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Sunday 28 August 2016

Dollar Ends Week with Gains, Supported by Yellen



The US dollar ended the week with gains against most major currencies (but not versus the Great Britain pound). The reason for the good performance was the outlook for monetary tightening, supported by comments from Fed Chair Janet Yellen.
For the whole week, traders were waiting for Yellen’s speechat the Jackson Hole Meeting, hoping that she might reveal timing for the next interest rate hike. In reality, she did not provide a specific date, but hinted that it may happen soon, though the exact timing depends on economic data:
Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months. Of course, our decisions always depend on the degree to which incoming data continues to confirm the Committee’s outlook.
Bets on a hike this year rose after the announcement.
While the dollar ended the week as the second strongest currency, the first one was the pound. Strong macroeconomic indicators released from the United Kingdom eased concerns about impact on the Brexit on the UK economy, making the sterling more appealing to investors.
EUR/USD dipped 1% from 1.1307 to 1.1192 during the week. GBP/USD ticked up from 1.3073 to 1.3127, touching the weekly high of 1.3272. USD/CHF jumped 1.8% from 0.9607 to 0.9779.
If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.


Monday 22 August 2016

Yen Suffers from Fischer’s Comments

Riskier currencies reacted negatively to the comments that Fed Vice Chairman Stanley Fischer made on Sunday, but safer ones, like the Japanese yen, were also not immune to the impact.
As many other currencies, the yen opened sharply lower against the US dollar, though also versus other most-traded rivals. The tightening stance of the Federal Reserve is in sharp contrast to the easing bias of Japan’s central Bank. That makes the Japanese currency especially vulnerable against the greenback.
USD/JPY traded near the opening level of 100.72 as of 8:54 GMT today after settling at 99.87 on Friday. EUR/JPY traded at 113.78 after closing at 113.38 on Friday and opening at 113.93 on Monday.
If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below

Sunday 21 August 2016

Week Ends with Losses for US Dollar as Policy Outlook Mixed

The US dollar continued to be driven mostly by monetary policy outlook during the past trading week. Unfortunately for the currency, the outlook was not particularly supportive, though it has changed a bit by the weekend.
The dollar was rather soft for the most part of the week as most market participants remained skeptical about chances for the Federal Reserve to continue monetary tightening in the near future. Fed minutes released during the week were not helping as they have shown division between US policy makers in the view of appropriate timing to raising interest rates again. Things improved a bitfor the greenback before the week ended as comments from various Fed members were starting to convince some traders that a rate hike is still possible.
Yet overall, the policy outlook remains unsupportive for the dollar. According the to the CME FedWatch site, chances for a hike in December are just little above 50% while only 12% of speculators bet on a raise in September. The only saving grace for the US currency is the fact that monetary policy of other developed nations’ central banks are also not supportive for their respective currencies.
EUR/USD rallied 1.4% from 1.1166 to 1.1327, and its weekly high of 1.1366 was the highest rate since the huge slump on June 24 when the Brexit announcement shocked markets. GBP/USD advanced 1.3% from 1.2917 to 1.3079. USD/JPY was down from 101.11 to 100.13, and its weekly low of 99.64 was the weakest rate since November 2013

Friday 19 August 2016

Canadian Dollar Little Changed After Thursday’s Rally

The Canadian dollar was little changed at the start of the Friday’s trading session after rallying against the US dollar and the Japanese yen on Thursday. The rally was caused by the rise of crude oil prices. The Canadian currency continues to follow moves of crude oil. Fortunately for the loonie, oil prices were moving up on Thursday, lifting the currency along with the them. Crude was rising on speculations about possible output cap by major oil producing countries as well as with the help of the weaker US dollar. Turning to the news from Canada itself, economic data released by the Statistics Canada was not good. It showed that foreign investment in Canadian securities fell to C$9.02 billion in June from C$13.99 billion in May. The actual value was nowhere near $17.23 billion predicted by experts. USD/CAD fell from 1.2843 to 1.2781 on Thursday and traded at 1.2786 as of 00:20 GMT today. EUR/CAD traded at about 1.4503 following the rise from 1.4495 to 1.4508. CAD/JPY rallied from 78.11 to 78.39 during the current trading session. If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Thursday 18 August 2016

Dollar Still Feels Weight of FOMC Minutes

The US dollar continued to feel pressure from yesterday’s FOMC policy minutes today, falling against other major currencies. Thus, EUR/USD continued to move higher. While the rally of the currency pairwas very limited yesterday, it is rather strong today. Positive economic indicators released from the United States on Thursday failed to support the greenback.
Philadelphia Fed manufacturing index rose from -2.9 to 2.0 in August, exceeding the analysts’ median forecast of 1.4. (Event A on the chart.)
Initial jobless claims fell from 266k to 262k last week instead of rising to 269k as experts had predicted. (Event A on the chart.)
Leading indicators edged up 0.4% in July while specialists had expected the same 0.3% rate of growth as in June. (Event B on the chart.)

