MasterForex Broker – Trend analysis of currency pairs and Comments (Updated daily)

[MasterForex Broker]

Overview of the main economical events of the current day - 2/06/2014

Main Events of the Coming Week

On Friday 30 May the US dollar decreased vs. most major currencies, having lost 0.17% to the dollar index amid weak US Consumer Sentiment. The US Personal Spending also reduced in April for the first time this year.

UoM Consumer Sentiment decreased in May to 81.9 p. in comparison with 84.1 p. in April – and appeared to be higher the initial evaluate of 81.8 p., but considerably higher the expectations at the level of 82.5 p. Current Assessment considerably fell in May as well. Food prices growth, high prices for oil, and slow growth of wages decreased Consumer Sentiment.

The US Personal Spending sharply reduced in April by 0.1% m/m against the expectations of growth by 0.2%. Personal Spending increased in March by 1% m/m (the highest rate since August 2009). Personal Spending decreased of the first time for over a year which became the new sign of the US economy slowdown after several negative months when the data was corrupted by the deterrent weather. At the same time Chicago PMI increased in May to 7-month high at the level of 65.5 p. from 63 p. in April against the expectations of decrease.

The pound sterling strengthened its positions on Friday amid growth of the UK Consumer Confidence to the highest rate for over 9 years since April 2005. GfK Consumer Sentiment increased in May to zero in comparison with -3 in April, having exceeded the expectations of growth to -2 p. The euro also increased despite the decrease of inflation rate in Spain and Italy. According to preliminary data annual inflation growth rate dropped in May – in Italy from 0.6% to 0.5%, and in Spain – from 0.3% to 0.2%.

The Canadian dollar decreased amid the Canadian economy growth. Annual GDP growth deteriorated in March to 8-month low at the level of 2.1% from 2.3% in February, whereas no changes were expected. The Canadian Quarterly GDP annualized slowed down in the first quarter to 1.2% in comparison with 2.7% in the previous quarter and the forecast of 1.8%. The lowest growth rate for over 5 quarter was mainly due to sharp decrease of investment and export.

The yen strengthened its positions after the release of Japanese inflation rate, but then it negated the whole growth. Japanese inflation accelerated in April to the highest rate since 1991, whereas industrial production and household spending dropped after the increase of sales tax. Consumer Price Index increased in April to 3.4% y/y in comparison with the growth by 1.6% in March.

According to the results of the week the US dollar demonstrated mixed dynamics vs. major currencies and had almost no changes to the dollar index. The US dollar decreased vs. the Australian dollar, the yen, and the Canadian dollar; increased vs. the New Zealand dollar and the pound sterling; and had almost no changes vs. the euro and the Swiss franc. Weak economy growth rate and the US Consumer Confidence put additionally pressurized the US dollar. According to the results of May the US dollar added slightly more than 1% to the dollar index, and the dynamics was mixed as well: the US dollar increased vs. major European currencies and NZD, but decreased vs. the yen, CAD, and AUD.

During the coming first week of the month there will be a lot of important data released, including the US Non-Farm Payrolls, and the Meeting of four major Central Banks which will also take place this week. The major event will be the release of the key US Non-Farm Payrolls on Friday; preliminary ADP will be released on Wednesday. On Monday ISM Manufacturing PMI and Construction Spending will be released; on Tuesday – Industrial Orders; on Wednesday – Trade Balance, ISM Services PMI and Beige Book; on Thursday – weekly Unemployment Claims.

The major event in the Euro-Zone will be the Meeting of the European Central Bank, the results of which will be announced in Thursday. Decrease of all three ECB rates is expected as well. ECB will probably take other measures of easing as well which will be directed for acceleration of economy growth and inflation rate. On Tuesday important preliminary inflation rate will be released in the Euro-Zone – no changes of inflation rate are expected (0.7% y/y). On Monday Final Manufacturing PMI will be released; and on Wednesday – Final Services PMI; on Tuesday – Euro-Zone Unemployment Rate; on Wednesday – Revised GDP of the first quarter; and on Thursday – Retail Sales.

On Monday in German preliminary Inflation Rate will be released; on Thursday – Industrial Orders, and on Friday – Trade Balance and Industrial Production. In the UK Manufacturing PMI, Construction PMI, and Services PMI will be released in the first three days. On Monday BOE Monetary & Financial Statistics will be released; and on Friday – Trade Balance. On Thursday the results of Monthly BOE Meeting will be announced – no policy changes are expected. On Wednesday and Thursday G7 Meeting in Brussels will take place.

