Daily Market Overview by FXNET

[Froso@FXNET]

Asian Session – Yen gains on safe haven demand after dismal China trade data

Risk aversion took hold on Monday after a shockingly weak Chinese trade balance report sent a shiver through the markets on the weekend. The world’s second largest economy posted a $23 billion monthly deficit in February compared to a $14 billion surplus expected. This comes after a nearly $32 billion surplus in January.

Meanwhile other disappointing news hurt market sentiment as well after Japan's current account deficit hit a record 1.5tn yen in January.

Due to increased safe haven demand, the yen benefited during Monday’s Asian session.

USDJPY opened on Monday with a gap lower on risk aversion following worse than expected China trade data. The pair dipped from 103.11 to 102.96. On Friday the dollar surged to a high of 103.75 on the back of stronger-than-forecast US jobs numbers.

EURUSD is proving to be resilient despite the growing tensions in the Ukraine crisis. The pair moved off post-NFP lows of 1.3851 hit on Friday and opened the Asian session on Monday at 1.3870 to reach a session high of1.3891.

GBPUSD traded a 1.6720-45 range during the Asian session, down from Friday’s high of 1.6784.

USDCHF traded a 0.8759-0.8780 range. Swiss retail sales data will be in focus today.

AUDUSD opened the Asian session at 0.9045, gapping down from Friday’s New York close of 0.9069 and slid to 0.9022. The aussie is being weighed down by the poor China trade numbers. China is a major trading partner for Australia.

 

[Froso@FXNET]

Asian Session – Yen steady after Bank of Japan policy remains unchanged

The focus of the Asian markets on Tuesday was on the Bank of Japan policy meeting which concluded after two days. As was anticipated by many, the BOJ held its policy unchanged and left its overnight call rate at 0.1% and the monetary base target at Y60-70 tln.

The BOJ also left its economic assessment of the Japanese economy unchanged, noting that the moderate economic recovery is continuing. The BOJ said that although export growth has levelled off there has been a pick up in capital spending, and that industrial production has been increasing at a somewhat accelerated pace.

USDJPY eased back to a low near 103.15 following the BOJ decision. Earlier in the session it rose to a high above 103.40.

EURJPY slid after the BOJ but holds above 143.00 as it has been doing in Monday’s US session.

GBPUSD slid down to a low near 1.6630 stayed near its low after the release of the BRC like-for-like retail sales which came in at -1.0% y/y versus forecast of 1.6%.

AUDUSD initially slid down to a low of 0.9010 following the release of weak Australian data before ending the session little changed. The National Australia Bank (NAB) business conditions and confidence data) came in at 0 versus +5 previously and +7 versus +9 prior (respectively) . However, the pair remains on the defensive on uncertainty regarding the weak China data over the weekend and the geopolitical tensions between Russia & Ukraine.

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[Froso@FXNET]

Asian Session – Yen strengthens on risk aversion over China concerns

Risk aversion led to a stronger yen while other major pairs drifted without clear direction as investors are taking on a cautious stance as concerns remain over a weakening Chinese economy after soft trade data earlier in the week. Also geopolitical tensions in Ukraine are weighing on market sentiment.

The only economic data releases today were from Australia. The Westpac report showed that consumer confidence in the country fell in March, extending its decline from a post-election peak in November.

The Australian dollar fell due to the domestic data as well as due to concerns over China, which is Australia’s major trading partner. Also Australia is a major producer of copper and iron ore, whose prices are tumbling recently. This is because copper is being used as collateral for loans in China, and with a slowing Chinese economy there are fears of defaults on these loans.

USDJPY opened the Asian session at 103.02 and came under pressure early as Asian markets started off on a nervous note (Nikkei went 2.4% lower) and Shanghai copper opening limit down. USDJPY eased to 102.78.

EURUSD opened the Asian session 1.3860 after another very quiet US session and traded a 1.3851/65 range. All of the market’s attention was on JPY and AUD pairs due to rising risk aversion sparked by China fears. Focus will turn to Euro zone industrial production data out later today although it is unlikely to have a large impact.

GBPUSD traded a tight range between1.6612-33 during the Asian session.

AUDUSD opened on Wednesday at 0.8977 and came under pressure early in the session due to soft Westpac consumer confidence numbers. Also weighing on AUD was falling copper and iron ore prices (Australia is a major exporter

 

[Froso@FXNET]

Forex Daily Analysis - 2 April 2014

The EUR/USD picked up 27 focuses today as eurozone Pmis demonstrated improvement over needed and German employments information reported a change with unemployment ticking down. The euro is exchanging at 1.3798. the euro EURUSD +0.27% was pushing higher against the dollar, creeping ever closer to that $1.38 level after information indicated the euro-zone fabricating PMI for March was affirmed at 53, easier than 53.2 seen in February. Still, the normal perusing for the first quarter arrived at the best result since the second quarter of 2011.

