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Re: Forex Fundamental Analysis & Forecast by RoboForex

The Aussie is rising. Overview for 14.10.2021

AUDUSD is capitalising on the “greenback” and market players’ interest in risky assets.

The Australian Dollar is growing against the USD on Thursday. the current quote for the instrument is 0.7413.

The statistics published by Australia in the morning showed that the Unemployment Rate expanded up to 4.6% in September after being 4.5% the month before. Anyway, it’s better than expected, 4.8%.

The Employment Change in the country was -138K after being -146K in August and against the expected reading of -120K. The Participation Rate showed 64.5% in September after being 65.2% in the previous month. Full-Time Employment was 26.7K after being -68K in August. Part-Time Employment showed  164.7K.

There were certain restrictions in the Australian economy during the pandemic, they can explain fluctuations in the data.

At the same time, investors are sure that the fourth quarter will be more positive for the labour market, if for no other reason than because the two largest states are planning to remove COVID-related restrictions in the next couple of weeks.   

The Aussie is currently supported by the weak “greenback” and taking full advantage of the situation.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Euro is holding the fort. Overview for 15.10.2021

EURUSD remains strong in anticipation of the US statistics.

The major currency pair is trying to keep its positive momentum. The current quote for the instrument is 1.1604.

The rally in the US 10-year bond yield slowed down amid growing inflation concerns and this actor counted against the “greenback”, which remains rather weak before the weekend. So far, there hasn’t been anything new that might have evened this negative factor.

The weekly Unemployment Claims report was quite good: it showed 293K after being 329K the week before and against the expected reading of 315K. A possible reason for this is that companies start hiring seasonal labour force in anticipation of holidays and sales season.

Later today, investors’ attention will switch to the US Retail Sales report for September, which is expected to show -0.2% m/m after being 0.7% m/m in August. The Core Retail Sales may add 0.5% m/m after expanding by 1.8% m/m the month before.

The stronger the readings, the more support the USD will get – it will mean that consumers continue spending money and the American economy is ready for stimulus reduction.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

EURUSD is retreating again. Overview for 18.10.2021

EURUSD is back to falling after the US released some solid statistics.

The major currency pair is falling a little bit early in the week. The current quote for the instrument is 1.1575.

The American statistics published last Friday were inspiring. For example, the Retail Sales added 0.7% m/m in September against the expected reading of -0.2% m/m. At the same time, the August data was revised from 0.7% m/m to 0.9% m/m.

This is good news: over three months, July through September, the indicator added 14.9% y/y. American citizens continue spending money and that’s good for the economy.

As a result, the US Fed has comprehensive information and data necessary for making a stimulus decision. Market players are expecting the regulator to start reducing the QE program as early as November, which is pretty close. If the regulator is going to rely on statistics only, then there are no doubts that now it’s the high tie to cut the program. The economy is doing a great job in handling the situation.

Later today, investors should pay attention to the US Industrial Production report for September, which may show 0.3% m/m after being 0.4% m/m the month before. Another indicator, the Capacity Utilization Rate may go from 76.4% to 76.6%.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Pound continues growing. Overview for 19.10.2021

GBPUSD is keeping its positive momentum supported by the weakness of the “greenback”.

The British Pound continues growing against the USD on Tuesday. The current quote for the instrument is 1.3794.

The short-term weakness of the American currency caused by some mixed September statistics on industrial production provides the Pound with additional support.

It seems like the United Kingdom overcame the fuel crisis that made people spend a lot of time queueing at petrol stations. At the same time, the consequences of supply problems are also fading away. this week, the British economy may really show how it is recovering after the COVID-related social restrictions were partially removed.

On Wednesday, the UK is scheduled to report on prices, including the CPI, the PPI, the RPI, and the HPI. The Consumer Price Index might as well remain rather high but the Bank of England is highly unlikely to take any measures against it.

On Friday, there will be a report on the Retail Sales for September, as well as flash releases on the Manufacturing and Services PMIs for October.

