Euro Firm During Monday’s Trading, Solid Inflation Data Helps Preserve Momentum

The euro was relatively strong against its major rivals today. The inflation data released during the current trading session, being rather positive, did not give the currency a reason to reverse its trend.

The eurozone consumer inflation in August was finalized at 1.5%, up from 1.3% in July. It was the same as in the preliminary estimate and the median forecast. The euro continued to rise after the data, but the currency may yet be dragged down over the week by political uncertainty as speculators wait for the German federal election on September 24.

EUR/USD rose from 1.1919 to 1.1963 as of 11:15 GMT today. EUR/GBP advanced from 0.8787 to 0.8834, rising for the first time after six consecutive daily losses.

This post was originally published by EarnForex

Pound Sterling Hits its Highest Level Since Brexit, Best Week in Nine Years on Rate Hike Speculation

The Great Britain pound surged during the past trading week, propelled by interest rate hike speculation. Meanwhile, safe currencies found little demand as risk appetite came to the market.

The Bank of England kept its monetary policy unchanged at this week’s policy meeting as was expected. Yet the central bank still managed to surprise market participants, signaling that an interest rate hike may happen sooner than most speculators were anticipating. Data that showed accelerating inflation supported the case for tighter monetary policy.

Talking about inflation, the faster-than-expected growth of consumer prices in the United States helped the US dollar to rebound. Market analysts were unconvinced that the bounce signal about a trend reversal, though.

The euro continued to be supported by the outlook for monetary tightening from European Central Bank. Meanwhile, safe currencies like the Japanese yen and the Swiss franc did not feel attractive to investors. North Korea continued its missile tests, increasing geopolitical tensions, but it seems that traders got used to such news.

GBP/USD jumped 3.0% during the previous week from 1.3184 to 1.3586 — the highest weekly close since the fateful week of June 2016 when the Britons voted for independence from the European Union. GBP/JPY surged as much as 5.6% from 142.61 to 150.58, and its weekly close was also the highest since June 2016. EUR/GBP slumped 3.6% from 0.9114 to 0.8790 to the lowest since July.

This post was originally published by EarnForex

Bank of England Makes Pound End Week Extremely Soft

While US nonfarm payrolls were arguably the most important economic release for the Forex market during the past trading week, the Bank of England policy meeting held special significance for the Great Britain pound.

Traders were rather optimistic ahead of the BoE meeting, leading to a rally for the sterling. Yet the rally came to an abrupt end after the central bank demonstrated dovish stance and revised growth forecasts down. Friday’s nonfarm payrolls were not helping either, leading to the currency’s worst two-day performance in nearly a month.

Meanwhile, the US dollar demonstrated an opposite performance. The greenback was rather soft throughout the week, especially after private employment data disappointed. But the dollar bounced by the weekend thanks to the better-than-expected official data.

GBP/USD declined from 1.3128 to end the week at 1.3043, retreating from the weekly high of 1.3267, which was the strongest level since September 15. GBP/JPY was from 145.19 to 146.77 during the week but pulled back to end trading at 144.38. EUR/GBP rallied from 0.8941 to 0.9022, and its weekly high of 0.9054 was the highest level since October 17.

Czech Koruna Advance After First Interest Rate Hike in Almost a Decade

The Czech koruna advanced against the US dollar today after the central bank decided to hike its key two-week repo rate.

The Czech National Bank raised its main interest rate by 20 basis points to 0.25% and the Lombard rate by 25 basis points to 0.50%, while keeping the discount rate unchanged at 0.05%. Such decision was expected by some analysts. It the first change in borrowing costs since November 2012 and the first domestic hike since February 2008. Furthermore, it was the first rate increase in the European Union in more than five years.

USD/CZK dropped 0.53% to 21.8993 as of 12:30 GMT today.

This post was originally published by EarnForex

NZ Dollar Driven Down by Employment Data

The New Zealand dollar fell today, dragged down by underwhelming employment data. The currency was in a retreat for four consecutive sessions versus the euro and for five against the Japanese yen.

New Zealand employment dropped 0.2% in the June quarter of this year from the previous three months, whereas analysts had expected a substantial increase by 0.7%. At the same time, the unemployment rate decreased from 4.9% to 4.8%, in line with expectations. The Labor Cost Index demonstrated the same 0.4% growth as in the previous quarter, while economists had hoped it would accelerate to 0.5%.

NZD/USD declined from 0.7465 to 0.7420 as of 12:45 GMT today. NZD/JPY went down from 82.37 to 82.20 intraday (touching the lowest since two weeks) before trading at 82.23.

