Currency
Is The Dollar To Be Given A Bull Run Break Before Ben?
The market yesterday was a write-off in terms of price action, as a few sovereign nations managed to squeeze in a national holiday in parts of Europe and in Canada. This week's US fundamental highlight will be delivered tomorrow - the FOMC Minutes from the May 1st meeting and helicopter Ben's testimony on the Economic Outlook and Monetary Policy before the Joint Economic Committee, in Washington. On the whole, market price actions over the past few-days indicate that a few investors are becoming a tad nervous ahead of Ben's speech.
Some investors are anticipating that the release of Wednesday's FOMC minutes will indicate that both the Fed's 'hawks and doves' are beginning to become "increasingly uncomfortable with the current $85- ...
The Australian dollar fell against its US peer today after the Reserve Bank of Australia released the minutes of its last policy meeting. The drop was small, however, and the currency gained against the Japanese yen at the same time.
The RBA minutes were dovish and said:
Conditions in the business sector, as assessed in surveys, generally had remained below average, possibly in part because the exchange rate had remained high despite lower export prices and interest rates.
Policy makers also thought that “the inflation outlook provided scope to ease monetary policy further, should that be necessary to support demand”. All in all, the minutes were negative for the Aussie, but the currency did not look bothered too much by them, most likely because anticipation of additional stimulus ...
The royal pound fell to a six-week low against the dollar on Tuesday after data showed U.K. inflation slowed more than economists forecast in April, before of the Bank of England releases minutes of its May meeting on Wednesday.
U.K. inflation retreated to 2.4 percent in April, the lowest level in seven months, coming back near the bank’s target. Pond drops versus dollar on speculations of further stimulus.
The GBPUSD pair slumped on Tuesday to trade around $1.5163 after opening at $1.55252 while recording the highest level of $1.5272 and lowest of $1.5154. The trading range for this week is among key support at 1.5100 and key resistance at 1.5385.
Dollar
The dollar edged up on Tuesday after weakening in the previous session as Moody’s Investors Service said yesterday that U.S. policy ...
European Market Update
UK inflation comes in lower than expected and offers BOE more room to stimulate if data does disappoint
Notes/Observations
RBA minutes: rate cut appropriate to boost growth; subdues growth & inflation provided room to cut rates; AUD high by historical standards
The USD/JPY was steady after the Japanese Econ Min Amari backed off from his comments expressing satisfaction with the current value of the JPY
Germany's Chancellor Merkel said to be considering certain treaty changes aimed at giving more powers to Brussels
Draft EU law to protect insured bank depositors under €100k; larger depositors could suffer losses after equity and bond holders hit
UK inflation comes in lower than expected and offers BOE more room to stimulate if data does disappoint
Thursday ...
Forex News and Events:
The FX markets remain on hold ahead of FOMC Chair Bernanke’s testimony due tomorrow. Over the past two weeks, the speculations on Fed’s tapering of bond purchases have been the key topic across all major currencies. Today, the USD weakness is in game due to position adjustments before hearing what Bernanke has to say.
Released this morning, the UK inflation in April greatly surprised to the downside. Cable registered a decent sell-off on the speculation for more QE to boost the growth, while Euro remains highly reactive to data/news out of US and UK.
Bernanke to Remain Dovish
The key topic across the major currency markets over the past two weeks has clearly been the specs on hawkish Fed and early tapering of asset purchases. However, last week’s US data put some ...
Title:
Dollar Off The Recent Top
Sunrise Market Commentary
- Rates: US Treasuries end quiet session nearly unchanged.
- In a typical Monday session devoid of eco data or main events, US Treasuries closed little changed. An initial rally that attempted to recoup Friday's losses was reversed when US equities rallied. Both ended the session nearly unchanged. Interesting comments on QE by Fed Evans in late trading pushed Treasuries slightly lower.
- Currencies: Dollar off the recent top
- The focus of currency markets is on the Fed's exit debate. The dollar is losing some ground as markets anticipate that Fed Bernanke will keep the current Fed approach when he speaks on Wednesday. EUR/GBP is holding a tight sideways range going into this week's UK eco data.
The Sunrise Headlines
- US equities ended ...
Fundamental Analysis
EUR
"The consolidation of public finances will follow the objectives that have been clearly set."
- Slovenia's finance ministry
Even despite the nation’s plan, which is projected to stabilise public finances and lead to an economic recovery, Slovenia’s credit rating was downgrade by the Fitch agency. Fitch cut Slovenia’s main debt rating to 'BBB+' down from A-, with a negative outlook; saying that macroeconomic and fiscal outlook has deteriorated significantly.
Read more: FULL REPORT - Fundamental Analysis
Technical Analysis
EUR/USD
"It’s the U.S. economy that’s in the vanguard, and that explains why the dollar continues to advance. The Federal Reserve might exit its quantitative easing sooner than later, while the BoE is going to do more QE and the ECB is ...
The Reserve Bank of Australia released its meeting minutes concerns May’s board meeting, where the bank sees that Australia’s GDP may show lower levels in 2013.
The Reserve Bank of Australia (RBA) and its board members decided to lower the nation’s official interest rate by 25 basis points to 2.75% during May’s board meeting as manufacturing hurts by high currency.
Meanwhile, the RBA added that moderate inflation and growth rates leave the room for policy makers to reduce the nation’s benchmark interest rate, as the bank noted that previous reduction in interest rate still affect on the nation’s economy.
From another side, this reduction in interest rate considered the sixth reduction, where RBA sees that current reduction will spur the nation’s economy amid the recent instable global ...
Asian Market Update
JPY weakens after Japan Econ Min Amari clarifies position on yen correction; AUD gains on neutral policy bias in RBA minutes
Economic Data
(AU) AUSTRALIA RBA POLICY MINUTES FOR MAY MEETING: Decided some easing scope should be used at the May meeting
(AU) AUSTRALIA MAR CONFERENCE BOARD LEADING INDEX: 0.1% V 0.3% PRIOR (3rd consecutive increase)
(NZ) NEW ZEALAND Q2 RBNZ 2-YEAR INFLATION EXPECTATION: 2.1% V 2.2% PRIOR (multi-year low)
(NZ) NEW ZEALAND APR CREDIT CARD SPENDING M/M: +0.4% V -0.3% PRIOR; Y/Y: 4.0% V 3.7% PRIOR
(NZ) NEW ZEALAND APR NET MIGRATION: 1.6K V 1.3K PRIOR
Markets Snapshot (as of 03:30 GMT)
Nikkei225 +0.1%
S&P/ASX -0.7%
Kospi -0.2%
Shanghai Composite -0.1%
Hang Seng -0.4%
Jun S&P500 -0.1% at 1,663
Jun gold +0.3% at $1,384/oz
Jul crude ...