Forex Previews

SNB keeps policy unchanged despite weak growth

Posted on June 18, 2015 at 10:04 am GMT

The Swiss National Bank kept its deposit rate at a record low of -0.75% on Thursday, in line with market expectations. The central bank also kept the three month Libor rate between -1.25% and -0.25%. The SNB has kept the deposit rate at record lows with the stated aim of making investments in the Swiss currency less attractive and thus gradually weakening the franc. In January the Swiss central bank removed the exchange rate ceiling between the Swiss franc and the [..]

Kiwi drops 1.5% against dollar on weak Q1 GDP data

Posted on June 18, 2015 at 9:21 am GMT

The New Zealand dollar took a tumble after weaker-than-expected GDP figures for the first quarter of 2015 shocked the markets. New Zealand GDP grew by just 0.2% in the first quarter from the previous quarter and was up 2.6% from the same quarter in 2014. Consensus estimates were for GDP to expand by 0.6% on the quarter, which would have been a milder slowdown from the 0.8% growth seen in the last quarter of 2014. This was the weakest growth [..]

Fed on track to raise rates but cut in growth outlook signals slower rise

Posted on June 17, 2015 at 8:17 pm GMT

The Federal Reserve’s Federal Open Market Committee concluded its two-day meeting today, keeping policy unchanged as expected. Markets have been keenly waiting for the details of the FOMC statement as slower than expected economic growth since the start of the year has pushed back initial expectations that the Fed would begin tightening monetary policy as early as June. This has led to increased speculation over the timing and the pace of any interest rate rise with the Fed acknowledging that [..]

Gold and silver continue to retreat from record highs

Posted on June 17, 2015 at 1:18 pm GMT

Gold prices not likely to recover to 2011 levels anytime soon Gold price has depreciated significantly from its all-time high of $1,920.80 per ounce it reached in September 2011 to around $1,180 per ounce currently. The main catalyst for the fall has been the US Fed’s tapering of its quantitative easing program, which is what drove prices to their record high in the first place. Gold price tends to rally when central banks expand their monetary base. But recently announced [..]

Pound jumps on strong earnings data and hawkish BoE minutes

Posted on June 17, 2015 at 10:25 am GMT

The unemployment rate in the UK was unchanged from the previous month in April at 5.5%, in line with estimates. The ILO based figure fell by 43,000 to 1.81 million in April, while the claimant count measure fell by 6,500 in May, giving a rate of 2.3%, slightly above estimates of 2.2%. Total employment in the UK rose by 114,000 to 31.1 million. What caught the markets off guard however, were the average earnings data, which showed acceleration in April. Average [..]

Rising transport costs push up UK inflation back into positive territory

Posted on June 16, 2015 at 12:22 pm GMT

After a brief flirtation with deflation in April, UK inflation edged back up to positive territory, with the CPI rate rising to 0.1% year-on-year in May. The figure was within estimates and up from -0.1% in April. Month-on-month, CPI rose by 0.2% as expected. A rebound in the price of fuel contributed to rising prices as they were higher by 1.9% on the month, with overall transport costs rising by 0.6% in May. But electricity and gas prices continued to [..]

Dollar unmoved from weak US industrial production data

Posted on June 15, 2015 at 2:49 pm GMT

Weaker-than-expected industrial production figures for the US had little impact on the dollar as the markets are more focused on Wednesday’s rate decision by the Fed and the escalating stand-off between Greece and its creditors. Nevertheless, as the Fed moves into a period of data dependency for the timing of its expected rate rise, it will be watching closely all indicators to assess the speed at which economic growth rebounds from the first quarter weakness. Industrial production in May declined [..]

Grexit fears intensify on lack of progress as deadline nears

Posted on June 15, 2015 at 10:02 am GMT

Euro volatility increased on Monday as another round of talks between Greece and its creditors failed. Sunday’s meeting, which was seen as the last opportunity for significant progress before the Eurogroup meeting, lasted 45 minutes according to reports as the differences between the two sides remained too wide. The Greek government’s refusal to budge on key election promises on pensions, wages and VAT on energy are the main sticking points for Greece’s creditors. The next key date is the Eurogroup [..]

Week Ahead – Inflation data for US, UK and Eurozone to set the tone but all eyes on Fed Meeting

Posted on June 12, 2015 at 12:10 pm GMT

The week ahead is set to be a significant one for monetary policy as May inflation figures are published for the US, UK, Eurozone and Canada. Central bank decisions for Switzerland, the US and Japan will be closely watched, especially the Fed’s June meeting. The US will start the week with industrial production figures out on Monday. They are expected to show industrial production expanded by a monthly 0.2% in May, versus -0.3% in April, while the Empire State Manufacturing [..]

RBNZ takes markets by surprise with 0.25% cut, sending kiwi down

Posted on June 11, 2015 at 10:05 am GMT

The Reserve Bank of New Zealand made an unexpected cut in its official overnight cash rate on Wednesday, lowering it by 0.25% to 3.25%. The majority of economists had expected that there would be no cuts this month. Another reason for the surprise was that the RBNZ had previously expressed reservations on reducing the lending rate as it could fuel an already overheated housing market in Auckland, the country’s biggest city. However, in May, the central bank announced new measures [..]

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