With the Final version US Q1 2015 GDP printing a less-damaged number, -0.2%, than previously estimated -0.7%, the US Dollar could register another winning streak on Wednesday; however, it fell during early hours of the Thursday as market players awaited EU talks decision and the US Income - Spending data. Moreover, the European front is likely to provide market direction as talks between the Euro-Area finance ministers, on Wednesday, again failed to agree with Greek proposal for aid. Moreover, the two-day EU talks, started on early Thursday, also proved to be non-working and Greece, together with its creditors, took a halt for rest before restoring the discussion. Should the Greece fails to acquire the necessary approval from its international creditors, it may default on its June 30 debt payment to IMF, ultimately leading to Grexit. Moreover, the New Zealand Dollar recovered a bit from its Five years low, resulted due to weaker GDP & surprise rate cut by the RBNZ during early month.
Even if the USD is losing a bit, chances are higher that the greenback could register considerable gains; however, should the Greece get the creditors agreement, it would suddenly change the market behavior towards EUR and can negatively affect the Greenback.
Higher than expected Jobless Claims and weaker Personal Income outpaced the benefits revealed by the Personal Spending data and weakened the US Dollar on Thursday while another failed talks by the EU financial leaders helped trimming some of the EUR weight; however, left being drastic drag as the market players are concerned that the last ditched discussions, to be started on Saturday, is more likely to support Greek aid and would rally the EUR. Commodity currencies, like NZD, AUD and CAD, strengthened with the market favoring uncertainty over the EU towards commodities.
With no major economics scheduled during the day, together with a halt at EU discussions, market players are likely to continue trading in their own mood with little support to USD up-move; however, the weekend talks of EU leaders are likely to provide considerable market moves and hence it is expected that there will be an EUR upside during the weekend; though, a failure to get the proposal accepted couldn’t drag down the EUR in a considerable way as there is Plan B ready for the same and is likely avoiding Grexit.
With the failure to agree with its international creditors, coupled with surprise announcement of referendum, the Greek saga may continue hurting the EUR; however, the region is less likely to allow its nation and may take surprise actions to fuel the regional currency during the later part of the week.
With the US Core Durable Goods Orders testing the highest level since September 2014 and Housing Market details signals proper chances that the Fed could go for an interest rate hike during September this year, coupled with final reading of Q1 2015 GDP matching the forecast by registering 0.2% decline as compared to -0.7% figure in the initial estimations, the US Dollar registered first weekly advance in previous four. Moreover, hawkish comments by the New York Fed President, William Dudley, provided additional support to the Greenback during weekend. The Greece finally failed to agree with its international creditors during weekend talks and imposed capital controls on its banking system to avoid more damages. The ECB froze vital funding support to Greece’s banks after the Greek PM surprisingly announced for a July 5 referendum on spending cuts that he initially has rejected. Currently, the Greece is in the traumatic situation and if there isn’t any positive to safeguard the Grexit, which majority of the EU members want, the Euro is likely to witness considerable downside. The JPY witnessed considerable upside as the uncertainty into the market spurred safe haven demand of the currency while the Crude prices kept witnessing declines due to stronger Dollar and an abrupt progress into the talks between Iran and US officials for interim nuclear agreement signaling the June 30 deadline won’t be matched and the Iran may continue facing the sanctions.
During the early part of the day, Japanese Retail Sales beat estimations and rallied by 3.0% against downwardly revised prior reading of 4.9% while German CPI, US Pending Home Sales and New-Zealand Building Consents m/m are likely important events to fuel the Forex market.
Considering the uncertainty over the Euro, coupled with the US labor market detail, scheduled for release on Friday, it would be in the best interest to hold intraday USD longs; however, certain pullbacks can’t be denied and the trader should be cautious to keep track of EU updates for the rest of the day/week.
