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European Session – Dollar stabilizes near 2-week lows; European stocks up sharply on Yellen

Posted on March 30, 2016 at 2:42 pm GMT

European equities rose sharply on Wednesday with the major indices up over 1.5% as risk appetite made a strong comeback after Fed Chair Janet Yellen signalled again yesterday that the Fed was in no rush to raise rates. Yellen’s cautious stance contrasted with those of other Fed officials who last week had increased the possibility of a rate rise as early as April. Another Fed official speaking today tried to strike a more balanced tone. Chicago Fed President Charles Evans [..]

Cautious Yellen stands ground as Fed hawks circle

Posted on March 30, 2016 at 11:17 am GMT

The Federal Reserve did little to dispel confusion over US monetary policy as Fed Chair Janet Yellen yesterday stood firm with her dovish stance in the face of a rising number of hawkish voices from within the FOMC. Speaking at the Economics Club of New York, Yellen reiterated the need for caution despite several Fed officials last week expressing their confidence that the US economy is strong enough to withstand at least two more rate hikes this year. In the [..]

Asian Session – Yellen reiterates caution on rates; dollar slides 1%

Posted on March 30, 2016 at 8:05 am GMT

Fed Chair Janet Yellen yesterday reiterated the need to move cautiously with rate increases, citing the uncertainty in the global economic outlook as a risk to the US economy. Speaking at the Economic Club of New York, Yellen said the Fed wanted to get ahead of the developments in the global economy and adjust its policy path accordingly before they start to impact its forecast for unemployment and inflation. She noted that economic and financial conditions remain less favorable than [..]

Technical Analysis – USDJPY falls below rising channel

Posted on March 30, 2016 at 7:14 am GMT

USDJPY has fallen out of the rising channel on Tuesday making a big tumble after rising for the past two weeks. The decisive break below the lower channel line triggered the pair’s downside move below the key 113.00 level to reach 112.20 by early Wednesday. Prices failed to close above resistance provided by the 50-day moving average and the 23.6% Fibonacci retracement level (113.50) of the February to March decline from 121.68 to 110.96. There is scope for prices to [..]

European Session – Dollar in focus as Fed Chair Yellen due to speak

Posted on March 29, 2016 at 2:54 pm GMT

News flow was limited during the European session on Tuesday but the market’s focus was on Fed Chair Janet Yellen’s speech at the Economics Club of New York later in the day. Meanwhile, earlier today in a speech in Singapore, San Francisco Fed President John Williams urged the Fed to stay on track with rate rises. The dollar was mixed against its major counterparts today and US data on home prices and consumer confidence had little impact on the currency. [..]

Technical Analysis – GBPJPY approaches 50-DMA on weakened downside bias

Posted on March 29, 2016 at 2:04 pm GMT

GBPJPY looked set to make its fourth straight day of gains on Tuesday as upside momentum continues to increase. Prices were capped by the bottom of the Ichimoku cloud just below 162.60. Further upside bias could see prices moving into the cloud to challenge the 50-day moving average. A break above the 50-DMA would shift the near term outlook to neutral/positive and the next resistance beyond this level would come at 165. Underlining the current upside momentum are the positively [..]

Yen subdued after mixed data; Expectations grow of more fiscal stimulus

Posted on March 29, 2016 at 10:47 am GMT

A batch of economic data released on Tuesday failed to change the gloomy outlook for Japan’s economy despite some signs of a rebound in consumer spending. Household spending in Japan jumped by 1.7% month-on-month in February after a 0.6% drop the prior month. Expectations were for a smaller increase of 0.5%. The year-on-year rate also beat estimates as a result to rise by 1.2% – the first annual increase in six months. Also out today were retail sales and unemployment [..]

Asian Session – Dollar attempts rebound but yen underperforms again

Posted on March 29, 2016 at 7:54 am GMT

The US dollar rebounded from Monday’s lows to edge higher in Tuesday’s Asian session. The greenback fell sharply yesterday after disappointing US personal consumption expenditure data which pointed to weak GDP growth in the first quarter of the year. However, trading is likely to remain cautious ahead of a key speech by Fed Chair Janet Yellen later today. The dollar climbed to around 113.65 yen in late Asian trading from a low of 113.14 yen on Monday. The Japanese currency [..]

Technical Analysis – GBPUSD pauses decline, rises above 1.40

Posted on March 29, 2016 at 7:21 am GMT

GBPUSD has stabilized just above the key 1.40 level and is in a neutral phase in the short term. The strong rebound that took the pair back above 1.40 from 1.3834 suggests that a short-term bottom is in place. For now the risk for further GBPUSD weakness has diminished, as the MACD has risen above zero into bullish territory. Sideways consolidation in a range between 1.4050 and 1.4400 is expected. RSI is still weak so a sustained up-move is not [..]

Personal spending and PCE deflator misses estimates, hurts dollar

Posted on March 28, 2016 at 2:50 pm GMT

The first item of news following the Easter holiday was a negative for the US dollar, as personal spending missed expectations while inflation also came in lower than expectations. There was also a substantial negative revision of January’s personal spending growth (adjusted for inflation), to unchanged from an original +0.4% month-on-month growth rate. Starting with the personal income side, the news appeared encouraging as it posted a 0.2% increase (above expectations) from January, when it had risen by 0.5%. Wages [..]

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