No Surprises from BoC & ADP But GBP Comes Under Pressure

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated on Wednesday that it has decided to keep its target for the overnight rate right where it is, while rate hikes in July and in September continue to work their way through the economy. The central bank commented, “While higher interest rates will likely be required over time, the bank will continue to be cautious, guided by incoming data in assessing the economy’s sensitivity to interest rates, the evolution of economic capacity, and the dynamics of both wage growth and inflation.” The markets had expected the BoC to keep the rate steady but the news saw CAD come under selling pressure, with USDCAD trading up from 1.2660 to just above 1.2800 where it has steadied overnight.

The US ADP report also provided few surprises, with private sector jobs in the US increasing by 190K from October to November as forecast by the market. The ADP Research Institute commented that “The labor market continues to grow at a solid pace” and “Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase it will become increasingly difficult for employers to attract and retain skilled talent. The markets look at the ADP report for clues on the “always impactful” NFP report due to be released on Friday.

GBP came under selling pressure on news that Michel Barnier, the EU’s chief Brexit negotiator, has told member states that the British government has just 48 hours to agree on terms on a potential deal or it will be told that negotiations will not move on to the next stage. If talks do not move on to the next stage of discussions in December then the terms of a transition period will likely be pushed back until the next European Council summit of leaders in March, by which time many businesses in the UK will have had to make decisions over their location and investments in the country. Prime Minister May told the UK Parliament, “We’re leaving the European Union, we’re leaving the single market and the customs union but we will do what is right in the interests of the whole United Kingdom,” and “nothing is agreed until everything is agreed.” GBP gave back many of its gains to trade as low as 1.3375 overnight.

EURUSD is little changed overnight, currently trading around1.1795.

USDJPY is 0.2% higher in early Thursday trading at around 112.64.

GBPUSD is 0.15% lower in early session trading at around 1.3373.

USDCAD is 0.15% higher overnight, trading around 1.2825.

Gold is little changed overnight, trading around $1,259.50.

WTI is 0.15% higher in early trading at around $56.12.

Major data releases for today:

At 10:00 GMT: Eurostat will release Eurozone Gross Domestic Product s.a. (QoQ) and (YoY) for Q3. Both releases are expected unchanged with Quarter-on-Quarter GDP forecast at 0.6% and Year-on-Year GDP forecast at 2.5%. Any significant deviation from the forecast is likely to see EUR volatility.

At 13:30 GMT: The US Department of Labour will release Initial Jobless Claims for the week ended December 1st and Continuing Jobless Claims for the week ended November 24th. Initial Claims are forecast to show a slight increase to 240K from the previous reading of 238K. Continuing Claims are forecast to come in slightly lower at 1.915M from the previous reading of 1.957M. Any significant deviation from expectations will see USD volatility.

At 16:00: European Central Bank President Mario Draghi is scheduled to speak in his capacity as Chair of the Group of Governors and Heads of Supervision (GHOS) in a press conference by the Bank for International Settlements, hosted at the European Central Bank in Frankfurt, Germany.

This article is written by FxPro

US Trade Gap Widens, Aussie GDP Disappoints

Data released by the US Commerce Department on Tuesday indicated that the US trade gap rose 8.6% in October from $44.9 billion in September, as imports from China and other suppliers hit a record high ahead of the holiday shopping season. Imports hit a record $244.6 billion in October, and exports were unchanged at $195.9 billion. For 2017, the US is running a trade deficit of $462.9 billion, up 11.9% over the same period in 2016. U.S. exports are up 5.3% this year. Imports totaled $48.2 billion from China, $39.4 billion from the EU and $28.7 billion from Mexico — all record highs. During President Trump’s recent visit to Beijing, US companies signed contracts valued by the Commerce Department at around $250 billion. But it could be months before any of those transactions are reflected in U.S. trade data.

On Tuesday, data from Markit’s Eurozone Services PMI for November was released coming in at 56.2 (previously 55.0), the composite was higher at 57.5 (56.0 in October). The strong number reflects a strengthening of economic expansion across the big-four Eurozone countries, with output growth accelerating to the fastest in over 78 months. Additionally, job creation has risen to a 17-year high and price pressures have strengthened.

Data from the Australian Bureau of Statistics published earlier today showed Australian GDP grew by 0.6% in seasonally adjusted chain volume terms, slightly below the 0.7% level expected by the markets. Annualized GDP came in at 2.8%. This is markedly better than the 1.8% seen in Q2, but was below the 3% growth that the markets had hoped for. AUDUSD fell on the news to near month lows of around 0.75717 before stabilizing.

EURUSD is 0.15% higher in early Wednesday trading at around 1.1823.

USDJPY is 0.4% lower in early trading at around 112.11.

GBPUSD is 0.15% lower in early session trading at around 1.3401.

AUDUSD is 0.3% lower following the GDP release, trading around 0.7585.

Gold is 0.1% higher overnight, currently trading around $1,267.5 after touching close to 2-month lows around $1,264.11.

WTI is little changed overnight, trading around $57.45.

Major data releases for today:

At 08:00 GMT: the European Central Bank (ECB) Non-monetary policy meeting is scheduled to take place in Frankfurt, Germany.

At 13:15 GMT: Automatic Data Processing Inc in the US will release ADP Employment Change for November. The markets are forecasting a gain of 190K, a drop from Octobers’ gain of 235K. The ADP data may hold clues as the markets await Friday’s all-important NFP release.

At 15:00 GMT: The Bank of Canada (BoC) is scheduled to provide a rate statement and interest rate decision. The markets are forecasting that the BoC will keep interest rates on hold at 1%. If there is a change in Canadian monetary policy and rates are hiked we can expect to see CAD volatility. That said, many believe the likelihood of such a hike is unlikely until Q2 of 2018.

This article is written by FxPro

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing sector will help support the growing US economy. With the markets forecasting a drop of 0.4% in October, Factory Goods Orders only dipped 0.1% in the midst of a fall in demand for both civilian and defense aircraft after an upwardly revised 1.7% jump in September. The modest decrease in Factory Orders came as orders for durable goods fell by 0.8 %, more than offsetting a 0.7% increase in orders for non-durable goods.

Eurozone Producer Price data from Eurostat on Monday showed a faster than expected easing in October. Producer prices climbed 2.5% annualized in October, slower than September’s 2.8% rise, which was revised down from 2.9%. The markets had forecast PPI to drop to 2.6%. PPI excluding energy increased slightly to 2.3% from the previous 2.2%. Industrial producer prices rose in all EU member states, with the largest increases recorded in Belgium, Bulgaria, Poland, Hungary and Ireland.

GBP gave back some of its recent gains on reports that the discussions between Prime Minister May and EU Commission President Juncker had ended on Monday without a formal agreement. The Prime Minister is under pressure to get an agreement on EU divorce issues before European leaders meet on December 14th to decide whether to give formal approval to start talks on post-Brexit trade. The stumbling blocks appear to center around the Irish border and the role of the European Court of Justice in overseeing EU citizens’ rights in the UK after Brexit. Talks are believed to resume on Wednesday in Brussels.

