Kenny Fisher

Kenny Fisher

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.

Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

Kenny Fisher Kenny Fisher 22.05.2023 14:53
BoJ Core CPI expected to ease USD/JPY steadies after extended slide In Monday’s European session, USD/JPY is steady, trading at 137.90. The yen gained 0.53% on Friday, after a nasty slide last week in which it fell 440 points and hit a six-month low. BoJ Core CPI expected to inch lower Inflation has become a hot topic for Japanese policy makers, which marks a sea-change after years of deflation. Japan is dealing with inflation of around 3%, which is much lower than in other major economies but nevertheless higher than the Bank of Japan’s 2% target. The new inflationary era has forced central banks to raise interest rates, but the BoJ remains an outlier as it has continued its ultra-loose monetary policy. Still, it appears that change is coming. There is a new sheriff in town, with Kazuo Ueda now at the helm of the BoJ. Ueda has said he would tighten policy if inflation remains sustainable at 2%, which makes every inflation reading a potential market-mover. Last week, core CPI rose to 3.4% in April, up from 3.1% a month earlier. The rise in inflation, together with a stronger-than-expected GDP report for the first quarter, has fuelled speculation that the BoJ could tighten policy in the near future. Read next: UK Gfk Consumer Confidence index got better fourth month in a row| FXMAG.COM The markets will be closely watching BoJ Core CPI, the BoJ’s preferred inflation gauge, which will be released early on Tuesday. The estimate for March stands at 2.8%, a drop lower than the 2.9% reading in February. We’re unlikely to see interest rates rise anytime soon, but Ueda has hinted at phasing out the Bank’s yield curve control (YCC) policy. Such a move would likely send the yen sharply higher, and unsurprisingly, the possibility that the BoJ will tighten policy has attracted the attention of speculators, who are betting on a shift in policy that will boost the yen. USD/JPY Technical In the Asian session, USD/JPY put strong pressure on support at 137.45. Below, there is support at 1.3615 There is resistance at 138.37 and 139.25 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. Japanese yen drifting ahead of BOJ Core CPI - MarketPulseMarketPulse
UK Gfk Consumer Confidence index got better fourth month in a row

UK Gfk Consumer Confidence index got better fourth month in a row

Kenny Fisher Kenny Fisher 19.05.2023 16:14
UK Consumer Confidence hits 15-month high BoE’s Bailey warns of wage-price spiral The British pound has pushed higher on Friday. GBP/USD is trading at 1.2449 in North America, up 0.32% on the day. The week is wrapping up on a positive note, as UK GfK Consumer Confidence index improved for a fourth straight month. That’s not to say that the UK consumer is in a cheery mood. The index improved from -30 to -27 and has been stuck in negative territory since 2016. Still, there has been steady movement upward in recent months and today’s reading marked a 15-month high. Energy prices have come down and consumers are feeling better about their personal finances. An improvement in consumer confidence often translates into stronger consumer spending, which would be good news for the UK economy. BoE Bailey’s warns of wage-price spiral  Bank of England Governor Bailey warned the markets this week that rate hikes were on the table and he would tighten policy if inflation remained persistent. The central bank has been unable to curb inflation, which remains in double-digits, despite an aggressive rate-tightening campaign which has raised the cash rate to 4.50%. The BoE has been content with small hikes of 25 basis points and has insisted that inflation will fall rapidly, but there is pressure on the Bank to deliver larger hikes in order to curb red-hot inflation. Bailey acknowledged this week that the UK was in the midst of a wage-price spiral, which will make the battle against inflation that much more difficult. Public sector employees continue to strike, in an effort to secure higher wages in response to the cost-of-living crisis. The government will likely have to cough up more money for the workers, which will lead to higher inflation. The US debt ceiling crisis is weighing on the financial markets, but it seems likely that lawmakers will reach an 11th-hour agreement. Lawmakers don’t want to be blamed for the US defaulting on its debt for the first time ever, and Republican House Speaker McCarthy says there could be a vote on a debt ceiling agreement next week. GBP/USD Technical There is support at 1.2366 and 1.2289 1.2474 and 1.2604 are the next resistance levels Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. British pound rises as consumer confidence improves - MarketPulseMarketPulse
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Kenny Fisher Kenny Fisher 19.05.2023 14:42
Canadian retail sales expected to decline Fed Chair and two FOMC members will speak later The Canadian dollar is trading quietly ahead of a key retail sales report later today. USD/CAD is trading in Europe at 1.3484, down 0.13%. Markets brace for soft Canadian retail sales The Canadian consumer is holding tightly to their wallet, which is not all that surprising in the current economic climate. Inflation ticked higher in April, rising from 4.3% to 4.4%. Add in high interest rates and it’s not hard to sympathize with consumers who are struggling with the cost of living. The April retail sales report may show that things are getting worse – headline retail sales is expected to slow to -1.4%, down from -0.2% in March, and the core rate is expected to fall from -0.7% to -0.8%. Not exactly a winning recipe for economic growth. A decline in today’s report could unnerve investors and send the Canadian dollar lower. The Bank of Canada will not be pleased with the slight increase in inflation, although the core rate, which is a more reliable gauge of inflation trends, did move lower. The BoC meets next on June 7th and there is only one more tier-1 release before the meeting, that being GDP. If retail sales contracts for a second straight month as expected, there will be more support for the BoC to continue to hold rates at 4.50%, where they have been pegged since March. Read next: Kenny Fisher talks British pound against US dollar. UK economy declined 0.3% in March, Bank of England chose the 25bp variant| FXMAG.COM It’s a bare economic calendar in the US today, with no data releases. The markets will have a chance to focus on Fedspeak, with Jerome Powell and two FOMC members delivering public remarks. Just a few weeks ago, the markets had priced in a pause at the June meeting at over 90%. That has changed to a 66% chance of a pause and a 33% chance of a hike of 25 basis points, according to CME’s FedWatch. That downward revision is due to a consistently hawkish message from the Fed and a solid US economy. USD/CAD Technical USD/CAD is testing support at 1.3479. Below, there is support at 1.3394 1.3644 and 1.3729 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CAD - Will retail sales weigh on the Canadian dollar? - MarketPulseMarketPulse
Kenny Fisher talks British pound against US dollar. UK economy declined 0.3% in March, Bank of England chose the 25bp variant

Kenny Fisher talks British pound against US dollar. UK economy declined 0.3% in March, Bank of England chose the 25bp variant

Kenny Fisher Kenny Fisher 12.05.2023 14:29
UK GDP remains steady at 1% in Q4 BoE raises rates by 25 bp BoE revises upwards its growth, inflation forecasts UoM consumer sentiment expected to slow GBP/USD is trading at 1.2517 in Europe, almost unchanged. In the UK, GDP declined by 0.3% in March m/m, below the 0.1% estimate and the February reading of 0.0%. Still, the economy managed to gain 0.1% in the first quarter, unchanged from Q4 2022 and matching the estimate. BoE raises rates by 25 bp, revises inflation, GDP forecasts There was no surprise as the Bank of England raised rates by 25 basis points, bringing the cash rate to 4.50%, its highest since 2008. This marked the twelfth consecutive hike in the current rate-tightening cycle, underscoring the BoE’s pledge to curb hot inflation. Governor Bailey said after the rate announcement that Bank would “stay the course to make sure that inflation falls all the way back to the 2% target”. Nobody is expecting that the road to 2% will be easy, with inflation currently in double digits. The BoE remains optimistic that inflation will fall rapidly during the year and will fall to 5% by the end of the year. In February, the BOE predicted 4% inflation by the end of the year. This seems like a tall order but is certainly possible if the rate hikes make themselves felt and cool the economy. Read next: New Zealand dollar against US dollar decreased by 1.07% yesterday| FXMAG.COM There have been constant concerns that the BoE’s aggressive rate policy would lead to a recession, and six months ago, the BoE had projected a recession. Bailey reversed course yesterday, saying that the drop in energy prices and stronger economic growth meant that GDP would expand by a weak 0.25% in 2023, versus the 0.5% contraction in the previous forecast. In the US, the economy is showing signs of cooling and high interest rates are expected to dampen the robust labour market. Unemployment claims surprised on the upside on Thursday, rising from 245,000 to 264,000, well above the estimate of 242,000. This is just one weekly report, but it’s sure to raise speculation that the labour market is showing cracks. The US wraps up the week with UoM Consumer Confidence, which is pointing to a rather sour US consumer. The indicator fell to 63.5 in April and is expected to ease to 63.0 in May. Weak consumer confidence can translate into a decrease in consumer spending, a key driver of economic growth. GBP/USD Technical GBP/USD is putting pressure on support at 1.2495. The next support level is 1.2366 1.2573 and 1.2676 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. GBP/USD flat as UK GDP a mixed bag - MarketPulseMarketPulse
New Zealand dollar against US dollar decreased by 1.07% yesterday

New Zealand dollar against US dollar decreased by 1.07% yesterday

Kenny Fisher Kenny Fisher 12.05.2023 14:23
New Zealand Inflation Expectations falls to 2.79% US unemployment claims rise UoM consumer sentiment to be released later today The New Zealand dollar is getting pummelled by the US dollar and is trading at 0.6240, down 0.93% on the day. This follows a drop of 1.07% on Thursday. New Zealand inflation expectations decline The week is ending on a high note for policy makers at the Reserve Bank of New Zealand. Inflation Expectations for the first quarter eased to 2.79%, down from 3.30% in Q4 of 2022. This marked a second straight deceleration and the first time inflation expectations have fallen below 3% in six months. The soft reading has pushed the New Zealand dollar sharply lower on expectations that the RBNZ might ease up on its rate hikes. Central banks are constantly on the alert for inflation expectations becoming entrenched, which can generate inflation and complicate the battle to curb inflation. The RBNZ has been aggressive in its rate-hike cycle, raising the benchmark cash rate to 5.25%. At the April meeting, the RBNZ hiked by 50 basis points and the downturn in inflation expectations will provide support for the Bank to ease its pace of rate hikes at the May 24th meeting to 25 bp, depending on the data. Read next: Kenny Fisher from Oanda talks US dollar against Canadian dollar - May 5th| FXMAG.COM The US economy has been showing signs of cooling, and the markets are widely expecting the Fed to pause in June, after ten straight hikes. The labour market has been surprisingly resilient, despite the Fed’s aggressive tightening. Unemployment claims surprised on the upside on Thursday, rising from 245,000 to 264,000, well above the estimate of 242,000. This is just one weekly report, but it’s sure to raise speculation that the labour market is showing cracks. The US wraps up the week with UoM Consumer Confidence, which hasn’t looked very strong. The indicator fell to 63.5 in April and is expected to ease to 63.0 in May. Weak consumer confidence can translate into a decrease in consumer spending, a key driver of economic growth. NZD/USD Technical NZD/USD is testing support at 0.6257. The next support level is 0.6199 There is resistance at 0.6352 and 0.6482 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. NZ dollar slide continues as inflation expectations ease - MarketPulseMarketPulse
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Reserve Bank of New Zealand to keep a close eye on inflation expectations release tomorrow

Kenny Fisher Kenny Fisher 11.05.2023 16:11
New Zealand releases inflation expectations Markets react positively to US inflation report NZD/USD is trading at 0.6342, down 0.38% on the day. New Zealand Inflation Expectations The Reserve Bank of New Zealand will be keeping a close eye on inflation expectations release early on Friday. Inflation expectations eased to 3.3% in Q1, down from 3.62% and the central bank will be hoping that the downswing continues. The RBNZ hiked by 50-basis points in April to 5.25% and meets next on May 24th. The inflation expectations report will be the final inflation release prior to the meeting and could move the dial of the New Zealand dollar. A hot report will increase the chances of a rate hike at the next meeting, while a weak report will point to inflation falling and ease pressure on the RBNZ to raise rates. US inflation report unlikely to sway Fed US inflation in April dropped a notch, but the disinflation process appears to have stalled. Headline inflation ticked down to 4.9%, down from 5.0% in March. It was the same story with the core rate, which dropped from 5.6% to 5.5%. NZD/USD rose 0.40% and hit a 3-month high after the release, as investors focussed on a decline in CPI Core Services Ex-Housing. Read next: Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little| FXMAG.COM I don’t expect this inflation release to sway the Fed’s rate policy, which is to keep rates elevated until inflation falls closer to the 2% target. Fed Chair Powell has hinted at a rate pause in June, and this has been widely priced in by the markets. The big question is what happens later in the year. Powell has insisted that rate cuts are not on the table, but the markets disagree and have priced in a 70% chance of a rate cut in September, according to the CME Group. A lot can happen before September, and if inflation falls more rapidly in the coming months, we may see the Fed rethink trimming rates, which would provide much-needed relief to consumers and businesses. NZD/USD Technical NZD/USD is testing support at 0.6352. The next support level is 0.6257 There is resistance at 0.6482 and 0.6592   Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. NZD/USD lower ahead of inflation expectations - MarketPulseMarketPulse
Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little

Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little

Kenny Fisher Kenny Fisher 11.05.2023 13:04
BoE likely to raise rates by 25 bp US to release PPI and unemployment claims later today GBP/USD is trading at 1.2587 in Europe, down 0.30% on the day. BoE expected to raise rates by 25 bp The Bank of England is expected to raise rates today for a 12th consecutive time, with a 25-basis point hike. This would bring the benchmark cash rate to 4.50%. The BoE can’t be faulted for not being aggressive, but it failed to react to rising inflation fast enough and has found itself playing catch-up with inflation. In March, CPI dipped but remained in double digits, at 10.1%. This has led to a severe cost-of-living crisis and the BoE has little choice but to continue raising rates until it is clear that inflation is on a downswing. The BoE remains optimistic and projected in February that inflation would fall to 3% within 12 months. This may be a bit of a stretch but I expect inflation to fall more quickly as the rate hikes make themselves felt and cool economic activity. The rate hike itself is unlikely to move the dial on the pound, but Bank statement and updated economic forecasts, especially with regard to inflation, could result in a market reaction. US inflation dips lower The US inflation report for April showed a small drop, with headline CPI falling from 5.0% to 4.9%. Still, the financial markets were pleased and the US dollar lost ground. Investors appeared to focus on one particular indicator that declined (CPI Core Services Ex-Housing) while ignoring that Core CPI was almost unchanged at 5.5%. Read next: Kenny Fisher from Oanda talks US dollar against Canadian dollar - May 5th| FXMAG.COM The markets are widely expecting a pause in June, with a 91% probability, according to the CME Group. With the core rate remaining sticky, I am doubtful that the Fed is considering any rate cuts at this stage, although the markets have mostly priced in a cut in September. GBP/USD Technical GBP/USD tested support at 1.2573 earlier in the day. The next support level is 1.2475 1.2676 and 1.2789 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. GBP/USD edges lower ahead of BoE meeting - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

USD/CAD - Canadian economy added 41,400 jobs beating expectations

Kenny Fisher Kenny Fisher 08.05.2023 14:24
Canada add 41K new jobs US nonfarm payrolls jump to 253K Canadian dollar surges by 1.2% The Canadian dollar has extended its gains on Monday. USD/CAD is currently trading at 1.3339, down 0.26%. Canada’s job market stays hot Canada’s labour market defied expectations in April, as the economy added 41,400 jobs, above the March gain of 34,700 and the consensus estimate of 20,000. The unemployment rate remained at 5.0%, below the forecast of 5.1%. Wage growth remained unchanged at 5.2%. The employment report was surprisingly strong given that there are signs of the economy weakening, with GDP for March expected at -0.1%. The BoC is keeping a watchful eye on inflation, which has fallen to 4.3% but is still more than double the BoC’s target. The central bank would like to continue pausing, but a rate cut is unlikely so long as wage pressures remain high. In the US, nonfarm payrolls for April surprised on the upside, rising to 253,000. This follows a March gain of 165,00, revised down from 236,000, and well above the consensus estimate of 179,000. Wage growth ticked up to 4.4%, above the upwardly revised 4.2% gain in March and above the estimate of 4.2%. Unemployment fell to 3.4%, down from the March reading of 3.4% which was also the estimate. Read next: Kenny Fisher from Oanda talks US dollar against Canadian dollar - May 5th| FXMAG.COM Somewhat surprisingly, the better-than-expected jobs data did not boost the US dollar, and the Canadian dollar jumped 1.2%, its best one-day showing since January. The markets have repriced a pause in July at 90%, down from 99% just before the employment release on Friday. Fed Chair Powell said last week that rate cuts were not on the table, but the markets have priced in a cut in rates in the fourth quarter. USD/CAD Technical USD/CAD is testing support at 1.3345. Below, there is support at 1.3284 1.3462 and 1.3553 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. Canadian dollar powers to 5-week high on strong job numbers - MarketPulseMarketPulse
Rates Spark: Balancing data and risk factors

Euro against US dollar lost 0.55% on Thursday despite Christine Lagarde's hawkish message

Kenny Fisher Kenny Fisher 05.05.2023 15:36
Eurozone, German data disappoint ECB raises rates by 25 bp US nonfarm payrolls expected to decline EUR/USD is drifting on Friday. In the European session, EUR/USD is trading at 1.1028, up 0.13% on the day. Today’s eurozone and German data were a disappointment. Eurozone retail sales for April declined 1.2% m/m, following a downwardly revised -0.2% in March and below the consensus of 0.0%. German Factory Orders for March plunged 10.7% m/m, versus a downwardly revised 4.5% in February and a consensus of -2.2%. The weak numbers were a reminder of weakness in the German and eurozone economies, but the euro shrugged off the data. Investors are preoccupied with digesting the ECB’s modest rate hike of 25 basis points and are waiting for the US nonfarm payrolls release later today. ECB raises rates, keeps door open to further increases The ECB mimicked the Federal Reserve and raised rates by 25 bp on Thursday. This marked a seventh straight rate increase from the ECB, but it was the smallest hike in the current tightening cycle. The ECB is trying to chart a rate path amidst weak growth and stubbornly high inflation and had to choose between hikes of 25 or 50 basis points. In the end, the central bank opted for the smaller increase, but ECB President Lagarde had a clear message that the Bank was not pausing and rates were not yet “sufficiently restrictive” to bring inflation down to the 2% target. EUR/USD fell by 0.55% on Thursday despite Lagarde’s hawkish message, possibly on disappointment that the rate hike was not 50 basis points. Inflation has been moving lower but upside risks remain, and that means that there is a good chance that the ECB will raise rates at least once or twice more. The markets have priced in a terminal rate of 3.65%, indicating that one more 25-bp hike is fully priced in but a second hike is less certain. Read next: Kenny Fisher from Oanda talks US dollar against Canadian dollar - May 5th| FXMAG.COM The US wraps up the week with nonfarm payrolls for April. The estimate stands at just 179,000, following 236,000 in March. The strong labour market, which has withstood the Fed’s tightening remarkably well, appears to be showing cracks. Unemployment claims jumped to 242,000 last week, up from a downwardly revised 229,000 and above the consensus of 240,000. Business optimism remains weak and that could translate into less hiring. If NFP falls to 180,000 or lower, the US dollar could lose ground on expectations that the Fed will ease its rate policy. EUR/USD Technical EUR/USD is testing resistance at 1.1022. The next resistance line is 1.1146 1.0956 and 1.0839 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. EUR/USD -Euro shrugs off weak eurozone, German data - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Kenny Fisher from Oanda talks US dollar against Canadian dollar - May 5th

Kenny Fisher Kenny Fisher 05.05.2023 15:05
Canada’s employment change expected to slow US nonfarm payrolls projected to fall to 179,000 Canadian dollar rallies for third straight day The Canadian dollar continues to rally today and has climbed 120 points since Tuesday. Earlier in the day, USD/CAD touched a low of 1.3490, its lowest level since April 21st. Canadian employment change expected to ease The markets will be treated to key employment numbers on both sides of the border later today. Canada is expected to have added 20,000 new jobs in April, following 34,700 in March. This would be the lowest reading in four months and would be a clear sign that the labour market is weakening as interest rate hikes make their effect felt on the economy. In the US, nonfarm payrolls for April could move the dial on the US dollar ahead of the weekend. The markets are braced for a drop to 179,000, following 236,000 in March. There is a growing feeling that the labour market, which is been surprisingly resilient to relentless rate hikes, is showing cracks. Unemployment claims jumped to 242,000, up from a downwardly revised 229,000 and above the consensus of 240,000. Business optimism remains weak and that could translate into less hiring. If nonfarm payrolls fall to 180,000 or less, I would expect to see the US dollar lose ground, on expectations that the Fed may ease policy. The Fed’s rate hike of 25 basis points this week may have been the end of the current rate-hike cycle, in which the Fed has raised rates 10 consecutive times. Fed Chair Powell hinted that the Fed could pause rates as soon as June, although he reminded his listeners that the battle against inflation was far from over and didn’t close the door on further hikes. The markets are betting on a pause in June, with a probability of 99%, according to the CME Group. Read next: China: Caixin Services PMI decreased after four consecutive months of increase| FXMAG.COM Powell said that given the inflation outlook, rate cuts were not on the table. The markets don’t buy it and have priced in a rate cut at around 50% in July and a whopping 88% in September, according to the CME Group. USD/CAD Technical USD/CAD tested support at 1.3492 earlier. Next, there is support at 1.3435 1.3580 and 1.3637 are the next resistance lines   Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CAD extends slide ahead of job reports - MarketPulseMarketPulse
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

Kenny Fisher Kenny Fisher 28.04.2023 16:20
Bank of Japan maintains monetary policy BoJ removes forward guidance and announces policy review Tokyo Core CPI rises higher than expected USD/JPY soars USD/JPY has jumped 1.3% today and is trading at 135.74. Earlier, the yen touched a low of 135.86, its lowest level since March 10th. BoJ holds policy but changes guidance Today’s Bank of Japan meeting was closely watched, as New Governor Ueda chaired his first meeting. As expected, there were no dramatic announcements about a shift in policy, but the yen still dropped sharply, as those investors that had hoped for a hint of monetary tightening in the short term were disappointed. The BoJ announced that key policy settings will stay the same. Interest rates will remain at -0.10% and the yield curve control (YOC) scheme on 10-year government bonds will maintain a band of 0.50% on either side of the 0% target. There was no surprise here, as Ueda has stated on numerous occasions and again this week that he would not change these policy settings. At the same time, the central bank modified its future guidance, removing its pledge to maintain rates at “current or lower levels”. The BoJ said it would “patiently continue with monetary easing” while saying it would conduct a broad review of monetary policy, which it expects to take one to one-and-half years. The takeaway from the BoJ meeting is that the markets can expect more of the same in the short term, but there is the possibility of a shift in policy down the road. Ueda stated earlier in the week that if inflation and wage growth were to accelerate faster than expected, he would consider the possibility of tightening policy.  Ueda does not seem as glued to current policy as his predecessor Kuroda, but the new Governor is unlikely to make any moves absent a major change in economic conditions. Read next: Cryptocurrency payments are steadily increasing, particularly as the DeFi market rebounds from the ‘crypto winter’| FXMAG.COM Ahead of the BoJ meeting there was an interesting note from Barclays which said that the yen could regain its status as a safe-haven currency, which has been taken over by the US dollar. Barclays said that if the BoJ normalizes policy and central banks cut rates due to a weak global economy, rate differentials would tighten and the yen would move higher. Barclays is projecting that the yen will rise to 123 by the end of next year, and the stronger currency could re-establish itself as a safe haven. Overshadowed by the BoJ meeting, Tokyo Core CPI rose in April, an indication that high inflation is alive and well. The indicator rose from 3.2% to 3.5%, above the market consensus of 3.2%. USD/JPY Technical USD/JPY tested resistance at 1.3585 earlier today. The next resistance line is 1.3657 134.99 and 1.3427 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/JPY surges after BoJ maintains policy, inflation rises - MarketPulseMarketPulse
Australian dollar was boosted by record low Australian unemployment rates, historical local budget surplus and a surprising resumption of cash rate

Reserve Bank of Australia may take a pause at the next meeting on May 2nd

Kenny Fisher Kenny Fisher 27.04.2023 15:55
AUD/USD is trading at 0.6606, down 0.31%. Earlier, AUD/USD fell to a low of 0.6595, its lowest level since March 15th. Australian inflation heads south Australia’s inflation levels have been falling and the downward trend continued in the first quarter. The headline figure slowed to 7.0%, down from 7.8% in Q4 and a notch above the market consensus of 6.9%. On a quarterly basis, headline CPI from 1.9% to 1.3%, versus the market consensus of 1.4%. The monthly CPI for March fell from 6.8% to 6.1%, below the estimate of 6.6%. Core CPI, which is considered a more reliable gauge of inflation trends, headed lower and beat the estimates, falling from 6.9% to 6.6% y/y (7.2% est.). On a quarterly basis, core CPI dropped to 1.2%, down from 1.7% and below the estimate of 1.4%. The key takeaway from these positive numbers is that they appear to have cemented another rate pause at the May 2nd meeting. The odds of a pause have risen from 83% prior to the inflation report to 100% at present. It looks safe to say that inflation has peaked, although the cautious RBA is unlikely to use the “P” word just yet. At the same time, it is premature to declare victory in the inflation battle, with headline inflation and the core rate running more than three times the RBA’s target band of 2-3%. Despite the market’s confidence in another pause, some economists feel that the RBA remains concerned that the high core rate could fuel a price wage spiral if it doesn’t tighten further. Read next: USD/JPY: BoJ meeting starts today, but the bank is expected to keep rates unchanged| FXMAG.COM First Republic’s shares sink AUD/USD is also under pressure as the banking crisis is back in the headlines. First Republic Bank shares fell by 50% after the Bank’s earnings report showed that deposits plunged by 40% in the first quarter. Risk sentiment has fallen as First Republic’s future very survival is at stake, and if banking jitters worsen, the US dollar could continue to climb higher. AUD/USD Technical AUD/USD tested resistance at 0.6620 earlier today. The next resistance line is 0.6714 0.6572 and 0.6459 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD stems the bleeding - MarketPulseMarketPulse
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

