The Yen has corrected. Overview for 22.11.2019

On Friday, USDJPY is slowly growing; the Yen paid no attention to the statistics on inflation.

The Japanese Yen is retreating a little bit against the USD at the end of the week. The current quote for the instrument is 108.63.

Demand for the Yen is somehow reducing due to some balance in the US-China trade talks. Nothing in particular, but investors calmed down.

In the morning, Japan reported on inflation in October. The National Core CPI added 0.4% y/y after showing +0.3% y/y in September. The Inflation Rate Ex-Food and Energy expanded by 0.7% y/y, which is more than the month before (+0.5% y/y).

The components of the report show that the furniture and household utensils added 4.2%, while clothes & footwear showed +1.2%. At the same time, electricity lost 1.0%, gas 0.4%, transportation & communication 1.0%, education 7.8%, and miscellaneous goods & services dropped by 2.9%.

Everything would be fine if it weren't for understanding that the inflation surge is extremely temporary: people were buying everything that could become much more expensive than usual before the VAT increase, and that can be clearly seen in the components. Prices will stop rising as early as in November, thus putting pressure on the country’s inflation readings.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro is sluggish. Overview for 26.11.2019

The major currency pair stopped falling; right now, it is consolidating, but it’s not for long.

EURUSD stopped sliding down. The current quote for the instrument is 1.1013.

Nothing interesting is happening in financial markets at the moment, so the major currency pair is barely moving as well. Yesterday, the American and Chinese officials talked on the phone and both said that it was necessary to continue negotiations. Nothing special, the same words that were said before on several occasions. In the meantime, investors may finally be tired of waiting endlessly for any progress and bears will take charge.

There was nothing important or interesting in the information flow, so market players prefer to save their strengths.

The only thing that makes shake financial market right now is the macroeconomic calendar. In the evening, the USA is scheduled to report on the Trade Balance for October. Apart from this, the country will publish preliminary numbers on the Wholesale Inventories, which may recover after plunging in September, and the New Home Sales (both for October), which is expected to show 708K after being 701K in the previous month.

One more report that is worth paying attention to is the CB Consumer Confidence, which is expected to go from 125.9 points in October to 126.9 points in November. If it does, this will support the USD.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro remains under pressure. Overview for 28.11.2019

On Thursday morning, EURUSD is consolidating; however, it remains under pressure, mostly because of external background.

EURUSD stopped falling and started consolidating, but the market sentiment is still bearish. The current quote for the instrument is 1.1006.

External background keeps investors in suspense. Yesterday, the US President Donald Trump signed two Hong Kong laws and Beijing vowed retaliation, thus leading market players to the conclusion that the trade talks may reach a deadlock again. According to Reuters, “The “Hong Kong Human Rights and Democracy Act,” which the Senate and House passed last week, puts the special treatment Hong Kong enjoys under U.S. law under tighter scrutiny linked to the extent of the territory’s autonomy from Beijing.” Of course, in American reality, this law may be stretched as the USA chooses. China said on several occasions in the past that it would brook no interference with the country’s internal affairs. So now, after the laws are signed, Beijing is ready to cut the talk and walk the walk.

The statistics published by the USA yesterday were rather mixed. The GDP report showed that the second estimation was 2.1% q/q against the first one of 1.9% q/q, and that’s good. However, the Personal Income was disappointing with 0.0% m/m in October after adding 0.3% m/m in the previous month and against the expected reading of +0.3% m/m. At the same time, Personal Spending expanded by 0.3% m/m, the same as expected, which is more than in September.

An increase in spending combined with a lack of dynamics in incomes is not a good signal really. End-of-season sales haven’t started yet, so consumers have no reason to spend more than they can afford. Consequently, November readings may show a sharp decline in spending and that will surely have a significant influence on industrial production and the GDP later.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Australian Dollar is correcting. Overview for 04.12.2019

After three trading sessions of stable and significant growth, AUDUSD is moving downwards on Wednesday; the correction is supported by numbers.

The Aussie started retreating against the USD after several days of growth. The current quote for the instrument is 0.6822.

The statistics published in the morning showed that the Australian GDP added only 0.4% q/q in the third quarter after expanding by 0.6% q/q the quarter before and against the expected reading of +0.5% q/q. Nevertheless, on YoY the indicator was 1.7%, which is pretty good.

It is evident that three rate cuts by the Reserve Bank of Australia in 2019 haven’t yet provided the country’s economy with the expected support. At the same time, one should admit that it’s typical for the Australian economy to reverse slowly, both upwards and downwards. It means that in the long run, and the RBA shares this outlook, the GDP will feel this impulse and get more dynamic.

