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European Session – Sterling deflated as Carney lessens likelihood of early rate hike

Posted on January 24, 2014 at 2:42 pm GMT

Despite the lack of data, there was volatility in the currency markets today. The euro and the pound did well in the first half of the European session before giving up gains against the dollar. The yen retained its strength mainly due to safe haven flows as risk sentiment was still down following a series of weak data out of the US and China on Thursday. The euro was unable to remain above the key 1.36 level which it breached [..]

Forex News – Housing expected to be positive factor for US economy in 2014

Posted on January 24, 2014 at 2:15 pm GMT

[caption id="attachment_12845" align="alignnone" width="550"] (click to enlarge)[/caption] Housing statistics are followed very closely by US economy-watchers. The state of the housing market is intertwined with the state of the US consumer, both with the wealth effect rising home prices generate and as employment and income prospects justify taking out a mortgage and buying a house. In addition, the housing market is very important as it encourages construction, which in turn can have a significant influence on GDP. Residential construction has [..]

Technical Analysis – EURUSD above 1.36 but rally loses momentum

Posted on January 24, 2014 at 9:07 am GMT

The euro was propelled back above the key 1.36 level after upbeat Eurozone PMI data on Thursday. After trading within a range since Monday, EURUSD finally broke out to rise above its 20-period moving average and above the downtrend line (from the January 14 high). The pair also broke above a key resistance level which is represented by the 23.6% Fibonacci retracement level of the move from the December 2013 high (1.3882) to the January 20 low (1.3506). The penetration [..]

Asian Session – Dollar weakens on falling US yields as soft data hurts sentiment

Posted on January 24, 2014 at 7:36 am GMT

Investors were generally avoiding risk today, as damp sentiment followed through from the US session after disappointing US data. As a result the US dollar was broadly weaker against most of its major counterparts while safe haven flows went to currencies like the yen. Falling US Treasury yields didn’t help the dollar. Meanwhile, Chinese manufacturing data from yesterday indicating a slowdown in the world’s second largest economy also led to a risk-off mood. On Thursday, US weekly initial jobless claims [..]

European Session – Euro jumps as Markit flash PMIs point to improving recovery

Posted on January 23, 2014 at 2:32 pm GMT

The euro was the big winner of today’s European session, as business surveys pointed to improving economic prospects for the Eurozone. The euro was up 0.86% against the dollar to trade at 1.3666, while against the yen it managed to gain 0.31% to trade at 141.75. The Eurozone Markit flash PMIs for January exceeded expectations, as the composite index came in at 53.2 versus 52.5 expected by economists and 52.1 the previous month. The manufacturing PMI figure climbed to a [..]

Forex News – BOC warns of inflation risk, scope for rate cut

Posted on January 23, 2014 at 1:22 pm GMT

The Canadian dollar tumbled to fresh 4-year lows against its US counterpart today after being weighed down by a dovish Bank of Canada outlook on the country’s economy. The BOC held its monthly policy meeting on Wednesday, and kept its benchmark interest rate at a record low 1%. While this was in line with expectations, the central bank left open the possibility for a rate cut in the future. It is expected that any policy easing would depend on upcoming [..]

Technical Analysis – USDCAD hits new 4-year high on dovish BOC

Posted on January 23, 2014 at 9:50 am GMT

The Canadian dollar weakened drastically on Wednesday after a dovish Bank of Canada outlook on the economy, following the central bank’s monetary policy meeting. USDCAD rallied to a new 4-year high of 1.1172 by the European session on Thursday after breaking a key psychological barrier of 1.10 late on Wednesday. The pair is approaching the 50% Fibonacci retracement level (1.1220) of the decline from the March 2009 high (1.3063) to the July 2011 low (0.9404). This Fibonacci level will act [..]

Asian Session – Aussie falls as Chinese manufacturing contracts

Posted on January 23, 2014 at 7:21 am GMT

Manufacturing data from China this morning showed the first contraction in 6 months and prompted new concern about growth in the world’s second largest economy. The HSBC flash manufacturing PMI fell to a 6-month low of 49.6 in January, below December’s final reading of 50.5 and missing expectations for a 50.3 reading. The soft data put a damper on market sentiment today, resulting in safe haven demand. Meanwhile, the Australian dollar was impacted the most since China is a major [..]

European Session – Pound rallies on big drop in unemployment

Posted on January 22, 2014 at 2:41 pm GMT

The pound was the currency that rose the most during today’s European session as unemployment in the UK dropped to within striking distance of the Bank of England’s threshold in order to consider an interest rate hike. The September-November unemployment rate dropped to 7.1% compared to expectations of a rate of 7.3%. The previous reading was 7.4%. At the same time when unemployment was announced, the Bank of England meeting minutes were also released. The minutes showed that the Bank [..]

Forex News – Big drop in UK unemployment rate sparks rally in sterling

Posted on January 22, 2014 at 1:37 pm GMT

[caption id="attachment_12808" align="alignnone" width="550"] (click to enlarge)[/caption] Having received a significant boost from the December retail sales report last Friday, the pound benefitted from a big drop in UK unemployment today. Specifically, the ILO definition of the unemployment rate fell to 7.1% in the three months to November from 7.4% the previous period. It was the lowest unemployment rate since the first quarter of 2009. The unemployment rate was also well below economists’ forecasts of 7.3%. The new data showed [..]

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