Tag Archives: markets

US Dollar Breaks a 12-Year High but is Momentum A Guarantee?

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US Dollar Breaks a 12-Year High but is Momentum A Guarantee?US Dollar Breaks a 12-Year High but is Momentum A Guarantee?

Fundamental Forecast for Dollar:Bullish

  • An NFP beat and 7-year low jobless rate doesn’t carry as much weight as the six-year high in wage growth
  • The market has quickly backtracked on its skepticism over a Fed hike, but risk trends will be the market’s keystone
  • See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot

Eight months of congestion have been brought to a dramatic end this past week as the US Dollar mounted an impressive rally in the aftermath of the October labor report. For the trader waiting patiently for progress, this may offer enough evidence to reestablish bullish positions waylaid earlier in the year when the record-breaking 10-month climb stalled. Those leaning on fundamentals can make the argument that a renewed run is warranted given the widening monetary policy gap between the Fed and its peers. However, traders should be mindful of a few inevitable contingencies: the rise of risk aversion and the inevitable limit of a disparate policy bearing. read more

Australian Dollar Rebound May Stall on FOMC Minutes, US CPI

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Australian Dollar Rebound May Stall on FOMC Minutes, US CPIAustralian Dollar Rebound May Stall on FOMC Minutes, US CPI

Fundamental Forecast for the Australian Dollar: Bearish

  • Aussie Dollar Soars as Upbeat Jobs Data Scuttles RBA Rate Cut Bets
  • FOMC Minutes, US CPI May Cap Aussie Gains on Policy Divergence
  • Find Key Turning Points for the Australian Dollar with DailyFX SSI

The Australian Dollar mounted a spirited recovery last week after an impressively strong set of employment figures crossed teh wires. The economy added a net 58.6k jobs in October, dwarfing economists’ forecasts calling for a 15k increase and producing the largest monthly increase in since March 2012. The jobless rate dropped to 5.9 percent, the lowest in 19 months. read more

Gold: Here’s What to Look for After this Historic Run

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Gold: Here’s What to Look for After this Historic RunGold: Here’s What to Look for After this Historic Run

Fundamental Forecast for Gold:Neutral

Gold prices fell for a fourth consecutive week with the precious metal down nearly 0.3% to trade at 1081 ahead of the New York close on Friday. The decline comes alongside a sharp sell-off in equity markets with the major indices off by more than 3.5% on the week. Despite declines in the greenback, bullion has remained under pressure as the Federal Reserve signals that it may be ready to hike the benchmark interest rate hike for the first time in nearly a decade. 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

GBP/USD Bounces Up to a Lower High Ahead of UK Inflation Data

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GBP/USD Bounces Up to a Lower High Ahead of UK Inflation DataGBP/USD Bounces Up to a Lower High Ahead of UK Inflation Data

Fundamental Forecast for British Pound:Bearish

Last week, my colleague David Song reiterated our Bearish forecast on the British Pound, citing the dovish tone taken by the Bank of England during Super Thursday and the fact that it looked as though the Sterling was going to continue getting hit by depressed rate expectations moving forward. As a matter of fact, one of the big takeaways from last week’s BoE announcement was that not only that the Bank of England wouldn’t likely be raising rates anytime soon, but that we may even be looking at an extension or increase in QE. The prevailing thought being that the Chief Economist of the Bank of England and voting member on the Monetary Policy Committee (MPC) Andrew Haldane may eventually bring on a three-way-vote. After numerous 8-1 splits on the MPC, with Ian McCafferty being the sole dissenter voting for a rate hike; many started to think that Mr. Haldane may also dissent, but voting for looser monetary policy to split the vote even further 7-1-1. 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

Australian Dollar Faces Perfect Storm of Key Event Risk Ahead

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Australian Dollar Faces Perfect Storm of Key Event Risk AheadAustralian Dollar Faces Perfect Storm of Key Event Risk Ahead

Fundamental Forecast for the Australian Dollar: Neutral

  • RBA Rate Decision, 3Q GDP Data Unlikely to Disrupt Existing Policy Bets
  • ECB Meeting, Yellen Testimony and US Jobs Data Cloud Risk Trends View
  • Identify Critical Turning Points for the Australian Dollar with DailyFX SSI

The Australian Dollar faces a perfect storm of volatility in the week ahead as high-profile event risk on the homegrown and the external fronts looms ahead. Monetary policy considerations are first to take center stage, only to be replaced by churn in risk sentiment trends. read more

How Much Air is Left in Gold Prices?

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How Much Air is Left in Gold Prices?How Much Air is Left in Gold Prices?

Fundamental Forecast for Gold: Neutral

The past six weeks have been brutal for Gold, and this was really sparked by rate hike expectations out of the Federal Reserve, as the top in Gold meshes well with the bottom in the US Dollar (both taking place on October 15th). But over the past six weeks, Gold is down by 11% and the dollar is only up by 8%; so this isn’t’ the only factor bringing pain to Gold prices. Numerous technical levels have given way, and Gold prices are sitting at six-year lows with very little support anywhere nearby. read more