Daily Market Analysis

European Session – Dollar pares back losses but sterling weaker on PMI downgrade

Posted on August 1, 2016 at 2:50 pm GMT

Major currencies struggled for direction in lacklustre trading in today’s European session as the dollar recovered only modestly from last week’s drop, while the pound took a knock from weak PMI data. The US dollar managed to hold above 102 yen after plunging below the level on Friday following surprisingly weak US GDP data for the second quarter, which dampened the likelihood of a tightening in Fed policy this year. Comments from Fed policymakers provided only limited support to the [..]

Asian Session – Dollar steadies after hit from weak GDP data

Posted on August 1, 2016 at 8:41 am GMT

The US dollar was steadier on Monday following its tumble after weaker-than-expected GDP data last Friday. US economic growth missed estimates by a wide margin in the second quarter due to weak business spending, reversing the recent trend of bullish data for the world’s largest economy. Adding to the disappointment was a downward revision to first quarter growth, leading investors to significantly pare back their expectations of a Fed rate hike in 2016. The dollar hit a three-week low of [..]

European Session – Dollar extends losses on dismal US GDP numbers; gold rallies

Posted on July 29, 2016 at 2:41 pm GMT

The last day of the trading week ended with a raft of data out during the European session. The Eurozone halved its growth in the second quarter, with GDP rising by 0.3%, though in line with expectations. The flash inflation estimate for the euro area in July rose to 0.2% year-on-year from 0.1% in June. From the UK, the Gfk consumer confidence survey fell to a lower – than – expected figure of –12 in July from –1 in June. [..]

Asian Session – Yen soars after BoJ disappoints but says will review all policies at next meeting

Posted on July 29, 2016 at 8:27 am GMT

The Bank of Japan announced only a modest tweak to its monetary policy at the end of its two-day meeting today, leaving financial markets widely disappointed which were expecting bolder measures. The Bank decided to increase the size of its purchases of exchange-traded funds from 3.3 trillion to 6 trillion yen annually. It also announced a doubling of the size of its dollar lending facility to $24 billion in a move designed to help Japanese businesses overseas. However, the Bank [..]

European Session – Gold rises to 2-week high on post-FOMC weakened dollar

Posted on July 28, 2016 at 1:51 pm GMT

The US dollar remained weak today after tumbling following the release of the FOMC statement late on Wednesday. The decision by the Federal Open Market Committee to keep interest rates on hold brought down the greenback. The only major currency weaker than the US currency was sterling. The pound fell versus its major counterparts on speculation of a rate cut by the Bank of England at its policy meeting next week. Cable slipped to a session low of $1.3136 after [..]

Asian Session – Dollar slips despite upbeat Fed; Yen firms as markets await BoJ

Posted on July 28, 2016 at 7:59 am GMT

The Federal Reserve kept monetary policy unchanged yesterday as expected but delivered a slightly more upbeat view of the US economy. Members of the Federal Open Market Committee saw the risks to the economic outlook as having “diminished” since the June meeting in reference to the Brexit vote. However, the FOMC maintained its data-dependent policy, giving little indication to when the next rate hike would come. The dollar spiked up immediately after the Fed’s decision, hitting 106.04 yen, but traders [..]

European Session – Oil prices tumble after inventories data; Dollar weak on dismal durable goods data and caution ahead of FOMC

Posted on July 27, 2016 at 2:54 pm GMT

Currency markets were relatively quiet ahead of the FOMC outcome later today. The Federal Reserve will conclude a two-day policy-setting meeting and is widely expected to keep rates on hold. But investors will look at the statement for clues into when the Fed will hike interest rates next. The US dollar was broadly weaker against its major counterparts. It came under pressure following a bigger-than-forecast drop in US durable goods orders in June which may spur some concerns about the [..]

Asian Session – Aussie down on weak inflation; Stimulus expectations push yen lower again

Posted on July 27, 2016 at 9:17 am GMT

Hopes of fiscal and monetary stimulus in Japan raised risk sentiment in Asian trading on Wednesday as the yen reversed yesterday’s gains to head lower again. Markets were boosted after Japan’s Prime Minister, Shinzo Abe, reportedly said today that the planned fiscal stimulus package will total more than 28 trillion yen. The figure is higher than earlier reports of 20 trillion yen and is said to include measures to counter the negative impact from Brexit. There were also rumours that [..]

European Session – Dollar reclaims 104 yen handle after strong US home sales, consumer confidence data

Posted on July 26, 2016 at 2:55 pm GMT

Sterling made a big turnaround after it tumbled in the early European session against the dollar and rose from a 2-week low of $1.3055 to $1.3174. The pound weakened in reaction to an FT report that Bank of England MPC member Martin Weale was in favour of immediate stimulus to boost growth in the UK economy, changing his prior position from last week. The euro oscillated around the key $1.10 level versus the dollar. In the absence of Eurozone data, [..]

Asian Session – Yen gains in cautious trading ahead of FOMC

Posted on July 26, 2016 at 7:57 am GMT

The yen advanced higher in Asian trading on Tuesday as caution set in before the Fed’s two-day FOMC meeting gets underway later today. Reports about the possible size of the Japanese government’s fiscal stimulus package added to the risk-off sentiment today. Investors were disappointed with the size of direct public spending by the Japanese government into the economy, even though it has reportedly been doubled from 3 trillion yen to 6 trillion yen. The dollar sank against the yen after [..]

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