On Tuesday in China Non-Manufacturing PMI and HSBC Final Manufacturing PMI will be released; and on Sunday 8 June – Trade Balance. On Tuesday in Australia Retail Sales will be released, and RBA will announce the results of its Meeting about rates; on Wednesday GDP for the first quarter will be released; and on Thursday – Trade Balance. On Wednesday in Canada Trade Balance will be released; on Thursday – Building Permits and Ivey PMI; and on Friday – Labor Market report. On Wednesday the results of the BOC Meeting about the rates will be released.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 05/06/2014

The US Services Activity Rocketed to 9-Month High

On Wednesday 4 June the US dollar strengthened its positions vs. most major currencies, having added 0.17% to the dollar index amid growth of Services Activity increased to the highest rate for over 9 months. The euro decreased amid weak Euro-Zone Services Activity.

The US Services Activity continued to grow for the third month in a row and reached in May the highest rate since August 2013. The US ISM Services PMI rose in May to 56.3 p. in comparison with 55.2 p. in April, having exceeded the expectations of growth to 55.5 p. Backlog of Orders, New Orders, Business Activity, and Employment increased most of all. Markit data also pointed acceleration of Services Activity growth in the USA in May to the highest rate for over more than two years – since March 2012. According to Fed’s Beige Book economy activity increased during recent two weeks in all US regions and this fact promoted increase of Consumer Spending.

At the same time ADP Employment and the US Trading Balance released on Wednesday appeared to be worse than expected. ADP Employment Change in the USA increased in May only by 179,000 in comparison with downwardly revised previous month’s reading at the level of 215,000 and the forecast of 210,000. Employment Change appeared to be the lowest for over 4 months. On Friday the US Labor Department will perform official Non-Farm Payrolls report. It is expected that Non-Farm Payrolls in May increased by 218,000 against 288,000 in April, and Unemployment increase by 0.1% to 6.4%.

The US Trade Balance deficit spread in April to 2-years high due to considerable growth of import, which appeared to be the highest throughout the history. Trade Balance deficit increased in April by 6.9% m/m to $47.2 billion, having considerably exceeded the expectations at the level of $40.8 billion. Previous month Trade Balance deficit at that was revised downwards – to $44.2 billion from the March reading of $40.4 billion. Import increased in April by 1.2% m/m, whereas export decreased by 0.2% m/m. Import growth indicates that consumers and companies started their spending recovery after winter fall.

The euro decreased amid Euro-Zone Services Activity which slowed down stronger than the initial estimate. Euro-Zone Final Services PMI in May composed 53.2 p. and appeared to be lower initial estimations of 53.5 p. Euro-Zone Flash Manufacturing PMI and Flash Services PMI decreased from 3-year high of 54 p. to 53.5 p., whereas 53.9 p. was reported before. Euro-Zone Revised GDP of the 1st quarter was confirmed at the level of 0.2% - at the same time 4th quarter data was revised upwards to +0.3% q/q from +0.2%.

The pound sterling the least decreased vs. the US dollar on Wednesday amid strong UK Services Activity growth rate. Services PMI just slightly decreased in May – from 58.7 p. to 58.6 p., whereas a more considerable decrease to 58.2 p. was predicted. Country’s services sector continued to steadily develop in May due to increase of new working places and creation of new companies, which is supported by the forecast of the Bank of England about the UK GDP growth this year by 3%. At the same time, BOE’s Richard Sharp announced that despite explosive growth of activity the economy of the UK is still unsteady and vulnerable to a whole range of risks – both inside ТВ outside the country.

The Canadian dollar dropped to its month low vs. the US dollar amid finished BOC’s Meeting during which the Overnight Rate was left without changes. Bank of Canada pointed downward risks for inflation prospects and weak export growth. Canadian economy recovers after the break in the 1st quarter, but the dynamics is slightly less than it was expected before. Canadian Trade Balance appeared to be worse than expected. Trade Balance deficit of 0.64 billion CAD was fixed in April, whereas its proficit of 0.20 billion was expected. Export dropped by 1.2% m/m, whereas import increased by 1.4% m/m to its record high.

Only the Australian dollar managed to strengthen its positions vs. the US dollar on Wednesday after the release of positive Australian economy growth rate which appeared to be the highest for over 2 years. Country’s GDP in the 1st quarter increased by 1.1% q/q, having exceeded the expectations of growth by 1%. Export gave a more contribution to the growth than before – in whole Australian economy returns to upward trend. New Zealand dollar was traded downwards amid drop of commodity prices. ANZ Commodity Prices dropped in May by 2.2% m/m after the drop by 3.7% in April, the decrease continues for the third month in a row.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 10/06/2014

Main Events of the Coming Week

On Friday 6 June the US dollar strengthened its positions vs. most major currencies, having added 0.07% еще he dollar index amid the US Non-Farm Payrolls. The US Unemployment Rate appeared to be better than expected, whereas Employment Changes coincided with the forecasts.

