Forex Previews

Will the yen retain its year-long trend after BoJ meeting next week?

Posted on September 14, 2016 at 1:48 pm GMT

The yen has appreciated in value quite substantially this year, gaining over 10% against the dollar so far. Weak global asset prices and uncertainty in the financial markets tend to support the Japanese currency which is seen as a safe haven. A big risk to the yen will be the Bank of Japan policy meeting next week. There is growing speculation that the Bank may cut its interest rates further into negative territory. The BoJ first introduced negative rates on [..]

Week Ahead – US retail sales eyed after recent weak data; BoE meets as recession fears ease

Posted on September 9, 2016 at 1:49 pm GMT

Inflation and retail sales data out of the US and UK will come into focus next week, while industrial production numbers for China, the Eurozone and the US will also be watched. Another highlight is the Bank of England’s policy meeting but this could be a non-event after August’s ‘sledgehammer’ stimulus package. Chinese business investment could hit 17-year low After a fairly quiet Monday, Chinese data will kick-start the week on Tuesday. The latest batch of industrial output, retail sales [..]

Euro gains as ECB on hold and Draghi fails to signal further easing

Posted on September 8, 2016 at 3:05 pm GMT

The European Central Bank left its three main rates unchanged at its policy meeting on Thursday, while holding the size of its asset purchases steady at €80 billion a month. The interest rates on the main refinancing operations, the marginal lending facility and the deposit facility were unchanged at 0%, 0.25% and -0.4% respectively. Markets were not expecting any new measures as the immediate threat from Brexit has abated and most indicators suggest the Eurozone economy continues to recover. However, [..]

Uncertainty over BoJ policy keeps yen near two week highs

Posted on September 8, 2016 at 12:09 pm GMT

As expectations of a Fed rate hike this month subside, speculation about what action, if any, the Bank of Japan will take when it meets in just under two weeks’ time has intensified. At its July meeting, the Bank of Japan had said it will conduct a “comprehensive assessment” of its policies in September, raising concerns that the Bank may be getting ready to withdraw its massive asset purchase program. The BoJ’s Deputy Governor, Hiroshi Nakaso, today reiterated remarks made [..]

UK manufacturing contracts in July on Brexit hit; Pound back below 1.34 dollars

Posted on September 7, 2016 at 11:33 am GMT

The first official industrial and manufacturing data for the month after the Brexit vote gave a mixed verdict on the state of the UK economy in July. Figures released today by the UK’s Office for National Statistics are the first hard data to cover the full month after the June 23 referendum. Manufacturing production in the UK fell at the fastest pace in a year in July as the shock and uncertainty created by the Brexit vote hurt output. Production [..]

Aussie makes strong gains after RBA strikes neutral tone

Posted on September 6, 2016 at 11:05 am GMT

The Reserve Bank of Australia decided to hold interest rates steady at 1.50% today as outgoing Governor Glenn Stevens attended his last policy meeting. After cutting rates by 25bps for a second time this year in August, few were expecting the RBA to cut again today. However, expectations of another cut later in the year were diminished after the central bank’s statement struck a more neutral tone than in previous meetings. In its statement, the RBA maintained its outlook that [..]

Sterling extends gains after UK services PMI rebounds strongly

Posted on September 5, 2016 at 12:03 pm GMT

The services PMI in the UK completed the triple whammy of a strong rebound in the PMI readings for August following the dramatic plunge in activity in July in the immediate aftermath of the Brexit vote. Britain’s services sector returned to growth in August according to today’s data from Markit/CIPS. The services PMI beat expectations of 50.0 to jump to 52.9 from 47.4 in July, giving it the biggest month-on-month gain in the series’ history. The strong data adds to [..]

Week Ahead – ECB meets amid wobbling confidence in Eurozone; trade and industrial data in focus

Posted on September 2, 2016 at 2:08 pm GMT

It will be a busy week for central banks as the ECB, RBA and Bank of Canada hold their scheduled policy meetings. But there is also plenty of data for investors to eyeball, ranging from Australian and Japanese GDP, UK services PMI, German and UK industrial production data, and trade figures for China, Germany and the UK. The US will take a backseat over the next 7 days with markets closed on Monday for Labor Day. ECB under pressure on [..]

UK manufacturing PMI posts surprise rebound as weaker pound lifts export orders

Posted on September 1, 2016 at 11:18 am GMT

Manufacturing activity in the UK rebounded sharply in August following the post-Brexit dip in July that saw the manufacturing PMI plunge to a three-year low. The Markit/CIPS manufacturing PMI rose at the fastest month-on-month pace on record, increasing from 48.2 in July to a 10-month high of 53.3 in August. Expectations were for a much smaller rebound to 49.0. The data suggests that the immediate negative impact of the shock vote to leave the EU was short-lived and British manufacturers [..]

Eurozone inflation rises less than expected, keeping prospect open of further ECB easing

Posted on August 31, 2016 at 2:37 pm GMT

Inflation in the euro area remained muted in August according to Eurostat’s flash estimate with headline CPI unchanged at 0.2% year-on-year. A majority of economists surveyed had been expecting inflation to edge up to 0.3% but today’s data underlines the view that the ECB has a long journey ahead before it meets its 2% inflation target. The weaker-than-expected reading comes even as energy prices continue to fall at a smaller rate. Energy prices were down 5.7% in the 12 months [..]

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