The Pound is looking up. Overview for 28.12.2021

GBPUSD is keeping its positive momentum, which may seem rather limited.

The British Pound intends to continue rising against the USD on Tuesday. The current quote for the instrument is 1.3439.

The good news for the Pound is that British authorities won’t introduce new social restrictions or another lockdown due to the increasing number of coronavirus cases. At the moment, most of them are a result of the spread of the new strain Omikron.

Right now, social restrictions are effective in Scotland, Wales, and Northern Ireland. In the rest of the United Kingdom's territory restrictions aren’t so tough.

In the short term, the epidemiological situation will remain the key factor to influence the Pound’s future behaviour.

As for the important statistics this week, the United Kingdom will release the Nationwide HPI, which is expected to continue improving in December after a significant growth the month before.

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

Improved risk attitude made the Euro grow. Overview for 30.12.2021

EURUSD managed to rise; at the year-end, investors are positive-minded.

The major currency pair recovered. The current quote for the instrument is 1.1316.

Improved risk attitude helped EURUSD to rise a little bit, but the pair is still trading within the range. At the year-end, market volatility is rather low and that makes the instrument stay in a tight range.

The statistics on the US Wholesale Inventories showed 1.2% m/m in November after being 2.3% m/m in the previous month and against the expected reading of 1.5% m/m.

The “greenback” got an unpleasant surprise from the real estate market. For example, the Pending Home Sales dropped 2.2% m/m in November after adding 7.5% m/m in October and against the expected reading of 0.6% m/m.

Today, the currency market is going to wait for the Monetary Policy Meeting Accounts to be published by the European Central Bank. However, the document is highly unlikely to offer investors something they don’t know.

In the evening, the US will report on the Unemployment Claims for the previous week, which is expected to show 205K.

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

EURUSD is kind of stuck up in the air. Overview for 05.01.2022

It seems like EURUSD is “under zero gravity”; investors are waiting for signals. 

The major currency pair is consolidating on Wednesday. The current quote for the instrument is 1.1317.

The price range of EURUSD is not very wide – the “greenback” was rising yesterday in the afternoon but lost its “profit” by nightfall. Market players are saving their strengths in anticipation of the US labour market data, for example, the ADP Non-Farm Employment Change, as well as the FOMC Meeting Minutes to be published later today.

Also, the Euro Area, the US, and Germany are scheduled to report on the PMIs – the data may revive the financial market a bit.

Not to say that investors are in favour of the risk – they are more of trying to escape it. This fact helps the USD to reach stability.

At the end of the week, other labour market data from the US will “hit the bell”. There is no direct correlation between today’s ADP Non-Farm Employment Change and the Non-Farm Payroll to be published on Friday, but the former definitely helps to form an impression of what is happening in the sector.

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

The Aussie froze. Overview for 11.01.2022

AUDUSD is barely moving although it has enough reasons for that.

The Australian Dollar stopped moving and froze against the USD. The current quote for the instrument is 0.7185.

The Retail Sales in Australia in November added 7.3% m/m against the expected reading of 3.9% m/m. It looks like the removal of social restrictions had a positive influence on consumer activity in the country. Right after big cities “were out of the woods”, the population went shopping.

The Australian Trade Balance showed that the export added 2% in December after losing 3% in November, while the import expanded by 6%. Good numbers.

The Aussie is currently supported by a drop-down in the US 10-year bond yield, which had been quite high for a long time.

In general, the situation is pretty good for the Australian currency but investors are still very careful.

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

The Euro skyrocketed to its 8-week highs. Overview for 13.01.2022

EURUSD continued rising after the US reported on inflation. 

The major currency pair continues growing on Thursday. The current quote for the instrument is 1.1468.

The CPI in the US showed 7.0% y/y, the same as expected. The “greenback” plummeted in response to this report: investors started to reduce their long positions because the data matched the forecasted reading, meaning that there was no inflation explosion last month.

However, it should be noted that in December the American CPI showed the highest reading in almost 40 years. On MoM, the indicator added 0.5%.