Thursday 11 August 2016

Aussie Dollar Drops After Bond Sale, Euro at Risk on German GDP

The Australian Dollar underperformed in overnight trade, falling after the results of a 7-year government bond auction crossed the wires. The bid-to-cover ratio registered at 2.39 and the average yield posted at 1.71 percent, down from 3.00 and 1.73 percent recorded the last time analogous paper was sold in late July.
The results point to reduced demand and weaker rate expectations, which may imply bets on further RBA easing ahead. Indeed, front-end borrowing costs fell alongside the currency. Traders are currently pricing in at least one more 25bps reduction in the cash rate over the coming 12 months. The Yen weakened as Japan’s benchmark Nikkei 225 index advanced, eroding demand for the anti-risk currency.
Looking ahead, second-quarter German GDP figures enter the spotlight. Output is expected to add 0.2 percent, marking the smallest gain since the third quarter of 2014. A soft result may weigh on risk appetite, punishing sentiment-geared currencies including the Aussie. It may also fuel ECB stimulus expansion bets, sending the Euro downward.
Later in the day, the spotlight turns to July’s US Retail Sales report and Augusts’ preliminary University of Michigan consumer confidence reading. Receipts growth is expected to slow (0.4 percent vs. 0.6 percent prior) while sentiment firms (91.5 vs. 90.0 prior). It will be curious to see if the results create momentum in the priced-in Fed rate hike outlook, where indecision has prevailed for the past three weeks.

using System; using System.Diagnostics; using System.Runtime.InteropServices; namespace AutoClickPopup { public class Popup { #region Constants const int BM_CLICK = 0x00F5; #endregion #region P/Invoke Methods // Example: FindWindow((string)null, windowName) [DllImport("user32.dll", SetLastError = true)] static extern IntPtr FindWindow(string lpClassName, string lpWindowName); // You must pass IntPtr.Zero as the first parameter. [DllImport("user32.dll", EntryPoint = "FindWindow", SetLastError = true)] static extern IntPtr FindWindowByCaption(IntPtr ZeroOnly, string lpWindowName); // Use to find controls on the popup window [DllImport("user32.dll", SetLastError = true)] static extern IntPtr FindWindowEx(IntPtr parentHandle, IntPtr childAfter, string className, string windowTitle); // Send a Message to a control [DllImport("user32.dll", CharSet = CharSet.Auto)] static extern IntPtr SendMessage(IntPtr hWnd, UInt32 Msg, IntPtr wParam, IntPtr lParam); #endregion private readonly string _windowTitle; private IntPtr _window; /// /// /// /// public Popup(string windowTitle) { _windowTitle = windowTitle; } /// /// Indicates if the windows was successfully found and is usable /// public bool IsFound { get { return _window != IntPtr.Zero; } } /// /// Try and find the window by the window title /// /// If the window was found public bool SearchForWindow() { try { _window = FindWindow(null, _windowTitle); //_window = FindWindowByCaption(IntPtr.Zero, _windowTitle); } catch { // Ignore Exceptions } return IsFound; } /// /// Click a button on the windows /// /// Text of the button public void ClickButton(string buttonText) { try { IntPtr btn = FindWindowEx(_window, IntPtr.Zero, "Button", buttonText); if (btn != IntPtr.Zero) { IntPtr rc = SendMessage(btn, BM_CLICK, IntPtr.Zero, IntPtr.Zero); BreakOnError(rc); } } catch { // Ignore Exceptions } } [Conditional("DEBUG")] public void BreakOnError(IntPtr code) { if (code != IntPtr.Zero) Debugger.Break(); } } }

Wednesday 10 August 2016

Gold Prices Attempt Recovery, Crude Oil Eyes EIA Inventory Data

Gold prices maintained a consolidative tone after plunging on Friday in the wake of a better-than-expected US jobs report. The metal is attempting to launch a recovery overnight, finding support in broad-based US Dollar weakness – but a lull in top-tier event risk to offer tangible support for follow-through raises questions about the move’s near-term sustainability.
Crude oil prices failed to maintain near-term follow-through after spiking to at two-week high on news of an informal OPEC meeting upcoming next month. Downside pressure may have been compounded after an inventories estimate from API showed US stockpiles rose 2.09 million barrels. Economists project official EIA data to show a 1.5 million barrel drawdown later today.
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GOLD TECHNICAL ANALYSIS – Gold prices are attempting to launch a recovery after finding support at rising trend line set from late May. A daily close above the 38.2% Fibonacci expansion at 1377.75 paves the way for a test of the 50% level at 1398.46. Alternatively, a reversal below the trend line – now at 1335.41 – sees the next downside barrier marked by the 38.2% Fib retracement at 1308.00.

