The Euro remains under pressure. Overview for 10.01.2020

On Friday, the major currency pair continues trading “in the red”, but bears aren’t as active as they used to be.

EURUSD is trying to reach stability on Friday morning, but there are still more bears than bulls in the instrument. The current quote for the pair is 1.1108.

The USA is scheduled to report on its labor market this week. On Wednesday, the country published the ADP Non-Farm Employment Change, which showed 202K in December after being 124K in November and against the expected reading of 140K.

Yesterday, the USA published the weekly Unemployment Claims report, which was 214K after being 223K the week before. It’s quite good, although the readings are inside the reference values. 

Later today, investors will be surely interested in the Non-Farm Employment Change, which is expected to show 266K in December after being 162K in the previous month. Another report, the Average Hourly Earnings, is anticipated to show +0.2% m/m in December after expanding by 0.3%m/m in November. Marker expectations relating to the Unemployment Rate are 3.5%.

The stronger the labor market numbers, the better for the American currency.

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

The Yen plummeted to eight months lows. Overview for 15.01.2020

USDJPY updated its multiweek highs due to investors’ reduced interest in “safe haven” assets.

The Japanese Yen reached stability against the USD on Wednesday after plunging to its eight months lows the day before. The current quote for the instrument is 109.92.

Right now, when market players are eagerly waiting for coveted information relating to the signing of the first phase of the US-China trade agreement, demand for the “safe haven” Yen went down significantly.

This morning, the BoJ Governor Kuroda spoke and said that despite the slowdown in some Exports parameters and drawdown in business sentiment the Japanese economy was expanding slowly but steadily. According to the BoJ expectations, the country’s economy will continue growing gradually, although it should be noted that problems in global economies had a serious impact on it.

Officially, the CPI is anticipated to change by approximately 0.5% but may improve up to 2.0% due to a positive difference between production volume and expansion of inflation expectations. Right now, the indicator is pressured by oil prices decline.

The Bank of Japan emphasized once again that it would expand the money base until the inflation reached 2.0%.

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

EURUSD is confused. Overview for 17.01.2020

On Friday, the major currency pair can’t decide where to move; this week has been pretty nervous.

EURUSD is looking neutral on Friday, but every day this week it was trading differently as investors couldn’t decide on the same direction. The current quote for the instrument is 1.1134.

The statistics published yesterday showed that the Retail Sales in the USA added 0.3% m/m in December, the same as expected and the November reading. The components of the report show that sales rebounded for food and drinks, clothes, and electronics and appliances and rose faster for gasoline. In contrast, sales of motor vehicles declined. The Core Retail Sales showed +0.7 m/m in December after showing no changes in the previous month and against the expected reading of +0.5% m/m.

The Import Prices added 0.3% m/m in December and matched market expectations.

The weekly report on the Unemployment Claims in the USA showed 204K, which is less than 214K the week before. It’s a good piece of news: the labor market is slowly recovering after Christmas and New Year holidays.

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

The Pound is trying to rise. Overview for 22.01.2020

GBPUSD moved upwards a bit thanks to the statistics on the employment, but it might be not enough to continue the momentum.

On Wednesday, the British Pound may try to keep yesterday’s momentum against the USD, but bulls might not be strong enough. The current quote for the instrument is 1.3047.

It became known yesterday that the Unemployment Rate in the United Kingdom remained unchanged at 3.8% in November, just as expected. As one can see from the report, the employment level added 0.6% and was 76.3%, which is the highest reading over the long haul.

The Average Earnings Index showed +3.2% 3m/y, the same as the period before. It appears that the incomes of the British people continue expanding in real terms, which is quite good. However, even with all things considered, the previous numbers made it perfectly clear that the country’s economy was rather weak.

The Claimant Count Change showed 14.9K in December, the same as in the previous month. Market expectations were 33.4K.

Employers are really worrying that the Brexit uncertainty may continue throughout 2020, thus preventing both enterprises and the employment sector from developing.

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

The Euro was falling too fast. Overview for 24.01.2020

On Friday morning, the major currency pair is moving close to its six weeks low and may yet resume trading downwards.

EURSUD had a very stressful Thursday, that’s why it remains under pressure on Friday as well. The current quote for the instrument is 1.1048.

Yesterday, the European Central Bank had its first meeting this year, where all key aspects of its monetary policy were left intact. However, the regulator announced that it had revised the purposes and goals of the monetary policy and the ways to achieve them.

