12 Июл 2018

FOREX Newsletter

     

FOREX Newsletter

July 12, 2018

 

Pulse of the Market

·      The Labor Department said its producer price index for final demand increased 0.3% last month

·      The Euro fell which followed a report that ECB members were split over when to raise rates

·      Both safe-haven currencies yen and Swiss franc were under pressure against the greenback

·      Bank of Canada raised interest rates and said it expected GDP to come in at 2.8% for the year

The U.S Dollar rose yesterday as data showing U.S. wholesale prices increased at a faster pace than anticipated last month raised investor expectations for stronger inflation, increasing the prospect of further Fed rate hikes. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.36% to 94.19. The Labor Department said on Wednesday its producer price index for final demand increased 0.3% last month. In the 12 months through June, the PPI rose 3.4% after rising 3.1% in May. This was the biggest annual increase in 6-1/2 years, stoking expectations the Fed could adopt a more aggressive stance on monetary policy tightening to rein in inflation. Euro weakness also pushed the greenback higher, as the single currency pared gains which followed report ECB members were split over when to raise rates. Some policymakers said an increase was possible as early as July 2019, while others suggested a move was unlikely until autumn next year, Reuters reported Wednesday, citing sources. The return of U.S.-China trade war jitters, meanwhile, did little to lift safe-haven currencies as both the yen and Swiss franc were under pressure against the greenback. The White House issued a list late Tuesday of 10% tariffs on $200 billion worth of Chinese imports it will assess. USD/CAD rose 0.26% to C$1.3148 after Bank of Canada raised interest rates Wednesday, and said it expected GDP to come in at 2.8% for the year. But analysts said the 2.8% year-end GDP target was somewhat optimistic and suggested that the loonie would continue to weaken. As things stand today, the 2.8% predicted growth for 2018 Q2 looks a touch optimistic, we remain biased for USD/CAD to re-test its 2018 highs in the coming weeks and months. The Canadian dollar whipsawed after the Bank of Canada increased interest rates as expected. After its initial 0.8 percent rally, the loonie swooned more than 1.1 percent when policymakers said U.S. tariffs would have a bigger effect on the economy than originally anticipated.
 
Time(GMT)   Economic Release IMP Actual Forecast Prior
01:00 Australia Consumer Inflation Expectation (JUL) Medium     4.2%
06:00 German Consumer Price Index (YoY) (JUN) Medium   2.1% 2.1%
08:30 Bank of England Credit Conditions & Bank Liabilities Surveys High      
09:00 Euro-Zone Industrial Production w.d.a. (YoY) (MAY) Medium   2.3% 1.7%
12:30 Canada New Housing Price Index (YoY) (MAY) Medium   1.0% 1.6%
12:30 U.S Initial Jobless Claims (JUL 07) Medium   225k 231k
12:30 U.S Continuing Claims (JUN 30) Medium     1739k
12:30 U.S Consumer Price Index (YoY) (JUN) High   2.9% 2.8%
12:30 U.S Consumer Price Index Ex Food and Energy (YoY) (JUN) High   2.3% 2.2%
12:30 U.S Real Avg Weekly Earnings (YoY) (JUN) Medium     0.3%
12:30 U.S Real Avg Hourly Earnings (YoY) (JUN) Medium     0.0%
18:00 U.S Monthly Budget Statement (JUN) Medium   -$80.0b -$146.8b
22:30 New Zealand BusinessNZ Manufacturing PMI (JUN) Medium     54.5

 

Euro

 

The single currency fell as the U.S Dollar strengthened in yesterday’s trading session after the market put aside trade tension fears and focused on the Labor Department’s expectation-beating inflation report, which increased prospects that the Federal Reserve will raise interest rates another two times this year. Overall, the EUR/USD traded with a low of 1.1664 and a high of 1.1756 before closing the day around 1.1671 in the New York session.

 

Yen

The Japanese Yen pair broke through the psychologically significant barrier of 112 yen for the first time since Jan. 10, rising as much as 1.3 percent to a top of 112.17 yen. Wednesday’s strong flows into the dollar/yen trade continued a trend that began after the United States last week reported decent employment data and a pickup in wages. Overall, the USD/JPY traded with a low of 110.74 and a high of 112.15 before closing the day around 112.00 in the U.S session.