Market players are actively discussing whether the Bank of England starts tightening its monetary policy as early as November in order to raise its benchmark interest rate up to 1% in May 2022. At the same time, high inflation is still believed to be temporary. Of course, it’s possible, but the British regulator is highly unlikely to revise its policy until the end of the year. The most probable scenario implies the first steps in this direction in the first quarter of 2022 – by that time, the regulator may draw a consistent conclusion in the inflation behaviour.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Pound will evaluate the statistics. Overview for 20.10.2021

GBPUSD stopped growing; market players are analysing the statistic on prices.

The British Pound slowed down its growth against the USD on Wednesday. The current quote for the instrument is 1.3780.

Earlier today, the United Kingdom released several reports on prices, which obviously confused investors and made the national currency move away from its highs.

For example, the Consumer Price Index in the UK in September was 3.1% y/y. In August, it was 3.2% y/y and no one expected it to change. The Core CPI showed 2.9% y/y after being 3.1% y/y the month before. Another indicator, the RPI, was 4.9% y/y after being 4.8% y/y in the previous month.

The fact that inflation in the UK dropped a little bit without the BoE’s involvement or intervention calms investors down. In this situation, discussions about a possible tightening of the regulator’s monetary policy become a bit irrelevant, at least prices are now out of the picture.

The PPI Input added 0.4% m/m in September, half as many as expected, but the same as in August, which is okay. The PPI Output expanded by 0.5% m/m, the same as expected, after adding 0.7% m/m the month before.

Producer prices continue rising but businesses and manufacturers managed to balance their performance and readings as problems with deliveries are slowly fading away.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Pound is slowly growing. Overview for 21.10.2021

GBPUSD continues trading moving upwards notwithstanding short pauses.

The British Pound is retreating a little bit against the USD but the overall tendency remains bullish. The current quote for the instrument is 1.3802.

In some way, the Pound is capitalising on the situation rising because the “greenback” remains static. It helps the British currency to rise while domestic news tends to be rather mixed.

According to the Reuters survey, the Bank of England may become the first of all global Central Bank to raise its benchmark interest rate after the pandemic is over. Current market expectations imply that the British regulator may raise the rate by 15 basis points, up to 0.25% in the first quarter of 2022, February or March. Earlier, it was believed that the BoE wouldn’t do it until the fourth quarter of 2021.

A small part of respondents, one-fifth, believe that the Bank of England will raise the rate during its meeting on 15 November. 

Some other numbers show that in the fourth quarter of 2021 the British economy may add only 1.1% against the previous expectations of 1.5%. Overall, this year the economy is expected to expand by 6.8%, while 2022 may show 5%.

As for inflation, in the first quarter of 2022, it may reach 4%. However, after that, the indicator is expected to fall: 3.5% in the second quarter and 2.7% in the third one.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Yen stopped strengthening. Overview for 22.10.2021

USDJPY reached stability after a couple of days of sales.

The Japanese Yen is slowly falling against the USD on Friday – market players are analysing the inflation data. The current quote for the instrument is 113.93.

Today’s statistics from Japan made investors pause to think. The Consumer Price Index in the country showed 0.2% y/y in September against the expected reading of -0.3% y/y. It’s rather unexpected for Japan: instead of deflation, there is inflation. The Core CPI showed 0.1% y/y, the same as expected.

Low inflation, which is quite often negative, is a huge issue for Japan, where the QE programs are much bigger than in other countries. However, the programs haven’t been able to boost consumer spending. The country's population is very careful in spending money after looking at the economic prospects.

In this light, it will be very interesting to track the inflation data in the future. if the next reports show the indicator growth, the national currency may get significant support.

The Flash Manufacturing PMI in Japan was 52.0 points in September after being 51.5 points in the previous month.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Euro is looking strong. Overview for 25.10.2021

EURUSD is supported by the risk attitude.

The major currency pair is feeling the global risk attitude and trying to keep its positive momentum. The current quote for the instrument is 1.1660.

The “greenback” enthusiasts’ stake on reactions of the US Fed hasn’t worked so far – the American regulator is watching the statistics in silence and trying to avoid giving any comments on the QE programme reduction. Initially, investors believed that the Fed would announce the stimulus reduction right after the data on inflation and industrial production, but in vain.

