Daily Fundamental Dose

Trading Discussion News and Economy
509

[B]Daily Fundamental Dose: 5-April-2016[/B]

Hello Traders,

While disappointing US Factory Orders continued fading chances of further rate-hikes by the US Federal Reserve during 2016, comments from Boston Federal Reserve President Eric Rosengren, that he is surprised as the market is being too pessimistic relating to one hike a year from Fed, limited further downside of the USD. The Euro remained weaker after downbeat PPI while AUD, NZD and CAD trimmed some of their recent gains. The AUD remained weaker with Retail Sales threat while the lowest level of New-Zealand NZIER Business Confidence since July 2012, coupled with declining Crude and Gas prices damaged the NZD and CAD respectively. The GBP held its gains against USD as the Construction PMI refrained from signaling weakness and the JPY kept rising across the board as weaker energy prices, coupled with pessimistic details from commodity oriented nations, renewed its safe-haven demand. Further, the Crude prices declined as details showed that the U.S. gasoline demand during January fell for the first time in 14 months, while overall U.S. oil demand fell 1% on a yearly basis.

During the early Tuesday, the RBA maintained its present monetary policy and the Governor said the presently strong AUD might hinder the economy’s path for new growth-era; however, the AUD didn’t respond to it and rallied ahead as its Iron ore exports from, the largest export item, surged to a record in March while recent plans from China to expand its infrastructure signaled further Iron demand from the Australia’s largest trading partner. Moreover, comments from Minneapolis Fed President Neel Kashkari and the Charls Evans, favored support for the present Fed monetary policy considering downside economic risk, which in-turn fetched the USD further towards south; though, surprise dip in German Factory Orders to five month lows limited the greenback’s decline against EUR.

Additionally, the JPY reached to the highest levels in nearly eighteen months against USD after the recent rout in global economy favored its risk-free demand. The currency ignore dovish comments from the BoJ Governor, released during early Tuesday, which mentioned that they are observing the market and if need be can support further monetary easing.

As the recent market turmoil again started favoring the JPY and dovish comments from FOMC members indicating another downbeat statement from FOMC meeting minutes, up for Wednesday release, chances of the USD continuing on its southward trajectory can’t be denied. However, its losses against the EUR and some of the commodity currencies might be limited. Hence, it would be better to keep observing today’s UK Services PMI, US and Canadian Trade Balance and ISM Non-Manufacturing PMI from US in order to place the safe trade.

Have a nice trading-day…

510

[B]Daily Fundamental Dose: 6-April-2016[/B]

Hello Traders,

Even if the US Trade deficit widened more than expected, signaling that the world’s largest economy isn’t immune from global risk, a three week high by the US ISM Non-Manufacturing PMI helped the US Dollar Index (I.USDX) to register first positive daily closing in seven previous days; however, the greenback failed to strengthen against JPY and the CHF as global safe-haven demand kept propelling these risk-free currencies. The Euro remained lackluster due to downbeat German Factory Orders and fourteen month low EU Services PMI while GBP stretched its recent weakness as UK Services PMI missed market consensus by printing 53.7 number. Moreover, the JPY rallied to the eighteen month high against USD while the AUD, NZD and CAD remained weaker due to broader strength of the greenback. However, CAD losses were limited as Crude prices rallied for the first time in 10 days’ trading and jumped by nearly 2% after Kuwait indicated producers could reach an agreement to arrest output, during their April 17 meeting, even if Iran doesn’t join in.

On Wednesday, Chinese Caixin Services PMI surpassed forecast and helped the commodity currencies, mainly the AUD; however, a dip in employment index for the first time in 2.5 years kept prices under check. Further, the IMF Chief, Christine Lagarde highlighted risks to the global economy during Tuesday and extended the broader safe-haven demand of risk-free asset classes.

While nothing major is scheduled the rest of the Wednesday, except Canadian Ivey PMI, market players would hold their breath for the FOMC minutes, up for later today, in order to examine the chances of Fed’s next rate hike decision. As US policy makers refrained from an interest-rate hike during their March meeting and discuss global economic risk to stop the central bank from tighter monetary policy, additional dovish details might hurt the greenback further.