USD has held onto recent gains following the passing of the US Tax Reform Bill in the Senate over the weekend. Both the Senate and the House of Representatives now need to reconcile each of their versions of the Bill – a process that is likely to face some challenges. This is standard practice and there is no reason to suggest that it will not be successful. There is every possibility that this Bill will be made law by the end of this year.

In an unsurprising move, the Reserve Bank of Australia (RBA) has left the cash rate on hold again today at 1.5%. This marks the fifteenth meeting in a row the RBA has held rates steady, with the last rate movement taking place in August 2016 with a 25-basis point rate cut. Being the last rate update for this year, the RBA board will next meet on 6 February 2018.

EURUSD is unchanged overnight, currently trading around 1.1852.

USDJPY is marginally higher in early Tuesday trading at around 112.55.

GBPUSD is unchanged in early session trading at around 1.3384.

AUDUSD is 0.7% higher, following the RBA decision to leave interest rates unchanged, currently trading around 0.7652.

Gold is slightly lower overnight, currently trading around $1,274.75.

WTI is 0.2% higher, currently trading around $57.28.

Major data releases for today:

At 08:55 GMT: Markit Economics will release German PMI and Composite PMI for November. Both PMI and Composite PMI are forecast unchanged at 54.9 and 57.6 respectively. Any significant deviation from forecast will likely see EUR volatility.

At 09:00 GMT: Markit Economics will release Eurozone Composite & Services PMI for November. Both data releases are forecast to be unchanged at 57.5 and 56.2 respectively. Any significant deviation from forecast will likely see EUR volatility.

At 13:30 GMT: the US Bureau of Economic Analysis and the U.S. Census Bureau will release the US Trade Balance for October. Forecasts are calling for an increase from the previous reading of -$43.5B to -$43.8B.

At 14:45 GMT: Markit Economics will release US Services & Composite PMI for November. Services PMI were previously 54.7 and Composite PMI was 54.6.

At 15:00 GMT: The Institute for Supply Management (ISM) will release US Non-Manufacturing PMI for November. Forecasts are calling for a lower release of 59.3 compared to the previous reading of 60.1. Any significant deviation from the forecast is likely to cause USD volatility.

This article is written by FxPro

The Week Ahead – Geo-Politics Will Be the Focus of the Week

This week will be dominated by Geo-Politics as the US Tax Bill needs to be reconciled between the Senate and House, whilst UK Prime Minister May meets Jean-Claude Juncker, the President of the European Commission, Brexit Secretary, David Davis, and his opposite number Michel Barnier, plus, in an all-important oversight role, the President of the European Council, Donald Tusk, who represents the leaders of the 28 EU member states, to move the Brexit process forward.

Early on Saturday saw the US Senate approve the tax overhaul bill. The approval marks a first significant “win” for President Trump and his Republican Party after months of failed proposals. The Bill is a sweeping overhaul of the US tax code that would cut individual rates and slash the corporate tax rate from 35% to 20% starting in 2019. Congress now needs to reconcile both the House and Senate bills this week – a task that should be relatively simple, as the Senate and House Bills are very similar with only minor amendments needed. The news has reinforced risk-on sentiment in the markets. However, the Trump administrations’ celebrations might be short-lived as reports suggest that former US National Security Adviser Michael Flynn pleaded guilty to lying to the FBI and said he would cooperate with the probe into Russian meddling in the U.S. presidential election.

UK Prime Minister Theresa May is hoping her talks with Jean-Claude Juncker today will ensure the EU will open the second phase of Brexit negotiations concerning relations after Britain’s withdrawal on March 30, 2019. The challenge is that the EU will only do that if there is “sufficient progress” in agreeing “divorce” terms, notably on three key issues: a financial settlement, guaranteed rights for EU citizens in Britain and a “soft border” with Ireland. Reports suggest the financial settlement has been agreed and sources close to the process have suggested that there were indications of agreement on citizens’ rights and of an understanding of how at least to move forward on the Irish border issue to avoid holding up the rest of the package. As a result of the talks today, there is hope from May that the EU Commission could then say there is sufficient progress to move to Phase 2. The markets are likely to see GBP volatility on any statements/comments coming out of these discussions.

EURUSD is little changed from Friday’s close, currently trading around 1.1870.

USDJPY is unchanged in early Monday trading at around 112.90.

GBPUSD is 0.2% higher in early session trading at around 1.3452.

Gold is unchanged, trading around $1,274.50.

WTI is 0.6% lower, currently trading around $57.93.

Major data releases for today:

At 09:30 GMT: the UK Chartered Institute of Purchasing & Supply and Markit Economics will release PMI Construction for November. The previous release of 50.8 is likely to see an improvement following the recent reports that the UK has come to an agreement on the Brexit divorce payout.

At 10:00 GMT: Eurostat will release Eurozone Producer Price Index for October (MoM & YoY). Month-on-Month data is expected to come in at 0.3% (prev. 0.6%) and Year-on-Year data is expected at 2.6% (prev. 2.9%), both data sets slightly worse than previous. If there is a significant deviation from the forecasted data the markets will see EUR volatility.

At 15:00 GMT: the US Census Bureau will release Factory Orders (MoM) for October. The previous reading of 1.4% is unlikely to be touched with this release. Forecasts are calling for 0.6%. Any significant deviation from the forecast will see USD volatility.

This article is written by FxPro

US Economy Expanding Faster Than Predicted, Dollar and Pound in Focus

Data released on Wednesday showed that the US economy expanded at its quickest pace since 2014 in Q3. The US Commerce Department said that GDP grew at an annualized rate of 3.3% in the July to September period — the highest reading since Q3 2014. The release beat market forecasts of 3.2% growth and was faster than the initial estimate of a 3% expansion. In a tweet, President Trump said GDP would have climbed to 3.9% if not for the storms, citing internal research by his Council of Economic Advisers. The improvement in GDP was led by stronger business investment. Spending on equipment, especially in transportation-related areas, rose 10.4%, beating forecasts of 8.6%. A disappointing data release came with the increase in consumer spending that came in unchanged at 2.3%.

GBP gained against its peers on news that London and Brussels have agreed that the UK will pay between €45 and €55bn ($53-63bn) to leave the European Union, according to media reports. The Financial Times has reported that Britain would cover EU liabilities worth as much as €100bn. EU chief negotiator Michel Barnier refused to confirm the reports, calling them “rumors” commenting in Berlin that “There is a subject on which we are continuing to work – despite the claims or rumors, that’s the issue of financial engagements”. An agreement would be significant as the UK prepares for a December EU summit where it hopes to start the next phase of talks on future trade ties with the EU. Whilst this is a major “step-forward” it still leaves 2 critical issues that need to be agreed upon: expatriate citizens’ rights after Brexit and the Irish border.

EURUSD is 0.15% higher in early Thursday trading at around 1.1850.

USDJPY is little changed overnight trading at around 112.34.

GBPUSD is 0.45% higher in early session trading at around 1.3455, after reaching an 8+ week high of 1.3479 earlier on Thursday.

Gold is unchanged overnight, currently trading around $1,281.25.

WTI is unchanged in early trading at around $57.45.

