Fundamental Analysis june 16
EUR/USD recovered 21 points after German CPI met expectations and French payrolls printed at expectations. The euro is trading at 1.3573. German inflation slowed in May, with prices down 0.9 percent year-on-year, to their lowest since February 2010, the Federal Statistical Office reported on Friday. The decline in energy prices was the major factor behind the drop. Prices fell 0.1 percent in monthly terms.
GBP/USD soared on comments from BoE Governor Carney after he mentioned that interest rates might increase sooner than later. The pound is trying to violate the 1.70 level trading at 1.6974. BoE‘s Carney late yesterday trade a U-turn by saying that a rate hike may come earlier.
AUD/USD eased slightly this morning dropping 6 points to trade at 0.9396 as traders sold off to book profits after last week’s rally. The iron ore price is flirting with the crucial $US90 a ton threshold after inching even lower over the weekend as weakened steel demand in China continued to weigh on the commodity.
USD/JPY continued to decline giving up 11 points to trade at 101.88 as traders shifted to risk off mode as violence escalated in Iraq. Whether geopolitical risks have any currency impact depends on how the situation in Iraq and Ukraine impacts the equity markets, but so far their reaction appears limited.
Gold continued to trade in the green adding 50 cents today to trade at 1274.50 as tensions in Iraq sent traders looking for a bit of safety. Between 2010 and 2013, the number of al Qaeda and al Qaeda-related groups rose 58 percent and the number of “Salafi jihadists” – violent proponents of an extreme form of Islam – more than doubled, according to a report by the RAND Corp think tank. Daniel Benjamin, former U.S. State Department counterterrorism coordinator under President Barack Obama, said he was “considerably more optimistic 18 months ago than … now” about the threat posed by al Qaeda-related groups. Few examples are more vivid than the fall of northern Iraq, which has raised the prospect of the country’s disintegration as a unified state.