This week, the European Central Bank is scheduled to have another meeting. According to market expectations, all monetary parameters of the regulator, such as the benchmark interest rate and the QE programme volume, should remain intact. It might be not good for the Euro.

Like the United States Secretary of the Treasury Janet Yellen said earlier, inflation would drop to acceptable readings in the second half of 2022. She thinks that monthly inflation managed to slow down if compared with spring and summer. However, as for YoY, the inflation rate remains high because of the 2020 low base. Yellen is sure that the US remains in control over inflation and doesn’t see any risks in expenditures and CPI data.

Inflation remains a controversial point for the US because there are no signs of a slowdown on a global scale.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The “greenback” is energetic again. Overview for 26.10.2021

EURUSD retreated yesterday and still remains under pressure.

The major currency pair is being sold for no reason at all. The current quote for the instrument is 1.1600.

Local loss of interest in risk attitude made the European currency fall yesterday. The economic calendar was rather neutral and no monetary policymakers delivered any speeches, so the market managed to balance the major currency pair in anticipation of the ECB meeting by itself.

To rise steadily, the Euro needs good news, for example, some strong macroeconomic statistics and “hawkish” comments from the regulator. However, none of these are expected in the nearest future.

Yesterday, Germany published a weak report on the Ifo Business Climate, which dropped to 97.7 points in October after being 98.9 points in the previous month and against the expected reading of 98.2 points. Germany is still experiencing supply shortages – they can be seen in this report. The Bundesbank Monthly Report published yesterday said that the German economy may significantly slow down in the fourth quarter of 2021 due to the weakness of the service industry and ongoing supply shortages. At the year-end, the German GDP may be pretty much below the forecasted reading of 3.7%. The regulator believes that inflation will continue rising in the nearest future but may slowly drop in the next year.

There won’t be any significant reports from Europe today but the US is planning to release some, for example, the New Home Sales for September and Conference Board Consumer Confidence for October, which is expected to decline, thus having a negative influence on the “greenback”.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Aussie is skyrocketing. Overview for 27.10.2021

AUDUSD is rising and ready to update its local highs.

The Australian Dollar is steadily growing against the USD. The current quote for the instrument is 0.7527.

The statistics published today showed that the Australian CPI was 0.8% q/q in the third quarter, the same as expected. On YoY, the indicator showed 3.1%, which is below market expectations.

It’s rather unusual: basically, the world is fighting inflation boosts and deflation can be seen only in some particular countries, where it’s some kind of chronic disease of local economies. As for Australia, a stable monetary policy and the state’s consistent work with the labour market really pay off.

At the same time, one shouldn’t disregard the possibility of the economic slump in China, which, despite all issues of the last 18 months, remains Australia’s key trade and economic partner. There are a lot of talks on the global market right now relating to a possible slowdown in the Chinese GDP and that’s may have a serious influence on the Australian economy later.

Nevertheless, right now the AUD rate is quite bullish despite the fact that the USD is also pretty strong. We can even say that the current bullish impulse in the Aussie may get stronger and the instrument is on the way to updating its highs.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Yen is attacking. Overview for 28.10.2021

USDJPY is back to falling after a short pause; investors remain cautious.

The Japanese Yen is strengthening against the USD on Thursday. the current quote for the instrument is 113.63.

On one hand, market players may require “safe haven” assets during downtimes, and the Yen is a perfect fit for that. On the other hand, the Yen always barely reacts to the statistics but might have responded to the Bank of Japan meeting results.

So, after its October session, the Japanese regulator left all parameters of its monetary policy intact: the benchmark interest rate is -0.1%, the 10-year bond yield target level also remained the same.

At the same time, the regulator revised its stance on the key economic outlook for this fiscal year. For example, inflation in the country is now expected to be 0% in 2021-2022 against the previous estimate of 0.6%. In 2022-2023, the indicator may show 0.9%, the same as expected before. The real GDP this year might be 3.4%, which is below the July estimate of 3.8%. in 2022-2023, the country’s economy may expand by 2.9% against the previous estimate of 2.7%.