USD/JPY: BoJ meeting starts today, but the bank is expected to keep rates unchanged

Kenny Fisher Kenny Fisher 27.04.2023 15:43
Tokyo Core CPI expected to remain unchanged at 3.2% US to release unemployment claims and GDP BoJ’s 2-day meeting begins today USD/JPY is trading quietly at 133.84, up 0.13% on the day. The yen’s lack of movement could change today with a host of key releases. Japan will release Tokyo Core CPI, while the US publishes Preliminary GDP for the first quarter and unemployment claims. Japan releases Tokyo Core CPI for April early on Friday, which is expected to remain steady at 3.2%. Will BoJ meeting bring more of the same? Japan’s inflation is running around 3%, a dream for most central banks but a headache for the Bank of Japan. There has been pressure on the BoJ to tighten policy as inflation remains above the target of 2%. Japan has experienced decades of deflation and the massive stimulus programme was meant to stimulate the economy. Inflation has moved higher, but former BoJ Governor Kuroda insisted that the central bank would not consider tightening until it was convinced that inflation was sustainable, which required stronger wage growth. New BoJ Governor Ueda has toed the party line so far, but left open the possibility of tightening if wage growth and inflation climb faster than expected. All signs point to the BoJ maintaining its policy settings when it wraps up its 2-day meeting on Friday, but the central bank has surprised the markets in a big way before, and the markets will be following the meeting closely. Read next: According to Oanda's analyst, bullish bias on gold is supported by de-dollarization, US-China High Tech War and more| FXMAG.COM In the US, unemployment claims have moved higher for four straight weeks and come in above the estimate each time. The upward trend is expected to continue, with claims expected to rise to 248,000, up from 245,000. The labor market remains strong, but the upswing could signal cracks in what has been a robust US labour market. Preliminary GDP for the fourth quarter is expected to drop to 2.0% y/y, down from 2.6% in Q4. USD/JPY Technical USD/JPY tested support at 133.41 earlier in the day. The next support line is 132.69 134.27 and 134.99 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/JPY - Yen eyes Tokyo CPI, US GDP - MarketPulseMarketPulse
Nasdaq 100 posted a new one year high. S&P 500 ended the day unchanged

Earnings season is underway. Economic events remain in focus too

Kenny Fisher Kenny Fisher 24.04.2023 23:52
It’s been a slow start to the week in the markets as investors have an eye on what’s to come with earnings season getting into full flow and major economic releases on the agenda. We’ve reached an interesting moment in which investors have been forced to retreat on post-SVB positioning on rate hikes, albeit not entirely, but they seem far from convinced that central banks will actually follow through and, if they do, that they will not reverse course. Credit conditions have tightened The reason for the apprehension is that early evidence suggests credit conditions have tightened in the aftermath of the mini-banking crisis but the extent to which it has happened, what the real economic consequences are, and what exactly it means for interest rates isn’t clear. And this is occurring at a time when inflation appears very stubborn but is set to fall sharply due to favourable base effects but the pace of disinflation is ultimately what, along with credit conditions, will determine how central banks respond. I feel things may look very different in a couple of months’ time but for now, we have to patiently play the waiting game. Earnings season is obviously giving us plenty of food for thought in the interim but the first day of the week isn’t typically the most thrilling and we’re seeing another example of that today. Stock markets are treading water and we may see that continue throughout the rest of the session. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. A slow start to the week in markets but there's plenty still to come - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

USD/CAD: March retail sales may be 1.4% lower. Decelerating economy may mean Bank of Canada will continue holding rates

Kenny Fisher Kenny Fisher 24.04.2023 12:12
Canadian retail sales declined US Manufacturing and Services PMIs accelerated USD/CAD has climbed 200 points in one week USD/CAD continued to rally today but has pared most of those gains. In Europe, USD/CAD is trading at 1.3527 Canada’s core retail sales drop  The markets were bracing for a weak Canadian retail sales report in February, and the numbers were indeed soft. Headline retail sales fell 0.2%, above the -0.6% gain but down from 1.6% in January. The core rate was even worse, with a decline of 0.7%, versus an estimate of -0.1% and a prior reading of 0.9%. The weak numbers extended the Canadian dollar’s woes, as USD/CAD is about 200 points higher since April 14th. The March numbers could be far worse, with Statistics Canada forecasting a 1.4% slide in retail sales. It’s clear that the Bank of Canada’s aggressive tightening is dampening consumer spending, and high inflation has taken a bite out of disposable income. The BoC has paused at its last two meetings and left the benchmark rate at 4.50% and is monitoring the effects of its tightening cycle. If the economy decelerates, we can expect the BoC to continue to hold rates, as long as inflation doesn’t move upwards. Canada releases February GDP on Friday, with the economy expected to have expanded by just 0.2%. Read next: Alphabet, Meta, Amazon - mega cap tech companies are to report their earnings they after day starting tomorrow!| FXMAG.COM In the US, Friday’s PMI reports for March beat the forecasts and indicated a slight acceleration in manufacturing and services. After six months of contraction, manufacturing pushed (barely) into expansion territory, rising from 49.2 to 50.4 (49.0 est.). Services rose to 53.5, up from 52.3 and above the estimate of 52.8 points. The strong numbers could reignite inflation and force the Fed to continue raising rates after the May meeting. Core inflation has been sticky and actually rose in March from 5.5% to 5.6% and we could see the core rate rise again in April. USD/CAD Technical There is resistance at 1.3577 and 1.3616 1.3487 and 1.3435 are providing support   Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. Canadian dollar hits 3-week low as retail sales decline - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Oanda's Kenny Fisher talks US dollar against Canadian dollar - April 21st

Kenny Fisher Kenny Fisher 21.04.2023 15:15
Canadian retail sales expected to have declined US Services and Manufacturing PMIs projected to have slowed USD/CAD pushes above 1.35 The US dollar is broadly higher today, and USD/CAD has climbed to 1.3530, up 0.40% on the day. The Canadian dollar is on a downturn and has lost close to 200 points since last Friday. Canadian dollar eyes retail sales, US PMIs The week wraps up with key releases on both sides of the border. Canada releases retail sales for February, with the markets expecting declines after strong gains in the prior reading. Headline retail sales are expected to fall by 0.6%, after a sharp gain of 1.4%. The core rate is projected to dip by 0.1%, after a 0.9% gain in January. A decline in consumer spending would not be all that surprising, given current economic conditions. Inflation, which is public enemy number one, appears to have peaked, but prices continue to rise and this is weighing on consumers. Households are seeing a decrease in disposable income as higher interest rates mean rising mortgage costs. The Conference Board of Canada has projected real GDP will expand by 0.9% in 2023, a negligible gain. Consumer spending is a key driver of economic growth and a sour consumer holding tightly on the purse strings will hamper the economic recovery. Read next: Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed| FXMAG.COM The US releases April PMIs later today and any surprises could affect the movement of USD/CAD before the weekend. The Services PMI is expected to dip to 51.5, down from 52.6, while the Manufacturing PMI is projected to tick lower to 49.0, down from 49.2 points. The 50.0 level separates expansion from contraction. Services is expected to show expansion for a third straight month, while manufacturing is forecast to remain in contraction for a seventh straight time. These trends are evident worldwide and are not limited to the US. The service sector (business activity) remains resilient in the face of an uncertain global outlook, while manufacturing continues to struggle with rising prices and supply chain issues. USD/CAD Technical USD/CAD is testing resistance at 1.3509. Above, there is support at 1.3629 1.3406 and 1.3275 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CAD extends rally, markets brace for weak Canadian retail sales - MarketPulseMarketPulse
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

Kenny Fisher Kenny Fisher 21.04.2023 15:05
AUD/USD has fallen sharply Fed members continue to urge more rate hikes Fed members say inflation still too high The Australian dollar has been relatively quiet during the week but is getting pummelled on Friday. AUD/USD is trading at 0.6685, down 0.84% on the day. The sharp drop can be attributed to technical factors and hawkish comments from Fed members on Thursday. The Federal Reserve is not yet ready to wrap up its current rate-tightening cycle and has sent out the troops to blitz the airwaves and reiterate the Fed’s hawkish stance. On Thursday, Fed member Bostic said he favors one more rate hike and then an extended pause, saying the tightening will take time to work its way through the economy. Bostic noted that the banking crisis had led to tighter financial conditions, which has made the Fed’s work easier. Read next: CMC Markets' analyst: Today's European and UK economic data continues to point to a divergence between manufacturing and services| FXMAG.COM Fed member Mester also came out in support of more rate hikes but suggested that the economy would have a soft landing. A day earlier, Fed member Williams said “inflation is still too high” and the Fed would use monetary policy to “restore price stability”. Williams added that he expected inflation to drop to 3.25% this year and hit the 2% target by 2025. The markets are hearing this message loud and clear, and have priced in a 25-basis point hike in May at 81%, according to the CME Group. Where the markets and the Fed differ is on rate cuts – the markets are anticipating cuts before the end of the year, while Fed members have said that it does not see the economy stalling to such an extent as to justify rate cuts. AUD/USD Technical There is resistance at 0.6803 and 0.6896 AUD/USD is testing support at 0.6711. Next, there is support at 0.6618 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD slides on hawkish Fedspeak - MarketPulseMarketPulse
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

Kenny Fisher Kenny Fisher 20.04.2023 15:11
New Zealand inflation fell to 6.7%, lower than expected NZD/USD is down 0.40% and dropped to its lowest level since April 16 Four members of FOMC will speak today New Zealand inflation eases more than expected Policy makers at the Reserve Bank of New Zealand are in a bubbly mood, as New Zealand’s inflation rate dropped to 6.7% in the first quarter, beating the market consensus of 7.1%. The RBNZ had braced for an acceleration to 7.3%, so the substantial drop was a welcome surprise. The central bank has been heavy-handed in its battle with inflation. The RBNZ shocked the markets earlier this month when it delivered a 50-basis point hike, as the markets had anticipated a modest 25-bp move, given the lackluster New Zealand economy. The oversize hike brought the benchmark cash rate to 5.25%, the highest level of any major central bank. The RBNZ’s aggressive tightening has cooled the economy and appears to have finally broken the back of inflation. Another drop in inflation would strongly suggest that inflation has peaked, but it’s early to celebrate, as inflation still remains much higher than the target band of 1%-3%. Read next: Eightcap analyst after UK CPI: It is an interesting position now for the Bank of England., do they need to go back to a few 50-point hikes to cut into the CPI rate?| FXMAG.COM What’s next for the RBNZ? As things currently stand, I would expect a 25-basis point hike at the May 24th meeting, although the central bank has a knack for surprising the markets. The key releases prior to the meeting include employment and inflation expectations, both of which will be closely watched for their potential impact on the rate decision. In the US, unemployment claims are expected to nudge up from 239,000 to 240,000. Unless the estimate is wide of the mark, the release is unlikely to affect the US dollar. Investors will be keeping a close eye on four voting members of the FOMC who will deliver public remarks today. The Fed is expected to deliver a 25-basis point hike next month, which could wrap up the current rate-hike cycle. NZD/USD Technical NZD/USD is testing support at 0.6213. Below, there is support at 0.6127 0.6289 and 0.6368 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. NZD/USD falls to 5-week low as inflation slows - MarketPulseMarketPulse
These findings of a review of the Reserve Bank of Australia may surprise you!

These findings of a review of the Reserve Bank of Australia may surprise you!

Kenny Fisher Kenny Fisher 20.04.2023 11:57
Australian Business Confidence and Business Conditions fall RBA review calls for overhaul of central bank Governor Lowe says willing to continue AUD/USD is almost unchanged, trading at 0.6714 Australian Business confidence declines again The NAB Business Confidence Index declined for a second straight quarter, falling by 4 pts. This missed the estimate of 2 and follows a Q4 2022 reading of -1. Business Conditions also dropped by 4 pts. The NAB found that businesses remain most concerned about wage growth and continue to report a shortage of workers. The good news was that supply chains have improved and there are expectations that inflation may have peaked. RBA review calls for major overhaul of central bank Australian Treasurer Chalmers released the findings of a review of the Reserve Bank of Australia today. The central bank last underwent major changes in the 1990s and the report had some 51 recommendations. The key suggestions include setting up a separate policy board, press conferences after each policy meeting and reducing board meetings from 11 to 8, in order to give households more time to react to rate decisions. Read next: US Treasury yields have increased since 13 April. VIX has decreased to a 14-month low| FXMAG.COM The changes are not expected to affect rate policy and the markets shrugged as the Australian dollar is drifting today. The report did not make any recommendations regarding the future of Governor Lowe, whose mandate expires in September. Lowe welcomed the report’s recommendations and said he would be happy to continue serving if ask to do so by the government. Lowe has absorbed heavy criticism for the sharp rise in rate hikes after stating in 2020 that rising inflation was transient and the RBA would not raise rates for three years. This forecast was of course way off the mark and the RBA has raised rates some 350 basis points over the past year, which has weighed heavily on households as mortgage payments have soared. AUD/USD Technical There is resistance at 0.6803 and 0.6896 AUD/USD is testing support at 0.6711. Next, there is support at 0.6018 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD - Aussie shrugs as business confidence falls, RBA review released - MarketPulseMarketPulse
BoE rates may remain uncut until the middle of 2024. Bank of England is expected to hike the rates 12th time in a row today

GBP/USD: UK economy: inflation dropped to 10.% remaining "hot and stubbornly high"

Kenny Fisher Kenny Fisher 19.04.2023 12:30
UK inflation falls to 10.1%, higher than expected BoE likely to raise rates in May Three Fed members will deliver public remarks today GBP/USD is trading at 1.2445, up 0.16% on the day. UK inflation stays above 10% UK inflation remains hot and stubbornly high. In March, headline CPI dropped to 10.1%, down from 10.4% but above the consensus estimate of 9.8%. Inflation is still stuck in double digits, but the silver lining is that inflation has resumed its downswing after unexpectedly rising in February from 10.4% to 10.1%. The core rate remained unchanged at 6.2%, above the estimate of 6.0%. The usual suspects were at play in the headline release, as food and energy costs continue to drive inflationary pressures. It hasn’t been the best of weeks for the Bank of England. The employment report showed that wage growth remains high and inflation is galloping at a double-digit pace. The BoE has raised rates to 4.25%, but the battle against inflation has been difficult, and it’s unclear if inflation has even peaked. The latest wage and inflation numbers have likely cemented another rate hike at the May meeting, but that’s not good news for a struggling economy. Read next: Suprisingly, Nikkei 225 is still more than 30% below its ATH (printed in 1989)| FXMAG.COM GDP in February was flat, as widespread strikes and the cost-of-living crisis dampened economic activity. Consumers are struggling with higher taxes, hot inflation and rising interest rates. Inflation remains the central bank’s number one priority and a pause in rates will isn’t likely until the tight labour market, which is causing higher wage growth, cools down. In the US, there are no tier-1 events on the calendar. Investors will be focussing on Fedspeak, with Fed members Williams, Goolsbee and Mann making public statements. Earlier this week, Williams said that he expects inflation to continue falling and to reach 3.75% by the end of this year and hit the 2% target by 2025. GBP/USD Technical GBP/USD is testing resistance at 1.2436. The next resistance line is 1.2526 There is support at 1.2325 and 1.2235 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. GBP/USD edges higher as UK inflation higher than expected - MarketPulseMarketPulse
Forex: On Friday US dollar against Japanese yen increased by 0.9%

Forex: On Friday US dollar against Japanese yen increased by 0.9%

Kenny Fisher Kenny Fisher 17.04.2023 16:13
USD/JPY slips to 1-month low US retail sales fall for second straight month Fed members Waller and Bostic urge more rate hikes Japanese yen extends losses The Japanese yen took it on the chin on Friday, as USD/JPY jumped 0.90%. The yen has edged lower on Monday and fell as low as 134.22, its lowest level since March 15th. With expectations rising that the Fed will raise rates in May, the yen could remain under pressure and fall closer to the symbolic 135 line. It was a light data calendar in Japan last week, giving investors plenty of time to focus on comments from new BoJ Governor Ueda. At the G-20 meeting in Washington, Ueda stuck to his script of “more of the same”, saying the Bank would continue its ultra-loose monetary policy. There has been pressure on Ueda to tighten policy, given that inflation hit 3.1% in February, higher than the 2% target. The Bank of Japan has become an outlier as other central banks have raised rates in order to contain inflation. In fairness, inflation in Japan compares to the levels we are seeing in most developed economies. Former Governor Kuroda insisted that inflation has been driven by higher import costs rather than stronger domestic demand and said real wages would have to rise before the BoJ would consider raising rates. The problem is that real wages continue to fall – the decline of 2.6% in February, marked an 11th straight decline. Read next: Oanda's Kenny Fisher points to Tuesday as a potential time of Aussie movement| FXMAG.COM Until wage growth recovers, there is little chance that the BoJ will tighten policy. That doesn’t mean the BoJ won’t make any moves in the near future, especially if the yen continues to depreciate. In December, the BoJ blindsided the markets by widening the target band on 10-year government bonds, which sent the yen sharply higher. Fed’s Waller, Bostic says more hikes needed The US dollar powered higher on Friday despite a soft retail sales report, as a rise in inflation expectations and hawkish Fedspeak raised the odds of a rate hike in May. UoM inflation expectations for the next 12 months jumped 4.6% in April, up sharply from 3.6% in March. Consumer confidence has been on the low side as inflation remains high, and the decline in retail sales was another sign that the US economy is losing steam. Fed member Waller stated on Friday that the Fed would need to continue raising rates because inflation is “far above target” and the labor market remains “quite tight”. Waller warned that the Fed would have to keep rates at a high level for an extended period and for longer than the markets expected. Fed member Bostic urged one or two more 25-bp hikes before wrapping up the current rate-tightening cycle. The likelihood of a 25-bp increase in May jumped to 80% on Friday, up from 68% a day earlier, which propelled the US dollar to strong gains at the end of the week. USD/JPY Technical There is resistance at 134.60 and 135.42 133.45 and 132.39 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/JPY - Yen falls below 134 as US dollar gains strength - MarketPulseMarketPulse
Australian dollar against US dollar decreased amid weak China CPI data

Oanda's Kenny Fisher points to Tuesday as a potential time of Aussie movement

Kenny Fisher Kenny Fisher 17.04.2023 16:05
US retail sales decelerate sharply in May US bank earnings were solid Markets have priced a May rate hike at 80% AUD/USD steady after swings of over 1% late last week The Australian dollar has steadied on Monday, trading just above the 0.67 level. We could see further movement from the Aussie early on Tuesday, as China releases GDP. Aussie sinks after strong US earnings, Fed speak The markets received another clear sign on Friday that the US economy is slowing, after a disappointing March retail sales report. Headline retail sales fell by 1% and the core rate by 0.8%, worse than expected and marking a second straight decline for both. A soft US retail sales report is usually a recipe for US dollar weakness, but that wasn’t the case on Friday, as AUD/USD fell by 1%. The US dollar received a boost from strong earnings results, higher inflation expectations and some hawkish Fed speak. Bank earnings impressed on Friday, with strong results from JP Morgan, Citigroup and Wells Fargo.  This indicates that the bank crisis has been contained for now, although further contagion cannot be ruled out. Read next: InstaForex analyst: Bitcoin is approaching the completion of the local stage of the upward movement, which will be followed by a corrective movement| FXMAG.COM On the inflation front, UoM inflation expectations for 12 months jumped 4.6% in April, up sharply from 3.6% in March. Consumer confidence has been on the low side as inflation remains high, and the weak retail sales report was clear proof that consumers are spending less due to high inflation and rising rates. Fed member Waller had a hawkish message on Friday, saying that the Fed would need to continue raising rates because inflation is “far above target” and the labor market remains “quite tight”. Waller warned that the Fed would have to keep rates at a high level for an extended period and for longer than the markets expected. Fed member Bostic said he supported one or two more 25-bp hikes to end the current tightening cycle. The likelihood of a 25-bp increase in May has jumped to 80%, up from 68% prior to the retail sales release. AUD/USD Technical There is resistance at 0.6897 and 0.6791 AUD/USD tested support below 0.6700 earlier today. The next support level is 0.6608 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD - Australian dollar takes traders for a wild ride - MarketPulseMarketPulse
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Oanda's Kenny Fisher talks New Zealand dollar against US dollar - April 14th

Kenny Fisher Kenny Fisher 14.04.2023 16:52
New Zealand Manufacturing PMI declines in March US retail sales expected to decline in March NZD/USD is trading quietly around the 0.6300 line New Zealand manufacturing declines New Zealand wrapped up the week on a sour note, as Manufacturing PMI for March slipped to 48.1, after a downwardly revised 51.7 in February and below the estimate of 51.0. A reading above 50.0 indicates expansion; below 50.0 indicates contraction. The manufacturing sector has been struggling across the globe due to weak economic conditions and supply chain issues, and the market reaction to the weak release was muted. Inflation remains the Reserve Bank of New Zealand’s number one priority. The central bank has taken off the gloves and has been very aggressive, including a 50-basis point hike last week which completely blindsided the markets. The benchmark cash rate is currently at 5.25%, but inflation remains stubbornly high at 7.2%. The markets are bracing for inflation to rise to 7.5% for the first quarter, and RBNZ Governor Orr will have a lot of explaining to do if inflation accelerates despite the relentless rise in interest rates. The US releases March retail sales later today, with the markets projecting soft numbers. Headline retail sales is expected to decline by 0.4% for a second straight month, while the core rate is forecast to fall by 0.3%, after a -0.1% read in February. Currently, the odds of a 25-bp hike are 69%, with a 31% chance of a pause, according to the CME Group. The retail sales release could impact the movement of the US dollar. A strong release would make a rate hike more likely, which is bullish for the greenback, while a soft release would raise expectations of a Fed pause and weigh on the dollar. NZD/USD Technical NZD/USD is putting pressure on support at 0.6282. Below, there is support at 0.6192 0.6356 and 0.6446 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. New Zealand dollar drifting after soft Manufacuturing PMI, markets brace for soft US retail sales - MarketPulseMarketPulse
These findings of a review of the Reserve Bank of Australia may surprise you!

