Tag: financial

China Eases Lending Standards to Boost Housing – Will it Work?

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This daily digest focuses on market sentiment, new developments in China’s foreign exchange policy, changes in financial market regulations and Chinese-language economic coverage in order to keep DailyFX readers up-to-date on news typically covered only in Chinese-language sources. read more

US Dollar to Tap Fed Speakers, NFPs For Another Run at 12 Year High

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US Dollar to Tap Fed Speakers, NFPs For Another Run at 12 Year HighUS Dollar to Tap Fed Speakers, NFPs For Another Run at 12 Year High

Fundamental Forecast for Dollar:Neutral

  • Following a clear ambiguity over a December Fed hike, a range of central bankers are set to speak – including Janet Yellen
  • October NFPs will represent top event risk, but payrolls and unemployment aren’t as important as the wage component
  • Find help with your trades and trading strategy from DailyFX analysts with DailyFX on Demand

The Dollar was once again offered the opportunity to make a run on 2015’s highs and move on to levels not seen since 2003. And once more it would fall short of the task. Thefundamental winds to the currency’s back are strong, but they are also well-encorporated. The relative fundamental appeal of the Greenback has carried EURUSD to 1.05, USDJPY to 126 and USDCNH to 6.60. An extension of this already-impressive run would require a serious escalation in conviction. But, what short of a realized Fed hike or financial plunge forcing investors to scramble for safety could measure up to the technical implications of a breakaway climb into 12-year highs? There is plenty on tap this week which will give it a go, but questions of scale will constantly plague bulls’ confidence. read more

Fonterra Milk Auction To Put Spotlight on RBNZ’s Next Move

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Fonterra Milk Auction To Put Spotlight on RBNZ’s Next MoveFonterra Milk Auction To Put Spotlight on RBNZ’s Next Move

Fundamental Forecast for the Kiwi:Bearish

  • New Zealand Dollar Ends The Week Nearly Flat Against a Mixed USD
  • Speculative Longs Outweigh Shorts By 20% Vs Previous 18% Showing Speculative Positioning Is Still Convincingly Long-Kiwi, Increasing the Risk if USD Moves Higher in Near-Future
  • For up-to-date and real-time analysis on the Kiwi and market reactions to economic factors currently ‘in the air,’DailyFX on Demandcan help.

Halfway through the month of November, the New Zealand Dollar has retraced much of its October gains. In fact, across the G10, NZD is lower vs. the USD than even the Oil-driven Canadian Dollar and Norwegian Krone. Month-to-date, the New Zealand Dollar is lower by 3.70%. However, the Australian Dollar is the most resilient vs. the USD due to a mid-week AU employment report that moved AU rates substantially. That type of divergence rarely lasts meaning either the NZD will soon strengthen or the AUD weaken vs. the USD. Many investment bank research notes favor the later as a likely December Federal Reserve liftoff looms. read more

British Pound Shows Signs of Life – Next Week Could be Big

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British Pound Shows Signs of Life – Next Week Could be BigBritish Pound Shows Signs of Life – Next Week Could be Big

Fundamental Forecast for British Pound: Bullish

A volatile week of FX trading pushed the British Pound to fresh six-month lows versus the US Dollar, but a late reversal suggests that the GBP/USD ‘Pounding’ may soon come to an end. We’ll look to a busy UK economic calendar to drive near-term moves in the Sterling. read more

US Rate Speculation Versus a Tumultuous World of Fundamentals

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US Rate Speculation Versus a Tumultuous World of FundamentalsUS Rate Speculation Versus a Tumultuous World of Fundamentals

Fundamental Forecast for Dollar: Bullish

  • A slew of Fed speeches and November NFPs will pilot rate expectations that already see a 78% chance of a Dec hike
  • The greater fundamentals winds may come from the Dollar’s peers amid a round of rate decisions and SDR status checks
  • See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot

