News / Page 78

Bank of Canada keeps rates on hold but Brexit and wildfires to weigh on growth

Posted on July 13, 2016 at 3:37 pm GMT

The Bank of Canada held interest rates unchanged at 0.5% at its monetary policy meeting on Wednesday as expected. However, the central bank lowered its outlook for the country’s GDP for 2016 in its latest quarterly report as second quarter growth is expected to take a big hit from the wildfires that broke out in Canada’s oil sands at the beginning of May. The forecast for annualized growth in the second quarter was lowered sharply from +1.0% to -1.0%. The [..]

European Session – Euro rises above $1.11, loonie gains after BoC holds rates

Posted on July 13, 2016 at 3:27 pm GMT

The euro and the Canadian dollar were the best performers out of the major currencies in the late European session. The loonie strengthened after the Bank of Canada announced its policy decision to leave interest rates unchanged at 0.5%. This was widely expected but what boosted the Canadian currency was a less dovish statement from the BoC. Despite some downward revisions to growth this year to 1.3% from a previously projected 1.7%, the statement was not overtly dovish as it [..]

Asian Session – Yen sell-off eases but cable extends gains ahead of May’s appointment

Posted on July 13, 2016 at 8:13 am GMT

The yen was slightly firmer on Wednesday after seeing two days of sharp losses, but risk appetite remained strong, helping Asian equities advance for a third straight day. Global stocks were boosted after US indices hit new all-time highs yesterday. Both the Dow Jones and the S&P 500 closed at fresh record highs as the outlook for global growth improved following a rebound in the US labour market in June and subsiding fears over the impact from Brexit. The dollar [..]

Technical Analysis – EURGBP reverses upside move to test key 0.83 support

Posted on July 13, 2016 at 7:03 am GMT

EURGBP has been easing off the post-Brexit high of 0.8627, a near 3-year high. Prices have been steadily declining since then and are now testing a key psychological level at 0.83. This is an important support level which saw some congestion around this area right after the big move up following the Brexit vote. Upside momentum faded after the big rally and RSI reached overbought levels above 70. Consequently, the RSI indicator has turned back down, although still in bearish [..]

European Session – Pound rallies 3 percent versus yen

Posted on July 12, 2016 at 2:51 pm GMT

Sterling staged a strong rally to hit a fresh one-week high against the dollar during today’s European session, peaking at $1.3186. The pound made a notable move higher against the yen, gaining 3 percent to touch a session high of 137.76 yen. The relief rally was mostly politically-driven and not based on fundamentals, as the pound was boosted by news of the announcement of a replacement for David Cameron. By Wednesday night, Theresa May will be the new Prime Minister [..]

Risk assets rise together with safe havens following Brexit vote

Posted on July 12, 2016 at 2:48 pm GMT

Gold, silver do best following Brexit Safe government bonds, stocks also do well If situation is not so bad, difficult to justify more stimulus One surprising aspect of the post-Brexit financial environment is how various assets have reacted to this unexpected event. Safe havens did very well as was expected, but perhaps less expected was how quickly risk assets shook off the post-Brexit blues and turned around to post a positive performance. As the chart shows, silver and gold have [..]

Technical Analysis – US 30 index futures bullish above cloud

Posted on July 12, 2016 at 12:40 pm GMT

The US 30 index futures has turned strongly bullish after recovering from the post-Brexit sell-off. Prices have risen sharply above the Ichimoku cloud and the tenkan-sen and kijun-sen lines are positively aligned. The momentum indicators are also supporting the bullish bias with the MACD turning positive again and the RSI rising towards 70. Further gains in the near term are possible as RSI has yet to cross into overbought territory. The index is trading not too far from its all-time [..]

May set to become British PM but unlikely to trigger Article 50 anytime soon

Posted on July 12, 2016 at 9:59 am GMT

There was hope that the political uncertainty that’s predominated the British political establishment as well as financial markets since the shock outcome of the Brexit referendum is about to end after Theresa May became the sole candidate in the Conservative party’s leadership race. British politics took another unexpected turn yesterday after one of the two remaining candidates to lead the UK Conservative party pulled out of the race. Andrea Leadsom, who was the only candidate from the ‘Brexit’ camp to [..]

Asian Session – Pound tops $1.31 as political uncertainty eases; Risk-on drives dollar above 103 yen

Posted on July 12, 2016 at 8:13 am GMT

Risk sentiment continued to improve on Tuesday, easing pressure on the yen, which extended its losses into a second day. Equity markets were the main winners of the current risk-on mood as record low government bond yields increased the attractiveness of global stocks. The S&P 500 in the US closed at a new record high yesterday, helping Asian shares open with strong gains today. The dollar made its sharpest daily gain against the yen since October 2014 on Monday, closing [..]

Technical Analysis – USDJPY stages strong rally but at risk of reversal

Posted on July 12, 2016 at 6:42 am GMT

USDJPY staged a strong rally on Monday from the 100 yen handle to eventually reach a high of 103.46 early on Tuesday. In the bigger picture though, the pair remains in a downtrend as prices have been making lower highs and lower lows since late 2015. The market remains below the 200 and 50-day moving averages, which support a bearish bias. A decisive daily close above 103.38 (July 1 high) is required to take immediate pressure off the downside with [..]

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