Reserve Bank of Australia: After the employment data release, chances of a pause in rate hikes have shrunk

Kenny Fisher Kenny Fisher 13.04.2023 16:06
Australia added 53,000 new jobs in March Australian dollar climbs 0.50% RBA Deputy Governor Bullock says rate pause not related to banking crisis Australian job creation surges Australia posted a blowout employment report today, giving the Australian dollar a strong boost. The economy created 53,000 new jobs in March, after a downwardly revised 63,600 a month earlier. This crushed the estimate of 20,000 and especially impressed as full-time employment increased by 72,000 (part-time decreased by 19,200). Unemployment was unchanged at 3.5%, below the forecast of 3.6%. Read next: Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation| FXMAG.COM What can we expect from the RBA? The central bank paused in March for the first time in the current rate-tightening cycle and Governor Lowe made clear that another pause was data-dependent. The next meeting is on May 2nd and the odds of a pause have eased to 78%, compared to 94% before the employment release. Australia releases the March inflation report less than a week prior to the meeting, and if inflation is higher than expected, the RBA will have to consider a 25-basis point increase in order to cool down the job market and inflation. The recent bank crisis, which roiled the global financial markets, appears to have eased. Still, the extent of the fallout of the collapse of four US banks and Credit Suisse is not yet clear, and central banks need to give consideration to the crisis in mind as they determine their rate path. RBA Deputy Governor Bullock addressed this issue on Wednesday, saying the RBA had considered a pause well before the bank crisis, and the bank decided on the non-move in order to protect job gains and to take into account lags in rate policy. Bullock maintained that there were no signs that the bank crisis had caused a tightening in financial conditions in Australia. AUD/USD Technical There is resistance at 0.6897 and 0.6791 AUD/USD tested support below 0.6700 earlier today. The next support level is 0.6608 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD - Australian dollar jumps on sizzling jobs report - MarketPulseMarketPulse
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

Kenny Fisher Kenny Fisher 13.04.2023 16:00
Bank of  Canada pauses rates for second straight month US headline inflation drops to 5%, core rate rises to 5.6% Canadian dollar climbs to highest level since February 16 The Canadian dollar has extended its rally, and is up 0.29% today, trading at 1.3402 in Europe. Bank of Canada holds rates There wasn’t much drama ahead of the Bank of Canada’s decision to hold rates, as the non-move was widely expected. The benchmark cash rate is at 4.5% and the rate statement said that the BoC was prepared to raise rates “if needed to return inflation to the 2% target”. The BoC’s growth forecast for 2023 was upwardly revised to 1.4%, up from 1.0%. This pleased investors and has boosted the Canadian dollar. US inflation report sends mixed signals The Fed and the markets eagerly awaited Wednesday’s March inflation report, but the mixed signals mean that little may have actually changed with regard to the Fed’s rate path. Gasoline and food prices fell but housing costs remained high. The good news was that headline inflation fell from 6.0% to 5.0%, lower than the consensus estimate of 5.2%. The bad news was that the core rate rose to 5.6% as expected, nudging up from the 5.5% read in February. Investors weren’t quite sure how to respond to the data – equities initially rose but the rally soon faded. Read next: Canadian dollar: Next week, all eyes will be on the inflation data, which is expected to cool down further to as low as four percent| FXMAG.COM After the inflation release, Fed member Barkin expressed concern that core inflation continues to run above 5%. Barkin noted that demand is cooling but the job market and inflation remain strong. Market pricing continues to sway ahead of the Fed meeting on May 4th. The odds of a 25-basis point hike are currently at 66%, according to the CME Group. This is down from the 72% probability prior to the inflation report. It was only a week ago that the odds of a 25-bp hike or a pause were split 50/50 and I expect further repricing ahead of the meeting. The markets expect the current rate-tightening cycle to end soon, with a few rate cuts expected by the end of the year. USD/CAD Technical USD/CAD is testing support at 1.3436. Below, there is support at 1.3356 1.3486 and 1.3566 are the next resistance lines   Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CAD - Canadian dollar hits 2-month high as BoC pauses again - MarketPulseMarketPulse
Rates Spark: Balancing data and risk factors

European Central Bank meets in the beginning of May. Eurozone Sentix Investor Confidence rises to -8.7

Kenny Fisher Kenny Fisher 11.04.2023 15:37
EUR/USD has climbed around 0.60% today and pushed above the 1.09 line Eurozone Sentix Investor Confidence improved to -8.7 Eurozone retail sales fell by 0.8% US releases inflation on Wednesday Eurozone Sentix Investor Confidence rises The Eurozone economy continues to recover, but there is plenty of work ahead. The Sentix Investor Confidence index improved to -8.7 in April, above the March read of -11.1 and better than the estimate of -11.7 points. The concerns over an energy crisis in Europe this winter failed to materialize and Germany and the rest of the eurozone came out of the winter better than many had expected, given the weak global economy and the Russia-Ukraine war. Still, the economic outlook remains pessimistic, as Sentix Investor Expectations remain negative in both Germany and the eurozone, at -13 and -11.5, respectively. Still, the markets were pleased with the slight improvement in investor confidence and the euro has responded with gains of around 0.60%. Read next: US inflation is released on Wednesday. Bank of Canada decides on the interest rate the same day| FXMAG.COM Eurozone retail sales slipped to -0.8% in February, matching the forecast but contracting after an upwardly revised 0.8% gain in January. Consumers are struggling with high inflation, rising interest rates and uncertain economic conditions and are keeping a tight grip on their wallets and purses. The ECB meets next on May 4th and all indications are that it will deliver another oversize rate hike. The central bank has been aggressive, raising rates by 50 and 75 basis points in recent months. The ECB was very slow to join the rate-hiking party and the benchmark rate is only 3.50%, compared to 4.25% for the Bank of England and 5.00% for the Federal Reserve. Inflation in the eurozone has proven to be a tougher foe than expected, and core inflation surprised by accelerating in February. The US releases the March inflation report on Wednesday. Inflation has been falling, albeit at a slower pace than the Fed had expected. This has necessitated additional rate hikes, with a 25-bp increase expected at the May meeting. Headline inflation is expected to fall to 5.4% in March, down from 6% in February. The core rate is projected to inch higher to 5.6%, up from 5.5%. EUR/USD Technical EUR/USD is testing support at 1.0889. Below, there is support at 1.0804 There is resistance at 1.0989 and 1.1074 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. EUR/USD - Euro gains ground as investor confidence improves - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

US inflation is released on Wednesday. Bank of Canada decides on the interest rate the same day

Kenny Fisher Kenny Fisher 11.04.2023 15:26
Three Fed members will deliver public statements on a very light data calendar today On Wednesday, the Bank of Canada is expected to pause, and US inflation is projected to fall to 5.2% USD/CAD is almost unchanged, trading around 1.3500 The Canadian dollar is almost unchanged, trading at 1.3501 in Europe. With no Canadian events and no tier-1 releases out of the US, we can expect a quiet day for USD/CAD. The markets will be listening closely as Fed members Goolsbee, Harker and Kashkari will speak. Wednesday should be much busier for the Canadian dollar, with key releases in both Canada and the US. The Bank of Canada will make a rate announcement and the US releases the inflation report for March. Bank of Canada likely to hold rates The Bank of Canada meets on Wednesday and is widely expected to pause rates for a second straight time, leaving the cash rate at 4.50%. Governor Macklem announced a “conditional pause” on rates, saying that the central bank would pause if warranted by the data. The key to the Bank’s rate path is inflation, which the central bank is committed to wrestling back to the target of 2%. Read next: Taiwan’s softer inflation and weak exports should make the central bank pause and weaken the currency| FXMAG.COM The battle against inflation is moving in the right direction, with CPI falling to 5.2% in February, down from 5.9% a month earlier. The employment market remains robust, with the economy adding 34,700 jobs in March, up from 21,800 in February. A rate hike would help cool the labour market but would dampen growth and hurt consumers and businesses which are struggling under the weight of high interest rates. With a pause being the likely decision, the tone of the rate statement could affect the movement of the Canadian dollar on Wednesday. US inflation The US releases March inflation on Wednesday. This will be the last CPI release prior to the Fed’s May 3rd meeting and will play a key factor in the Fed’s rate decision. Currently, the markets have priced in a 25-basis point hike at 67%, according to the CME Group, and an unexpected inflation reading will very likely lead to the repricing of rate hike bets. Inflation fell from 6.4% to 6.0% in February and is expected to ease to 5.4% in March. USD/CAD Technical USD/CAD tested support at 1.3486 earlier today. Below, there is support at 1.3397 1.3566 and 1.3629 are the next resistance lines Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CAD steady, Bank of Canada expected to pause again - MarketPulseMarketPulse
Unexpected drop in Swiss inflation may complicate SNB decision

Unexpected drop in Swiss inflation may complicate SNB decision

Kenny Fisher Kenny Fisher 03.04.2023 15:55
USD/CHF is unchanged in the European session, trading at 0.9150. The Swissie pushed higher earlier but has given up those gains. Switzerland’s inflation rate fell to 2.9%, down from 3.4%, and the drop could make the Swiss central bank think twice about another rate hike in June. The US releases ISM Manufacturing PMI, which is expected to post another decline, with an estimate of 47.7 points. Swiss inflation underperforms Swiss inflation fell to 2.9% y/y in March, down from 3.4% in February and below the estimate of 3.2%. On a monthly basis, inflation slipped to 0.2% in March, vs. 0.7% prior and 0.4% anticipated. The driver behind the drop was lower fuel costs. Switzerland’s inflation levels may be the envy of other major economies, but the Swiss National Bank (SNB) finds itself in a tough fight, given that inflation has exceeded its 0%-2% target for over a year. The SNB has been very aggressive, relatively speaking, with its rate policy in order to contain inflation. The SNB delivered a 50-basis point hike in March, marking a fourth straight increase which brought the cash rate to 1.5%. The rate hike helped propel the Swiss franc in March when it gained 2.5% against the US dollar. Read next: RBA decision: according to Governor Lowe, inflation, employment and consumer spending data would play vital role| FXMAG.COM What’s next for the SNB? The next meeting isn’t until June, and prior to the inflation release, there was a reasonable likelihood of another rate hike. The unexpected drop in CPI could complicate that decision, as policymakers will have to give thought to a 25-bp hike or even a pause in rates, as the economy is showing signs of weakness. GDP was flat in the fourth quarter, and last week’s numbers were soft. The KOF Economic Barometer fell to 98.2, down from 98.9 and below the estimate of 100.5 points. Retail sales posted a weak gain of 0.3%, better than the prior release of -1.7% but shy of the forecast of 1.9%. If inflation continues to head south, policy makers will have their excuse to ease up on the pace of rates and give the economy a break. Weak manufacturing remains a global problem, as the Russian invasion of Ukraine and China’s zero-Covid policy disrupted supply chains and dampened demand. On Friday, Swiss manufacturing PMI dipped to 47.0 in March, down from 48.9 in February which was also the consensus forecast. US ISM Manufacturing PMI will be released later today and is expected to weaken to 47.5 in March, down from 47.7 in February. USD/CHF Technical USD/CHF tested resistance at 0.9164 earlier in the day. The next resistance line is 0.9221 0.9104 and 0.9002 are providing support Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. USD/CHF - Swiss franc steady, inflation lower than expected - MarketPulseMarketPulse
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

RBA decision: according to Governor Lowe, inflation, employment and consumer spending data would play vital role

Kenny Fisher Kenny Fisher 03.04.2023 15:43
The Australian dollar has edged higher at the start of the week. In the European session, AUD/USD is trading at 0.6715, up 0.45%. The RBA meets on Tuesday (Australia time) and is expected to pause rates. The US releases ISM Manufacturing PMI, which is expected to record another decline. RBA likely to pause rate hikes The RBA has aggressively tightened interest rates in the current cycle, raising rates 10 straight times. The fight against inflation continues but there has been some improvement. February CPI fell sharply to 6.8%, vs. 7.4% prior and 7.1% anticipated. Inflation is more than triple the RBA target, but the sharp rise in rates has dampened economic activity and further hikes could jeopardize a soft landing. The RBA is widely expected to stay on the sidelines, with the market pricing in a pause at 86%. Governor Lowe has said that in addition to inflation, employment and consumer spending data would play a key factor in the RBA’s decision. The labour market remains tight, but retail sales hit the breaks in February and slowed to just 0.2%, down from 1.8% in January and just above the consensus estimate of 0.1%. The weak retail sales data supports the RBA taking a breather. The banking crisis, which roiled global financial markets, raised fears of a financial meltdown. Although the contagion appears to have been contained, central banks are having to think twice about raising rates in an uncertain economic landscape, and if the RBA does pause, it could use the banking crisis as further ammunition in defending its decision. US ISM Manufacturing PMI expected to decline We’re seeing a decline in manufacturing across the globe as demand remains weak. The Russian invasion of Ukraine and China’s Covid-zero policy interrupted supply chains and dampened demand, and manufacturing is yet to recover even though China has made an about-face and relaxed its Covid regulations. Read next: The US ISM services survey expected to remain resilient. Italian and Spain PMI forecasted to go above 50| FXMAG.COM The US is no exception to this disturbing global trend. ISM Manufacturing PMI has been in decline for four straight months, with readings below the 50 threshold, which separates expansion from contraction. The estimate stands at 47.5, a bit lower than the 47.7 reading in January. AUD/USD Technical AUD/USD is putting pressure on resistance at 0.6737. Above, there is resistance at 0.6790 There is support at 0.6678 and 0.6582 Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. AUD/USD - Aussie on the move, RBA expected to pause rates - MarketPulseMarketPulse
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

In Q4 New Zealand economy gained 2.2%, much less than in Q3

Kenny Fisher Kenny Fisher 29.03.2023 23:19
The New Zealand dollar is lower on Wednesday. NZD/USD is trading at 0.6236 in the North American session, down 0.28%. In the US, Pending Home Sales slowed but were better than expected. Later in the day, New Zealand releases ANZ Business Confidence. New Zealand business confidence expected to improve New Zealand’s business sector has been pessimistic about the economy and that is expected to continue. The ANZ Business Confidence Index has been mired in negative territory, and no relief is expected from the March release on Thursday (New Zealand time). The estimate stands at -47.5, versus -43.3 prior. The silver lining is that things have improved since a multi-year low reading of -70.2 in December. The New Zealand economy slowed in Q4, with a gain of 2.2% y/y, down sharply from 6.4% in Q3 and below the estimate of 3.3%. The continuing rise in interest rates has dampened economic activity, with RBNZ Chief Economist Conway describing the slowdown as “welcome”. Conway acknowledged that even with the central bank’s aggressive tightening cycle, it was uncertain if inflation expectations had been contained. The RBNZ has projected inflation expectations for Q1 at around 5.5%, and inflation is running at a 7.2% clip, despite the central bank’s tightening. The RBNZ meets next on April 5th  and the markets have priced in a 25-bp hike at 90%. That could be the end of the current tightening cycle, with a 50/50 chance of another rate hike in May and rising speculation of a rate cut before the end of the year. US Pending Home Sales outperform In the US, Pending Home Sales beat expectations, as the February reading came in at 0.8%, versus 8.9% prior and an estimate of -2.9%. The Case-Shiller Housing Index declined for a ninth straight month, falling to 2.5% in January, shy of the forecast of 2.6% and the prior reading of 4.6%. The housing sector is in a slump, with mortgage payments almost doubling from a year ago. NZD/USD Technical NZD/USD put pressure on resistance at 0.6276 earlier in the day. Above, there is resistance at 0.6349 There is support at 0.6221 and 0.6148   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD - New Zealand dollar runs out of steam, business confidence next - MarketPulseMarketPulse
ZEW Economic Expectations came in at -41.3. Swiss retail sales go public on Friday

ZEW Economic Expectations came in at -41.3. Swiss retail sales go public on Friday

Kenny Fisher Kenny Fisher 29.03.2023 22:57
The Swiss franc has edged higher on Wednesday. USD/CHF is trading at 0.9176 in the European session, down 0.23%. The ZEW Economic Expectations index fell sharply to -43.3 points. In the US, CB Consumer Confidence improved to 1o4.2 points. Banking crisis sends Swiss economic expectations crashing lower The banking crisis has eased after causing market turmoil across the globe. Switzerland’s banking sector has taken a hit, as Credit Suisse, the country’s second-largest bank, collapsed and had to be rescued by rival UBS, with the Swiss government injecting some $108 billion to ensure that the takeover is completed. The reputation of the Swiss banking system has been badly tarnished and the fallout will likely have a negative impact on the Swiss economy. Even before the banking crisis, the Swiss economy was sputtering. GDP was flat in Q4 of 2022, as a weak global economy meant less demand for Swiss exports. The economy was expected to grow by 1.1% in 2023, lower than average growth, and that figure could well be revised lower due to the banking crisis. Inflation hit 3.5% in 2022, much lower than in other major economies but high for Switzerland. The Swiss National Bank has tried to curb inflation with higher interest rates and delivered a 50-basis point hike earlier this month. Read next: Craig Erlam and Jonny Hart talk UK inflation, Bank of England and Binance| FXMAG.COM ZEW Economic Expectations has been mired deep in negative territory for over a year, but showed a significant improvement in January, rising from -40.0 to -12.3 points. The February reading, released today, came in at -41.3, as the January improvement was short-lived. We’ll get another snapshot of the strength of the Swiss economy on Friday, with the release of retail sales and the KOF Economic Barometer. In the US, consumers have been concerned about their bank deposits and the stability of the banking system. Despite these worries, the Conference Board Consumer Confidence index improved to 104.2 in March, up from an upwardly revised 103.4 prior. Consumer expectations also rose, from 73.0 to 74.0 points. If the banking crisis does not worsen, the strong consumer expectation numbers should translate into increased consumer spending. USD/CHF Technical USD/CHF tested resistance at 0.9212 earlier in the day. The next resistance line is 0.9304 0.9106 and 0.9014 are providing support   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CHF - Swiss franc steady after economic expectations slide - MarketPulseMarketPulse
Asia Morning Bites - 23.05.2023

RBA decision: according to Governor Lowe, retail sales and inflation print will be crucial

Kenny Fisher Kenny Fisher 28.03.2023 16:45
The Australian dollar is trading at 0.6672 in Europe, up 0.39%. Australian retail sales posted a weak gain of 0.2% and the quarterly CPI release is next. The banking crisis has eased a bit and risk currencies like the Aussie are in positive territory today. RBA keeping eye on retail sales and inflation ahead of rate meeting The markets were braced for a sharp deceleration in retail sales for February, but the meagre 0.2% gain missed the estimate of 0.4% and follows a strong gain of a revised 1.8% in January. Consumers are holding tighter to their wallets as the double whammy of rising interest rates and high inflation has dampened consumer spending. RBA Governor Lowe said that this week’s retail sales and inflation release will be key factors in the rate decision on April 4th. The strong drop in retail sales supports the case for the Reserve Bank of Australia to take a pause. As for inflation, it is expected to drop to 7.1% in February, down from 7.4% in February. If the release is higher than the forecast, the RBA will be under pressure to raise rates at next week’s meeting. Another factor that Lowe will have to consider is the banking crisis, as central banks will need to think twice before raising rates since it puts further stress on the banking system. The markets have priced in a pause at 86%, with the likelihood of a 25 bp increase of only 13%. Read next: According to Conotoxia's Grzegorz Dróżdż, UBS shares seem to have stopped losing value| FXMAG.COM The Federal Reserve announces its rate decision on Wednesday and the fact that the meeting is a live one will add to the drama. Market pricing has swung wildly, as only a few weeks ago the markets expected a 50 bp hike. Throw in a nasty bank crisis, and currently, the markets are split between a 25 bp increase and a pause. In December, the Fed’s Summary of Economic Projections (SEP) which includes forecasts for interest rates and inflation. There has been a lot of market turbulence since then, and any revisions in the SEP could affect the movement of the US dollar. AUD/USD Technical AUD/USD is testing resistance at 0.6676. Above, there is resistance at 0.6728. There is support at 0.6565 and 0.6402 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD - Aussie rises as risk appetite improves, CPI next - MarketPulseMarketPulse
Forex: On Friday US dollar against Japanese yen increased by 0.9%

Japan's inflation goes down to 2.7%. Taking it into consideration, JPY hasn't reacted vividly

Kenny Fisher Kenny Fisher 28.03.2023 11:30
The Japanese yen is in positive territory and broke below the 131 line in the Asian session. USD/JPY is trading at 131.17, in Europe, down 0.30% on the day. BoJ inflation indicator eases BoJ Core CPI, the preferred inflation gauge of the central bank, dropped to 2.7% in February, down from 3.1% in January and below the estimate of 3.5%. The decline in core inflation wasn’t all that surprising, as last week’s National Core CPI also fell sharply, due to government subsidies for utility bills which took effect in February. The yen’s response has thus been muted to the inflation release. The Bank of Japan has been very reluctant to tighten policy, and the only moves we’ve seen over the past few months have related to yield curve control, in order to prop up the yen. The BoJ has insisted that high inflation is transient and will fall to 2% later this year as the effect of high commodity prices eases. The Bank has said it would consider tightening if wages move higher, as this would be a sign that inflation is sustainable. Stay tuned as employees won substantial wage hikes at annual labour talks earlier this month. If wage growth does translate into higher inflation, the BoJ will be under pressure to tighten policy, but the new BoJ Governor, Kazuo Ueda, has not given any indications that he plans to exit accommodative policy anytime soon. BoJ Governor Kuroda spoke earlier today, with a “business as usual” message. Kuroda said that the sustainable infation target had not been met and it was too early to discuss an exit from the Bank’s loose monetary policy. The Federal Reserve announces its rate decision on Wednesday, and after a roller-coaster ride for market pricing, it’s currently close to a 50/50 toss-up. Will the Fed hike by 25 basis points or will it take a pause for the first time in the current rate-tightening cycle? The Fed was expected to raise rates by 25 bp, but the banking crisis, which has shaken up the financial markets, is a compelling reason for the Fed to stay on the sidelines and let the markets catch their breath. USD/JPY Technical There is resistance at 130.60 and 131.57 129.30 and 127.05 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY - Japanese yen tests 131, BOJ Core CPI eases - MarketPulseMarketPulse
UK Gfk Consumer Confidence index got better fourth month in a row

Although, there are no crucial releases this week, but that doesn't mean it will be a resilient week for GBP

Kenny Fisher Kenny Fisher 27.03.2023 15:42
The British pound is trading quietly on Monday. In the European session, GBP/USD is trading at 122.49, up 0.15%. The pound has looked sharp of late, and last it touched a high of 1.2343, its highest level since late January. In the UK, there are no tier-1 releases this week, but that doesn’t mean it will be a quiet week for the pound. Investors will be listening closely as BoE Governor Bailey speaks at public engagements today and on Tuesday. The latter should be especially interesting, as Bailey will testify before the Treasury Select Committee about the Silicon Valley collapse. Bailey to testify on SVB collapse Bailey has sounded surprisingly optimistic, given that inflation remains in double digits despite the BoE raising rates 11 consecutive times. After the 25-bp rate hike earlier this month, Bailey said that he expected inflation to fall “quite rapidly” in the next few months. On Friday, Bailey said that the prospects for growth were better and there was a “pretty strong likelihood” that the country would avoid a recession this year. I’m not at all sure that lawmakers share the Governor’s optimism, and they will likely grill Bailey on the Bank’s rate policy, which has failed to reign in high inflation. Sticky inflation is not the only headache that Bailey needs to deal with. The banking crisis has caused stress in the financial markets, and investors remain concerned about the stability of the banking sector. Authorities in Switzerland and the US have acted quickly and decisively, which has helped calm down the markets. President Biden and Treasury Secretary Yellen have said that the banking system is safe, and on Friday, the Financial Stability Oversight Council, a group of financial regulators, said that the US banking system remains “sound and resilient”. The stresses on the banking system are being closely watched by central banks, which are fearful of the contagion spreading as well as a credit crunch, which could slow economic growth. ECB President Lagarde said last week that the bank crisis could help lower inflation, and UK lawmakers might ask Bailey if the crisis could dampen inflation in the UK. GBP/USD Technical GBP/USD is testing resistance at 1.2248. The next resistance line is 1.2341 There is support at 1.2152 and 1.2071 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD - Will BoE's Bailey shake up the British pound? - MarketPulseMarketPulse
Forex: Euro against US dollar - forecast on April 24th, 2023

First Republic bank received $30bln from other US banks. ECB's primary focus remains containing inflation

Kenny Fisher Kenny Fisher 21.03.2023 17:47
The euro has put together a 3-day rally and is up again on Tuesday. In the European session, EUR/USD is trading quietly at 1.0756, up 0.30%. Financial markets settle down Let’s start with some good news. European stock markets have settled down and are in positive territory. The euro took a bath last Wednesday and plunged 1.47% as Credit Suisse shares tumbled, but the currency has battled back and recovered these losses. The emergency takeover of Credit Suisse by UBS and the joint announcement by six major central banks to boost liquidity have provided some reassurance to the markets that the banking system is not in danger of collapse. That’s not to say that this nasty bank crisis is behind us. Investors are still trying to come to terms with the lightning collapse of three US banks and Credit Suisse, the second-largest bank in Switzerland, all in just 11 days. Another US bank, First Republic, received an emergency injection of $30 billion from some major US banks, but this may not prove to be enough, as depositors are estimated to have removed $89 billion and the bank’s shares are in freefall. Read next: Weak Polish retail sales add to gloomy outlook| FXMAG.COM In light of the bank crisis, central banks will have to weigh their moves carefully and re-evaluate rate policy. The ECB didn’t flinch and delivered a 50-basis point move as promised. Had the ECB decided not to go ahead with the 50-bp hike, it risked losing credibility. As well, the ECB’s primary focus remains containing inflation. With eurozone inflation running at an 8.5% clip, the ECB needed another oversize rate hike. Could the financial crisis turn out to be a blessing in disguise? Perhaps, according to ECB President Lagarde. On Monday, Lagarde told European lawmakers that market turmoil could dampen demand and “might actually do part of the work that would otherwise be done by monetary policy and interest rate hikes”. Lagarde reiterated that more rate hikes were needed to curb inflation, but didn’t make any commitments as to the pace of rate hikes, which makes sense, given that the current crisis is not over. EUR/USD Technical EUR/USD is putting pressure on resistance at 1.0778. Next is 1.0890 There is support at 1.0647 and 1.0535 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD - euro extends rally, market turmoil eases - MarketPulseMarketPulse
Ralph Shedler talks US dollar against Swiss franc - May 12th

Next Credit Suisse case developments may add volatility to Swiss franc

Kenny Fisher Kenny Fisher 20.03.2023 14:11
USD/CHF is trading quietly on Monday, after a tumultuous week. In the European session, USD/CHF is trading at 0.9276, up 0.15%. Credit Suisse takeover, central banks take action There was a flurry of activity on Sunday in response to the banking crisis which has shaved some $1 trillion from global financial shares this month. UBS has agreed to take over Credit Suisse, the second-largest bank in Switzerland. The move hasn’t stopped the bleeding at Credit Suisse, as its shares are down some 60% today. UBS shares are down 6% today and Deutschebank and other major European banks are also in the red. As well, six central banks, including the Swiss National Bank (SNB) and the Federal Reserve announced they had coordinated action in order to boost liquidity. This move is aimed at restoring market confidence in the global banking system, which has been rocked by the failure of two US banks and the meltdown at Credit Suisse. Read next: Microsoft, Amazon and Google increased by nearly 15% last week| FXMAG.COM The Swiss franc was not immune to the market mayhem, as the sharp fall in Credit Suisse shares on Wednesday sent the Swissie tumbling by 2.1% and only settled down after intervention by the SNB. The Swiss franc, traditionally a safe-haven bastion, has seen its reputation tarnished as Swiss banks are in the middle of a banking crisis. Further developments in the Credit Suisse saga could lead to more volatility in the Swiss currency. The market turmoil has seen market pricing for Wednesday’s Fed meeting shift from an increase of 50 basis points to 25, with an outside chance of a pause in hikes. The Fed has adopted a hawkish stance in its battle with inflation, but the latest crisis will make the Fed think twice about its pace of rate hikes. The markets have priced in a terminal rate in a range of 4.75% to 5.25%, and with the current rate at 4.50-4.75%, that means the markets are expecting the Fed to take a pause in the coming months. USD/CHF Technical USD/CHF is testing resistance at 0.9304. Above, there is resistance at 0.9382 0.9226 and 0.9110 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss franc in calm waters, but is there are a storm ahead? - MarketPulseMarketPulse
Small factors combine to pressure credit

Euro against US dollar: what were the reasons of a 50bp ECB rate hike?