The week ahead is the antithesis of what we have come to expect from December. Seasonal studies say the month is historically a quiet one with a quiet build in risk appetite. Instead, we are heading into the first wave of a significant fundamental assault that will test already flimsy speculative forecasts while running a high risk of volatility. The question immediately on most FX traders’ minds is whether the standings of monetary policy biases shaped over the past few months will hold their course. Yet, participants of all markets should be more concerned over the implications of volatility against thin volume and a leveraged speculative exposure. These are circumstances ripe for liquidity problems and a dramatic shift in both market direction and pace. read more

US Dollar Wobbles But Fed Speculation and Liquidity Keep a Bid

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US Dollar Wobbles But Fed Speculation and Liquidity Keep a BidUS Dollar Wobbles But Fed Speculation and Liquidity Keep a Bid

Fundamental Forecast for Dollar: Bullish

  • The probability of a December 16 FOMC rate hike according to Fed Funds futures Friday is 74 percent
  • Monetary policy is a steady fundamental current, but the true engine for the Dollar may prove liquidity and volatility
  • See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot

The US Dollar this past week thwarted what could have been a nasty reversal that changed the balance of sentiment. Having already stretched to 12-year highs, a number of surveys mark long-Dollar as one of the most oversaturated trades in the market. Yet, the market is there for a reason…for good reason. Whether we are looking forward to steady markets where the glint of yield attracts investors or liquidity-levered volatility that sends a current of fear through the system, the Greenback will be a favored vehicle for investors. The key variable is one of intensity, and that will be put to the test with the holiday trading conditions. read more

British Pound Looks like a Buy, but Watch Huge Risk on Fed Decision

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British Pound Looks like a Buy, but Watch Huge Risk on Fed DecisionBritish Pound Looks like a Buy, but Watch Huge Risk on Fed Decision

Fundamental Forecast for British Pound: Bullish

Another big week for the British Pound left the GBP/USD exchange rate at fresh monthly highs, but an even-bigger week ahead warns of major volatility for all US Dollar FX counterparts. read more

Will the Chinese Yuan Stop Falling in the Week Ahead?

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Chinese Yuan CNY

NZD/USD NY Spot Close 6.53139

Will the Chinese Yuan Stop Falling in the Week Ahead?

Fundamental Forecast for the Yuan:Neutral to Bearish

In the past week, the Chinese yuan offshore exchange rate against the US Dollar has had little upside action, despite the US Dollar seeing higher volatility while breaking major technical support levels against other currencies. Mainly, this is because the offshore yuan exchange rate is still highly influenced by the onshore yuan rate, which is set to a peg versus the greenback, and is only allowed to float within +/-2% range. Once the People’s Bank of China, the Chinese central bank equivalent of the Federal Reserve, announced a new RMB weighting against a basket of currencies, only then did the USD/CNH rate find upward movement. read more

ECB Post-Mortem: Higher in ST before Lower in MT for EUR/USD

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ECB Post-Mortem: Higher in ST before Lower in MT for EUR/USD

Fundamental Forecast for EUR/USD:Neutral

Our pre-meeting concerns about EUR/USD short covering proved well-founded on Thursday. read more

US Dollar Fundamentally Moored Until Fed or Fear Decides Its Fate

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US Dollar Fundamentally Moored Until Fed or Fear Decides Its FateUS Dollar Fundamentally Moored Until Fed or Fear Decides Its Fate

Fundamental Forecast for Dollar: Bullish

  • November NFPs haven’t steered the Fed off course for a rate hike before year end though the ECB reaction alters the view
  • Anticipation for the December 16 FOMC meeting will curb trend development but not dampen volatility
  • See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot

A lot has changed for the Dollar this past week. Technically speaking, the Greenback has tumbled from its 12-year highs and now finds itself in a comfortable range. Proximity to critical highs or lows creates tension and can subsequently spur speculative runs for trend development. Fundamentally, the ECB decision and NFPs have wrung some tension from positioning. And, while the week ahead carries more than its fair share of important event risk, the systemically important catalysts are further out on the horizon. These circumstances will shape trading conditions for the Dollar and the broader financial markets. Anxiety will support volatility, but fostering trends will be far more difficult. Active traders should adapt to the environment while investors (longer term) should mark the change in tempo for the currency’s monetary policy advantage post-ECB and pre-FOMC. read more