hit 100.0 and the euro slightly shortened its loss. EUR/USD fell 0.23%, settled at 1.0610.

The dollar goes higher broadly despite lower PCE prices

The dollar was bullish against other major currencies ahead of Thanksgiving holiday with bundle of mixed data. The core data PCE prices flat at 0.0%, below 0.2% expected which eased the rate hike expectation. But the durable goods order rose 3.0%, above expectation of 1.5% and also the personal income was higher at 0.4%, more than previous month’s rise at 0.2% that supported the PCE drop impact for the rate hike and kept the dollar being bullish. USD/JPY rose 0.15% to 122.62.

The pound rises after adjustment of the growth rate

The British pound rose against the dollar after the Chancellor of the Exchequer George Osborne announced after the budget review that the finance of the government is improved and thus it will withdraw the tax reduction. The GDP growth rate for 2016 was also adjusted from 2.3% to 2.4% indicating improvement of the economy. It indicated investors that the central bank will move up the rate hike decision and led the pound bullish. GBP/USD rose 0.23% after the announcement.

Market movements

The emerging market and commodity market currencies showed fluctuation after the dollar index hitting 100.0. Investors found the ECB’s quantitative easing may vary the asset movements to according currencies. The South African rand fell 0.70%, Turkish lira fell 0.38% and Russian ruble was down 0.11%. But the commodity currencies rose, with New Zealand dollar gaining 0.39%, Australian dollar up 0.15% and the Canadian dollar gained 0.06%.

 

[limyeeshin]

The euro turned lower against the dollar last week with the possibility for Swiss Central bank to lower the rates. The investors found the Eurozone might also lower rates supported by the European Central Bank (ECB) Vice President saying negative interest rates will not affect financial market adversely. The ECB President Mario Draghi also has been indicating that the central bank could increase the size of its monthly quantitative easing program next month. The euro slumped to the dollar by 0.17%, EUR/USD traded at 1.0593 not far from Wednesday’s seven-month lowest of 1.0565.

The dollar was bullish broadly against major currencies as the demand for greenback still rising with confident expectation of rate hike next month by the Federal Reserve. Beginning of last week dollar fell slightly after the revised U.S. GDP was upward adjusted by 2.1% but in decreasing trend except stock sector. Also, after Turkey jet downing Russian fighter bomber the safe asset preference was increased and supported the dollar strengthening. Trading volumes were thin on Friday as the market was closed early for its black Friday after being closed Thursday for Thanksgiving. On Friday, the dollar rose 0.19% broadly at 100.15, highest index since March.

Japanese yen was steady stronger in Asia on Monday after the boosted retail sales data. In Japan, the industrial production for October rose 1.4%, below the expected rise of 1.9% but the retail sales offset the slower industrial production by jumping 1.8%, much higher than 0.8% increase expected. USD/JPY changed hands at 122.75, falling 0.04% in early trading on Monday.

In Australia, the MI inflation gauge showed reading of 0.1%. Australia is about to release bundle of data. HIA new home sales, business inventories for the third quarter, company gross operating profit and housing and private sector credit are due and expected to rise steadily. AUD/USD traded at 0.7188 in early trading.
New Zealand business confidence for November came in at 14.6%, slight below 15% expec
ted but well improved from previous month’s 10.5%.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, November 30
Japan is to release data on retail sales and industrial production.
Australia is to publish bundle of data on new home sales and company operating profits and more.
New Zealand is to release a report on business confidence.
Japan is to release data on construction orders and housing starts.
Germany is to publish data on retail sales and consumer price inflation.
The U.S is to release data on Chicago state PMI, pending home sales and Dallas manufacturing

Tuesday, December 1
China is to release data on PMI manufacturing and service sector followed by Caixin PMI manufacturing and service report.
Japan is to release data on PMI manufacturing sector.
The Reserve Bank of Australia is to hold monetary policy meeting and announce its benchmark rate and give rate statements.
The Eurozone and Germany is to release data on PMI manufacturing sector, movements in employment and unemployment rate.
Canada is to publish monthly GDP growth report.
In the U.S., bundle of data on auto sales, PMI manufacturing, ISM manufacturing report and construction expenses are due.

Wednesday, December 2
In Australia, the Reserve Bank of Australia Governor Glenn Stevens is to speak at the Australia-Israel Chamber of Commerce breakfast, in Perth.
Australia is to publish data on third quarter gross GDP.
The U.K. is to release survey data on construction activity.
The Eurozone is to publish preliminary data on producer and consumer price inflation.
The U.S. is to publish report on private sector jobs creation.
Also, the Fed Chair Janet Yellen is to speak at the Economic Club of Washington D.C.
Canada is to hold monetary policy meeting and announce its benchmark rate and give rate statements.

Thursday, December 3
Australia is to release data on its trade balance.
In the Eurozone, the Eurozone, Germany and France are to release data on PMI service sector. The U.K. is also to publish data on PMI service sector.
Also, the Eurozone’s retail sales data are due.
European Central Bank is to hold monetary policy meeting and announce the rates followed by press conference with the ECB President Mario Draghi.
The U.S is to release bundle of data on initial jobless claims, PMI service sector, factory order and ISM non-manufacturing sector.
Federal Reserve Chair Janet Yellen is to speak on monetary policy before the Joint Economic Committee in Washington D.C.