With the Greece facing troubles at the domestic front, together with default on IMF payment, pessimism on Europe continued hurting the regional currency Euro. However, there was still a sound of optimism that the EU will continue helping the troubled nation and may take measures. On the USD side, the CB Consumer Sentiment rallied to five months high, supporting the greenback to end of positive side while weaker Flash EU CPI and mixed UK details pulled back the Euro and GBP respectively. JPY also gained some grounds as on-going uncertainty over the Greece and positive economics at the domestic front helped the safe-haven currency. Moreover, AUD also gained a bit with some positives out of China and a pullback at lower levels triggered small buying.
During the early part of the day, Australian Building Approval rallied considerably while the Chinese Manufacturing PMIs lagged behind their previous readings. Market players would now concentrate on the UK Manufacturing PMI, Eurogroup meeting, US ADP reading, ISM Manufacturing and NZD GDT Price Index details.
Given the current situation of uncertainty around Greece, coupled with important details out of UK and US, it would be prudent not to take major trades today; however, the support for the USD likely remains intact given the economic details support the same.
With the ADP numbers rallying to six month high and the ISM Manufacturing PMI testing five month high, the US Dollar gained considerably against majority of its counterparts on Wednesday, supporting the US Dollar Index close at the four week high. Moreover, the double stance of Greek PM, initially saying to compromise on international creditors’ terms, and then communicating to the referendum voters to say “NO” to the international creditors’ demands, hindered the Euro decline, providing counter strength to the greenback. The GBP also registered declines against majority of its counterparts as official Manufacturing PMI plunged to the lowest level in two years while JPY reversed from its lows on a technical bounce from important horizontal support. Also, the New-Zealand GDT Price index plunged to the lowest level in six readings, supporting the speculations that the RBNZ will reverse all the tightening measures adopted in 2014 by signaling consecutive 0.25% rate cuts during July, September and October.
Thursday, the day of important economic details, mainly driven by the US NFP, started with the Australian Trade deficit’s expansion to -2.75B comparing revised down prior figure of -4.14B. Other than the US NFP, UK Construction PMI and US Factory Orders are also likely to fuel forex market in considerable way.
With the recent economics favoring USD, coupled with the pessimism at EU and UK, the greenback can continue trading upside; however, given the today’s labor market details reveal weakness of the world’s largest economy’s job world, early gains of the greenback could easily be wiped out. Hence, it would be in the best interest of the market players not to target big trades in USD while small trades favoring USD buying ahead of the details can be a good option.
On Thursday, mixed labor market readings, coupled with the five month low of factory orders, vanished September rate hike speculations and pulled back the US Dollar Index (I.USDX) towards negative closing. The NFP for the month of June declined to 223K from the revised down reading of 254K while the Unemployment Rate tested 5.2% lows. NFP readings of April, May and June were revised down, signaling the labor market growth isn’t promising to trigger first rate hike since 2006. At the European front, the polls concerning Greek PM’s referendum on EU aid, signaled mixed signals as 43% voters intend to vote “no” to reject the austerity demanded by creditors in exchange for financial aid while 42.5% back a “yes” to accept the conditions and 15% didn’t answer anything. Moreover, the 81% voters supported to keeping the Euro. The Greek Finance Minister Yanis Varoufakis said in a Bloomberg Television interview Wednesday that he would resign should the YES vote wins majority. The UK Construction PMI marked four month high and supported the GBP while uncertainty at the European and US front helped JPY strengthen.
During the early part of the day, plunge in the Chinese equities, together with the weaker than expected Australian Retail Sales damaged AUD while Independence Day holiday in the US restricted volatility into the forex market. However, UK Services PMI and the European Retail Sales are likely to provide considerable moves to the Forex market.
With the weaker labor market numbers, USD put a negative impression in the trades’ minds ahead of its holidays and could provide increased damages to the greenback should the weekend votes at the Greece favored NO, together with increased optimism that the troubled nation will get the financial aid. Hence, it would be worthwhile not to take big orders during the weekend and wait for the EU outcomes while intraday trading based on fundamental outcomes shouldn’t be avoided.
