Aussie got on sale. Overview for 03.11.2022

On Thursday, the Australian dollar against the US dollar is falling. The current quote is 0.6345.

The morning trade balance statistics turned out interesting. In September, the results in Australia turned out better than expected. Export grew by 7% against 2.6% previously. Import dropped to 0% from 4.6% previously.

The statistics could support the Aussie but the pressure from the dollar was stronger.

In the nearest future, the Australian dollar has good chances for remaining negative because the US Fed is serious about further tightening of the credit and monetary policy.

Also, the Chinese statistics will also influence the AUD, and it is very unlikely to be positive.

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

JPY got stronger. Overview for 08.11.2022

The Japanese yen against the US dollar looks quite confident. The current quote is 146.76.

The morning statistics from Japan came out non-homogenous. First thing, we are interested in household spending. The indicator has grown by 2.3% y/y, while a month before it grew by 5.1%. The forecast was conservative, suggesting a decline to 2.6% y/y.

This indicator can be interpreted as a leading one for inflation. At a certain point it seemed that people started spending more. This could stimulate the economy but apparently, it was just a glimpse of optimism. Households are spending less again because they do not believe in the future of the economy and prefer to save money.

In the report on the monetary policy, presented today by the Bank of Japan, it is said that inflation remains high in the country because the regulator sees evidence of growth of prices for services. In the next financial year, consumer inflation will slow down to less than 2% due to the slow-down of the global economy.

In the document, by the way, it is highlighted once again that currency rates are defined by fundamental reasons.

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

GBP is looking for option for growth. Overview for 10.11.2022

The British pound against the US dollar has recovered. The current quote is 1.1400.

GBP rate remains quite volatile, while investors are engaged with the news. At the same time, it must be admitted that after Rishi Sunak was appointed Prime Minister, political disturbance subsided. However, there are questions to the economy and monetary policy.

Main focus got on the comments of the leading economist of the BoE Huw Pill. He said that the CB had made a mistake stimulating the economy in times of the pandemic. He meant the 550 billion-pound stimulation programme.

Pill got his job in the Bank of England after these decisions were made, which means his view may be quite objective. He states that too much attention was paid to the issue of the falling demand while the supply also needed it. In other words, the support of supply was more intense than necessary. According to Pill, this is the clue to the speeding-up inflation.

This is the first time during the current crisis when a monetary official spoke up about regulation mistakes and openly admitted the CB’s responsibility for the inflation rally.

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

GBP: high and scary. Overview for 14.11.2022

The British pound against the US dollar is at the highs since the end of August. The current quote is 1.1789.

The main trigger for the growth of the GBP is the weakness of the USD. This is the factor that has let the pound climb up so high. Fundamentally speaking, there are very few positive factors for the GBP.

The Bank of England is trying to support optimism verbally. As the head of the institution Andrew Bailey spoke last Friday, new increases in the interest rate were very possible in upcoming few months.

He says, holding back inflation in Britain will take from eighteen to twenty-four months. Bailey finds it rational that business should manage indexing of wages, increasing payments to those employees who receive less.

Interestingly, Bailey commented on the time it would take to conquer inflation but sail nothing about the maximum size of the interest rate.

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

GBP is aiming high. Overview for 16.11.2022

The British pound against the US dollar continues growing. The current quote is 1.1860.

The weakness of the USD is actively used by pound fans to help the GBP recover after preceding crashes.

On Wednesday, a large block of statistics is due in Great Britain. Take a look at the CPI in October. British inflation m8ght have sped up to 10.05% y/y against 10.1% previously. Frankly speaking, these results are scary. Base inflation might have grown to 6.6% y/y from 6.5% earlier.

Also, input-output PPI is to be published, and they will show the dynamics in the real sector. The retail sales index is to be presented as well.

In fact, we are interested in the comments of the Bank of England after the reports are published. Earlier, the BoE mentioned that the interest rate will continue growing but gave not levels neither terms. Verbal interventions have almost no effect on the capital market.

A certain decline in inflation pressure will give extra support to the pound.

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

EURUSD is looking around. Overview for 18.11.2022

On Friday, the market major is balancing in a vacuum. The current quote is 1.0370.

According to a Reuters poll, the US Federal Reserve System at the December meeting is expected to lift the interest rate by 50 points. However, the peak of the interest rate may be much higher. So, by the end of the year the interest rate is likely to have reached 4.25-4.50%. The Fed will hold the meeting on 14 December. The main risk, according to the poll, is further growth of the rate.

Investors are really keen on rates, perhaps because there is a bunch of scenarios there, or because this catalyst heats up the instrument faster than any other one.

Meanwhile, president of the FRB of Saint Louis stated yesterday that the minimum limiting rate should be 5.00-5.25%.

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

EURUSD: a pause at the market. Overview for 22.11.2022

On Tuesday, the market major hardly moves; the current quote is 1.0250.

Yesterday the news background for currencies was still, because main expectations were concentrated on commodities. The macroeconomic calendar is also empty, and the quotes have accounted for any expectations of the actions of the US Fed. Today important statistics will also be scarce.

On Tuesday afternoon, the Euro zone will publish the CCI for November, and the US – the PMI in Richmond production. Both reports are unlikely to impress investors.

And while market players are saving power, contemplating the background, the European gas market is worth taking a look at. Warm weather allowed for saving fuel, which eases inflation stress at least temporarily. Moreover, Europe has started to take care of making reserves of energy carriers for the future and is negotiating with alternative suppliers. If things go smooth, the EUR might get some support.