Friday, December 4
Australia is to release data on retail sales.
Japan is to publish data on consumer sentiment.
Germany is to release data on factory orders.
Eurozone is to publish data on PMI retail sector.
Canada it so release data on employment with unemployment rate and publish its trade balance.
The U.S. is to release data on its trade balance and round up the week with the ADP non-farm payroll report.

 

[limyeeshin]

The dollar rises with improved labor data

The U.S. dollar was stronger against other major currencies after solid ADP non-farm payroll data. ADP Research Institute reported that U.S. private employers added 217,000 jobs in November from 182,000 in October, much above 183,000 expected. Also the unemployment rate ticked down to 5.0% as expected. The Fed Chair Janet Yellen’s statements that implied more certainty toward rate hike in December supported the dollar strengthening and the greenback reached over 100.5 at a point. However the beige book only hinted the economy is improving and the manufacturing shrinkage due to bullish dollar burdened the investors and shortened the dollar’s gains. The dollar itself rose 0.19% in late trading.

The euro falls ahead of ECB’s monetary policy statements

The euro fell against the dollar ahead of the European Central Bank’s monetary policy meeting with increased expectation of ECB to ramp up a comprehensive 1.1 trillion euro asset buying program. Investors also widely expects that ECB will cut down its benchmark refinancing rate from a record-low of 0.05% and also decrease further the deposit rate that is already negative at -0.20%. EUR/USD settled trading at 1.0617, down 0.09% in late session. The euro fell against the dollar by 3.5% over last month and 12% for the year.

The pound falls with stronger U.S. employment data

The British pound was also impacted from the dollar index strengthening with solid U.S. employment data and Yellen’s hawkish statements. Also, the increased expectation toward ECB’s monetary policy for QE program increased the pound’s loss. The pound shortened its loss as the dollar index lessened its gains after Yellen’s Q&A with less affirming comments. GBP/USD fell 0.92%, traded at 1.5055.

Aussie falls after disappointing trade data for October

The Australian dollar fell after the trade data showing wider gap than expected for October. Australia reported the trade balance showed a deficit of A$3.305 billion, way below the expected deficit of A$2.665 billion. Also, the New Home Sales for October fell 3.0%, and the AIC Services fell to 48.2 in November from 48.9 in October. The disappointing figure depreciated the aussie, AUD/USD traded at 0.7287, falling 0.32%.

Market Movements

Major pair movements
EUR/USD -0.17%
JPY/USD -0.30%
GBP/USD -0.92%
Commodity linked currencies were generally weakened due to commodity price drop. Norway crone fell 0.44%, New Zealand dollar fell 0.61%, Russian dollar fell 1.20% and the Australian dollar fell 0.29%. Other emerging market currencies were higher, with South African rand gaining 0.48% and Brazilian real gaining 0.51%.

 

[limyeeshin]

The euro retreated against the dollar after the disappointing monetary policy meeting by the European Central Bank last week. In early trading, slowdown in U.S. ISM manufacturing data weakened the dollar. The Federal Reserve Chair Janet Yellen strongly implied the rate hike execution in December however in regards to most recent U.S. economic indexes showing slow improvement, limited the euro weakening. The Eurozone decided to lower the deposit rate by 10bp at the ECB monetary policy meeting, lower than market’s expectation, let the EUR/USD hit 1.10. But the improved U.S. labor data on Friday limited the euro gaining further.

In the U.S., the Labor Department reported the U.S. economy added 211,000 jobs in November, above 200,000 jobs seen. The unemployment rate slightly ticked to 5% in November. The report supported the existing expectations toward rate hike in mid-December by Federal Reserve, strengthened the dollar. EUR/USD changed hand at 1.0880, down 0.56%. The pair yet closed the week with gains of 2.81%.

The Australian dollar fell in Asia on Monday with little regional data amid solid expectation of a Federal Reserve rate hike this month. In Australia, AI and HIA November construction index declined 1.4 points to 50.7 with new orders decreasing in all groups. AUD/USD traded at 0.7334, falling 0.10%.

Japanese yen also ticked down in Asia on Monday amid increased rate hike expectation by Federal Reserve. USD/JPY changed hands at 123.22, up 0.09%.

In the week ahead, investors will be looking ahead to central bank meetings in the U.K, Switzerland and New Zealand. The Bank of England Governor Mark Carney is to speak before the European Parliament Committee on Economic and Monetary Affairs on Monday, In Brussels.

Also, upcoming U.S. data on retail sales and inflation will be in focus for determination of Fed rate hike in mid-December.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, December 7
Japan is to release composite leading index.
Germany is to publish data on industrial production.
The Bank of Japan governor Haruhiko Kuroda is to speak at an event.
The Bank of England governor Mark Carney is to testify before the EPC meeting in Brussels.
In the U.S., the labor market conditions index and data on consumer sentiment are due.

Tuesday, December 8
Japan is to release data on current account and revised GDP growth.
Australia is to publish NAB report on business confidence.
China is to release data on its trade balance.
England is to publish data on manufacturing production and industrial production.
In the Eurozone, revised third quarter GDP growth is due.
Canada is to release data on building permits.

Wednesday, December 9
In Australia, Westpac is to report on consumer sentiment followed by data on home loans.
Japan is to publish data on core machinery orders.
China is to release data on both consumer and producer price inflation.
Germany is to release data on its trade balance.
China is to publish data on new loans and M2 money supply.