This post was originally published by EarnForex

Brazilian Real Higher After Interest Rate Cut

The Brazilian real rallied against the US dollar yesterday after the Federal Reserve released a dovish policy statement and Brazil’s central bank cut its key interest rate.

The Central Bank of Brazil cut the Selic rate by one percentage point to 9.25%, in line with expectations. It was the first time since November 2013 when the interest rate was set below 10%. Moreover, the central bank signaled that it may continue monetary easing at the same pace at the next policy meeting.

USD/BRL sank 1.07% to 3.1384 as of 11:30 GMT today.

This post was originally published by EarnForex

Euro Strong During Week of ECB Meeting

The euro was strong during the past trading week due to the statement of the European Central Bank, which market participants considered to be hawkish. The pair finished the previous week at 1.1664.

Comments of ECB President Mario Draghi after the policy meeting had something both for the doves as well as for the hawks. Yet markets focused on the hawkish part of his speech, believing that the mention of quantitative easing discussion in fall means that the central bank may start QE tapering as soon as September.

The US dollar was weakened by inability of US President Donald Trump to implement planned reforms. The Great Britain pound suffered from the bad inflation reading, which hurt prospects for monetary tightening from the Bank of England. The Australian dollar was volatile as the Reserve Bank of Australia was sending mixed signals about its plans for monetary policy.

EUR/USD jumped 1.7% from 1.1472 to 1.1664, touching the highest level in two years during the week. EUR/GBP soared as much as 2.4% from 0.8761 to 0.8973. EUR/AUD rallied from 1.4655 to 1.4736, bouncing from the weekly low of 1.4419.

This post was originally published by EarnForex

Australian Dollar Rallies Undisturbed by Poor Data

The Australian dollar continued to rise today following yesterday’s surge. The poor macroeconomic data released over the current session did not bother the currency much.

Yesterday’s rally was caused by the policy minutes of the Reserve Bank of Australia, which market participants considered hawkish. The notes showed that Australian policy makers targeted 3.5% as the neutral level for the key interest rate, and that is far above the current 1.5%.

As for today’s data, the leading index dropped sharply in June, and the report said:

The index is pointing to a slowdown in momentum in Australia’s growth profile with the first below trend reading since July 2016. The deterioration mainly reflects international factors including a sharp turnaround in Australia’s commodity prices in Australian dollar terms.

AUD/USD advanced from 0.7915 to 0.7942 as of 13:00 GMT today following yesterday’s gain by 1.5%. EUR/AUD dropped from 1.4591 to 1.4523.

This post was originally published by EarnForex

Canadian Dollar Ends Week Strongest amid BoC Hike Speculations

The Canadian dollar ended the week as the strongest major currency because the events during the week’s trading fueled speculations that the Bank of Canada will hike interest rates as soon as the next week.

Markets considered the comments of BoC Governor Stephen Poloz as a sign that the central bank is ready to raise interest rates. Solid employment data supported the case for monetary tightening. All those factors reinforced the view that the BoC will hike rates on July 12. As a result, the Canadian dollar was able to ignore the slump of crude oil, rallying during the week.

The US dollar was also strong, partly due to solid employment growth. Meanwhile, the Australian dollar was the among the weakest currencies as the Reserve Bank of Australia failed to join other central banks in switching its stance to more hawkish one. The weakest one, though, was the Japanese yen, driven down by emergency bond buying by the Bank of Japan.

USD/CAD slid from 1.2967 to 1.2875 — the lowest weekly close since August. EUR/CAD declined from 1.4804 to 1.4673. CAD/JPY soared 2.3% from 86.39 to 88.42.

This post was originally published by EarnForex

Great Britain Pound Steady, Undeterred by Poor Economic Data

The Great Britain pound was steady today as the recent bout of poor macroeconomic releases did not deter investors from the currency.

The Purchasing Mangers’ Indexes for Great Britain released this week were universally disappointing. Yet it looks like they did not prevent market participants from expecting the Bank of England to perform monetary tightening in the not-so-distant future. While the sterling pulled back from the recent highs, it was still trading not far from the nine-month high reached against the dollar in May.

Traders will get a chance to react to the ADP private-sector payrolls report at 1215 GMT. The report is expected to show 185,000 private sector jobs were added to the economy in June. Traders often use this report to gauge the outcome of Friday’s headline number in the U.S. Non-Farm Payrolls report. This report is expected to show the economy added 179,000 jobs.

GBP/USD traded at 1.2953 as of 11:10 GMT today after opening at 1.2932. GBP/JPY rose from intraday’s low of 146.06 to 146.77.

