June 14, 2018
Pulse of the Market
- The Federal Reserve raised interest rates by a quarter of a percentage point yesterday
- Powell after the Fed’s two-day meeting said the economy has strengthened significantly
- The British Pound pared earlier gains despite U.K inflation matching economists’ estimates
- Canadian Dollar gained as oil prices continued to support amid larger draw in U.S crude supplies
The U.S Dollar fell against its rivals despite upbeat economic data pointing to signs of faster inflation. The Labor Department said yesterday its producer price index for final demand increased 0.5% last month, topping expectations for a 0.3% rise. In the 12 months through May, the PPI rose 3.1% after rising 2.6% in April. The faster pace of inflation comes as data showed Tuesday the consumer price index rose 0.2%, beating economists’ forecasts for a 0.1% rise. The Federal Reserve yesterday voted to raise its benchmark federal-funds rate by a quarter-percentage point and became slightly more hawkish on its expectations for what it will have to do this year. The Fed increased the federal funds rate target to a range of 1.75% and 2% and forecasted it expected to raise rates four times this year, up from a forecast of three in March. The move did not reflect a major shift in the Fed’s thinking. The “dot plot” shows only one official switched to a slightly higher interest-rate path. And the difference between three and four moves this year remains extremely narrow. Eight Fed officials said they expected interest rates to rise at least four times while seven forecast three rate hikes. Ahead of the decision, analysts said a signal of four rate hikes would indicate the Fed is focusing more on the low U.S. unemployment rate and not worried about weakness overseas or recent market turmoil sparked by Italian politics. The central bank made several changes to the statement to reflect the economy is much firmer ground. The Canadian dollar edged higher against its U.S counterpart yesterday, with the currency recovering from an earlier one-week low ahead of an expected interest rate hike by the Federal Reserve. The Australian Dollar recovered from Tuesday’s drop, as traders took up positions ahead of the latest volley of labor market data due for release today.
|01:00||Australia Consumer Inflation Expectation (JUN)||Medium||3.7%|
|01:30||Australia Employment Change (MAY)||High||19.0k||22.6k|
|01:30||Australia Unemployment Rate (MAY)||High||5.6%||5.6%|
|02:00||China Retail Sales (YoY) (MAY)||Medium||9.6%||9.4%|
|02:00||China Industrial Production (YoY) (MAY)||Medium||7.0%||7.0%|
|04:30||Japan Industrial Production (YoY) (APR)||Medium||2.5%|
|06:00||German Consumer Price Index (YoY) (MAY)||Medium||2.2%||2.2%|
|11:45||European Central Bank Rate Decision (JUN 14)||High||0.00%||0.00%|
|11:45||ECB Marginal Lending Facility (JUN 14)||High||0.25%||0.25%|
|11:45||ECB Deposit Facility Rate (JUN 14)||High||-0.40%||-0.40%|
|12:30||Canada New Housing Price Index (YoY) (APR)||Medium||1.7%||2.4%|
|12:30||ECB President Draghi Holds Press Conference in Riga||High|
|12:30||U.S Retail Sales Advance (MoM) (MAY)||High||0.4%||0.3%|
|12:30||U.S Import Price Index ex Petroleum (MoM) (MAY)||Medium||0.2%||0.1%|
|12:30||U.S Export Price Index (YoY) (MAY)||Medium||3.8%|
|12:30||U.S Initial Jobless Claims (JUN 09)||Medium||222k||222k|
|12:30||U.S Continuing Claims (JUN 02)||Medium||1734k||1741k|
|14:00||U.S Business Inventories (APR)||Medium||0.3%||0.0%|
The single currency gained as the U.S Dollar fell despite upbeat economic data pointing to signs of faster inflation. The Labor Department data showed that its producer price index for final demand increased 0.5% last month, topping expectations for a 0.3% rise. In the 12 months through May, the PPI rose 3.1% after rising 2.6% in April. Overall, the EUR/USD traded with a low of 1.1723 and a high of 1.1799 before closing the day around 1.1793 in the New York session.
The Japanese Yen pair reversed its earlier gains in yesterday’s session as the move to increase rate did not reflect a major shift in the Fed’s thinking. The “dot plot” shows only one official switched to a slightly higher interest-rate path. And the difference between three and four moves this year remains extremely narrow. Overall, the USD/JPY traded with a low of 110.25 and a high of 110.82 before closing the day around 110.35 in the U.S session.
The British Pound won a moment’s respite late Tuesday when MP’s rejected the so called “meaningful vote” amendment to the EU Withdrawal Bill, which seemingly kicks any threat to the stability of the government out into the long grass, but the next challenge to Prime Minister Theresa May’s leadership and the government is already looming over Sterling. Overall, the GBP/USD traded with a low of 1.3306 and a high of 1.3387 before closing the day at 1.3376 in the New York session.
The Canadian Dollar edged higher against its U.S counterpart yesterday, with the currency recovering from an earlier one-week low. The Bank of Canada has raised interest rates once this year. Chances of another hike at its next meeting in July have eased to about 62 per cent from more than 70 per cent before a G7 summit in Canada at the weekend. Overall, USD/CAD traded with a low of 1.2952 and a high of 1.3049 before closing the day at 1.2987 in the New York session.
The Australian Dollar rose against a majority of developed world currencies yesterday, recovering from an overnight slump, as traders took up positions ahead of the latest volley of labor market data from down under that is due for release. Today’s unemployment data offers the Aussie unit a chance to recover some more lost ground Overall, AUD/USD traded with a low of 0.7527 and a high of 0.7606 before closing the day at 0.7562 in the New York session.
EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 55 and lies above the neutral zone. In general, the pair has gained 0.37%.
Currently, GBP/JPY is trading below 14, 50 and 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 51 reading and lies above the neutral zone. On the whole, the pair has closed unchanged.
Currently, the cross is trading below 14, 50 and 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 54 reading and lies above the neutral region. In general, the pair has gained 0.07%.
This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also showing a bullish signal. The Relative Strength Index is above 56 and lies above the neutral region. On the whole, the pair has gained 0.37%.
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 38 and lies below the neutral region. In general, the pair has lost 0.11%.
|FOREX Closing Prices for June 13, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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