Even if the ECB President, during his testimony on Monday, provided another push to the concerns that the European Central Bank might announce additional monetary easing measures to safeguard the regional economy from global disinflation fears, comments from the Federal Reserve Vice Chairman, Stanley Fischer, which said that the FOMC is troubled in deciding what to do next, weakened the greenback against majority of its counterparts. The GBP and the JPY , however, were clear winners of the day as higher prints of UK Manufacturing PMI, coupled with renewed uncertainty in the global markets helped these currencies. Moreover, the Crude prices maintained their downside as soft manufacturing numbers from US and China threatened to have lesser energy demand during the present global supply glut; though the downside of it remained limited due to chances of probable talks between the Russia and OPEC, to reduce the global crude supply, which in-turn helped the AUD, NZD and CAD.
During early Tuesday, the RBA maintained it cash-rate unchanged, as expected; however, the Australian central bank also mentioned that the global disinflation worries, coupled with dip in commodity prices and weaker China, favors further monetary easing by the bank in near-future. The news had a negative impact on the AUD. Following the RBA announcement market players are expected to keenly observe the UK Construction PMI and the New-Zealand quarterly job numbers, in order to determine the respective moves of GBP and NZD.
While the recent market turmoil again favored the safe-havens, JPY is likely reversing its recent downside; however, better US job numbers, coupled with a surprise hawkish outcome of the BoE’s “Super Thursday”, might help fueling the USD and GBP, while cutting down the risk-averse demand. Hence, it is in the best interest of the market players to keep favoring the JPY buying before the US labor market details while remaining cautious about possible greenback up-move after that.
Even with no major releases the USD kept registering downside against majority of its counterparts as market players doubted the Fed’s ability to act on their four-rate-hike a year plan. The Euro, however, wasn’t on a good stand even after witnessing lesser Unemployment rate while the GBP kept running down with weaker than forecast Construction PMI and speculations that the BoE might adhere to interest-rate cut rather than a hike till 2018. Moreover, the CHF was on a downturn with the SNB President’s comment that the currency is overvalued and the Swiss central bank might act to control the strength while the AUD, which initially pared down after the RBA left open the doors for an interest-rate cut in future. The NZD, which witnessed a surprise plunge in Unemployment rate and a hawkish RBNZ comments, gained across the board while the JPY and Gold were positive for the day as global uncertainty helped soaring the safe-haven demands.
Wednesday started with the BoJ minutes that stated policy makers see improvement in inflation and no need for further monetary actions while the Oil prices, which plunged for the second day on Tuesday, were on a bit relief side after the market forecast revealed nearly 50% improvement in prices by the year-end. Moving on, reports from the China Gold Association said that the Gold demand from world’s second largest consumer, China, climbed 3.7% to 985.9 metric tons in 2015 and the same is expected to rise further during 2016 due to broader uncertainty of the dragon nation. The Australian Dollar is also on its pullback mode even after Chinese Caixin Services PMI surpassed forecast as the Australian trade deficit rose to the record high on the Chinese woes while the NZD also seems trimming some of its recent gains as commodities are witnessing a bit of profit-booking.
For the rest of the day, UK Services PMI, US ADP Non-farm Employment Change and the ISM Non-Manufacturing PMI, are likely to govern the market. As the market started favoring USD again, a better print of US details might extend the early hour gains of the greenback; however, the JPY isn’t likely to lose against the US Dollar due to overall safe-haven demand and comments from BoJ minutes while the commodity currencies, AUD, NZD and CAD, coupled with the CHF, are expected to witness profit booking sessions.
Even as the US ADP number surpassed 193K forecast & marked 205K, the job mark remained well below the upwardly revised prior of 267K, which together with the lowest ISN Non-Manufacturing PMI since April 2014, provided considerable damages to the greenback on Wednesday. Disappointing economics, coupled with comments from Federal Reserve Bank of New York President, William Dudley, that stronger USD might hurt the US economy and the presently tighter conditions may have to be looked at seriously at the next meeting, forced market players to cut down chances of March rate-hike and triggered strong rally in the prices of Gold and Crude. The rise in commodity prices helped the AUD, NZD and CAD, together with the safe-haven demand of JPY, while the EUR, which left without any major releases, also gained due to the counter moves of the greenback.