Kenny Fisher Kenny Fisher 20.03.2023 12:54
After a tumultuous week in the financial markets, things appear to have settled down. The euro is showing limited movement, trading at 1.0655. Central banks move in unison to contain contagion It was anything but a quiet Sunday, as the Swiss government engineered an emergency bank merger, with UBS agreeing to buy Credit Suisse, the second largest bank in Switzerland. At the same time, six major central banks, including the Federal Reserve and the ECB, announced a joint move to ensure liquidity in the financial system. Both moves were aimed at restoring confidence after two US banks collapsed and Credit Suisse shares plunged. This has caused market turmoil and battered the global banking system, with European, Japanese and US bank shares all down by around 10%. The palpable fear is that the contagion could spread and trigger a full-blown financial crisis and it remains to be seen if the Credit Suisse merger and the central banks’ move will calm the markets. Read next: UBS Take over of Credit Suisse means over 50% of deposits will be held by a single institution| FXMAG.COM The ECB kept the pedal on the floor last week, delivering a 50-basis point rate hike which brought the cash rate to 3.0%. The move came in the middle of the banking crisis, and there was speculation that the Bank would opt for a modest 25-bp increase. There were two strong reasons for the oversize rate hike. First, ECB President Lagarde had stated that the ECB would raise rates by 50 bp, and not following through could have damaged the Banks’ credibility. Second, inflation remains high at 8.5%, and with Germany and the eurozone showing some decent economic numbers, the conditions were ripe for a 50-bp move. The ECB is lagging behind other central banks with a cash rate of 3.0% and will have to continue raising rates to lower inflation closer to the target of around 2%. EUR/USD Technical 1.0622 has been a key level throughout the week. EUR/USD is testing resistance at this line. Next is 1.0718 There is support at 1.0542 and 1.0446 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro edges lower, ECB and other central banks take joint action - MarketPulseMarketPulse
Bank of England raised the interest rate for the 12th meeting in a row

British pound against US dollar - UK inflation expectations got reduced

Kenny Fisher Kenny Fisher 17.03.2023 14:31
We have seen some strong movement from the British pound this week, which is not surprising given the turmoil which has gripped the financial markets in the wake of the US banking crisis. In the European session, GBP/USD is showing little movement and is trading at 1.2119. Big banks to the rescue Market mayhem has been the buzzword this week, as the financial markets were shaken by the collapse of Silicon Valley Bank (SVB) over the weekend. The contagion spread and Credit Suisse, Switzerland’s second-largest bank saw its shares tumble 30% on Wednesday. In the US, shares of First Republic Bank, a mid-size bank, sank after a run on the bank by depositors. The major US banks sprang into action, fearing that the contagion would spread to mid-size and small banks. Bank of America, Goldman Sachs and others pledged to lend First Republic $30 billion. The rescue plan is unprecedented and nervous markets are hopeful that the crisis will not worsen. The Fed and the US government are also watching developments with bated breath. Treasury Secretary Yellen told a Senate finance committee that the US banking system is “sound” and that there would be a review of what went wrong at SVB. For now, the big bank rescue plan has calmed fears and risk appetite has improved. Still, with bank shares moving up and down like a yo-yo this week, caution sounds like sound advice for traders. Read next: Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen| FXMAG.COM The Fed holds its policy meeting on March 22nd and market pricing has been all over the map. Earlier in the week, it was a toss-up between a 25-basis point hike or a pause, according to the CME Group. The big bank rescue plan has shifted the odds to 79% for a 25-bp increase and 21% for a pause in hikes. I would not be surprised to see further market repricing ahead of the Fed meeting. In the UK, there was some welcome news on the inflation front. Inflation Expectations eased to 3.9% in February, down from 4.8% in January and a 5-month low. Inflation is running at a 10.1% clip, but the drop in inflation expectations could signal that inflation is headed back into single digits. GBP/USD Technical GBP/USD tested resistance at 1.2164 earlier in the Asian session. The next resistance line is 1.2294 There is support at 1.2113 and 1.1984 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD - Pound steady, inflation expectations ease - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Kenny Fisher Kenny Fisher 17.03.2023 13:15
The Japanese yen is in positive territory on Friday, trading at 133.02, up 0.56%. USD/JPY touched a one-month low on Thursday, falling as low as 131.72. How will BoJ react to the new wage agreement? The Kazuo Ueda era has begun at the Bank of Japan. Former Governor Kuroda has departed after 10 years at the helm and the markets are on alert as Ueda takes over. In his confirmation hearings, Ueda toed the line, stating that the current policy was appropriate. The markets aren’t so sure, as the Bank’s yield control curve (YCC) policy has distorted the bond markets and is in need of change. Kuroda didn’t make any moves at his final meeting earlier this month, which may have put more pressure on Ueda to tweak YCC, which would likely have a significant impact on the markets and the yen. Meanwhile, the annual Japanese rite of collective wage talks has ended, with employees getting the last laugh. Major Japanese companies, including automakers, agreed to fork over the largest pay increases since 1997, with an average wage increase of around 3%. Japan’s inflation rate of around 4% is much lower than in other major economies but is at a 42-year high and this put pressure on employers to provide hefty wage hikes. Read next: Maybe inflation isn't stealing the show as before, but for ECB it's still the key thing| FXMAG.COM How will the BoJ react to the wage agreement? Former Governor Kuroda insisted that current inflation was due to external factors such as high commodity prices and said that the BoJ would not consider tightening unless there was evidence that inflation was sustainable and being driven by wage growth. The new wage agreement could provide the BoJ with an excuse to tighten policy and even raise interest rates. Governor Ueda’s first meeting on April 28th promises to be interesting. USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY - Yen climbs to 1-mth high on market turmoil - MarketPulseMarketPulse
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

Maybe inflation isn't stealing the show as before, but for ECB it's still the key thing

Kenny Fisher Kenny Fisher 17.03.2023 12:06
It has been a busy week for the euro, reflective of the gyrations we’re seeing in the financial markets. EUR/USD has bounced back from a mid-week slide and is trading at 1.0661, up 0.46% on the day. ECB moves full steam ahead In the midst of market turmoil and fears of a full-blown financial crisis, the ECB held its rate meeting on Thursday and had everyone guessing about its intentions. The central bank had strongly signalled it would raise rates by 50 basis points but the bank crisis certainly complicated matters. Credit Suisse shares tumbled by as much as 30% a day before the meeting, weighing on the euro and eurozone bonds. It would have been understandable if the ECB had opted for a 25-bp move due to the market mayhem, but the central bank kept its word and delivered a 50-bp hike, bringing the main rate to 3.0%. Was the 50-bp hike risky in these volatile conditions? Yes, but policy makers may have been encouraged by the Swiss National Bank stepping up and lending Credit Suisse $53 billion, and there was the issue of the ECB’s credibility, after President Lagarde had essentially pledged a 50-bp increase. Also, a 50-bp was the strongest medicine the central bank could deliver in the fight against sticky inflation. Read next: Kim Cramer Larsson takes a technical look at Nasdaq 100, S&P 500, Dow Jones and Russel 2000| FXMAG.COM Inflation may have been knocked out of the headlines this week, but it hasn’t gone anywhere and remains the ECB’s number one priority. There was good news as the ECB’s inflation projections were revised downwards from December. Currently, inflation is expected to average 5.3% in 2023 and 2.9% in 2024, compared to the December estimate of 6.3% in 2023 and 3.4% in 2024. In her press conference after the meeting, President Lagarde was careful not to commit to further rate hikes, saying that rate decisions will be “entirely data dependent.” Still, with inflation well above the 2% target, it’s a safe bet that the ECB is not done with the current rate-tightening cycle. EUR/USD Technical 1.0622 has been a key level throughout the week. EUR/USD is testing resistance at this line. Next is 1.0718 There is support at 1.0542 and 1.0446   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD - Euro heads higher as ECB delivers 50-bp hike - MarketPulseMarketPulse
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

Australia: employment report stronger than expected. Reserve Bank of Australia expected to pause

Kenny Fisher Kenny Fisher 16.03.2023 22:17
The Australian dollar has taken investors on a roller-coaster ride this week, reflective of the gyrations we’re seeing in the financial markets. In the North American session, AUD/USD is trading at 0.6656, up 0.56%. Australian job growth outperforms Australia’s employment report for February was stronger than expected. The economy produced 64,600 news jobs, after a decline of 10,900 in January. This beat the estimate of 48,500. What was especially encouraging was that full-time jobs rose by 74,900, with part-time positions declining by 10,300. The unemployment rate fell to 3.5%, its lowest level in almost 50 years, down from 3.7% and below the estimate of 3.6%. The tightness in the labour market has allowed the RBA to aggressively tighten, with ten straight rate hikes since April 2022. Inflation slowed to 7.4% in January, down from 8.4% in December, so the rate hikes are having an effect on curbing inflation. Still, it will be a long road back to the inflation target of around 2%. The central bank is leaning to taking a pause at the April meeting and leaving the cash rate at 3.60%. Major central banks are moving away from continued tightening and the RBA will have to take that into account, as well as the Silicon Valley crisis which has investors on edge about contagion spreading. Central banks have to be cautious with all the market turmoil, for fear that additional tightening would make a global recession more likely. Read next: Credit Suisse, which decreased by 25% on Wednesday, dragged the euro lower| FXMAG.COM Market pricing of rate moves has been gyrating like a yo-yo, and currently there is a 10% chance that the RBA will cut rates by 25 basis points at the April meeting. Just a month ago, the markets expected rates to peak at 4.1% in August. The SVB crisis has completely shifted pricing and the markets are currently expecting rates to fall to 3.35% by August.On There was more good news as Australian consumer inflation expectations for March ticked lower to 5.0%, down from 5.1% and below the forecast of 5.4%. AUD/USD Technical AUD/USD is testing support at 0.6639. Below, there is support at 0.6508 0.6713 and 0.6844 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar climbs on strong employment data - MarketPulseMarketPulse
New Zealand dollar against US dollar decreased by 1.07% yesterday

The US unemployment claims reached 192K. According to Kenny Fisher, this points to a resilient labour market, what can support hawkish Fed

Kenny Fisher Kenny Fisher 16.03.2023 22:04
The New Zealand dollar has had a busy week, which is not surprising given the turmoil which has gripped the markets. NZD/USD has extended its losses on Thursday and is trading at 0.6162, down 0.40%. New Zealand GDP declines  The markets were braced for a soft GDP report for Q4, but the decline was sharper than expected. GDP slowed to 2.2% y/y, down from 6.4% in Q3 and shy of the estimate of 3.3%. On a monthly basis, GDP fell 0.6%, following a gain of 2.0% in Q3 and shy of the estimate of -0.2%. The Reserve Bank of New Zealand had projected 0.7% growth, and the miss could mean the central bank will ease up on the pace of rate hikes. The economy is showing weakness across the board, including manufacturing, consumer spending and trade. The RBNZ had projected that the economy would tip into a recession in the second quarter of 2023, but the contraction in Q4 may signal that the economy is already in recession. The forecast for Q1 of 2023 is gloomy, exacerbated by the severe flooding in January and February. Read next: ECB hikes by 50bp and drops forward guidance, while keeping the door open to more hikes| FXMAG.COM Given this bleak backdrop, the central bank may have to back its tightening plans. The markets had priced in the RBNZ hiking the cash rate by another 75 basis points to 5.50% by the third quarter, but this has fallen to 5.10%. The RBNZ meets next on April 5 and the market is 50/50 on whether the next hike will be 25 or 50 basis points. In the US, today’s data was a mixed bag. Unemployment claims fell to 192,000, down from 212,000 and lower than the forecast of 205,000. This points to a resilient US labour market, a key pillar of support for the Fed’s hawkish rate stance. Manufacturing has been struggling and the Philly Fed Manufacturing Index ticked higher to -23.2, compared to -24.3 prior and well below the forecast of 14.5 points. This release follows the Empire State Manufacturing Index, which tumbled to -24.6, down from -5.8 and below the forecast of -8.0 points. NZD/USD Technical NZD/USD is testing support at 0.6149. Below, there is support at 0.6071 0.6212 and 0.6290 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends losses as GDP contracts - MarketPulseMarketPulse
ECB cheat sheet: Difficult to pull away from the Fed

Credit Suisse, which decreased by 25% on Wednesday, dragged the euro lower

Kenny Fisher Kenny Fisher 16.03.2023 14:15
The euro has rebounded on Thursday after sliding 1.5% a day earlier, its worst daily showing since September 2022. In the European session, EUR/USD is trading at 1.0613, up 0.35%. The financial markets are in turmoil, with fears growing that the Silicon Valley collapse could lead to a full-blown banking crisis. Stock markets have fallen sharply and global banks took a hit on Wednesday after Credit Suisse stocks plunged by 25%. Credit Suisse dragged the euro sharply lower and US Treasury yields and eurozone bond also tumbled. Investors are understandably jittery and the lack of any action from the authorities is not helping matters. ECB meets in midst of market turmoil How will this volatile situation impact on the ECB decision later today? Given all the market turmoil, it’s anyone’s guess what ECB policy makers will do. Just last week, the markets had priced in an 85% chance of a 50 basis-point increase, but that has been shaved to 25 bp since the SVB collapse. ECB President Lagarde had signalled very clearly that the central bank would raise rates by 50 bp, and if the ECB doesn’t deliver it risks damaging credibility. A pause in rates is unlikely, but given the ugly economic backdrop, such a move cannot be discounted. Read next: Is the end of NFT flipping and speculation near? LiveArt announces an NFT membership card| FXMAG.COM Inflation in the eurozone is red-hot at 8.50% and remains the ECB’s number one concern. The current banking crisis may have shifted attention away from inflation, but the ECB will have to continue raising rates to bring inflation closer to the 2% target. The current market turmoil could lead the ECB to be more cautious at today’s meeting, but I expect that policy makers won’t shift their aggressive rate policy. The ECB will release an updated inflation forecast at the meeting, and if, as expected, the core rate projection is revised upwards, hawkish policy members at the ECB will be calling for more rate hikes. EUR/USD Technical EUR/USD is testing resistance at 1.0718. The next resistance level is 1.0798 There is support at 1.0622 and 1.0542 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD - Credit Suisse woes knock down euro, will ECB hike today? - MarketPulseMarketPulse
UK Gfk Consumer Confidence index got better fourth month in a row

Inflation in the UK still above 10%. OBR projects it may decline to 2.9% by the end of the year

Kenny Fisher Kenny Fisher 15.03.2023 23:45
The British pound has taken a nasty tumble on Wednesday. In the North American session, GBP/USD is trading at 1.202, down 1.1% on the day. Credit Suisse drags down US banking sector, boosts US dollar Since the collapse of the Silicon Valley Bank, the financial markets have been on a roller-coaster ride. Today the ride has been straight down, as equity markets are sharply lower. Credit Suisse, a major Swiss bank, saw its shares slump 25% today and fall to a record low, after Saudi National Bank, Credit Suisse’s largest investor, said it would not provide further funding. This has put further pressure on the already reeling financial sector and sent the shares of US banks sharply lower today. The financial crisis has dampened risk appetite, which has boosted the safe-haven US dollar higher against all the majors except the Japanese yen, which is also a safe-haven asset. Read next: Facebook and Instagram parent Meta has announced discontinuing NFT support on mentioned platformed | FXMAG.COM Today’s US releases, led by retail sales, were a disappointment. The retail sales headline figure came in at -0.4% m/m, missing the estimate of -0.3% and well off the January reading of an upwardly revised 3.2%. The core rate slowed as expected to -0.1%, after an upwardly revised 2.4% gain in January. The Producer Price Index also slowed in February and the NY Empire State Manufacturing Index fell by -24.6, compared to -5.8 prior. The soft data has raised the likelihood of a Fed pause at the March 22 meeting, with the markets pricing the odds of a pause or a 25-bp hike at close to 50/50. Just a week, ago the markets were expecting the Fed to hike by 50 bp at next week’s meeting. Inflation in the UK remains above 10%, which has taken a significant toll on households. Real household disposable income is expected to fall by some 5.7% over the next two years, according to the Office for Budget Responsibility (OBR). That would mark the biggest two-year drop since records began in 1956. The OBR had a surprisingly optimistic view on inflation, however, projecting that it would fall to just 2.9% by the end of the year. GBP/USD Technical GBP/USD has broken below support at 1.2113. The next support level is at 1.1984 There is resistance at 1.2294 and  and 1.2474 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound sinks on banking sector fears - MarketPulseMarketPulse
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

New Zealand GDP expected to shrink 0.2%, according to Oanda's Kenny Fisher, road to RBNZ's inflation target may be long

Kenny Fisher Kenny Fisher 15.03.2023 16:31
The New Zealand dollar is in negative territory on Wednesday, ending a 3-day rally that saw NZD/USD climb 160 points. In the North American session, NZD/USD is trading at 0.6205, down 0.50%. New Zealand GDP projected to contract in Q4 New Zealand releases fourth-quarter GDP later today, with the markets braced for a slowdown compared to Q3. GDP is expected to decline 0.2% q/q in Q4, compared to a 2% gain in Q3. On an annualized basis, the consensus stands at 3.3% growth, down sharply from 6.4% in Q3. The Reserve Bank of New Zealand has been aggressive in its tightening, raising the cash rate to 4.75%. The central bank is in an all-out battle against inflation, but success remains elusive as inflation remains stickier than anticipated. In the fourth quarter, inflation came in at 7.2%, the same as in Q3 and a tick lower than the 7.3% gain in Q2. The sharp rise in rates hasn’t eased inflation but has hurt the economy. Retail sales for Q4 fell 0.6%, after an upwardly revised gain of 0.6% in Q3, and manufacturing sales fell sank to -0.4% in Q4, after a 5.0% gain in the third quarter. A weak GDP report will likely result in more criticism of the central bank’s rate policy, which is causing economic damage but has failed to rein in inflation. The road from 7% inflation to the RBNZ’s target of 1-3% promises to be a long and bumpy journey, and the markets are expecting the central bank to raise rates as high as 5.25% in mid-2023 before taking a pause. That means more misery for households and businesses who are grappling with the double whammy of rising interest rates and red-hot inflation. Read next: The payrolls bump was mostly witnessed in leisure, hospitality, retail trading, government and health care| FXMAG.COM In the US, today’s numbers were dismal. The retail sales headline figure came in at -0.4% m/m, missing the estimate of -0.3% and well off the January reading of an upwardly revised 3.2%. The core rate slowed as expected to -0.1%, after an upwardly revised 2.4% gain in January. The Producer Price Index also slowed in February and the NY Empire State Manufacturing Index fell by -24.6, compared to -5.8 prior.  These unimpressive numbers have lent support to the case for a pause from the Fed at the next meeting. Currently, the markets have priced in the likelihood of a 25 bp hike or a pause at close to 50/50. NZD/USD Technical NZD/USD is testing support at 0.6212. Below, there is support at 0.6149 0.6290 and 0.6353 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US retail sales decline, PPI softens, New Zealand GDP next - MarketPulseMarketPulse
Asia Morning Bites - 23.05.2023

Reserve Bank of Australia tightening cycle may end soon. Employment report to be released soon

Kenny Fisher Kenny Fisher 15.03.2023 13:18
The Australian dollar, which has posted strong gains early in the week, has run into a wall on Wednesday. In the European session, AUD/USD is trading at 0.6638, down 0.66%. Australian job growth expected to rebound Australia releases the February employment report on Thursday (Australia time). Job growth is expected to rebound, with a consensus of 48,500 after a soft January read of -11,500. The unemployment rate is expected to tick lower to 3.6%, down from 3.7%. The Reserve Bank of Australia will be watching closely, as a robust labour market has enabled the central bank to continue its tightening – the Bank raised rates last week by 25 basis points, a 10th straight hike which brought the cash rate to 3.60%. The good news is that the end of the tightening cycle could be near, with the markets pricing in a pause at the April meeting. Consumers and businesses are weary of rising interest rates and confidence indicators do not paint an optimistic picture. Read next: The year-to-date trend for green cryptos remains very bullish. ADA has propelled 32%, and DOT witnessed a 37% surge, just to name a few| FXMAG.COM Along with the job data, Australia releases consumer inflation expectations for March. The markets are braced for the indicator to rise to 5.4%, after a 5.1% gain in February. Inflation expectations is a key inflation gauge as it can set the direction of actual inflation, and the RBA will not be happy if inflation expectations accelerate. There is an uneasy calm in the air as the dust begins to settle after the Silicon Valley Bank collapse. The sky is not falling, not even above US bank towers, as regional bank stocks have rebounded. The US inflation release on Tuesday delivered as expected, with both the headline and core CPI readings matching the estimates. Headline CPI fell to 6.0%, down from 6.4%, while the core rate ticked lower to 5.5%, down from 5.6%. Inflation is cooling but we’re not seeing the disinflation process that the markets were celebrating only a few weeks ago. AUD/USD Technical AUD/USD is testing support at 0.6639. Below, there is support at 0.6508 0.6713 and 0.6844 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
UK Gfk Consumer Confidence index got better fourth month in a row

The Pound Has Not Reacted To The Release Of Data

Kenny Fisher Kenny Fisher 14.03.2023 14:27
The British pound has reversed directions after an impressive rally that saw GBP/USD climb 370 points. In the European session, GBP/USD is trading at 1.2154, down 0.24%. US dollar recovers The collapse of the Silicon Valley Bank (SVB) on Friday sent the financial markets into turmoil on Monday. US bank stocks declined sharply, while safe-haven gold powered higher. The US dollar retreated against the major currencies and the 2-year Treasury yield fell almost a full point. Tuesday has brought better news, as the markets appear to have settled down. The US dollar has regrouped and is higher against the majors. There is an uneasy calm in the air, but that doesn’t necessarily mean that this latest crisis is behind us. Investors are on alert and will be very sensitive to new developments and any negative news could renew market volatility. The Fed and Treasury Department acted quickly to protect depositors and President Biden sent a reassuring message at an impromptu television address, but the collapse of the 16th largest lender in the US means it’s unlikely to be “business as usual” for some time. It was just a week ago that Fed Chair Powell’s hawkish testimony on the Hill raised expectations of the Fed delivering a 50-bp increase at the March 22 meeting. Those expectations have vanished into smoke, with the markets now expecting a 25-bp hike, with an outside chance of a pause.  We could see further market repricing after today’s CPI report, with headline CPI expected to fall to 6.0%, down from 6.4%. In the UK, the employment report was within expectations. The unemployment rate remained at 3.7%, shy of the estimate of 3.8%. Hourly earnings fell to 5.7%, as expected, down from an upwardly revised 6%. The pound hasn’t reacted to the release and the data is unlikely to change minds at the Bank of England, which is expected to raise rates by 25 bp at the March 23 meeting.   GBP/USD Technical GBP/USD tested resistance at 1.2113 earlier in the day. Above, there is resistance at 1.2294 There is support at 1.1984 and 1.1854 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
These findings of a review of the Reserve Bank of Australia may surprise you!

