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RBNZ keeps rates on hold but worried about rising New Zealand dollar

Posted on October 29, 2015 at 11:42 am GMT

The Reserve Bank of New Zealand (RBNZ) kept its official cash rate unchanged at 2.75% at its October meeting after cutting them by 25 basis points at each of its previous three meetings. A slowdown in economic growth from tumbling global dairy prices and lower inflation from falling oil prices prompted the central bank to start loosening monetary policy in June for the first time in four years. The RBNZ was among few central banks in advanced economies to tighten [..]

Asian Session – Dollar up on FOMC statement but eases against yen on strong Japan data

Posted on October 29, 2015 at 8:33 am GMT

The US Federal Reserve surprised markets on Wednesday when the FOMC statement sounded more hawkish than what analysts were expecting. The statement specifically referred to what information the committee will be assessing at its next meeting, suggesting that a move in December is a strong possibility. The dollar index jumped by 1.5% after the statement as many investors had ruled out a rate rise this year. In the statement, the FOMC said that the risks to economic outlook and the [..]

Technical Analysis – EURJPY strengthens bearish bias, breaking out of range

Posted on October 29, 2015 at 8:04 am GMT

EURJPY extended its decline to a new low since falling from the high of 141.04 (June 2015). The underlying bearish market structure remains as prices have fallen below the 200-day moving average and below the Ichimoku cloud. The cross of the tenkan-sen line below the kijun-sen line has increased the bearish bias. RSI is increasingly negative. The market has now retraced over 50% of the rise from 126.08 to 141.04 and is now testing the 61.8% Fibonacci retracement level of [..]

Fed hints at possible December rate hike; dollar jumps

Posted on October 28, 2015 at 7:28 pm GMT

The Federal Open Market Committee (FOMC) concluded its two-day meeting today and as expected, voted to keep the federal funds rate unchanged with one dissenter voting against the decision. Richmond Fed President Jeffrey Lacker once again voted to raise rates by 0.25% but the FOMC’s statement suggests he may not be outvoted at the next meeting. The committee sounded more upbeat than at the previous meeting, noting that the risks to the outlook for economic activity and the labor market [..]

European Session – Dollar weak ahead of Fed, oil and gold rally

Posted on October 28, 2015 at 4:26 pm GMT

The US dollar remained weak against most major currencies due to low demand ahead of the FOMC policy announcement due later in the day. The Federal Reserve is expected to keep interest rates unchanged near zero percent. A recent spate of weak US economic data has led to most economists forecasting that the US central bank would hold fire at this meeting and keep rates where they have been since 2008. The dollar was steady against the yen, trading above [..]

Swedish crown fluctuates after Riksbank expands QE

Posted on October 28, 2015 at 9:46 am GMT

The Swedish crown fluctuated sharply after the Riksbank announced its policy decision to expand QE and keep its benchmark rate unchanged. Sweden’s central bank expanded its bond purchase programme by 65 billion Swedish crowns to a total of 200 billion crowns and held the benchmark repo rate at -0.35% as expected. The Riksbank has cut rates three times this year in an effort to fight risks of deflation. Rates have been lowered from 2.0% in late 2011 The central bank [..]

Asian Session – Aussie falls as soft inflation increases chance of RBA rate cut, focus turns to Fed

Posted on October 28, 2015 at 8:26 am GMT

The Australian dollar was one of the worst performing currencies in Wednesday’s Asian session after it plunged following data showing the weakest pace of inflation in Australia in three years. Headline CPI came in at 0.5% quarter-on-quarter in the three months to September compared to 0.7% in the prior quarter. This missed forecasts of a 0.7% number. Meanwhile, compared to a year earlier, CPI rose 1.5%, below expectations for a 1.7% rise. The Australian dollar fell sharply against the US [..]

Technical Analysis – AUDUSD tumbles after breaking cloud top support

Posted on October 28, 2015 at 7:12 am GMT

AUDUSD was finding support at the top of the Ichimoku cloud in the past week around 0.7200. This support level failed on Wednesday and prices tumbled into the cloud and dipped below it to reach 0.7110 after Australian CPI data missed forecasts and came in lower. The intra-day bias is bearish as RSI has turned negative and fell below 50. Prices are also below the 50-day moving average. The market has retraced just over 50% of the rise from 0.6935 [..]

European Session – Dollar slides versus yen on soft batch of US data ahead of Fed, sterling weighed by UK GDP

Posted on October 27, 2015 at 3:14 pm GMT

Risk sentiment was weighed down by weak equity markets on Tuesday. The dampened mood spilled over to currency markets, giving the yen a safe haven bid. Meanwhile, investors remain nervous ahead of the Fed (and other central bank meetings) this week. Geopolitical risk was also in focus as US-China relations were tested after a US warship sailed through disputed waters in the South China Sea. The main economic release during the European session was UK third quarter GDP data. The [..]

US durable goods orders fall again in September

Posted on October 27, 2015 at 2:15 pm GMT

Orders for durable goods – an important gauge of business spending in the US – fell by 1.2% month-on-month in September, slightly above estimates of a 1.5% drop. This follows a downwardly revised figure of -3.0% in August. Excluding transport equipment, durable goods orders fell by a smaller 0.4%, though this was sharply below forecasts that it would stay unchanged. The core rate was also subject to a downward revision for August, which was lowered to -0.9% from 0.0%. Another [..]

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