Forex Previews

Cautious Yellen stands ground as Fed hawks circle

Posted on March 30, 2016 at 11:18 am GMT

The Federal Reserve did little to dispel confusion over US monetary policy as Fed Chair Janet Yellen yesterday stood firm with her dovish stance in the face of a rising number of hawkish voices from within the FOMC. Speaking at the Economics Club of New York, Yellen reiterated the need for caution despite several Fed officials last week expressing their confidence that the US economy is strong enough to withstand at least two more rate hikes this year. In the [..]

Yen subdued after mixed data; Expectations grow of more fiscal stimulus

Posted on March 29, 2016 at 10:46 am GMT

A batch of economic data released on Tuesday failed to change the gloomy outlook for Japan’s economy despite some signs of a rebound in consumer spending. Household spending in Japan jumped by 1.7% month-on-month in February after a 0.6% drop the prior month. Expectations were for a smaller increase of 0.5%. The year-on-year rate also beat estimates as a result to rise by 1.2% – the first annual increase in six months. Also out today were retail sales and unemployment [..]

Personal spending and PCE deflator misses estimates, hurts dollar

Posted on March 28, 2016 at 2:52 pm GMT

The first item of news following the Easter holiday was a negative for the US dollar, as personal spending missed expectations while inflation also came in lower than expectations. There was also a substantial negative revision of January’s personal spending growth (adjusted for inflation), to unchanged from an original +0.4% month-on-month growth rate. Starting with the personal income side, the news appeared encouraging as it posted a 0.2% increase (above expectations) from January, when it had risen by 0.5%. Wages [..]

Week Ahead – Important week for US data after rate talk triggers dollar rally

Posted on March 24, 2016 at 2:20 pm GMT

The coming week looks set to get busy after the long Easter weekend, particularly for the US, which will see some key data releases such as the monthly non-farm payrolls report. Also to come into focus will be the Bank of Japan’s Tankan survey, Eurozone flash inflation and manufacturing PMI out of China. United States The United States will be one of few Western markets open on Monday when many European markets will be closed for the Western Easter celebrations. [..]

After a dovish FOMC, Fed speakers turn unexpectedly hawkish

Posted on March 23, 2016 at 12:42 pm GMT

The US Federal Reserve surprised markets at its FOMC meeting on March 16 when it took a much more dovish stance than what most traders had been expecting. Although a downgrade of the Fed’s projections on the US economy and its dot plot guidance of the fed funds rate had been expected, markets were taken aback by the overcautious tone of the FOMC statement. In the Fed Chair’s press conference, Janet Yellen downplayed the significance of the recent spike in [..]

UK inflation remains muted but bigger deficit increases pressure on Osborne

Posted on March 22, 2016 at 12:09 pm GMT

Annual inflation in the United Kingdom was unchanged at 0.3% in February, falling short of estimates that it would edge up to 0.4%. Core inflation, which excludes volatile items such as energy, food, alcohol and tobacco prices, was also unchanged at 1.2%, in line with estimates. On a month-on-month basis, CPI rose by 0.2%, which was half the 0.4% rate expected by economists. Today’s data supports the growing view that the Bank of England’s first rate hike since the financial [..]

Week Ahead – Eurozone PMI and UK, Japan inflation to dominate in quiet week

Posted on March 18, 2016 at 3:56 pm GMT

After an intense two weeks of central bank activity, it will be a relatively quieter week ahead of the Western Easter break. Along with Eurozone flash PMI, inflation data for the UK and Japan will be the main data to watch over the coming seven days. Starting the week will be housing data for the United States. Existing home sales are due on Monday and are forecast to show a 2.9% decline over the month in February. New home sales [..]

SNB keeps policy unchanged but repeats franc intervention threat

Posted on March 17, 2016 at 3:13 pm GMT

The Swiss National Bank held interest rates unchanged on Thursday at its latest policy meeting. It kept its 3-month LIBOR target rate at between -1.25% and -0.25% and the interest on sight deposits with the central bank at -0.75%. The decision was unanimously expected by all economists in both Reuters and Bloomberg surveys, but there was some speculation that the SNB would respond with a counter measure to the ECB’s aggressive easing last week. The strong value of the Swiss [..]

Dovish Fed lowers rate rise expectations; dollar drops

Posted on March 16, 2016 at 9:05 pm GMT

The Federal Open Market Committee concluded its two-day policy meeting on Wednesday and as expected, kept the federal funds rate unchanged for the second meeting at between 0.25%-0.50%. Accompanying the March meeting statement were the FOMC’s latest economic projections, including forecasts for the fed funds rate over the next three years. In what turned out to be a more dovish-than-expected outlook by the Fed, the latest projections expect GDP growth to be slightly weaker in 2016 and 2017 but unchanged for [..]

Sterling extends losses on growth downgrade, shrugging off strong jobs data

Posted on March 16, 2016 at 2:33 pm GMT

The British pound extended its losses into a third day on Wednesday, erasing around half of its gains made since the start of the month. Stronger-than-expected jobs data out earlier today failed to halt the pound’s decline, which has dipped back below 1.41 dollars for the first time in two weeks. The latest labour market report out of the UK showed that the unemployment rate was unchanged at 5.1% in the three months to January. However, the number of people [..]

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