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 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

Risk-On & Retail Sales Sends AUDUSD to 4-Month Highs

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Risk-On & Retail Sales Sends AUDUSD to 4-Month HighsRisk-On & Retail Sales Sends AUDUSD to 4-Month Highs

Fundamental Forecast for the Australian Dollar: Neutral

  • Uneven GDP Points to Uncertainty Ahead for Australia’s Economy
  • Less dovish RBA and on balance better data flow helping AUD
  • Identify Critical Turning Points for the Australian Dollar with DailyFX SSI

The Australian Dollar peaked over the October 12th high on Friday. The risk-on sentiment as displayed by the SPX500 back near the 2,100 level and a Reserve Bank of Australian that isn’t looking to talk down the currency like they have in the past has provided a consistent bid under the Australian Dollar. Australia’s currency strengthened most aggressively against the Japanese Yen, Canadian Dollar and US Dollar last week finishing higher by 2% across the board. Not only was AUD benefitted from Economic data in the form of retail sales that came in slightly better than expected at 0.5%MoM vs. exp. 0.4% and GDP, but the pricing in a rate cut by the RBA over the next year has nearly disappeared. If the US Dollar remains on weaker through the month of December, a push toward 0.7500 looks increasingly probable with the fundamental and Intermarket wind in the Australian Dollar’s sails. read more