31 Июл 2018

FOREX Newsletter

   

FOREX Newsletter

 July 31, 2018
 

 

Pulse of the Market

·      Investors braced for the possibility that the BOJ will announce changes to its monetary easing policy

·      German and Spanish inflation remained slightly above the ECB’s price stability target in July

·      Bank of England is expected to raise interest rates on Thursday

·      Besides the BoJ, other central bank news is likely to be on investors’ radar this week

The U.S Dollar was lower yesterday, while the euro and sterling were higher as investors wait for a a number of central bank meetings this week. The U.S Dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.43% to 94.06. Meanwhile, the pound inched higher, with GBP/USD rising 0.31% to 1.3146. Investors are waiting for a flurry of central bank policy decisions this week that could determine direction of currencies. The Federal Reserve makes a policy decision Wednesday afternoon, but with no rate hike expected. Investors expect the Fed to raise rates in September, with the chance of an increase at 87.8%. The U.S economy accelerated as expected in the second quarter, underlining the case for the Federal Reserve to gradually increase interest rates. Gross domestic product registered a seasonally-adjusted annual rate of 4.1% growth in the second quarter, its fastest rate of growth since the third quarter of 2014. Other central banks are also meeting this week, with the Bank of Japan ending its two-day meeting today. The Bank of England is expected to raise interest rates on Thursday, despite Brexit uncertainty. The dollar was lower against the safe-haven yen, with USD/JPY decreasing 0.05% to 110.97. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion. The euro was higher after the dollar fell, despite the European Central Bank keeping rates unchanged last week.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  BOJ Monetary Policy Statement High      
  BOJ Rate Decision (31 JUL) High   -0.10% -0.10%
01:00 China Manufacturing PMI (JUL) High   51.3 51.5
05:00 Japan Housing Starts (YoY) (JUN) Medium   -2.5% 1.3%
05:00 Japan Consumer Confidence Index (JUL) Medium   43.8 43.7
06:00 German Retail Sales (YoY) (JUN) Medium   1.5% -1.6%
07:55 German Unemployment Change (000’s) (JUL) High   -10k -15k
07:55 German Unemployment Claims Rate s.a. (JUL) High   5.2% 5.2%
09:00 Euro-Zone Consumer Price Index Core (YoY) (JUL) High   1.0% 0.9%
09:00 Euro-Zone Gross Domestic Product s.a. (YoY) (2Q) High   2.2% 2.5%
10:00 Italian Gross Domestic Product w.d.a. (YoY) (2Q) High   1.3% 1.4%
12:30 Canada Gross Domestic Product (YoY) (MAY) High   2.3% 2.5%
12:30 U.S Personal Income (JUN) Medium   0.4% 0.4%
12:30 U.S Personal Spending (JUN) Medium   0.4% 0.2%
12:30 U.S PCE Core (YoY) (JUN) High   2.0% 2.0%
13:45 U.S Chicago Purchasing Manager (JUL) Medium   61.8 64.1
14:00 U.S Consumer Confidence Index (JUL) High   126.5 126.4
22:45 New Zealand Unemployment Rate (2Q) High   4.4% 4.4%
22:45 New Zealand Employment Change (YoY) (2Q) High   3.6% 3.1%

 

Euro

The single currency recovered recent losses while most major currency pairs stuck to narrow trading ranges ahead of economic data and central bank monetary policy meetings this week. The US dollar index, which measures the greenback against a basket of six currencies, was down 0.43% at 94.27. Overall, the EUR/USD traded with a low of 1.1646 and a high of 1.1717 before closing the day around 1.1707 in the New York session.

 

Yen

The Japanese Yen was slightly lower as investors braced for the possibility that the Bank of Japan will announce changes to its monetary easing policy at the conclusion of a two-day meeting. The BoJ will consider changes to its massive stimulus program to make it more sustainable, such as allowing greater swings in interest rates and widening its stock-buying. Overall, the USD/JPY traded with a low of 110.87 and a high of 111.14 before closing the day around 111.05 in the U.S session.