This post was originally published by EarnForex

Crude Oil Drops as OPEC Output Grows, Russia Opposes Deeper Production Cuts

Crude oil dropped today, ending the rally that has started on June 22. Traders were still concerned about oversupply on the market. Output from the Organization of Petroleum Exporting Countries was growing despite relatively high compliance from members that agreed to cut their production.

The problem was that those countries that were exempt from production cuts, like Nigeria and Libya, pumped enough oil to offset the cuts. Without deeper cuts, the OPEC is unlikely to reach its goal of rebalancing the market. Yet Russia, the biggest non-OPEC producer that joined the output reduction accord, opposed the idea of deeper cuts.

The Energy Information Administration will report on US inventories tomorrow. The report is usually released on Wednesday, but it was postponed due to the Independence Day holiday. Analysts predicted that the report will show a decrease by 2.4 million barrels.

August futures for delivery of WTI crude oil dropped as much as 1.23% to $46.49 per barrel as of 9:57 GMT on NYMEX today. September Brent crude declined 1.13% to $49.05 per barrel on ICE.

This post was originally published by EarnForex

Japanese Yen Fails to Capitalize on Upbeat Tankan Survey

The Tankan survey released today showed that business conditions for Japan’s large enterprises improved in both manufacturing and non-manufacturing sectors last quarter. Yet the Japanese yen failed to capitalize on the favorable data.

The Tankan Large Manufacturers Index climbed from 12 in the March quarter to 17 in the June quarter, exceeding the median forecast of 15. The Tankan Large Non-Manufacturing Index rose from 20 to 23, though it was a bit below the average forecast of 24.

Yet the Japanese currency did not pay attention to the report, probably still being under pressure from the outlook for extremely accommodative monetary policy in the foreseeable future.

USD/JPY rose from 112.10 to 112.86 as of 12:30 GMT today. EUR/JPY rallied from 127.98 to 128.36.

This post was originally published by EarnForex

Australian Dollar Unable to Keep Gains Caused by China’s PMI

A private report released today showed that China’s manufacturing sector switched to growth. The Australian dollar attempted to rally with the help from the good news from Australia’s biggest trading partner. Yet the currency lost its gains versus its most-traded rivals (with the exception of the soft Japanese yen) as the report was not as good as it looked at first glance.

The Caixin China General Manufacturing PMI climbed from 49.6 in May to 50.4 in June, exceeding analysts expectations of 49.9. The reading above 50.0 means that the sector is expanding. Yet the report did not sound particularly optimistic, saying:

The manufacturing sector recovered slightly in June, but based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later.

AUD/USD was up from 0.7681 to 0.7695 intraday but backed off to trade at 0.7651 as of 12:10 GMT today. AUD/JPY rallied from 86.10 to 86.54.

This post was originally published by EarnForex

Grains Rally on Worries About Drought, USDA Acreage Report

Futures for wheat jumped by the exchange limit on the Chicago Board of Trade, and corn and soybeans also rallied. Prices climbed amid concerns that drought in parts of growing regions of the United States may damage crops. The acreage report from the US Department of Agriculture also affected the prices.

The USDA reported that area planted by wheat in 2017 was at 45.7 million acres, down 9% from 2016 but still below forecasts. Area planted by soybeans was at record 89.5 million acres, up 7% from the previous year, but it was also below analysts’ estimates. Area planted by corn was at 90.9 million acres, down 3% from the previous year, but in this case the actual figure was above the reading predicted by experts. While specialists had expected that soybeans would overtake corn as the number one US crop in terms of acreage, it looks like US farmers actually preferred to plant corn at the expense of wheat and soybeans.

Contract for delivery of wheat in September jumped as much as 6.05% to $5.26 per bushel as of 00:25 GMT on CBoT today. Corn rallied 3.11% to $3.81 per bushel. November soybean futures gained 3.24% to $9.5475 per bushel.

This post was originally published by EarnForex

Hawkish Monetary Policy Outlook Doesn’t Help Sterling

The outlook for monetary policies of central banks around the world were one of the main driving factors for the Forex market during the previous week. But while the outlook for Bank of England monetary policy became more hawkish, it was not enough to support the Great Britain pound.

Several BoE members made hawkish remarks over the week, leading to speculations that the central bank is going to raise interest rates in the foreseeable future. Yet concerns about the Brexit prevented the sterling from capitalizing on the bullish talks. Besides, BoE chief Mark Carney himself was not hawkish at all, making the optimistic outlook questionable.

Talking about questionable optimism, market participants were doubting that the US Federal Reserve will be able to be as aggressive with its monetary tightening as it wants to be.