Have a nice trading-day……

511

[B]Daily Fundamental Dose: 7-April-2016[/B]

Hello Traders,

While US FOMC meeting minutes revealed expected details, which are in-support of wait and watch approach by the US Fed before announcing another interest-rate hike, the US Dollar maintained its downside as the minutes confirmed recent dovish communications by Fed policy makers. The minutes also revealed that the FOMC supports two rate-hikes in 2016 against the four previously examined. Moreover, the Federal Reserve Bank of St. Louis President James Bullard, in a Bloomberg Radio interview, also supported the recent FOMC decision; however, he also mentioned that the chances of April rate-hike depends upon upcoming data-points amongst which some are mixed off-late. Broadly soft dollar gave extra strength to rest of the currencies amongst which JPY was a clear winner that extended its gains beyond 18 month lows while Crude prices also witness some gains on weaker Dollar and unexpected fall in US inventories, in-turn helping the commodity currencies, likely AUD, NZD and CAD. Moreover, the GBP remained fragile against majority of its counterparts as fears of Brexit are now coupled with downbeat readings from UK.

Having witnessed dovish FOMC releases, as expected, market players would turn on separate public appearances of ECB and Fed heads, during the later part of the day, in order to examine hints for upcoming actions from the leading central banks. Moreover, weekly reading of US Jobless Claims and Canadian Building Permits are some other details that would provide market liquidity.

Considering the recent risk-off market sentiment, together with rise in commodity prices and absence of any major US details, it would be prudent to favor the USD sells unless there are positive readings starts flashing from the world’s largest economy. Moreover, the JPY isn’t showing any signs of weakness and hence it becomes advisable to keep holding and initiate small JPY longs.

Have a nice trading-day……

512

[B]Daily Fundamental Dose: 11-April-2016[/B]

Hello Traders,

With dovish FOMC and not so good economic data-points, the US Dollar Index (I.USDX) dropped for the second consecutive week while losses against EUR remained limited as downbeat German Factory Orders and weaker Services PMI, coupled with ‘Brexit’ speculations confined the EUR up-move. The GBP also weighed down against the USD on sluggish PMI and contracting Manufacturing PMI while JPY maintained its strength and rallied ahead in the 17 month high direction as global uncertainty, coupled with weakness in USD, prompted market players to turn towards safe-havens. Furthermore, the AUD, CAD and the NZD remained uplifted due to continuous improvement in commodity prices while Crude prices rallied on weaker US crude production and further drop in rig-counts ahead of the crucial April 17 meeting.

However, gains in the Crude prices remained under pressure on Monday after the weekend news indicated the Iraq oil production rallied to the record high while Iran adhered to discount in Crude prices to gain the major market share while staying away from the global oil-production cut talks in Doha during this Sunday. Additionally, the influential bank, Goldman Sachs, said on Monday that the Doha talks are more likely to fail and provided additional weakness to the Crude prices.

On the economic front, after improvement in Manufacturing, as indicated via official Manufacturing PMI released during month start, the Chinese PPI, published on early Monday, printed lesser drop than forecast, marking the highest numbers in more than a year while Consumer inflation rose 2.3% from a year earlier, matching February’s pace and helped the Commodity currency gain additional strength. Further, the Japanese core machinery orders fell 9.2% in February, the lowest in three months; though it failed to cap the JPY gains.

Moving on to the rest of the day’s economics, speeches by the US Treasury Secretary and the FOMC member, coupled with a random announcement from the Fed to discuss the discount rates to be charged by the Federal Reserve Bank, would fuel the Forex market.

To sum, the greenback is more likely to witness further downside as there are lesser signs of economic improvements from recently released data-points while the Fed itself threatens the market of global risk on US. However, Inflation and Consumer centric details might offer some relief, if printing upbeat marks, to the greenback traders during the rest of the week.