The GBP/USD eased today giving up 26 points to exchange at 1.6637 after manufacturing PMI dipped below forecast but remained in a positive zone. March UK Markit/CIPS manufacturing PMI printed at 55.3 vs 56.7 expectations the lowest since July 2012

The AUD/USD added 3 points giving back a bit of earlier gains after the RBA announcement. Glenn Steven’s did as expected and held rates and policy. Prior to the release the Aussie was at the 93 price level on stronger than expected Chinese data. The Chinese Governments Purchasing Managers’ Index rose to 50.3 in March, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today. That compared with February’s 50.2 reading and the 50.1 median estimates from analysts in a Bloomberg News survey. Numbers above 50 signal expansion. The Aussie is trading at 0.9268 at this writing.

The USD/JPY continued to decline as the sale tax increase goes into effect today. The JPY eased by 8 pips to trade against the US dollar at 103.30. The yen remained lower against the dollar after Bank of Japan data showed the Tankan index for sentiment among large manufacturers in the nation rose to 17 in the first quarter from 16 in the previous period. The Tankan was weak,” said Ken go Suzuki, chief currency strategist at Mizuho Securities Co. in Tokyo. “Some investors buying the dollar against the yen may take profits as it climbed above 103 in the past few days.” Gold is flat for the day moving between small gains and losses at 1284.80 after falling below the 1280 price on Monday for a few minutes.

Gold prices steadied on Tuesday, recovering early losses, as comments from Federal Reserve Chair Janet Yellen defending easy-money policies hurt the dollar, while a drop to seven-week lows overnight sparked interest from bargain-hunting buyers. The metal fell to a low of $1,278.34 an ounce in Asian trade as stocks rallied on the back of Yellen’s comments, which reassured investors that the bank would maintain monetary support for the U.S. economy.

 

[Froso@FXNET]

The USD/JPY gained 17 points to trade at 103.84 as the yen loses
EUR/USD : is level for the day, exchanging at 1.3794 unable to support the 1.38 level after Spanish unemployment indicated a huge drop in cases and yearly GDP met desires, in spite of the fact that quarterly GDP printed underneath figure. The euro also ticked higher. Like the dollar it tends to draw support from prospects of higher world growth and is also supported by expectations the European Central Bank will steer clear on Thursday of any action to ease monetary policy. A rising dollar was this year’s big call for many banks and funds in January and most have been disappointed, with a falloff in growth in China and a euro bolstered by returning flows of capital instead the dominant trends.

GBP/USD : climbed by 14 points after construction PMI printed close to expectations but showing strong growth. The pound is trading at 1.6642 as traders evaluate the Bank of England’s next move now that the economy is recovering steadily. The improved outlook suggests the Bank of England may tighten monetary policy in the next 12 months.

AUD/USD : eased to trade at 0.9235 giving up 13 points after building approvals missed expectations. The currency continues to remain well above its trading range on hopes of stimulus from the Chinese government. The RBA kept the target cash rate at 2.5 percent, as expected, and kept its view that rates won’t change while the central bank supports the economy.

USD/JPY : gained 17 points to trade at 103.84 as the yen loses its value as traders are now expecting the Bank of Japan to add stimulus to offset the negative effects of the sales tax increase which went into effect on April 1st. The combination of rising global equity markets with rising U.S. Treasury yields is a catalyst for USD/JPY to move higher,” said Kit Juckes, analyst at Societe Generale

Gold : added $3.90 ahead of the ADP payroll release to trade at 1283.90 as traders begin to take position ahead of the ECB and the NFP over the next two days. The ADP jobs report will be the main event that traders are waiting for with data due to be released in just a few hours. Having fallen 8% in just over two weeks, gold “hasn’t found a host of willing buyers looking to pick up cheaper metal,” said UBS analyst Adel Tully. “Some buying interest has emerged on the lows, but further downside has been prevented largely because sellers are in short supply.”

 

[Froso@FXNET]

Fundamental Analysis April 4
EUR/USD is flat ahead of the ECB meeting. the choice is expected in simply a couple of hours, yet the firecrackers will probably be later in the day at Mr. Draghi's question and answer session. Merchants can anticipate that the Governing Council will simplicity arrangement unassumingly at this gathering, through a little cut in key rates or liquidity activities. Aggressive unconventional policies remain distant. The ECB may introduce new liquidity measures today to counter tightness in funding conditions, but we think they will most likely not deliver additional rate cuts or monetary policy accommodation.