Thursday, December 10
New Zealand is to hold monetary policy meeting and announce its benchmark rate and give rate statements.
Japan is to release data on manufacturing private sector and producer price inflation.
Australia is to publish labor data on employment movements and unemployment rate.
England is to release data on trade balance followed by the monetary policy meeting by BOE and rate statements.
The U.S. is to release data on initial jobless claims and import and export prices.

Friday, December 11
Germany is to release data on consumer and wholesale price inflation.
The U.S. is to publish data on producer prices, retail sales and consumer sentiments.

On Saturday 12th, China is to publish data on fixed asset investment, industrial production and retail sales.

 

[limyeeshin]

Thursday 10 December 2015


The dollar drops amid rising oil prices

The U.S. dollar dropped against other major currencies after the oil prices rebounded, recovering commodity linked currencies. Although the expectations for a U.S. rate hike this month still continues to support greenback with recent solid employment data fueling it further, increased outlook of U.S. economy will keep at a slow pace after the rate hike limited its support and pushed the dollar further down. USD/JPY fell 1.22% to 122.16, EUR/USD gained 1.15% to 1.0957 and GBP/USD gained 1.14% to 1.5166.

The kiwi rises despite rate cut from RBNZ

The Reserve Bank of New Zealand lowered its official cash rate by 25bp to 2.5% within the expectation. The New Zealand dollar gained on Thursday despite the rate cut as it was within investors expected scope. The RBNZ Governor Graeme Wheeler said that monetary policy needs to be accommodative to help ensure that future average inflation settles near the middle of the target band. He also added that the economy will achieve it at current rate settings although the bank will reduce rates if circumstances warrant. Investors found the market will remain still and therefore the kiwi rose 0.79% despite the RBNZ’s decision. NZD/USD increased 0.28% to 0.6737. AUD also rose by 0.33%, AUD/USD traded at 0.7228.

The euro remains subdued after the ECB meeting

The euro remained calm after last European Central Bank meeting shortened markets expectations for the scope of its easing program. On Tuesday, the 19 nation bloc in EU said the third quarter GDP increased by 0.3% amid rising inventories and higher household spending. The euro surged against the dollar on Wednesday hitting 1.10 for the first time in a month as investors prepared in advance for a rate hike by the Federal Reserve in next week. EUR/USD pair traded in a broad range of 1.0879 and 1.1042, settled at 1.1026, gaining 1.23% in the session.

Market Movements

Overall, the dollar itself fell 1.13%, EUR/USD gained 1.15%, USD/JPY fell 1.22% and GBP/USD gained 1.14%.
The commodity linked currencies were generally bullish, New Zealand dollar gained 0.79%, Australian dollar gained 0.33%, Norway crone gained 1.48%, Russian ruble gained 0.49%, and Brazilian real rose 1.20%.
Other emerging market currencies fell after the oil prices move, South African rand fell 2.36%, Turkish lira fell 0.21%, and Chinese yuan fell 0.17%.

 

[limyeeshin]

The dollar weakened broadly against other major currencies on Friday after steep decline in oil prices and Chinese yuan, brought concerns toward economy slowdown to emerging markets and commodity linked markets. The dollar was firm after the solid improved U.S. labor data in the beginning of the week, but the oil prices reached below 38$, lowest levels since 2009 and the dollar was weakened due to increased concerns for global market slowdown. The loss was yet limited ahead of FOMC meeting this week.

The funds that were moved to emerging markets after quantitative easing by Bank of Japan and ECB broke away and strengthened back the euro and yen. EUR/USD rose 0.48%, traded at 1.0992 with gains of 1.03% for the week. USD/JPY fell 1.81% for the week, traded at 120.99 in late trade on Friday. The dollar was also lower against the pound traded at 1.5217.

Chinese yuan fell to the lowest levels in four and half years on Friday, worsening investors’ concerns toward slow growth in the world’s second largest economy leading global market slowdown. Still most investors expect the Federal Reserve to raise interest rates for the first time in almost ten years at upcoming meeting on December 15th. Recent solid U.S. data supported the expectations that the economy is on a strong enough phase for the rate hike.

Japanese yen gained on Monday in Asia after the Tankan Sentiment index showed steady outlook of manufacturing. Large manufacturing firms in Japan showed +12 for the fourth quarter, while non-manufacturing large firms slightly moved to +18 from +19. Positive figures gave indications that major firms are in a better business conditions. USD/JPY traded at 120.86, down 0.10% after the data.

The Australian dollar slightly ticked up in early Asia on Monday despite steep drop of yuan as investors found hope in published data in China. The Aussie is highly linked to Chinese economy as China is the largest partner of trades in Australia. The weekend data showed industrial production in China rose 6.2% in November while retail sales rose 11.2% as well as rise in fixed investment by 10.2%. All data showed the industrial output is in growth footing with better than expected performances. AUD/USD rose 0.01% to 0.7189.

In the week ahead, investors will be focusing to Wednesday’s outcome of the final FOMC meeting of 2015. Upcoming data on U.S. inflation, manufacturing and industrial production will be also closely watched for better indication of rate decision ahead of the meeting.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, December 14
Japan is to release Tankan manufacturing and non-manufacturing index.
The U.K is to release housing price index.
Japan is to release data on industrial production.
The Eurozone is to release data on industrial production.