Have a nice trading-day……

513

[B]Daily Fundamental Dose: 12-April-2016[/B]

Hello Traders,

On Monday, the US Dollar stretched its previous week’s decline as Federal Reserve Bank of New York data indicated that the U.S. consumers’ expectations for inflation declined in March, signaling that the Thursday’s crucial CPI might be lower and can continue restricting the Fed from monetary tightening. Moreover, the US President, Barack Obama and Fed Chair discussed the downside risk to the world’s largest economy during their Monday’s meeting. The Euro continued being sluggish while the GBP strengthened heavily ahead of its today’s crucial CPI release. The AUD, NZD and CAD rallied with the Crude price rise and a welcome news from Chinese Inflation while the CHF and JPY remained supported from safe-haven demand. The Crude prices remained volatile ahead of the Sunday’s meeting wherein the global oil producers are expected to discuss the global oil production freeze.

On Tuesday, Australian NAB Business Confidence rose to the highest levels since August 2015 and the employment index jumped four points to five, its best result since 2011, providing additional support to the AUD while the NZD price remained uplifted with overall commodity advance.

For the rest of the day, UK CPI and the US Import prices are the list that market players would be observing; however, chances are higher that the better result of UK CPI will strengthen the GBP. Hence, it would be prudent to support the GBP and commodity currencies while liquidating a bit of their positions on JPY and CHF as chances of profit booking are higher.

Have a nice trading-day….

514

[B]Daily Fundamental Dose: 13-April-2016[/B]

Hello Traders,

In a rush to avoid safe-havens, mainly triggered by a rise in Crude prices ahead of the crucial production freeze meeting on Sunday, the market helped US Dollar to strengthen against its key rivals, like JPY, EUR and CHF. However, the same up-move in commodity basked helped AUD, NZD and CAD register heavy across the board gains while today’s BoC meeting provided additional strength to the Canadian Dollar. Further, the IMF grabbed market attention during its quarterly economic outlook on Tuesday when it downgraded the global growth forecast considering the risk of disinflation and weaker export numbers to 3.2% from 3.4% predicted in January. The fund also cut down the Japanese growth forecast while bringing up the Chinese growth expectations, which in-turn provided additional support to the commodity prices.

Wednesday started with another welcome number from China, this time in-terms of Trade Balance details wherein the Chinese exports rallied 11.5%, the first increase since June and largest gain since February 2015. The news helped China bulls predict that the Friday’s Chinese GDP will be better and favored the commodity prices rise. However, gains in Crude prices were in-check after the Saudi Arabia’s oil minister, Ali al-Naimi, appeared to rule out chances of a cut in crude production during Sunday’s meeting.

Following the China triggered market moves, rest of the day is likely to continue witnessing liquid flows as US Retail Sales and PPI, monetary policy meeting on the Bank of Canada (BoC) and the Crude inventories, may offer trading opportunity.

Considering the recent uptick of the USD, given the Retail Sales and PPI match their optimistic forecasts, the greenback may extend its up-move while a rising inventory levels could further damage the Crude prices. Also, JPY recently started witnessing the profit booking moves and a stronger US detail might drag it further down.

Have a nice trading-day……

515

[B]Daily Fundamental Dose: 14-April-2016[/B]

Hello Traders,

Despite weaker than expected Retail Sales and PPI, the US Dollar managed to post its bigger daily gain in more than a month as renewed concern for global central bankers to announce further monetary easing helped the greenback ahead. The EUR slid against greenback after the industrial production contracted more than forecast while GBP remained on a soft foot as the UK house-price gauge fell to nine month lows. Commodity currencies, namely AUD, NZD and CAD, were also on their losing streak against USD as overall commodity basket remained sluggish, headed by Crude decline, after the OPEC cut down its demand forecast and Russian Oil minister said that Sunday’s meeting might only reveal loose announcements and may fail to give strong support to global oil production freeze. Moreover, the BoC also cut down its 2017 growth forecast and raised the 2016 growth forecast by being a bit worried about global economic outlook and dragged the CAD further towards south while the JPY and the Gold were also trading down as the BoJ Governor said the central bank might not refrain from further monetary easing.

Thursday became another good-day for the USD traders as a surprise rate alteration by the Singapore central bank helped market players support the greenback while 2.5 year low of Australian Unemployment Rate and a four month high Employment Change failed to support the AUD.