 CRUDE OIL TECHNICAL ANALYSIS  Crude oil prices paused to consolidate gains having advanced following the appearance of a bullish Morning Star candlestick pattern. Near-term resistance is in the 43.94-44.40 area (38.2% Fibonacci retracement, support-turned-resistance), with a daily close above that exposing the 50% level at 45.41. Alternatively, a move back below the 23.6% Fib at 42.12 clears the way for a retest of the 14.6% retracement at 40.99.

US Dollar Under Fire, NZ Dollar Extends Gains into RBNZ Meeting





The US Dollar faced selling pressure in overnight trade as US bonds advanced, pushing rates lower and undermining yield support for the benchmark currency. Fixed income demand appeared to stem from haven demand, with rising bond prices mirroring a drop in S&P 500 futures. Tellingly, the anti-risk Japanese Yenoutperformed among the G10 FX majors.
The British Pound corrected higher having slumped following dovish comments from the BOE’s Ian McCafferty yesterday. The New Zealand Dollar continued to rise in what looks to be an extended pre-positioning for the upcoming RBNZ monetary policy announcement. A 25bps rate cut is broadly expected, meaning surprise risk is skewed to the upside for the currency if forward guidance is less dovish than what is already priced in. With that in mind, gains may reflect protective short-covering.
A scheduled speech from RBA Governor Glenn Stevens – his final outing at the helm of the central bank before stepping down next month – did not generate a dramatic response from the Australian Dollar. Stevens reiterated familiar sentiments, cautioning about over-reliance on monetary policy to deliver growth and urging fiscal authorities to do their part. He also voiced support for inflation-targeting as a policy regime versus more rigid alternatives like that gold standard or an exchange-rate peg.
Looking ahead, another quiet day on the European and US economic data fronts is likely offers few stumbling blocks for established momentum. As noted yesterday however, the lull in high-profile news flow may make markets more sensitive than usual to unexpected headline risk. Otherwise, the aforementioned RBNZ rate decision marks the next key inflection point.

                         

Monday 8 August 2016

British Pound Unmoved on Best BRC Retail Sales Data in 6 Months

The British Pound showed a reserved response against its major counterparts after British Retail Consortium Sales crossed the wires. The data was released less than one week after a highly anticipated Bank of England rate decision. In this monetary policy announcement, the central bank appears to have downplayed the threat of a near term recession due to their newly enacted accommodative measures.
In July, BRC sales increased 1.1 percent (YoY) versus -0.7 percent expected and -0.5 percent in June. Meanwhile, total sales improved 1.9 percent (YoY) from 0.2% in June. Both of the consumer spending measurements marked their largest gains since January 2016, a six month high.
Perhaps the better than expected data releasing against the backdrop of a dovish central bank does not have much scope to impact policy easing bets. It could be possible to get a stronger lead from next week’s higher profile releases such as UK’s consumer price inflation report. In addition, a singular piece of economic data does not necessarily imply that a trend has reversed.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading that roughly 66 percent of open positions in GBP/USD are long. The SSI is a contrarian indicator at extreme levels, implying furtherGBP/USDweakness ahead.

Crude Oil Prices Eyeing API Inventory Data After OPEC-Linked Jump






Crude oil prices rebounded to a two-week high after OPEC President Mohammed Al Sada said the cartel will hold an informal meeting in Algiers next month. The comments fueled hopes for output-side relief after the WTI contract fell to a four-month low last week. Gold prices are in digestion mode after Friday’s sharp decline – the largest in three months – following a dramatically better-than-expected US jobs report. The outcome bolstered Fed policy tightening bets, pushing yields higher and undermining support for anti-fiat assets. Looking ahead, a lull in high-profile news flow may make for a quiet consolidative session. The absence of a readily apparent focal point could make for increased sensitivity to headline risk however, fueling knee-jerk volatility. The API estimate of weekly crude inventory flows may also be a near-term market mover.

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