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Forex News – Central Bank of Turkey reduces interest rate but Lira little changed

Posted on June 26, 2014 at 9:59 am GMT

The Central Bank of Turkey decided to cut interest rates by 75 basis points on Tuesday, June 24, as it cut its benchmark 1-week repo rate to 8.75% from 9.50%. The central bank had also cut its key rate by 0.50% during its May meeting (from a high of 10%). The Central Bank of Turkey was forced to hike interest rates by a huge 5.5% back in January – from 4.5% to 10% – in order to defend the Turkish [..]

Forex News – Carney speeches create sterling rollercoaster

Posted on June 25, 2014 at 2:13 pm GMT

In the absence of volatility in the three biggest major currencies of the US dollar, the euro and the Japanese yen, the British Pound has attracted a lot of attention from short-term traders and other market participants. This has created some degree of volatility and there have been some powerful moves for the pound lately. On June 11, during the annual Mansion House speech, the Governor of the Bank of England Mark Carney expressed concern that the market was underpricing [..]

Forex news – US Existing home sales confirm housing recovery from winter doldrums

Posted on June 24, 2014 at 12:26 pm GMT

Existing home sales for the United States beat estimates by increasing by 4.9% (annualized pace) compared to the previous month. The monthly numbers implied annual sales of 4.89 million homes – the highest since October of 2013. Back in October there was a rush to lock in the low in mortgage rates. The 30-year mortgage rate is up around 80 basis points to 4.4% from its all-time low of 3.6% in late 2012. Overall the improvement in existing home sales, [..]

Forex News – May Canadian inflation beats expectations, loonie rallies

Posted on June 23, 2014 at 11:25 am GMT

News that inflation in Canada during May was at its highest in more than 2 years at 2.3% surprised markets as analysts were expecting a 2.1% rate. It was the highest headline inflation rate since February of 2012. Inflation was pushed higher by a more than 8% annual rise in energy prices. Core prices, which exclude 8 volatile components such as energy and food , rose by 1.7% and was again higher than what analysts had expected at 1.5%. As [..]

Forex news – Week ahead to feature Eurozone PMIs and Japanese inflation

Posted on June 20, 2014 at 10:13 am GMT

Following the Fed meeting this week, next week is likely to be relatively quieter for the US dollar and the focus will shift to the Eurozone and Japan. For the Eurozone, the key days to watch will be Monday and Tuesday. Monday will offer some clues as to the strength of the economic recovery in the Eurozone with the release of Markit Flash PMI surveys for June. Services and manufacturing for the countries of the Eurozone as well as an [..]

Forex news – Fed staying the course disappoints dollar bulls, risk assets rally

Posted on June 19, 2014 at 1:35 pm GMT

The key risk events of the Fed policy meeting, statement, updated staff economic forecasts and the quarterly press conference by Janet Yellen, proved to be dollar negative as they sparked aggressive sales of the greenback. Given that there were few changes in the overall tone of Fed communication and the outlook for monetary policy, the disappointment by dollar bulls could be hard to explain. The market’s disappointment was probably due to the fact that despite some upbeat news on the [..]

Forex News – US May inflation higher-than-expected but dollar little moved

Posted on June 18, 2014 at 12:35 pm GMT

News that US seasonally adjusted consumer prices increased by 0.4% month-on-month surpassed expectations of a 0.2% rise and a 0.3% rise during the previous month. The annual rate of inflation was 2.1%, which was the strongest reading since October of 2012. According to the Bureau of Labor Statistics, inflation was strong across the board, with many of the sub-components rising by more than 2%. Food prices were especially strong as they climbed by 0.5% month-on-month and by 2.5% year-on-year. Energy [..]

Forex News – Pound drops after weak inflation but recovers on second reading

Posted on June 17, 2014 at 12:30 pm GMT

The news that inflation in the United Kingdom during May was weaker-than-expected came as somewhat of a surprise to a market that was used to UK data coming in stronger-than-expected recently. The Consumer Price Index, which is harmonized with other EU countries, came in at 1.5% year-on-year compared to 1.7% forecast by economists and a 1.8% rate in the previous month. It was the slowest headline inflation rate in more than 4 years or since October of 2009. Core CPI, [..]

Forex News – How much geopolitical risk do developments in Iraq represent?

Posted on June 16, 2014 at 9:42 am GMT

The news that the Sunni islamist insurgents of the Islamic State of Iraq and the Levant (ISIL) managed to capture Iraq’s second largest city, Mosul, sent shockwaves throughout the world and raised the specter of a protracted conflict that could further destabilize the region and potentially lead to disruptions in oil supplies. Such a conflict may also dissuade investment into the oil infrastructure of Iraq and its reserves may stay unexploited underground for longer. Iraq is the 6th largest oil [..]

Forex News – Federal Reserve meeting dominates the week ahead

Posted on June 13, 2014 at 12:41 pm GMT

The June 17/18 meeting of the US Federal Reserve’s Open Market Committee (FOMC), responsible for setting monetary policy, will loom large over the coming week. The meeting is particularly important as it will feature an update of the staff projections as well as a press conference by Fed Chair Janet Yellen. The Fed should reduce its monthly asset purchases to 35 billion dollars – 15 billion in mortgage-backed bonds and 20 billion in Treasuries. The key focus of the investors [..]

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