As the coronavirus pandemic is retreating, the Japanese economy will boost its recovery, as well as the CPI. However, one shouldn’t exclude any unexpected consequences the pandemic may have on the Japanese economy, which remains in dire straits. Still, the current trend is quite positive although rather slow.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Euro skyrocketed. Overview for 29.10.2021

EURUSD skyrocketed after the US released its GDP statistics.

The major currency pair remains strong at the end of this trading week. The current quote for the instrument is 1.1650.

There were a lot of things to pay attention to yesterday. The European Central Bank had another session and left all key parameters of its monetary policy intact. In the comments, the ECB Governor Christine Lagarde said that rate-related market expectations were totally different from the regulator’s stance. She said that the analysis used by the ECB showed no conditions required for the rate revision by the time investors were expecting it.  At the same time, the regulator believes that the reduction of the PEPP programme is not the reduction of the stimulus.

The ECB says that the pandemic influence is getting weaker, the economy is improving but not as fast as it was expected to. According to the regulator’s estimates, the GDP must exceed pre-pandemic levels by the end of the year.

The stance on inflation is quite standard. The CPI is expected to rise until the end of 2021 but may drop in 2022. Energy prices may have a negative influence on consumer activity.

Overall, the meeting was quite calm and the ECB didn’t give any clear signals whether it was ready to tighten its monetary policy or not, quite the contrary. The Euro remained stable but only until the moment the US released its GDP report.

The American economy added 2.0% q/q in the third quarter after expanding by 6.7% q/q the quarter before and against the expected reading of 2.7% q/q. The Real Consumer Spending report showed +1.6% after being +12.0% in the second quarter. The data was disappointing because it calls into question the regulator’s intentions during its November meeting, which is scheduled for 2-3 November. in response to the weak GDP report, the “greenback” plummeted.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

EURUSD dropped and just can’t recover. Overview for 01.11.2021

EURUSD plunged after the US statistics on prices.

The major currency pair reversed dramatically last Friday. The current quote for the instrument is 1.1560.

The situation was quite clear until the US released the September data on the Core PCE Price Index, which added 0.2% m/m, the same as expected, after expanding by 0.3% m/m the month before. However, on YoY, it increased by 4.4%. This indicator is one of the key inflation parameters assessed by the US Fed. On the verge of the regulator’s November meeting, it’s not much of a positive piece of news.

The report made the 10-year US bond yield rise and the “greenback” followed.

The Personal Spending in the US added 0.6% m/m in September, matching the expectations, after expanding by 1.0% in the previous month. The report shows that consumers are in a hopeful mood, the same as before, and that’s good. The Personal Income dropped 1.0% m/m after adding 0.2% in August. The reason for that might be the absence of one-time social insurance benefits, for example.

This week, investors are focused on the US Fed session scheduled for 2-3 November – they are expecting the regulator to announce its decision on the QE programme reduction. The current volume is $120 billion and the Fed may cut it down by $15 billion. Further still, market players believe that the Fed will close the programme completely by mid-2022. At that time, the regulator may return to discussing the benchmark interest rate revision.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Aussie is falling. Overview for 02.11.2021

The Australian Dollar is retreating against the USD on Tuesday. The current quote for the instrument is 0.7458.

The Reserve Bank of Australia had another meeting today. The benchmark interest rate remained unchanged at 0.1% as expected. It’s been the lowest value ever and it remains intact. It was quite unusual that the RBA scrapped the 0.1% yield target on April 2024 government bond. Earlier, it was 10 basis points.

The stimulus programme will remain in effect at A$4 billion a week until at least mid-February 2022.

Overall, the regulator is sticking to a “wait-and-see” attitude. The RBA is in no hurry, under no pressure. To act more decisively, the RBA wants to see stable growth of salaries as was said earlier. As long as inflation is outside the 2-3% range, the regulator won’t consider any rate hikes.

The RBA announced its forecasts for the key macroeconomic indicators. For example, the GDP is expected to add 3.0% in 2021, 5.5% in 2022, and 2.5% in 2023. The Unemployment rate is expected to drop, to 4.25% at the end of 2022 and 4.0% in 2023.

