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Forex News – Weekly Review – Euro underperforms on expectations of ECB easing in June

Posted on May 16, 2014 at 1:10 pm GMT

The euro was one of the worst performing major currencies against the US dollar this week after weakening on remarks made by European Central Bank Chairman Mario Draghi that suggested that the central bank would possibly take some sort of monetary action as early as next month as a measure against deflationary pressure. The euro fell to as low as 1.3647 after reaching as high as 1.3992, a more-than 2-year high. Adding to the bad news was that the euro [..]

Forex News – Eurozone economy grows half than expected in Q1

Posted on May 15, 2014 at 12:15 pm GMT

The euro fell to an 11-week low against the dollar at 1.3650 after coming under pressure on soft GDP data, signaling that the recovery in the Eurozone is not that strong. Three major economies contracted, including France, the Netherlands and Portugal, while the overall Eurozone economic growth was much weaker than expected in the first quarter, growing by only half of what was forecast. The weak economic growth would likely increase pressure on the European Central Bank to loosen monetary [..]

Forex News – UK jobless rate drops to 5-year low

Posted on May 14, 2014 at 10:30 am GMT

The UK unemployment rate ticked lower in the 3-month period from January to March, falling to 6.8% from 6.9% as expected. The April claimant count change reflected a drop of 25,100 compared with expectations of 30,000. This disappointed markets, leading sterling to fell against the dollar. Data also showed that wage growth was lower than expected, thereby reducing the pressure on the Bank of England to raise interest rates. Recently there was growing speculation that BoE policy makers could raise [..]

Forex News – Weekly Review – ECB highlight of the week, EUR takes a hit from Draghi

Posted on May 9, 2014 at 12:09 pm GMT

The highlight of this week was the European Central Bank President Mario Draghi’s press conference. While the ECB was expected to hold its main refinancing rate at 0.25%, what took markets by surprise was Mr. Draghi’s comments that suggested the governing council would be “comfortable with acting next time. ” This led markets to interpret this as by the next meeting in June, and the bank would implement some form of stimulus measures, either in the form of an interest [..]

Forex News – Do Putin’s latest statements on Ukraine signal a de-escalation of geopolitical risk?

Posted on May 8, 2014 at 9:24 am GMT

The emergence of geopolitical risk from Ukraine following the overthrow of the previous pro-Russian government, Russia’s annexation of Crimea and the slide towards civil war in Eastern Ukraine as well as the threat of a Russian invasion there, have created the worst geopolitical crisis between East and West since the end of the cold war. The worry about developments in Ukraine was not the main headline affecting financial markets during the past few weeks, but it was at the back [..]

Forex News – Dollar index down more than 1% year-to-date, defying predictions of rise

Posted on May 7, 2014 at 11:58 am GMT

[caption id="attachment_16400" align="alignnone" width="570"] (click to enlarge)[/caption] One development that has surprised many market participants so far this year has been the drop in the dollar index. The index was down by 1.18% on Tuesday 6th May, compared to the end of 2013. The dollar has slipped by 1.23% against the euro and 2.50% versus sterling. Both currencies have climbed to record multi-year highs against the dollar recently. The yen, reacting after its severe drop in 2013, is up 3.4%, [..]

Forex News – Reserve Bank of Australia to keep low rates as austerity sets in

Posted on May 6, 2014 at 9:17 am GMT

The Reserve Bank of Australia (RBA) kept interest rates unchanged at 2.50% during its meeting today. This was widely anticipated by economists, as a hot housing market is preventing the RBA from cutting interest rates further as it perhaps would like. Inflation during the first quarter was at the high end of the bank’s 2-3% target range, at 2.93% year-on-year. The key interest rate has been at 2.50% since August 2013. According to the IMF, the Australian economy will grow [..]

Forex News – Chinese manufacturing survey index remains underwater in April

Posted on May 5, 2014 at 12:46 pm GMT

The news that China’s final April HSBC PMI index dipped to 48.1 compared to 48.3 announced initially, was interpreted as a slightly negative development for risk assets and the global economy. It was the fourth consecutive month during which the index was below 50, which is the expansion-contraction dividing point. However, despite the downward revision of the index, it was up marginally from March’s 48.0 reading. It appears the deterioration in operating conditions observed during April had to do with [..]

Forex News – Week ahead: Central bank meetings and business surveys likely to dominate agenda

Posted on May 2, 2014 at 11:39 am GMT

The highlight of the week will be the European Central Bank’s Governing Council meeting on Thursday and ECB chief Mario Draghi’s press conference after the decision. The ECB is not expected to provide any fresh monetary stimulus in the form of rate cuts, asset purchases or additional liquidity. However, Draghi could clarify what the bank’s future options are, how the bank views the level of the euro and what the progress is for the Asset Quality Review (AQR or bank [..]

Forex News – Sterling boosted after UK Manufacturing PMI hits 5-month high

Posted on May 1, 2014 at 10:13 am GMT

The British pound strengthened after the UK purchasing managers’ index (PMI) advanced higher in March to hit a five month high. The seasonally adjusted data collected by Markit/CIPS between 11-25 April showed the PMI printed a reading of 57.3, surpassing the 55.8 figure in March. Manufacturing production expanded at a robust pace as enterprises in the UK increased their new orders, both due to increased domestic as well as overseas demand. Factory production expanded at the fastest in four years [..]

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