For the rest of the market players would closely observe details of BoE meeting as there are news that the policymakers would discuss ‘Brexit’ damages during the meeting while the crucial US CPI will gain additional attention due to its hawkish forecast. Should there be a threat of UK leaving EU discussed in the meeting, and the same is communicated via meeting minutes, chances of the GBP going further down can’t be denied while a welcome US CPI may help the USD traders add some more longs.

Have a nice trading-day……

516

[B]Daily Fundamental Dose: 15-April-2016[/B]

Hello Traders,

Even as the US inflation number lagged behind forecast; though, being ahead of negative priors, record low jobless claims helped the greenback extend its recent upward trajectory which was also supported by the weaker central bank fixings at various global leaders, including Singapore and China, coupled with dovish talks by BoJ and BoC. The Euro remained a bit on upside as the CPI measure ticked up with 0.0% against -0.1% expected & Flash reading while the GBP maintained its downside as BoE, in its monetary policy meeting minutes, sound worried about the ‘Brexit’. Moreover, the JPY help its downturn due to shift in risk-appetite while the CAD and NZD were in red due to decline in commodity prices and the AUD strengthened with upbeat employment details. The crude prices held its south-run ahead of this Sunday’s crucial meeting as speculations strengthened that the global oil-produces may not reach a deal to curb oil supply-glut.

On Friday, the China flash another good news, signaling that the dragon nation’s economy is improving with GDP matching 6.7% forecast and a rise in Industrial Production and Fixed Asset investment. Additionally, latest developments from the global central bankers’ meeting at International Monetary Fund and World Bank spring talks signal that the leaders are worried about ‘Brexit’ and troubles economic outlook.

As the globe is again favoring greenback, chances of the US Empire State Manufacturing Index, Industrial Production and Prelim UoM Consumer Sentiment to print a welcome number and providing further strength to the USD are higher. Also, a weaker reading from Canadian Manufacturing Sales is likely to drag the CAD further towards south while the JPY and Crude can continue on their losing path.

Have a nice trading-day and a great weekend……

517

[B]Daily Fundamental Dose: 18-April-2016[/B]

Hello Traders,

Even after witnessing not-so-good economic details, the US Dollar Index (I.USDX) managed to complete its first positive weekly closing in previously three as dovish announcements from various global central bank representatives spurred the greenback which seems the only currency to register an interest-rate hike. The Euro maintained its weakness while the GBP remained on uptick. Moreover, commodities, and in-turn the commodity currencies like AUD, NZD and CAD, were also on their south-run with stronger Dollar curbing the commodity prices while higher inventory levels kept punishing the Crude prices.

Sunday’s the crucial talks between the world’s biggest producers ended without an agreement in Doha and spurred further downside of the Crude; however, the same risk-off sentiment in the market favored the JPY which also got help from earthquake at the nation’s southern part and geopolitical risks like the impeachment going on in Brazil.

As the market opened on Monday after the failed talks in Doha, commodity prices slid heavily, together with the plunge in AUD and CAD while improvement in New-Zealand’s quarterly inflation helped the NZD strengthen against majority of its counterparts.

Given the recent risk-off sentiment in the market, the JPY is likely to continue its upside with the Crude expected to extend the south-run; though, the slide is energy prices might refrain from dropping heavily as open-ended strike in Kuwait’s three oil refineries might cut the crude output for short-term. Hence, with no major releases left for publishing, it would be prudent to hold the JPY on the buy side while cutting down some of the recent USD buys.

Have a nice trading-day…

518

[B]Daily Fundamental Dose: 19-April-2016[/B]

Hello Traders,

During the first trading-day after failed talks by global oil producers to tame the Crude supply glut, a second consecutive day’s strike at Kuwait helped the energy prices to rally and forget about the previous losses. The same also damaged USD and the perceived-safety, JPY, while helping the commodity currencies, namely AUD, CAD and NZD to rally. The EUR remained on a strong foot ahead of the ECB while the GBP remained subdued with no major events to observe.