Having witnessed magnified turbulence on Wednesday, which dragged the US Dollar down, all eyes are stick on the BoE which will shake the Thursday’s market trading with its Quarterly Inflation Report (AIR), monetary policy meeting and minutes. Should the UK central bank continue speaking dovish words, also cuts the inflation and growth forecast, and curtail the chances of an interest rate-hike, the GBP is likely to experiencing a fall like USD witnessed yesterday.
In addition to the BoE, the US Factory Orders, is the only reading that might offer some USD moves during the rest of the day. Should the BoE disappoints market and drags the GBP down, while there isn’t anything major from EU, the USD might regain its strength on Thursday. Moreover, the same move is likely to rollback the commodity gains and might hurt the AUD, NZD and CAD as well. Hence, it is in the best interest of the market players to keep watching the updates before deciding on trades.
The “Super Thursday” actually proved its worth and shook the global financial markets, including the Forex, wherein the USD became one of the biggest loser as downbeat economic details, including the higher Jobless and more contraction in Factory Orders, coupled with dovish comments from some of the FOMC policy makers, forced the greenback to test the grounds ahead of its crucial job market details are scheduled to publish during the later Friday. The GBP, which could gain positive remarks from the Governor, rallied against majority of its counterparts even if the QIR downgraded near-term inflation and growth forecasts while the JPY magnified its north-run as global market uncertainty fueled the safe-haven demand of the Japanese currency, that same move, coupled with USD weakness, also helped the Gold prices to rally towards the highest levels in more than three months. Moreover, the commodity currencies, which left with no major releases extended their recent gains even as the Crude prices remained a bit lower cue to global supply glut.
At the start of important Friday, which includes US job details, the Reserve Bank of Australia, in its quarterly monetary policy statement, said that the economy continue to strengthen with lose monetary policy while pessimism from China disturbs the country’s immediate economic outlook. The central bank also cut down its inflation forecast for the year through June 2016 and its 2017 growth projections, curtailing some of the early week gains of Australian Dollar. The Crude price, also remained lackluster as the upcoming Lunar New Year holiday season might drag market liquidity during most of the next week. On the economic side, the Australian Retail Sales marked no growth after it printed 0.4% growth previously while market players are paying close attention to see the US details.
As the market has overreacted to recently downbeat US details and some of the FOMC policy makers’ comments, a positive number during the later Friday might help the USD recover some of its early week loses; however, another disappointment can force the greenback test lower grounds. Hence, it would be in the best interest of the participants to hold their positions with stop-losses and avoid trading against USD before the data release.
Even if the US Jobless Rate plunged to the lowest level in eight year, coupled with a year’s high earnings, the US Dollar failed to reverse its early week looses caused due to disappointing economic data-points and dovish comments from some of the FOMC members. The Euro which was left to receive any new data-points for the troubled region, rallied strongly against its US counterparts as the ECB President failed to provide hints for further monetary easing during its March meeting while the GBP maintained its up-move even with downgraded inflation and growth forecasts by the BoE in its QIR, as upbeat data-points and a bit hawkish comments from the BOE Governor faded speculations of an interest rate cut by the UK central bank. Moreover, the CHF ignored comments from the SNB President that the currency is overvalued and the Swiss central bank might act to control the strength while the AUD remained weaker after the RBA left open the doors for an interest-rate cut in future. Furthermore, the NZD, which witnessed a surprise plunge in Unemployment rate and a hawkish RBNZ comments, gained across the board while the JPY and Gold were positive for the week as global uncertainty helped soaring the safe-haven demands.