Another thing that is against the USD right now is the global improvement of market sentiment. Earlier, US Fed Chairman Jerome Powell said that the Omikron strain of the COVID-19 would have a slight impact on the country’s economy and financial system. Since coronavirus-related worries are subsiding, the demand for the USD as a “safe haven” asset is getting rather low.

Now the focus of investors’ attention is switching to the weekly Unemployment Claims and Retail Sales reports from the US, which are scheduled for release today and tomorrow.

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

EURUSD decided to wait. Overview for 17.01.2022

EURUSD stopped growing; the statistics failed the “greenback”. 

The major currency pair is rather neutral early in the week. The current quote for the instrument is 1.1426.

The statistics published by the US were disappointing. It seems like the Omikron strain together with surging inflation penetrated the country’s economy and financial system much deeper than anyone could have imagined.

The Retail Sales plummeted by 1.9% m/m against the expected decline of 0.1% m/m. At the same time, the November reading was revised downwards, -0.2% m/m. It seems like Americans managed to buy Christmas presents earlier than December and spent not as much money as usual.

Industrial Production in the US also dropped in December and showed -0.1% m/m against the expected reading of +0.2% m/m. The month before, the indicator added 0.7% m/m.

However, not only the Omikron strain probable has an influence on the indicator. The second factor is surging inflation, because of which manufacturers had to revise their deliveries and new orders. The Capacity Utilization Rate went from 77.0% in November to 76.5% in December. This confirms the slowdown in production.

The US is celebrating Martin Luther King Jr. Day today, that’s why EURUSD may be less active than usual.

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

The Pound stopped falling. Overview for 19.01.2022

After a recent drawdown, GBPUSD is consolidating; the Pound badly needs support.

The British Pound stopped its decline against the USD in favour of consolidation. The current quote for the instrument is 1.3611.

The factor that supported the Pound earlier, expectations of a possible rate hike soon by the Bank of England, is no longer effective. It seems to have been “beaten” by the Fed’s “hawkish” policy.

The statistics published yesterday were rather mixed and didn’t offer the Pound the support it hoped for. The Unemployment Rate in the United Kingdom dropped to 4.1% in November after being 4.2% the month before. That’s good news. The Average Earnings Index added 4.2% 3m/y after expanding by 4.9% 3m/y over the previous period. The slowdown in the latter indicator means that the British labour market has enough jobs and workplaces.

The Claimant Count Change showed -43.3K in December after being -95.1K in November (revised data) and against the expected reading of -38.6K. These readings match those in the unemployment report.

Later today, the UK will release a lot of data on prices for December, such as the CPI, the Core CPI, the RPI, the HPI, and the PPI Input/Output.

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

EURUSD dropped again. Overview for 21.01.2022

EURUSD got under local pressure; investors need “safe haven” assets. 

The major currency pair remains under pressure on Friday. The current quote for the instrument is 1.1329.

The statistics from the US are rather controversial and raise a lot of questions but market players seem to have stopped paying attention to it. The “greenback” is now interesting but as a “safe haven” asset. 

Yesterday, the United States Department of the Treasury said that inflation was rising much faster than was predicted by most economists. The Department is responsible for inflation boost together with the Fed, and the Department has no doubts that the regulator could be realistic about the country’s economic state and get inflation under control. If the pandemic doesn’t intensify, the CPI should drop until the end of 2022. 

The weekly Unemployment Claims showed 286K this week after being 231K the week before and against the expected reading of 227K.  it’s not critical, although it’s the first time in several weeks the indicator increased.

The Existing Home Sales in December was 6.18M after being 6.48M in November and against the expected reading of 6.42M. However, this decline may be seasonal.

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

The Aussie remains under pressure. Overview for 25.01.2022

AUDUSD continues falling; the statistics were disappointing.

The Australian Dollar is falling against the USD on Tuesday. The current quote for the instrument is 0.7148.

The Australian CPI showed 1.3% q/q in the fourth quarter after being 0.8% q/q the quarter before and against the expected reading of 0.1% q/q. On YoY, the indicator skyrocketed by 3.5% after adding 3.0% in the previous quarter and against the expected reading of 3.2%. Both numbers are significantly higher than the average expectations of the Reserve Bank of Australia.

