13 Июл 2018

FOREX Newsletter

     

FOREX Newsletter

July 13, 2018

 

Pulse of the Market

·      The U.S Dollar advanced to a fresh six-month high against the Japanese yen yesterday

·      Bloomberg reported that U.S and Chinese officials considered restarting the trade conversations

·      A measure of U.S consumer-price inflation hit a 6-year high in June data showed yesterday

·      The minutes of the ECB’s June meeting reiterated that interest will remain at current levels

The U.S Dollar was holding steady at one-and-a-half-week highs against a currency basket yesterday after data showing that U.S. inflation hit a six year high in June, underpinning expectations for two more rate hikes by the Federal Reserve this year. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was trading, having risen 0.67% on Wednesday. Consumer inflation rose by an annualized 2.9% in June the Labor Department said. It was the highest rate since 2012. On a monthly basis, prices rose by just 0.1%, slowing from 0.2% in May. The figures came a day after data showing that U.S. producer prices posted the largest annual gain in six-and-a-half years in June, adding to signs of strength in the economy. The reports indicated that even with the uncertainty arising around U.S. trade policy the Fed should remain on track to keep hiking interest rates this year. Another report showed that initial jobless claims fell to a two month lows last week, as the labor market continues to tighten. The dollar was trading near six-month highs against the yen, with USD/JPY last at 112.48, up 0.44% for the day. The Federal Reserve pointed to possibly two more interest rate hikes in the remaining year, which would put the total number of increases at four. Supportive economic data makes this path more likely.  The euro was little changed, with EUR/USD last at 1.1678, still well below Monday’s three-and-a-half-week highs of 1.1790. Earlier Thursday the minutes of the European Central Bank’s June meeting reiterated that interest will remain at current levels for as long as needed to raise inflation towards its target. The ECB also warned that the increase in trade protectionism in recent months is hurting the European economy. The warning came as the European Commission cut its growth forecast for Europe this year, blaming the rising threat of a trade war. The Bank of Canada raised its benchmark interest rate on Wednesday by 25 basis points to 1.50 per cent and signaled more rate hikes to come, saying that while mounting trade tensions with the United States were a concern, their impact on growth and inflation looked modest so far. Money markets see a 65 per cent chance of another hike by December.
   
Time(GMT)   Economic Release IMP Actual Forecast Prior
04:30 Japan Industrial Production (YoY) (MAY) Medium     4.2%
06:00 German Wholesale Price Index (YoY) (JUN) Low     2.9%
11:00 Bank of England Deputy Governor Jon Cunliffe Speaks in Kendall Low      
12:30 U.S Import Price Index ex Petroleum (MoM) (JUN) Medium   0.3% 0.1%
12:30 U.S Import Price Index (YoY) (JUN) Low   4.7% 4.3%
12:30 U.S Export Price Index (YoY) (JUN) Medium     4.9%
13:00 Canada Existing Home Sales (MoM) (JUN) Medium   1.5% -0.1%
14:00 U.S U. of Mich. Sentiment (JUL) High   98.0 98.2
14:00 U.S U. of Mich. Current Conditions (JUL) Low     116.5
15:00 U.S Fed Releases Monetary Policy Report to Congress High      
17:00 Baker Hughes U.S. Rig Count (JUL 13) Medium     1052

 

Euro

The single currency fell after Government bond yields across the euro area fell yesterday after minutes from the ECB’s last meeting showed the bank will keep rates at record lows for as long as needed, and its rate guidance should be seen as “open-ended.” The gap between two- and 10-year borrowing costs is at its narrowest in over a year. Overall, the EUR/USD traded with a low of 1.1648 and a high of 1.1694 before closing the day around 1.1669 in the New York session.

