EUR has paused. Overview for 25.04.2024

The main currency pair paused its ascent on Thursday. The current EURUSD exchange rate stands at 1.0705.

Nothing significant happened; the market remains highly sensitive to even the slightest changes in global sentiment.

Today, the US will release the GDP statistics for Q1 2024. The economy is expected to grow by 2.5% compared to the previous 3.4%. A local slowdown in economic growth at the beginning of the year may be a normal response to some dip in activity. However, the GDP is forecasted to gain dynamics later on.

The market believes the US dollar is emerging as the most effective currency this year. Simultaneously, the fundamental performance of the US economic system compared to other countries suggests that USD could continue rising against other currencies.

The US dollar is supported by rising US government spending and high demand for the safe-haven asset. Moreover, the deflationary effect of China's economic decline buoys the USD.

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

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AUD continues to rise. Overview for 29.04.2024

The Australian dollar appears strong against the US dollar. The current AUDUSD exchange rate stands at 0.6567.

The Aussie surpassed a three-week high against its American counterpart as the USD slightly corrected its position ahead of this week's meeting. It is worth noting that the Aussie has surged to its 11-year high against the JPY. The anticipated currency interventions from the Bank of Japan still do not deter anyone.

Previous inflation statistics in Australia reinforced expectations that the Reserve Bank of Australia will not embark on monetary policy easing anytime soon. The consumer price index in Q1 declined to 3.6% from the previous 4.1%. However, it remained above the forecasted 3.4%, marking the fifth consecutive quarter of easing inflationary pressure.

Meanwhile, the monthly index accelerated in March, reaching 3.5% from 3.4% in February.

This week, Australia will publish retail sales and trade statistics, providing further insights into the state of the economy.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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JPY declines again. Overview for 07.05.2024

The Japanese yen, paired with the US dollar, resumes its decline. The current USDJPY exchange rate stands at 154.54.

After a series of strengthening moves, the yen came under pressure again amid the statements of a leading monetary policymaker Masato Kanda that the government is ready to fight speculative movements of exchange rates. However, Kanda left unanswered the question of interventions last week.

The yen rose by 5.2% from its 34-year lows, with strong growth observed during three sessions but then stopping.

As the Bank of Japan data shows, at least 60 billion USD was spent to protect the yen.

If these were targeted interventions, it is no wonder that the yen resumed its decline once they were over. Fundamental indicators remain negative for the JPY – the difference between the Bank of Japan and the US Federal Reserve approaches is profound.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
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NZD is declining. Overview for 13.05.2024

The New Zealand dollar, paired with the US dollar, is retreating. The current NZDUSD exchange rate stands at 0.6008.

The position of the US dollar has stabilised, once again exerting pressure on the NZD. The market focus is shifting to the US inflation statistics, which are scheduled for release this week.

The Reserve Bank of New Zealand will hold its meeting next week, with the interest rate expected to remain at 5.5% per annum. The RBNZ intends to maintain its restrictive monetary policy until there are more concrete indications that inflation is approaching the designated 2% target.

Overall, the RBNZ's position aligns with the global agenda: monitoring prices, recording economic slowdown facts, and keeping its finger on the pulse to intervene at the right moment.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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EURUSD has reached a new five-week peak. Overview for 15.05.2024

The primary currency pair is advancing on Wednesday. The current EURUSD exchange rate stands at 1.0822.

Upbeat comments from Jerome Powell, the US Federal Reserve chair, regarding the state of the US economy weighed on the US dollar. He gave a relatively confident outlook on GDP growth rates. Powell believes that the economy is still growing more vigorously than the trend. Additionally, he is convinced that inflationary pressures will ease. Despite recent statistics that could challenge this confidence, Powell remains steadfast in his optimistic views.

This year, high consumer prices have prompted the Federal Reserve to alter its monetary policy trajectory, compelling it to abandon its monetary easing strategy to gather more data.

Investors anticipated six interest rate cuts in January, but now, only one is expected. According to the CME FedWatch monitor data, the interest rate may be lowered by a maximum of 45 basis points this year, with the first cut expected in September.

Today is crucial as the market awaits inflation and retail sales data for April.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
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JPY is declining again. Overview for 17.05.2024

The Japanese yen, paired with the US dollar, is retreating at the end of the week. The current USDJPY exchange rate stands at 155.77.

Morning data showed that the Bank of Japan had kept the volume of bond purchases the same, refraining from taking action after reducing the volume earlier in the week.

Investors speculated that the Japanese regulator kept the amounts unchanged, believing that the JPY had already received support from the recent weakening of the US dollar. Meanwhile, traders continue to bet that the BoJ will decide to lower bond purchase parameters at its upcoming meeting.

It is worth noting Bank of Japan governor Kazuo Ueda’s statement that the central bank has no plans to sell its assets.

This week’s statistics showed a slowdown in the Japanese economy. The country’s GDP in Q1 contracted by 2% y/y, falling short of expectations. Private consumption has declined for four consecutive quarters, dragging down the entire system.

Such a report presents significant challenges for the Bank of Japan, which must balance supporting the economic system and protecting the weak yen.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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GBP is rising higher. Overview for 21.05.2024

The British pound is strengthening its position against the US dollar. The current GBPUSD exchange rate stands at 1.2709.