The key risk is the situation in the healthcare sector and the pandemic. If the anti-coronavirus vaccination campaign boosts and produces positive results, the economy may recover quite quickly.

The Aussie’s response to the meeting results was decline.

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

515 (edited by RF roboforex 2021-11-03 11:17:05)

Re: Forex Fundamental Analysis & Forecast by RoboForex

EURUSD dropped a little bit. Overview for 03.11.2021

The major currency pair keeps waiting for volatility in the middle of the week. The current quote for the instrument is 1.1580.

Nothing extraordinary has happened to EURUSD over the last 24 hours. Investors are focused on the US Fed meeting, which will be over later today. Thanks to this, the USD rate improved a bit last night.

The Fed is expected to announce a pretty clear decision on reducing the QE programme. Market players currently believe that -$15 billion per month will be enough (right now, it’s $120 billion). If it happens, the regulator may boost the reduction during its February meeting and close the programme completely in summer 2022. After that, it may consider revising the benchmark interest rate.

This scenario is the most comfortable for the “greenback” because it will help the US currency to strengthen.

The statistics from Europe published yesterday weren’t good and couldn’t support the Euro. For example, the German Final Manufacturing PMI showed 57.8 points in October after being 58.2 points before. The same indicator for the Euro Area dropped from 58.5 to 58.3 points.

Apart from the Fed meeting, investors should pay attention to the Unemployment Rate in Europe for September. Also. The USA will report on the Services PMI in October and the Factory Orders in September.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Aussie just can’t rise. Overview for 04.11.2021

AUDUSD just can’t find any reasons for recovering after plunging earlier this week.

The Australian Dollar is falling against the USD on Thursday. the current quote for the instrument is 0.7423.

The Retail Sales in Australia added 1.3% m/m in September, matching the expectations. Consumers remain quite active even despite some COVID-related restrictions.

The country’s export dropped 6% m/m in September after losing 4% m/m in the previous month. The import showed -2% m/m after bein-1% m/m over the same period. The import decline as the internal demand indicator doesn’t look optimistic so far but it may improve closer to Christmas and next summer.

According to the Fitch Ratings expectations, the Reserve Bank of Australia will raise the interest rate in 2023, although the regulator itself was talking about 2024. During its latest meeting, the regulator said that the rate wouldn’t be revised until inflation got back in the range of 2-3%. There is a more optimistic scenario, which implies a rate hike may happen at the end of 2022 if inflation reaches stability and salary growth exceeds expectations.

The forecast from ANZ is also quite optimistic – it implies a rate hike in the mid-2023 and the closure of the QE programme in six months.

The Aussie is pretty calm when it comes to the rate discussions.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Pound plunged to the bottom. Overview for 05.11.2021

GBPUSD plummeted after the November meeting of the BoE.

The British Pound dropped to its 5-week lows against the USD. The current quote for the instrument is 1.3427.

The reason for this was the November meeting of the British regulator. Market players expected the interest rate to add 15 basis points but it remained at 0.10%. In the comments that followed, the BoE Governor said that meeting market expectations was not on the regulator’s job list.

The rate was kept intact by 7 votes against 2. The QE programme volume remained at £875B with £20B corporate bonds. The programme was kept this way by 6 votes against 3.

The Bank of England believes that the current monetary policy is optimal for today. According to its opinion, the rate must be raised in the coming months in order to push inflation to 2%. The CPI is expected to be much lower than 2% at the end of the forecast period and continue reducing even after that.

The unemployment rate shouldn’t go up in the short term but this is not, of course, a hundred percent sure.

As for everything else, the Bank of England holds to the same stance as other global Central Banks – on its way out of the pandemic, the British economy faces similar problems but no one really knows how to resolve them quickly.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

EURUSD suffers from pressure. Overview for 08.11.2021

The major currency pair is slightly declining. The current quotation is 1.1560.

Friday statistics from the USA supported the dollar, but it had had no problems anyway. After the Fed made some decisions in accordance with the market expectations of a cut-down on stimulation, the dollar looks quite confident.