Tuesday, December 15
In Australia, The Reserve Bank of Australia is to release minutes on its recent monetary policy meeting followed by the data on house price inflation and auto sales.
The U.K. is to release data on consumer and producer price inflation as well as retail price index.
In the Eurozone, ZEW institute is to report on its economic sentiment.
Canada is to publish data on manufacturing sales.
In the U.S., data on consumer price inflation, New York state manufacturing activity and housing market index are due. Investors will be attentive to the data ahead of the FOMC meeting for better indication of rate decisions by Fed.

Wednesday, December 16
In the Eurozone, bundle of data will be published on PMI manufacturing and non-manufacturing index, consumer price inflation and trade balances.
The U.K. is to report on monthly employment.
In the U.S., data on building permits, new starts, industrial production and PMI manufacturing index are to be published.
Also, The FOMC meeting outcome will be announced followed by the Fed Chair Janet Yellen’s press conference.

Thursday, December 17
New Zealand is to release data on third quarter GDP growth.
Japan is to publish data on its trade balance.
In Germany, IFO institute is to report on the business climate.
The U.K. is to release data on retail sales.
The U.S. is to publish reports on initial jobless claims and Philadelphia’s manufacturing activity.

Friday, December 18
New Zealand is to publish data on its business confidence.
In Japan, The Bank of Japan is to publish minutes on its recent monetary policy meeting.
Canada is to release data on consumer prices and wholesale sales.
The U.S. is to publish data on PMI service sector.

 

[limyeeshin]

Thursday 17 December 2015


Federal Reserve approves rate hike
The U.S. dollar rose broadly against other major currencies after the Federal Reserve approved its first interest rate hike in almost ten years. The Federal Open Market Committee (FOMC) lifted its benchmark rate by 25 basis points to a range 0.25-0.50%. The dollar reached 98.5 point and turned lower after the announcement that further increasing pace will be considered gradual, hitting 97.7. But the Fed Chair Janet Yellen evaluated the U.S. economy is overall in satisfactory progress showing confidence in general, rebounded the dollar. The movements gap was mild with continued up and downs. EUR/USD fell mildly to 1.087, down 0.13% in late trade.

Yen shortens loss after improved trade balance
Japanese yen shortened its loss against the dollar after the trade balance data showing better than expected figures. In Japan, the trade balance for November was a deficit of ¥380.0 billion, less than the deficit of ¥446 billion expected. USD/JPY changed hands, down 0.18% to 122.44.

The kiwi falls despite improved third quarter GDP
The New Zealand dollar fell against the dollar in Asia Thursday despite the third quarter GDP growth was improved as the Federal reserve rate hike weighs higher with its first rate hike since 2006. New Zealand third quarter GDP rose 0.9% quarter on quarter, slightly better than 0.8% rise expected. NZD/USD traded at 0.6765, down 0.48%. The Aussie was eased with AUD/USD tracing 0.33% to 0.7206.

Market movements
Overall the U.S. dollar rose despite the dovish rate hike by Federal Reserve.
Major pairs:
EUR/USD -0.13%
USD/JPY +0.39%
GBP/USD -0.21%
Emerging markets and commodity linked currencies moved only mildly despite the rate hike. The oil price drop more affected commodity linked currencies to hold lower. Norway crone fell 1.04%, Russian ruble fell 0.90%, Brazilian real fell 0.24%, Australian dollar lowered 0.40% and New Zealand dollar fell 0.08%. Mexican peso and Turkish lira rose by 0.43% and 1.04% each and also South African rand slightly ticked by 0.05%.

 

[limyeeshin]

Edition 35｜December 21, 2015


The U.S. dollar was broadly higher last week after the Federal Reserve decided to raise the initial interest rate first time in nine years with support from improved national economic indicators. The euro was slightly bullish at the beginning of the week after ECB president Draghi mentioning it can reach the inflation rate of 2% as expected showing confidence on the economy. But the U.S. consumer prices and New York state manufacturing were showing solid improvements ahead of FOMC meeting, turned the euro bearish.

Japanese yen boosted against the dollar on Friday after the monetary policy meeting by Bank of Japan with its latest easing measures fell short of market expectations. The Bank of Japan kept its main monetary easing target at ¥80 trillion, but decided to extend the government bonds maturity, setting up a ¥300 billion fund to buy exchange traded funds. USD/JPY hit 123.52 after the announcement before turning down 1.14% to 121.16 as investors found BoJ’s easing movement was not too significant.

The pound rose against the dollar on Friday, recovering from its eight-month loss as investors found the further rate hike will take on slower pace than expected. Fed Chair Janet Yellen announced after the rate hike decision that further rise will be gradual and dependent on upcoming data. GBP/USD hit 1.4950 before consolidating at 1.4934, up 0.21%.

Elsewhere, the oil price dropped to near seven year lows as continuing concerns on a global over-supply pressuring prices, leading global equity markets to tumble on Friday. Emerging markets and commodity linked currencies showed variation with steep dropping of oil prices.

The Australian dollar held weaker in Asia on Monday with no major data ahead with holiday thinned trading. AUD/USD traded at 0.7167, falling 0.27%. In New Zealand, the Westpac consumer sentiment rose to 110.7 for the fourth quarter from 106.00 in the third quarter. NZD/USD traded at 0.6730, ticking 0.06%.