With the Greece gaining its expected “No” vote from its weekend referendum, the Greek authorities gained considerable powers to discuss the aid for reform package, forcing the Euro declines during early Monday. With 61% voters supporting dissent of its policy makers with that of international creditors, German Chancellor Angela Merkel and French President Francois Hollande called for an emergency leaders’ summit on Tuesday to discuss further way out for the Greeks while the European Central Bank is meeting Monday to discuss extending a new lifeline to Greek lenders. However, EU leaders aren’t showing any signs to compromise their initial offerings with mentioned reforms unless the Greece does start anything new acceptable measures to unveil the reform packages. Moreover, the Chinese equity markets, that lost nearly 30% during June, witnessed sharp gains during weekend as brokerages and fund managers agreed to buy massive amounts of stocks helped by China’s state-backed margin finance company which in turn would be aided by a direct line of liquidity from the central bank. With the uncertainty over the market, safe haven assets, like Gold, JPY and USD, gained during the weekend and are on the upward trajectory during the early part of the Monday.
Moreover, the Japanese central bank, BoJ, Governor, said during early Monday that the Japanese economy is capable to counter the threat generated with Greece referendum, supporting the JPY additionally.
During the rest of the day, German Factory Orders, Swiss CPI, Canadian Ivey PMI and the US ISM Non-Manufacturing PMI are likely to provide market liquidity in addition to the on-going Greek discussion.
Should the EU leaders bend to the Greece demands there can be strong upside moves for the Euro while failure to agree with Greece, which is more expected, can continue pulling down the regional currency. Hence, it would be better not to put big trades during the current week that decided Greek destiny; however, small intraday trades favoring USD shouldn’t be avoided.
Greece drama took a new turn on Monday when its strict FM, Yanis Varoufakis, who has been famous for his ability to counter with each of its international creditors and delaying the process of deal, resigned from his post. Moreover, the Germany and France, in speech at Paris, said chances are brighter that the Greece could get the deal run this time, but it is their last time to either be in or out of the Europe. Hence, all eyes are turned on the EU Summit, to be start on Tuesday, as this could suggest Greek status in EU. Moreover, the ECB on Monday tighten rules for Emergency Liquidity Assistance (ELA) to Greece, hardening for the country to counter its current financial crisis where the banks are closed till Wednesday; however, the central banker left the cap for ELA untouched. At the US side, the ISM Non-Manufacturing PMI surpassed prior but remained lower than expected while weaker Canadian Ivey PMI data provided additional weakness to the CAD. Moreover, the GBP remained firm ahead of its Manufacturing Production details while the JPY was also firm with safe haven demand support.
On Tuesday, the RBA left its monetary policy unchanged and said that the policy is accommodative enough for the current stage of their economy even if growth prospects are not so strong. The New-Zealand NZIER Business Confidence plunged to the lowest level since June 2012, giving more damages to NZD.
With the EU summit scheduled during the day, that is finally likely to decide the fate of Greece, market players are likely to concentrate on each detail from the summit, providing considerable volatility for the EU pairs. Moreover, UK Manufacturing Production and Trade Balance details from US and Canada are likely to provide additional liquidity to the forex market. Hence, it would be in the best interest of the market players to trade with considerable care otherwise there may be damages.
With the EU leaders giving Sunday deadline for Greece to accept a rescue with competitive measures being offered ahead of Friday, the Euro region currency decline heavily against majority of its counterparts. The troubled nation’s banks have been on the shutdown mode while the ATMs are running out of cash and are totally reliant on ECB’s emergency help. The EU leaders are top discuss Greece’s request during Wednesday’s conference call where majority of the heads keep expecting considerable good reform list to get the aid funds available. Moreover, the lesser than forecast US Trade Deficit helped the greenback extend its upward trajectory while the GBP witnessed weaker day as Manufacturing Production contracted highly since the year start of the year. Commodities and the commodity currencies, namely NZD, AUD and CAD, also witnessed downtrend continuation as plunge in Chinese markets kept hurting their outlook. However, The JPY remained strong against majority of its counterparts as safe haven demand, due to the on-going uncertainty over China and Greece, provided firm support to the Japanese currency.