Major data releases for today:

All Day: OPEC meeting in Vienna, Austria.

At 09:00 GMT: German Statistics will publish the German Unemployment Rate s.a. and Unemployment Change for November from the Bundesagentur für Arbeit. Seasonally adjusted German Unemployment is expected to be unchanged at 5.6%, with the Change in November expected to be -10K (prev. -11K). If the actual number is significantly different from expectations we are likely to see EUR volatility.

At 10:00 GMT: Eurostat will release Eurozone Consumer Price Index & CPI Core (YoY) for November. CPI is expected to have increased to 1.6% from the previous release of 1.4% and Core is forecast to come in at 1.1% from the previous release of 0.9%. Any significant deviation from the forecast will likely cause EUR volatility.

At 13:30 GMT: the US Bureau of Economic Analysis will release Core Personal Consumption Expenditure – Price Index (MoM & YoY) for October. Month-on-Month is forecast to come in at 0.2%, a slight increase from the previous 0.1%. Year-on-Year PCE is also forecast to come in slightly higher at 1.4% (prev. 1.3%). A release significantly different from forecast will see USD volatility.

At 13:30 GMT: the US Department of Labor will release Initial Jobless Claims for the week ended November 24th and Continuing Jobless Claims for the week ended November 17th. The markets expect to see data that reinforces a strong and resilient labour market in the US, which has been fueling economic growth.

At 18:00 GMT: FOMC board Member and SEO of the Federal Reserve Bank of Dallas is scheduled to speak.

This article is written by FxPro

North Korea Missile Test Fails to Rattle Markets

Earlier today, North Korea launched an ICBM that flew higher and further than any previous test firing. The missile was launched from just north of Pyongyang, reaching a height of nearly 3 kilometers and landed 600 miles east, in the Sea of Japan. This latest test firing, 2-months on from the last, is a direct challenge to President Trump, with the US Defense Secretary, James Mattis, commenting that the latest test firing demonstrates that North Korea has the ability to hit “everywhere in the world”. Early comments from Trump have been that the US “will handle” the situation. Trump also said, “We will take care of it,” adding later that North Korea “is a situation that we will handle.” This latest test appears to have had little effect on the markets with USD holding steady and only a slight demand for safe-haven Gold.

USD received a boost following news that the prospects for a US tax cut have improved after Senate Republicans forcibly pushed forward their bill in a partisan committee vote that set up a full vote by the Senate as soon as tomorrow, although details of the measure remained unclear. Republican leaders admitted that they have yet to round up the votes needed for passage in the Senate, where they hold a slim 52-48 majority.

Data released on Tuesday showed US consumer confidence has surged close to a 17-year high in November, due to a strong labor market, while house prices rose in September, which should underpin consumer spending and boost economic growth. The US Conference Board said its consumer confidence index increased 3.3 points to 129.5 in November, within striking distance of 132.6, which was touched in November 2000.

Jerome Powell, the Fed Chair nominee, appeared before the US Senate confirmation hearing on Tuesday and seemed to be continuing in his predecessor’s steps, stating that the case for a December rate hike “is coming together”. Powell pledged to continue the Fed’s current approach to monetary policy, by gradually raising interest rates so long as economic growth remains healthy.

EURUSD is little changed overnight, currently trading around 1.1863.

USDJPY is unchanged in early Tuesday at trading around 111.41.

GBPUSD is 0.25% higher in early session trading at around 1.3418.

Gold is 0.15% higher, currently trading around $1,295.75.

WTI is 0.1% lower overnight, currently trading around $57.70.

Major data releases for today:

All Day: OPEC will host a meeting in Vienna, Austria with representatives from 13 oil-rich nations.

At 13:00 GMT: Destatis will release German Harmonized Index of Consumer Prices (YoY) for November. HICP is a measure of prices used by the Governing Council of the EU to define and assess price stability in the euro area as a whole in quantitative terms. The forecast is for a slightly higher release of 1.7%, compared to the previous 1.5%. Any significant deviation from forecast is likely to cause EUR volatility.

At 13:30 GMT: the US Bureau of Economic Analysis will release Gross Domestic Product Annualized for Q3. The forecast is for an improvement to 3.2% from the previous release of 3%. A higher release could see USD move higher, conversely, a lower than forecast release will see USD come under pressure. Core Personal Consumption Expenditures (QoQ) for Q3 will also be released. As an important indicator of US inflation, forecasts are suggesting a higher release of 1.4% (prev. 1.3%), which will further confirm a growing US economy and a higher probability of a December rate hike from the Fed.

At 14:00 GMT: Bank of England Governor Mark Carney is scheduled to speak at the FMSB – Two Years on From the Fair and Effective Markets Review Event in London.

At 15:00 GMT: Federal Reserve Chair Janet Yellen is scheduled to testify on the economic outlook before the congressional Joint Economic Committee in the US.

At 15:30 GMT: the US Energy Information Administration will release Crude Oil Stocks change for the week ended November 24th. A higher drawdown of -3.150M is expected, compared to the previous draw of
-1.855M. With OPEC meeting in Austria, the markets will be looking to see how crude oil stocks have changed in the world’s largest oil consuming nation and how that will affect the price of both WTI and Brent.

This article is written by FxPro

USD Languishes on US Tax Reform Uncertainty

USD continues to languish at 8-week lows against many of its peers, as the markets are concerned over possible delays to the US Tax Reform Plan. Senator John Cornyn, the Senate Republicans’ whip, said on Monday “Hopefully we will get to the floor on Wednesday.” Asked to clarify if he meant the vote to proceed will be Wednesday, he said yes. The expectation is that Senate Majority Leader McConnell will bring the bill to the house on Tuesday and that will then start a 20-hour debate clock (excluding breaks which are likely from Democrats). It becomes a dynamic process with many votes on amendments and further debates, but the expectation is that it will end this week. Tennessee Republican Senator Corker, who had been a dissenter regarding the deficit burden the plan would cause, has been rumored to have spent the Thanksgiving period on calls with the administration in the hope of moving the bill forward. Corker’s spokesman stated, “While more work remains, all parties are hopeful that the final bill will be good for our country.” Until the markets have a clearer idea as to the timeline, and final amended bill to enact, USD is likely to remain soft.

GBP has benefitted from USD weakness, but concerns have risen as the UK nears an EU summit on Brexit in mid-December, with the markets concerned that GBP will become more vulnerable to political headlines as the date nears. UK Prime Minister Theresa May was given a 10-day “absolute deadline” by the EU to improve her Brexit divorce offer. The improved offer needs to address a resolution on the Northern Ireland border issue or face failure in persuading EU leaders to open trade talks with Britain at the December summit.

EURUSD is little changed overnight, currently trading around 1.1914.

USDJPY is 0.1% higher in early Tuesday trading at around 111.17.

GBPUSD is 0.1% higher in early session trading at around 1.3330.

Gold is unchanged overnight, currently trading around $1,293.25.

WTI is 0.2% lower in early Tuesday trading at around $57.67.

Major data releases for today:

07:00 GMT: Bank of England Bank Stress Test Results will be released. The Bank of England has now set out further details of the UK scenario for the stress tests that the eight major UK banks and building societies will be undertaking this year.