It seems like the ECB is ready to change its policy for the first time since 2003. In general, it’s not surprising at all: Christine Lagarde inherited a pretty stable system from the former governor, which however no longer shows the expected results. So, it would be okay to adapt the system to new market conditions, but in this case, the regulator will have to revise targets of its key macroeconomic indicators (mostly, downwards) and the tools to achieve them as well.

According to Lagarde, the ECB is going to take into account climate risks. Her comments were pretty smooth, that’s why market players decided that the regulator was ready to expand, theoretically, the QE program. However, nothing was said about this. 

Most likely, the ECB is looking forward to boosting the inflation, but it will be very difficult without expanding the QE.

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

The Pound is still being controlled by bears. Overview for 29.01.2020

GBPUSD continues falling deeper and deeper on Wednesday afternoon.

The British Pound remains weak against the USD. The current quote for the instrument is 1.3011.

The statistics from the United Kingdom published yesterday showed that the CBI Realized Sales remained at 0 points in January against the expected reading of 5 points. The reading didn’t make investors happy: everything that is below zero indicates decline, but zero is a pretty negative thing as well because it means that the sector has problems. 

“Guardian” has reported recently that early in the spring the United Kingdom and the European Union might start talks on further cooperation after the Brexit. According to the media, the date is March 3rd.

It’s very important for both parties to start discussing the trade agreement and other issues, such as a single European market and the customs union without wasting time. The existing regulations are effective throughout this year. Earlier, it was reported that these talks may last as long as until the end of 2022. One of the EU representatives said that there were risks of breach between two parties. If it does happen, it will be a major problem for both parties. However, it’s rather unclear who will suffer more, London or Brussels.

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

The Yen is consolidating. Overview for 31.01.2020

On Friday morning, USDJPY continues consolidating inside the range; investors are quite calm about “safe haven” assets.

The Japanese Yen is correcting against the USD on Friday after strengthening the day before. The current quote for the instrument is 109.08.

Demand for the Yen has been more active recently due to an outbreak of the Chinese coronavirus. Market players weren’t sure that the outbreak would have no impact on real economic features. Probably, they were thinking that the Chinese population may reduce their retail sales and focus more on treatment and protecting their health. This, in its turn, might influence the country’s industrial production and, hence, requirements for raw materials and energies. This was the exact reason for panic on the market and investors’ needs for “safe haven” assets were in favor of the Yen.

The statistics published by Japan in the morning showed that the Unemployment Rate in the country remained at 2.2% in December against the expected reading of 2.3%. The Tokyo Core CPI, the leading indicator for inflation in the country showed 0.7% y/y in January against 0.8% y/y the month before. It’s not a good piece of news.

The Retail Sales y/y lost 2.6% y/y in December after adding 2.1% y/y in November and against the expected reading of -1.7% y/y.

The preliminary report of the Industrial Production showed +1.3% m/m in December after being -1.0% m/m in the previous month. The indicator is reaching stability and that’s a good sign.

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

Bears are in charge of EURUSD. Overview for 05.02.2020

Market players have been selling the major currency pair for the fourth consecutive trading session; they clearly favor the USD.

EURUSD continues falling on Wednesday – it’s the fourth trading session in a row. The current quote for the instrument is 1.1037.

The Chinese coronavirus issue is still making investors keep their positions in “safe haven” assets and the Dollar is leading this list.

In fact, the news relating to this issue is changing and updating quite fast. For example, the People's Bank of China has already invested about 1.7T yuan in the country’s financial system, which is quite much money. Moreover, the government is taking actions to improve the current epidemiological situation, as well as inform people about the virus and how to avoid it. All this taken together must calm investors down, but it will take some time.

The statistics published yesterday showed that the Factory Orders in the USA added 1.8% m/m in December after losing 1.2% m/m in the previous month and against the expected recovery by 0.7% m/m. the indicator is quite predictable because by a half it consists of already published data on the Durable Goods Orders.

Among reports to be published today, one should pay attention to the Retail Sales in the Euro Area in December, which is expected to lose 0.55 m/m. it’s a bad signal for the Euro.

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

Statistics made EURUSD slump. Overview for 10.02.2020

The major currency pair remains weak early in another February week.
On Monday morning, EURUSD doesn’t seem to be plummeting but clearly remains rather weak. The current quote for the instrument is 1.0960, which is the lowest since October 2nd, 2019. 

The statistics published last Friday revealed the sound stability of the US labor market in January. The Non-Farm Employment Change showed 225K after being 147K and against the expected reading of 163K. The Unemployment Rate increased up to 3.6%, although it wasn’t expected to change. The Average Hourly Earnings added 0.2% m/m, which is a bit lower than expected, but better than in December.