AUD/USD Pair Tested 0.6639 In Resistance Earlier In The Day

Kenny Fisher Kenny Fisher 13.03.2023 12:56
The Australian dollar is considerably higher on Monday. In the European session, AUD/USD is trading at 0.6617, up 0.58%. Earlier in the day, AUD/USD rose 95 points before paring much of those gains. Bank collapse clouds Fed policy The week is starting off with a light data calendar, but the markets are abuzz after the Silicon Valley Bank (SVB) suddenly collapsed. The failure of SVB has raised contagion fears but so far the damage seems contained and hasn’t weighed too much on the large banks. The Federal Reserve and Treasury Department stepped in quickly and said SVB depositors would be protected, which calmed down jittery markets to some extent. The SVB debacle was the largest failure of a US bank in 15 years and has dramatically shifted market pricing of interest rates expectations. Before the collapse, the markets had priced a 50-bp hike at 70% and a 25-bp at 30%. Currently, there is a 70% of a 25-bp increase and a 30% chance of the Fed taking a pause. This shift away from a 50-bp hike is weighing on the US dollar, which has lost ground against the major currencies as a result. Still, if it becomes clear that no further banks are in danger of failing, we could see the markets again price in a 50-bp increase. Besides the contagion issue, investors will be keeping a close eye on Tuesday’s inflation report. The February US employment report on Friday was hot/cold. Job growth came in at 311,000, blowing past the estimate of 225,000. The rest of the report was not as impressive and lent support to the view that the labour market may be about to cool. Wage growth ticked lower to 0.2% m/m, down from 0.3% in January and a consensus of 0.3%. As well, the unemployment rate rose to 3.6%, above the prior reading of 3.4%, which was also the estimate. Australia releases consumer and business confidence indicators on Tuesday, with both expected to show improvement. Westpac Consumer confidence is expected to post a gain of 0.1% after a miserable -6.9% reading, while National Australia Bank’s Business Conditions are projected to improve to 21, following a reading of 18 prior.   AUD/USD Technical AUD/USD tested 0.6639 in resistance earlier in the day. Above, there is resistance at 0.6713 There is support at 0.6508 and 0.6434 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Kenny Fisher Kenny Fisher 10.03.2023 13:30
The Japanese yen is trading at 1.36.83 in the European session, down 0.52%. USD/JPY fell 0.90% on Thursday but has recovered much of those losses today. Kuroda exits with a whimper Bank of Japan Governor Kuroda didn’t fire any final shots at his final meeting today. The BoJ maintained interest rates at -0.1%, where they have been pegged since 2016, and didn’t make any changes to its to yield curve control (YCC) policy. Traditionally, BoJ governors do not make waves at their final meeting, but there was an outside chance that Kuroda might buck the trend. Kuroda has surprised the markets in the past, most notably when he widened the yield curve band in December and jolted the markets. This time, Kuroda stayed on the sidelines and the yen responded with losses as some investors were disappointed that he didn’t tweak the YCC. Kazuo Ueda takes over as BoJ Governor next month, and there is growing speculation that Ueda will change forward guidance and tweak or even abandon YCC, as distortions in the yield curve are damaging the bond markets. Ueda may not press the trigger when he chairs his first meeting in April but is expected to shift policy in the coming months. The US releases its February employment report, highlighted by nonfarm payrolls, later today. The blowout January reading of 517,000 is widely seen as a blip, although the labour market remains surprisingly resilient, despite the bite of rising interest rates. The estimate for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed’s hawkish stance and should be bullish for the greenback. The Fed will also be keeping a close eye on wage growth, in addition to nonfarm payrolls. Average hourly earnings are expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. Higher wages drive inflation higher and an acceleration in wage growth would complicate the Fed’s battle to curb inflation.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Kenny Fisher Kenny Fisher 10.03.2023 13:00
The Canadian dollar continues to sag and has dropped 1.9% this week. Hold onto your hats, as we could have some further volatility from USD/CAD in the North American session, with the release of the US and Canadian employment reports. All eyes on NFP The highlight of the day is the US nonfarm payrolls report, which is expected to head back to earth after a blowout gain of 517,000 in January. The consensus for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed’s hawkish stance and should be bullish for the greenback. The ADP payroll report, which precedes the nonfarm payroll release, improved to 242,000, up from an upwardly revised 119,000 and above the estimate of 200,000. The ADP reading is not considered all that reliable at forecasting the nonfarm payrolls report so I wouldn’t read too much into it. Still, the US labour market remains strong despite the Fed’s tightening, and I would not be surprised to see nonfarm payrolls follow the ADP’s lead and beat the estimate. In addition to nonfarm payrolls, the Fed will also be keeping a close eye on wage growth. Average hourly earnings is expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. The Fed is focussed on lowering inflation and an acceleration in wage growth could prompt the Fed to be more aggressive with its pace of rate increases. Canada also recorded a sharp gain in new jobs in January, with a reading of 150,000, up from 104,000 prior. The markets are braced for a small gain of 10,000 in February, and a soft print of 5,000 or lower would likely weigh on the Canadian dollar. The unemployment rate is expected to tick up to 5.1%, up from 5.0%.   USD/CAD Technical There is support at 1.3787 and 1.3660 1.3927 and 1.4190 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Governors Of The Bank Of Japan Are Unlikely To Make Policy Changes

Kenny Fisher Kenny Fisher 09.03.2023 12:32
The Japanese yen is showing strength on Thursday. In the European session, USD/JPY is trading at 136.27, down 0.79%. Kuroda’s last hurrah After 10 years at the helm of the Bank of Japan, Governor Kuroda chairs his final policy meeting on Friday. Traditionally, BoJ governors have not made policy changes at their last meeting, and in all likelihood, Kuroda will not go out into the night with guns blazing. Still, Kuroda likes to keep the markets guessing and his tweak of the 10-year yield target range in December completely blindsided traders and jolted the financial markets. This has kept the markets on alert for Kuroda tweaking or even abandoning the BoJ’s yield curve control (YCC) policy. The bond market remains dysfunctional due to the YCC, even with the band widening in December. Governor-elect Ueda has stated that the current policy is appropriate, but this is to be expected at this sensitive time of changing the guard at the BoJ. Ueda will be under pressure right away to make changes to the YCC, and that could occur as soon as he takes over in April. Fed Chair Powell didn’t add anything new at a second day of testimony on Capitol Hill, but the markets have been scrambling since his hawkish comments to lawmakers a day earlier. Powell’s said that the Fed would accelerate the pace of interest rate increases if that was what the data dictated. The markets have fallen in line and have priced a 50-basis point hike at the March 22 meeting at 77% according to the CME Group, compared to 25% before Powell’s testimony on Tuesday. Powell’s hawkish stance has also fuelled expectations that the peak rate will be higher than expected. In December, the Fed projected a rate of 5.1%, but that is clearly out of date. The markets have priced in a peak rate of around 5.5% and Blackrock, the world’s largest asset manager sees rates peaking at 6%. Currently, the benchmark rate stands at 4.75%.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Bank Of Canada Is Widely Expected To Maintain The Cash Rate At 4.50%

Kenny Fisher Kenny Fisher 08.03.2023 14:04
The Canadian dollar has steadied on Wednesday, after sliding 1% a day earlier. Later today, the Bank of Canada meets for its monthly meeting. BoC likely to pause The Bank of Canada is widely expected to take a pause at today’s meeting and maintain the cash rate at 4.50%. This would mark the first pause in rate hikes since the current tightening cycle began in January 2022. The BoC has raised rates by 425 basis points during this time and the tightening has had a dampening effect on the economy – GDP in Q4 flattened out and inflation has fallen under 6%. There is a possibility that the BoC will continue to hold rates, but that will depend on the data, particularly inflation and employment. The shift in policy is bearish for the Canadian dollar, especially with the Federal Reserve expected to continue raising rates. Currently, there is only a 25-bp differential in rates between the US and Canada, but if the Fed keeps raising and the BoC stays on the sidelines, the divergence in rates will weigh on the Canadian dollar, which has plunged some 3% since its February high. It’s a very different story south of the border, where the US economy is churning out strong numbers and the disinflation process appears to be on hold. In his testimony on Capitol Hill, Fed Chair Powell noted that the latest (January) data was stronger than expected and signalled that the Fed would respond with higher rates than it had previously anticipated. Although the January numbers may have been a blip, the markets are marching to the Fed’s tune and have now priced in a 50-bp hike at the March 22 meeting at 75%, up from 25% prior to Powell’s testimony, according to the CME Group.   USD/CAD Technical 1.3701 and 1.3784 are the next resistance lines 1.3571 is a weak support line, followed by 1.3478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

AUD/USD Pair Sustained Its Second Most Bearish Day

Kenny Fisher Kenny Fisher 08.03.2023 13:02
The Australian dollar has stabilized on Wednesday after a dreadful outing a day earlier. In the European session, AUD/USD is trading just below the 0.66 line. AUD/USD sustained its second most bearish day this year on Wednesday, with a staggering decline of 2.1%. Earlier today, the Australian dollar touched a low of 0.6567, its lowest level in four months. A combination of a dovish rate hike by the Reserve Bank of Australia and hawkish comments from Fed Chair Powell sent the Australian dollar reeling. The RBA hike of 25 basis points was practically business as usual, but investors picked up on the removal of a reference to raising rates “over the months ahead”, a possible signal that the RBA could be near the end of the current rate-tightening cycle. The rate statement explicitly said that inflation had peaked, clearly a dovish signal from policy makers. Earlier today, Governor Lowe used a second “p” word which weighed on the Australian dollar, saying that a pause in rate increases was closer. Does that mean that the April meeting will be a “one and done”? Perhaps, but Lowe has said previously that the Bank will make its rate decisions on a meeting-by-meeting basis, after evaluating the data. This means that the next inflation and employment reports will have a critical impact on what the RBA does at next month’s meeting. In the US, Fed Chair Powell remained in hawkish mode in his testimony on Capitol Hill. Powell pointed to the recent string of strong releases and said the Fed would likely need to raise rates more than it had anticipated. Powell said that the Fed would evaluate the need to increase the pace of rate hikes based on the “totality of the data”. The remarks caused a huge shift in market pricing, with the likelihood of a 50-bp at the March 22 meeting rising to 70%, up from 25% prior to Powell’s testimony, according to the CME Group.   AUD/USD Technical 0.6565 is a weak support line. Below, there is support at 0.6402 There is resistance at 0.6626 and 0.6749 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike

The SNB Does Not Provide Forward Guidance For Its Rate Policy

Kenny Fisher Kenny Fisher 07.03.2023 14:16
USD/CHF has rebounded on Tuesday, ending a rally that saw the Swiss franc climb over 1%. In the European session, USD/CHF is trading at 0.9344, up 0.40%. Swiss inflation higher than expected Switzerland released the February inflation report on Monday and the reading was higher than expected. CPI rose 0.7% m/m, up from 0.6% in February and above the 0.4% forecast. On an annualized basis, CPI climbed 3.4%, edging up from 3.3% and higher than the forecast of 3.1%. These inflation numbers would be a dream come true for most major central banks, which are struggling with inflation levels two or three times higher. Still, the Swiss National Bank is concerned about high inflation, as its target is 0-2%. The SNB was widely expected to raise rate by 50 basis points at the rate meeting on March 23 and the uptick in February inflation cements the likelihood of such a move. Swiss National Bank Chair Jordan will make an appearance later today and is likely to address the rise in inflation. The SNB does not provide forward guidance for its rate policy, but the central bank has projected an inflation rate of 2.4% for 2023. With the cash rate currently at 1%, it’s a safe bet that we’ll see another hike in June of either 25 or 50 basis points. The continuing tightening should provide a boost to the Swiss franc, but traders should keep in mind that the SNB has not hesitated to intervene in the foreign exchange market when the Swiss franc became too strong for its liking. In the US, Federal Reserve Chair Powell will be in the spotlight as he testifies before a Senate committee later today. The Fed has remained hawkish and after a host of strong January releases, the markets have shifted their expectations closer to the Fed’s stance. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to pricing in three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates and the markets are hoping that Powell’s comments will provide some clarity.   USD/CHF Technical There is resistance at 0.9381 and 0.9420 0.9304 and 0.9224 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Dovish Tone Of The Statement Has Sent The Australian Dollar Lower

Kenny Fisher Kenny Fisher 07.03.2023 14:12
The Australian dollar continues to lose ground and is sharply lower on Tuesday. In the European session, AUD/USD is trading at 0.6676, down 0.81%. Earlier, the Australian dollar fell as low as 0.6674, its lowest level since December 23rd. RBA delivers a ‘dovish hike’ There were no surprises from the RBA, which hiked rates by 25 basis points and raised the cash rate to 3.6%. This marked a fifth consecutive increase of 25 bp, as the central bank continues to raise rates in modest increments in a bid to curb inflation without choking economic growth. This rate decision was noteworthy in the language of the rate statement, which suggested that the RBA could be nearing the end of the current rate cycle. The statement removed a reference in the February statement to needing to raise rates “over the months ahead”, and instead stated that “tightening of monetary policy will be needed to ensure that inflation returns to target. The markets picked up on this change in language as a dovish signal. As well, the statement explicitly said that inflation had peaked, another hint that multiple rate hikes may not be needed. The dovish tone of the statement has sent the Australian dollar considerably lower today. In the US, Federal Reserve Chair Powell testifies today on the semi-annual monetary policy report. The Fed has been consistently hawkish about the need to continue raising rates and the markets have aligned their expectations closer to the Fed. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to expectations for three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates after a host of stronger-than-expected data in January, such as a blowout employment report. These strong numbers may have been a blip, and it will be interesting to see if Powell reiterates a hawkish stance and ignores the January numbers. The markets are widely expecting a 25-basis point hike at the March 22 meeting, but a 50 bp increase cannot be discounted, as the Fed has said that the pace of rate hikes could be ‘higher and longer’.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

Kenny Fisher Kenny Fisher 07.03.2023 10:56
It’s shaping up to be another relatively flat day in the markets as investors turn their attention to Capitol Hill ahead of Jerome Powell’s first testimony. The Fed Chair will appear before the Senate Banking Committee later today to testify on the semi-annual monetary policy report. These events naturally attract a lot of attention but the reality is the Chair’s performance is usually quite polished and uncontroversial, and the occasion itself can drag on and frequently venture away from topic. In other words, we shouldn’t assume we’re about to get fireworks from Powell. What may make this occasion different is the fact that there’s so much uncertainty around the outlook for interest rates and inflation. While the Fed has maintained that rate hikes must continue, the economic data from January has forced markets to adjust to that reality too so there’s every chance we get a hawkish offensive from Powell. Considering the likelihood of the January data being a blip rather than a trend, I think it would probably be wiser for Powell to maintain his previous tone as he may risk spooking the markets but if the FOMC truly is weighing up a 50 basis point hike this month, this would be a good opportunity to lay the groundwork for it. Nearing the end The RBA appeared to soften its tone once more after hiking rates by another 25 basis points today. The central bank is now of the opinion that inflation has peaked and so multiple rate hikes may no longer be the base case. That said, the RBA will decide meeting by meeting and a lot can change in between. Markets are now pricing in at least one more hike in the cycle and maybe two. The Australian dollar is a little lower on the day as the decision was perceived to be a dovish hike. Some promising signs Chinese trade data highlighted some modest improvements but remain quite weak overall. The drop in imports can possibly be attributed to some one-off factors including Covid exit waves and the Lunar New Year and the data will surely improve over the coming months as the economy returns to normal. Exports remained under pressure, although the number was better than expected, indicating still soft global demand which aligns with what we’ve seen recently elsewhere. Hanging on in there Bitcoin has been in consolidation since Friday’s sell-off with traders seemingly fearful of further ripple effects but still willing to hang on for now just in case. It’s been a fantastic year for crypto so far but events late last week were a quick reminder of the challenges facing the industry in the short term and the consequences of that. There’ll also be an eye on Powell’s testimony today as it may influence overall risk appetite in the markets. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

According to Oanda's Kenny Fisher, Kazuo Ueda will be under pressure to tweak the YCC

Kenny Fisher Kenny Fisher 06.03.2023 22:51
The Japanese yen is drifting at the start of the week. In the North American session, USD/JPY is trading just under the 136 line. Japan’s wage growth expected to slow Japan will release Average Cash Earnings for January later today. The wage growth indicator surged 4.8% y/y in December and is expected to slow to 1.9% in January. The sharp jump in December was likely a one-time bump, driven in large part by December bonuses. Wage growth is a key factor in the Bank of Japan’s ultra-loose policy. Governor Kuroda has said that he will not tighten policy, despite rising inflation, until there is evidence that inflation is being driven by wage growth rather than external factors such as commodity prices. Kuroda will chair his final policy meeting on March 10. Barring a huge surprise, Kuroda is expected to maintain policy and not make any changes to the yield control curve (YCC). Read next: In crude oil, we are increasingly likely to see a year of two distinctive halves| FXMAG.COM BoJ Governor-elect Kazuo Ueda takes over from Kuroda in April and has stated has his confirmation hearings that current policy is appropriate. Still, Ueda will be under pressure to tweak the YCC which continues to cause bond market distortion and he could make a change in policy as early as his first policy meeting in April. Federal Reserve Chair Powell will testify before Congress on Tuesday and Wednesday, and inflation will be the hot topic. The Fed’s aggressive rate-hike cycle has led to inflation dropping for seven straight months, and Powell acknowledged last month that the “disinflation” process had finally started. What has complicated matters is a string of better-than-expected releases, notably a sizzling nonfarm payrolls of 517,000 in January. Consumer spending has remained strong and Friday’s ISM Services PMI came in at 55.1 in February, which indicates strong expansion. How will the Fed respond to an economy that is performing better than expected? The markets hope to get some answers this week from Powell’s testimony on the Hill. USD/JPY Technical 136.06 is a weak resistance line, followed by 136.86 135.02 and 134.22 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY - Will wage growth shake up the yen? - MarketPulseMarketPulse
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Bank of Canada is expected to keep the rate unchanged, NFP expected to come at 200K

Kenny Fisher Kenny Fisher 06.03.2023 17:43
The Canadian dollar is coming off a relatively quiet week but that could change as there a host of key releases this week. Ivey PMI kicks things off later today, followed by the Bank of Canada rate decision on Wednesday and the February employment report on Friday. Canada’s Ivey PMI recorded a massive rebound in January, climbing from 33.4 all the way to 60.1 points. A reading above 50.0 points to expansion. The reading is expected to remain strong in February, with an estimate of 57.7 points. Canada’s economy ended 2022 in an unimpressive fashion, posting a growth rate of 0.0% y/y in the fourth quarter, compared to 2.3% in Q3. This was much lower than the market estimate of 1.5% and the Bank of Canada’s projection of 1.3%. On a monthly basis, December GDP contracted by 0.1%, down from 0.0% in November and below the estimate of 0.0%. BoC expected to pause The Bank of Canada meets on Tuesday and is widely expected to hold rates at 4.50%. A non-move would be significant, as the BoC hasn’t taken a pause since the current rate-tightening cycle began in January 2023. Governor Macklem has signalled to the markets that he wants to take a pause in tightening, and the weak GDP report will support the BoC easing off the rate pedal as the economy shows signs of slowing. The steep hike in rates has pushed inflation lower, as it fell to 5.9% in January, down from 6.3% a month earlier. What will the BoC do after tomorrow’s rate decision? The BoC would love to pause rates throughout the year, but Macklem has made clear that a pause is dependent on supportive data. There is also the complication that the Federal Reserve is likely to continue hiking several more times this year, and the BoC does not want to fall too far out of sync with rate levels in the US. Read next: Important Week For The Australian Dollar And Japanese Yen, BoJ And RBA Monetary Policy Decision Ahead| FXMAG.COM In the US, this week’s key events are Fed Chair Powell’s semi-annual testimony before Congress and the nonfarm payroll report, both of which could move the US dollar. If Powell provides any hints about further rate hikes, the US dollar could respond with gains. Nonfarm payrolls was red-hot in January with 517,000 new jobs, but this is expected to be a one-time bump, with the estimate for February standing at 200,000. The surprisingly resilient labour market has the Fed concerned about wage pressures, and a strong wage growth release could raise market expectations of higher rates. USD/CAD Technical 1.3701 and 1.3784 are the next resistance lines 1.3571 is a weak support line, followed by 1.3478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes Ivey PMI - MarketPulseMarketPulse
The RBA’s aggressive rate tightening cycle will be continued

The RBA’s aggressive rate tightening cycle will be continued

Kenny Fisher Kenny Fisher 06.03.2023 14:00
The Australian dollar is under pressure at the start of the new trading week. AUD/USD is trading at 0.6735 in Europe, down 0.50%. RBA expected to hike by 25 bp The RBA is widely expected to raise rates by 25 basis points on Tuesday, which would bring the cash rate to 3.60%, the highest level in a decade. The RBA’s aggressive rate tightening cycle has not been as effective as the central bank had hoped, as inflation has been stickier than expected. Australia’s monthly CPI for January dropped to 7.4%, down from 8.4% a month earlier. This drop indicates that rate hikes are having an impact on the economy, but there is a long road ahead before inflation falls back to the RBA’s target of 2-3%. There was some positive news on Monday, as the Melbourne Inflation gauge for February showed a drop in core inflation to 4.9% y/y, down from 5.3% in January. The headline figure remained unchanged at 6.3% y/y. Australian Treasurer Jim Chalmers has said he is “cautiously hopeful” that inflation has peaked, but it’s likely that the RBA will have to hike rates at least one more time before it can hit the pause button. Investors will be keeping a close eye on Governor Lowe’s rate statement, which will likely be hawkish given the stubbornly high inflation levels. Any hints about the need for further rate increases would likely be bullish for the Australian dollar. In the US, it promises to be a busy week. The key events are Fed Chair Powell’s semi-annual testimony before Congress and the nonfarm payroll report, both of which could move the US dollar. The markets will be keeping a close eye on Powell’s remarks and whether he will sound less hawkish, given the recent string of unexpectedly strong US releases. Nonfarm payrolls sizzled in January with 517,000 new jobs, but this is expected to be a one-time bump, with the estimate for February standing at 200,000. The surprisingly resilient labour market has the Fed concerned about wage pressures, and a strong wage growth release could raise expectations for further rate hikes.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Technical look: Euro against US dollar - what can we expect from the pair?

Euro against US dollar shaped by inflation prints. Eurozone CPI reached 8.6%

Kenny Fisher Kenny Fisher 02.03.2023 13:55
The euro remains busy and is down 0.40% on Thursday, trading at 1.0624. This follows the euro gaining 0.90% a day earlier. Eurozone inflation falls to 8.6% The euro’s moves today and yesterday have in large part been dictated by inflation releases. Earlier today, Eurozone Final CPI came in at 8.6% for January, down sharply from 9.2% in December. Headline inflation eased for a third straight month, after hitting a peak of 10.6% in October. The core rate has not followed this downward trend and ticked higher to 5.3% y/y in January, up from 5.2% in December. The improvement in headline inflation eased worries that the ECB would have to deliver another 50-basis point hike in May, after the expected 50-bp increase at the March 16 meeting. These concerns that the ECB would remain aggressive pushed the euro almost 1% higher on Wednesday after German inflation edged up to 9.3% in February, up from 9.2% in January and above the estimate of 9.0%. The usual suspects were at play in driving inflation higher – food and energy. The government has provided energy subsidies, but energy prices still shot up in January by 23.1% y/y, while food prices surged 20.2% in January y/y. In addition to the German inflation report, France and Spain also recorded unexpectedly strong inflation. The eurozone data calendar will wrap up with German and eurozone Service PMIs, which have been showing improvement and are back in expansion territory, an indication of a pickup in economic activity. The German PMI is expected at 51.3 and the eurozone PMI at 52.3 points. Read next: Patrick Reid on Kazuo Ueda's testimony: the speech did not give any clues away and kept many of us guessing| FXMAG.COM In the US, the Federal Reserve remains hawkish with its message that higher rates are on the way. Fed member Bostic reiterated this stance, saying that the terminal rate would be between 5% and 5.25% and have to remain at that level well into 2024. The markets have priced in a terminal rate of 5.50%, but worries over sticky inflation have led to some calls for rates to rise as high as 6%. EUR/USD Technical EUR/USD is testing support at 1.0655. Below, there is support at 1.0596 There is resistance at 1.0765 and 1.0894 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD dips as eurozone inflation eases - MarketPulseMarketPulse
The RBA Is Expected To Raise Rates By 25bp Next Week

The RBA Is Expected To Raise Rates By 25bp Next Week

Kenny Fisher Kenny Fisher 01.03.2023 14:17
The Australian dollar is showing strong gains for the first time in a week. AUD/USD is trading at 0.6764 in Europe, up 0.53%. Australia’s inflation eases Australia’s inflation fell to 7.4% in January, down from 8.4% in December and below the estimate of 8.0%. Australian Treasurer Jim Chalmers said that he was “cautiously hopeful” that inflation has peaked, but inflation still remained the economy’s biggest challenge. The GDP report was not as positive, with a gain of 0.5% q/q in Q4, below the Q3 gain of 0.7% and the forecast of 0.8%. On an annualized basis, GDP slowed to 2.7% in Q4, down sharply from 5.9% in the third quarter. The RBA’s rate-hike cycle has slowed economic activity and is responsible for the drop in inflation as well as the soft GDP. The central bank will have to consider how aggressive it should be with regard to future rate increases. Inflation needs to come down much further, but further rate hikes raise the risk of the economy tipping into a recession. The RBA is expected to raise rates by 25 basis points next week but may pause at the April meeting if the data, particularly inflation, allows the Bank to take to a breather. The Aussie received a boost today from strong Chinese PMIs. Manufacturing and Non-manufacturing PMIs improved in February and beat expectations, with readings of 52.6 and 56.3, respectively. A reading above 50.0 indicates expansion. China is Australia’s largest trading partner and a stronger Chinese economy means greater demand for Australian exports, which is bullish for the Australian dollar. China’s transition from zero-Covid to reopening the economy has gone well so far and a rebound in China is important not just for China and the region but for the global economy as well. Read next: Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

There Is A Strong Chance Of The Canadian Economy Tipping Into A Recession By Mid-2023

Kenny Fisher Kenny Fisher 28.02.2023 14:57
Canadian GDP expected to slow in Q4 It’s a very light data calendar for Canadian releases this week, with today’s GDP report the sole tier-1 event. Canada’s economy is expected to slow to 1.5% y/y in the fourth quarter, following a solid 2.9% gain in Q3. A slowdown in economic activity is what the Bank of Canada is looking for, as inflation remains public enemy number one.  CPI is moving in the right direction as it fell to 5.9% in January, down from 6.3% in December. The BoC is optimistic that the downturn will continue, with a forecast that inflation will fall to 3% by mid-2023 and hit the 2% target by the end of the year. The BoC will have to tread carefully in this tricky economic landscape. The economy is cooling and while inflation is easing, it remains much higher than the 2% target and will require additional rate hikes which will make a soft landing a difficult endeavour. If growth continues to weaken in 2023, there is a strong chance of the economy tipping into a recession by mid-2023. The Bank meets next on March 8 and the markets are expecting a 0.25% hike for the second straight time. The Bank would like to take a pause in its tightening cycle but this will require a substantial drop in inflation. In the US, strong employment and consumer data and stubborn inflation have supported the Fed’s hawkish stance and there is talk of the Fed raising rates as high as 6%. It was only a few weeks ago that the markets were talking about a ‘one and done’ rate hike in March, followed by a long pause and perhaps some cuts by year’s end. This has all changed as the US economy has proven to be surprisingly resilient, despite rising rates and high inflation. The markets are currently pricing in three more rate hikes this year, but that could change in a hurry if key releases in February show that the economy is slowing down.   USD/CAD Technical There is resistance at 1.3701 and 1.3794 1.3570 is under strong pressure in support. 1.3478 is the next support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Whether The RBA Will Be Able To Avoid A Recession?