07:30 GMT: Bank of England Governor Mark Carney is scheduled to speak.

14:15 GMT: FOMC Member Jerome Powell is scheduled to speak.

14:15 GMT: New York Federal Reserve President William Dudley is scheduled to speak.

15:15 GMT: FOMC Member Patrick Harper is scheduled to speak.

16:15 GMT: Bank of Canada Governor Stephen Poloz is scheduled to speak.

20:45 GMT: US Treasury Secretary Steven Mnuchin is scheduled to speak.

This article is written by FxPro

Bitcoin Nears $10K, Ethereum Nears $500. What’s Next?

Bitcoin price is getting closer and closer to $10K, was trading at approximately $9,715, though price eased a bit to $9312 at the time of writing. By last summer’s end, big businesses were seen to gain an even greater interest in Bitcoin, likely entering the market on September 15, when the cryptocurrency lost 40%, dropping to $2,990. Since then, any skepticism surrounding Bitcoin, comparing it to the tulip mania and the dot-com bubble, has mostly died out, with media nowadays releasing exceptional forecasts about the bright future of cryptocurrencies, valuing Bitcoin’s future price at around $500K!

Ethereum, Bitcoin’s partner to crime, has surged to $491 on Monday morning, setting another new record. Ethereum is also expected to reach the $500 in the next days.

Naturally, speculative jumps have become all the more aggressive as media mentions, discussions between heads of countries and central bankers, as well as conferences, seem intent on persuading ordinary people not to lose the chance they have now of investing in Bitcoin.

As a pioneer among cryptocurrencies, Bitcoin is a benchmark in this field, though its potential future growth can hardly be predicted with any certainty. This applies to all altcoins. The community seems to benefit not only from news regarding software update or enhanced anonymity but even during conflicts between supporters and opponents of various protocols.


Suggested Article: How Blockchain will change our Life, Economy and the World


Currently, the market is anticipating that Bitcoin will reach $10K, with the lack of warning signals down to the lack of any doubts regarding further growth. It begins to seem those big businesses intended to profit from it. If this happens, there is a huge risk that big players start taking profit, with news provoking panic and sell-off. The cryptocurrency market currently seems like a playground for Wall Street tycoons, with JP Morgan Chase’s Jamie Dimon ‘looking at business opportunities in the planned Bitcoin-futures market’, albeit having labeled Bitcoin ‘a fraud’ just two months ago.

Once speculation is over, it is very likely that only the real business model projects will remain, such as logistics companies, accountancy or statistics firms reliant on the blockchain.

This article is written by FxPro

EUR Gains on Hopes of German Coalition, S&P Downgrades South African Rand

The political instability in Germany improved over the weekend, as the leader of Bavaria’s conservative party endorsed an alliance with Germany’s Social Democratic Party (SPD). With voter pressure and the need to avoid new elections, the SPD has agreed to talk with Chancellor Angela Merkel, which raises the prospect of a new “Grand Coalition” German Government. Many European leaders have underlined the importance of getting a stable German government in place quickly so that the Eurozone can discuss its future, including Brexit and proposals by French President Emmanuel Macron on Eurozone reforms. Chancellor Merkel stated over the weekend that she would pursue a grand coalition and an Enid poll showed on Sunday that 52% of Germans backed a grand coalition. Support for Merkel’s Christian Democratic Union was up 2 points at 33% from a week ago and the SPD was up 1 point at 22%. The markets have reacted favorably to the news pushing EURUSD to 2-month highs in early Monday trading.

Crude oil prices were mixed in early Monday trading, as the market has turned cautious ahead of a highly-anticipated Organization of Petroleum Exporting Countries (OPEC) meeting on Thursday to see whether major producers plan to extend their current production-cut agreement. The Markets expect OPEC to extend output cuts for a further 9 months until the end 2018, in a bid to reduce global oil inventories and support oil prices.

On Friday, Standard & Poors Global Ratings downgraded South Africa’s local debt to “junk” status, which saw the Rand slide against its peers. S&P also reduced the rating on South Africa’s international debt by one place, to BB, moving it deeper into non-investment grade territory, often known as junk. The more important move was cutting the country’s local currency credit rating from BBB to BB+, meaning that is now also considered speculative. The downgrade will put pressure on international investors, who require investment-grade ratings. USDZAR traded from a low of around 13.8050 up to 14.1560 following the downgrade, before settling around 14.09 in early Monday trading.

EURUSD is little changed from Friday, currently trading around 1.1944.

USDJPY is 0.15% lower in early session trading at around 111.22.

GBPUSD is unchanged from Friday’s close, currently trading around 1.3343.

Gold is 0.16% higher, currently trading around $1,291.50.

WTI is 0.4% lower in early Monday trading at around $58.37.

Major data releases for today:

At 09:00 GMT, The European Central Bank (ECB) will publish the EU Financial Stability Review. The European Central Bank has published the Financial Stability Review, which provides an overview of the possible sources of risk and vulnerability to financial stability in the eurozone, twice a year since 2004.

At 15:00 GMT, the US Census Bureau will release New Home Sales and New Home Sales Change (MoM) for October. New Home Sales are forecast to come in at 0.625M, a slight reduction on the previous release of 0.667M. Any significant deviation from forecast will see USD volatility.

At 15:30, the Federal Reserve Bank of Dallas will release the Dallas Fed Manufacturing Business Index for November. This is a general barometer of Texan output, employment, orders, prices and other indicators, and whether they have increased, decreased or remained unchanged over the previous month. As the largest state, the markets will look at this indicator as a gauge on the larger US economy.

This article is written by FxPro

UK Growth Forecast Lowered – GBP Strengthens, US Dollar Tumbles on Dovish Fed

UK Chancellor Phillip Hammond delivered an Autumn Budget that appeared to be somewhat neutral in its content. More sobering was the updated forecast of UK economic growth, which is growing slower than previously thought. Hammond said productivity levels remained “stubbornly flat”, with growth until 2021 expected to be lower than predicted in March. The Office for Budget Responsibility (OBR) is now predicting the UK economy will grow by 1.5% this year – considerably lower than the 2% forecast it made in March. More sobering was the fact that growth will drop to 1.3% by 2020 and rise to 1.5% in 2021 – also lower than its forecast predicted in March. However, the markets recognize that both the OBR and BoE have recently been seen to take a more cautious stance when forecasting growth, so many are looking at these new forecasts as a worst-case scenario that is likely to be better. The Budget has done little to appease Prime Minister May’s voters and it appears that her continued leadership will, undoubtedly, come into question in the coming weeks/months.

Data from the US showed new claims for jobless benefits fell for the week ended November 18th, further underlining the robust labor market the US is experiencing. For the week ending November 18th, new claims for unemployment insurance dropped by 13K to 239K, in line with market expectations. Jobless claims have now held below 300K for 142 weeks (nearly 3 years), the longest streak since 1970.

