12 Dic 2018

FOREX Newsletter

FOREX Newsletter

December 12, 2018

 

Pulse of the Market

·      The core producer price index in U.S increased more than expected in November

·      German Chancellor Angela Merkel said the European Union would not renegotiate its Brexit deal

·      Japanese indicators continue to have a bad week as manufacturing data also disappointed

·      The Canadian Dollar edged higher against the U.S Dollar as oil prices and stocks rose

The U.S Dollar inched higher yesterday, as a leading indicator of inflation rose, increasing pressure on the Federal Reserve to raise rates. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.13% to 97.31. The core producer price index increased more than expected in November. The Federal Reserve keeps its eye on this data because, when producers pay more for goods, they are more likely to pass price increases on to the consumer. The Dollar has been under pressure recently amid expectations that the Fed will pause its rate of interest rate hikes and trade tensions between the U.S and China. Meanwhile, the pound pared back earlier gains after German Chancellor Angela Merkel said the European Union would not renegotiate its Brexit deal. UK Prime Minister Theresa May pushed back a planned Parliament vote on the draft of the Brexit deal in the hopes of striking a better deal with Brussels. The Dollar was slightly lower against the safe-haven Japanese yen. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. Japanese indicators continue to have a bad week. The BSI Manufacturing Index slipped to 5.5 in the third quarter, down from 6.5 in the second quarter. Preliminary Machine Tool Orders nosedived, with a reading of -16.5 percent. This was the sharpest decline since July 2016. Earlier this week, Final GDP in the third quarter declined 0.6%. This was the second decline this year. On an annualized basis, the economy declined by 2.5% in Q3, after a gain of 2.8% in the second quarter. This was the worst downturn since 2014. The Euro declined yesterday, with EUR/USD dipping 0.24% to 1.132. The Euro could strengthen should European Central Bank President Mario Draghi stick this week to indications that monetary policy could be tightened next year, just as the Federal Reserve’s interest-rate path is thrown into doubt.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
04:30 Japan Tertiary Industry Index (MoM) (OCT) Medium   0.8% -1.1%
10:00 Euro-Zone Industrial Production w.d.a. (YoY) (OCT) Medium   0.8% 0.9%
12:00 U.S MBA Mortgage Applications (DEC 7) Medium     2.0%
13:30 Canada Teranet/National Bank HPI (YoY) (NOV) Low     2.8%
13:30 U.S Consumer Price Index (YoY) (NOV) High   2.2% 2.5%
13:30 U.S Consumer Price Index Ex Food and Energy (YoY) (NOV) High   2.2% 2.1%
13:30 U.S Real Avg. Weekly Earnings (YoY) (NOV) Medium     0.9%
13:30 U.S Real Avg. Hourly Earnings (YoY) (NOV) Medium     0.7%
15:30 DOE U.S. Crude Oil Inventories (DEC 7) Medium     -7323k
15:30 U.S DOE Cushing OK Crude Inventory (DEC 7) Low     1729k
15:30 DOE U.S. Gasoline Inventories (DEC 7) Low     1699k
19:00 U.S Monthly Budget Statement (NOV) Medium   -$197.0b -$100.5b
23:50 Japan Buying Foreign Bonds (Yen) (DEC 7) Low     ¥1053.5b
23:50 Japan Buying Foreign Stocks (Yen) (DEC 7) Low     -¥75.0b

Euro

The single currency fell in yesterday’s trading session. Euro zone authorities are scrutinizing proposals for a synthetic common bond aimed at strengthening banks’ immunity to financial shocks but the process will take time given the asset’s complexity, ECB governing council member Philip Lane said yesterday. Overall, the EUR/USD traded with a low of 1.1304 and a high of 1.1398 before closing the day around 1.1315 in the New York session.

 

Yen

The Japanese Yen ended almost unchanged yesterday, after posting considerable gains earlier in the session. On the release front, Japanese manufacturing data disappointed. In the U.S, PPI came in at 0.1%, above the estimate of 0.0%. Core PPI dropped to 0.3%, but beat the estimate of 0.1%. Later in the day, the U.S releases CPI reports. Overall, the USD/JPY traded with a low of 112.98 and a high of 113.44 before closing the day around 113.35 in the U.S session.