With the discussions over Greece continue taking center stage of the market, the US FOMC meeting minutes, Canadian Building Permits and the UK Annual Budget Release are likely to gain much of the market importance during the rest of the day.
Having witnessed considerable USD strength during Tuesday, it is expected that the greenback could witness a bit of pullback ahead of minutes while upbeat view of the minute, coupled with stronger inflation outlook, which is more expected, could continue supporting the upward trajectory of the US Dollar. However, it would be better to keep close track on the market updates prior to taking any trades as current volatility may end up hurting your trades.
With the Greece on its move to get the aid funds as soon as possible, chances of Grexit seems faded during the Wednesday, helping Euro to register first positive day against majority of its counterparts. The Greek PM, on Wednesday, formally applied for a three-year loan and European authorities launched an accelerated review of the request. The loan with unspecified amount will be reviewed soon, helping the troubled nation, whose banks are shut till July 13 with only 60 Euros of daily withdrawals allowed for each person, to shore of the current crisis. On the US side, minutes of recent FOMC meeting signaled that the policy makers were satisfied with the recent advance in economic indicators and said such continuous moves can help them hike the interest rate soon; however, macroeconomic situations, mainly in Greece and China, restricts them from tightening quickly and hence the decision to raise their benchmark interest rate will be decided on a meeting to meeting basis. The NYSE halted its trading for nearly 4 hours saying it was a technical glitch while the Chinese regulator ordered shareholders with stakes of more than 5% from selling shares for the next six months in order to halt a plunge in stock prices that has been hurting global financial markets recently. The GBP plunged heavily against majority of its counterparts as fiscal tightening in the budget and economic growth forecast downgrade, coupled with uncertainty over Grexit, could restrict the Bank of England (BoE) from raising interest rate anytime in near-future. The JPY maintained its strength due to global market uncertainty supporting the safe haven demand of the currency.
During the early part of Thursday, the Australian labor market details printed better than forecast numbers; however, revised figures of the previous period cut down the optimism, signaling further rate cuts by the RBA. Moreover, the Chinese CPI was also better than expected, to 1.4% against 1.3% forecast and 1.2% prior, while the PPI plunged to the lowest level in four months, pulling back the gains in commodity currencies.
With majority of scheduled important details being released during the early part of the week, Thursday has only BoE, Canadian Housing market details and US Jobless Claims to fuel the market volatility; however, the on-going acceleration of Greece bailout process may continue providing strong support to the Euro; however, dovish comments can continue dragging the regional currency and help the USD to gain some of the important moves. Hence, it is in the best interest of the traders to keep updated themselves with the market moves.
After all the six months’ drama and referendum, the Greece finally abide by its creditors’ demands on Friday to spending cuts, including pension savings and tax increases while it presented the draft version of their proposal to European authorities asking for a three-year bailout loan of at least 53.5 billion Euros ($59.2 billion). However, the Greeks need to assent the same proposal once the EU authorities approve it during weekend, signaling that the scene is still not over. The Germans are also likely to reveal their resistance and may help infuse much of the volatility into the market during weekend. Hence, it would be in the best interest of the market players to stay awake with no trades on their list prior to the announcements later Sunday. The US Dollar remained firm and registered positive closing even after the Jobless Claims rallied to the highest in four months to 297K against the upwardly revised 282K while the GBP kept losing its grounds expecting the Greece to hurt their growth and delaying the rate hike. JPY witnessed a bit of pullback and commodity currencies remained near firm with improvement in Chinese markets soothing early damages. The oil prices witnessed another positive day as scaling down tensions at China and Greece kept supporting the outlook of energy fuel; though, talks between Iran and the rest of global
leaders, likely to agree on removing Iranian sanctions could pullback the recent gains of Oil prices.