Kenny Fisher Kenny Fisher 28.02.2023 14:46
The Australian dollar remains under pressure and has edged lower on Tuesday. AUD/USD dropped below the 0.67 line on Monday for the first time since Jan. 3. Australian retail sales bounce back Australian retail sales jumped 1.9% m/m in January, following an upwardly revised 4% decline in December and beating the consensus of 1.5%. The data indicates that consumer demand remains resilient despite rising interest rates and higher inflation. For the RBA, the upswing in consumer spending is a sign that the economy can continue to bear higher rates. The central bank has hiked some 325 basis points since May 2022 in a bid to curb inflation. The cash rate is currently at 3.35% and the markets have priced in a peak rate of 4.3%, with four rate hikes expected before the end of the year – one more than what is expected for the Fed. The RBA meets on March 7 and is widely expected to raise rates by 25 basis points. Wednesday could be a busy day for the Australian dollar, as Australia releases inflation and GDP reports. Inflation for January is expected to ease to 7.9% y/y, following an 8.4% gain in December. GDP for the fourth quarter is projected to slow to 2.7% y/y, after a robust gain of 5.9% in Q3. A decline in inflation and in GDP would indicate that high interest rates are having their intended effect and slowing economic activity. The question is whether the RBA will be able to guide the slowing economy to a soft landing and avoid a recession. In the US, a recent string of strong numbers has raised speculation that the Fed could raise interest rates as high as 6%. The unseasonably warm weather in January may have played a part in the better-than-expected numbers and we’ll have to see if the positive data repeats itself in February. The markets have shifted their stance from a final rate hike in March with rate cuts late in the year to pricing in three more rate hikes in 2023. If upcoming inflation, employment and consumer spending reports point to a weaker economy, we can expect the markets to revert to pricing in a dovish pivot by the Federal Reserve.   AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The Kiwi Pair (NZD/USD) Touched Its Lowest Level

Kenny Fisher Kenny Fisher 27.02.2023 14:07
The New Zealand dollar has extended its losses on Monday, after a dismal end to the week. In the European session, NZD/USD is trading at 0.6151, down 0.20%. Earlier, NZD/USD touched a low of 0.6131, its lowest level since Nov. 23. The US dollar flexed its muscles against the majors on Friday, courtesy of a sharp rise in the US personal consumption expenditures price index (PCE), the Fed’s preferred inflation indicator. Headline PCE inflation climbed 0.6% m/m in January, up from 0.2% in December and above the estimate of 0.5%. Core PCE inflation also rose 0.6% m/m, above the December reading of 0.4%, which was also the forecast. As well, Personal Spending in January surged 1.8%, compared to -0.1% in December and an estimate of 1.3%. The uptake from the better-than-expected inflation and consumer data is that the economy remains resilient and the Fed may have to raise rates even higher, perhaps closer to 6%. The markets have quickly shifted from expecting a hold in rate cuts to pricing three more rate increases this year, and the US dollar is showing gains on expectations that more rate hikes are coming.  Following the PCE release, Fed member Mester said she wasn’t surprised by the strong numbers and said that the Fed needed to do more to put inflation on a “sustainable downward path to 2%”. New Zealand retail sales decline In New Zealand, retail sales for Q4 disappointed at -0.6% q/q, down from an upwardly revised 0.6% reading in Q3 and shy of the estimate of 1.5%. This marks the third decline in four quarters. The core rate fell by 1.3%, compared to an upwardly revised 0.6% in Q3 and an estimate of 1.5%. The central bank remains in aggressive mode and raised rates by 0.50% last week, bringing the cash rate to 4.75%. The decline in retail sales signals that the extensive tightening is taking a bite out of economic activity, which is necessary in order for inflation to decline. Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM NZD/USD Technical 0.6124 is under pressure in support. Below, there is support at 0.6049 0.6193 and 0.6245 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The German economy underperformed in the Q4 of 2022, GDP declined

The German economy underperformed in the Q4 of 2022, GDP declined

Kenny Fisher Kenny Fisher 24.02.2023 14:28
The euro is down slightly on Friday. EUR/USD has been slowly moving lower and is down 1.1% this week. German GDP misses estimate The German economy, the biggest in the eurozone, underperformed in the fourth quarter of 2022. GDP declined by 0.4% in Q4 2022 q/q, below the 0.5% gain in Q3 and shy of the forecast of -0.2%. On an annualized basis, GDP slowed to 0.9%, down from 1.4% in Q3 and below the forecast of 1.1%. It was a rough end to 2022 for the German economy – the energy crisis, high inflation and the end of fuel subsidies all contributed to negative growth in the fourth quarter. The German consumer spent less in Q4 compared to Q3, but the silver lining is that consumer confidence continues to rise. GfK Consumer Climate is estimated to have improved to -30.5 in March, up from -33.8 in February. Consumer confidence is still deep in negative territory but has now accelerated over five consecutive months. The Federal Reserve remains in hawkish mode, as members continue to remind the markets that inflation is too high and more rate hikes are coming. The recent employment and retail sales reports helped convince the markets that the Fed means business, and investors are no longer talking about a ‘one and done’ rate hike in March with rate cuts before the end of the year. The markets appear to have bought into the ‘higher and longer’ stance that the Fed has been pushing, and expectations of a 0.50% hike in March have risen. According to CME’s FedWatch, the markets have currently priced the odds of a 25-basis point hike at 76% and a 50-bp increase at 24%. Earlier this week, the split was 83% for a 25-bp hike and 17% for a 50-bp rise.   EUR/USD Technical 1.0604 is a weak resistance line. Above, there is resistance at 1.0704 There is support at 1.0513 and 1.0413 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The BoJ is hoping that the government’s massive stimulus package will help bring down inflation

Kenny Fisher Kenny Fisher 24.02.2023 13:45
The Japanese yen is slightly weaker on Friday. In the European session, USD/JPY is trading just above the 135 line. Ueda pledges to continue easy policy Incoming Bank of Japan Governor Kazuo Ueda appeared at a parliamentary hearing on Friday and the markets were all ears. The buzz-word from Ueda was ‘continuity’, which really wasn’t a surprise. Ueda has already said that the current policy is appropriate and he maintained this stance at the hearing. Ueda said that ultra-low rates are needed while the economy is fragile and ruled out fighting inflation by tightening policy. With inflation running at 4%, above the BoJ’s target of 2%, there is pressure on Ueda to abandon or at least adjust the Bank’s yield control policy (YCC), which is being criticised for distorting market functions. Ueda treated this hot potato with caution. He acknowledged that the YCC had caused side effects but said that the BoJ should evaluate whether recent steps such as widening the band around the yield target would ease these problems. The takeaway from Ueda’s testimony is that he is in no hurry to shift central bank policy. Still, there is strong pressure on Ueda to address YCC, which is damaging the bond markets. Investors should not discount the possibility that Governor Kuroda could widen the target yield band at the March meeting in order to relieve pressure on Ueda. If Kuroda doesn’t act, the bond markets could respond with massive selling before Ueda takes the helm of the BoJ in April. The inflation pressures facing the BOJ were underscored by National Core CPI for January, which rose from 4.0% to 4.2%. This was just shy of the 4.3% estimate, but still the highest reading since 1981. The BoJ has insisted that inflation is temporary (remember that line from the ECB and the Fed?), and is hoping that the government’s massive stimulus package, which includes subsidies for electricity, will help bring down inflation.  Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.85. Above, there is resistance at 135.75 1.3350 and 131.90 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  Source: Yen edges lower after BoJ's Ueda testimony - MarketPulseMarketPulse
The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

Kenny Fisher Kenny Fisher 23.02.2023 14:08
The New Zealand dollar remains in calm waters, with little reaction to the Reserve Bank of New Zealand’s rate hike or the FOMC minutes. The RBNZ raised rates by a half-point on Wednesday, as the central bank remains aggressive in its battle to curb inflation. The move was in line with expectations and the New Zealand dollar moved higher but quickly pared those gains. The increase brings the cash rate to 4.75%, its highest level since 2009. With inflation running at a 7.2% clip, the RBNZ will have to keep raising rates until there is clear evidence that inflation has peaked. There was a strong possibility that the RBNZ would deliver a second straight hike of 0.75%, but Cyclone Gabrielle, which caused massive damage, led the bank to opt for a more modest hike of 0.50%. RBNZ Governor Orr said that it was too early to assess the monetary policy implications of Gabrielle but Orr noted that the rebuilding efforts would add to inflationary pressures. The rate statement was crystal clear with regard to future policy. The statement said although there are signs of inflation falling, the core rate and inflation expectations are too high and “monetary conditions need to tighten further” in order to bring inflation back down to the target of 1%-3%. FOMC says more hikes needed The FOMC minutes sounded a lot like the RBNZ statement, with Fed policy makers saying that there were signs that inflation had eased but more rate hikes were needed to lower inflation back to the 2% target. The minutes noted that the labour market remains robust, which is contributing to continuing upward pressures on wages and prices.” The Fed meeting took place before the blowout January employment report, and concerns over a hot labour market will be even more amplified. An important takeaway from the minutes is that although the vote to hike by 0.25% was unanimous, two members (Bullard and Mester) saw a case for a 0.50% increase. The Fed has been consistent in its hawkish stance, and what has changed over the past few weeks is that market pricing is more aligned with the Fed, with the markets no longer projecting a rate cut late in the year. Still, market pricing could shift again if the next batch of key data weakens ahead of the March 22 meeting. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The RBNZ Gave The New Zealand Dollar (NZD) A Brief Boost

The RBNZ Gave The New Zealand Dollar (NZD) A Brief Boost

Kenny Fisher Kenny Fisher 22.02.2023 12:43
The New Zealand dollar jumped after the Reserve Bank of New Zealand meeting but has pared most of these gains. In the European session, NZD/USD is almost unchanged at 0.6216. RBNZ hikes by 50 basis points The RBNZ delivered a 50 bp rate increase today, bringing the cash rate to 4.75%, its highest level since 2009. The move was widely expected, but a hawkish tone from the central bank gave the New Zealand dollar a brief boost. The rate statement noted that while there are signs that inflationary pressures are easing, CPI remains too high. The statement said that the cash rate “still needs to increase” in order to get inflation back to the Bank’s target of 1%-3%. There is plenty of life left in the RBNZ’s rate-tightening cycle, as the central bank has forecast a peak rate of 5.5% later this year. The next rate meeting is in April, and as things stand, we can expect another 50-bp hike at that time. Inflation is running at a 7.2% clip and a 75-bp hike was a strong possibility at today’s meeting before Cyclone Gabrielle hit and caused damage in the billions of dollars. This is expected to dampen growth in the slow term, although the rebuild should boost inflation. In the US, Manufacturing PMI was almost unchanged at 47.8, while Services PMI improved to 50.5, an 8-month high. The 50.0 level separates contraction from expansion, and both services and manufacturing have been in decline for months, as high inflation and rising interest rates have dampened activity in these sectors. The Fed will release the minutes of its February meeting, when it delivered a 25-basis point hike. The markets will be interested in the extent of support for a 50-bp hike at the meeting. The blowout employment report and a strong retail sales release have forced the markets to come closer to the Fed’s stance, and there is now talk of more rate hikes this year, when only a few weeks ago the markets were confidently projecting rate cuts in late 2023. Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM NZD/USD Technical There is resistance at 0.6245 and 0.6357 0.6162 and 0.6049 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Reserve Bank of Australia keeps getting in the way of the Australian dollar

Kenny Fisher Kenny Fisher 21.02.2023 14:45
The Australian dollar is in negative territory on Tuesday. In European trade, AUD/USD is trading at 0.6876, down 0.50%. RBA minutes indicate concern over inflation The Reserve Bank of Australia keeps getting in the way of the Australian dollar. RBA Governor Lowe appeared before a parliamentary committee last Wednesday and confirmed that further rate hikes were on the way as inflation was still unacceptably high. The Aussie responded by dropping 1.1%. The RBA minutes were released today and members expressed concern at the upside risk to inflation, noting that there was “more breadth and persistence” in inflation. The hawkish tone of the minutes has boosted rate-hike bets but the Australian dollar remains under pressure over concerns that the RBA is having trouble getting a handle on inflation, despite its aggressive rate-tightening cycle. Again, the Aussie has responded with losses. How much higher will interest rates go? That will depend to a large extent on upcoming data, starting with Wednesday’s Wage Price Index for Q4. Wages are expected to have climbed 3.5% y/y in Q4, up from 3.1% and the highest level since September 2012. Wages are an important driver of inflation and higher wages will make it more difficult for the Bank to curb inflation. The RBA minutes also indicated that members debated whether to raise rates by 25 or 50 basis points. Ultimately, the RBA opted for a modest 25-bp increase, which brought the cash rate to 3.35%. The money markets are projecting a terminal cash rate of 4.25% by August, which means that the RBA will likely be busy in the coming months. We’ll also hear from the Federal Reserve on Wednesday, with the release of the minutes from the February meeting. The Fed didn’t have any surprises and raised rates by 25 basis points. The markets will be looking to see how close the Fed was to hiking by 50 basis points. If the rate decision was a close call, the US dollar could continue to rally. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM AUD/USD Technical AUD/USD is testing support at 0.6907. Below, there is support at 0.6784 There is resistance at 0.7001 and 0.7124 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The RBNZ Is Widely Expected To Deliver A 50-Bp Increase

Kenny Fisher Kenny Fisher 21.02.2023 14:17
The New Zealand dollar is slightly lower on Tuesday. NZD/USD declined over 0.50% earlier but has pared most of these losses and is trading at 0.6240, down 0.20%. RBNZ expected to hike by 50 bp The Reserve Bank of New Zealand will meet on Wednesday, its first policy meeting this year. The Bank last met in November, at which time it hiked rates by a record 75 basis points, bringing the cash rate to 4.25%. There had been expectations of another 75-bp increase at tomorrow’s meeting, but Cyclone Gabrielle has thrown a monkey wrench into the decision. The cyclone, which caused damage in the billions of dollars, has raised concerns about the economy and the RBNZ is widely expected to lower gears and deliver a 50-bp increase. In the short term, the major disruptions from the cyclone are projected to raise inflation, which is already running at 7.2%, its highest level since 1990. Aside from Gabrielle, there are signs that inflation may have peaked. Inflation Expectations eased in Q1 to 3.3%, down from 3.6% in Q4 2022. Inflation hit 7.2% in the final quarter of 2022, lower than the RBNZ’s forecast of 7.5%. The RBNZ still has its foot on the brake, but if inflation continues to head lower, we can expect the Bank to ease up on the pace of rates in the coming meetings. In the US, we’ll get a look at the February PMI reports. Recent US numbers have beaten expectations, including employment growth, retail sales, and inflation. This is not a complete picture of the economy, as the services and manufacturing sectors have been in contraction territory for months, with readings below the 50.0 level. This negative trend is expected to continue, with Manufacturing PMI expected at 47.3 and Services PMI at 47.2 points. Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Expect the ECB to keep increasing rates at the short-term, at least until the summer

The Disinflation Process Has Not Started In The Eurozone

Kenny Fisher Kenny Fisher 20.02.2023 14:19
The euro showed some volatility at the start of last week but since then it has been in calm waters and has stayed close to the 1.0.7 line.We’ll get a look at eurozone and German PMIs on Tuesday. ECB signals another 50 bp hike The ECB has been criticized for sending mixed messages to the markets, but Christine Lagarde was crystal clear last week when she told EU lawmakers that “in view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in March”. Lagarde said the ECB would then evaluate future moves, but with inflation still high, the risks for further rate hikes are skewed to the upside. The ECB’s primary focus is to tame inflation. Headline inflation fell to 8.5% in January, down from 9.2% in December, but is still unacceptably high. Core CPI has been stickier than expected and wage increases are stemming the drop in inflation. ECB member Isabel Shnabel said last that investors risk underestimating inflation, a warning that the Fed has also made to the markets that have consistently been more dovish about rate policy than the Fed. Schnabel noted that the disinflation process has not started in the eurozone, another signal that the central bank will remain in a hawkish mode for the near future. Fed members continue to pound out the message that inflation remains too high and more rate hikes are needed. Investors are clearly concerned that the Fed will make good on these statements, which has sent risk sentiment lower and the US dollar higher. The markets had high hopes that the March rate increase would be a ‘one and done’, but it looks like the Fed will continue raising rates into the second quarter. According to CME’s FedWatch, the markets have priced in an 83% of a 25-bp hike and a 17% of a 50-bp increase. Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0704. Above, there is resistance at 1.0795 1.0604 and 1.0513 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The US Dollar Is Broadly Higher And Has Pummelled The Yen, USD/JPY Broke Above 135.00 Today

Kenny Fisher Kenny Fisher 17.02.2023 13:52
The Japanese yen is down sharply on Friday. In the European session, USD/JPY is trading at 134.93, up 0.73%. The yen fell below 135 earlier today for the first time since December 23. Solid US data sends dollar higher The US dollar is broadly higher and has pummelled the yen, climbing 2.6% this week. Strong US numbers have boosted the dollar, as the Fed is likely to remain hawkish with the economy remaining strong. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Consumer inflation ticked lower but was stronger than expected. Is the disinflation process stalled? The economy has proven to be surprisingly resilient to rising interest rates, leading to hopes for a soft landing or even a ‘no landing’. The Fed has been consistent in its message of ‘higher for longer’ with regard to rates, but the markets haven’t really been listening, assuming that the Fed would have to pivot and even cut rates later in the year. The stronger-than-expected releases, from nonfarm payrolls to inflation to retail sales have forced the markets to revise their stance and move closer to the Fed position that the terminal rate will be above 5%. Fed speak remains hawkish Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The depreciation of the yen will be raising eyebrows in Tokyo. The Bank of Japan and the Ministry of Finance have often voiced unease when the yen has plunged and this has led to currency interventions in order to prop up the yen. It’s a delicate time for the Bank of Japan, as Kozo Ueda is set to take over as Governor in April. If the yen continues to lose ground, we’re sure to hear warnings from the BoJ and the Ministry of Finance, possibly with threats of intervention. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.47. Above, there is resistance at 136.05 There is support at 1.3355 and 1.3296 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Kenny Fisher Kenny Fisher 17.02.2023 10:29
The euro is down for a third straight day and fell earlier to 1.0629, its lowest level since Jan. 23. In the European session, EUR/USD is trading at 1.0639, down 0.30%. US dollar flexing muscles The US dollar is showing some strength this week against the majors, as US data continues to shine. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Is the disinflation process stalled? The markets didn’t expect such good numbers, but the economy has proved to be surprisingly resilient to rising interest rates. The Fed has been preaching ‘higher for longer’ for some time, but the markets stuck to their dovish stance, expecting that the Fed would have to pivot and even cut rates later in the year. The host of strong US numbers has forced investors to recalibrate, and the markets have revised upwards their peak rate forecast to above 5%. The US dollar has been the big winner of the shift in market thinking, and US Treasury yields are at their highest level this year. Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The ECB raised rates by 50 basis points in February and has signalled that it will do the same at the Mar. 16 meeting. The main financing rate is currently at 3%, well below the Fed (4.5%) and other major central banks. It’s not clear what the Bank has planned after the first quarter, but with inflation running at 8.5%, the risk for further rate hikes is skewed to the upside. The ECB has made it clear that rates will remain high until there is evidence that inflation is falling toward the target, which means that the current rate-tightening cycle isn’t anywhere near its end. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0629. Below, there is support at 1.0581 1.0762 and 1.0847 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Forex: Kenny Fisher comments on US dollar against Canadian dollar - February 16th

Kenny Fisher Kenny Fisher 17.02.2023 00:04
The Canadian dollar continues to lose ground on Thursday. In the North American session, USD/CAD is trading at 1.3461, up 0.50%. Soft data weighs on Canadian dollar Weak Canadian releases are weighing on the Canadian dollar, which is down about 1% this week. Housing Starts fell to 215 thousand y/y, down from 248,000 (est. 240,000) and the lowest level since October 2020. Manufacturing Sales came in at -1.5% m/m, down from -0.2% (est. -1.8%). The Bank of Canada raised rates by 25 basis points in January, bringing the cash rate to 4.50%. At the meeting, the BoC signalled that it would hold rates at this level while it assessed the impact of its steep rate-tightening cycle. Inflation dropped to 6.3% in December, down from 6.8% and the lowest since February 2022. The battle with inflation isn’t won yet, but the BoC is quite optimistic, projecting that headline inflation will drop to just 2.6% in 2023. Lower inflation is unlikely to lead to rate cuts as long as wage growth, a key driver of inflation, remains strong. Read next: Judging from FxPro analyst's words, the US economy is doing well, but... | FXMAG.COM The BoC doesn’t have it easy when it comes to establishing rate policy, since Canada’s economy is so heavily dependent on the US. Currently, signs are pointing to the US experiencing a mild recession, but a more severe downturn in the US economy would dampen Canada’s export-reliant economy. In the US, we continue to see stronger-than-expected releases. The US Producer Price Index slowed to 6.0% in January, down from 6.5% but stronger than the estimate of 5.4%. This follows the January CPI report that ticked lower to 6.4% but was higher than the 6.2% estimate. Retail sales delivered an impressive gain of 3% in January, above the estimate of 1.8%. This was a strong rebound from the December reading of -1.1% and marked the largest gain since January 2022.  These strong numbers have boosted the US dollar, as the Fed will likely raise rates higher and for longer in order to put the brakes on the resilient economy and bring down inflation. USD/CAD Technical USD/CAD is testing resistance at 1.3439. Next is resistance at 1.3528 1.3386 and 1.3297 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar extends losses - MarketPulseMarketPulse
Ipek Ozkardeskaya: BoE will certainly leave the door open for further hikes

The Markets Are Braced For Bad News Form UK Report

Kenny Fisher Kenny Fisher 16.02.2023 14:22
The British pound has steadied on Thursday. In the European session, GBP/USD is trading at 1.2053, up 0.25%. This follows a sharp drop of 1.2% a day earlier. UK inflation continues to fall but remains disturbingly high. Headline inflation fell to 10.1% in January, down from 10.5% in December and below the consensus of 10.3%. The drop in inflation is welcome news, but food prices, a key driver of inflation, surged by 16.8% in January. With inflation still in double digits, the Bank of England will have to continue raising rates, with the most likely scenario being a 25-basis increase at the Mar. 22 meeting. The market probability of a 25-bp hike rose as high as 73% on Wednesday before dipping to 66% today, according to Refinitiv data. In the US, retail sales delivered an impressive gain of 3% in January, above the estimate of 1.8%. This was a strong rebound from the December reading of -1.1% and marked the largest gain since January 2022. This positive release follows the January inflation report that ticked lower to 6.4% but was higher than expected. These strong numbers translated into strong gains for the US dollar on Wednesday, as the Fed will likely raise rates even higher in order to put the brakes on the strong economy. The UK wraps up the week with retail sales on Friday. The markets are braced for bad news, with an estimate of -5.5% y/y for the headline figure (-5.8% prior) and -5.3% for the core rate (-6.1%). A weak retail sales report could sour investors on the pound and send the currency lower.   GBP/USD Technical GBP/USD tested resistance at 1.2071 earlier in the day. The next resistance line is 1.2180 1.1958 and 1.1838 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Analysis Of The Aussie Pair, Lowe Is Insistent That The Number One Priority Is To Curb Inflation

Kenny Fisher Kenny Fisher 16.02.2023 12:34
It has been a busy session for the Australian dollar, which started the day with losses but has recovered. In European trade, AUD/USD is trading at 0.6919, up 0.23%. Mixed Australian data Australia delivered some mixed data earlier today. The headline Employment Change for January surprised on the downside at -11,500 after -14,600 prior, well below the forecast of 20,000. There was better news on the inflation front, as Consumer Inflation Expectations for February fell to 5.1%, down from 5.6% expected and prior. The Australian dollar initially declined after these releases but has recovered and eked out small gains. The Aussie had a miserable outing on Wednesday, falling 1.1%. This was courtesy of hawkish remarks from RBA Governor Lowe, which unnerved investors. Lowe appeared before a parliamentary committee and confirmed that further rate hikes are on the way. The central bank has tightened sharply but this has not brought down inflation. In December, CPI hit 7.8%, the highest level since 1990, which Lowe admitted was “way too high”. The double whammy of rising rates and red-hot inflation is squeezing households and businesses, but Lowe is insistent that the number one priority is to curb inflation and avoid inflation expectations from becoming entrenched. US retail sales surprised with a huge 3% gain in December, the largest gain since January 2022. This rosy reading comes on the heels of an inflation release that was higher than expected. These strong numbers should have been bullish for the US dollar, as the Fed will likely raise rates even higher in order to put a brake on the strong economy. Investors, however, shrugged off the inflation and retail sales data and sent equities higher on Wednesday with a “bad news is good news” view. With risk appetite still intact, the US dollar hasn’t been able to capitalize on the inflation and retail sales releases. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM AUD/USD Technical AUD/USD is testing resistance at 0.6929. Above, there is resistance at 0.7001 0.6846 and 0.6774 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bank of England hikes rates and keeps options open for further increases