According to the US Department of Labor Unemployment Rate in May stayed at the same April level of 6.3%, whereas growth to 6.4%was predicted. The US Unemployment Rate still stays at the lowest rate since September 2008. The US Non-Farm Payrolls increased in May by 217,000 in comparison with downwardly revised 282,000 in April – which in whole coincided with the expectations which varied from 210,000 to 218,000.

Average Hourly Earnings increased in May by 0.2% m/m which coincided with the forecasts. Average workweek and Participation Rate had no changes in May comparing to April. Underemployment Rate – U6 decreased from 12.3% to 12.2%. Total nonfarm in the USA in May reached 138.5 million, having exceeded the previous Employment Change high which was reached in January 2008 – this fact again pointed the acceleration of economy recovery this spring.

The euro and the pound sterling decreased amid weak data. German Industrial Output increased in April by 0.2%, whereas growth by 0.4% was expected. German Trade Balance at the same time appeared to be better than expected. Trade Balance proficit increased in April to €17.7 billion comparing to €15 billion in March and the forecast of €15.2 billion. Bundesbank increased the German GDP forecasts for 2014, but decreased Inflation Rate forecast. Vice President of the ECB Vitor Constancio announced that ECB still has additional tools of policy weakening in the form of rates decrease and asset purchase. The UK Trade Balance Deficit expanded in April to £9.6 billion comparing with £8.3 billion in March and the expectations at the level of £8.7 billion.

The Canadian dollar slightly decreased on Friday amid Unemployment Rate in Canada which appeared to be worse than expected. Unemployment Rate increased in May to 7% comparing to 6.9% in April, whereas no changes were expected. Employment Change in May increased by 25,800 which coincided with the forecasts – however the whole growth fell on Part Time Employment Change. Full Time Employment Change reduced in May by 29,100.

According еще the results of the week the US dollar demonstrated mixed dynamics vs. major currencies and for the second week has almost no changes to the dollar index. The US dollar decreased vs. the pound sterling, the Australian dollar, the Swiss franc, and the euro; but increased vs. the Canadian dollar, the yen, and the New Zealand dollar. Major European currencies stopped the decrease after ECB Meeting which took place the week before. The Canadian dollar which appeared to be under pressure last week before the BOC Meeting about rates decreased vs. the US dollar most of all.

During the second week of the month there will be not so much significant data released. On Tuesday in the USA JOLTS Job Openings, Wholesale Sales, and Wholesale Inventories will be released; on Wednesday - Federal Budget Balance; on Thursday – Retail Sales and Import Prices; on Friday – Producer Price Index and Preliminary UoM Consumer Sentiment.

On Thursday in the Euro-Zone Industrial Production and Monthly ECB’s Report will be released; and on Friday – Trade Balance and Quarterly Employment Level. On Friday in Germany Final Inflation Rate will be released as well. On Tuesday in France Industrial Production will be released; and on Thursday – Inflation Rate. On Tuesday in Italy Industrial Production and Final GDP for the first quarter will be released; and on Friday – Final Inflation Rate.

On Tuesday in the UK Industrial Production will be released, and on Wednesday – Employment Rate. Growth of Industrial Production and fall of Unemployment Rate is expected. On Monday in Japan Final GDP for the 1st quarter and Current Account will be released, on Wednesday – Quarterly BSI Manufacturing Index, on Thursday – Core Machinery Orders, and on Friday – Bank of Japan will announce the results of its 2 days Meeting.

On Tuesday in Australia NAB Business Confidence will be released, on Wednesday – Westpac Business Confidence, and on Thursday – Labor Market report. On Thursday the decision of the Reserve Bank of New Zealand about Official Cash Rate will be announced and Quarterly Press-Conference of RBNZ’s Governor Wheeler will also take place. Increase of Official Cash rate is expected. On Thursday in Canada New House Price Index is going to be released; on Friday – Manufacturing Sales. On Tuesday in China Inflation Rate will be released; and on Friday – Industrial Production, Retail Sales, and and Fixed Asset Investment.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 10/06/2014

Euro Continued Its Fall

On Monday 9 June the US dollar was traded mixed, having added 0.25% to the dollar index amid absence of any significant macro statistics in the USA and bank holidays in some countries of the Euro-Zone.