In the week ahead, trading volumes are expected to be thinned and calm due to Christmas holiday market closure. The U.S. will release key reports on GDP, jobless claims and home sales.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, December 21
Bank of Japan is to publish its monthly report on the economy.
Germany is to release producer price inflation.

Tuesday, December 22
The U.K. is to release GfK consumer sentiment index and data on public sector borrowing.
Germany is to release import price index and GfK consumer sentiment index.
The U.S. is to release the final third quarter GDP and data on existing home sales.

Wednesday, December 23
Japan markets are closed.
New Zealand is to release data on its trade balance.
The U.K. is to publish data on its current account, GDP growth and business investments.
Canada is to release data on retail sales and economic activity.
The U.S. is to release bundle of data on durable goods order, personal income and expense, new home sales, consumer sentiments and oil inventories.

Thursday, December 24
Markets in Germany, Italia, Brazil, and Hong Kong are closed for Christmas Eve.
Bank of Japan is to release minutes on the latest monetary policy meeting.
The U.S. is to release data on initial jobless claims and weekly natural gas inventories.

Friday, December 25
Markets closed: United States, Germany, France, United Kingdom, Canada, Australia and New Zealand.
Japan is to release string of data on household spending, consumer price inflation, unemployment rate and housing starts.

 

[limyeeshin]

Edition 36｜December 29, 2015

Yearly Review
The U.S. dollar showed up and downs with its influence from the rate hike issues. The euro was bearish with the European Central Bank extending quantitative easing program. In third quarter, China stock index was eased from its sudden drop but the devaluation in yuan brought emerging market currencies to depreciation. The rate hike was executed in the fourth quarter but the dollar’s gain was yet limited.

Overall major pairs, USD/JPY fell 0.62%, EUR/USD fell 9.32%, and GBP/USD fell 4.23%. Emerging market currencies were bearish, South African rand fell 31.09%, Mexican peso fell 16.92%, and Turkish lira fell 25.03%. As well as commodity linked currencies, with Russian ruble falling 20.94%, Brazilian real down 129.45%, New Zealand dollar down 12.33%, Norway crone down 16.40%, and Australian dollar fell 10.91%.

Weekly News
The euro rose against the dollar last week after slowed U.S. economic index released. While the dollar’s bullish trend let up after the rate hike execution, the oil price movements more affected the euro up and downs. While the trades were thinned due to global markets being closed for Christmas, the dollar slid lower against the euro and yen. The loss was limited as the market closure for holiday limiting significant moves to traders. EUR/USD closed the week at 1.0963, up 1% and USD/JPY fell 0.66%, closed the week at 120.287.

The mixed U.S. economic reports further lowered the dollar, failed to hint how soon the Federal Reserve will raise the rates next year. The U.S. economy grew 2.0% in the third quarter, slightly higher than 1.9% expected but revised from 2.1% of preliminary estimate. The U.S. core capital goods orders declined 0.4% last month, while shipments of core capital goods fell 0.5%. But personal spending rose and consumer sentiment improved to a five-month high in December. Also, the U.S. oil prices rallied for the fourth straight session on Thursday, gaining 10% for the week.

On Monday, the oil price dropped further as well as gold and silver and nonferrous metal showing decline, the safe asset preference was increased. But the commodity market falling spurred concerns toward emerging market and the carry trades moved to Eurozone and Japan slightly increasing the euro and yen.

The pound fell due to the oil price drop as the brent oil hitting lowest point in eleven years. But the U.K. and the British Commonwealth countries markets were shut for holiday, limited the loss of pound. The pound fell 0.27% against the dollar.

In the week ahead, trading volumes are expected to be remained thin and calm due to holiday period. The U.S. will release key reports on consumer confidence, pending home sales and jobless claims, guiding the strength of the economy and investors will look for further indication of next rate hike.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Tuesday, December 29
The U.S. is to release data on S&P Case schiller housing prices, consumer sentiments and State Street investor sentiments.

Wednesday, December 30
Spain is to release data on consumer prices.
The Eurozone is to release data on money supply.
The U.S. is to publish data on mortgage applications, pending home sales and weekly report on oil inventories.

Thursday, December 31
Markets in Germany, Japan and France are shut for the New Year’s Eve holiday.
The U.S. is to report on initial jobless claim and Chicago state PMI manufacturing.

Friday, January 1
Markets closed: United States, Europe, Japan, China, United Kingdom, Canada, Australia and New Zealand for New Year’s holiday.
China is to publish PMI data on manufacturing and non-manufacturing activity.

 

[limyeeshin]

Edition 37｜January 5, 2016


The dollar rose against other major currencies with increased preference toward safe asset. The slowdown in Chia manufacturing increased the concerns on emerging markets economy and firmed the euro and yen. Especially, the steep drop in China stock market which invoked the circuit breaker for the first time by falling further than 7%, followed by stock drops in U.S. and Eurozone markets, expanded the concerns on emerging markets economy. Thus, the dollar with increased safe asset preference hit 99.2 and turned bullish. But the increase in yen and euro limited the dollar’s gain.