The pound appears steady, supported by the local decline in the US dollar and comments from monetary policymakers. In his speech yesterday, Bank of England Deputy Governor Ben Broadbent did not rule out a summer interest rate cut.

However, Broadbent provided no specific information indicating that this scenario is inevitable. Market expectations show the likelihood of lowering the interest rate to 5.00% from the current 5.25% at the next meeting in June.

The Bank of England continues to gather information and data on the state of the UK’s economic system. If the situation continues to develop in line with its forecasts, the bank rate will likely change.

On Wednesday, the UK will release inflation statistics, crucial for understanding the BoE’s future actions. According to the consensus forecast, the consumer price index decreased to 2.1% in April from 3.2% in March. The Bank of England’s CPI target is precisely 2.0%.

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

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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GBP is appreciating. Overview for 23.05.2024

The British pound sterling is still ascending against the US dollar. The current exchange rate for GBPUSD stands at 1.2727.

Yesterday's published statistics revealed a decrease in British inflation. On a year-on-year basis, the Consumer Price Index in April fell to 2.3% from the previous 3.2%. The forecast had anticipated a more significant decline to 2.1% y/y. On a month-on-month basis, inflation rose by 0.3% compared to the previous 0.6%, once again defying expectations and not ruling out the 0.2% increase.

Investors' reaction to the inflation statistics was not positive. The data suggests that the Bank of England will maintain a wait-and-see stance for now, but by August, it may be ready to begin an easing cycle. These expectations are worse than before: prior to the release of statistics, the market had anticipated a cut in the BoE interest rate as early as June.

It is said on the market that the pound currently needs grounds to stand out among the G-10 currencies. The interest rate in the UK remains at 5.25% per annum. With it staying high, the pound is gaining on this front.

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

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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JPY has strengthened. Overview for 27.05.2024

The Japanese yen has moderately risen against the US dollar. The current USDJPY pair stands at 156.73.

Bank of Japan monetary policymakers are actively commenting on current developments. Bank of Japan Governor Kazuo Ueda noted that it is premature to address interest rate issues until inflation expectations consolidate. Assessing a fair, neutral interest rate level is currently very difficult.

His colleague, Bank of Japan Deputy Governor Shinichi Uchida, believes the BoJ is close to completing its battle against deflation. He noted that wage growth will likely continue. Japan has been combating deflation for over a decade and has yet to be successful.

Previously released inflation data exerted local pressure on the yen. The overall consumer price index decreased to 2.5% in April from 2.7% in March. April’s core inflation fell to 2.2% from 2.6% in March, marking the second consecutive month of decline. These are not the most favourable figures.

The Bank of Japan continues to fight for stable prices. The interest rate will remain unchanged until signs of confidence in this area emerge.

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

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
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JPY is gradually retreating. Overview for 29.05.2024

The Japanese yen is declining against the US dollar on Wednesday. The current USDJPY exchange rate stands at 157.24.

The instrument is currently at a four-week high. The yen has returned to the levels observed before Tokyo intervened to support the national currency in late April and early May.

On 29 April, the US dollar reached a 34-year peak of 160.24 yen, prompting at least two currency interventions by the Japanese monetary authorities. According to various estimates, about nine trillion yen or more (57.21 billion USD) was spent to support the weak yen. The JPY exchange rate stabilised and recouped some losses, but not for long.

The Japanese monetary authorities continue to make verbal interventions, which have no impact on the market. As the market suggests, without real actions, the dollar-yen exchange rate will rapidly return to levels preceding the intervention.

The Bank of Japan may expect an interest rate hike if a sharp weakening of the yen rate leads to inflationary growth.

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

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
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EUR is growing, but the dollar is gloomy. Overview for 31.05.2024

The primary currency pair is gaining on Friday. The current exchange rate for EURUSD is 1.0817.

The US dollar stabilised by today, but it noticeably weakened the evening before. This development was attributed to the publication of the second estimate of the US GDP for Q1 2024. The data do not rule out the possibility of US Federal Reserve interest rate cuts this year.

The statistics showed that GDP increased by only 1.3% y/y in January-March, while the first estimate reflected a 1.6% rise. This deterioration in the data has opened the door for the Fed to consider at least one rate cut by the end of the year. The market's current assessment of the likelihood of monetary policy easing at the September meeting stands at 55%, compared to 51% a day earlier.

Today, the market focuses on the Core PCE, the Fed's preferred inflation component. By this evening, the market will have more data on which to base speculations about the Federal Reserve's monetary policy outlook.

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

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
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EUR has surged. Overview for 04.06.2024

The primary currency pair continues to climb higher on Tuesday. The current EURUSD exchange rate stands at 1.0908.

The US dollar has retreated to its lowest value since 21 March as signs of persisting weakening in the US economy strengthen arguments for an imminent interest rate cut by the US Federal Reserve. The US ISM manufacturing PMI in May decreased to 48.7 points from the previous 49.2, falling short of expectations.

According to the LSEG monitor, the likelihood of a Federal Reserve rate cut in September is currently estimated at 59.1% compared to 55.0% on Friday. This anticipation is further heightened by growing expectations, which were no more than 50.0% early last week. The employment market data for May, particularly the wage parameters, which are significant in the context of inflation, will be crucial this week.

The Federal Reserve’s next meeting will conclude on 12 June, and the latest consumer price data will be released that day. Although no risk is expected at this meeting, the Federal Reserve must update its economic forecasts.

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

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team