The US dollar increased vs. the yen and the Swiss franc, decreased vs. the Canadian dollar and the Australian dollar, and had hardly any changes vs. other major currencies. In Germany, France, and Switzerland there was a banking holiday on Monday. The markets continued to evaluate the US Non-Farm Payrolls released on Friday.

Conference Board Employment Trends Index increased in May to 118.58 from downwardly revised April reading of 117.32. The Index confirmed acceleration of Employment growth rate in the USA. FOMC Member James Bullard announced that FOMC is at the nearest stage of achieving target levels of inflation and employment than during these 5 years. Increase US 10-Years Treasury Yields from 2.59% to 2.61% positively affected the US dollar.

The euro considerably decrease, having again dropped lower than $1.36 amid unexpected drop of Euro-Zone Investor Confidence to the lowest rate for over 6 months despite new ECB measures for economy growth acceleration. Euro-Zone Sentix Investor Confidence sharply dropped in June to 8.5 p. comparing to 12.8 p. in May against the expectations of growth.

The index decreases for the second month in a row from 3-years high that have been reached in April. The decrease mainly occurs due to fall of Current Assessment, but 6-months Expectations also decreased. The pound sterling, on the contrary, had almost no changes according to the results of the day before the release of the data on Tuesday and Wednesday. On Tuesday the UK Industrial Output will be released.

The yen slightly strengthened its positions after the release of Japanese economy growth data which exceeded the expectations. Final Japanese GDP growth for the 1st quarter was revised upwards to 1.6% q/q against the preliminary evaluate of +1.5% and +0.2% in the previous quarter. This is the highest growth for over 2.5 years since the 3rd quarter of 2011. Consumer Sentiment in Japan rocketed to its high for over 4 months after 5 months of decrease. At the same time Japanese Current Account proficit in April increased less than it was expected.

After last optimistic economic reports, the forecasts and BOJ Governor Kuroda’s comments – market participants started to revise their expectations in relation to additional stimulation measures on the part of Bank of Japan. Reuters survey demonstrated that only 4 out of 35 interrogated analysts expect BOJ to interfere changes in their monetary policy at the July Meeting – it is considerably less comparing to the previous month.

The Canadian dollar increased vs. the US dollar amid positive Canadian Housing Market. Housing Starts increased in May by 0.8% in comparison with April – to 198,300 of houses, whereas decrease to 185,000 was expected. It has confirmed deceleration of the Canadian economy growth during recent several months which was due to weather, nit due to fundamental factors. Oil prices which reached the highs of the middle of April also positively influenced CAD.

The Australian dollar was traded upwards amid Chinese foreign commerce released on Sunday. Chinese Trade Balance proficit expanded in May to $35.9 billion in comparison with $18.5 billion in April and the forecast of $22.6 billion. Proficit appeared to be the highest for over more than 5 years. Export from China increased in May by 7% y/y, having exceeded the expectations, while import reduced by 1.6% in comparison with the same month the year before. Demand for AUD was also supported by “carry trade” - demand for high-yielding assets with “AAA” rating lead to capital inflow in Australia.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 11/06/2014

New Zealand Dollar Strengthened Its Positions Before RBNZ Meeting

On Tuesday 10 June the US dollar was traded mixed, having added 0.22% to the dollar index amid positive US data. The pound sterling and the Swiss franc decreased amid weak Retail Sales. The Australian dollar strengthened its positions amid stable Business Confidence in Australia.

The US dollar increased vs. major European currencies and the Canadian dollar, but decreased vs. the yen, the New Zealand dollar, and the Australian dollar. The US Labor Market continues to improve. JOLTS Job Openings according to Bureau of Labor Statistics increased in April to 4.46 million vs. 4.17 million in March, having reached the levels of late 2007 which were noticed before the start of recession. NFIB Small Business Index continued its growth for the 3rd month in a row and reached in May the highest rate since September 2007. The index increased to 96.6 p. in comparison with 95.2 p. in April, having exceeded the forecasts.

The US Wholesale Inventories notably increased in April, having exceeded the forecasts and strengthened possibility of economy growth acceleration in the 2nd quarter. Wholesale Inventories rose by 1.1% m/m after the similar growth in March, whereas growth by 0.6% was expected. Inventories are the key component of the GDP. In the 1st quarter GDP fell by 1% as Inventories Change decreased GDP by 1.6%. In the 2nd quarter it is expected that GDP growth will exceed 3% but Inventories growth in April may mark up the GDP growth estimate. Wholesale Trade Sales increased in April by 1.3% m/m, having exceeded the forecasts of growth by 0.9%.

