News / Page 145

Week ahead – GDP revisions in UK, US, Japanese inflation and Xmas

Posted on December 18, 2015 at 1:43 pm GMT

Following the interest rate increase by the Federal Reserve on December 16, it looks like the year’s most important story has already been written. Looking ahead to what should be a relatively quiet week, there will be some economic news from the UK and the US in the form of revisions to GDP data. Furthermore, there will be some updates from Japan in terms of inflation and Bank of Japan minutes. Starting from the UK, final GDP numbers for the [..]

Technical Analysis – USDCAD Monthly breaks fresh 12-year highs; eyes 1.45

Posted on December 18, 2015 at 8:39 am GMT

The loonie fell to fresh 12-year lows versus the greenback, as weakness in the oil price (oil is a major export for Canada) combined with bullish sentiment on the US dollar led the USDCAD pair substantially higher. The loonie is now the worst performing G10 currency of the year versus the US dollar with year-to-date losses in excess of 18%. The latest move has been relatively sudden and sharp and this is reflected in the relative strength index (RSI), which [..]

Asian Session – Yen firmer after BoJ disappoints with changes to its QE program

Posted on December 18, 2015 at 8:13 am GMT

The Bank of Japan took markets by surprise by expanding the range of assets it will purchase under its quantitative easing program. At its latest monetary policy meeting, the Bank decided to set aside 300 billion yen from its existing QE fund to purchase exchange-traded funds issued by firms with the aim of encouraging companies to invest more and increase wages. The Bank of Japan also decided to increase the maturity of Japanese government bonds that it purchases from 10 [..]

European Session – Euro under pressure against dollar on policy divergence

Posted on December 17, 2015 at 3:25 pm GMT

The euro remained under pressure against the broadly firmer dollar given policy divergence between the ECB and the Fed. After the Fed lifted rates yesterday, the euro weakened and extended losses in Asia, then consolidated in European trading. European data this morning showed a disappointing German IFO survey, with the business climate indicator falling slightly to 108.7 in December from a prior 109. But the market focus was on the Fed message so price action for the euro versus the [..]

Strong UK retail sales unable to lift rates outlook as weak wage growth persists

Posted on December 17, 2015 at 12:03 pm GMT

Retail sales in the UK posted another strong month in November as British consumers took advantage of Black Friday deals. After a revised 0.5% drop in October, retail sales jumped by 1.7% month-on-month in November, beating estimates of a 0.5% gain by a wide margin. This matches September’s increase of the same amount and takes the year-on-year rate to 5.0%. Low inflation and cheaper fuel have raised households’ disposable incomes, leaving consumers with more cash in their pockets to spend [..]

Asian Session – Dollar makes modest gains after historic rate hike

Posted on December 17, 2015 at 8:53 am GMT

The US dollar rose across the board in currency markets after the Fed announced its first rate hike in almost a decade yesterday. The FOMC raised the Fed funds target range by 25bps to between 0.25-0.50% in a widely telegraphed move. The US currency initially dipped against other currencies after the announcement but later rebounded. The dollar index hit a two-week high of 99.0 but had eased slightly in late Asian trading today. The greenback was back above 122 yen [..]

Technical Analysis – Gold falling in descending channel

Posted on December 17, 2015 at 8:31 am GMT

Gold has been moving in a descending trend channel formation since March 2014, (on the weekly chart) and making lower highs and lower lows as prices bounce off the upper and lower channels lines. The bias remains bearish, especially after prices fell below the key psychological level of 1200 since June of this year. A low of 1046.29 was reached on December 3. This is the lowest level since 2010. Technical indicators are giving bearish signals. The tenkan-sen is below [..]

Fed raises rates by 0.25% but dollar fluctuates on accommodative policy

Posted on December 16, 2015 at 9:18 pm GMT

The US Federal Reserve announced its first increase in the Fed funds rate since June 2006, raising the target range from 0-0.25% to 0.25-0.5%. The move, which was widely expected and carefully telegraphed by the Fed, signals the end of ultra-low interest rates that have been in place since the financial crisis. The decision was unanimous by the Federal Open Market Committee (FOMC) and comes after signs of division within the committee on the appropriate timing for lift-off following the [..]

European Session – Sterling falls on weak UK wage data; dollar subdued ahead of Fed

Posted on December 16, 2015 at 3:46 pm GMT

The wait for the Federal Reserve policy announcement today limited any big moves in the currency market as investors took on a cautious mood. Markets have priced in a 78% chance of a rate hike today. A 25 basis point increase in the Fed funds target range to 0.25 – 0.50% is widely expected at this December meeting after much speculation over the past year. This would be the first time the Fed would raise the key rate in nine [..]

Eurozone PMI points to strong fourth quarter on rising manufacturing activity

Posted on December 16, 2015 at 11:57 am GMT

Eurozone activity eased slightly in December as the services PMI registered a drop compared to November. But the flash reading remained well above 50, which separates expansion from contraction. Manufacturing saw a faster rise in output than services for the first time in over 12 months. The Markit flash estimate for manufacturing PMI rose to a 20-month high of 53.1 in December, up from 52.8 in November and above estimates it would stay unchanged. This wasn’t enough though to compensate [..]

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