Swiss Franc Leads European Majors Lower, Dollar Fighting Back
European majors are generally under pressure today. Weak economic data from Eurozone and UK is one of the factors. Stocks are indifferent to the data though, and rise broadly probably on expectation that loose monetary policy will stay longer. Selloff in Swiss Franc is also apparent, in particular with...
Australian Dollar Surges as RBA Maintains Tightening Bias Despite Growth and Inflation Downgrade
Australian Dollar jumps broadly today after RBA rate decision. While growth and inflation forecasts are downgraded, the overall announcement suggests that RBA is maintaining tightening bias. The next move on interest rate is still a hike even though it may take longer to happen. The positive impact of RBA...
RBA Review – Policy Rate to Stay Low for Some Time as Risks to Growth and Inflation Skewed to Downside
As widely anticipated, RBA left the cash rate unchanged at 1.5% for the 27th consecutive meeting. Yet, it has turned less optimistic about Australia’s economic outlook while noting downside risks to global growth.
As suggested in the accompanying statement, the members indicated that “the central scenario is for the Australian...
Yen Sold Off Broadly, Dollar Extends Recovery But Still Held Below Resistance Elsewhere
While Dollar is extending it's broad based recovery today, it's Yen's weakness that's worth more of a mention. There is no clear follow through in global stock rally today. Yet Yen is under broad based pressure and it's overtaking Aussie as the weakest one in early US session. Aussie,...
Dollar Recovering Broadly, But Held Below Near Term Resistance
Dollar is trading broadly higher today, trying to recovery some of last week's losses. New Zealand Dollar follows closely, which Canadian Dollar is also a close third. Yen and Australian Dollar are taking turns to be the weakest ones. Mildly risk appetite is pressuring both Yen and Swiss Franc....
BOE Preview – Downgrade on Economic Outlook as Brexit Remains Uncertain
Again, we expect BOE to vote unanimously to keep the Bank rate unchanged at 0.75%, as well as to leave the asset purchase program at 435B pound, at the February meeting. While the focus of the meeting remains on Brexit uncertainty, economic assessment and forward guidance, the dynamics of...
Dollar Down But Not Out after Fed, Oil Lifted Canadian, Iron Ore Boosted Australian
Fed's dovish turn occupied a lot of head lines last week. Stocks were lifted while Dollar was pressured. However, the moves were not as drastic as they could seem to be. There was no upside acceleration in stocks. Treasury yield actually dropped at the long end, indicating that expectations...
Dollar Dips on Weak Wage Growth, Rise in Unemployment Rate
Dollar is back under some pressure in early despite very strong headline NFP number. The problem with the report is that, other parts are rather weak, including revision in prior month's figure, rise in unemployment rate. More importantly, wage growth is a clear miss. The greenback is extending recent...
Dollar Regains Ground after US-China Trade Talks, Turns to Non-Farm Payrolls
It seems that the impacts of poor economic data and Fed's dovish turn on the markets are "roughly balanced" for now. Stocks in the US and Asia turned mixed and stayed mixed since yesterday. Poor Chinese manufacturing data gives the markets nothing to cheer for, yet there is no...
Yen Rises as Risk Appetite Fades Following Weak US, Canada and Eurozone Data
Risk appetite fades today as sentiments are weighed down by a string of weak economic data from Eurozone and US. In short, German retail sales dropped the most in 11 years. Eurozone GDP growth was stuck at 4-year low in Q4. Italy was in technical recession in H2 2018....
Dollar Tumbles Broadly after Dovish FOMC, More Downside Ahead
Dollar was sold off broadly overnight after Fed's dovish FOMC statement. And it remains the weakest one for today. US equities also surged sharply and risk appetite was carried through to Asian session. Riding on this, commodity currencies are generally higher, as led by Australian Dollar. However Yen also...
US Crude Oil Inventory Increased Less than the Market had Expected
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks declined -4.77 mmb to 1262.34 mmb in the week ended January 25. Crude oil inventory added +0.92 mmb to 445.94 mmb (consensus: +3.16 mmb). Inventories increased in 3 out...
FOMC Review – Fed Calls for Patience on Further Rate Hike
The Fed addressed the issues we are concerned with, in quite a dovish tone, at the January meeting. As widely anticipated, the Fed funds rate stayed unchanged at 2.25-2.5%. The members removed the forward guidance of gradual interest rate increases. They called for patience on further normalization, as inflation...
Dollar Surges after Strong ADP Job Data, FOMC Next
Dollar jumps notably in early US session against Swiss Franc and Yen following stronger than expected ADP job report. But strength in the greenback is not broad based. Traders are cautiously await FOMC statement and press conference, to see how cautious Fed would sound. There is prospect of a...
Brexit Update : Less Clarity, More Confusion after Another Vote
The UK Parliament voted on the amendments of the PM Theresa May’s Brexit deal, which they have rejected two weeks ago. Among the seven amendments selected by John Bercow, Speaker of the House of Commons, for debate and vote, the so-called Copper plan and Brady plan caught most attention....
Sterling Tumbles as UK Seeks Irish Backstop Renegotiation, Dollar Awaits FOMC and Trade Talks
Sterling tumbled broadly as the UK opened a new chapter in Brexit negotiation with yesterday's parliamentary amendment votes. In short, Prime Minister Theresa May needs to go back to EU to renegotiate the Irish backstop into alternative arrangements. But EU has repeated its stance on no renegotiation. For now...
Sterling Regains Ground But Upside Limited by Brexit Uncertainties
Sterling strengthens broadly today but upside is capped as markets are now watching Brexit debate in the Commons. The opening statement of May was rather dull as she repeated the pledge to deliver Brexit. Meanwhile the situation got more complicated and confusing today as other alternatives emerge, most notably...
Sterling Soft as Brexit Votes Awaited, Yen Shrugs Mild Risk Aversion
The forex markets remain rather quiet today so far. The selloff in stocks and oil overnight triggered some pull back in Canadian and Australian Dollars, but losses were limited. Similar, Yen was given just a mild pop while it's unmoved by the shallow decline in Asian stocks.
Though, "softness" in...
Sterling and Canadian Weaken in Quiet Markets, Dollar Mixed ahead of Key Events
Trading in the forex markets has been rather subdued for most of the day. But there are signs of some additional weakness in Sterling and Canadian Dollar in early US session. Traders could be lightening up positions ahead tomorrow's Brexit votes and debates in the Commons. But the Pound...
FOMC Preview – How Dovish is the Fed?
There are several issues we are expecting from the FOMC meeting later this week. While it is widely anticipated that the Fed would leave its policy rate unchanged at 2.25-2.5%, the potential changes in the accompanying statement and the message conveyed by chair Jerome Powell would be indicative of...