The US Commerce Department released data for US Durable Goods on Wednesday, showing a surprisingly larger-than-expected decrease of 1.2% from October to a seasonally adjusted $236 billion. The fall follows a 2.2% increase in September. The markets had been forecasting a slight increase of 0.2% in October. GDP, excluding transportation, rose 0.4% in October and has increased for 4 consecutive months – albeit below the forecast 0.5% rise. The disappointing data saw USD come under selling pressure in late Wednesday trading.

Late on Wednesday saw the release of the minutes of the Fed’s last policy meeting. Many Fed policymakers expect that interest rates will have to be raised in the “near term”, confirming market expectations that the Fed will hike rates in December. The minutes, however, indicated that “Some members expressed concerns about the outlook for inflation expectations and inflation; they emphasized that, in considering the timing of further adjustments in the federal funds rate, they would be evaluating incoming information to assess the likelihood that recent low readings on inflation were transitory and that inflation was on a trajectory consistent with achieving the Committee’s 2% objective over the medium term.” Following release of the minutes USD came under selling pressure that has continued into early Thursday trading.

EURUSD is 0.1% higher in early session trading at around 1.1832.

USDJPY is near a 2-month low, trading around 111.20.

GBPUSD is 0.1% lower in early Thursday trading at around 1.3310.

Gold is 0.15% lower, trading around $1,290.

WTI is 0.2% lower in early trading at around $57.90.

Major data releases for today:

At 09:00 GMT, Markit Economics will release Eurozone PMI Composite, Services PMI and Manufacturing PMI for November. Composite PMI is expected unchanged at 56, Service PMI is expected slightly higher at 55.1, from the previous release of 55.0, and Manufacturing PMI is forecast to come in at 58.3, lower than the previous release of 58.5. If any data is far from the forecast we can expect to see EUR volatility.

At 09:30, the UK Office for National Statistics (ONS) will release UK Gross Domestic Product (MoM & YoY) for Q3. Both data sets are expected to be unchanged with the month-on-month release expected at 0.4% and the year-on-year release expected at 1.5%. If the actual release is significantly different from the forecast we can expect to see GBP volatility.

At 16:30, the European Central Bank will release Monetary Policy Meeting Accounts. The markets will be analyzing the tone and the words used to determine future economic policy for the Eurozone. Officials familiar with the thinking of policymakers have suggested that the European Central Bank is likely to make multiple small adjustments to its guidance on monetary policy next year, rather than any major change in language as it ends quantitative easing. Depending on the content of the release the markets may see EUR volatility.

This article is written by FxPro

Can the UK Budget Help PM May?

Today sees the release of the UK’s Autumn Budget with the markets believing this financial statement is critical for Prime Minister Theresa Mays’ survival. Following the very narrow victory she had in the recent General Election, this Budget could provide May with an opportunity for redemption from voters. The Prime Minister is treading water as she deals with conflicts within her own cabinet and talks of a rebellion within her own party to oust her. However, whilst Prime Minister May is under pressure from all sides, it appears that the Brexit negotiation process is moving forward with many close to the process stating that a Brexit divorce deal is likely within three weeks. Further information has stated that negotiators have penciled in the week of December 4 as a breakthrough moment for the two sides.

On Tuesday, Federal Reserve Chair Janet Yellen stated that the central bank is “reasonably close” to its goals and should keep gradually raising US interest rates to avoid the dual pitfalls of letting inflation drift below target for too long and driving unemployment down too far. Such comments would normally result in USD strengthening but had little effect on the greenback. Later today may provide more information as the Fed will release the minutes of the Oct. 31-Nov. 1 FOMC meeting minutes, which the markets will be evaluated for any new indications that an interest rate hike is likely in December.


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Ongoing political developments in Germany are being closely watched by the markets, whilst many believe that German economic growth will not be impacted by the collapse in coalition talks between German Chancellor Angela Merkel and potential partners. Merkel has stated that she would prefer new elections if she can’t put together a majority to lead the nation. EUR hit a 4-week low overnight before retracing higher, as the markets appear to be focusing on the Eurozone’s healthy economy and not Germany’s political instabilities.

EURUSD is 0.15% higher in early Tuesday trading at around 1.1763.

USDJPY is 0.32% lower in early session trading at around 111.98.

GBPUSD is little changed overnight, trading around 1.3247.

Gold is 0.2% higher, trading around $1,285.

WTI is 1.3% higher, trading around $57.88.

Major data releases for today:

At 12:30 GMT, Her Majesty’s Treasury will release the Autumn Financial Statement. The statement is given by UK Chancellor Hammond and focuses on the current state of the UK economy. Often referred to as the Autumn Budget, which details future tax and spending plans for the UK. There is a possibility that the statement could result in volatility in GBP.

At 13:30 GMT, the US Department of Labour will release Initial Jobless Claims for the week ended November 17th & Continuing Jobless Claims for the week ended November 10th. Initial Claims are forecast to have fallen to 240K from the previous release of 249K, with Continuing claims rising slightly from 1.860M to 1.882M. If the actual release is significantly different from expectations we will see USD volatility.

At 13:30, the US Census Bureau will release Durable Goods Orders and Durable Goods Order excluding transportation for October. Durable goods are forecast at 0.3% from the healthy previous reading of 2.0%, with the data excluding transportation expected at 0.5% from the previous 0.7%. US industrial productivity has been healthy for some time so a poor reading is likely to see USD come under pressure. Conversely, a higher reading will see USD strengthen.

At 15:30 GMT, the US Energy Administration will release Crude Oil Stocks change for the week ended November 17th. The forecast is calling for a drawdown of -2.167M compared to the previous increase of 1.854M. As always, regardless of the actual release, the markets will experience volatility in both WTI and Brent prices.

At 19:00 GMT, the Federal Open Market Committee will release the minutes from their previous meeting. The markets are keen to analyze the tone of the content to determine future US economic policy.

This article is written by FxPro

Political Turmoil in Germany Hurts EUR, RBA Warns about Wage Growth

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed, which could result in Germany having to call snap elections. With no viable government coalition, it seems highly likely that Germany will be forced to hold new elections. For the past month, Merkel had been in negotiations with the pro-business FDP and their leader Christian Linder. However, sources close to the negotiations stated that Lindner walked out of discussions saying that there was “no basis of trust” to form a government with Merkel’s conservative alliance CDU-CSU and the ecologist Green party. Germany now faces weeks/months of instability which has, initially, seen EUR come under pressure.

Earlier today, the Reserve Bank of Australia released the minutes from their last monetary meeting. The RBA has played down expectations of domestic wage rises and offered little hope to struggling retailers in an economic assessment that has pushed expectations for a future rate hike towards the end of 2018. The RBA suggested that “the experience of other advanced economies – where growth in wages had been low despite ongoing reductions in unemployment – might be unavoidable in Australia”. AUD saw selling pressure following the minutes’ release, trading to a low last seen in June before retracing higher.

EURUSD is 0.2% higher in early Tuesday trading at around 1.1740.

USDJPY is 0.15% lower in early session trading at around 112.46.

GBPUSD is 0.2% higher, currently trading around 1.3247.

AUDUSD recovered from early trading lows to currently trading around 0.7545.

Gold is 0.3% higher in early Tuesday trading at around $1,280.75.

WTI is nearly 0.3% higher in early session trading at around $56.55.