During the weekend, the Chinese forex reserve signaled that the troubled nation dumped USD to safeguard their struggling economy while the Japanese Current account rallied for 18th consecutive month in December. Moving on, the Crude prices remained in a bit upside as steps by oil producers to address the global supply glut led to steep selloffs.
Moving forward, the current week, which includes the Lunar New Year holidays, is likely to remained more on the sidelines as the Chinese markets and some of the Asian markets will be observing holidays during most part of the week. However, EU GDP, US Retail Sales and the Testimony by the US Fed Chair, coupled be of importance to the forex market players to observe while the Monday is likely to witness absolute silence as the Canadian Building Permits and Housing Starts are the only releases scheduled for publish. Hence, it would be prudent for the market participants to not enter into new trades and maintain their support for the USD as brighter chances favor a reversal in USD after it plunged heavily during last week.
Even without any major economics at the start of Lunar New Year holiday shortened week, the US Dollar kept marking its weakness against majority of its counterparts, except the CAD and GBP as market players shunned expectations of Fed’s interest-rate hike during March meeting and expect minimal chances for the same due on April meeting. The Euro also remained sluggish ahead of Friday’s GDP data while the GBP marked negative closing as investor sentiment turned around from majors helped the safe-havens, including the JPY and Gold prices that rallied considerably. The Gold prices surpassed $1200 mark for the first time since June 2015 while the USDJPY plunged to the lowest since November 2014. As there prevails an absence from China, commodity currencies remained more or less silent while broader supply glut continue hurting the Crude prices.
During the early Tuesday, the Australian NAB Business Confidence matched its downwardly revised 2.0 mark while Trade Balance details from Germany and UK, coupled with the Australian Westpac Consumer Sentiment, coupled provide liquidity during the later part of the day.
As there prevails continued threat of the USD buying, with no major releases except Friday’s consumer centric details and Wednesday’s Testimony by Fed Chair, chances are brighter that the greenback might reverse its recent downside by the end of this week. However, one should be cautious about the actual event announcement and then trade.
Tuesday became no different day for the US Dollar as fears of a global economic slowdown kept suppressing chances that the Fed could go ahead with its planned four rate hikes in 2016 even as the US labor department showed that that job openings rose in December to 5.61 million, the second-highest level on record. The greenback weakened to the lowest levels in more than three months against its European counterparts while strengthened only against AUD. Further, UK Trade balance couldn’t helped the GBP while the EUR also remained lackluster ahead of Thursday’s Eurogroup meeting, which is likely deciding Greek fate. Moreover, the commodity currencies remained on weaker due to continuous slide in Crude prices while JPY maintained its up-move across the board with rising safe-haven demand.
On Wednesday, the Crude nursed some of its recent losses as the Iran said it was open to cooperate with Saudi Arabia in cutting down its oil production, if needed; however, market players keep awaiting the UK Manufacturing Production and the Fed Chair’s Testimony amongst which the later one is likely to have major impacts on the market.
Given the Fed Chair successfully convinces the investor fraternity, even if it is less likely, chances of the USD rally can’t be denied. However, continued dovish tone of the Fed Chair and inability to clear the doubts on the Fed’s upcoming policy move, can punish the greenback. Hence, it would be better to stay out of the USD trade ahead of the clear signals and favor the JPY buying due to its present risk-free trade status.
Global economic woes took dramatic shape on late-Wednesday and the early Thursday while coupled with the Fed Chair’s testimony and a renewed tension between the North and South Korea. The uncertainty shore up the safe-haven demand of Gold and Yen, which fuelled the JPY against USD to the 15 month highs while yellow metal surpassed important resistance-line stretched for nearly two years. Even the absence of Japanese markets could hold the JPY from rising across the board while the Dollar is being punished with the Fed Chair’s comment, during her testimony on Wednesday, that the central bank might delay a hike but not abandon. Commodity currencies flashed mixed signals as weaker Crude prices and absence of Chinese markets due to Lunar holidays stopped them from rising.
