EUR growing again. Overview for 09.12.2022

On Friday, the market major looks vigorous. The current quote is 1.0580.

The market is discussing a possible increase in the European interest rate by 75 base points. Leading investors are now making lots of forecasts concerning this issue. We must admit, expectations are rather carnivorous. This supports the EUR.

The statistics on the unemployment claims in the US published yesterday demonstrated growth to 230 thousand from 226 thousand previously. The data met expectations. The employment sector in the US looks stable and withstands the Fed's policy rather easily.

Today all eyes will be on the November PPI report. The production inflation will tell how the business is beating constant price growth. Inflation is the foundation stone for the Fed, any signals concerning it are important.

Moreover, the prelim Michigan University CCI in December is due. There is a chance the index has stabilized.

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

GBP steps back. Overview for 13.12.2022

On Tuesday, the British pound against the US dollar continues to decline. The current quote is 1.2260.

Today’s statistics from Great Britain came out ambiguous.

The unemployment rate in October grew to 3.7% from 3.6%. The change had been anticipated due to seasonal and other processes in the employment sector. The number of unemployment claims in November increased by 30.5 thousand, becoming an unpleasant surprise. The index had been expected to grow by just 3.5 thousand after a previous decrease by 6.4 thousand.

Average wage in the country over August-October grew by 6.1% as expected.

The British labor market is practically stuck. On the one hand, companies continue work and need employees; on the other hand, they cannot afford to pay them more due to growing inflation and expenses. The pound would have dropped with such disappointing statistics but it is supported by weakness of the USD.

This is not all the statistics scheduled for today. At noon, minutes of the previous meeting of the Bank of England will be published, and the market will try to find hints on the previous steps of the regulator. The new meeting will happen on Thursday.

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

GBP counts on Bank of England. Overview for 15.12.2022

The British pound against the US dollar remains expensive. The current quote is 1.2392.

To tell you the truth, the current quote of the pound looks even stronger keeping in mind how much the market was affected by the change of the PM and how hard it took the conservative financial policy of the BoE.

The Bank of England will attract attention today as well. A meeting is scheduled for this afternoon, at which the interest rate is likely to be increased by 50 base points. Hence, it will amount to 3.50% instead of the current 3.00%. The decision is expected to be made unanimously.

It will be interesting to see how the BoE assesses the inflation situation and the perspectives of the economy. The comments might remain cautious and restrained. As statistics demonstrated earlier, the CPI had left its all-time highs but can return there if nothing changes in the economy.

There is a risk that the BoE will be more cautious than it is wise these days. For the pound, it might be negative. But while the USD is weak, the GBP will be aiming up.

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

EURUSD will remain neutral. Overview for 19.12.2022

The market major survived the meetings of the Fed and ECB and is getting ready for Christmas. The current quote is 1.0610.

The statistics published on Friday in the US and Europe could hardly be called impressive.

The final CPI in the euro zone in November demonstrated growth by 10.1% y/y, while the forecast had been 10.0% y/y. Inflation remains a big problem in the region even with the tough approach of the European Central Bank to the monetary policy.

The ECB mood at the December meeting turned out carnivorous. This gave the EUR some support but as yet has made little effect on inflation itself.

The US presented prelim Markit PMI in production and non-production for December. The first index had dropped to 46.2 from 47.7 points, while the second one – to 44.4 from 46.2 points. This is not the best news for the dollar but it had been anticipated.

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

EURUSD got Zen. Overview for 21.12.2022

The market major has been consolidating in a narrow range for several days. The current quote is 1.0620.

As was said earlier, EURUSD investors have already got all the facts they might need. Theoretically, situation there must be stable until Christmas.

The statistics from yesterday was quite curious. For example, new house foundations in the US in November did not change, remaining at 1.43 million while 1.40 million had been expected. This is unusual but positive: Americans keep on building houses even when prices are growing. At the same time, the number of construction permits dropped to 1.34 million from 1.51 million. This is normal due to seasonal changes.

All in all, the US real estate sector looks absolutely confident. Demand has never crashed here, though supply is somewhat decreasing. Consumers show no agitation that could appear if they expected real worsening of the economic conditions.

The CCI in the euro zone in December grew to -22 points from -24 points, as expected.

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

EUR returned to starting point. Overview for 23.12.2022

On Friday, the market major looks stable. The current quote is 1.0610.

The US statistics published yesterday turned out to be quite unexpected. The final GDP for Q3 demonstrated growth of the economy by 3.2% instead of 2.9% estimated previously. This revision had not been forecast but it turned out in the best of American ways. It turns out that regardless of the all-time fastest growth of crediting cost, the economy remains more sustainable than expected and keeps a positive impulse.

Today is the last trading day in the West before Christmas and winter holidays. This might affect volatility.

However, before investors leave for celebrations, US statistics might be of interest. Today we are to see durable goods November reports, where a decline by 0.9% m/m is expected after preceding growth by 1.1% m/m. The indicator itself is very volatile, so it would be wise to take a look at its components. The US will also present consumer income and expenses reports as well as the Fed’s favourite Core PCE Price Index (basic personal spending) for November. It might have remained at 0.2% m/m.

These statistics are neutral for the USD. Thin Christmas market might be full of steep surges but it is not likely that we will see anything bright here until next week.

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

JPY is vigorous. Overview for 27.12.2022

The Japanese yen against the US dollar remains strong. The current quote is 132.89.

A week has passed since the intervention of the BoJ, and the yen has renewed the highs of the last 4 months. Now it is going back very smoothly and almost unnoticeably. Meanwhile, it must be admitted that the interventions had quite a pronounced effect.

