News / Page 128

Swedish krona falls after Riksbank cuts repo rate to -0.50%

Posted on February 11, 2016 at 12:25 pm GMT

Sweden’s central bank, the Riksbank, took markets by surprise by delivering a bigger-than-expected cut in its repo rate. The central bank cut rates by 15bps to -0.50% from -0.35%. Analysts were expecting only a 10bps cut to -0.45%. Citing low inflation as the main reason for today’s decision to loosen monetary policy, the bank said CPI is expected to be lower in 2016 than previously forecast. In its latest projections, the central bank cut the forecast for CPI to 0.7% [..]

Asian Session – Dollar slides below 112 yen on dovish Yellen

Posted on February 11, 2016 at 8:38 am GMT

The US dollar slipped to fresh 4-month lows following Fed Chair Janet Yellen’s testimony yesterday where she warned of downside risks to the US economy. Speaking before Congress, Yellen stuck to the Fed’s current policy path but signalled that rates might have to rise at a more gradual pace than expected, saying that the Fed is not on a “preset course”. She noted that financial conditions in the US have become less supportive of growth and while the economy is [..]

Technical Analysis – EURGBP continues uptrend after double bottom pattern

Posted on February 11, 2016 at 8:00 am GMT

EURGBP is continuing the uptrend after the formation of the double bottom trend reversal pattern. The shift to a bullish trend was confirmed after the market broke above the key 0.7500 level in January and prices are now targeting the 50% Fibonacci retracement level at 0.7870. This is the retracement of the downleg from 0.8813 to 0.6936 (February 2013 to July 2015 low). Once this resistance level is breached, a continuation up toward the 0.8000 level could be seen next. [..]

Yellen maintains inflation outlook but highlights growing risks

Posted on February 10, 2016 at 6:37 pm GMT

In her testimony to the House Financial Services Committee, Fed Chair Janet Yellen spoke about the growing risks to the US economy in her first public statement since the December rate hike. While maintaining the Fed’s outlook that the economy will continue to grow at a moderate pace and inflation will return to the 2% objective in the medium term, Yellen stressed that monetary policy was not on a “preset course”. Pointing to the recent falls in equity prices and [..]

European Session – Euro reverses to below $1.12 after Yellen’s written testimony

Posted on February 10, 2016 at 3:27 pm GMT

Markets were more stable today with risk appetite returning in Asia and Europe. This led to the yen giving back some gains made from safe haven flows yesterday. The dollar recovered from mid-114 yen to rise just above the key 115 level in European trading. The euro fell back after testing the 1.1300 level against the dollar, while sterling rose above 1.4500 versus the greenback only to reverse lower following the release of Federal Reserve Chair Janet Yellen’s prepared semi-annual [..]

UK industrial output slumps at end of 2015; similar picture across Europe

Posted on February 10, 2016 at 1:19 pm GMT

It was a poor month for industrial production in Europe’s major economies in December as output slumped towards the end of the year. In the UK, industrial production contracted by 1.1% over the month in December – the biggest monthly drop since September 2012. Expectations were for a much smaller fall of -0.1%. Manufacturing also had a bad end to the year, with output declining by 0.2% month-on-month versus estimates of a 0.1% rise. On a year-on-year basis, industrial output [..]

Asian Session – Dollar bounces from near 4-month lows but equities still under pressure

Posted on February 10, 2016 at 8:29 am GMT

Asian stock markets were in negative territory again on Wednesday as fears about global growth and the health of banks continue to weigh on equities. Tokyo’s Nikkei 225 index shed another 2.3%, while Sydney closed 1.2% lower. Chinese markets remain closed for the week for the Lunar New Year celebrations. The dollar index, which measures the US dollar against a basket of currencies, hit a near 4-month low of 95.66 on Tuesday but had firmed to 96.09 in late Asian [..]

Technical Analysis – EURJPY bearish in descending channel

Posted on February 10, 2016 at 8:04 am GMT

EURJPY is falling in a descending channel since early June 2015 when the pair fell from a high of 141.04 down to a low of 126.15. After touching this low on January 21, there was an attempt to rally to 132.29 but resistance was found at the 100-day moving average (red line). Subsequently the pair reversed back down to fall below the 130.00 psychological mark. This important level has now turned into resistance. Should prices fail to break back above [..]

European Session – Euro nears $1.13, dollar tests 115 yen

Posted on February 9, 2016 at 3:53 pm GMT

The markets were in a risk-off mood due to broad weakness in equities, which arose from worsening expectations for global growth. Investors fled to the safe-haven Japanese currency, pushing it to its highest level in sixteen months versus the US dollar, while the Japanese 10-year government bond plunged below zero for the first time. The dollar traded below 115 yen before jumping above this level on some upbeat US jobs data. The latest JOLTS report (Job Openings and Labor Turnover [..]

Technical Analysis – USDCHF finds support at 200-DMA on bearish shift

Posted on February 9, 2016 at 3:12 pm GMT

USDCHF extended its losses for a seventh day, dropping to 3½-month lows. The pair found support at the 200-day moving average where it bounced off a low of 0.9717. The pair has retraced about 55% of the August-November upleg from 0.9257 to 1.0327, taking it below the Ichimoku cloud in the process. Momentum indicators are pointing to strong downside bias but with RSI just above the oversold level and the stochastics already in that territory, further losses may be limited. [..]

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