With the safe-haven demand keep pushing the Gold and Yen prices, major central banks’ weakness in helping their economy kept hurting the equity markets on Thursday when the Eurogroup meeting will discuss on Greek issues. Moreover, US Jobless Claims and a second round of Fed Chair’s Testimony is the left-out thing that could help the market stabilize during the rest of the day.
If the Fed Chair twist her words from what she said yesterday chances of a bit of USD pullback can’t be denied; however, it could only be a pullback move and the greenback is less likely to recover much unless Friday’s economic numbers print good signs.
Mounting concerns over the health of global economy, coupled with a decline in energy prices, blew the global financial markets on Thursday. The USD became the victim of this sell-off as Fed Chair, in her testimony, failed to impress the market players who are seeking a rate-cut signal from the central banker as macro slowdown could force the Federal Reserve to join the gang of BoJ and ECB. With gloomy outlook, safe-havens were the biggest hits for market participants, favoring Gold and JPY, coupled with some bond-buying, to mark skyrocketing prices. Commodity basket was more on the sluggish side with the Crude prices marking fresh low during early Thursday while the EUR remained benefited from the USD’s downside.
Following its plunge on Thursday, during the holidays at China and Japan, global markets recovered a bit during early Friday; however, overall view still remained bearish as investors are still favoring the safe-havens and bonds. The Crude, which plunged on Thursday with higher US stockpiles, recovered during later hours of that day with comments from the energy minister of OPEC-member United Arab Emirates sparked hopes of a coordinated production cut. Moreover, EUR also seems losing its recent strength even as the German GDP met its 0.3% forecast while the greenback is on its short-covering pullback ahead of the consumer-centric details scheduled for release during the later part of the day.
As the global markets plunged heavily, making the USD witness heavy losses during the week, only drastically upbeat details from US could help the greenback, else it is likely to continue on its downside. Moreover, further downbeat numbers, as expected, could force the US Dollar to witness more negative days going forward.
More than four year highs of US Core CPI and the Brexit discussion snatched market attention during last week and helped the USD and JPY respectively while AUD, NZD and CAD remained firm against the greenback as improvement in commodity prices, coupled with upbeat economics helped them extend their recent advances. The Gold prices were on its pullback series while the Crude remained a bit positive due to lower count of US Rigs. The EURO and the GBP had to take the burden of Britain leaving the single currency region even as the UK Prime Minister announced referendum on vote on June 23 and the EU authorities also passed aid package to help the Britain remain in the Euro region.
During the early Monday, the market continue favoring the greenback while rolled back some support from the JPY as Markit/Nikkei Flash Japan PMI fell to 50.2 in February, from 52.3 in January. However, slew of Flash Manufacturing and Services PMIs from Germany, EU and France could continue gaining the market attention during the rest of the day.
As the uncertainty over Brexit triggered GBP plunge during last week, the same is more likely to remain present during the current week as UK leaders are divided over the issue while headline GDP numbers from US and UK, coupled with US housing market details and consumer confidence might provide busy trading scheduled to market players.
Even as the US CB Consumer Confidence Index dropped to the lowest in three months, the US Dollar managed to mark a positive daily closing against majority of its counterparts as comments from the Federal Reserve Vice Chairman Stanley Fischer, Fed’s No. 2 policy maker, mentioned that it is still not certain that global economic woes affected US economy is a bitter way. Moreover, the Existing Home Sales figure rallied to the highest in four months and provided additional strength to the greenback. The Euro remained negative, together with the GBP, as Brexit talks and the lowest German Ifo Business Climate Index since December 2014, dragged the currencies down. Moving on, the Crude re-joined its downside after the Iranian official said that the country won’t join latest agreement between the Saudi Arabia and Russia to hold the Crude output at January levels.
On early Wednesday, the market followed yesterday’s suit of favoring the USD and continued its support for the JPY while comments from the Saudi Arabian official to less likely abide by the recent talks provided more weakness to the Crude prices, in-turn fetching the AUD, CAD and NZD down.