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

EUR got a chance again. Overview for 24.11.2022

On Thursday, the market major has turned out much higher than expected. The current quote is 1.0430.

All eyes in the market yesterday were glued to the minutes of the previous meeting of the US Federal Reserve System. One thing that got immediately notices is the wording "uncertainty lags". This is something new to the Fed's characteristics but investors interpreted it as readiness of the regulator to pause increasing the rate

Today the interest rate is 4%. The nearest Fed meeting is scheduled for 13-14 December, and the market expects the interest rate to be increased there by 50 base points.

There is a good chance that the Fed will keep and eye on the market conditions and base its final decision in them.

The local improvement in the attitude to risks is now supported by the absence of a part of investors: it is the Thanksgiving Day in the US. Until Monday, market activity will remain low.

Yet one more factor supporting interest towards risky trades is the expectation that China will support its economy and that the NBC will drop reserve norms for banks.

Today investors will be interested in the minutes of the latest meeting of the European Central Bank. There is unlikely to be anything equally impressive as in the Fed's minutes there, yet EURUSD fluctuations may show some reaction.

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

EURUSD avoids risks. Overview for 28.11.2022

At the beginning of a new week, EURUSD is stepping back. The current quote is 1.0350.

At the global capital markets, pessimistic moods are ruling. Investors are fleeing from risks, which immediately affect respective assets.

The market is focused on the aggression of the US Fed that may additionally find a foothold in statistics. This week, fresh employment market data for November will be published in the US. Statistics are expected to come out moderate, and investors will be able to interpret it as a chance for the Fed to keep increasing the interest rate.

Also, check the second US GDP assessment for Q3. It might come out a bit better than the prelim assessment, demonstrating growth of the economy by 2.7% instead of 2.6% earlier. This would be a good signal for investors.

On the whole, all talks in the market are spiralling around further decisions of the Fed. Any statistics are interpreted as support for resistance to the upcoming growth of the rates. For now, the circumstances are good for the USD.

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

EURUSD remained neutral. Overview for 30.11.2022

On Wednesday, the market major remains balanced. The current quote is 1.0350.

Yesterday the macroeconomic calendar started coming back to life, step by step. The US issued a Conference Board CCI report for November. The index had fallen to 100.2 points from 102.2 points previously. The forecast had been weaker, suggesting a decline to 100.0.

There is nothing surprising to it. Businesses and consumers are becoming less active and confident while loans are becoming more expensive, and the financial load on everybody without an exception is growing.

Today the market is focused on the European and American statistics alike.

The EU is publishing a prelim inflation report for November. Last month, we saw the high of 10.6% y/y; this time, the index is expected to have dropped to 10.4% y/y. This is hardly a reason for joy because the trend remains in force. Base inflation should have remained at 5.0% y/y. For the EUR, such colossal inflation load is a serious stress.

However, it is not at all decided that the ECB will raise the interest rate by 75 base points or more at the December meeting to do something with the inflation.

The US will issue a new GDP assessment for Q3, and it might have grown to 2.8% from 2.6% earlier. Moreover, the ADP NFP for November are due. This will be the first one in the row of employment market reports, and it is going to be informative. The NFP is expected to have grown by 196 thousand upon growing by 239 thousand previously. Strong statistics will support the USD.

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

Bravo, EUR! Sorry, USD! Overview for 02.12.2022

On Friday, the market major is, indeed, happy. The current quote is 1.0510.

Investors keep drowning the USD after the speech delivered this week by the head of the US Federal Reserve System Jerome Powell.

According to CME, the probability of an increase of the interest rate by 50 base points at the meeting on 13-14 December is 75%. This has already been accounted for in by the quotes already. The Core PCE statistics let us count on such an outcome. The indicator has grown by 0.2% m/m after a previous increase by 0.5% m/m.

Deciding upon the interest rate, the Fed uses this very inflation index. As long as it is falling, it can be used as an argument for decreasing the speed of growth of the interest rate.

Also, the pressure on the Fed from everywhere, business and politicians included, should also be taken into account. The crediting price is already very high and is most likely to be even higher. However, it can be increased more cautiously.

Today will be an interesting day. The US is preparing statistics on the labour market for November. It is expected that the unemployment rate will remain at 3.7%; the number of workplaces should extend by 200 thousand upon growing by 261 thousand a month ago. However, in case of any changes, EURUSD will be volatile.

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

AUD got into trouble. Overview for 06.12.2022

On Tuesday, the Australian dollar against the US dollar is growing. The current quote is 0.6718.

At the latest meeting, the Reserve Bank of Australia lifted the interest rate to 3.10% from 2.85%. This decision had been anticipated. The increase by 25 base points is quite by the previously voiced monetary policy of the RBA.

This is the eighth in a row increase in the interest rate. The rate is at the high of April 2013, and can be lifted even higher: the RBA does not exclude further growth aimed against inflation pressure.

According to the RBA comments, the regulator has decided firmly to bring inflation back to target values and is going to do anything for this. The current CPI in Australia is too high and is going to keep growing in the upcoming months.

At the same time, the Australian economy continues growing steadily.

The way to the target inflation level and a soft landing of the Australian economy looks quite narrow, which means the rate might start growing more actively from now on.

For the Aussie, this turned out to be serious support.

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