Continuing with the theme of unwarranted optimism, the last week’s speculations about an interest rate hike from the Bank of Canada muted after inflation disappointed. Positive retail sales data provided some support to the currency, but it was not enough to overcome the effect of falling oil prices.

Meanwhile, markets considered the policy statement from the Reserve Bank of New Zealand hawkish enough to drive the New Zealand dollar up, making it one of the strongest currencies during the past trading week.

GBP/USD closed the week at 1.2719, though bounced from the weekly low of 1.2589.

This post was originally published by EarnForex

Aussie Down as Chinese Economic Data Overshadows Australian Reports

The Australian dollar fell today against its major peers as poor China’s macroeconomic data overshadowed decent reports released in Australia. China is the biggest trading partner of Australia, therefore its economic performance has a big impact on the Australian currency.

Australian retail sales climbed 1.0% in April from March, seasonally adjusted, far above market expectations of 0.3%. Private capital expenditure rose 0.3% in the March quarter from the previous three months, a bit less than was predicted by analysts (0.4%). But the real bummer was the Caixin China General Manufacturing PMI, which dropped from 50.3 to 49.6 in May, falling below the neutral 50.0 level (thus indicating contraction of the sector) for the first time in almost a year.

AUD/USD dropped from 0.7428 to 0.7397 as of 10:24 GMT today. EUR/AUD gained from 1.5128 to 1.5177, and its daily high of 1.5225 was the highest since June 2016.

This post was originally published by EarnForex

Canadian Dollar Jumps as BoC Statement Doesn’t Show Dovishness

The Canadian dollar jumped following the monetary policy meeting of the Bank of Canada as the central bank’s statement turned out to be not as dovish as market participants were expecting.

The BoC left its main interest rate at 0.5% as was widely expected. Markets also expected a dovish statement, especially after inflation missed economists’ projections. Yet instead, the central bank voiced optimism about both global and domestic economies, stating about Canada’s economy:

“The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions”.

The optimistic remarks helped the Canadian currency to ignore oil prices, which fell as traders were nervous ahead of yesterday’s meeting of the Organization of Petroleum Exporting Countries.

USD/CAD dropped on Wednesday from 1.3512 to 1.3408. The USD/CAD is trading slightly higher on Thursday to correct yesterday’s move at 1.3435, up 0.22%.

This post was originally published by EarnForex

Chinese Yuan Falls After Moody’s Downgrade

The Chinese yuan slipped against the US dollar today (though it has trimmed the losses by now) after Moody’s Investor Service made a surprise cut of China’s credit rating for the first time in almost three decades.

Moody’s reduced the country’s sovereign grade from Aa3 to A1 and changed the outlook from negative to stable. The rating agency cited following considerations for its decision:

“The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government”.

Markets have been shocked by announcement initially, sending commodities and Asian currencies down. But currently the shock eased as economists argued that the relatively low level of China’s international debts means that the cut should be not as important for China as it would be for countries more dependent on credit.

USD/CNY was up 0.08% to 6.8905 as of 11:00 GMT today but off the day’s high of 6.8946.

This post was originally published by EarnForex

GBP/USD Breaks 1.30 Level After Retail Sales Data

The GBP/USD currency pair rallied today, breaking the psychologically important 1.30 level and trading near the highest level since September. Other sterling crosses were also trading higher, though the pound was unable to maintain its gains versus the Japanese yen.

Britain’s retail sales climbed by 2.3% in April after falling by 1.4% in March. The gain was almost two times the increase predicted by analysts. Some experts speculated that the rise in sales could be a result of temporary factors like Easter or good weather, but that did not deter the Great Britain pound from rallying.

GBP/USD jumped from 1.2966 to 1.3046 as of 11:00 GMT today. GBP/JPY 143.66 to 144.78 intraday but pulled back to trade near 143.89 later.

This post was originally published by EarnForex

Sterling Reacts Positively to Employment Data

The Great Britain pound reacted positively to UK employment data released today, which showed accelerating wage inflation and a surprise drop of the unemployment rate. It allowed the currency to halt the four-day losing streak versus the euro and the Swiss franc.

According to the report from the Office for National Statistics, average weekly earnings rose 2.4% in the three-month period through March from a year ago after rising 2.3% in the previous reporting period. The unemployment rate fell from 4.7% to 4.6% unexpectedly. The number of jobless claims fell to 19,400 in April from the upwardly revised 33,500 in March.

GBP/USD rose from 1.2913 to 1.2964 as of 13:05 GMT today. EUR/GBP was up from 0.8577 to 0.8614 intraday but backed off to trade at 0.8572 by now.

This post was originally published by EarnForex