The unemployment rate in October in the USA dropped to 4.6% from 4.8% previously, while the forecast expected a result of 4.7%. Average hourly wage grew by 0.4% m/m, along with the forecast. The NFP in October increased by 531 thousand against the forecast 455 thousand. According to the revised statistics, last month the growth was 312 thousand.

So, Q4 started quite positively for the employment sector. This is mostly thanks to the spreading of the coronavirus slow down in September and October. This makes us think that Q4 for the US economy will be more efficient than Q3. The demand for workforce remains high, the number of vacancies is larger than the number of the unemployed.

The Fed suggests that by the mid of 2022, the States will have reached full employment, yet this seems fantastic.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

Yen is growing extremely fast. Overview for 09.11.2021

The Japanese yen is growing noticeably against the US dollar. The current quotation is 112.80.

It does not seem that the yen is growing thanks to the comments of monetary politicians or some statistics. The reason should be the market demand for safe-haven assets: investors are looking for a global foothold. On the whole, the market is now against the American dollar as long as it has got all the facts from the Fed and all the macrostatistics.

Anyway, macroeconomic reports give an idea of what is going on in the economy. We are most interested in inflation and everything around it. As soon as a miracle happens, and Japan finally conquers deflation, the Central Bank will start doing something with the public debt and stimulation programs. It will be interesting.

According to the statistics published today, average hourly wage in Japan in September grew by 0.2% y/y. This is inferior to the forecast (+0.6% y/y) and to the result from back in August. Companies fight less over workforce because have little trust in the financial future. This might be a problem.

The Japan Economy Watchers index in October grew to 55.5 points against 42.1 points in September and the forecasts 48.6 points. This is a good signal because might mean future interest in spending, and this is just what is needed.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

US dollar looks interesting again. Overview for 10.11.2021

The major currency pair has declined slightly but looks rather stable before new macroeconomic reports. The current quotation is 1.1580.

Yesterday the trading day brought good news from the Euro zone. ZEW business sentiment index in November grew to 25.9 against 21 previously and the forecast 20.6. The same indicator in Germany reached 31.7 from 22.3 points previously.

Business sentiment must have improved thanks to almost complete abolishment of coronavirus restrictions inside European economies. The freer the conditions – the better for business and customers.

The US PPI in October also improved to 0.6% m/m, as expected, after previous growth by 0.5%. This means that prices grow gradually along the whole chain from the crude material supplier to the final customer.

Today is going to be an interesting day in terms of statistics. All eyes are on the US report on the CPI in October. The forecast inflation is at once 0.6% m/m higher than last month, after previous growth by 0.4% m/m. Base inflation could have extended by 0.4% m/m against previous growth by 0.2% m/m. However, current high inflation (its y/y values are renewing the highs) cannot make the Fed cancel it decision to reduce stimulation. Probably, a month or two later the Fed might speed up the process to increase the interest rate faster and hold back the growth of prices. Hence, depending on the data from today, volatility of the dollar might grow significantly, if real values turn out higher than forecast.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

American dollar sky-rocketed on inflation. Overview for 11.11.2021

The major currency pair dropped to the lows of July-2020. The current quotation is 1.1480.

American inflation statistics or October detonated like a real bomb. The market had expected these data to become the main event of the week but had never counted on such an effect.

The US CPI in October grew by 6.2% y/y. This is the high since November 1990. A month ago, the value was 5.4%. This time, the forecast was 5.9%. Inflation in the US grew by 0.9% m/m, while growth by 0.6% had been expected.

What does this mean for the USA, its monetary policy, and why did the dollar react this way?

\Things are quite simple. In the eyes of investors, speeding up of inflation can make the Federal Reserve System increase the interest rate sooner than they plan now. Currently, the Fed is expected to reduce the stimulation program smoothly, winding up the QE by the mid-2022 and only then approaching the interest rate. When inflation is making such large steps, things can also speed up.

This is what has been supporting the dollar since the publication.

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

522 (edited by RF roboforex 2021-11-12 10:56:09)

Re: Forex Fundamental Analysis & Forecast by RoboForex

Pound renews the lows. Overview for 12.11.2021

The British pound against the US dollar renews the lows of the last 11 months. Current quotations are 1.3389.