Two days before that, the ADP published their Non-Farm Employment Change report, which showed 291K. Taken together, these reports are an excellent indicator that the American employment market is quite stable. That’s a good sign for the USD.

Also, last Friday the USA reported on the Consumer Credit in December, which provided “greenback” with some additional support. The indicator showed 22.1B USD after being 11.8B USD in November and against the expected reading of 15.2B USD. This indicates the growth of customer activity and may later have a positive influence on other macroeconomic indicators.

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

EURUSD is looking down again. Overview for 12.02.2020

The correction in the major currency pair failed; bears are pushing the pair towards new lows.

On Wednesday morning, EURUSD is back to falling after a slight rebound. The current quote for the instrument is 1.0903.

There were no important numbers for the USA and the Euro Area in yesterday’s macroeconomic calendar, that’s why investors were mostly focusing on what head of global central banks had to say.

The US Federal Reserve Chairman Jerome Powell spoke in the Congress. He was quite optimistic is his comments and said that the country’s economy had been improving for the last 11 years. Key reasons for this were a stale employment market and a growing GDP. Among possible risks, Powell named the Chinese coronavirus and concerns relating to the country’s GDP growth in the long-term

According to Powell, under current conditions, there are no solid reasons for revising the regulator’s monetary policy. It means that the Fed’s interest rate may stay in the range between 1.50-1.75% for a long time.

As for the labor market, Powell’s comments were pretty interesting. For example, he said that the employment change was higher than necessary. However, employers change their approach and choose to hire less-skilled people and train them in the course of the works. Ethnic and race issues are still a risk in the sector. Historically, the issue turns out to be much more complicated than it was thought before.

However, no matter how stable the employment market is,  labor productivity was pretty low at the time of economic growth. It may reduce corporate profits and, for example, force enterprises to monitor parameters of capital expenditures.

The Fed’s stable stance is a good signal for the USD.

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

Sales in EURUSD continue. Overview for 14.02.2020

On Friday morning, the major currency pair remains under pressure; the coronavirus driver is valid again.

EURUSD is updating its three-year low almost every day. The current quote for the instrument is 1.0831.

The key factor that is against the European currency these days is investors’ avoiding risks relating to news about new spots of the virus outbreak. China started implementing a new method of identifying the infected, which significantly increased the number of diseased and deceased. For market players, who already seemed to have calmed down, it was a signal to switch to “safe haven” assets.

In this light, investors didn’t pay much attention to the unimpressive statistics from the USA, which would count against “greenback” in normal circumstances. The Consumer Price Index showed only +0.1% m/m in January against the expected reading of +0.2% m/m. On YoY, the indicator was 2.5%. the Core CPI added 0.2% m/m, the same as expected, after adding 0.1% m/m in December.

The components of the report show that the largest increase was in the cost of food and medical care services, although these increases more than offset a decrease in the gasoline index, which fell 1.6%, and energy, declined 0.7%.

It means that in the nearest future the prices will likely grow slower than expected and that’s not a good signal for the Fed.

There will be a lot of numbers today, both from the USA (Retail Sales, Industrial Production, Consumer Sentiment, Inflation Expectations) and the Euro Area (Trade Balance, GDP), which will surely provide some reasons for active movements in EURUSD.

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

The Australian Dollar weakened significantly. Overview for 18.02.2020

AUDUSD plummeted on Tuesday after the RBA’s comments.

The RBA’s comments forced a negative response in AUDUSD. The current quote for the instrument is 06678.

Earlier today, the Reserve Bank of Australia published its Monetary Policy Meeting Minutes, which investors didn’t like at all. The document said that the regulator was ready to continue cutting the rate if necessary. However, the current period of low interest rates is still needed by the country’s economy, that’s why it will continue as long as it has to.

According to the Australian regulator, another rate cut may boost inflation and help the labor market. If the regulator is speaking about it, then the decision has already been made and the RBA is just waiting for the right time.

Of course, the RBA is very worried by the Chinese coronavirus issue, which is considered as a new source of uncertainty for the global economy in general, and for China and Australia in particular.

Moreover, the RBA mentioned forest fires, which took place in the country this January. According to the regulator’s estimations, the negative influence of this aspect will be seen in the numbers for the 4th quarter of 2019 and 1st 0f 2020.

In other words, there was nothing in the document that might support the Aussie and help it to reach stability.

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