 

British Pound

The British Pound rebound came to an abrupt halt yesterday after a report that colleagues of Prime Minister Theresa May believed they had sufficient numbers to mount a no-confidence vote in her leadership. The British pound fell to a new 20-month low, down more than half a percent on the day, after earlier trading above $1.26. Overall, the GBP/USD traded with a low of 1.2478 and a high of 1.2637 before closing the day at 1.2486 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher against its U.S counterpart yesterday as oil prices and stocks rose amid hopes of an easing in the China-U.S. trade war. Canada is a major exporter of commodities, including oil, and runs a current account deficit so its economy could benefit from an improved outlook for the global flow of trade or capital.   Overall, USD/CAD traded with a low of 1.3375 and a high of 1.3421 before closing the day at 1.3388 in the New York session.

 

Australian Dollar

The Australian Dollar gained yesterday. While risk-sentiment has been weaker since last week due to fears that US-China trade tensions are worsening rather than lessening, the risk correlated Aussie strengthened yesterday. Rather than this being caused by any positive data, the Australian Dollar’s gains were mainly caused by weakness in rivals Overall, AUD/USD traded with a low of 0.7182 and a high of 0.7223 before closing the day at 0.7202 in the New York session.

 

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 46 and lies below the neutral zone. In general, the pair has lost 0.32%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 33 reading and lies below the neutral zone. On the whole, the pair has lost 0.56%.

 

Aussie-Yen

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 47 reading and lies below the neutral region. In general, the pair has gained 0.25%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 71 and lies above the neutral region. On the whole, the pair has gained 0.25%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 25 and lies below the neutral region. In general, the pair has lost 0.31%.

 

Appendix

  

FOREX Closing Prices for December 11, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13534 1.13989 1.13049 1.13156 -0.0039
USD/JPY 113.32 113.447 112.988 113.355 0.0410
GBP/USD 1.25625 1.26374 1.24783 1.24864 -0.0074
USD/CHF 0.99028 0.99366 0.98611 0.99308 0.0029
USD/CAD 1.33981 1.34219 1.33759 1.3388 -0.0007
EUR/JPY 128.686 128.958 128.153 128.273 -0.4130
GBP/JPY 142.385 142.907 141.489 141.571 -0.8040
CHF/JPY 114.414 114.608 113.984 114.113 -0.3010
AUD/JPY 81.494 81.778 81.203 81.661 0.2040
EUR/GBP 0.90345 0.90677 0.90044 0.90613 0.0022
EUR/CHF 1.12432 1.12561 1.12228 1.12392 -0.0005
GBP/CHF 1.24395 1.24809 1.23914 1.24009 -0.0039

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1187 1.1246 1.1281 1.1340 1.1375 1.1434 1.1469
USD/JPY 112.62 112.80 113.08 113.26 113.54 113.72 114.00
GBP/USD 1.2272 1.2375 1.2431 1.2534 1.2590 1.2693 1.2749
USD/CHF 0.9807 0.9834 0.9882 0.9910 0.9958 0.9985 1.0033
USD/CAD 1.3323 1.3349 1.3369 1.3395 1.3415 1.3441 1.3461
EUR/JPY 127.16 127.66 127.96 128.46 128.77 129.27 129.57
GBP/JPY 139.65 140.57 141.07 141.99 142.49 143.41 143.91
CHF/JPY 113.24 113.61 113.86 114.24 114.49 114.86 115.11
AUD/JPY 80.74 80.97 81.32 81.55 81.89 82.12 82.47
EUR/GBP 0.8958 0.8981 0.9021 0.9044 0.9085 0.9108 0.9148
EUR/CHF 1.1189 1.1206 1.1223 1.1239 1.1256 1.1273 1.1289
GBP/CHF 1.2278 1.2335 1.2368 1.2424 1.2457 1.2514 1.2547

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

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