On early Tuesday, RBA’s April 05 meeting minutes revealed that the Australian economic growth is moderate; however,
policymakers are worried for the AUD strength which might force them towards monetary easing. The AUD remained on its upside and neglected these comments while the rest of the commodity currencies were also going up due to the rise in Crude prices. Additionally, the JPY also recovered some of its Monday’s losses as uncertainty in Brazil, coupled with a dip in USD again helped the Japanese currency.

While we are heading towards another USD dip sessions, EU ZEW numbers and Housing market details from the US become important to determine the greenback’s move. If the EU numbers meet their upbeat consensus chances are higher that the US Dollar continues to lose its strength while a downbeat EU numbers coupled with improvement in US housing details may help the US currency recover its looses.

Have a nice trading-day….

519

[B]Daily Fundamental Dose: 20-April-2016[/B]

Hello Traders,

Tuesday became no objectionable day in previous three where the USD kept losing against the commodity currencies, EUR and GBP while JPY remained weaker across the board. Additionally, U.S. housing starts fell more than expected in March and permits for future home construction hit a one-year low, providing more damage to the greenback while upbeat ZEW readings from EU & Germany, coupled with optimism for UK kept helping the EUR and GBP respectively.

On early Wednesday, the markets turned around from its latest fashion as Chinese stocks headed for their biggest decline since February, which dragged the AUD, NZD and CAD while comments from BoJ Governor, mentioning that the JPY strength isn’t relating to the monetary policy, indicating less easing, helped the Japanese currency regain its strength. Moreover, three-day strike of Kuwaiti oil workers ended and triggered Crude price slide, providing additional weakness to commodity currencies.

Looking forward, today’s UK labor market details will be a hit for the GBP to decide its near-term move while Canadian Wholesale Sales and US Existing Home Sales will help foresee immediate moves of the CAD and USD respectively. Moreover, US Crude oil inventories might provide further direction to presently declining energy prices. Hence, it would be better to take a backseat for now and wait for the important releases prior to taking any orders.

Have a nice trading-day…

520

[B]Daily Fundamental Dose: 21-April-2016[/B]

Hello Traders,

Together with recent Chinese optimism and upbeat U.S. corporate earnings, the US Existing Home Sales rallied more than expected and strengthened the US Dollar Index (I.USDX) to register its first positive daily closing in a week. Additionally, EUR and GBP traders also refrained from adding more of longs due to nearness of ECB meeting and downbeat UK job details. Further, the commodity currencies maintained their rise as prices of Crude and Iron-ore rallied while JPY remained on a bit downside with swift in market risk-sentiment. Moreover, Crude extended its north-run as US Crude stockpiles registered lesser than expected rise and IEA signaled that the Crude production from Non-OPEC countries will be record low during 2016.

On early Thursday, Australian quarterly NAB Business Confidence printed lesser than its upwardly revised prior and dragged the AUD down while Crude prices also witnessed some sort of profit booking. Adding to that, the EUR and GBP remained on downside ahead of the ECB and monthly reading of UK Retail Sales while JPY strengthened a bit with market taking help of safe-havens to secure against unexpected announcement from ECB.

Considering the recent dip in EU Unemployment Rate, the ECB President is more likely to continue supporting his hawkish stance, revealed in March; however, a surprisingly weaker language might drag the EUR further towards south. Moreover, another drawback from UK economics, in-terms of weaker Retail Sales can provide additional damage to the GBP. Also, the US Philly Fed Manufacturing Index and the US Jobless Claims are some other details that could further propel the market liquidity.

Have a nice trading-day….

521

[B]Daily Fundamental Dose: 22-April-2016[/B]

Hello Traders,

Thursday became another good-day for the USD traders as lowest Jobless number since 1973, coupled with dovish ECB helped the US Dollar Index (I.USDX) complete second positive daily close. The Euro remained volatile and ended up in negative territory as the contradiction between ECB’s policy statement and President Mario Draghi’s news conference failed to convince investors that present stimulus will help the economy to jump start the second quarter. The GBP, even after gaining during early hours, failed to strengthen as UK Retail Sales dipped to more than two years’ low while the JPY maintained its downside as market risk-sentiment continue to improve on upbeat US earning releases. Moreover, commodity currencies remained jittered with volatile Crude price that is struggling to manage the oversupply and improvement in global manufacturing numbers.