GBP/USD gave up 16 points to trade at 1.6610 after UK services PMI missed expectations and also printed lower than last months. It is not a major upset to the markets but enough to see some traders moving away from the pound as the US dollar continues to climb. Sterling fell to a day’s low against the dollar and the euro on Thursday, after UK services sector expanded at a slower-than- expected pace in March.

AUD/USD eased by 33 points against a much stronger greenback after more data showed a steady recovery in the US economy. Retail sales in Australia missed expectations this morning and the trade balance widened more than expected but remain less than the previous months. In Australia, the RBA wants Australia’s biggest banks and building societies to pay a levy to help pay for a fund that will protect their own depositors in the event of a banking collapse.

USD/JPY soared to trade at 104.05 as the dollar gained momentum after the ADP data release on Wednesday showed that the private employers created more jobs than in previous months and there was a strong upward revision to the previous month. The Japanese yen declined against other major currencies in Asian morning deals on Thursday as investor sentiment rose on strong U.S. data and China’s mini stimulus package designed to boost spending on railways and tax relief for struggling small businesses.

Gold reversed course and begin to ease giving up $4.50 to trade at 1286.30 after climbing in the Asian session as high as 1293. Traders are beginning to take positions ahead of tomorrow’s NFP and after comment from several Federal Reserve members all saying that we would likely see an interest rate increase in mid-2015. Investors are waiting on a European Central Bank policy statement later in the session and monthly jobs data from the U.S. Friday.

 

[Froso@FXNET]

Forex Daily Analysis - 7 April 2014


EUR/USD kept on decliing in front of the non-cultivate payroll report. The euro keeps on traing
downwards after dovish remarks from ECB Director Draghi, who made no move yesterday yet talked
down expansion and offered signs that the Bank could add liquidity to the business sectors.
GBP/USD eased to trade at 1.6585 falling steadily since construction PMI missed expectations and the
US dollar continued to gain ahead of the NFP release due shortly. Sterling headed for the bottom of its
recent range against the dollar on Friday, hurt by a bullish week for the US currency and a couple of
marginally weaker than expected numbers on the British economy.

AUD/USD gave up 9 points to trade at 0.9283 remaining close to its record high the currency fell against
a strong USD and a minor data release from the ANZ jobs advertisements which slipped below last
month. It has been a slow trading morning with Chinese markets closed traders looked for any signs or
news.
USD/JPY is flat this morning ahead of the Bank of Japan meeting trading at 103.28 after steadily
declining last week against a strong greenback. Japan’s central bank will probably double purchases
of exchange-traded funds in a second round of monetary easing under Governor Haruhiko Kuroda
anticipated in coming months, a Bloomberg News survey of economists’ shows. The dollar remained
stronger following a three-week rally before the U.S. central bank releases minutes this week of the
Federal Open Market Committee’s March meeting.Leveraged funds boosted their bearish bets on the
U.S. currency to the most in almost four years last week, spurring speculation it will strengthen as some
of those positions are reversed.
Gold gained to trade at 1292.50 as traders begin to take positions prior to the non-farm payroll release
wid could send the US dollar soaring or just the opposite. Gold headed for a third weekly decline, the
longest run of losses since September, before a report forecast to show the fastest jobs growth in the US
in four months, supporting further reductions to monetary stimulus.

 

[Froso@FXNET]

Fundamental Analysis April 8
EUR/USD is exchanging at 1.3715 up by 11 focuses as the euro picked up a bit of force after the arrival of German Industrial Production numbers indicating a positive build in processing. A week ago on April third, the European Central Bank (ECB) took off its most recent redesign on money related strategy. President Mario Draghi reminded markets that dangers in the euro zone stay to the downside. Speculators keep on showwing enthusiasm toward euro region holdings. This investment probably illustrates at any rate a portion of the headstrong quality in the euro.

GBP/USD is completely flat today, with no direction as traders are taking a break. The pound is holding at 1.6575 ahead of the Bank of England meeting later this week. The Fed will release on minutes of its March 18-19 meeting on April 9. Policy makers at the gathering cut monthly bond purchases by $10 billion to $55 billion. Fed Chair Janet Yellen said the central bank may start to raise interest rates “around six months” after ending its asset-buying program.

AUD/USD gave up 9 points to trade at 0.9283 remaining close to its record high the currency fell against a strong USD and a minor data release from the ANZ jobs advertisements which slipped below last month. It has been a slow trading morning with Chinese markets closed traders looked for any signs or news

USD/JPY is flat this morning ahead of the Bank of Japan meeting trading at 103.28 after steadily declining last week against a strong greenback. Japan’s central bank will probably double purchases of exchange-traded funds in a second round of monetary easing under Governor Haruhiko Kuroda anticipated in coming months, a Bloomberg News survey of economists’ shows.