UK Inflation Continues To Fall, But Also British Pound (GBP) Too

Kenny Fisher Kenny Fisher 15.02.2023 14:08
UK inflation falls but remains above 10% The British pound is sharply lower on Wednesday. In the European session, GBP/USD is trading at 1.2069, down 0.88%. UK inflation continues to fall, although it clearly has a long way to go. January’s inflation dropped to 10.1%, down from 10.5% in December and below the consensus of 10.3%. The core rate dropped to 5.8%, down from 6.3% in December and lower than the consensus of 6.2%. These numbers offer room for a bit of optimism, as does the drop in wage growth on Tuesday. Still, inflation is a bumpy road that will feature highs and lows and market participants would be wise not to make decisions based on one release. With headline inflation still in double digits, the Bank of England will have to continue raising rates, with the most likely scenario being a 25-basis increase at the Mar. 22 meeting. In the US, inflation in January ticked lower to 6.4%, down from 6.5% but higher than the forecast of 6.2%. It was a similar story for the core rate, which dropped from 5.7% to 5.6% and was above the forecast of 5.5%. Inflation is still falling but the trend may be stalling, which will provide support for the Federal Reserve’s hawkish stance. After the US inflation release, several Fed members reiterated the “higher for longer” theme. Fed members Barkin, Logan and Harker all had a similar message that the Fed would likely raise rates if inflation did not fall fast enough. The Fed has projected a federal funds rate of 5% to 5.5% by the end of the year, but given the strong economy and high inflation levels, there have been forecasts of a terminal rate as high as 6%.   GBP/USD Technical 1.2180 has strengthened in resistance as GBP/USD is down sharply. 1.2304 is the next resistance line 1.2071 and 1.1947 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Asia Morning Bites - 04.05.2023

The NAB Noted That Firms Are More Optimistic About Global Growth

Kenny Fisher Kenny Fisher 14.02.2023 14:45
The Australian dollar is unchanged on Tuesday, after starting the week with strong gains. In the European session, AUD/USD is trading at 0.6966. Australia’s Business Confidence jumps Australia’s NAB Business Confidence rebounded in January, rising from 0 to 6 and above the forecast of 1 point. Business Conditions rose to 18, up from 13 and higher than the forecast of 8 points. This follows three months of softening in late 2022. The NAB noted that firms are more optimistic about global growth and the jump in business conditions is a sign that the economy is more resilient than previously expected. The positive news failed to send the Aussie higher, as the markets are waiting for today’s US inflation report. Reserve Bank of Australia Governor Lowe will be on the hot seat when he appears before parliamentary committees on Wednesday and Friday. Inflation rose to 7.8% in December, its highest level since 1990. The RBA has hiked rates by some 325 basis points in 10 months, yet inflation isn’t showing signs of peaking. The RBA raised rates by 25 bp last week and Lowe has signalled that more increases will be needed to tame inflation. Inflation isn’t expected to fall to the RBA’s target of 2% to 3% until 2025. Lowe has faced a barrage of criticism in his handling of inflation and interest rate policy and it’s far from certain that he will be reappointed for another term. Lowe is likely to face a grilling from the committee members, who may be thinking that “something isn’t working here”. All eyes on US inflation The US releases January inflation later today. Inflation is projected to fall to 6.2%, down from 6.5%, but there is unease in the markets that headline inflation might be stronger than expected. The sizzling jobs report indicated that the US labour market remains strong and January has seen higher energy and used car prices. The markets aren’t as confident that the Fed will cut rates late in the year and if the inflation report is higher than expected, the markets could fully price in two more rate hikes. This would be a major shift towards the Fed stance, as Jerome Powell has been saying for months that the pace of rate hikes will likely be higher and longer than previously expected. Recent inflation reports have overestimated inflation and the US dollar has responded with sharp losses. Today’s inflation report will likely follow that pattern, and if inflation is weaker than expected, the dollar should lose ground. Conversely, the dollar should get a boost if inflation is higher than expected.   AUD/USD Technical 0.6962 is a weak resistance line, followed by 0.7080 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
InstaForex's Ralph Shedler talks Euro against Japanese yen

Markets Saw Kauza Ueda's Appointment As A Signal To Change Policy Of BoJ But Ueda Himself Suppressed This View

Kenny Fisher Kenny Fisher 13.02.2023 14:18
The Japanese yen has started the week with sharp losses. In the European session, USD/JPY is trading at 132.54, up 0.86%. Japan’s GDP expected to rebound There are high hopes for the Japanese economy, which is expected to climb by 2% in the fourth quarter, following a 0.8% decline in Q3. Japan reopened to tourists in October, which fueled a recovery in the services sector and this will likely boost GDP. Even so, the economy has headwinds to deal with such as higher inflation and a weaker global economy, which will likely weigh on growth in 2023 Q1. Ueda to take over at BoJ There has been a guessing game over the successor to Haruhiko Kuroda as Governor of the Bank of Japan and press reports about a successor have generated plenty of volatility from the Japanese yen. Last week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen briefly lower, as Amamiya is considered a dove. Amamiya declined the offer and in a surprise move, the BoJ has decided to appoint Kazua Ueda. The news initially resulted in yen buying, as the markets viewed the choice as a signal for fresh thinking and a change in policy. This view was quickly dampened by Ueda himself, who said on Friday that current policy settings were appropriate. This has sent the yen sharply lower on Monday. Ueda may be trying to sound diplomatic in order to avoid any waves ahead of his appointment, and it’s very possible he will tighten policy once he’s in charge. In the meantime, the BoJ is expected to maintain its ultra-loose policy, so the yen won’t be getting any help from the BoJ for the time being. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM USD/JPY Technical USD/JPY has support at 131.38 and 130.71 There is resistance at 132.96 and 134.18 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Question Of Who Will Become The Next BoJ Governor Has Resulted In Volatility For The Yen

Kenny Fisher Kenny Fisher 10.02.2023 14:07
It has been a busy day for the Japanese yen, which jumped as much as 1.1% today before paring most of those gains. In the European session, USD/JPY is trading at 131.04, down 0.37%. Report says BoJ has chosen next governor The Japanese yen posted sharp gains after a Nikkei report that Kazua Ueda would be selected as the Bank of Japan’s next governor. Ueda is a former member of BoJ’s policy board and will replace Haruhiko Kuroda in early April. The yen’s gains, although only lasting a short time, indicate that Ueda is expected to take a more hawkish stance than Kuroda, who was the architect of an ultra-loose monetary policy that has largely remained in place even while other major banks have been hiking rates to tackle inflation. The question of who will become the next BoJ Governor has resulted in volatility for the yen. Earlier this week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen lower for a brief time, as Amamiya is considered a dove. Amamiya declined the offer and if the latest report is accurate, things should get very interesting under the helm of the hawkish Ueda. US unemployment claims rose for the first time in six weeks, from 183,000 to 196 thousand, which was above the consensus of 190,000. Still, this marked a fourth week of claims below the 200,000 level. The four-week moving average, which smooths out much of the week-to-week volatility, actually edged lower to 189,250. This is an indication that the labour market remains tight, despite reports of mass layoffs by Amazon, Facebook and other large companies.   USD/JPY Technical USD/JPY tested support at 130.71 earlier. The next support line is 129.12 There is resistance at 132.23 and 133.27 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ECB preview: 50bp next week but how far will the ECB still go?

Weak Data From The German Economy Will Make It Difficult For The ECB To Make Excessive Interest Rate Hikes

Kenny Fisher Kenny Fisher 09.02.2023 13:11
The euro has posted strong gains on Thursday. EUR/USD is trading at 1.0749, up 0.57%. German CPI ticks higher German inflation came in at 8.7% y/y in January, up from 8.6% in December. On a monthly basis, CPI rose 1.0%, following a -0.8% reading in December. The report shows that German inflation remains high and it’s still too early to talk of a peak. The good news is that nasty double-digit inflation seems behind us, thanks in large part to lower energy prices due to a warm winter in Europe. The ECB raised rates by 50 basis points last week, bringing the cash rate to 3.0%. The cash rate remains well below that of all other major central banks – the Fed’s rate, for example, is at 4.75%. ECB policy makers have noted that core inflation, which is a more reliable gauge than headline inflation, remains stickier than expected. The central bank meets next on Mar. 16 and the markets have priced in a 50-bp hike. What happens after March is uncertain. The ECB could take a pause in order to assess the impact of its tightening cycle or it could continue hiking, perhaps in modest increments of 25 bp, until there is a clear indication that core inflation is coming down. ECB rate policy is primarily focused on taming inflation, but it must also keep an eye on the strength of the German economy, the largest in the eurozone. Recent data has been weak, which will make it harder for the ECB to deliver oversize rate hikes. German Industrial Production came in at -3.2% in December, GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The Fed paraded four policy makers on Wednesday, each of whom drummed the message that the fall in inflation was welcome but the fight was not yet over. Fed member Williams said that a restrictive policy stance could last for a few years until inflation dropped to the target of 2%. The markets may be listening more closely to the Fed since the blowout employment report on Friday, but continue to underestimate the Fed’s end game. The markets have priced in a terminal rate of 4.6%, while the Fed has projected a terminal rate of 5.1%. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0758. Above, there is resistance at 1.0873 1.0714 and 1.0633 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Expect the ECB to keep increasing rates at the short-term, at least until the summer

German Industrial Production Decreased, Which Is Bad News For The Rest Of The Eurozone

Kenny Fisher Kenny Fisher 07.02.2023 15:28
The euro has fallen for three straight sessions and has extended its losses on Tuesday. Earlier in the day, EUR/USD fell below the 1.07 line for the first time since Jan. 23. Eurozone data disappoints German and eurozone numbers have been soft this week, adding to the euro’s woes. Eurozone retail sales fell 2.7% in December, worse than the estimate of -2.5% and well off the November read of 1.2%. German Industrial Production came in at -3.2% in December, down from 0.4% in November and below the expectation of -0.6%. Germany is the locomotive of the bloc but the engine is stuttering, which is bad news for the rest of the eurozone. GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The US dollar received a much-needed boost from the January nonfarm payroll report, as the 517,000 gain crushed expectations. There are no major releases out of the US today, but Fed Chair Powell will participate in a panel discussion. If Powell strikes a hawkish tone, the US dollar could extend its gains. There are a host of Fed members speaking this week, and if they reiterate the “higher for longer” stance that the Fed continues to embrace, the US dollar could continue to move north. How will the Fed react to the stellar employment report?  Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. With the benchmark rate currently at 4.5%-4.75%, we’re likely looking at two more rate hikes, exactly what Jerome Powell said at the FOMC meeting last week. The spike in job creation has raised hopes that the Fed can pull off a “soft landing” and there is even talk on Wall Street of a “no landing” which would mean that a recession could be avoided. Read next: EUR/USD Drop Below 1.0700$ And GBP/USD Drop To 1.967$, The Aussie Pair Holds Above 0.69| FXMAG.COM EUR/USD Technical 1.0758 is a weak support line, followed by 1.0633 There is resistance at 1.0873 and 1.0954 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Aussie Pair (AUD/USD) Is Steady On Monday

Kenny Fisher Kenny Fisher 06.02.2023 13:56
After a miserable end to the week, the Aussie is steady on Monday and is trading at 0.6912. The January US nonfarm payrolls was a blowout that shocked the markets. The economy created a stunning 517,000 new jobs, crushing the estimate of 185,000 and well above the previous read of 260,000. The unemployment rate fell from 3.5% to 3.4%, its lowest rate since 1969. There was more positive news as the ISM Services PMI climbed back into expansion territory with a reading of 55.2, up from 49.2 and above the forecast of 50.4 points. The US dollar surged against most of the major currencies after the employment report, while equity markets were down. The Australian dollar plunged by 2.2% on Friday. There had been speculation that the Fed might deliver a “one and done” rate hike in March which would end the current rate-hike cycle, but the job report has poured cold water on those hopes. The labour market is running much too hot for the Fed’s liking and wage growth remains an important driver of inflation. Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. RBA expected to raise rates The RBA will be in the spotlight on Tuesday with its monthly rate announcement. The central bank is expected to raise rates by 25 basis points, which would bring rates to 3.35%, a 10-year high. This would mark a fourth straight hike of 25 bp, as the RBA continues to fight inflation with steady but modest rate hikes. There are signs that rising interest rates are starting to bite the economy, with today’s retail sales release of -3.9% the latest reminder. The cash rate is projected to peak around 3.6%, although it could rise further if inflation remains stickier than expected. The employment market remains robust, allowing the central bank to continue raising rates as it sees fit. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.6962 and the round number of 0.7000 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Ralph Shedler talks US dollar against Swiss franc - May 12th

US dollar against Swiss franc: Swiss National Bank focused on limiting the effects of inflation

Kenny Fisher Kenny Fisher 03.02.2023 16:40
The Swiss franc is unchanged on Friday, trading at 0.9132. USD/CHF has posted sharp swings over the past several days and is down 0.80% this week. Swiss releases have been a mixed bag this week. The KOF Economic Barometer rose to 97.2, up sharply from 91.5 and above the consensus of 93.3 points. This is an important sign that the economic recovery is strengthening. However, retail sales fell by 2.8%, down from -1.4% and Manufacturing PMI dropped from 54.1 to 49.3, which indicates a contraction. Consumer climate remains in negative territory, although it did rise to -9, up from -38 points. Jordan signals a rate hike in March Swiss National Bank President Jordan said on Thursday that inflation is above the level of “price stability” and the SNB is focused on limiting the effects of inflation. Jordan said that further interest rate hikes were on the table in order to keep inflation in check. Jordan also said that the SNB would intervene in the currency markets if necessary. Inflation climbed 2.8% in 2022, which is low compared to other major economies but above the SNB’s target of 2%. The SNB was busy last year, raising rates out of negative territory to 1%. The next meeting isn’t until Mar. 23, with a 57% probability of a 25-bp hike and a 43% probability of a 50-bp increase. The Fed has relied on a strong labour market to enable it to continue raising rates, and today’s US job report could be a market-mover. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, so this week’s employment releases have been mixed. The markets will also be keeping a close look at hourly earnings and the unemployment rate. USD/CHF Technical USD/CHF tested resistance at 0.9153 earlier today. Above, 0.9219 is the next resistance line 0.9027 and 0.8894 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swissie takes a pause after busy week - MarketPulseMarketPulse
Rolls-Royce share price has increased by over 60% since the start of the year

The Decision Of The Bank Of England Had A Negative Impact On The British Pound (GBP)

Kenny Fisher Kenny Fisher 03.02.2023 13:13
The British pound is showing little movement on Friday, after plunging 1.2% a day earlier. In the European session, GBP/USD is trading at 1.2210. Major central bank announcements have been in the spotlight this week, including the Federal Reserve and Bank of England rate decisions. GBP/USD posted modest gains after the Fed decision, rising 0.43%. Investors liked what they heard from Fed Chair Powell, even though he warned that rates would stay high and the battle against inflation was far from over. The markets are expecting inflation to fall faster than the Fed is thinking and are counting on some rate cuts this year, even though Powell said yesterday that he does not expect to cut rates this year. Powell did acknowledge that disinflation had started, which boosted risk sentiment and helped send the dollar broadly lower. Pound slides after BoE decision The pound fell sharply after the BoE raised rates by 50 basis points for a second straight time. As with the Fed, the markets were cheered by the dovish comments of Governor Bailey who said that inflation had turned a corner and noted that members had removed the word “forcefully” from its forward guidance statement. Bailey warned that inflation pressures remained and inflation risks were tilted upwards, but investors ignored this part of his message. Besides inflation, the Fed is focussed on the strength of the labour market, so today’s US job report could be a market-mover. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, so this week’s employment releases have been mixed. The markets will also be keeping a close look at hourly earnings and the unemployment rate. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD Technical 1.2184 and 1.2104 are providing support There is resistance at 1.2289 and 1.2369 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
FX Daily: Time for the dollar to pause?

The Message From The ECB Caused The Euro To Fall Sharply

Kenny Fisher Kenny Fisher 03.02.2023 12:56
The euro is catching its breath on Friday after some sharp swings over the past two days. EUR/USD is trading quietly at the 1.09 line. Fed, ECB send euro on a wild ride This week’s central bank rate announcements sent the euro on a roller-coaster ride. The Fed’s 25-basis point hike pushed the euro higher by 1.16%, while the ECB hike of 50-bp sent the euro down by 0.76%. The end result is that the euro is back to where it started the week, just below the 1.09 line. The Fed rate decision sent the US dollar broadly lower, as investors were heartened by Jerome Powell saying that the disinflation process had begun and that he expected another couple of rate hikes before the current rate-hike cycle wrapped up. The markets are expecting inflation to fall faster than the Fed is thinking and are counting on some rate cuts this year, even though Powell said yesterday that he does not expect to cut rates this year. The markets were looking for a dovish bend to Powell’s remarks and once they found it, stocks went up and the US dollar went down. The ECB meeting came a day after the Fed decision, and the rate hike of 50-bp was expected. Still, the euro fell sharply, perhaps due to a confusing message from the ECB. On the one hand, in its policy statement, the central bank signalled another 50 bp hike in March and kept the door open for additional hikes after March. At the same time, ECB President Lagarde said in a press conference that rate moves would be determined on a “meeting by meeting” basis seemed to veer away from the message in the policy statement. The ECB continues to have trouble communicating with the markets, which will only add to market volatility as investors try to figure out the central bank’s plans. The week wraps up with the US employment report. The Fed has said that the strength of the labour market is a key factor in its rate policy, so today’s release could have a strong impact on the movement of the US dollar. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, making it difficult to predict what we’ll get from nonfarm payrolls. The markets will also be keeping a close look at hourly earnings and the unemployment rate.  Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM EUR/USD Technical 1.0921 is a weak resistance line, followed by 1.1034 There is support at 1.0878 and 1.0826 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Australian Dollar Surged Against Its US Counterpart After Fed Meeting

Kenny Fisher Kenny Fisher 02.02.2023 11:56
After a sluggish start to the week, AUD/USD bounced back on Wednesday with gains of 1.18%. The pair has edged lower on Thursday and is trading at 0.7137 in the European session. Powell sends US dollar lower The Federal Reserve raised rates by 25 basis points at the Wednesday meeting, as expected. The Fed noted that inflation has eased but reminded listeners that it remained much higher than the 2% target. Jerome Powell signaled that more rate hikes are coming and said he did not expect to cut rates this year. Sounds hawkish, right? Well, the US dollar initially recorded gains but headed lower after Powell acknowledged that the disinflation process had begun, which was sweet music to the ears of the financial markets. The result was a dovish hike and the Australian dollar surged against its US counterpart. The US dollar index is in retreat and has fallen to 100.99. There are two more inflation reports ahead of the Mar. 22 meeting and if they show inflation continues to fall, the Fed could wrap up the current rate-tightening cycle at that meeting. Besides inflation, the Fed is focused on employment data, which will make Friday’s nonfarm employment report an important factor in the Fed’s rate plans. In December, nonfarm payrolls fell from 256,000 to 223,000 and the downturn is expected to continue, with an estimate of 190,000 for January. The Reserve Bank of Australia meets next week and is expected to deliver a modest 25-basis point hike. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. Read next: Resumption Of Cooperation Between Airbus And Qatar Airways| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.7181 and 0.7282 0.7071 has switched to support, followed by 0.7000 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

If German Numbers Remain Weak, The ECB Will Have To Consider Easing Up On Rates

Kenny Fisher Kenny Fisher 01.02.2023 12:52
It has been a quiet week for EUR/USD which continues to say close to the 1.09 line. The lack of activity could change in a hurry in the North American session, with the Fed rate announcement. Eurozone inflation slides in January Eurozone inflation is expected to be 8.5% in January, down from 9.2% in December and below the consensus of 9.0%. The key driver behind the decline was energy prices, which rose 17.2% in January, compared to 25.5% in December. Core CPI remained at 5.2%, a notch above the consensus of 5.1%. On a month-by-month basis, Core CPI fell by 0.8%, compared to a 0.6% gain in November and below the forecast of -0.2%. Today’s inflation report is the final key event ahead of the ECB rate decision on Thursday. It’s practically a given that the central bank will raise rates by 50 basis points, bringing the cash rate to 3.0%. After that, the pace of monetary tightening will depend largely on the strength of the eurozone economy and inflation levels. The ECB will be pleased with the drop in headline inflation but concerned that the core rate has been stickier. Germany, the locomotive of the bloc, released dismal numbers this week. Retail sales crashed, with a decline of 5.3% while GDP came in at -0.2%. If German numbers remain weak, the ECB will have to consider easing up on rates with modest hikes of 25 basis points rather than 50-bp moves. The markets are forecasting a terminal rate in the range of 3.25%-3.75%. All eyes are on the Federal Reserve, which is widely expected to raise rates by 25 basis points. This would bring the benchmark rate to 4.75%. Inflation in the US fell to 6.5% in December, marking six straight months of de-acceleration. It appears that inflation has peaked, although the Fed won’t be using the “P” word for fear of an excessive reaction from the markets. The Fed has been more hawkish about rate levels than what the markets have priced in, and if Jerome Powell reiterates this hawkish stance, the markets could be in for a cold shower which would be bullish for the US dollar. Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0878. Below, there is support at 1.0826 1.0921 and 1.1034 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The RBA Raised The Rates By 25bp As Expected

Retail Sales Were Weak And The Australian Dollar Has Responded With Sharp Losses

Kenny Fisher Kenny Fisher 31.01.2023 14:56
It has been a rough start to the week for the Australian dollar. AUD/USD has dropped 0.68% on Tuesday and is down 1.36% on the week. In the European session, the Australian dollar is trading just above the 0.70 line. Australia’s retail sales sink Retail sales for December were dismal, with a reading of -3.9% m/m, compared to the consensus of -0.3%. This was down from the 1.7% gain in November and marks the third decline in four months. It was the first decline in 2022 and the Australian dollar has responded with sharp losses. The silver lining is that retail sales are traditionally weak in December and the strong November read was a sign that consumers did their Christmas shopping early in order to take advantage of Black Friday discounts. The sharp drop in consumer spending is another sign that cost of living pressures are taking a toll on consumers. Strong consumer spending has enabled the Reserve Bank of Australia to continue raising rates in order to tame inflation. The RBA will not be pleased with the latest retail sales data but it still expected to go ahead next week with a modest 25-basis point increase. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. The Federal Reserve concludes its 2-day meeting on Wednesday, and a 25-bp increase is priced at close to 100%. This doesn’t preclude volatility in the currency markets, as a hawkish stance from the Fed, either in the rate statement or in comments from Jerome Powell, could provide a boost to the US dollar. The markets continue to talk about a rate cut late in the year due to the weakening US economy, but the markets could be in for a nasty surprise if the Fed reiterates that high rates are here to stay and there are no plans to cut rates. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM AUD/USD Technical AUD/USD is putting pressure on support at 0.7000. The next support line is 0.6890 0.7071 and 0.7181 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The German economy underperformed in the Q4 of 2022, GDP declined

Germany’s Economy Declines In Q4, Eurozone GDP Is Expected To Slow

Kenny Fisher Kenny Fisher 30.01.2023 14:27
The euro is in positive territory on Monday. EUR/USD is trading at 1.0907 in the European session, up 0.36%. It was a quiet week for the euro, which continues to hug the 1.09 line. I expect to see stronger volatility this week, as the eurozone releases GDP and inflation data, followed by the ECB rate announcement on Thursday. German GDP declines in Q4 Germany’s economy posted a rare decline in the fourth quarter. GDP came in at -0.2% q/q, down from 0.4% in Q3 and shy of the forecast of zero. On an annualized basis, GDP slowed to 1.1%, down from the Q3 read of 1.3%, which was also the forecast. The markets are braced for more bad news out of the eurozone on Tuesday. German retail sales for November are expected to drop by 4.3% y/y, after a decline of 5.9% in November. Eurozone GDP is expected to slow to 1.8% y/y in Q4, compared to 2.3% in Q3. The ECB will be keeping a close eye on this week’s GDP and inflation data, ahead of a key rate decision on Thursday. The central bank has adopted a hawkish stance but is still playing catch-up with inflation, which is currently at 9.2%. The markets are expecting 50-basis points at the upcoming and March rate meetings, but there is uncertainty as to what happens after that. The ECB would love to ease up on rates, but the paramount consideration is curbing high inflation. The cash rate stands at 2.50%, and the markets are forecasting a terminal rate in the range of 3.25%-3.75%, meaning that there is plenty of life left in the current rate-tightening cycle.   EUR/USD Technical EUR/USD is testing support at 1.0907. Below, there is support at 1.0837 1.0958 and 1.1028 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

The Bank Of England Is Likely To See One Or Two More Rate Hikes In The First Half Of The Year

Kenny Fisher Kenny Fisher 27.01.2023 14:32
The British pound is slightly lower on Friday. In the European session, GBP/USD is trading at 1.2366, down 0.37%. Will US Core PCE continue to drop? There are no UK releases today, so all eyes will be on the US Core PCE, which is considered the Federal Reserve’s preferred inflation indicator. The forecast stands at 4.3% y/y for December, following 4.7% in November. If the print is in line with the forecast, it will mark a fourth straight decline in inflation. The Core PCE release, even if it misses expectations, won’t change the outcome of the Fed meeting next Wednesday. The CME’s Fed Watch has pegged the likelihood of a 25-basis point hike at 98%. Still, the meeting could have a strong impact on the US dollar, depending on the tone of the rate statement and Fed Chair Powell’s follow-up remarks. The Fed has been very consistent in its hawkish stance, reiterating that rates will stay high and there are no plans to cuts rates, in contrast to the markets, which are expecting rate cuts late in the year. If the Fed repeats its hawkish stance at the meeting, it could give a lift to the US dollar. The Bank of England holds its meeting just a day after the Fed on Feb. 2. The central bank is widely expected to raise rates by 0.50%, which would bring the cash rate to 4.0% and would be a 10th straight rate increase. Despite the significant tightening, inflation is running at a sky-high 10.5%, meaning that the BoE can’t even think about a pause in its rate-tightening cycle. The terminal rate is likely to be reached at 4.25%-4.5%, so we’re likely to see one or two more rate hikes in the first half of the year. For the BoE, the first sign of success against inflation will be to bring it back to single digits, after four straight months above 10%.   GBP/USD Technical 1.2335 and 1.2233 are providing support There is resistance at 1.2446 and 1.2499 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The RBA Is Expected To Raise Rates By 25bp Next Week