During Friday, the Australian home-loan approvals fell by the most in more than five years; however, second day surge in Chinese equities, mainly backed by strong government measures, helped receding the pessimism. The Japanese consumer confidence also lagged behind the expected 41.9 mark while testing three month high 41.7 mark.
While Greece is near to its much awaited bailout funds, there are likely disturbances to hinder the process of allowing loan to the troubled country, likely triggering another rout of EUR ahead of actual approval. Given the Greece gets approved of the funds, fears of Grexit nudges away and the Euro can reimburse its recent losses. Hence, the traders fraternity needs to be cautious with the Greek development in addition to the Canadian labor market details and UK Trade Balance.
With the Greece and its international creditors still at logger heads to avail the troubled nation required funds without practicing basic demands, the Euro region currency remained a bit weaker against majority of its counterparts. However, talks that the ECB could delay its July 20 payment from Greece, together with the optimism that the Greece will be able to secure funds, provided some kind of pullback to the regional currency. Moreover, the US Dollar remained a bit off the bull run as market players took the Fed Chair’s comments, during weekend, as hindering Fed’s first interest rate hike since 2006. The Crude oil weakened considerable, declining for the second consecutive week as Iran is near to witnessing a waive off to its sanctions by the global leaders, signaling massive supply from the oil leader.
During the early part of the day, EU summit stretched longer than expected with giving Greece another 3 days to either leave the Euro or accept their rigid conditions to get the funds while the Chinese Trade balance registered lesser than expected trade surplus.
With the crucial week ahead, it would be better to track each of scheduled details prior to taking any trades as market is likely to witness considerable volatility from majority of global leaders. However, the Greece is likely to force Euro down as chances of it agreeing to its international creditors are lesser and even if it agrees, it has to get the agreement accepted by its nationals on July 15, signaling more delay and disturbances.
Monday provided a sigh of relief to European leaders as the Greek Prime Minister, Alexis Tsipras, surrendered to their demands for immediate action to get 86 billion Euros ($95 billion) of aid he needs to keep his country in the euro area. However, the parliament decision, to be held on Wednesday, is less likely to approve such stringent conditions where the Greece has to sacrifice more and can trigger another round of uncertainty with extra plunge in Euro. The US Dollar gained considerably with the fact that the Greece parliament is less likely to approve of such measures while the dovish comments made by Fed Chair, during last week, provided additional strength to the greenback. Receding tensions in Euro area coupled with stop in Chinese capital markets’ plunge seems hurting the safe have demand of the JPY that kept its decline running on Monday while Oil prices also plunged with the expectations that the Iran is close get easing of sanctions and resumption of its oil exports into an oversupplied market.
During the early Tuesday, the Australian NAB Business Confidence rallied to the highest level since July 2014 and halted the plunge in AUD. Market players are likely to wait for UK CPI, US Retail Sales and the ZEW numbers for EU and Germany in order to determine the immediate Fx moves.
Even if the Greece secured its status as an Euro country, the drama is still not over, signaling another round of Euro decline; however, this decline is less likely to sustain for more time as the troubled nation hasn’t have any options that to accept what creditors say. Moreover, crucial details from the global leaders are scheduled to release during the week and can provide additional volatility into the market, forcing the traders to wait and watch for actual release prior to taking big trades; though, overall sentiment favors USD up-move.
Tuesday was another day full of economics and announcements that fueled the forex market volatility. The drama of Greeks kept making European leaders on the edge even if the opposition party seems supporting the ruling Syriza leaders to edge their country out trouble and stay in Euro-zone. On a different note, the Iran finally got its international sanctions removed, supporting extended supplies into the global market; however, these supplies are likely to reach the flow during 2016 and hence provide d a bit of strong move to the crude prices on Tuesday. US Retail Sales registered a plunge of -0.3% against 0.2% gain expectations while the UK Inflation reading remain static at 0.0%. However, comments by the BoE Governor, during Inflation Report Hearings, that the BoE seems closer to rate hike, provided considerable strength to the GBP against majority of its counterparts.