 

British Pound

 

The British Pound posted gains in yesterday’s session. On the release front, British Net Lending to Individuals improved to GBP 5.4 billion, edging above the estimate of GBP 5.3 billion. Today, the U.S releases consumer spending and inflation indicators, as well as CB Consumer Confidence. The pound hasn’t made much noise in recent weeks. Overall, the GBP/USD traded with a low of 1.3095 and a high of 1.3150 before closing the day at 1.3133 in the New York session.

 

Canadian Dollar

 

The Canadian Dollar strengthened to a nearly seven-week high yesterday, boosted by higher oil prices and optimism that progress could be made in talks to revamp the NAFTA trade pact. Negotiations to update the North American Free Trade Agreement had stalled since June when the United States imposed tariffs on Mexican and Canadian steel.  Overall, USD/CAD traded with a low of 1.2992 and a high of 1.3076 before closing the day at 1.3037 in the New York session.

 

Australian Dollar

The Australian Dollar fell off against the US Dollar. Last week, the Australian dollar ended the week slightly lower against the US dollar. Since mid-June, the Australian dollar has been trading in a fairly narrow range against the US dollar. Following sharp sell-offs earlier this year, recent trading volumes in the currency have been fairly average. Overall, AUD/USD traded with a low of 0.7383 and a high of 0.7411 before closing the day at 0.7408 in the New York session.

 

 

Euro-Yen

EUR/JPY is trading above 14, 50 and 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 50 and lies above the neutral zone. In general, the pair has gained 0.48%.

  

Sterling-Yen

Currently, GBP/JPY is trading above 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 43 reading and lies below the neutral zone. On the whole, the pair has gained 0.29%.

  

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 also indicating a bearish stance. The Relative Strength Index is above 47 reading and lies below the neutral region. In general, the pair has gained 0.14%.

 

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 60 and lies above the neutral region. On the whole, the pair has gained 0.23%.

 

Sterling-Swiss

This cross is trading above 14, 50 and below 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 37 and lies below the neutral region. In general, the pair has lost 0.39%.

 

Appendix

  

FOREX Closing Prices for July 30, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16577 1.17174 1.16467 1.17074 0.0051
USD/JPY 110.982 111.147 110.871 111.057 0.0800
GBP/USD 1.31066 1.31503 1.30953 1.31331 0.0029
USD/CHF 0.99403 0.99548 0.98761 0.98835 -0.0060
USD/CAD 1.30598 1.30764 1.29922 1.30379 -0.0019
EUR/JPY 129.395 130.05 129.289 130.004 0.6230
GBP/JPY 145.476 145.902 145.368 145.857 0.4180
CHF/JPY 111.607 112.387 111.518 112.387 0.8130
AUD/JPY 82.14 82.274 82.01 82.27 0.1180
EUR/GBP 0.88921 0.89168 0.8879 0.89138 0.0020
EUR/CHF 1.15899 1.16019 1.1565 1.15708 -0.0021
GBP/CHF 1.30307 1.30572 1.29733 1.29807 -0.0051

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1593 1.1620 1.1664 1.1691 1.1734 1.1761 1.1805
USD/JPY 110.63 110.75 110.90 111.03 111.18 111.30 111.46
GBP/USD 1.3047 1.3071 1.3102 1.3126 1.3157 1.3181 1.3212
USD/CHF 0.9776 0.9826 0.9855 0.9905 0.9934 0.9984 1.0012
USD/CAD 1.2910 1.2951 1.2995 1.3036 1.3079 1.3120 1.3163
EUR/JPY 128.75 129.02 129.51 129.78 130.27 130.54 131.03
GBP/JPY 144.98 145.18 145.52 145.71 146.05 146.24 146.58
CHF/JPY 110.94 111.23 111.81 112.10 112.68 112.97 113.55
AUD/JPY 81.83 81.92 82.10 82.18 82.36 82.45 82.62
EUR/GBP 0.8852 0.8865 0.8890 0.8903 0.8927 0.8941 0.8965
EUR/CHF 1.1520 1.1542 1.1557 1.1579 1.1593 1.1616 1.1630
GBP/CHF 1.2866 1.2920 1.2950 1.3004 1.3034 1.3088 1.3118

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

 

 

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