Being a quite day today, with only US New Home Sales to publish, markets are less likely to reverse their favor for USD and the JPY while renewed supply glut concerns might continue dragging down the Crude prices and the AUD, NZD and CAD. Moreover, Brexit talks could keep holding the EUR and the GBP down until the June referendum.
Even as the Markit Economics reported the worst reading on U.S. service-sector activity since 2013 and the US New Home Sales dropped more than previously forecast, the US Dollar managed to mark a positive daily closing against majority of its counterparts except NZD, CAD and CHF. The EUR and GBP kept trading waters with the Brexit fears while abated safe-haven demand caused the JPY to register negative close. Moreover, the Crude prices managed to mark a positive daily closing even as the US Crude oil inventories rallied while Gold prices kept on its northward trajectory.
As the market continue favoring the greenback even with the weaker results, chances of the USD stretch its previous weekly gains become more likely while today’s UK GDP numbers will be crucial for the GBP traders as weaker than expected growth mark could extend the UK currency’s slide. Moreover, upbeat GfK German Consumer Climate index might get magnified support if the EU Final CPI prints a welcome numbers and can help the EUR reverse some of its recent losses.
Hence, it would be in the best interest of the market players to keep a hold on USD longs while a weaker GDP print cold provide additional chances to sell the GBP.
Although US Durable Goods Orders rallied to the highest since August 2014 and the Core reading grew to April 2014 highs, indicating the reversal in US manufacturing activities, the greenback failed to grew against its European, UK, Australia, New-Zealand and Canadian counterparts as improvement in Crude prices, coupled with a profit booking moves ahead of the critical GDP releases and G20 meeting, kept the greenback under check. The Crude prices rallied on Thursday after confirmation of a meeting of major oil producers to address a global supply-glut. Further, the JPY remained weaker as weaker inflation readings continue favoring the need of further monetary easing by the ECB. Moreover, the UK GDP matched its initial estimation of 0.5% growth while the EU Final CPI remained weaker to 0.3% against 0.4% forecast.
While weaker inflation numbers triggered speculations that the Bank of Japan, which recently announced negative interest rate, could take additional steps to fuel the economy, the BoJ Governor, in his speech during early Friday, said that the bank has no plan for such activity and helped the JPY regain some strength. Moreover, the G20 and the upcoming US GDP, which is expected to signal weaker growth mark of 0.4% against previous 0.7%, continue market attention as there aren’t any new releases, except the German CPI, scheduled for publish.
Should there be a weaker reading of the US GDP and the G20 leaders also spread concerns of gloomy economic outlook, the USD is likely to reverse its early week gains while the JPY is expected to continue on its upward trajectory. The commodity currencies, namely the AUD, NZD and the CAD, may reverse some of their recent advances as the Crude prices are expected to remain volatile during its broader downside.
Following the eighteen months high of US Durable Goods Orders, preliminary estimation of Q4 2015 US GDP surpassed its initial forecast of 0.7% mark and rallied with 1.0% gain, helping the US Dollar Index to carry forward its previous weekly gains. However, the greenback seems ending the February month on a negative front against majority of its counterparts as it is on its way to lose 1% against EUR and a whopping 8% loss against JPY, the highest since 2008. The market, which kept favoring the greenback during last week, mainly due to upbeat US economics, started liquidating some of its charm at the start of Monday after the G20 failed to provide any clear signals from the global leaders to counter the deflationary threat. Moreover, the Crude prices turned positive during last week as the Russia and Saudi Arabia are almost close to freeze their oil production at the January levels, the same move also helped the CAD to maintained its firmness.
As the global uncertainty helped supporting safe-haven demand of the JPY, coupled with year’s high industrial production and upbeat housing starts, the Japanese currency reversed some of its losses against the USD while the GBP kept on extending its monthly losses, nearly 3.0%, against the greenback as talks concerning Brexit continue gaining support from UK leaders. The EU maintained its downside as the regional leaders said during G20 that they wouldn’t refrain from further devaluation of the EUR, if needed.
