Forex Previews

Forex News – Oil briefly rises above $54 but will it sustain rally?

Posted on February 4, 2015 at 2:11 pm GMT

Oil prices rallied sharply on Tuesday to rise above $54 a barrel, peaking at $54.20, which is the highest level so far this year. Since hitting a 6-year low of $43.57 on January 29, prices are up more than 20%. The question is whether oil prices are finally on the rebound after having declined for over 7 months, as prices dropped steeply from the June 2014 peak of $107.45. Some analysts say the recent rally will weaken, given that there [..]

Forex News – RBA cuts rates to 2.25%; Australian dollar sinks

Posted on February 3, 2015 at 2:04 pm GMT

The news that the Reserve Bank of Australia cut interest rates by a quarter point was a surprise to most analysts, although the move had been widely rumored and speculated by the markets. The cut brought the Overnight Cash Rate (OCR) to 2.25% – an all-time low – and there was a high probability that the RBA would cut by an additional 25 basis points when it next meets in March. As recently as December, the RBA had hinted that [..]

Forex News – US GDP for the fourth quarter underwhelms; keeps dollar bulls in check

Posted on February 2, 2015 at 2:01 pm GMT

The news that US GDP growth for the fourth quarter came in at a 2.6% annualized pace – less than what economists expected at 3% – was on balance slightly dollar negative. The previous quarter’s growth rate was much higher at 5%; although that level of growth was unsustainable. For the year as a whole, growth came in at 2.4%, a respectable performance and the best since 2010 – particularly given the surprise contraction of the first quarter due to [..]

Forex News – Week Ahead: Nonfarm payrolls, Reserve Bank of Australia and Chinese PMIs likely center of attention

Posted on January 30, 2015 at 3:02 pm GMT

Central bank meetings in Australia and the UK, key business sentiment surveys out of China and the US and of course the all-important US employment report, will likely prove the highlights of the coming week for financial markets. Starting with Australia, the local dollar has received a battering lately on expectations that the country’s central bank, the Reserve Bank of Australia, is thinking about adopting a bias towards cutting interest rates. The actual RBA meeting will take place on Tuesday [..]

Forex News – Federal Reserve is still “patient” with rates; weighs jobs, growth and inflation ahead

Posted on January 29, 2015 at 1:22 pm GMT

The Federal Reserve statement, which was released following its 2-day meeting that ended on Wednesday, contained no big surprises. Still, there were some shifts in the Fed’s language which do provide clues as to what happens next. The most important point was perhaps that the Fed has upgraded its view of the US economic expansion to “solid” from “moderate”. It also upgraded its view of job gains, describing them as “strong” instead of “solid” in the previous statement. The Fed [..]

Forex News – Australian inflation dampens bets of rate cuts by RBA

Posted on January 28, 2015 at 1:41 pm GMT

The news that Australian consumer prices for the fourth quarter held well, put a damper on expectations that the Reserve Bank will cut interest rates in the near future. While the headline inflation slightly missed expectations as a result of the fall in energy prices, other inflation measures which exclude the extreme price-moving categories, managed to beat forecasts. More specifically, Consumer prices increased 0.2% quarter-on-quarter against expectations of a 0.3% increase while the year-on-year rise was 1.7% against expectations of [..]

Forex News – Denmark vows to defend euro peg and cuts rates in the process

Posted on January 27, 2015 at 12:11 pm GMT

Following the abandonment of the Swiss franc cap by the Swiss National Bank, currency traders have also recently attacked other pegs. One of these pegs under attack is the Danish Krone with the euro. The rationale is that the Krone should outperform the falling euro and appreciate. The economic situation in Denmark is better compared to the Eurozone; with growth expected at 1.8% in 2015 and inflation at 1.6% – but it is not exactly overheating. Although all currency unions [..]

Forex News – Greek elections put anti-bailout coalition in power, market in wait-and-see mode

Posted on January 26, 2015 at 12:10 pm GMT

The news that the leftist SYRIZA party won the Greek elections and formed a coalition government with the Independent Greeks meant that Greece has moved from a government that was formed with the aim of implementing the bailout terms to a government that aims to dismantle it or at least substantially alter it. This introduces some uncertainty over whether Greece will continue to be supported by the Troika of international lenders of European Commission / IMF and ECB and receive [..]

Forex News – Week Ahead – FOMC the next big event after ECB

Posted on January 23, 2015 at 3:00 pm GMT

The following week will be a busy one as there will be many important economic data releases. The highlight of the week will be the FOMC rate decision. GDP numbers from various major economies will be out as will inflation data. Looking at the Eurozone, the main data will be from Germany, its largest economy. The German Ifo business climate data will be published on Monday while retail sales and import price numbers are due on Thursday. Another consumer confidence [..]

Forex News – ECB’s QE package beats expectations; euro falls sharply

Posted on January 23, 2015 at 1:20 pm GMT

The highly anticipated announcement of ECB’s Quantitative Easing package in the end surpassed expectations. The European Central Bank decided that it would buy 60 billion euros worth of securities every month – around 10 billion euros of mainly bank-issued debt such as Asset Backed Securities and Covered bonds and 50 billion of government and state institution bonds. The program will start on March of 2015 and continue until September of 2016. This would inject 1.08 trillion euros of liquidity into [..]

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