On early Friday, markets were too volatile after hearing the news that the BoJ is expected to announce negative-rate loans to Japanese banks, which in-turn spiked probabilities that the central bank might announce another interest-rate cut during its next week’s meeting. Further, China also added to the market spikes as news showed the dragon nation pumped highest money into the economy, through open market purchase, since January.

Having witnessed considerable moves at the start of the day, which were mostly in favor of the USD and against the EUR and JPY, Flash readings of headline EU PMIs, coupled with the Canadian CPI and Retail Sales are some other data-points that would govern the rest-of-the-day moves. Further, meeting between the EU leaders and its international financiers, to finalize another tranche of relief package for the struggling Greece, would also gain some attention and can weaken the EUR further towards south. As there are no major releases from US, chances of the USD moves to depend upon the EU releases/events will be higher; though, it becomes wise to expect that the greenback might complete week on a positive side.

Have a nice trading-day and a great weekend……

522

[B]Daily Fundamental Dose: 25-April-2016[/B]

Hello Traders,

Last week, improvement in US housing number and another plunge by weekly Jobless Claims propelled the US Dollar Index (I.USDX) to print consecutive second weekly gain; however, the greenback failed to rally against GBP, CAD and AUD as swift in ‘Brexit’ votes strengthened the UK currency while rising Crude prices helped AUD and CAD maintain up-move. Further, the EUR failed to register strength as ECB’s mixed communication propelled the regional currency towards south while JPY dropped heavily after the news that the BoJ will ease its monetary policy further during this week’s meeting. The Crude managed to print handsome rise with third weekly advance as dip in US crude inventories and hope that global oil producer will meet again in June helped to counter the broader supply-glut worries.

During early Monday, the market shifted its favor from USD to JPY ahead of the crucial FOMC and BOJ meetings to take place during the day while GBP remained strong after the US President’s meeting to UK boosted polls favoring the Britain to stay in EU after June referendum. Oil prices remained on profit booking mode, dragging down the commodity currencies, like AUD, NZD and CAD, while EUR remained stronger ahead of German IFO Business Climate Index release.

Looking ahead, US New Home Sales is the only data-point to help the market players after the German release while the on-going shift in risk sentiment may continue helping the JPY and damage the USD.

Have a nice trading-day……

523

[B]Daily Fundamental Dose: 26-April-2016[/B]

Hello Traders,

Following the last week’s considerable rise, the US Dollar Index dipped into negative territory on Monday as New Home Sales unexpectedly declined for a third month in March as demand in West plunged to record lows; however, the greenback managed to extend its strength against NZD and CAD as commodities remained weaker. The GBP and EUR were on the strong foot after the US President’s visit to UK propelled polls favoring UK to remain in EU while the Crude prices declined on Monday as Saudi Arabia and Iran seems in a mood to pump more of the oil into global supply glut and refrain from major oil producers’ agenda to cut the production when they meet in June. Furthermore, the Gold prices remained sideways but gained while JPY recovered its previous losses ahead of the crucial BoJ and FOMC meeting this week which can guide this week’s global moves.

On Tuesday, the market again started favoring the greenback and the Crude ahead of the important Durable Goods Order and CB Consumer Confidence details from US while speech from BoC Governor and the New-Zealand Trade Balance will provide additional volatility to traders.

Should the US Durable Goods Orders matches their optimistic forecasts and the Consumer Confidence also rallies, chances of the USD to regain its strength and extend the recent upward trajectory can’t be denied while a dovish tone of the BoC Governor, at Canada-US Securities Summit, coupled with the broader likelihood of weaker Crude prices, can drag the CAD to south.