 

British Pound

The British Pound faced a tough after ministers from British Prime minister Theresa May’s cabinet suddenly quit their posts, which has raised speculation that a leadership challenge could come as early as this week. The political instability has also cast into doubt the bank of England’s ability to lift interest rates next month.  Overall, the GBP/USD traded with a low of 1.3197 and a high of 1.3283 before closing the day at 1.3202 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened to a more than one-week low against its U.S counterpart in yesterday’s trading session as broad-based gains for the greenback offset an interest rate hike and the prospect of further tightening by the Bank of Canada. The U.S dollar rose as the market put aside trade tension fears and focused on an expectation-beating inflation report. Overall, USD/CAD traded with a low of 1.3062 and a high of 1.3212 before closing the day at 1.3208 in the New York session.

 

Australian Dollar

The Australian Dollar was unable to capitalize on improving local consumer sentiment data, weighed down by a resumption in trade war headlines. In July, Westpac Consumer Confidence rose 3.9% m/m which was the fastest increase since May 2016. Meanwhile, the index clocked in at 106.1 from 102.1 in June. That was the highest outcome since November 2013. Overall, AUD/USD traded with a low of 0.7363 and a high of 0.7445 before closing the day at 0.7364 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 63 and lies above the neutral zone. In general, the pair has gained 0.29%.

 

Sterling-Yen

Currently, GBP/JPY is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 61 reading and lies above the neutral zone. On the whole, the pair has gained 0.38%.

  

Aussie-Yen

Currently, the cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 53 reading and lies above the neutral region. In general, the pair has lost 0.33%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 54 and lies above the neutral region. On the whole, the pair has lost 0.07%.

 

Sterling-Swiss

This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 47 and lies below the neutral region. In general, the pair has lost 0.13%.

 

Appendix

 

 

FOREX Closing Prices for July 11, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.17436 1.17568 1.1664 1.16717 -0.0071
USD/JPY 110.92 112.15 110.748 112.001 1.0210
GBP/USD 1.32746 1.32835 1.31978 1.32023 -0.0071
USD/CHF 0.99179 0.9964 0.99033 0.99575 0.0041
USD/CAD 1.3113 1.32128 1.30622 1.32081 0.0097
EUR/JPY 130.296 130.937 129.889 130.719 0.3820
GBP/JPY 147.265 148.105 146.778 147.887 0.5660
CHF/JPY 111.809 112.548 111.572 112.443 0.5620
AUD/JPY 82.515 82.693 82.037 82.488 -0.2760
EUR/GBP 0.88419 0.88597 0.88277 0.88387 -0.0006
EUR/CHF 1.16468 1.16558 1.16168 1.16293 -0.0018
GBP/CHF 1.31673 1.31811 1.31376 1.31474 -0.0017

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1545 1.1605 1.1638 1.1698 1.1731 1.1790 1.1824
USD/JPY 109.71 110.23 111.11 111.63 112.52 113.04 113.93
GBP/USD 1.3087 1.3142 1.3172 1.3228 1.3258 1.3314 1.3344
USD/CHF 0.9859 0.9881 0.9919 0.9942 0.9980 1.0002 1.0041
USD/CAD 1.2959 1.3010 1.3109 1.3161 1.3260 1.3312 1.3410
EUR/JPY 129.05 129.47 130.09 130.52 131.14 131.56 132.19
GBP/JPY 145.75 146.26 147.08 147.59 148.40 148.92 149.73
CHF/JPY 110.85 111.21 111.83 112.19 112.80 113.16 113.78
AUD/JPY 81.46 81.75 82.12 82.41 82.78 83.06 83.43
EUR/GBP 0.8792 0.8810 0.8824 0.8842 0.8856 0.8874 0.8888
EUR/CHF 1.1573 1.1595 1.1612 1.1634 1.1651 1.1673 1.1690
GBP/CHF 1.3086 1.3112 1.3130 1.3155 1.3173 1.3199 1.3217

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

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

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