China Caixin PMI index fell to 48.2, below 49.0 seen by analysts. It indicates that any reading below 50, shrinkage in manufacturing sector. The disappointing figures in manufacturing transmitted to Chinese stocks, brought Shanghai Composite Index falling more than 7% that halted trading by the circuit breaker. Chinese sell-off brought global stock markets to bearish for the first trades of 2016. Germany Dax hit worst session in five years and the Dow Jones Industrial Average fell up to 450 points, suffering worst openings to a year.
Depreciation in stock markets and the yuan value hitting the lowest level since May 2011, brought fluctuation to forex market due to increased concerns on emerging markets. Also, the middle-east risk rose by Saudi Arabia announcing diplomatic cessation with Iran acted as an unfavorable factor in the market.

Elsewhere, Japanese yen changed hands with the dollar at 119.42 after Japan reported the monetary base at 29.5%, down from 32.5% in previous year. British pound slightly recovered from its loss broadly on Monday after the U.K. manufacturing sector data. Markit manufacturing fell to a three month low of 51.9, lower than 52.7 seen. GBP/USD traded at 1.4770 recovering from the overnight lows of 1.4692. The Australian dollar fell in Asia on Tuesday to 0.7187, down 0.04%.

Emerging markets currencies, especially high-exporting countries to China were generally bearish. South African rand fell 0.7%, Norway crone fell 0.44%, Brazilian real fell 1.72%, and Turkish lira fell 1.62%. Also commodity linked currencies broadly fell, Canadian dollar fell 0.8%, New Zealand dollar dropped 1.49%, and Australian dollar fell 1.44%. Chinese yuan also fell 0.96% and Russian ruble rose 0.38% distinctively.

In the week ahead, investors will be looking ahead to U.S. manufacturing and service activity and job report. Also, Tuesday’s report on Eurozone’s inflation will be in focus.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Tuesday, January 5
Germany is to release report on number of movements in employment.
Eurozone is to publish data on consumer price index.
The U.K. is to publish data on construction sector.
The U.S. is to release data on auto-sales.

Wednesday, January 6
China is to publish Caixin index on service sector.
The Eurozone is to release data on PMI service sector and producer prices.
The U.S. and Canada are to release its trade balance.
The U.S. is also to release bundle of data on ADP non-farm payroll, PMI service sector, factory orders, and ISM non-manufacturing index.
Federal Reserve is to release the recent FOMC meeting minutes at the end of the day.

Thursday, January 7
Australia is to release its trade balance and data on building approvals.
Germany is to publish data on factory orders and retail sales.
Eurozone is to report on the unemployment rates and retail sales.
The U.S. is to release data on initial jobless claims. Also, Chicago fed president Charles Evans is to speak at an event.

Friday, January 8
Australia is to release data on retail sales.
Japan is to publish the composite leading index.
Germany is to release data on industrial production and the trade balance.
Canada is to publish data on building permits, movements in employment and unemployment rate.
The U.S. is to report on employment and release data on wholesale inventory.

 

[limyeeshin]

Thursday 7 January 2016


The dollar drops after FOMC minute release

The U.S. dollar turned slightly bearish against other major currencies after the Federal Reserve released meeting minutes. The dollar increased its gaining gap after ADP non-farm payroll report showing great improvement in earlier trading. But Federal members showed concerns toward prices and said that cautious approach is required to minimize the economic shock. The general atmosphere of the recent meeting implied to investors that next rate hike pace will be in a slower pace. The dollar itself dropped 0.17% after the minute release.

Chinese yuan hit lowest level on Wednesday

Chinese yuan fell to its lowest level since 2010 opening of its offshore market extending its slide. Yuan has begun the year with 2.5% of decline in three days almost near the one-off onshore devaluation in August. It led to a global stock market selloff and another wave of competitive devaluation around Asia and other key economies are now on fear. The forecast shows further 7%-10% weakening of the yuan over the next 12 months. The offshore rates fell more than 1% against the dollar and hit the record low at 6.7315 on Wednesday.

Euro gains as emerging market currencies fall

The euro gained as emerging market currencies fell after declined economic data in China. The yuan hit its lowest level since 2010 opening which supported the euro’s gain. The euro gained 0.30% against the dollar at the late trading as the Federal Reserve reiterated its gradual plan toward monetary policy. EUR/USD settled at 1.0783 on the session.

Market movements

Currency traders reacted to the geopolitical and economic news in Asia and Middle-east. North Korea announced its successful hydrogen bomb testing on Wednesday and also the Chinese service sector fell to its lowest point in 17 months. The impact hit surrounding economies and the South Korean won fell to its four-month lows.
Also the oil price declined to the lowest level since 2009 as inventory for gasoline and refined oil sharply increased.

Overall, the EUR/USD gained +0.35%, USD/JPY fell-0.49 at 118.47, and GBP/USD fell -0.31%. Emerging market currencies were influenced from oil price drop and yuan depreciation. South African rand fell 1.32%, Mexican peso fell 0.92%, and Russian ruble fell 1.58%. Commodity linked currencies were also lower, New Zealand dollar fell 1.11%, Australian dollar fell 1.42%, Norway crone dropped 0.62%, and Canadian dollar fell 0.73%. Chinese yuan itself fell 0.83%, near to 6.7.