Major data releases for today:

At 09:05 GMT, the Reserve Bank of Australia’s Governor Phillip Lowe is scheduled to speak at the Australian Business Economists (ABE) Annual Dinner in Sydney Australia.

At 09:30 GMT, the UK Office for National Statistics will release Public Sector Net Borrowing for October. The PSNB captures an amount of new debt held by the UK government. The release is expected to come in at £6.600 billion compared to the previous release of £5.326 billion. We can expect to see GBP volatility if the release is substantially different from expectations.

At 15:00 GMT, European Central Bank Executive Board member Benoit Coure is scheduled to chair a Policy Panel “Economic convergence: before or beyond fiscal union” at ECB Conference “Public debt, fiscal policy and EMU deepening” in Frankfurt, Germany.

At 23:00 GMT, Federal Reserve Chair Janet Yellen is scheduled to speak in a Panel Discussion at the New York Stern School of Business in NY, NY, USA.

This article is written by FxPro

Draghi: “Eurozone economy is robust but…”

Speaking at the Frankfurt European Banking Congress, ECB President Mario Draghi, commented that “although the Eurozone economy was robust” recovery was still heavily reliant on stimulus from the European Central Bank. He stated that positive economic growth alone was not enough to allow the ECB to increase the pace of monetary policy normalization. The current lackluster inflation growth is causing a withdrawal of stimulus to be slow. He commented that “Despite this progress on the real side of the economy, from a monetary policy perspective our task is not complete, as we have not yet seen a sustained adjustment in the path of inflation”.

On Friday, data from the US Census Bureau showed that the rate of new home construction in the US rose sharply in October. New Housing Starts rose a healthy 13.7% in October (from September), as the negative impacts of the summer hurricanes appear to have been overcome. The annualized rate climbed to 1.29 million, beating forecasts of 1.19 million. The increase ended 3 consecutive monthly declines. The more forward-looking dataset of New Home Permits rose 5.9% to a rate of 1.3 million, indicating that the housing industry is growing at a healthy pace as the US economy is strengthening.

Statistics Canada released data on Friday showing the consumer price index was up 1.4% in October compared with a year ago, following a 1.6% increase in September. The Bank of Canada, which uses a 2% inflation target in setting monetary policy, raised its key interest rate target twice this year following strong economic growth to start the year. The markets expect growth for H2 to come in at a slower pace and the BoC has suggested that while further rate hikes are likely, they will be cautious and pay close attention to the incoming economic data. The markets do not expect a rate hike until the end of Q1 next year at the earliest.

Officials from the US, Canada, and Mexico have been meeting in Mexico City for the 5th of 7 planned rounds to update the North American Free Trade Agreement (NAFTA), from which President Donald Trump has threatened to withdraw. The US Administration has, apparently, made demands that other members have deemed unacceptable. With negotiations ongoing, it appears that all sides are far from agreement, which is likely to cause, in particular, volatility in MXN as Mexico appears to be the largest economic loser if the US does indeed withdraw.

EURUSD is 0.2% lower in early Monday trading at around 1.1768.

USDJPY is little changed from Friday’s close, currently trading around 112.05.

GBPUSD is 0.1% lower in early session trading at around 1.3247.

USDMXN is 0.14% higher, currently trading around 18.9350.

USDCAD is 0.2% higher in early Monday trading at around 1.2790.

Gold is 0.16% lower, currently trading around $1,291.75.

WTI is little changed in early trading at around $56.61.

Major data releases for today:

At 18:00 GMT, ECB President, Mario Draghi, is scheduled to provide an introductory statement at the ECON Hearing of the European Parliament in Brussels, Belgium.

This article is written by FxPro

Positive US Data Negated by Tax Plan Opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5% in September. The modest increase in consumer prices was in line with market expectations. CPI excluding food and energy prices climbed by 0.2% in October after inching up by 0.1% in the previous month – as expected by the markets. The US Commerce Department released data showing that US retail sales rose by 0.2% in October after spiking by an upwardly revised 1.9% in September. This slight increase beat market expectations and gives more justification for the Fed to hike rates in December and next year as the markets are >90% expecting. Such data should have boosted USD but that was countered on news that the Senate Republican tax plan received opposition from two Republican lawmakers, a possible warning sign for the plan. This is more damning as the Republican party can’t lose more than 2 votes from their ranks for the reform proposal to pass.

Data, on Wednesday, from the UK Office of National Statistics (ONS) showed UK unemployment holding at 4.3%, unchanged in the last 3 months and at its lowest rate for 42 years. The ONS also released average earnings data that, year-on-year, climbed to 2.2%. Whilst average earnings are rising, the gap to UK inflation is concerning for monetary policymakers. Currently, UK inflation is running at an annualized rate of 3% which means that real average earnings, adjusted for inflation, have dropped 0.4% from a year ago. The Bank of England Monetary Policy committee will need to digest the current, and future data, before making any change in monetary policy.

The Japanese Ministry of Economy, Trade, and Industry released data showing Japan’s industrial production declined less than forecast in September. Industrial production dropped to a seasonally adjusted monthly 1% in September, beating the 1.1% decrease reported earlier. This was followed by a 2% rise in August.

EURUSD is 0.1% lower in early Thursday trading at around 1.1787.

USDJPY is 0.2% higher in early session trading at around 113.10.

GBPUSD is little changed in early trading at around 1.3172.

Gold in unchanged overnight, currently trading around $1,277.

WTI is 0.15% higher in early trading at around $55.56.

Major data releases for today:

At 09:30 GMT, UK National Statistics will release Retail Sales (MoM & YoY) for October. Month on Month data is forecast to come in at 0.1%, an improvement on the previous release of -0.8%. Year on Year data is forecast at -0.6% a significant drop from the previous release of 1.2%. The markets will likely see GBP volatility on the data release.

At 10:00 GMT, Eurostat will release CPI and CPI Core (YoY) data for October. CPI is expected unchanged at 1.4% with Core CPI forecast at 0.9%, lower than the previous release of 1.1%. Expect EUR volatility if the actual release is significantly different from the forecast.

At 13:30 GMT, the US Department of Labor will release Initial Jobless Claims for the week ending November 10th along with Continuing Claims for the week ending November 3rd. Continuing claims are expected lower at 1.895M compared to the previous release of 1.901M. Initial Jobless Claims are forecast to come in at 253K, a slight reduction from the previous release of 239K. If the data is significantly different from expectations the markets will experience USD volatility.

At 14:00 GMT, Bank of England Governor Mark Carney is scheduled to speak at the Future Forum at St. George’s Hall, Liverpool, England.

This article is written by FxPro

Ruble Suffers Biggest Drop in More Than a Year

The Russian ruble seems to have run out of luck. Yesterday, the currency lost 1.5% against the dollar and 2.5% against the euro, with this drop coming in as a result of several negative factors. The API reported an increase in oil inventories, which may be confirmed later in the day in the official report. This added pressure on oil quotes, as investors focused on the issue of oversupply amid sustaining high oil inventories.