The Aussie’s drawdown might have been more serious if it hadn’t been for the statistics from China published earlier today. The Caixin Services PMI increased up to 53.5 points in November after being 51.1 points the month before and against the expected reading of 51.2 points. The components of the report show that new orders increased quite well, while employment remained doubtful.

In general, today’s market sentiment isn’t in favor of risks due to new details relating to the US-China trade talks and that put additional pressure on the Aussie.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Euro intends to grow. Overview for 06.12.2019
The major currency pair remains stable on Friday and intends to continue its growth.

EURUSD is keeping its positive momentum at the end of a very volatile week. The current quote for the instrument is 1.1102.

The American currency got significantly weaker yesterday due to mixed numbers from the USA. The Factory Orders report showed +0.3% m/m in October after being -0.8% m/m in the previous month. The indicator got a little support from the growth of demand for computers and electronic products, as well as machinery orders, but at the time of weak business activity and manufacturing sector, the growth is rather limited.

Transportation equipment orders rebounded by +0.7% after losing 3.2% in September. Civilian aircraft and parts increased by 10.7%, but couldn’t completely recover after showing -19.0% the month before.

It’s quite interesting that orders for electrical equipment, appliances and components dropped 1.8%, thus eliminating growth by 0.9% September.

Data on the labor market was good: the weekly Unemployment Claims report showed 203K after 213K the week before, which is the lowest value in 7 months. The USA will continue reporting on the employment, including the NFP and the Unemployment Rate. These reports are always interesting for market players and make EURUSD more active.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Australian Dollar is quietly falling. Overview for 10.12.2019

On Tuesday morning, AUDUSD is retreating affected by the statistics from Austalia and China.

The Australian Dollar is “losing weight” against the USD on Tuesday. The current quote for the instrument is 0.6825.

Today’s statistics from Australia showed that the NAB Business Confidence dropped to 0 points in November after being 2 points in the previous month. The indicator is calculated based on the survey results of staff of the largest Australian companies excluding the agricultural sector. Readings above zero mean optimism, otherwise – pessimism.

Chinese inflation reached the highest level since 2012 and now equals 4.5% y/y after being 3.8% y/y in October. However, the actual reading matched the expected one, because the inflation was predicted to increase earlier. The key reason was pork:  after the Montgomery swine flu outbreak, the market suffered from pork shortage, thus increasing the CPI. On YoY, pork prices added 110%, on MoM – 3.8% after expanding by 20.1% the month before.

The inflation target for China is 3%.

There is an assumption that in order to lower the inflation pressure on the country’s economy, the People's Bank of China may devalue the Yuan.

All processes in the Chinese economy are important for Australia because China is its key trade and economic partner.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The USD was crashed by the Fed’s stance. Overview for 12.12.2019

The major currency pair reached its five weeks highs influenced by the Fed’s comments after the December meeting.

On Thursday morning, EURUSD is trading close to its five weeks highs. The current quote for the instrument is 1.1138.

The US Fed December meeting, which was over yesterday, offered investors nothing new. The interest rate remained at 1.50-1.75%, the same as expected. However, the comments that followed surprised market players.

The regulator said that the current monetary policy was appropriate and in compliance with its economic purposes. The Fed continues monitoring home affairs and inflation pressure, which is quite reserved. It means that the interest rate wouldn’t be cut unless the regulator witnesses some serious changes in the country’s economy.

It was a pretty unpleasant surprise for the USD because market players were sure that the American economy was strong enough for the rate increase in the nearest future.

The revised forecast from the Fed was a bit worse. For example, inflation is expected to be 1.4-1.5% at the end of 2019 against the previous estimate of 1.5-1.6%.

Later today, investors’ attention will switch to the ECB meeting.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Numbers couldn’t support the Aussie. Overview for 16.12.2019

AUDUSD is falling early in the week influenced by the strong USD and rather mixed statistics.

The Australian Dollar is retreating against the USD in the middle of December. The current quote for the instrument is 0.6870.

In the morning, Australia reported on the Manufacturing PMI, which dropped down to 49.4 points in December after being 49.9 points in the pre3vious month, thus indicating a continual decline in the sector. The Services PMI in Australia decreased down to 49.5 points after showing 49.7 points in November, which is also pretty bad for the Aussie because should be vice versa due to the seasonality.

Numbers from China, no matter how positive they were, couldn’t support the Australian Dollar. The Industrial Production added 6.2% y/y in November and reached its five-month high after showing +4.7% y/y the month before and against the expected reading of +5.1% y/y. Apparently, the indicator improved because of more active domestic demand – the Chinese government put a lot of effort for that.

The Fixed Asset Investment showed +5/2% ytd/y, just as expected. The Retail Sales added 8.0% y/y in November after expanding by 7.2% y/y in October.