Gold is trading at 1299.00 down by $4.50 as traders book profits after the commodities climb at the end of last week. Gold rose Friday to its highest level in more than a week after data showed the U.S. created slightly fewer jobs than expected in March. This suggested the Federal Reserve is likely to keep interest rates near zero well into 2015 and encouraged lurking buyers to step into gold. Although prices back below $1,300 Monday, they held onto the majority of their gains. After a closer analysis the upward revision to the previous month’s jobs creation turned traders to a more positive note that the Fed will move swiftly to cut its asset purchases and end the program.

 

[Froso@FXNET]

Fundamental Analysis April 9
EUR/USD added 27 focuses to exchange at 1.3769 after the dollar plunged as dealers re-assessed the FOMC taping and rate increment. Dealers are holding up to see the points of interest of the last Fed gathering in tomorrow's moment discharge. Climbing pressures in Ukraine likewise tempered speculator craving for danger. Ace Moscow dissenters in eastern Ukraine seized arms in one city and announced a separatist republic in an alternate. Ukraine on Monday called the moves a piece of a Russian plan to legitimize an attack.

GBP/USD soared today adding 91 points after positive economic data releases. The GBP is trading at 1.6699 and is likely to break the 1.67 range before the end of the day. Industrial production and manufacturing production both exceeded forecast. Sterling rose to its highest in three weeks against the dollar and a one-month maximum against the euro after data on Tuesday showed industrial output rose much faster than forecast in February.

AUD/USD added 11 points to trade at 0.9281 after the release of the NAB business confidence report which printed a bit lower than the previous month. Traders moved from equities to commodity currencies as earning season begins today. The value of Reserve Bank of Australia’s foreign currency reserves jumped by $US10 billion ($10.8 billion) last month just as emerging market central bankers accelerated their intervention in foreign exchange markets in an attempt support their economies.

USD/JPY gave up 12 points to trade at 102.98 remaining well above its trading range as the JPY strengthened after the Bank of Japan held rates and policy this morning. Today’s decision said that Japan’s economy has continued to recover moderately, and noted front-loaded demand ahead of the April sales-tax bump. Overseas economies, mainly advanced ones, are starting to recover, the BOJ said.

Gold continued to climb today as geopolitical tensions grew between Russia and the Ukraine. Gold added $12.20 to trade at 1310.50. Foreign currency market sources think that the Federal Reserve will postpone the tapering of bond purchases, following the disappointing jobs report for March. Businesses added 192,000 jobs during the month, below expectations of 199,000 jobs. The unemployment rate in the US remained unchanged at 6.7%, compared with expectations of a drop to 6.6%.

 

[Froso@FXNET]

Fundamental Analysis April 11
EUR/USD keeps on inflaing exchanging at 1.3866 including 11 focuses moving without much explanation behind the additions. The euro searches headed for a genuine fall in the close term. he dollar dropped to more than two week-lows against the euro and Swiss franc on Wednesday after minutes of the most recent Federal Reserve money related arrangement gathering recommended that the U.s. national bank may not raise premium rates at whatever time soon.

GBP/USD is quiet ahead of the BoE meeting later today, although the MPC is not expected to make any changes and will avoid a public statement traders are remaining cautious before the release. The GBP exchange rate jumped by half a cent to a near-2-month high in reaction to the latest Minutes from the Federal Reserve, which showed that policymakers are concerned that a premature hiking of interest rates could damage the burgeoning economic recovery.

AUD/USD added 13 points to break over the 94 level trading at 0.9402 after a strong employment release this morning. The Aussie unemployment rate fell to 5.8% a much larger fall than expected. The nation also created a lot more new jobs that forecast. Australia’s dollar reached a more than four-month high versus the greenback after the government reported unemployment unexpectedly fell for the first time since September.

USD/JPY eased by 15 points to trade at 101.84 as the yen has steadily gained since the Bank of Japan decision to hold rates and stimulus. Mr. Kudora later gave a glowing outlook for the economy and said that there was little need for additional stimulus. he dollar drifted at three-week lows against a basket of major currencies early on Thursday, having fallen for a fourth session after minutes from the Federal Reserve’s March meeting disappointed dollar bulls.

Gold added $16.40 to trade at 1322.30 climbing steadily after the FOMC minutes release and on geopolitical tensions with Russia. Gold extended gains to a third session on Thursday, scaling fresh two-week highs, after minutes from the Federal Reserve’s policy meeting showed that officials were not keen on increasing interest rates anytime soon.