The euro continued its decrease on Tuesday for the 3rd day in a row amid controversial Industrial Production which appeared to be worse than expected in France and better in Italy. Bank of France Business Sentiment dropped in May to 10-month low at the level of 97 p. from 98 p. in April, whereas no changes were expected.

ECB’s Liikanen announced on Tuesday that ECB intends to save highly soft monetary policy. ECB is ready to take further measures in order to deal with long period of low inflation which may negatively influence price stability and Euro-Zone economy growth. ECB’s Makuch stated that ECB still has field for further decrease of key interest rate to zero rate as in Czech Republic.

During the last few days after the decrease of rates the euro dropped to semiannual low vs. the Australian dollar. The euro matures into category of low-profit currencies that use carry trade as a tool of funding. Many financial institutions have to sell common currency as legislation doesn’t allow then possess assets with negative yield.

The pound sterling and the Swiss franc decreased amid weak Retail Sales. BRC Retail Sales Monitor increased in May by 0.5% y/y against the expectations of growth by 1.6%. The reading is used to be released a week before official Retail Sales report and lets to have common understanding about the trend. Official ONS Retail Sales report is going to be released on Thursday 19 June. The UK Industrial Production in April coincided with the expectations (+0.4% m/m) and did not lend support to the British currency. Retail Sales in Switzerland increased in April by 0.4% y/y, whereas growth by 2% was predicted before.

According to NIESR British economy of the recent three month demonstrated deceleration of growth rate to 0.9% comparing with 1.1% of the previous month. According to NIESR British economy reached the peak fixed before the financial crisis of 2008. British GDP in late May 2014 was higher by 0.2% than the pre-crisis peak. British economy strengthening will let the Bank of England to start increase of Base interest rate which is at the moment at record low of 0.5%. It is expected that BOE will start increase of rates in 2015.

The Australian dollar strengthened its positions to 4-week high vs. the US dollar amid stable business Confidence in Australia which stayed in May at April level (+7 p.). This positive result amid Consumer Confidence weakening in recent weeks after budget adoption for 2014-2015 foresees interference of new taxes and reduction of spending.

New Zealand dollar increased before RBNZ Meeting the results of which will be announced on Wednesday at 21:00 GMT. It is expected that base interest rate will be increased by 0.25% to 3.25%. NZD may get support in short-term if RBNZ will confirm its intension to increase interest rate in middle term. IMF announced on Tuesday that New Zealand economy growth becomes more and more large-scale.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 12/06/2014

The Pound Sterling Increased Amid Unemployment Rate


On Wednesday 11 June the US dollar was traded downwards vs. most major currencies amid absence of any significant macro statistics in the USA and the Euro-Zone. The pound sterling increased after release of positive UK Labor Market. The New Zealand dollar rocketed after RBNZ increased Official Cash Rate.

The US dollar decreased vs. most major currencies except for the euro and the Swiss franc, having almost no changes to the dollar index. The euro continued to stay under pressure on Wednesday falling to 4-days low vs. the US dollar. ECB’s Hansson announced that ECB should start technical preparation to QE – but it is early to speak whether there is strong necessity in further measures. ECB should be ready to QE; this option is still in ECB’s reserve for possible usage in future.

The pound sterling strengthened its positions after three days decrease amid positive UK Labor Market which demonstrated UK jobless rate fall to the lowest rate for more than 5 years since early 2009. Unemployment Rate and Claimant Count Change decreased more than it was expected; this fact reflects acceleration of economy recovery. ILO Unemployment Rate dropped in April to 6.6% from 6.8% in March, whereas decrease only to 6.7% was expected. Decrease of Unemployment Rat may force BOE to start increase of rates in the end of this year already.

Unemployment Rate decreased in May by 27,400, which appeared to be more than expected at the level of 25,000. The UK Employment Change rocketed in the three months through April by 345,000. At the same time – increase of people in employment appeared to be record high since 1971 when calculation of this reading in the country has started. Employment Change also refreshed historical high and reached 30.5 million. At the same time, Average Earnings Index in February-April decelerated to 0.7% from 1.9% the month before – this is the lowest growth rate for over almost a year.

The yen increased amid decrease of stock markets, which led to growth of demand for save heaven currency. Stock markets dropped after the decrease of world economy growth forecast by the World Bank. The previous forecast of 3.2% growth was reduced to 2.8%. Among key reasons of forecast decrease according to bank experts are abnormally cold winter in the USA and geopolitical conflict between Russia and Ukraine. Besides not very convincing Chinese economy growth rate this year also had influence to the revision.

