Forex Previews

China cuts rates again by 0.25% and lowers reserve ratio

Posted on October 23, 2015 at 1:50 pm GMT

The People’s Bank of China (PBOC) has cut interest rates for a sixth time since November 2014 as it tries to stimulate the economy, which has slowed down markedly in 2015. The central bank cut its 1-year lending rate by 0.25% to 4.35% and its 1-year deposit rate by 0.25% to 1.50%. The reserve requirement ratio (RRR) was also cut, for the fourth time this year, by 50 basis points to 17.5% and applicable to most large banks. Additionally, the [..]

Week Ahead – All eyes on FOMC, BoJ and RBNZ meetings but Q3 GDP also in focus

Posted on October 23, 2015 at 12:27 pm GMT

The coming week is set to be a busy one both in terms of data and for central bank activity. The Fed will hold its October FOMC meeting, while the Bank of Japan and Reserve Bank of New Zealand will also meet. The key indicators to watch for will be US and UK third quarter GDP and Eurozone flash CPI. Starting the week are the German IFO survey for business confidence and expectations. It will be interesting to see how [..]

Dovish ECB sends euro plummeting below 1.12 dollars

Posted on October 22, 2015 at 2:56 pm GMT

The European Central Bank raised the prospect of further monetary stimulus as early as December as it highlighted downside risks to economic growth and inflation. Weaker growth in emerging markets and developments in financial and commodity markets are seen as weighing on the euro area’s growth prospects. Speaking at the press conference, which followed the announcement that monetary policy was kept unchanged, ECB President Mario Draghi hinted at the possibility of adjusting policy at its December meeting when new economic [..]

Pound surges on robust UK retail sales growth in September

Posted on October 22, 2015 at 10:45 am GMT

UK consumers splashed out in September as the Rugby World Cup boosted spending during the month. Retail sales jumped by 1.9% on the month to give a year-on-year rise of 6.5% – the highest rate since November 2014. Consensus estimates were for retail sales to increase by 0.3% month-on-month and 4.8% annually. However, there was a downward revision to August’s figure, which was revised lower from 0.2% to -0.4% month-on-month. Excluding fuel, retail sales were up 5.9% year-on-year. The biggest [..]

Mixed signals from Fed leaves year end rate rise in the balance

Posted on October 21, 2015 at 12:43 pm GMT

As Fed policymakers round up their speeches ahead of next week’s FOMC meeting, doubts remain whether the Federal Reserve will raise interest rates by the year end. After spending much of the year stressing the Fed’s data dependency on the timing of any decision to increase rates, Fed policymakers have yet to convince markets that the US is ready for lift-off. In the summer, a tightening labor market had pointed to a September increase in the Fed’s funds rate, but [..]

Loonie in focus after Liberals election win and upcoming Bank of Canada meeting

Posted on October 20, 2015 at 10:23 am GMT

The centre-left Liberal party, led by Justin Trudeau, won the general election in Canada on Monday, ending the Conservative’s nine-year run in power. Although the Liberals had been leading in the polls, they were not expected to win a majority. With the counting now over, the Liberals have won 184 seats, compared to the Conservative’s 99 seats. The New Democratic party has shrunk to just 44 seats, dropping to third place. The size of the win means the Liberals have [..]

China growth falls to below 7% for first time since 2009 but beats expectations

Posted on October 19, 2015 at 10:34 am GMT

GDP growth in China slowed to an annual rate of 6.9% in the third quarter of the year from 7.0% in the previous quarter. But the figure was slightly ahead of consensus estimates of 6.8%, which eased fears of a sharper slowdown. China’s economy, a leading driver of world growth, has become a major cause of concern in recent months following the stock market crash and falling property prices. As the government attempts to rebalance the Chinese economy, there are [..]

Week Ahead – Markets await China GDP, ECB meeting and flash PMI data

Posted on October 16, 2015 at 10:28 am GMT

Following a week of key indicators that on balance favored a US and UK rate hike, it will be the turn of the euro to come into sharp focus as the ECB meets to consider whether further monetary easing is necessary for the Eurozone. Before that though, investors will be on edge for key data coming out of China at the start of the week. Monday will see the release of third quarter GDP data for China, which is expected [..]

Dollar firms on stronger-than-expected inflation figures

Posted on October 15, 2015 at 1:59 pm GMT

US consumer prices were unchanged in September on an annual basis as CPI fell to 0.0% from 0.2% the prior month. This was slightly above estimates that consumer prices would fall by -0.1%. On a month-on-month basis, CPI fell for the second month in-a-row to -0.2% from -0.1%, in-line with estimates. The core rate, which excludes food and energy, was also stronger-than-expected. Core CPI edged up to 0.2% month-on-month, above estimates of that it would rise by 0.1%. The 12-month [..]

As AUD/USD retests 0.74, has the Australian dollar bottomed out?

Posted on October 15, 2015 at 10:50 am GMT

The Australian dollar has been depreciating since the spring of 2013 as global commodity prices have tumbled on softening demand, particularly from China. The Australian economy came out of the world financial crisis relatively unscathed as strong demand in China for commodities such as iron ore – Australia’s main export – drove economic growth. But a slowing economy in China, combined with the rout in oil prices and a strong US dollar, has pushed commodity prices to multi-year lows, hitting [..]

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