 

Yen

The Japanese Yen pair strengthened to a six-month high, bolstered by solid inflation data and continuing a weeklong rally of the pair which suggests investors believe the greenback stands to benefit from a trade war. The weakness of the yen suggests bullish sentiment about the greenback, rather than a bid for safety. Overall, the USD/JPY traded with a low of 111.89 and a high of 112.60 before closing the day around 112.52 in the U.S session.

 

British Pound

The British Pound gained slightly yesterday. With all the uncertainty surrounding the UK at the moment such as political instability as well as the current Brexit negotiations that seem to be dragging on forever, many are starting to wonder just how is the British pound holding up in the face of such problems.  Overall, the GBP/USD traded with a low of 1.3178 and a high of 1.3243 before closing the day at 1.3204 in the New York session.

 

Canadian Dollar

The Canadian Dollar strengthened rebounding from an earlier 10-day low, as investor appetite for risk recovered and after the BOC raised interest rates on Wednesday for the second time this year. Canada exports many commodities, including oil, and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows. Overall, USD/CAD traded with a low of 1.3147 and a high of 1.3216 before closing the day at 1.3151 in the New York session.

 

Australian Dollar

The Australian Dollar has been thrown on the defensive as their triple exposure to Asia, exports and commodities left them hostage to the fallout from a Sino-US trade conflict. Australia’s economic fate is entwined with China; given the Asian giant is its single largest export market and the world’s biggest buyer of commodities. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7417 before closing the day at 0.7400 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 65 and lies above the neutral zone. In general, the pair has gained 0.47%.

 

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 66 reading and lies above the neutral zone. On the whole, the pair has gained 0.48%.

 

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 59 reading and lies above the neutral region. In general, the pair has gained 1.03%.

 

 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 53 and lies above the neutral region. On the whole, the pair has lost 0.05%.

 

 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 58 and lies above the neutral region. In general, the pair has gained 0.66%.

 

Appendix

 

 

FOREX Closing Prices for July 12, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1672 1.16943 1.16482 1.16695 -0.0002
USD/JPY 112.004 112.608 111.898 112.521 0.5200
GBP/USD 1.32028 1.32431 1.31786 1.32042 0.0002
USD/CHF 0.99571 1.00256 0.99456 1.00214 0.0064
USD/CAD 1.32101 1.32163 1.31473 1.31517 -0.0056
EUR/JPY 130.75 131.452 130.649 131.33 0.6110
GBP/JPY 147.908 148.873 147.767 148.6 0.7130
CHF/JPY 112.459 112.941 112.168 112.258 -0.1850
AUD/JPY 82.485 83.374 82.358 83.341 0.8530
EUR/GBP 0.88386 0.88481 0.88189 0.88347 -0.0004
EUR/CHF 1.16245 1.17059 1.16193 1.16953 0.0066
GBP/CHF 1.31474 1.32548 1.31335 1.32348 0.0087

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1601 1.1625 1.1647 1.1671 1.1693 1.1717 1.1739
USD/JPY 111.37 111.63 112.08 112.34 112.79 113.05 113.50
GBP/USD 1.3110 1.3144 1.3174 1.3209 1.3239 1.3273 1.3303
USD/CHF 0.9889 0.9918 0.9969 0.9998 1.0049 1.0078 1.0129
USD/CAD 1.3058 1.3103 1.3127 1.3172 1.3196 1.3241 1.3265
EUR/JPY 130.03 130.34 130.84 131.14 131.64 131.95 132.44
GBP/JPY 146.85 147.31 147.95 148.41 149.06 149.52 150.17
CHF/JPY 111.20 111.68 111.97 112.46 112.74 113.23 113.52
AUD/JPY 81.66 82.01 82.67 83.02 83.69 84.04 84.71
EUR/GBP 0.8791 0.8805 0.8820 0.8834 0.8849 0.8863 0.8878
EUR/CHF 1.1555 1.1587 1.1641 1.1674 1.1728 1.1760 1.1814
GBP/CHF 1.3039 1.3086 1.3161 1.3208 1.3282 1.3329 1.3403

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

 

 

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