 

[limyeeshin]

Edition 38｜January 11, 2016


The euro rose against the dollar despite solid U.S. employment report as concerns over slowing growth China continued. The yuan declined sharply on Wednesday, lower than the official onshore devaluation in August 2015. It led to a global stock market sell off and the Chinese stock trading was halted as it declined by 7% on Wednesday and acted the circuit breaker. The concerns are rising as the world’s second biggest economy is growing even slower than expected. The euro and yen rose against the dollar as concerns rose for emerging markets economy, EUR/USD rose 0.65% at 1.0929 and JPY/USD rose 2.38% at 117.44.

The U.S. employment report was improved in December with 292,000 jobs added. It increased from an upwardly revised 252,000 jobs in November and above 200,000 jobs expected. The unemployment rate also held steady low at 5%. The report supported expectation for the rate hike by Federal Reserve could be in a faster pace. The U.S. dollar itself ticked up slightly at the late trading by 0.16% but still lowered by 0.09% for the week.

The British pound lingered near five-year lows after disappointing U.K. trade balance data. The U.K. National Statistics office said the trade deficit narrowed down to £10.64 billion in November from £11.20 billion in previous month but it was still higher than £10.50 billion expected. The Brexit concerns also continued to remain and aggravated the pound’s loss, GBP/USD hit 1.4526, down 0.99%.

Japanese yen gained further on Monday in early Asia trading while markets in Japan are shut for national holiday. USD/JPY traded at 116.88, down 0.49%. On the other side, Australian dollar weakened further against the dollar by 0.25% at 0.6929, down 4.73% for the week.

Emerging market currencies and commodity linked currencies were lower with China economy concerns and oil price drop. South African rand fell 1.65%, Russian ruble fell 0.95%, New Zealand dollar fell 1.25%, and Australian dollar weakened by 0.86% for the day.

In the week ahead, investors will be looking ahead to economic reports in China, especially the trade balance on Wednesday. Also the U.S. data on retail sales, producer prices and consumer sentiments will indicate the further rate hike pace by Federal Reserve. Bank of England’s meeting minutes will also be in focus.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, January 11
Markets in Japan are closed for a national holiday.
In the Eurozone, Sentix investor sentiment index is to be released.
The U.S. is to publish labor market conditions index.

Tuesday, January 12
Japan is to release data on current account, bank loans and consumer sentiments.
China is to release data on new loans.
The U.K. is to publish data on industrial and manufacturing production.
In the U.S., the Federal Vice chair Stanley Fischer is to speak at an event in Paris. Also, the Redbook and Job openings and labor turnover survey are due.

Wednesday, January 13
China is to release its trade balance.
The Eurozone is to publish data on consumer prices and industrial production.
In the U.S., the data on weekly oil inventory and beige book are to be released.

Thursday, January 14
Japan is to release data on core machinery orders and producer price inflation.
Australia is to release data on number of employment movements and unemployment rate.
Bank of England is to publish its recent monetary policy meeting minutes.
Canada is to report on new house prices.
The U.S. is to publish data on initial jobless claims and import and export prices.

Friday, January 15
Australia is to release data on new home loans.
Eurozone is to publish trade balance. EU financial ministers will hold monetary policy meeting all day.
The U.S. is to round up the week with bundle of data on producer prices, retail sales, New York state manufacturing, industrial production, and consumer sentiments.

 

[limyeeshin]

Thursday 14 January 2016


Dollar trims gains with shrunk manufacturing

The U.S. dollar trimmed its gains against other major currencies but remained supported as Chinese trade data shows improvement on Wednesday. The concerns on surrounding markets and emerging markets seemed to ease after the upbeat trade balance from China. The euro and yen were weakened after the data and the dollar rose responsively, however, the state fed presidents Eric Rosengren and Charles Evans mentioned that the rate hike pace will be slower than it was in 2004, trimmed the dollar’s gain. Later the day, the beigebook added that the national U.S. economy is improved, yet shrunk in manufacturing and there is no pressure for price inflation, turned the dollar bearish. The dollar itself lowered 0.06% after the beige book release.

Upbeat Chinese trade balance supports emerging currencies

Chinese trade balance on Wednesday showed upbeat movements that eased woes on emerging markets economy. The official figures showed that Chinese export rose 2.3% in December, rebounding from 3.7% decline in November. Exports were declined -1.4% on yearly basis in dollar terms, better than -8.0% drop expected. Imports also fell by 7.6% on yearly basis in dollar terms, better than 11.5% decline seen. The data eased the woes on surrounding economies, stabilized according currencies. At the same time, the central bank in China fixed the midpoint rate for the yuan at levels close to the fix of previous two days, easing concerns for rapid depreciation of yuan.

Major pairs

EUR/USD +0.23%
USD/JPY +0.03%
GBP/USD -0.08%
AUD/USD +0.11%
NZD/USD +0.15%

Market Movements

The emerging markets and commodity linked currencies were generally strengthened as upbeat Chinese trade data eased concerns to according markets. The oil price still pressured the currencies as it once dropped below 30$, first time since April 2004 but investors seemed to focus more on the Chinese trade data.
Overall, the South African rand rose 0.76%, Turkish lira rose 0.76%, Norway crone gained 0.69, Russian ruble was strengthened by 0.40%, and Brazilian real rose 0.34%. But the U.S. manufacturing shrinkage impacted Mexican peso, dropped by 0.27% and steep decline in Chinese stock weakened Australian dollar by 0.30% and New Zealand dollar by 0.16% in late trading.