The markets seem set to register profits in assets that have previously rallied. Commodities and stocks are under pressure as a result of speculation that, over the past few months, they have gained too much too fast. This has had an impact on the ruble, contributing to its sharp drop.

The ruble had shown signs of weakness early last month, with positions abandoned despite the growth in oil quotes. This in relation to a currency that is traditionally weak around this time of the year due to payments on external debt and more active budgetary expenditures. The increase in purchases of foreign currency to the reserve fund by the Russian Ministry of Finance has had further negative impact.

The ruble is expected to remain under pressure as the factors that affect it will most likely continue to do so for the foreseeable future. Oil corrections and risk aversion in the global markets could potentially cause the ruble to fall even further in the coming days and weeks. EURRUB reached 71, heading for the highs of August around 72, while USDRUB surpassed 60, now on its way to the extremes of July and August at 61. A move beyond these levels could signal an even bigger drop in the currency, in the regions of 75 and 64 for the currency pairs respectively.

This article is written by FxPro

Data Boosts EUR, Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition, Q1 growth was adjusted higher to 0.9% from the previous 0.7%. The recent increase in exports and business investment appears to be the main driver behind the improvement, as consumer and government spending were stable through the quarter. Germany’s economy is now growing at an annualized rate of 2.8% the best growth the country has seen for 6 years. Whilst the economy is growing there is very little inflationary pressure as German inflation is well below target. With the German economy doing well, the markets expect this growth to precipitate to other member states and, as a result, EUR climbed over 1% on Tuesday. The upward momentum has carried through overnight with EURUSD touching 1.18 in early trading.

Data from the US on Tuesday indicated producer prices rose 0.4% last month, which beat expectations. The data helped boost PPI to 2.8% in the 12 months up to October, for the largest yearly increase in wholesale inflation in nearly 6 years. The markets will now be focusing on US consumer inflation data later today. Forecasts are calling for a slight increase. The current CME Group’s FedWatch tool puts the probability of a December rate hike of a quarter point at 91.5%. If, however, today’s data is weak, that may reduce the probability of a December rate hike by the Fed.

EURUSD is currently trading around 1.1824.

USDJPY is 0.25% lower in early Wednesday trading, at around 112.89.

GBPUSD is 0.2% lower in early session trading, at around 1.3176.

Gold is little changed overnight, currently trading around $1,283.25.

WTI is lower, currently trading around $55.14.

Major data releases for today:

At 09:30 GMT, UK National Statistics will release Average Earnings (including and excluding Bonus) for the previous 3 months and current year to September. Both data sets are expected to come in at 2.1%, a slight fall from the previous reading of 2.2%. With inflation outpacing earnings in the UK, the markets will be interested to see if the gap can be closed that will determine future monetary policy decisions.

At 13:30 GMT, the US Census Bureau will release Retail Sales (MoM) for October. Retail Sales are forecast to come in at 0.0%, a significant decline from the previous reading of 1.6%. If consumer spending has zero growth, the markets will expect to see a lower CPI reading that will be released at the same time.

At 13:30 GMT, the US Census Bureau will release a plethora of data related to CPI, with the main focus being on CPI & CPI excluding Food & Energy (YoY) for October. CPI is forecast to come in lower at 2.0% from the previous release of 2.2%. CPI excluding food & energy is forecast to be unchanged at 1.7%. Any significant deviation from the forecast will likely cause USD volatility.

At 15:30, the US Energy Information Administration will release Crude Oil Stocks change for the week ending November 10th. The forecast is for a draw of -2.850M being the reverse of the previous release that saw inventories rising 2.237M. The release can often cause volatility in both WTI & Brent if it is widely different from expectations.

This article is written by FxPro

Asian Shares Mostly Lower as Chinese Data Disappoints

China’s economy has been robust throughout 2017 as a continued recovery in manufacturing and industrial sectors, a healthy property market and surprisingly strong exports have helped push growth in the first three-quarters close to 6.9%. However, data on Tuesday from the Chinese National Bureau of Statistics showing fixed-asset investment growth declined to 7.3%, from January to October, below forecasts of a 7.4% growth. Further disappointing data showed year-on-year industrial output coming in at 6.2% in October and significantly lower than September’s strong release of 6.6%. Many believe this contraction in growth is likely to continue in the coming months, albeit at a very moderate pace, as China looks to limit the risk of debt, which slows demand, and its push to improve pollution that has negatively impacted factory output. Consumer data is also showing signs of waning as Retail Sales (YoY) for October came in at 10%, missing forecasts of 10.4% and below the previous months reading of 10.3%. With President Xi Jinping stating that “China will focus on quality over speed as it pursues economic growth” and restating the need to improve pollution and reduce riskier lending, it is likely that China will struggle to move towards a domestic demand driven economy.

The markets are now focused on today’s gathering of several central bankers in Frankfurt, Germany, who are taking part in an ECB organized event. The central bankers, including the Fed’s Janet Yellen, the BoE’s Mark Carney, the ECB’s Mario Draghi and the BoJ’s Haruhiko Kuroda, will participate in a panel titled: “At the heart of policy: challenges and opportunities of central bank communication”. Needless to say, the markets will be keenly listening to any hints on the future monetary policy that could cause market volatility.

EURUSD is slightly higher in early Tuesday trading at around 1.1700.

USDJPY is little changed, trading at around 113.86.

GBPUSD is unchanged overnight, currently trading around 1.3115.

Gold is -0.49% lower in the early trading session at around $1,272.50.

WTI is -0.35% lower in early Tuesday trading at around $56.56.

Major data releases for today:

At 07:00 GMT, the Statistical Office of the European Union, Destatis, will release the Harmonized Index of Consumer Prices (YoY) for October. The statistical methodology results in an index of Consumer Prices correlated across all EU member states to define and assess price stability. Consensus is calling for an unchanged reading of 1.5% – any significant deviation from the forecast could see EUR volatility.

At 08:05 GMT, the CEO of the Federal Reserve Bank of Chicago and current FOMC member Charles Evans is scheduled to speak at the European Central Bank Conference in Frankfurt, Germany on the topic of “Communications Challenges for Policy Effectiveness, Accountability, and Reputation”.

At 9:00 GMT, Sabine Lautenschläger, a member of the European Central Bank’s Executive Board, is scheduled to speak at the opening discussion at the Banking Supervision, Resolution and Risk Management Conference during 20th Euro Finance Week in Frankfurt, Germany.

At 9:30 GMT, UK National Statistics will release Consumer Price Index (YoY) for October. The consensus is calling for a slightly higher release of 3.1% from the previous 3.0%. The Bank of England had suggested that inflation in the UK will peak in 2018 at near to 3.5% before retracing lower. If this release of CPI is significantly higher than expected, we may see a change in monetary policy from the BoE that will result in higher interest rates. Be aware that any deviation from forecast is likely to result in GBP volatility.

At 10:00 GMT, ECB President Mario Draghi, Fed Chair Janet Yellen, Bank of England Governor Mark Carney and Bank of Japan Governor Haruhiko Kuroda are scheduled to participate in a policy panel: “At the heart of policy: challenges and opportunities of central bank communication” at the conference “Communication challenges for policy effectiveness, accountability and reputation” organized by the ECB in Frankfurt, Germany.