The New Zealand dollar rocketed after RBNZ Official Cash Rate increase this year for the 3rd time in a row – from 3.00% to 3.25%. The decision coincided with the forecasts, but RBNZ Rate Statement pointed stronger inclination to policy tightening than it was expected. RBNZ signaled further increase of rate by 1.00% in nest 12 months, as the Central Bank presses for preventing Inflation pressure.

RBNZ’s Wheeler announced that New Zealand economy growth has considerable impulse and inflation pressure increases due to Construction Spending, Net stream increase, and high prices for New Zealand commodity export lend support for export income. New Zealand dollar is still high, but it will be possibly corrected amid lower commodity prices – Dairy prices decrease by 12% is expected next year. RBNZ expects decrease of New Zealand trade weighted index almost by 7% during next three years.

The Australian dollar was traded upwards before the release of Australian Labor Market. AUD was in demand on the part of pension funds and Japanese insurance companies, which strive to more “AAA” bond yield. Australian Consumer Confidence which increased after sharp decrease the month before also positively affected AUD. Released on Thursday Australian Labor Market data appeared to be mixed. Unemployment Rate in May had no changes (5.8%) against the expectations of growth to 5.9% - while Employment Change sharply reduced by 4,800, whereas growth by 10,000 was expected.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 13/06/2014

The US Dollar Dropped Amid Retail Sales


On Thursday 12 June the US dollar dropped vs. most major currencies, having lost 0.25% to the dollar index amid weak Labor Market and Retail Sales in the USA. The Australian dollar strengthened its positions amid Australian Labor Market report. The pound sterling spiked after BOE Governor Mark Carney’s announcement.

The US Initial Unemployment Claims last week increased by 4,000 to 317,000, whereas decrease of claims by 3,000 to 313,000 was expected. Previous week data was revised downwards from 312,000 to 313,000. Claims increase for the second week in a row. Four-Week Moving Average of Initial Claims increased by 4,750 – from 310,500 to 315,250. Four-Week Moving Average increased from the lowest rate for over 7 years for the first time after 4 weeks of decrease.

The US Retail Sales increased in May less than it was expected, and its growth rate decreases for two months already. Retail Sales increased in May by 0.3% m/m against the expectations of growth by 0.6%. The increase of sales was mainly due to increase of Motor Vehicle Sales by 1.4%. Retail Sales Ex Auto increased by 0.1% m/m, which appeared to be less than the expected forecast of +0.4%. At the same time previous month data was revised upwards. Retail Sales increased in April by 0.5% m/m, but not by 0.1% as it was reported earlier.

The US Business Inventories increased in April by 0.6% m/m – this is the highest growth rate for over 6 months and this fact supports the expectations of economy growth recovery in the 2nd quarter.

The euro descended to the weekly low vs. the US dollar, but strengthened its positions according to the results of the day amid weakness of the American currency. Euro-Zone Industrial Production appeared to be better than expected and demonstrated the highest monthly gain for over 5 months. Industrial Production increased in April by 0.8% in relation to the previous month having twice exceeded the forecast.

The pound sterling continued its growth on Thursday after positive UK Labor Market released on Wednesday. Housing Market also supported the pound sterling. RISC House Price Balance increased in May to 57% from 55% in April against the expectations of decrease. The pound sterling spiked at the end of the day after Bank of England Governor Mark Carney announced that interest rates in the UK could rise sooner than investors expect. To choose the moment of rates increase correctly Bank of England will precisely watch the Labor Market, and increase of interest rates will be gradual and limited.

The Australian dollar strengthened its positions to 2-month high vs. the US dollar after the release of Australian Labor Market. Unemployment Rate had no changes in May (5.8%) against the expectations of growth to 5.9%. Employment Change suddenly reduced by 4,800 whereas growth by 10,000 was expected. However, the reduction of employed mainly fell on Part Time Employment Change which reduced in May by 27,000.Full Time Employment Change increased by 22,200. Chinese Monetary & Financial Statistics also had positive effect. New Loans increased in May to 871 billion of yuans from 775 billion in April against the expectation of decrease.

New Zealand dollar demonstrated the highest growth on Thursday and rose to monthly high vs. the American currency after RBNZ Meeting during which the Central Bank of New Zealand increased Official Cash Rate for the third time in a row this year. RBNZ Rate Statement pointed more inclination to policy tightening than it was expected. The Canadian dollar strengthened its positions amid Oil Prices growth to 9-month high. Increase of Oil Prices triggered concerns about possible break of supply amid escalation of conflict in Iraq.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 17/06/2014

The Pound Sterling Reached $1.70


On Monday the US dollar was traded downwards vs. most major currencies, having lost 0.12% to the dollar index before the two-day FOMC Meeting which starts on Tuesday. IMF downwardly revised the forecasts of the US GDP for the current year.

