Daily Market Analysis

European Session – Risk rally drives up dollar and equities; Oil up on renewed production freeze calls

Posted on August 8, 2016 at 2:13 pm GMT

The dollar remained buoyant in European trading to steadily climb higher against the yen. It touched a session high of 102.65 yen as most traders upped their expectations that the Fed could raise rates by the year end if the US labor market continues to improve at the current pace. Dovish remarks by Fed Governor Jerome Powell failed to dampen the positive expectations. Speaking to the Financial Times today, Powell reiterated the need to be “patient” as he warned of [..]

Asian Session – Dollar extends post-NFP gains; China trade data disappoints again

Posted on August 8, 2016 at 7:59 am GMT

Risk appetite continued to rise on Monday following Friday’s stronger-than-expected non-farm payrolls report, which helped improve the outlook for the US economy. The dollar extended its gains into today’s Asian session, while Asian equities rallied to one-year highs on the back of the risk-on mood. One of the biggest gainers was the Nikkei 225 index in Tokyo, which closed up 2.4%. However, shares in China were up by a smaller 0.9% as disappointing trade data weighed on the Chinese market. [..]

European Session – Dollar rallies on good nonfarm payrolls; gold tumbles

Posted on August 5, 2016 at 3:16 pm GMT

The European session was mostly quiet ahead of the all-important nonfarm payrolls report. Trading in most major currency pairs was subdued until the data which surprised to the upside and sent the dollar on a strong rally. The July jobs report showed that 255,000 jobs were created which was well above expectations for a 180,000 print, and there was an upward revision to the June figure to 292,000 from 287,000. This was the second consecutive robust jobs report which also [..]

Asian Session – Dollar subdued ahead of NFP; pound stabilizes after post-BoE fall

Posted on August 5, 2016 at 8:02 am GMT

The dollar lost some ground in Asian trading on Friday as investors turned cautious ahead of the US jobs report later today. Non-farm payrolls will likely have eased in July from the strong surge seen in June but are still expected to come in at a healthy pace of 180k. A solid jobs report is seen as keeping the door open for a rate hike later in the year, which would support the dollar. But in the meantime, the greenback [..]

European Session – Gold jumps, pound falls after BoE cuts rates to 9-year low and expands QE

Posted on August 4, 2016 at 2:34 pm GMT

The Bank of England dominated the market’s focus today as there were few other developments to note. Sterling came under heavy selling pressure on the announcement that the BoE made its first interest rate cut in seven years and added more stimulus. The market was satisfied with the more aggressive stance by the Bank. While the 25 basis point rate cut to a record low 0.25% was widely expected, markets were split on whether the BoE would expand its quantitative easing program, [..]

Asian Session – Pound steady ahead of BoE decision; Dollar edges higher as yen backtracks

Posted on August 4, 2016 at 8:12 am GMT

The pound held steady in a tight range on Thursday as investors await the Bank of England’s latest monetary policy decision later in the day. Most analysts are expecting a 0.25% cut in the Bank’s base rate to stimulate the UK economy following recent data pointing to the sharpest slowdown in growth since the financial crisis. There are also expectations that the Bank will announce other measures such as restarting its quantitative easing program or new ways to boost lending [..]

European Session – Dollar recovers following ADP jobs and ISM data; gold retreats

Posted on August 3, 2016 at 2:57 pm GMT

The US dollar trimmed some of yesterday’s losses especially against the euro and has stabilized against the yen. Despite stronger Eurozone PMI data, the euro was softer today, falling back below the key $1.12 level. Final July PMI figures showed slightly stronger services and composite readings than the preliminary estimates. The index for Services PMI came in at 52.9, higher than the 52.7 expectation and up from the preliminary 52.7 number. The final composite PMI printed a reading of 53.2 [..]

Asian Session – Dollar steadier but struggles to hold on to 101 yen

Posted on August 3, 2016 at 8:04 am GMT

The US dollar stabilized in Asian trading on Wednesday following another steep fall yesterday on growing doubts about the prospect of further rate increases by the Fed this year. The greenback hit a 3-week low of 100.67 yen yesterday but managed to rebound above the 101 level in today’s Asian session. The euro and the pound were also stuck near 3-week lows against the yen at 113.40 and 134.65 respectively. The Japanese currency continued to face upside pressure today due [..]

European Session – Yen outperforms, pushing dollar to 3-week low

Posted on August 2, 2016 at 2:52 pm GMT

US dollar weakness dominated the currency markets, while the yen strengthened further in a risk averse European session. The dollar fell to a fresh 3-week low versus the yen to touch 100.97 yen. US data out today did not help support the greenback. The core PCE price index which is closely watched by the Federal Reserve did not change in June from the 1.6% year-over-year pace seen in May. This suggests that inflation pressure in the US is still low and [..]

Asian Session – RBA cuts rates by 0.25% but aussie bounces back; Oil struggles at $40

Posted on August 2, 2016 at 8:39 am GMT

The Reserve Bank of Australia cut interest rates to a new historic low of 1.50% today in a widely expected move. Weaker-than-expected inflation data out last week prompted the RBA to make its second 25bps reduction this year. In a possible sign of further cuts to come, RBA Governor Glenn Stevens said in his statement that the risk of the housing market being exacerbated by lower interest rates has diminished. The Australian dollar hit a one-week low of 0.7485 against [..]

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