The Australian regulator is scheduled to have the meeting next week, which will be interesting, to say the least: the RBA is expected to announce the QE programme closure or even raise the benchmark interest rate. In this light, the inflation data may serve as an additional reason in favour of the tightening of the monetary policy.

The NAB Business Confidence dropped to -12 points in December against the previous reading of 12 points. The situation is much worse than it was during the Delta strain outbreak. The components show a sharp drop in employment, down to 2 points, while the sales remained unchanged at 14 points.

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

The Aussie is falling. Overview for 27.01.2022

AUDUSD continues falling; the “greenback” remains strong. 

The Australian Dollar continues falling against the USD on Thursday. the current quote for the instrument is 0.7077.

The American currency remains strong after “hawkish” comments from the US Fed and that puts a lot of pressure on AUD.

The statistics published by Australia weren’t impressive and couldn’t support the Aussie. For example, the preliminary Manufacturing PMI reading showed 55.3 points in January after being 57.7 points the month before. The Services PMI dropped to 45.0 points after showing 55.1 points in December.

The NAB Business Confidence plummeted to -12 points in December after being 12 points in November. Possible reasons are Chinese-Australian relation concerns and Omikron-related risks. The MI Leading Index m/m remained at zero in November after being 0.2% m/m in the previous month.

Judging by the published reports, one may assume that the Reserve Bank of Australia could wait and not raise the benchmark rate in the nearest future. This though is confirmed by the latest surveys from Reuters: before that, financial markets were expecting the regulator to raise the rate in May, but now in November, at the earliest. According to CME, in November, the rate could go up by 15 basis points.

However, during its next meeting on 1 February, the RBA might announce the closure of the bond purchasing programme. This news may support the Aussie.

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

EURUSD is recovering. Overview for 31.01.2022

EURUSD rebounded from its local bottom and is trying to regain its positions. 

The major currency pair recovered a little bit on Monday. The current quote for the instrument is 1.1177.

The first supporting factor is that the craze around the US Fed January meeting is dying down – all the statements, decisions, and intentions are already included in prices, and all that’s left to do right now is waiting for the regulator to close the QE programme and raise the benchmark interest rate for the first time in many months. Another factor is the declining demand for the “greenback” as a “safe haven” asset after market players stopped selling messily. That’s the high time for reaching stability.

The statistics published by the US recently weren’t impressive. For example, the Core PCE Price Index added 0.5% m/m in December, the same as expected. Why is it important? The Fed monitors this indicator when making fiscal decisions, that’s why it shouldn’t be underestimated.

The Personal Spending dropped 0.6% m/m in December, the same as expected, after adding 0.4% m/m in November. At the end of 2021, this decline can be explained by the fact that people were buying Christmas and New Year presents earlier than usual. The Personal Income added 0.3% m/m against the expected reading of 0.5% m/m.

The final report on the University of Michigan Consumer Sentiment reduced to 67.2 points in January after being 68.8 points the month before. by the way, the indicator wasn’t expected to change. However, this local decline can be explained by complications ш the current epidemiological situation.

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

The Pound successfully recovered. Overview for 02.02.2022

GBPUSD took a break amid a series of increases; however, it is still looking great.

The British Pound paused its growth against the USD on Wednesday. The current quote for the instrument is 1.3533.

The statistics published by the United Kingdom were reasonably positive. For example, the Mortgage Approvals showed 71K in December after being 68K in the previous month. On the other hand, the Net Lending to Individuals showed a slight decline.

The final Manufacturing PMI report showed 57.3 points in January after being 56.9 points the month before. That was better than expected.

The key factors that support the Pound right now are the weakening of the “greenback” and expectations of the rate hike by the Bank of England. The USD does show weakness and that helps the Pound to recover after the stressful January. As for the BoE’s monetary policy tightening, everyone is expecting the regulator to be more decisive: as a rule, the BoE doesn’t make aggressive comments about its monetary decisions unless it plans to take them.

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