During the early part of the Wednesday, the Chinese GDP number surpassed 6.9% expected figure by matching 7.0% prior mark while the Industrial Production surged to the highest level in four months. The Bank of Japan, in its monetary policy, refrained from altering its current policy measures; however, cut down the inflation and growth forecasts signaling fears emanating from slow down in major countries.
For the rest of the day, market is likely to remain fueled as the Greece is heading for parliamentary vote on its recently accepted measures to get the aid from its international creditors. Even if it is likely to be accepted by majority, there are chances that publics outrage coupled with the recently conveyed dissent by the IMF, saying EU could have softened the demand for Greece, can provide disturbances to the market’s smooth running. Moreover, UK labor market details, monetary policy meeting by the Bank of Canada (BoC) and the New-Zealand CPI, are some of the important details that the market players should take care of.
Even with the Greek reforms being debated in parliament today, and it freeing up between 82-86 billion euros of loans, do you really think Greece will make a recovery? Or will it still be unable to pay the debts and just require another bailout further down the line, or even an exit from the EU?
Even with the Greek parliament approving the recent bailout measures to avail the EU funds as soon as possible, Euro region currency couldn’t strengthen as global leaders fear that the nation isn’t capable to deliver such stringent conditions and will eventually fail for another crisis. The US Dollar gained considerable on Wednesday as improvement in manufacturing and PPI numbers, coupled with the hawkish tone of Federal Reserve Chair, Janet Yellen, in her testimony to House Financial Services Committee, again strengthened speculations that the Fed could go for interest rate hike sometime during the later part of the year. The GBP liquidated majority of its Tuesday’s gains after witnessing disappointed labor market details while JPY kept weakening after BoJ and reduction in safe haven demand. Moreover, commodity currencies, like AUD, NZD and CAD, plunged heavily as slump in commodity prices, stretching from Crude to iron ore to milk powder, coupled with surprise rate cut by the Bank of Canada signaling rout of weakness for the commodity oriented nations.
Having witnessed considerable USD strength, the Thursday has ECB meeting to rule the forex market, coupled with on-going riots at Athens. Moreover, the US Philly Fed Manufacturing Index and the second testimony by the Fed Chair, together with US Jobless Claims, final reading of EU CPI and Swiss Retail Sales, are some other details that could provide meaningful information to the market players in determining the further moves.
Given the crisis in Athens spreads, the Euro is likely to continue its decline while commodity currencies are more expected to keep running down with rest of the central bankers, namely RBNZ and RBA, could follow the BoC in cutting down the rates. The GBP has little to read and can comply with EUR & USD trades while JPY is likely to extend its weakness. However, bold words by ECB President, Mario Draghi, which is expected, can provide a bit more of the volatile sessions during the later part of the day.
Even if the Greece gets all the funds from EU, it is less likely to recover during short-medium term as fundamentals aren’t supporting the national recovery unless it takes drastic measures, surpassing the EU debt level rules, etc. However, these funds can provide short-term relief to the troubled nation.
Thursday became another volatile day for the Forex market when the ECB President kept repeating its “Whatever it Takes” and signaled readiness to support Greece, pulling down the EURGBP towards testing weakest in more than seven years while weaker commodity basket kept pulling down the AUD, NZD and CAD towards multi-year lows. The US Dollar kept gaining the track as improvement in economic numbers kept supporting speculations concerning near-term interest rate hike.
During the last day of this important week, the early sessions are likely to remain illiquid with no major releases scheduled for publishing while during the later part of the day, Canadian & US CPI, coupled with US Building Permits, Housing Starts and Prelim UoM Consumer Sentiment are likely to support the greenback moves.
Even after getting the green signals from all the fronts, funds for Greece are to be release only after Monday and there are public outrage in Athens, signaling more of EUR weakness while better US fundamentals may keep supporting near-term USD up-move.