This article is written by FxPro

Bitcoin Price Breaks Below $6000, Bitcoin Cash Jumps 300% in the Past Three Days

As of November 12, Bitcoin is trading below $6000. Once the SegWit2x fork was suspended, the price of Bitcoin surged to $7,999 on cryptocurrency exchange Bitfinex, before losing more than $2,000 in a matter of days.

It is worth noting that the recent rally was supported by altcoin sell-off as traders exchanged them with Bitcoin, hoping for “free coins” after the hardfork. Meanwhile, markets seemed to have too high hopes about getting something for free as developers wanted to implement only technical updates and said nothing about a new cryptocurrency. It looks like someone wanted to see Bitcoin reach even higher highs than the ones of a week ago.




On the one hand, the hardfork was meant to solve a problem with mining difficulty levels for Bitcoin Cash. On the other, though, SegWit2x’s opponents declared that its developers did not implement replay protection, asking the community to oppose the new fork. SegWit2x was also supposed to support original blockchain, 2x chain and new Bitcoin based on the PoW (Proof-of-work).

Over the past few weeks, Bitcoin Cash has attracted a solid demand worldwide. Bitcoin cash was trading in the range of $336 to $635, but since Friday Bitcoin cash prices rose to the all-time high of $2422 and currently are trading at $1829. Many investors stood to receive the same amount of coins following the fork, yet this time it seems they were unlucky.

This article is written by FxPro

Kiwi Gets a Boost

Earlier today the Reserve Bank of New Zealand (RBNZ) left their Official Cash Rate (OCR) unchanged at a record low of 1.75% – as the markets had forecast. More importantly was the RBNZ revising inflation forecasts upwards, which is likely to signal an increase in interest rates earlier than previously predicted. RBNZ acting Governor Spencer stated after the announcement “Monetary policy will remain accommodative for a considerable period,” & “the exchange rate has eased since the August statement and, if sustained, will increase tradables inflation and promote more balanced growth.” The RBNZ had set an inflation target of between 1% and 3% and now expects inflation to reach 2% in Q2 of 2018, full 3 quarters earlier than previously expected. Because of inflationary pressure, the markets are forecasting a rate hike by the end of next year. Following the announcement, NZDUSD rose from around 0.6922 to just above 0.6970. NZDUSD has suffered in the second half of this year, after reaching a high in July of around 0.7550 the Kiwi slumped to lows around 0.6830 earlier this month. Today’s announcement gives a much needed “boost” to the Kiwi.

Wednesday’s EIA report surprised the markets with an unexpected increase in oil inventories. The markets had been expecting another drawdown around -2.8M that continues a trend seen over the past few releases. For the week ending November 3rd US Crude Oil inventories rose 2.2M as supplies increased, while production jumped to a record all-time high. The major focus is the fact that US production increased 67,000 bpd to 9.62 Million bpd – the highest since data was readily available in 1983. The increase in US production can only undermine OPEC’s supply cuts to boost the price of crude.

EURUSD is unchanged in early Thursday trading at around 1.1600.

USDJPY is -0.25% lower, currently trading around 113.55.

GBPUSD is 0.15% higher in early trading at around 1.3135.

NZDUSD is currently trading around 0.6970.

Gold is 0.30% higher, currently trading around $1,285.

WTI is currently trading -0.20% lower at around $56.95.

Major data releases for today:

At 09:00 GMT, the European Central Bank launches a new publication, the Economic Bulletin, to replace the ECB Monthly Bulletin. It will be published two weeks after each Governing Council meeting.

At 10:00 GMT, the European Commission will release Economic Growth forecasts as compiled by the Directorate General for Economic and Financial Affairs (DG ECFIN).

At 13:30 GMT, the US Department of Labour will release Initial Jobless Claims for the week ended November 3rd and Continuing Claims for the period ended October 27th. The previous release of Initial Claims of 229K is expected to be bettered, with forecasts calling for a release of 232K. Continuing Claims are expected to come in at 1885K, a minor increase on the previous release of 1884K. Any significant deviation from forecast will see USD volatility.

At 15:00 GMT, the UK National Institute of Economic and Social Research will release an estimate of UK GDP. This release occurs 1 month before the official GDP release and could result in GBP volatility.

At 16:30 GMT, Swiss National Bank Chairman Thomas Jordan is scheduled to speak at the CFS Presidential Lectures in Frankfurt, Germany on the subject: “Independence of Central Banks after the Financial Crisis: The Swiss Perspective”.

This article is written by FxPro

Data & Polls Pressure Sterling

Sterling suffered downward pressure on Tuesday and Wednesday morning as the latest monthly report from the British Retail Consortium showed non-food sales slumping in October to the lowest levels in 5 years. Total sales crept up 0.2% from a year earlier, like-for-like sales slipped 1%, a reversal from the 1.9% rise in September. British consumers continue to experience a squeeze on their incomes as wage growth is behind inflation, driven by the continued weakness in GBP following the Brexit vote in 2016.

More pressure was added on GBP following the release of a poll, conducted by ORB International for The Telegraph, that showed public confidence in Prime Minister May’s ability to deliver a strong Brexit had fallen to a record low. 66% of those polled disapprove of the way the Government is handling negotiations with the EU. Prior to the snap election in June, the percentage of disapprovers stood at 45%. The poll also suggested that public confidence in Prime Minister May has fallen sharply with only 26% believing she will “get the right deal for Britain in the Brexit negotiations” – in June this stood at 44%. With several key members of the Conservative Party suffering suspensions, due to sexual harassment allegations, and Foreign Secretary Boris Johnson damaging international relations following his recent remarks concerning the imprisonment of a British dual national in Iran, many are wondering if Theresa May’s tenure as Prime Minister may be near its end.

In the US, reports are circulating that Senate Republican leaders are considering a 1-year delay in the implementation of a major corporate tax cut to comply with Senate rules. USD had seen a recent improvement against its peers on expectations that President Trump’s Administration would deliver on their pledge to reduce taxes, which would help economic growth and lift interest rates. With the prospect of delays, USD will lose much of its appeal and could give back its recent gains.

EURUSD is 0.12% lower in early Wednesday trading at around 1.1600.

USDJPY is 0.2% lower in early session trading at around 113.75.

GBPUSD is little unchanged in early trading at around 1.3172.

Gold is 0.25% higher, trading around $1,278.50.

WTI is little changed overnight, currently trading around $57.02.

Major data releases for today:

At 08:00 GMT, the European Central Bank is scheduled to hold a
non-monetary policy meeting in Frankfurt, Germany.

At 13:15 GMT, the Canadian Mortgage, and Housing Corporation will release Housing Starts (YoY) for October. The forecast is calling for 210K new homes constructed against the previous release of217.1K. We can expect to see CAD volatility if the release is significantly different from expectations.

At 15:30, The US Energy Information Administration will release Crude Oil Stocks change for the week ended November 3rd. The forecast is for another draw of -2.8M compared to the previous draw of -2.435M. The EIA report never fails to cause volatility in both WTI and Brent, especially if the release is wildly different from expectations.

This article is written by FxPro