Have a nice trading-day……

524

[B]Daily Fundamental Dose: 27-April-2016[/B]

Hello Traders,

Following dismal readings of US Durable Goods Orders, Services PMI and Consumer Confidence, the US Dollar Index (I.USDX) again dropped on Tuesday; however, woes that the BoJ might propel its monetary easing on Thursday, kept making the JPY a big looser across the board. The EUR and the GBP remained on the positive side as continued flow of ‘Brexit’ avoiders helped both these currencies without any big economic releases while AUD, NZD and CAD held their strengths intact mainly due to rising commodity prices. The Crude prices rallied to five month highs as World bank expected prices to rise during second half of 2016 while U.S. Crude inventories dropped by 1.07 million barrels last week, the American Petroleum Institute was said to report ahead of today’s stockpiles data.

Even as the market kept punishing the USD and JPY, Wednesday became a good start for both these currencies as a surprise drop in Australian headline inflation to the lowest since January 2009 signaled need for the RBA intervention and dragged the AUD while the same uncertainty helped the JPY to hold its further downside.

After witnessing heavy volatility during early hours, mainly due to Australian CPI, UK GDP and the monetary policy meetings of the Federal Reserve and the Reserve Bank of New-Zealand are likely to gain major market attention during the rest of the day. Additionally, US Pending Home Sales might also provide intermediate moves to USD pairs ahead of the Crucial FOMC.

Majority of the market consensus favor that the Fed is likely to provide signal for its June rate hike during today’s meeting; however, recent details haven’t been so promising and might stop the central banker from being hawkish. If this happens, the USD could become a bigger flop than the JPY. Though, an upbeat tone of the FOMC statement might help the greenback reverse its recent downside. Hence, it would be in the best interest of the market players to wait till the Fed announcement prior to taking any big trades on the USD.

Have a nice trading-day….

525

[B]Daily Fundamental Dose: 28-April-2016[/B]

Hello Traders,

Following the surprise drop in Australian CPI shook market during early trading hours of Wednesday, FOMC and RBNZ played their roles in a better way to provide extra-large volatile moves for the market during the day-end sessions. The Federal Reserve, in its monetary policy meeting on Wednesday, refrained from signaling any rate-cuts during June meeting by signaling improvement in global financial markets and downplaying recent weakness in the U.S. economy, market players considered it as dovish and dragged the USD towards south. The outcome was followed by the RBNZ meeting wherein the New-Zealand central dropped speculations of interest-rate cut and strengthened the NZD. Moving on, the CAD was benefitted from higher Crude prices which surpassed $45 on least US stockpile since October 2014 while the JPY remained weaker on Wednesday as BoJ was just around the corner.

On Thursday, Bank of Japan disappointed the global financial market after it refrained from signaling any further stimulus measures, which was much expected previously. After the news the Japanese currency rallied heavily across the board and reversed major part of its recent losses of nearly three weeks, indicating further downside towards its 107.80 support.

With the on-going flush in USDJPY, the US Advance GDP and Jobless Claims will add fuel into the pair during later hours. If only, the Jobless maintain its downward trajectory and the GDP also indicate an up-move than the 0.7% forecast, the US Dollar can recover some of its losses, else chances are higher that the greenback is up for further downside. Hence, it would be prudent to take the sell side of the USD rather than buying the greenback till anything promising from the world’s largest economy comes forward.

Have a nice trading-day……….

526

[B]Daily Fundamental Dose: 29-April-2016[/B]

Hello Traders,

Thursday proved to be a big drag on the USD strength as initial estimate of the Q1 2016 GDP number for the world’s largest economy grew slowest pace in two years as consumer spending softened and a strong dollar during early year undercut export earnings. Greenback’s weakness was well enjoyed by the commodity front wherein the Crude prices rallied for third consecutive day in marking fresh highs of 2016. The JPY was the biggest gainer of the day and is heading for its brightest week since 2008 after its central banker (BoJ) refrained from adding further stimulus in its bag and defied market forecasts for doing so. The EUR and GBP, as left without any major economics, remained stronger mainly due to USD weakness but were weaker while comparing to the JPY, AUD, CAD and NZD.