 

[limyeeshin]

Edition 39｜January 18, 2016​

The euro rose against the dollar on Friday as the concerns on oil prices drop continued to weigh. Beginning of the week, the euro was weakened as the offshore yuan slightly appreciated and China central bank tries to regulate the pace of devaluation. Thus, woes toward emerging markets were eased and turned the euro bearish. Also, the trade balance in China showed great improvement than the expectation further weakened the euro. But the U.S. economic report showed shrinkage in numbers and the oil prices hit below $30 in later week, brought back fear on emerging market slowdown and turned the euro bullish, shortening its loss. EUR/USD pair gained +0.46%, traded at 1.0915 in late trade.

The U.S. dollar was weakened against the euro and yen after weak U.S. economic data on Friday in combination of increased concerns on emerging markets economy. The U.S. retail sales fell 0.1% in December, compared to 0.1% increase seen. Also, the industrial output fell three months in a row by 0.4% last month, below 0.2% decline expected, while U.S. producer prices also declined. The dollar itself fell -0.13% against other major currencies, limited its loss by gaining from commodity linked currencies. USD/JPY fell -0.84%, traded at 117.05.

The commodity producing countries and emerging market currencies tumbled as the oil prices dropped to its fresh low below $30 since November 2003. Also, the commodity prices for industrial production declined as decline in U.S. industrial production and New York State manufacturing grew fear on demand depression. Copper fell -1.64%, nickel fell -2.12%, iron fell -2.31%, and aluminum fell -0.66%. AUD/USD fell 1.73% for the day and hit lows of 0.6828, the weakest since May 2009. CAD/USD fell to a fresh 12 year lows by falling 1.22% at 1.4540. NZD/USD also fell 0.2% to three and a half month lows at 0.6459.

The British pound dropped to new five and a half year lows against the dollar on Friday as Brent crude oil price hit $29.93, the lowest since 2004. GBP/USD fell -1.10%, hitting 1.4339 the lowest since 2010 before consolidating at 1.4357.

Elsewhere, emerging market currencies were generally weakened. South African rand fell 2.07%, Mexican peso fell 2.08%, Turkish lira dropped 0.81%, Norway crone dropped 0.62%, and Russian ruble fell 1.86%.

In the coming week, investors will be looking ahead to Chinese economic growth data for fourth quarter as well as the Eurozone private sector growth on Friday.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, January 18
U.S. markets are closed for Martin Luther King Day.
Australia is to release data on new auto-sales.
China is to release data on housing prices.
Japan is to publish data on industrial production.

Tuesday, January 19
China is to release bundle of data on GDP growth, industrial production, retail sales, and fixed asset investment.
Germany is to publish data on consumer price inflation followed by the ZEW report on German economic sentiment.
Eurozone is to publish data on current account and consumer prices.
The U.K. is to release data on consumer and producer price inflation and retail sales.
The U.S. is to release data on housing market index.

Wednesday, January 20
New Zealand is to release data on consumer price inflation.
Germany is to publish data on producer price inflation.
The U.K. is to release employment data on new unemployment claims, unemployment rate and average earnings.
Canada is to publish data on manufacturing sales and wholesale sales.
Also, Bank of Canada is to release the minutes of its recent monetary policy meeting.
The U.S. is to release bundle of data on consumer price inflation, housing new starts and building permits.

Thursday, January 21
In the Eurozone, European central bank is to hold monetary policy meeting and announce its benchmark rates. The ECB governor Mario Draghi is to give statements on monetary policy decision.
The U.S. is to release data on initial jobless claims and Philadelphia state manufacturing as well as weekly inventory for natural gas and crude oils.

Friday, January 22
Japan is to release data on PMI manufacturing index.
Eurozone is to release data on PMI manufacturing sector.
The U.K. is to publish data on retail sales.
Canada is to release data on consumer price inflation.
The U.S. is to release PMI data on manufacturing sector and existing housing sales.

 

[limyeeshin]

Thursday 21 January 2016​

Major currencies remains up and downs, safe asset preference increased

The forex market showed steady up and downs under safe asset preferences with oil prices drop. The oil prices collapsed down to $26 level and spurred concerns on emerging markets economy. The euro and yen showed strength with increased safe asset preference from stimulated fears on emerging market slowdown. But the European and U.S. stock price sharply declined and thus, major currencies showed up and downs. The euro turned bearish as the oil prices shortened its falling gap. Also, investors expect that ECB monetary policy meeting would result in dovish movements, further weakened the euro.

Yen keeps bullish with demands on safer currencies

Japanese yen gained against the dollar with increased preferences on safer asset after steep decline in oil prices and stock markets in U.S. and Eurozone. It hit below 116.2 as concerns on emerging markets are increased. Also, Japan Chamber of Commerce announced that it is not required for Bank of Japan to increase current quantitative easing, further strengthened the yen. It shortened its gains as oil prices and stock drop gaps are reduced.

Major Pairs

EUR/USD -0.15%
USD/JPY -0.65%
GBP/USD +0.11%

Market movements

Elsewhere, emerging market currencies were generally bearish with shrinkage in commodity markets as material and oil prices dropped steep. Russian ruble fell sharply by 4.08%, Norway crone fell 0.93%, Brazilian real dropped 0.89%, and Australian dollar declined 0.45%. Others remained calm, with South African rand down 0.16%, and Turkish lira down 0.25%.