Category: Forex News

Calm Between The Storms

This Thursday shall serve as the calm between the storms following yesterday’s FOMC meeting and Q2 US GDP print and tomorrow’s July non-farm payrolls report. The US dollar remains strong following an initial report that the second quarter expanded at an annualized rate of 4.0% versus a 3.0% expectation. This was well received by the market following a first quarter that has since be revised to a contraction of -2.1%. Janet Yellen and company really said nothing at the most recent Federal Reserve meeting, reducing QE purchases by $10B as expected and not changing their tone on the rate outlook. USD/JPY was the biggest mover in the afternoon session, approaching levels not seen since early May.

Overnight it was rather quiet, with mostly second tier data out of Asia and Europe. Japanese construction orders and housing starts missed expectations, which continues a string of poor Japanese data. The European Union reported core inflation for the month of July, which came in on line at +0.8%. For now, most movements in EUR/USD have been US centric with nothing on the calendar for the continent until next Thursday’s ECB meeting and press conference. The European Central Bank has been quiet since May’s meeting when they enacted new liquidity measures and promised action to combat a strengthening euro. Since that time, the euro has dropped 5% against the US dollar.
Looking to South America for a change, there is news in Argentina that could send markets into a mini-tailspin should the situation continue to dissolve. The government is attempting last minute talks to avoid default on $539 million in payments to bondholders after a U.S. judge ruled that the money couldn’t be distributed unless a group of hedge funds holding defaulted debt also got paid. While Standard & Poor’s has declared Argentina to be in default, it would appear world markets are holding out hope for a last second agreement. Global equity indices are mixed, weighing this news against geopolitical situations in Eastern Europe and the Mid-East and the on-going corporate earnings season in the US.
This morning, the US reported weekly jobless claims, which came in around expectations at +302k. Canada also reported GDP for the month of May, which came in as expected at +2.3%. USD/CAD continues to trade higher today, approaching levels not seen since early June. The market’s attention today will no doubt be paid to the situation in Argentina and the on-going corporate earnings season. Should things remain calm today, I would suspect that we see a little rebound in the US dollar across the board as it has taken big strides in the last few days against most G10 currencies. If we see the situation in Argentina boil over it could continue to boost the dollar (and yen and Swiss franc) as investors pile into safe haven currencies. One last thing to note as we close out the week is tonight’s HSBC Manufacturing PMI number in China. This is looking to remain in expansionary territory above 50 amid reports the IMF is set to lower 2015 GDP expectations of 6.5-7.0% for the world’s second largest economy.
further reading:
Canada grows in May by 0.4%, but the Canadian dollar falls

Canada grows in May by 0.4%, but the Canadian dollar falls

While Canadian growth beat expectations, it isn’t enough against the greenback. Canadian Gross Domestic Product rose by 0.4% in May, better than predicted. Canada was expected to report a growth rate of 0.3% in the month of May after only 0.1% in April. USD/CAD traded above 1.09 before the release. The Canadian dollar has been beaten

US jobless claims rise to 302K – USD extends gains

US jobless claims rise to 302K – USD extends gains

US jobless claims rose above 300K to 302K, as expected. However, the lack of a significant revision from last week is positive news. On the contrary, last week’s number was revised to the downside: 279K. US jobless claims were expected to bounce back above 300K to 303K, after they fell to an 8 year low

EUR/USD July 31 – Under Pressure As US GDP Sparkles

EUR/USD July 31 – Under Pressure As US GDP Sparkles

EUR/USD is stable on Thursday, as the pair continues to trade in the high-1.33 range in the European session. On the release front, Eurozone indicators were mixed. In Germany Retail Sales and Unemployment Change beat their estimates, while French Consumer Spending posted another strong gain. Eurozone CPI and Unemployment Rate met expectations. In the US, today’s highlight

Euro-zone July inflation digs the bottom: 0.4%

Euro-zone July inflation digs the bottom: 0.4%

How low can euro-zone inflation go? Lower – a new low of 0.4% is recorded in euro-zone inflation – the lowest since 2009. Will the ECB react to this news or will it prefer to say that more time is needed for its measures to be felt in the markets? It is clearly missing its target.

AUD/USD loses 0.93 – 3 reasons

AUD/USD loses 0.93 – 3 reasons

The not too hawkish message from the Fed saved the Aussie from losing 0.93, but this didn’t last too long. The pair is now below the line, the lowest since mid June. Here are three reasons: Weak Australian fundamentals: Australian building approvals fell by 5%, significantly worse than a drop of 1% expected. Despite the volatility

German unemployment -12K in July – better than expected

German unemployment -12K in July – better than expected

Good news from the euro-zone’s powerhouse: the number of unemployed dropped by 12K in July after a rise of 7K in June (after revisions). Germany was expected to report a small drop of 5K in the number of unemployed in July, The seasonally adjusted unemployment rate was predicted to remain unchanged at 6.7% and that is the

EUR/AUD Dip Remains Attractive To Buyers

EUR/AUD Dip Remains Attractive To Buyers

Technical Bias: Bullish Key Takeaways • Euro surged higher against the Australian dollar after a break of the 200 hourly SMA. • Euro zone consumer price index release escalates a short-term correction risk for the EURAUD pair. • EURAUD support seen at 1.4310 and resistance ahead at 1.4410. The Euro declined against the US dollar

Market Movers Podcast Test Episode #9: where inflation is hiding and a preview for the top-tier movers

Market Movers Podcast Test Episode #9: where inflation is hiding and a preview for the top-tier movers

Here is another test episode of Market Movers, presented by Lior Cohen of Trading NRG and Yohay Elam of Forex Crunch. As you can see from the title, we are still in a testing period. You are welcome to listen, subscribe and provide feedback. In today’s episode, we focus on the US, divided into two parts: Where

Why the dollar corrected on the Fed [Videos]

Why the dollar corrected on the Fed [Videos]

We had an exciting day in currency markets, with the dollar steaming forward on the impressive GDP number but making the much desired correction on the Fed decision. Why did the dollar correct? What are the lines in the major currency pairs? Valeria Bednarik of FXStreet and I covered the event live. Here are the videos