The forecasts of the US GDP growth for 2014 were revised downwards by 0.8% to 2%. International Monetary Fund refers to severe winter, Housing Market problems, and weak international demand. The forecast of the US economy growth for 2015 was left without changes at the level of 3%. IMF stated that the US interest rates should stay near zero level even after the middle of 2015. Last week World Bank also decreased the forecasts of the US GDP growth for the current year from 2.8% to 2.1%.

Meanwhile, released on Monday US data were not bad. Industrial production in May exceeded the expectations (+0.5%) and increased by 0.6% m/m, previous month data was revised upwards from -0.6% to -0.3%. Capacity Utilization Rate increased by 0.2% to 79.1% from upwardly revised 78.9%, whereas no changes were expected.

Empire State Manufacturing Activity continued its growth in June and reached the highest rate for over 4 years. Empire State Manufacturing Index increased in June to 19.28 p. in comparison with 19.01 p. in May, whereas decreased to 15 p. was expected.

Constructors’ Confidence at the US Housing Market increased in June for the first time for over half a year. NAHB Housing Market Index rocketed in June by 4 p. to 49 p. from the lowest year’s reading of 45 p. in May, having exceeded the expectations of growth to 47 p. Historically low interest rates and more favorable Housing Market situation improve sentiment of potential customers.

The euro was traded upwards amid Bundesbank Monthly Report in June. Bundesbank predicts considerable German economy growth in the 3rd quarter. Among reasons of economy expansion are explosive growth of construction sphere and favorable consumer climate. According to Bundesbank, German GDP will increase in 2014 by 1.9%, and in 2015 -by 2%.

On Monday the pound sterling refreshed the year’s high and rose higher than $1.7 for the first time since August 2009 before the U.K. inflation rate which will be released on Tuesday. A slight deceleration of annual inflation growth rate is expected in May to 1.7%in comparison with 1.8% in the previous month. BOE’s Charles Bean announced that decrease of interest rates would be a sign to suggest that economy resumes its normal course. Bean noted that he estimates British economy’s prospects in a more optimistic way.

The New Zealand dollar was traded upwards amid New Zealand Institute of Economic Research (NZIER) forecast about New Zealand economy growth acceleration this year. Westpac Consumer Sentiment decreased in the 2nd quarter by 0.5 p. to 121.2 p., but it is still around 9-year high which was reached in the previous quarter.

The Australian dollar had almost no changes according to the results of the day amid RBA Assistant Governor Christopher Kent’s comments – he announced that according to recent forecast of the Central Bank – Unemployment Rate will stay high during two years and Employment Rate growth will be gradual.

The Canadian dollar strengthened its positions amid growth of Canadian Existing Home Sales in May at maximum rate for over 4 years (+5.9% m/m). Foreign portfolio investment in Canadian securities in April appeared to be the highest for over a year. The yen increased amid increase of tension in Iraq and decrease of Japanese stock market.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 18/06/2014

Australian Dollar Dropped Amid RBA Meeting Minutes Release

On Tuesday 17 June the US dollar strengthened its positions vs. most major currencies, having added 0.22% to the dollar index before the release of results of FOMC Meeting on Wednesday. The euro dropped amid decrease of German Economic Sentiment to 1.5 year low. The pound sterling decreased amid weak U.K. inflation rate.

The US dollar strengthened its positions amid strong U.S. Consumer Price Index which accelerated its growth and grew in May with the highest pace for over 15 months. Consumer Price Index (CPI) increased in May by 0.4% m/m, having twice exceeded the expectations of growth. Inflation Annual Growth Rate composed 2.1% - this is the highest growth rate since October 2012. Core Consumer Price Index Ex Food and Energy increased by 0.3% m/m and by 2% y/y, having exceeded the expectations.

10-Years U.S. Treasury Yield which rose from 2.60% to 2.66% also promoted the U.S. dollar strengthening. At the same time Housing Market data appeared to be worse than expected. Building Permits dropped in May by 6.4% to 0.99 million of houses against the expectations of decrease by 0.4%. Housing Starts dropped last month by 6.5% to 1.00 million of houses, whereas decrease by 2% was predicted.

The pound sterling decreased after 4 days of growth amid weak U.K. inflation rate which decelerated more than it was expected. Consumer Price Index Annual growth rate decreased in May to 1.5% in comparison with 1.8% in April, whereas decrease only to 1.7% was expected. This is the lowest CPI growth rate since October 2009. Deceleration of CPI in May was due to Food and Transportation prices fall. Retail Price Index and Producer Price Index also appeared to be worse than expected.