News relating to a possible signature of the first phase of the US-China trade agreement should have a positive influence on the Australian currency.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Pound continues falling. Overview for 19.12.2019

On Thursday morning, GBPUSD is moving downwards; the correction is getting deeper.

The British Pound continues falling against the USD on Thursday morning. The current quote for the instrument is 1.3081.

Investors continue following the Brexit and have concerns that the United Kingdom may leave the alliance with the “hardcore” scenario, which implies no trading conditions because it might be impossible to discuss all nuances of trade relations between the parties in 11 months of the transition period. Probably, policymakers will be able to define some key points, but not much else. That’s what is keeping market players on the edge, because it may cut the United Kingdom off the European trade routes.

Today, the Bank of England is scheduled to have its last meeting this year. The interest rate is expected to remain unchanged at 0.75%. As a rule, the British regulator is pretty conservative when it comes to making monetary decisions and prefers to take its time when applying fiscal tools. Most likely, the BoE will decide to wait and see how the Brexit procedure unravels and make decisions only after that.

In addition to that, the United Kingdom is going to report on the Retail Sales which is expected to recover by 0.3% m/m in November after losing 0.1% m/m the month before. Also, investors are expecting the CBI Realized Sales in December. It looks like the Pound is going to have a quite volatile day.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Pound updated its three weeks lows. Overview for 24.12.2019

GBPUSD stopped falling, but remains week.

The British Pound slowed down its decline against the USD on Tuesday. The current quote for the instrument is 1.2944.

This week, there will be no important statistics for the British Pound: today it’s Christmas eve, tomorrow – Christmas itself, that’s why British markets will be closed until Thursday.

However, market players are really concerned about the Brexit. At the moment, when the Conservative Party and the country’s Prime Minister Boris Johnson are “set loose” in making the Brexit decisions, chances of the “hardcore” exiting scenario are rising. It means that the United Kingdom may exit the European Union until January 31st, 2020 without caring whether it has a trade agreement with the alliance or not. Euphoria was quickly replaced by routine, because Tory may really ignore common sense in favor of completing the Brexit as soon as possible. In the meantime, investors are pretty clear-eyed about the risks and see all possible problems that may follow the exiting procedure.

What exactly alerted them? The fact that the British policymakers insist on a special article in the Brexit agreement that makes the English judicial law dominating over the European one. The alliance may not agree to it and Johnson may jeopardize the talks and threaten to exit the Union without the agreement.

Under such conditions, the Pound may remain under pressure for a long time, which prevents it from getting back to 1.30.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

The Yen is retreating. Overview for 26.12.2019

Some part of investors returned to the market on Thursday and made USDJPY grow quite quickly.

The Japanese Yen is falling against the USD on Thursday. the current quote for the instrument is 109.55.

There is still no important news on the market, but can it really be right after the celebration of Christmas? However, this is the reason why market players prefer the USD, which is considered a more stable currency.

A bit earlier, the Bank of Japan published the Monetary Policy Meeting Minutes. The document says that the regulator will have to extend its cooperation with the Japanese government regarding the country’s economic policy. It sounds reasonable and strategically correct, in case all participants of the process are willing to take control over inflation and economic growth.

The document also says that 7 members of the BoJ voted to keep the interest rate at -0.10%, while 2 were against it.

All policymakers shared the opinion that the impulse to reach economic stability could die out any minute due to the decline of growth rate of global economies. Most likely, trade wars have a significant influence on the export-oriented Japanese economy.

A lot of reports will be published by Japan tomorrow: the Unemployment Rate. the Retail Sales, the Industrial Production, the Tokyo Core CPI, and the BoJ Summary of Opinions.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

EURUSD is anticipating a calm New Year week. Overview for 30.12.2019

The major currency pair is expected to have a pretty calm week and trade in a narrow range.

EURUSD is very quiet early in the last week of December. The current quote for the instrument is 1.1175.
Last Friday, market players already took their lead from the news flow relating to the short-term outlook of the US-China trade agreement. Chinese representatives already said that they remained in close contact with American negotiators and were ready to sign the first draft of the agreementб thus sparking investors’ interest in risks and putting pressure on the USD. In addition to that, US President Donald Trump mentioned that the deal signed with China would require at least a high-profile ceremony.

In this light, the Euro went to its two weeks highs against the “greenback” but will find it very difficult to continue climbing due to the New Year calmness on the market.

This week, the USA is scheduled to publish several reports of Monday and Tuesday: the Preliminary Wholesale Inventories and the Pending Home Sales for November. After that, one should pay attention to the Conference Board Consumer Confidence, which is expected to go from 125.5 points to 128.0 points.

Wednesday will be a holiday almost everywhere.

Later in the week, investors will start returning to the market and may pay attention to the Construction Spending and the ISM Manufacturing PMI. December numbers on the US labor market will be published only the next week, on January 10th.

Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.