News / Page 211

RBNZ takes markets by surprise with 0.25% cut, sending kiwi down

Posted on June 11, 2015 at 10:05 am GMT

The Reserve Bank of New Zealand made an unexpected cut in its official overnight cash rate on Wednesday, lowering it by 0.25% to 3.25%. The majority of economists had expected that there would be no cuts this month. Another reason for the surprise was that the RBNZ had previously expressed reservations on reducing the lending rate as it could fuel an already overheated housing market in Auckland, the country’s biggest city. However, in May, the central bank announced new measures [..]

Asian Session – Kiwi down sharply after surprise rate cut; yen rally proves short-lived

Posted on June 11, 2015 at 7:36 am GMT

The Reserve Bank of New Zealand surprised markets on Thursday by cutting its official cash rate by 0.25% to 3.25%. This was the first cut in four years and expectations of further cuts were raised after the RBNZ said in its statement that further easing may be appropriate. Weak commodity and dairy prices were cited as the main reasons for slowing demand growth, and with inflation low and the exchange rate still overvalued, there is room for further cuts. The [..]

Technical Analysis – NZD/USD strong downside bias after testing 0.7000

Posted on June 11, 2015 at 7:19 am GMT

The intra-day bias on the NZD/USD remains on the downside after the large drop early on Thursday to a near 5-year low of 0.6996. The decline from the peak of 0.7743 (April 29 high) has resumed after a brief upside move to 0.7231 on Wednesday. After a break below support of 0.7175 (February 3 low), this level became a strong resistance level which prices tested several times since the beginning of June. The outlook is bearish since the market remains [..]

European Session – Dollar weakness and stronger UK industrial output lift sterling to 3-week high, Carney speech in focus

Posted on June 10, 2015 at 2:27 pm GMT

The euro rallied early in the European session after another sell-off in German bunds today which resulted in 10-year bund yields passing 1.00% for the first time since September 2014. The euro/dollar pair hit a high of 1.1385 but did not stay for long and dropped back to 1.1259 on weak Italian industrial production data and some headlines regarding Greece. A planned meeting between Greek Prime Minister Tsipras and the leaders of Germany and France in Brussels later today was [..]

Swedish krona and Swiss franc charter new ground with negative rates; Canadian dollar hit by oil

Posted on June 10, 2015 at 2:25 pm GMT

Deflation fears pushes Swedish krona to multi-year lows The Swedish krona has been one of the worst performing currencies in the developed world, declining over 12% during the past year. It has been falling against the euro since August 2012 and has depreciated rapidly against the dollar since March 2014, hitting a lot of 8.88 kronor per dollar, though since recovering slightly to around 8.3. Low inflation expectations has been the main driver of the krona’s weakness as Sweden’s [..]

Yen jumps against dollar after Kuroda comments

Posted on June 10, 2015 at 9:21 am GMT

The yen unexpectedly reversed the dollar’s strong rally against the Japanese currency after surprise comments by the Bank of Japan Governor, Haruhiko Kuroda caught markets off-guard. The dollar has been surging higher against the yen since late May, making gains of over 5% to a 13-year high of 125.85. But in a speech at the Japanese parliament’s lower house financial affairs committee, Kuroda said that the yen’s real effective exchange rate is “very weak” and further falls were unlikely. The [..]

Asian Session – Yen rallies after Kuroda says the currency is already weak

Posted on June 10, 2015 at 7:21 am GMT

The Japanese yen jumped higher today after the head of the Bank of Japan Haruhiko Kuroda said the currency was “very weak”. Dollar / yen slumped as a result, falling from around 124.54 before the speech to around 122.80 – touching a low of 122.49. Still, Kuroda said an easy monetary policy would be maintained as he also did not see any asset bubbles forming in Japan because of quantitative easing. In economic data that preceded Kuroda’s testimony before parliament, [..]

Technical Analysis – EURCAD bullish after inverse head and shoulders formation

Posted on June 10, 2015 at 7:15 am GMT

EURCAD has pushed above the daily Ichimoku cloud but found resistance at the 38.2% Fibonacci retracement at 1.3994 of the decline from 1.5583 (March 2014) to 1.3021 (April 2015). There is scope for a correction back to the neckline of the inverse head and shoulders pattern at around 1.3785. The outlook is quite bullish because of this inverse head and shoulders chart pattern. This pattern usually indicates a reversal of the prior trend, in this case the downtrend from 15583 [..]

European Session – Greece concerns and bund yields drive currency markets

Posted on June 9, 2015 at 2:42 pm GMT

Greece concerns and bund yields were the main drivers of the currency markets during Tuesday’s European session since there were no tier one data releases. Economic data out of the Eurozone showed revised Q1 GDP at 0.4% quarter-on-quarter. With regards to Greece, Tsipras’ government submitted fresh proposals to its creditors today, which were rejected for being insufficient. The latest submission on reforms comes after last week’s 47-page proposal by Athens was also rejected and then a counter-offer by the creditors [..]

Technical Analysis – EURUSD holds above 1.12; outlook bullish but weak

Posted on June 9, 2015 at 1:40 pm GMT

EURUSD headed lower today in another volatile session but remained above the 1.12 level. Short term bias is looking bearish as the stochastic oscillator is heading downwards with the %K line having dipped below the %D line. Support could come around 1.1044 where the 100-day moving average is bottoming out and was a previous resistance level. However, with prices holding above the Ichimoku cloud, as well as the 50- and 100-day moving averages, the medium-term outlook is for the continuation [..]

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