Forex Previews

Dollar up as US Q2 GDP revised higher by more than expected to 3.7%

Posted on August 27, 2015 at 2:25 pm GMT

US GDP growth for the second quarter was revised higher to 3.7% from 2.3% in the initial estimate. Consensus estimates were for GDP to be revised to 3.2%. The upward revision to second quarter growth comes after first quarter growth was also revised higher to 0.6% back in July, suggesting the US economy has been more resilient in weathering transitory factors and weak global demand than initially anticipated. According to the US Bureau of Economic Analysis, the improved GDP numbers [..]

Emerging market currencies hit hard by China worries and slump in commodity prices

Posted on August 26, 2015 at 11:52 am GMT

Emerging market currencies have been steadily falling against the dollar over the past year on rate rise speculation in the US and declining commodity prices, particularly crude oil. But with the worsening slowdown in the Chinese economy and the recent turmoil in China’s stock market, their depreciation has accelerated in recent weeks. Low liquidity in financial markets has also contributed to the exaggerated volatility in currency markets. The prospect of interest rates going up in the US has led to [..]

China cuts rates by 0.25% and lowers reserve requirement ratio by 0.50%

Posted on August 25, 2015 at 12:24 pm GMT

China’s central bank, the People’s Bank of China (PBOC), surprised the markets on Tuesday by announcing a reduction in interest rates, cutting its one-year loan rate to 4.60% from 4.85%. The one-year deposit rate has been cut by 0.25% to 1.75%. The PBOC also cut its reserve requirement ratio (RRR) for most large banks by 50 basis points to 18.0%, effective as of September 6. This is the fourth rate cut so far this year and the third reduction in [..]

China leads plunge in global equities; emerging market currencies hit new lows

Posted on August 24, 2015 at 10:51 am GMT

China’s equity markets saw their biggest one-day drop since 2007 on Monday with the Shanghai SE Composite index closing 8.5% lower. Today’s losses have wiped out the stock market’s gains since the start of the year, though shares do remain around 40% higher than 12 months ago. The lack of any intervention or announcement of new stimulus measures by Chinese authorities over the weekend exasperated the mood of panic in the markets. Shares in other Asian markets also saw big [..]

Week Ahead – US data to keep dollar in spotlight; Q2 GDP likely to get revised up

Posted on August 21, 2015 at 1:50 pm GMT

The week ahead will be relatively light in terms of major data with the exception of the United States, which has a busy calendar for the coming week. Figures for new home sales, durable goods and personal spending could prove crucial ahead of the Fed’s September meeting. Second estimates of second quarter GDP data for the US, UK and Germany will also be closely watched. The first of the GDP data will come from Germany with the final estimate for [..]

Eurozone PMI points to increased activity in August but France lags

Posted on August 21, 2015 at 9:34 am GMT

Flash PMI data for the Eurozone showed manufacturing and services activity picking up in August. The Markit flash composite PMI for the Eurozone rose to 54.1 in August from 53.9 in July. Estimates were for a reading of 53.7. Manufacturing PMI was unchanged at 52.4, against expectations of 52.2. Services PMI rose to 54.3 in August from 54.0 in July and was above estimates of that it would stay unchanged. A reading above 50 indicates expansion, while a value below [..]

UK retail sales rise less than expected putting pound under pressure

Posted on August 20, 2015 at 10:21 am GMT

UK retail sales in July rose by a much smaller amount than expected, increasing by 0.1% on the month, against forecasts of a 0.4% increase. On a 12-month basis, sales volumes were up 4.2% from a year ago, against estimates of a 4.4% rise. But the soft headline figure was mostly due to lower fuel sales as retail sales excluding automotive fuel showed a healthier rise of 0.4% in July compared to June, in-line with estimates. The annual rate also [..]

US inflation softer than expected; dollar bounces back after brief drop

Posted on August 19, 2015 at 2:13 pm GMT

US inflation showed little sign of accelerating in July as the annual rate of CPI rose by 0.2%, in-line with estimates and only slightly higher than June’s 0.1%. The month-on-month change was below estimates as prices rose by just 0.1%, the slowest rate since April, against forecasts of a 0.2% rise. The core CPI rate, which excludes food and energy items, held steady at 1.8%, which was within estimates. But the month-on-month rate came in at 0.1%, below forecasts of [..]

Pound rallies again as UK inflation picks up in July

Posted on August 18, 2015 at 11:54 am GMT

The consumer price index (CPI) in the UK rose to an annual rate of 0.1% in July, beating estimates that it would remain unchanged at 0%. The month-on-month rate fell by 0.2%, against estimates it would fall by 0.3%. Core CPI, which excludes volatile items such as food and energy, also accelerated, rising to 1.2% in July from 0.8% in the previous month. Forecasts were for a more modest rise to 0.9%. Falling food and fuel prices were the biggest [..]

RBA reveals no surprises in minutes; awaits Fed’s decision

Posted on August 18, 2015 at 9:53 am GMT

The Reserve Bank of Australia’s meeting minutes from its August meeting went largely unnoticed on Tuesday as there were no major surprises in the minutes, with the cash rate kept unchanged at 2%. The RBA has adopted a less dovish tone in recent weeks as the Australian dollar has continued to extend its two-year decline against the US dollar, reaching a new 6-year low of 0.7214 on August 12. The central bank’s board had been keen to highlight for much [..]

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