The euro dropped amid decrease of German Economic Sentiment to 18-month lows. German ZEW Economic Sentiment continued to decrease in June for the 6th month in a row against the expectations of growth. The index decreased to 29.8 p. in comparison with 33.1 p. in May. Business Confidence decreased in recent months due to concerns about the Ukrainian crisis, developing markets, and Chinese economy deceleration.

At the same time, German Current Assessment continued its growth in June for the 7th month in a row, having strengthened its positions to 67.7 p. against 62.1 p. in April. June reading of the index is the highest for over almost 3 years since July 2011. Euro-Zone ZEW Economic Sentiment stopped in June its 4-month decrease and rose to 58.4 p. in comparison with 55.2 p. in May.

On Tuesday the largest decrease was demonstrated by the Australian dollar which dropped to 7-day low vs. the U.S. dollar after the release of the last RBA Meeting Minutes in which the Central Bank confirmed that interest rates will stay at record low for some period of time. RBA expects for the growth of GDP lower than the trend during the next year. AUD course is high according to historical standards especially in terms of decrease of commodity prices – it lends less support to economy rebalancing.

The New Zealand dollar was also corrected downwards on Tuesday after considerable growth of the previous week. Meanwhile, GDT Price Index increased during the Tuesday GlobalDairyTrade auction for the first time since early February. During this period of time the Index decreased by 25%. The Swiss franc dropped amid decrease of forecasts of country’s GDP by the Swiss Government for 2014 and 2015 due to possible export deceleration.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 19/06/2014

The U.S. Dollar Dropped Amid FOMC Meeting Results

The U.S. dollar dropped on Wednesday 18 June vs. most major currencies, having lost 0.27% to the dollar index after the announcement of FOMC Meeting results.

The U.S. dollar was traded downwards and dropped during the press-conference of Fed’s Chair Janet Yellen who seemed to disenchant the U.S. dollar buyers. Yellen did not set time limits of possible increased of rates. As it was expected FOMC reduced QE3 for the 5th time in a row by another $10 billion to $35 billion.

FOMC sharply reduced the forecasts of the US economy growth for the current year, having left it without changes for 2015-2016. FOMC reduced the forecasts of Unemployment Rate for the nearest years. Inflation Rate forecasts were left without changes. Most of Fed’s officials expect the first increase of rates in 2015. In comparison with March forecasts a more sharp increase of rates in 2015 and 2016 is expected.

During the Press-Conference Fed’s Chair Janet Yellen announced that FOMC intends to maintain near zero rates during long period of time after Bond-Buying ends. Increase of rates has no fixed time. Fed Balance will stay large for some period of time. FOMC will continue discussions about normalization policy tools at future Meetings, but it is not a signal of imminent action.

Released on Wednesday data in the USA also appeared not to be dollar’s favor. The U.S. Current Account deficit expanded more than it was expected ($97 billion), having increased in the 1st quarter by 27% to $111.2 billion in comparison with $87.3 billion in the 4th quarter. The deficit appeared to be the largest for over 6 quarters which was due to export fall and decline in earnings.

The pound sterling decreased after the release of the last Bank of England Meeting Minutes, but then it negated all the losses, having even increased. Meeting Minutes signaled about possible but hardly probable increase of rates this year. Monetary Policy Committee Members were surprised but low probability attached by investors to 2014 Rate Move.

Most MPC Members agreed to see more evidence of reduction in slack before rate rise – MPC Members saw spare capacity in range of 1% to 1.5% of GDP. Premature rate rise could lead to considerable costs in lost output. Uncertainty over impact reinforces case for raising Bank Rate gradually and cautiously.

The New Zealand dollar was traded upwards before the release of New Zealand GDP for the 1st quarter. New Zealand Current Account Proficit of the 1st quarter reached 1.41 billion NZD in comparison with the deficit of 1.51 billion in the previous quarter, having exceeded the expectations. New Zealand GDP increased in the 1st quarter by 1% q/q against the forecast of +1.2%.

The Canadian dollar strengthened its positions amid Canadian Wholesales Sales growth at the highest rate for over 9 months. Wholesales Sales increased in April by 1.2% m/m having twice exceeded the expectations. The yen increased amid Japanese Trade Balance the deficit of which expended in May less than it was expected – to 0.91 trillion JPY in comparison with 0.81 trillion in April, whereas deficit at the level of 1.17 trillion was expected. The export dropped by 2.7% y/y, whereas import reduced by 3.6% y/y.

By MasterForex Company