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European Session – Euro fluctuates due to ECB; oil surges as inventories fall

Posted on September 8, 2016 at 3:22 pm GMT

In the absence of any major economic data releases during the European session, the highlight of the day was the ECB meeting and press conference by ECB Chief Mario Draghi. The euro was trading firm ahead of the decision but when the ECB announced that it was maintaining its current monetary policy, the single currency jumped higher. The euro rose above the key 1.1300 level as Draghi spoke and reached a fresh September high. As the dust settled after the [..]

Euro gains as ECB on hold and Draghi fails to signal further easing

Posted on September 8, 2016 at 3:05 pm GMT

The European Central Bank left its three main rates unchanged at its policy meeting on Thursday, while holding the size of its asset purchases steady at €80 billion a month. The interest rates on the main refinancing operations, the marginal lending facility and the deposit facility were unchanged at 0%, 0.25% and -0.4% respectively. Markets were not expecting any new measures as the immediate threat from Brexit has abated and most indicators suggest the Eurozone economy continues to recover. However, [..]

Uncertainty over BoJ policy keeps yen near two week highs

Posted on September 8, 2016 at 12:09 pm GMT

As expectations of a Fed rate hike this month subside, speculation about what action, if any, the Bank of Japan will take when it meets in just under two weeks’ time has intensified. At its July meeting, the Bank of Japan had said it will conduct a “comprehensive assessment” of its policies in September, raising concerns that the Bank may be getting ready to withdraw its massive asset purchase program. The BoJ’s Deputy Governor, Hiroshi Nakaso, today reiterated remarks made [..]

Asian Session – Yen holds onto gains after GDP revised up, BoJ Deputy speech

Posted on September 8, 2016 at 8:38 am GMT

The yen held on to its gains on Thursday following the dollar’s post-ISM sell-off as an upward revision to Japanese GDP in the second quarter provided further support to the yen. There was muted reaction though to a speech by the Bank of Japan’s Deputy Governor, Hiroshi Nakaso, who signalled that rates could be cut deeper into negative territory. Japan’s economy expanded by an annualized rate of 0.7% in the second quarter of the year, up from the preliminary estimate [..]

Technical Analysis – GBPUSD falls back below 1.3400; 1.3300 eyed

Posted on September 8, 2016 at 7:25 am GMT

GBPUSD maintains a short-term bullish structure after rising from the August 15 low of 1.2864 to the September 6 high of 1.3444. However, upside momentum has faded and there was a rapid drop yesterday to 1.3318. Weaker momentum is highlighted by the drop in the RSI indicator, which has levelled off, suggesting the market could consolidate in the near term. The 1.3300 level is eyed. Unless GBPUSD can move and stay above 1.3400 in the near term, there is a [..]

European Session – Loonie falls after BOC holds rates and Canadian business survey disappoints

Posted on September 7, 2016 at 3:03 pm GMT

The euro consolidated against the dollar during today’s European session, after Tuesday’s impressive rally, as further gains were limited ahead of Thursday’s European Central Bank policy meeting. Some analysts believe that the ECB might be pressured to come up with a decision on further stimulus measures. The euro touched session lows of 1.1228 and highs of 1.1271 against the dollar. The pound dipped to a new intra-day low of 1.3350 dollars just before Mark Carney, Governor of the Bank of [..]

Bad US economic news may not hurt the dollar longer-term

Posted on September 7, 2016 at 1:51 pm GMT

The US dollar has experienced quite a flip-flop in the past few weeks, as a summer that was dominated by a relatively uneventful Brexit was drawing to a close. Relatively hawkish statements from Federal Reserve officials (particularly Chair Yellen) that seemed to open the door to a possible rate hike in September, have clashed with some particularly weak readings from the two most important business surveys of the world’s largest economy. In particular, the ISM’s manufacturing and non-manufacturing surveys posted [..]

Technical Analysis – NZDJPY attempts a break above 200-DMA

Posted on September 7, 2016 at 1:39 pm GMT

NZDJPY has rallied by about 5% over the past three weeks, climbing from 72.20 to around the 76 level, taking prices above both the 50-day and 200-day moving averages. But the rally has come to a pause this week as the pair is being capped by the upper band of the downward sloping regression channel that prices have been trading in since January. The ebbing momentum is evident by the stochastics which are trending down, having already crossed into overbought [..]

UK manufacturing contracts in July on Brexit hit; Pound back below 1.34 dollars

Posted on September 7, 2016 at 11:32 am GMT

The first official industrial and manufacturing data for the month after the Brexit vote gave a mixed verdict on the state of the UK economy in July. Figures released today by the UK’s Office for National Statistics are the first hard data to cover the full month after the June 23 referendum. Manufacturing production in the UK fell at the fastest pace in a year in July as the shock and uncertainty created by the Brexit vote hurt output. Production [..]

Asian Session – Dollar/yen extends slide on weak US data; Kiwi rallies to 16-month high

Posted on September 7, 2016 at 8:39 am GMT

Markets were back in risk-on mood in Asian trading on Wednesday as investors cut back expectations of a Fed rate hike this month following yesterday’s weak US data. Non-manufacturing activity in the US grew at the slowest pace in 6½-years in August according to the ISM index. The dollar plummeted after the data as the poor ISM reading means the Fed is unlikely to raise rates at its policy meeting later this month. The greenback fell to a one-week low [..]

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