The pound these days is definitely not an object for envy: statistics are awfully ambiguous, and the USD is pushing too hard to be opposed.

According to the prelim report, the British GDP in Q3 grew by just 1.3% q/q against the forecast 1.5% and growth by 5.5% in Q2. A decline in the British economy must be directly connected to issues with supply chains and the pandemic.

Industrial production in Britain in September dropped by 0.4% m/m, which is an unpleasant yet expected signal. The forecast was 0.2%, and a month before, this index grew by 1.0%. Manufacturing in September dropped by 0.1% m/m against the expected growth by 0.2% m/m. In construction, growth was abrupt, by 1.3% m/m against the forecast growth by 0.2% m/m. This must be a partial compensation for the decline by 0.7% in August.

Production suffers due to some issues with supply as well. This is a problem of all large economies these days, but for Britain, it is even worse after Brexit.

For Q4, there is little optimism: supply issues will be still there and might be even worse in the cold season. For the pound, this is a bad signal.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Yen is consolidating within the range. Overview for 15.11.2021

USDJPY has entered a narrow consolidating range; investors are saving strengths for further movements.

The Japanese Yen is forming a narrow consolidation range against the USD. The current quote for the instrument is 113.87.

According to the preliminary GDP report from Japan, the indicator lost 0.8% q/q in the fourth quarter after adding 0.5% q/q the quarter before and against the expected reading of 0.2% q/q. On one hand, everyone should remember last year’s hiпро basу – the third quarter was the recovery peak. On the other hand, it’s obvious that the current volume of the Japanese stimulus is not enough.

The Japanese consumption remains very restrained and it can be easily seen in the GDP. Without consumer spending, the economy will halt.

The final Industrial Production report showed -5.4% m/m in September, the same as both preliminary and expected readings.

The key reason here is the same as all over the world – interruptions in deliveries. However, one shouldn’t exclude the fact that manufacturers scaled down production due to the lack of consumer demand.

The current interest in the Japanese Yen as a “safe haven” asset is rather low but may revive at any moment.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Aussie is falling. Overview for 16.11.2021

AUDUSD is retreating; the Chinese aggression shouldn’t be underestimated.

The Australian Dollar is falling against the USD on Tuesday afternoon. The current quote for the instrument is 0.7339.

While there are no important statistics from Australia, the centre stage is taken by geopolitics, which is not quite calm right now.

Yesterday, the Chinese media called on Australia not to pry into other country’s affairs, meaning the conflict between China and Taiwan. Chinese authorities say that in the Australian army takes part in military operations across the Taiwan Strait, China will have to respond.

It seems like the relations between China and Australia are at a low ebb, and that’s not good news: China remains Australia’s key trade and economic partner and geopolitical problems may have an extremely negative influence on their cooperation. At the same time, many Australian politicians don’t think that the relations between Taiwan and Australia are vitally important.

The Aussie rate will negatively respond to any minor aspects in the Chinese-Australian relations.

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

Re: Forex Fundamental Analysis & Forecast by RoboForex

The Pound is keeping a stiff upper lip. Overview for 17.11.2021

GBPUSD continues consolidating after a massive drop earlier.

The British Pound is still consolidating against the USD. The current quote for the instrument is 1.3422.

According to the statistics published today, the British CPI showed 4.2% y/y in October after being 3.1% y/y the month before and against the expected reading of 3.9% y/y. The Core3 CPI went from 2.9% y/y to 3.4% y/y.

It’s pretty clear already that the Bank of England is not going to respond to an inflation boost because it believes that the economy may reach stability without any interference. Of course, it will take some time but the British regulator is in no hurry. This might be the reason why the Pound remains quite calm today.

The RPI skyrocketed to 6.0% y/y after being 4.9% y/y in the previous month. The PPI Input and Output added 1.4% m/m and 1.1% m/m against the expected readings of 1.1% m/m and 0.7% m/m respectively.

The only thing which is beyond doubt is that inflation will go up for at least a couple of months but may start decreasing early in 2022.

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

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