When the Japanese markets are off for near a week-long holidays starting from Friday, JPY continued gaining on the second consecutive day and surged to an 18-month peak while AU PPI dropped to four years’ low with -0.2% number, providing additional pressure on the RBA to announce interest-rate cut after the nation’s CPI plunged to seven years low on Wednesday. Additionally, the New-Zealand ANZ Business Confidence surpassed its prior 3.2 with 6.2 print.

During rest of the day, EU will release figures for gross domestic product, inflation and unemployment while Canadian GDP, US Personal Spending and Chicago PMI are additional details to propel market volatility. Considering the recent market turmoil, which raises bars for the Fed to announce another rate-hike, together with weaker GDP print, the USD might extend its downside for the rest of the busy Friday and end up closing on the negative front unless witness drastic positives from the scheduled numbers. Hence, it would be prudent to remain on the short side while taking USD trades.

Have a nice trading-day and a great weekend………

527

[B]Daily Fundamental Dose: 02-May-2016[/B]

Hello Traders,

Last week was full of surprises and market disappointment wherein the BoJ’s reluctance to signal additional monetary easing propelled the JPY towards highest level in more than 18 months and surprise dip in Australian Inflation dragged the AUD down while the US Dollar Index (I.USDX) registered third monthly negative closing as the Federal Reserve kept cutting down the talks to indicate another rate-hike backed by weaker GDP number. The EUR and GBP also remained sluggish due to downbeat economic data-points while NZD and CAD remained strong as commodity basket rallied on weaker Dollar and improvement in China. The Crude prices marked the biggest monthly gain in a year after seventh week of decline in US inventories and unfavorable weather at South America propelled the energy prices.

During the first full week of May 2016, Chinese official Manufacturing and Non-Manufacturing PMIs signaled that the dragon nation is slowly emerging out of its drawbacks as Manufacturing PMI printed another 50+ number for second consecutive month while Non-manufacturing PMI also remained on the above 50 contraction level. Further, the Japanese Manufacturing PMI, published on Monday, shrank in April at the fastest pace in more than three years, dragging a bit to JPY while most of the markets, including China and UK, are closed due to May labor-day holiday.

Given the absence major market players due to extended weekend, chances of fewer market moves taking place become brighter; though, US ISM Manufacturing PMI could provide signal for the USD to start its first trading-day of the Month. Should there be continued avoidance of the USD, backed by soft data-points, the US Dollar might extend its recent downturn; however, market players would wait for this week’s headline labor market details to determine further greenback moves. Moreover, Tuesday’s RBA will be important after the recent drop in AU inflation statistics, if the central banker adopts rate-cut, or provide strong signal to the upcoming one, the AUD can drop heavily while not doing so can reverse majority of its recent losses.

Have a nice trading-day….

528

[B]Daily Fundamental Dose: 03-May-2016[/B]

Hello Traders,

Following weaker than expected prints by the US ISM Manufacturing PMI and Construction Spending, the US Dollar extended its southward trajectory on Monday and dropped across the board. The EUR remained a bit strong as Final Manufacturing PMI improved while receding risk of ‘Brexit’, as reflected from recent polls showing major support for the UK remaining in the EU, helped the GBP to reverse almost all the losses of its during 2016. The JPY maintained its up-move amidst weaker Manufacturing numbers from globe supporting safe-haven demand while commodity currencies remained lackluster as Crude dropped for the first time in five sessions on the back of profit-booking.

Tuesday became another good-day of volatility wherein the RBA’s first in a year move to alter its benchmark rate, which was well forecasted, dragged the AUD towards south; however, the record low Cash-Rate decision by the RBA was sound like ephemeral as the Aussie (as it is nicknamed) aimed towards bounce in the present session. The JPY grew heavily as Chinese Caixin Manufacturing PMI became another detail which signaled global downturn in Manufacturing as it dipped to 49.4 mark against 49.8 forecast & 49.7 prior.

For the rest of the day, chances are higher that the AUDUSD could reverse its recent dip and the GBP & JPY can continue gaining ahead. However, UK Manufacturing PMI and the quarterly release of New-Zealand job details will be the best to observe as disappointing numbers might reverse the recent gains of the NZD and the GBP. Moreover, the USD is less likely to stop its running decline with no major economics to track.

Have a nice trading-day……