Including the first week of the March, the present week has plenty of important readings that could continue helping the market moves. Notable amongst them are US jobs reports, RBA and key PMI releases from UK and China. During Monday, Flash reading of EU CPI and the US Chicago PMI, coupled with US Pending Home Sales are likely to gain major attention from the market players. Should the EU Inflation reading continue printing dismal numbers, chances of further decline by the EUR becomes brighter while improvement in US stats can help the greenback extend its recent upside.
Even as the US Chicago PMI fell behind its consensus and prior and the Pending Home Sales also dropped at its steepest in more than a year, the US Dollar managed to maintain its up-move against majority of its counterparts, except the GBP, JPY and the AUD, as the recent move by the Chinese Authorities (PBOC) to cut its reserve requirement ratio, caused market players to run for risk-free asset classes. The EUR remained weaker as the Flash reading of EU Flash CPI for the month of March, dipped to lowest since March 2015 by printing -0.2% number. Moreover, the GBP witnessed some profit-booking moves and the CAD dipped again even with the rise in Crude prices. Furthermore, the Crude prices maintained its recent up-move and registered first positive monthly closing as cut in crude output from OPEC and the United States, and a pledge by Saudi Arabia to limit market volatility, fueled the energy prices.
Following the Chinese move on Monday, headline manufacturing PMIs from the dragon nation, released during early Tuesday, gave another shock to the World’s largest industrial player as official survey showed activity in China’s manufacturing sector shrank for a seventh straight month in February while Caixin Manufacturing PMI remained in the contraction region for one more time. Moreover, the RBA left its monetary policy unchanged, as expected, though cited risk of weaker inflation numbers and dragged the AUD down.
Tuesday seems a day of Manufacturing PMIs as the UK and US Manufacturing PMIs are still in the pipeline to publish following the releases from Chinese and Spanish PMIs. Should there be continued dismal releases of manufacturing activity, global threat of economic slowdown can keep forcing the market players towards JPY and Gold. Moreover, if the US details print a bit upbeat readings, chances of the greenback maintaining its rise can’t be denied.
While Manufacturing PMIs from UK, Spain, Italy and China printed downbeat readings the US Manufacturing indices told another story and helped the greenback strengthen against majority of its counterparts. The US ISM Manufacturing, even after still being in the below 50 area, marked 49.5 number, the four month high, versus 48.5 consensus & 48.2 prior while the US Construction Spending rallied to the highest levels in a year, signaling that the world’s largest economy is robust enough to counter the present global tension. Improvement in USD adversely affected the Yen and Gold prices both of which registered heavy losses while the Canadian Dollar maintained its up-move after the Crude price advance.
Following the rise of Crude and USD, coupled with the CAD advance, the market started Wednesday with a blow to commodity currencies, mainly the New-Zealand and Canadian Dollar as American Petroleum Institute showed a huge build up in US Crude inventories which were already at record high levels. Moreover, Moody’s rating agency downgraded the Chinese outlook for “Stable” to “Negative” citing the fiscal risk while other major rating firms are also eyeing to reveal weaker signals for the dragon nation’s economic strength. On the economic side, the Australian GDP surpassed 0.5% Q4 2015 forecast and printed the 0.6% growth number, fueling the AUD higher; however, the Chinese news and pullback in Crude prices might restrict further advances by the Australian Dollar.
While Australian GDP and Moody’s outcome triggered market volatility during early Wednesday, UK Construction PMI, US ADP Non-farm Employment Change and the Crude Oil inventories by DoE form US, might gain market attention during the rest of the day. Should the ADP number maintains its strength, USD can continue on its upward trajectory while additional stockpiles can further damage the Crude prices and in-turn the commodity currencies, mainly the CAD.