In today's comments, the head of the Bank of Japan mentions that the widening of the admissible fluctuation borders around the target level of state bonds yield was not at all the first step towards the exit from the ultrasoft monetary policy. According to the politician, Japan is at a turning point where all decisions are crucial. The question is, whether the country will be able to get out of the low inflation period that has extended too much.

In the second half of 2023, the growth of consumer prices in Japan will slow down. In the next financial year, base inflation in the country might end up below 2%. This is the official forecast of the BoJ.

It is quite hard to make any long-term plans based on these forecasts: it is unclear, how exactly the authorities will be supporting the labour market seeing a slow-down there. Transition to accomodating monetary policy might be hindered. There are more questions than answers here, and the Bank of Japan would not share its decisions.

For the JPY, worsening of inflation expectations might be a negative signal. Seems like the CB is running out of efficient instruments.

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

USD got its fans. Overview for 29.12.2022

On Thursday, the market major is declining. The current EURUSD quote is 1.0620.

USD owes it mainly to the growth of the US state bonds yield. The return on 10-year bonds has reached the month peak. This provoked recovery of the USD and a local decline of the main currency pair.

The market is quiet. The macroeconomic calendar shows only secondary news, which is normal for the time between Christmas and the New Year.

The number of incomplete trades in the US secondary housing market in November dropped by 4% m/m, which was surprising. Year by year, the index dropped by 37.8%. This is no surprise, on the contrary: high crediting prices make consumers postpone expensive purchases.

Today check out the weekly unemployment claims report in the US. It is quite unlikely that the data will be a holiday present: they are stuck in a channel between 210-230 thousand and will hardly escape it in the nearest future.

Right after the holidays, investors will start watching the US economy again. The labour market info will show how employment levels react to the economic slow-down and high rates. And if things remain neutral, market players will count on an increase in the interest rate by 25 base points at the nearest Fed's meeting.

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

EUR looks good again. Overview for 09.01.2023

On Monday, the market major is vigorous. The current quote is 1.0680.

Over the first week of the year, the pair lived through both abrupt growth of the USD and a similarly fast recovery of the EUR. The thin holiday market with low liquidity levels only facilitated large amplitude of fluctuations.

Investors got focused on the minutes of the US Fed's meeting. In the document, the regulator asked investors and economists to abstain from preliminary optimism and hasty decisions based on just one moderate increase in the interest rate. The USD got stronger but not for long.

The US have already presented the employment market statistics for December. The unemployment rate dropped to 3.5%, though it had been expected to remain at 3.7%. The NFP grew by 223 thousand against 200 thousand expected. This is good news demonstrating the sustainability of the labour market. At the same time, average hourly wage grew by just 0.3% upon growing by 0.6% previously. This is neutral news because companies just comply with the interests of their employees.

Bad news came out of the blue. The US ISM demonstrated a decline in services to 49.5 points against 55 points expected. A slow-down in the economic activity in the midst of the consumption season is indeed bad, and the USD reacted at once.

All in all, a direct indication on a slow-down of the country's economy was serious bad news for the USD.

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

EUR remains strong. Overview for 12.01.2023

On Wednesday, the market major remains vigorous. The current quote is 1.0750.

The market supports the EUR, and there are no reasons as yet for this attitude to change.

The US statistics from yesterday could hardly be called impressive. Optimism index of small business in December dropped to 89.8 points from 91.9 previously. This is no surprise because small enterprises turn out more sensitive and vulnerable in face of high interest rates.

The speech delivered by the Head of the Federal Reserve System Jerome Powell, delivered at the Riksbank conference, appeared more like neutral. Powell mentioned that the independence of the Fed from political institutions enhances the efficacy of its fight against inflation. This same independence makes the Fed abstain from interfering with climate change issues apart from some very general questions.

Today can be quite calm for EURUSD because no important statistics or crucial meetings are scheduled. Investors will be saving power for Thursday when the US issue their inflation report. All fluctuations will be concentrated there.

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

EUR renewed April peaks. Overview for 13.01.2023

On Friday, the market major sticks to its local h8ghs. The current quote is 1.0840.

The main event of the previous trading session was the publication of the US inflation reports. This was beautiful.

The CPI in December dropped to 6.5% y/y as expected from 7.1% previously. Monthly speaking, inflation decreased by 0.1% after an increase by 0.1% in November.

Base inflation dropped to 5.7% y/y from 6.0% y/y, as expected. However, monthly speaking, base CPI grew by 0.3%.

The USD dropped to the low of April 2022 against the EUR. Curiously enough, the market did not run to the strategy "buy on rumors, sell on facts"; instead, it went by the trend.

It seems that the weakness of the USD confirms the expectations of softer Fed's policy.

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

AUD needs foothold. Overview for 17.01.2023

The Australian dollar against the US dollar is eager to grow. The current quote is 0.6970.

Aussie got support from Chinese statistics. China is the key trade and economic partner of Australia, hence, its statistics are extremely important for the Green continent.

So, the Chinese GDP in Q4, 2022 grew by 2.9% y/y, while the consensus forecast was 1.8% y/y of growth. In Q3, the Chinese economy grew by 3.9% y/y but did not grow quarter-by-quartet, though it was expected to shrink by 0.8%. Over the whole of 2022, the economy expanded by 3% y/y.

The fact that the Chinese GDP turned out better than rather pessimistic forecasts made investors happy. Fundamentally speaking, though, there is nothing good in that statistics: China has lost the status of the global economic locomotive, and no one knows when it will recover from all the lockdown damage.

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