Although US ADP number surpassed market consensus and prior release, Fed’s Beige Book said that the nation’s employment scenario isn’t clear due to the present global economic downturn and dragged the US Dollar down against majority of its counterparts. The Australian Dollar was a clear winner on Wednesday after the Q4 2015 GDP surpassed expectations and helped the economy witness the best year since 2011 while the JPY regained its strength on the back of macro uncertainty. Moreover, the Commodities front maintained their recent upside and provided additional strength to the AUD, NZD and CAD wherein the Crude prices ignored a record high US stockpiles as talks concerning OPEC output freeze, coupled with expectations of bottoming out prices, strengthened energy prices. The GBP witnessed additional downside, except against USD, on the back of weaker than expected Construction PMI while the market players keep holding their breath for the Friday’s job numbers.
During the early Thursday, Australian Trade Balance provided extra power to the AUD’s up-move as the trade deficit shrank more than expected while Chinese Caixin Services PMI followed suit with the official Non-Manufacturing PMI are printed lesser mark than expected and previous reading.
For the rest of the day, market players would keep an eye over the critical UK Services PMI and the US Jobless Claims, ISM Non-Manufacturing PMI, together with the US Factory orders, in order to determine upcoming moves. Should there be continuation of upbeat US releases and the weaker UK readings, chances of the greenback regaining its strength can’t be denied. Furthermore, on-going raft of commodity buying might also be disturbed and can drag down the AUD, NZD and CAD, if the US data-points mark more than welcome numbers. Hence, it would be in the best interest of traders to take care of trades and wait for the important events.
Thursday proved to be a big drag on US Dollar as four week high Jobless Claims, coupled with the first drop of Services industry employment in two years and a weaker ISM Non-Manufacturing PMI faded the good news from Factory Orders which grew at a highest pace since August 2015. The GBP kept witnessing red signs from economic data-points as UK Services PMI dropped to the least since April 2013 and the Halifax HPI plunged to the lowest since May 2012 while the JPY stretched its recent downstream as gain in commodity prices pushed market players towards risky asset classes. Crude prices remained firm while the Gold rallied to the highest levels in more than a year.
While yesterday blew USD, the greenback seems regaining its ground on Friday ahead of the critical jobs numbers as forecasts relating to these headline data-points suggests strong growth in US employment situation and can provide further room for the Fed to increase their benchmark interest rate in 2016. However, consensus relating to the Earnings may provide a drag to the US Dollar and if the NFP & Unemployment Rate print downbeat readings, chances of the recent USD downtrend to extend can’t be denied. Hence, it is in the best interest of market players to wait till these headline details prior to taking any trades and must have SL to all the trades.
Even as the US NFP registered strong numbers on Friday, and the Unemployment Rate also help steady near 8 years low, the unexpected dip in hourly earnings to the lowest in more than a year dragged the US Dollar Index (I.USDX) towards registering first negative weekly closing in previous three. The Euro which was largely surrounded by the expectations of further monetary easing by the ECB, remained sluggish while profit booking activities in the GBP propelled the UK currency to register a strong week. Moreover, the AUD was the biggest winner of the week, registering highest weekly gains versus USD in four years as surprise hike in GDP favored RBA’s stance of not cutting the interest rates further. The JPY also witnessed some profit booking moves and refrained from registering big gains as it did during previous weeks while the NZD and CAD gained support from rising commodity prices. The Crude prices also extended its up-move after record low US rig counts while the Gold rallied to the highest level in more than a year.
During the weekend, the Chinese news about the nation’s new five-year economic plan remained in the highlight as the world’s largest industrial producer refrained from giving strong expectations for growth while the AUD witnessed pullback moves after strong week.
For the rest of the day, German Factory Orders and Japanese GDP are in the pipeline to fuel market moves while market players are likely to concentrate more on the Thursday’s ECB and the Saturday’s Chinese Industrial Production during the upcoming week.
To what extent do you predict that the EUR will depreciate if/when the ECB announces QE on Thursday, and what affect do you predict for other currency pairs in the wake of this announcement?