The Outlook For The Aussie (AUD) Remains Bright

Kenny Fisher Kenny Fisher 27.01.2023 14:29
The Australian dollar is almost unchanged on Friday, trading at 0.7112. Australia’s PPI slips Just a day after Australian CPI unexpectedly rose, the Producer Price Index went in the opposite direction. PPI in the fourth quarter slowed to 5.8% y/y, down from 6.4% in Q3 and below the consensus of 6.3%. On a monthly basis, PPI fell to 0.7%, much weaker than the gain of 1.9% in Q3 and the forecast of 1.9%. The RBA has raised rates sharply but inflation is yet to peak. The CPI release for Q4 was a shocker, rising to 8.4% after a 7.3% gain in Q3. The markets had priced in a peak rate of 3.6%, but with the cash rate currently at 3.1% and more rate hikes on the way, it appears that the market is underestimating the terminal rate. The Australian dollar has been on a tear, rising around 10% since Nov. 1. The outlook for the Aussie remains bright, both for domestic and global reasons. At home, the RBA will continue to raise rates in order to curb inflation. Abroad, China has reopened and that will increase demand for Australian exports. As well, commodity prices are high which is good news for the export sector and the Australian dollar. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive, with GDP for Q4 coming in at 2.9%. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Consumer spending, which accounts for some 68% of GDP, could determine whether the US economy tips into a recession or not. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If the Fed is to guide the economy to a soft landing, retail sales will have to rebound strongly. Read next: The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report| FXMAG.COM AUD/USD Technical There is resistance at 0.7160 and 0.7256 0.7064 and 0.6968 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Tokyo Core CPI Reading Is Adding Pressure On The Bank Of Japan

Kenny Fisher Kenny Fisher 27.01.2023 11:46
The Japanese yen is in positive territory on Friday. In the European session, USD/JPY is trading at 129.76, down 0.33%. Tokyo CPI hits 4.3% Inflation indicators in Japan continue to head northwards. Tokyo Core CPI rose to 4.3% y/y in January, up from 3.9% in December and ahead of the consensus of 4.2%. This is the highest level in 42 years, but what is more worrying for the Bank of Japan is that the indicator has exceeded the central bank’s target of 2% for the eighth straight month. The increase was broad-based, with food and fuel prices the main contributors to the increase. The Tokyo Core CPI reading follows other inflation indicators which have hit decades-high levels, adding pressure on the BoJ to exit its stimulus programme. The BoJ insists that inflation will peak at 3% in March. but this view seems over-optimistic, given the trend we’re seeing from inflation data. BOJ Governor Kuroda has said he will maintain the Bank’s ultra-loose policy until wages increase, which would indicate that inflation is driven by domestic demand rather than cost-push factors. Kuroda winds up his term in April, and the new Governor could decide to tighten policy, which would boost the yen. US GDP climbed 2.9% y/y in Q4, down from 3.2% in Q3 but still a respectable clip. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Much will depend on the strength of consumer spending, which accounts for some 68% of GDP. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If this trend continues, it seems likely that the US economy will tip into a recession. Read next: Another Sector Announced Layoffs, Hasbro Reduced Its Workforce, IBM And SAP Have Joined Technology Companies That Are Reducing Employment| FXMAG.COM USD/JPY Technical 129.46 is a weak support level. The next support line is 128.40 There is resistance at 130.89 and 131.69 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bank of Japan to welcome Kazuo Ueda as its new governor

BoJ Core CPI Has Now Accelerated And Challenging The Bank Of Japan’s Stance

Kenny Fisher Kenny Fisher 26.01.2023 13:52
Tokyo CPI expected to rise Inflation has been on the rise in Japan and the trend is expected to continue with the release of Tokyo CPI later today. The headline figure is expected to rise to 4.4% in December, up from 4.0% in November, while the core rate is forecast to climb to 4.2%, up from 4.0%. Earlier this week, BoJ Core CPI, the central bank’s preferred inflation gauge, rose to 3.1%, up from 2.9% prior and above the forecast of 2.9%. BoJ Core CPI has now accelerated for 11 straight months, challenging the BoJ’s stance that inflation is transitory. The BoJ is projecting that inflation will peak at 3% in March, but this forecast seems questionable, given that rising energy and food prices have been driving inflation higher and higher. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hurt Japan’s fragile economy. Kanda sends warning to speculators The yen has been relatively quiet over the past two weeks, but Japan’s top “currency diplomat” sent out a warning today. Vice Finance Minister for International Affairs Kanda said that sharp, one-sided moves in the currency markets would not be tolerated. Kanada oversaw the currency intervention in October after the yen had fallen close to 152 to the dollar. The yen has since rebounded and is currently trading close to 130 to the dollar. Kanda’s message is aimed at speculators, but with inflation rising and the BoJ’s ultra-loose policy looking increasingly anachronistic, speculators are likely to continue betting that the BoJ will have to tighten policy and the yen will rise as a result. The IMF had a message of its own for the BoJ, suggesting that the central bank allow more flexibility in 10-year bond yields, which would mean a shift in BoJ policy. It’s a busy day on the economic calendar, with the US releasing GDP and durable goods. GDP is expected to slow to 2.6% in Q4, which would still point to solid growth. Durable Goods is forecast to rebound and gain 2.5% in December, following a soft reading of -2.1% in November. Traders can expect some volatility from the US dollar in the North American session, as the markets have jumped on any soft readings as a signal that the Fed will have to ease up on its aggressive rate policy, and this has sent the US dollar lower. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM USD/JPY Technical There is resistance at 130.36 and 131.69 129.46 and 128.40 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
According To UOB Group New Zealand Dollar (NZD) Could Dip To 0.6240

Today’s CPI Release Has Negative Impact On The New Zealand Dollar

Kenny Fisher Kenny Fisher 25.01.2023 14:31
The New Zealand dollar is under pressure on Wednesday. In the European session, NZD/USD is trading at 0.6478, down 0.41%. Markets eye New Zealand CPI The New Zealand dollar reacted negatively to today’s CPI release, falling as much as 0.60% before paring these losses. Fourth-quarter CPI remained unchanged at 7.2%, a notch above the consensus of 7.1%. More importantly, the reading was below the Reserve Bank of New Zealand’s forecast of 7.5%, which could mean that the central bank will ease up on the pace of rate hikes. The central bank has been aggressive, as it raised rates by some 325 basis points in 2022, bringing the cash rate to 4.25%. Similar to the Fed’s experience, the markets aren’t buying into the RBNZ’s hawkish message and are betting that rates will peak at 5.0%, lower than the RBNZ’s projection of 5.5%. The central bank delivered a supersize 75-basis point hike in November, and prior to the inflation release, the market had priced in a 75 bp or 50 bp hike as a 50/50 toss-up. Following the CPI reading, that has changed to 70/30 in favour of a 50-bp move. Inflation has been falling globally while domestically, consumer spending and confidence have fallen due to the rising cost of living. This has raised speculation that the RBNZ could wind up its current rate cycle earlier than it anticipated. The US releases GDP for the fourth quarter on Thursday and we could see some volatility from the US dollar. GDP is expected to slow to 2.8%, down from 3.2% in Q3 but still a respectable pace of growth. On Wednesday, US PMIs pointed to contraction in the manufacturing and services sectors, pointing to cracks in the US economy as high rates continue to take their toll. The US dollar remains under pressure as soft readings have raised hopes that the Fed will ease up on rate policy due to the slowing economy. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drop Below 130.00| FXMAG.COM NZD/USD Technical 0.6455 is under pressure in support.  The next support line is 0.6379 There is resistance at 0.6547 and 0.6648 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Soft PMIs Are Further Signs Of A Weak UK Economy

Soft PMIs Are Further Signs Of A Weak UK Economy

Kenny Fisher Kenny Fisher 24.01.2023 14:15
The British pound has posted slight gains on Tuesday. In the European session, GBP/USD is trading at 1.2302, down 0.60%. UK debt hits record UK debt costs soared in December, sending the budget deficit to a record 27.4 billion pounds. This was sharply higher than the November reading of 18.8 billion pounds and the consensus of 17.3 billion pounds. The drivers behind the sharp upturn were rising interest payments and government subsidies for gas and electricity. The government’s bill for the subsidies in December was some 7 billion pounds. Despite the grim debt news, the pound remains steady, thanks to broad US dollar weakness. UK PMIs for December didn’t help matters, as both the Services and Manufacturing PMIs came in below the 50 level, which indicates contraction. Manufacturing rose slightly to 46.7, up from 45.3 in November and above the forecast of 45.0 points. The Services PMI fell to 48.0, down from the November read and the forecast, both of which were 49.9 points. The soaring debt and soft PMIs are further signs of a weak UK economy. These are clearly not ideal conditions for raising interest rates, but with inflation at 10.5%, the Bank of England doesn’t really have much choice, as entrenched inflation could cause more damage to the economy than high interest rates. The road back to low inflation promises to be a long one, with the BoE projecting that inflation won’t drop to 5% until late this year. The US will release Manufacturing and Services PMIs which are expected to remain in contraction territory. Manufacturing is expected to tick lower to 46.1 (46.2 prev.), while Services is forecast to dip to 44.5 (44.7 prev.). If the releases are softer than expected, the US dollar could lose ground as speculation will rise that the Fed may have to ease up on the pace of rates. Read next: South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM  GBP/USD Technical GBP/USD is testing support at 1.2335. Below, there is support at 1.2233 There is resistance at 1.2499 and 1.2601 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bank of Japan to welcome Kazuo Ueda as its new governor

The BoJ Is Projecting That Inflation Will Peak At 3% In March

Kenny Fisher Kenny Fisher 23.01.2023 14:14
The Japanese yen has edged lower on Monday. In the European session, USD/JPY is trading at 130.15, up 0.45%. The yen slipped 1.3% against the dollar last week, falling as low as 131.57 before recovering. Inflation heads higher Core CPI jumped 4.0% y/y in December, its highest level since 1981. This matched the forecast and followed a 3.7% gain in November. The usual suspects were at play, as food and energy prices rose sharply. Energy prices climbed 15.2%, while food prices were up 7.4%, the fastest pace since 1977. Core CPI has exceeded the BoJ’s 2 percent inflation target for nine straight months, as the central bank’s argument that inflation is transitory has become increasingly hard to defend.  The BoJ is projecting that inflation will peak at 3% in March, but it’s unclear why inflation will start to fall, barring a complete turnaround in energy and food prices. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hamper economic growth. We’ll get another look at inflation on Tuesday, with the release of the central bank’s preferred inflation gauge, BoJ Core CPI. The index rose steadily in 2022, from just 0.8% in January to 2.9% in November. The consensus for December is unchanged but a reading of 3.0% or higher will put pressure on the BoJ to tighten policy, which would be bullish for the yen. The BoJ surprised the markets last week when it maintained policy settings at its monthly meeting. The non-move may have been primarily aimed as an ambush on speculators who bought yen in anticipation of the BOJ tightening policy. Still, the markets are expecting a shift in the BoJ’s ultra-loose policy, although it could occur after the new governor takes over in April. What is clear is that the BoJ will continue to command the attention of traders. The BoJ’s next meeting is on March 8th.   USD/JPY Technical There is resistance at 130.67 and 131.69 129.46 and 128.41 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Eurozone Economy Is Holding Up Fairly Well Despite The Ukraine War

Kenny Fisher Kenny Fisher 20.01.2023 14:36
The euro continues to have a very quiet week, as EUR/USD appears content to trade around the 1.08 line. Lagarde brings her message to Davos It’s difficult to think of ECB President Lagarde as a hawk, as she ignored rising inflation in the eurozone for a long period, insisting that it was transitory. The ECB was late to the global tightening party and found itself scrambling to curb inflation. The new Lagarde has become more hawkish and hasn’t shied away from making strong statements, such as warning the markets not to underestimate the ECB’s rate policy. Lagarde has brought her hawkish message to Davos this week, saying that inflation remains “way too high” and that the ECB would stay the course until inflation returns to 2%. With inflation currently at 9.2%, that promises to be a slow process. The ECB is widely expected to raise rates by 50 basis points in February, but what happens after that isn’t clear. The eurozone economy is holding up fairly well despite the Ukraine war and the feared energy crisis appears to have been averted, thanks to a warm winter and diversification efforts. The question going forward is whether the ECB will respond to the positive economic environment with a smaller hike of 25 bp or will it keep the pedal on 50-bp increases in order to ensure that inflation does not become entrenched. Lagarde said in December that the Bank would determine future rate moves based on data and that it was very possible that more 50-bp increases were coming after February. ECB members are divided on the issue, leaving the markets uncertain about what will happen at the March meeting. The Federal Reserve begins a two-week blackout period after today, ahead of the rate meeting on February 1st. This means that public comments or interviews from Fed officials will be sharply limited. Fed member Brainard spoke on Thursday and echoed the Fed’s hawkish stance. Brainard said that rates needed to remain high even with signs that inflation was starting to ease. The Fed dot plot indicates that rates will peak at 5.1%, while the markets have priced a peak at around 4.75%. We’ll hear from Fed members Harker and Waller later today.   EUR/USD Technical 1.0780 is a weak support line. Below, there is support at 1.0691 1.0921 and 1.1010 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Speculation That The Bank Of Canada Could Wind Up Its Tightening At The First Meeting Of 2023

Kenny Fisher Kenny Fisher 20.01.2023 12:23
The Canadian dollar is unchanged on Friday, trading at 1.3466 in the European session. We could see some volatility in the North American session, as Canada releases retail sales. Retail sales expected to decline The markets are bracing for a downturn in retail sales for November, with a forecast of -0.5% m/m for the headline figure and -0.4% for the core rate. This follows a strong report in October, as the headline reading was 1.4% and core retail sales at 1.7%. If the releases are as expected or lower, it could be a rough day for the Canadian dollar. Today’s retail sales release is the final major event prior to the Bank of Canada’s meeting on January 25th. The markets have priced in a 25-bp increase, but a hold is also a possibility, especially with December inflation falling to 6.3%, down from 6.8%. The BoC has raised rates by some 400 basis points in the current rate-tightening cycle, which began in March 2022. Similar to the market outlook on the Fed’s rate policy, there is significant speculation that the BoC could wind up its tightening at the first meeting of 2023 and then keep rates on hold. The BoC has said that future hikes will be determined by economic data, and there are signs of strength in the economy despite the Bank’s aggressive rate policy. GDP expanded by 2.9% in Q3 which was stronger than expected and job growth sparkled in December, with over 100,000 new jobs. The markets will be looking for clues about future rate policy from the rate statement and BoC Governor Macklem post-meeting comments. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM USD/CAD Technical 1.3455 is a weak support line, followed by 1.3328 1.3582 and 1.3707 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

Weak Consumer Spending And Consumer Confidence Point To Economic Problems In The UK

Kenny Fisher Kenny Fisher 20.01.2023 12:21
The British pound has edged lower on Friday. In the European session, GBP/USD is trading at 1.2360, down 0.27%. Retail sales fall sharply UK retail sales were dismal in December. The headline figure fell -1.0% m/m, missing the forecast of 0.5% and below the November read of -0.5%. The core rate declined by 1.1%, shy of the forecast of 0.4% and below the November reading of -0.3%. On an annualized basis, the numbers were downright ugly – headline retail sales came in at -5.8% and the core rate at -6.1%, which was worse than November and below the estimates. Any hopes for a surge in spending due to Christmas were dashed, as consumers cut back due to the cost-of-living crisis. Inflation has eased a bit but remains in double digits, and consumers are expected to hold tight to the purse strings, as food and energy prices remain high and wages have been eroded by inflation. Consumer confidence remains in deep-freeze, with GfK Consumer Confidence falling to -45 in December, down from -42 in November and shy of the consensus of -40. Weak consumer spending and confidence points to a struggling economy, but the Bank of England has little choice but to continue raising rates in order to curb inflation. This will be a slow process, with the BoE projecting that inflation will fall to 5% late in the year. The Federal Reserve enters a 2-week blackout period after today, ahead of the rate meeting on February 1st. This means that public comments or interviews from Fed officials will be sharply curtailed. This made Fed member Brainard’s comments on Thursday all the more important. Brainard sounded hawkish, saying that rates needed to remain high even with signs that inflation was starting to ease. The Fed dot plot indicates that rates will peak at 5.1%, while the markets have priced a peak at around 4.75%. We’ll hear from Fed members Harker and Waller later today. Read next:A Serious Security Vulnerability In T-Mobile Caused Another Hacker Attack| FXMAG.COM GBP/USD Technical 1.2352 is a weak resistance line, followed by 1.2455 There is support at 1.2255 and 1.2179 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Forex: On Friday US dollar against Japanese yen increased by 0.9%

Japanese yen: judging from Kenny Fisher's words, Bank of Japan action is not about "if"

Kenny Fisher Kenny Fisher 19.01.2023 22:31
The Japanese yen has edged higher on Thursday, after showing strong volatility a day earlier. In the North American session, USD/JPY is trading at 128.48, down 0.32%. There was plenty of anticipation ahead of the Bank of Japan meeting on Wednesday, with speculation that the central bank would follow up on the December meeting and change its policy settings. In the end, the BoJ defied market expectations and maintained policy. After the announcement, the yen dropped as much as 2.6% but pared most of those losses. The BoJ may have got the last laugh (for now) against speculators with its non-move, but that doesn’t change the big picture. A shift in the BoJ’s ultra-loose policy appears to be a matter of when rather than if, given that inflation is hovering at its highest level in 41 years. The markets expect to get another confirmation that inflation is rising, with the release of Tokyo CPI later today. The headline figure is expected to climb to 4.4% in December, up from 3.8% in November, while the core rate is projected to accelerate to 4.0%, following a 3.7% gain. The BOJ has insisted that inflation is transitory, but this stance is becoming harder to defend as inflation continues to rise and shows no sign of peaking. Read next: European Central Bank's President Christine Lagarde warns, but...| FXMAG.COM Mixed US data US numbers were a mix today. Unemployment claims sparkled, falling from 205,000 to 190,000 and beating the forecast of 214,000. The US labor market remains robust and is a critical factor in enabling the Fed to remain hawkish and continue raising interest rates. The manufacturing sector, however, is looking dismal. The Philly Fed Manufacturing Index came in at -8.9, its seventh decline in the past eight months. This follows a dismal read from the Empire State Manufacturing Index earlier this week, which fell to -32.9 in December, down from -11.2 in November. USD/JPY Technical USD/JPY is testing support at 128.40. The next support line is 127.13 There is resistance at 129.40 and 131.33 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen edges higher ahead of Tokyo CPI - MarketPulseMarketPulse
Bank of England hikes rates and keeps options open for further increases

British pound to US dollar: UK Gross Domestic Product is released tomorrow

Kenny Fisher Kenny Fisher 19.01.2023 21:27
The British pound is almost unchanged on Thursday, trading at 1.2342 in the European session. Markets brace for another decline in retail sales All eyes will be on the UK’s December retail sales, which will be released on Friday. The UK consumer has been holding tight to the purse strings, which is bad news for an economy that has tipped into recession. Headline retail sales is expected to decline by -4.1%, after a -5.9% read in November, and the core rate is projected at -4.4%, following -5.9% in November. A weak release will put pressure on the pound, which has looked sharp this week with gains of 1.07%. Consumer confidence has been in deep-freeze, which is not a surprise given the cost-of-living crisis that continues to squeeze consumers. GfK Consumer Sentiment is expected at -40, little changed from the previous reading of -42 points. UK inflation dropped for a second straight month in December, falling from 10.7% to 10.5%. This is a welcome trend, but double-digit inflation is nothing to cheer about. As well, core inflation, which is a more accurate gauge, remained steady at 6.3%. The Bank of England has the unenviable task of having to continue to raise rates in order to curb inflation, despite the weak economy. The BoE holds its next meeting on February 2nd and the markets have priced in a second-straight 50-bp increase, which would bring the cash rate to 4.0%. Unless inflation takes a dramatic plunge, we can expect further rate hikes after the February meeting. The US dollar seems to lose ground whenever the US releases soft data, as we have seen this week. The Empire State Manufacturing Index sank to -32.9, while headline and core retail sales both fell by -1.1%. PPI came in at -0.5%. All three releases were weaker than the November readings and missed the forecasts, indicating that cracks are appearing across the US economy, which is feeling the bite of the Fed’s aggressive tightening. The Fed continues to insist that high rates are here to stay for a while, but the markets are clinging to the belief that weak data will force the Fed to end the current rate cycle after a 25-bp increase in February and even cut rates late in the year. I expect this pattern to continue and for the US dollar to lose ground if economic releases continue to miss their forecasts. . GBP/USD Technical 1.2352 is a weak resistance line, followed by 1.2455 There is support at 1.2255 and 1.2179 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Will retail sales weigh on British pound? - MarketPulseMarketPulse
Anticipating a Bearish USD Index: Analysis and Target Levels

The Australian Jobs Report In December Had A Negative Impact On The Australian Dollar (AUD)

Kenny Fisher Kenny Fisher 19.01.2023 14:53
The Australian dollar has extended its slide on Thursday. AUD/USD is trading at 0.6884 in Europe, down 0.82%. Australian employment data disappoints Australia’s December employment report was weaker than expected, sending the Australian dollar sharply lower. The headline reading showed a loss of 14,600 in total employment, which may have soured investors. The release wasn’t all that bad, as full-time jobs showed gains of 17,600, with part-time positions falling by 32,200. The unemployment rate remained at 3.5%, but this was a notch higher than the forecast of 3.4%. On the inflation front, recent releases point to inflation moving higher. November CPI rose to 7.3%, up from 6.9%, and the Melbourne Institute Inflation Expectations climbed to 5.6%, up from 5.2%. We’ll get a look at the all-important quarterly inflation reading next week. Inflation came in at 1.8% q/q in Q3, and an acceleration in Q4 would force the Reserve Bank of Australia to consider raising rates higher and for longer than it had anticipated. The cash rate is currently at 3.10%, and I expect the RBA will raise it to 3.50% or a bit higher, which means we are looking at further rate hikes early in the year. The US dollar seems to take a hit every time there is a soft US release, and this week has had its share of weak data. The Empire State Manufacturing Index sank to -32.9, while headline and core retail sales both fell by -1.1%. PPI came in at -0.5%. All three releases were weaker than the November readings and missed the forecasts, indicating that cracks are appearing across the US economy, as the bite of higher rates is being felt. The markets are clinging to the belief that softer numbers will force the Fed to ease up on its pace of rate hikes and possibly end the current rate-cycle after a 25-bp increase in February. The Fed has done its best to dispel speculation that it will pivot, but I expect the US dollar to lose ground if key releases are weaker than expected.   AUD/USD Technical AUD/USD is testing support at 0.6893. Below, there is support at 0.6810 0.6944 and 0.7027 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Kenny Fisher Kenny Fisher 18.01.2023 13:58
The Japanese yen has fallen sharply on Wednesday. In the European session, USD/JPY is trading at 129.38, up 0.96%. Earlier in the day, the yen fell as low as 131.58 but has pared some of today’s losses. BOJ maintains policy After a quiet start to the week,  the Japanese yen is showing strong volatility today. This follows the Bank of Japan’s policy meeting, where policy makers defied market expectations and made no changes to rate and yield curve control (YCC) settings. The markets had been on alert since the BoJ widened the band on 10-year JGBs in December, and there was speculation that the BoJ widen the band or even ditch its yield curve control altogether at today’s meeting. The central bank’s decision to stay on the sidelines sent the yen sliding as much as 2.6% before it recovered. The BoJ forecasts for GDP and inflation didn’t show much change and were overshadowed by the BOJ’s non-move. The GDP forecast was downgraded from 2.0% to 1.9% for FY22 and 1.9% to 1.7% for FY23. The inflation outlook didn’t change much either  – the FY22 forecast was raised from 2.9% to 3.0% and the FY23 remained unchanged at 1.6%. The weak Japanese economy means that risks to growth are tilted to the downside and the BoJ is unlikely to make any policy tweaks to its ultra-loose policy before the new BOJ Governor takes over in April. Japanese government bond yields have fallen sharply in response to the BOJ decision to keep YCC in place, retreating from the 0.50% cap and falling as low as 0.36%. The cap had been under attack in recent days, forcing the BOJ to spend trillions of yen to defend it. I would not be surprised to see yields move higher in the short term due to speculators again testing the BoJ resolve to defend the cap. Read next:Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM USD/JPY Technical USD/JPY has pushed above resistance at 1.2940 and 131.33. The next resistance line is 133.28 128.40 and 127.71 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Is Expected To Increase Its Inflation Forecast At The Meeting

Kenny Fisher Kenny Fisher 17.01.2023 13:13
The Japanese yen is in calm waters on Tuesday, as the Bank of Japan’s two-day meeting starts today. In the European session, USD/JPY is trading at 128.76, up 0.18%. Markets eye BOJ meeting The markets are keeping a close eye on the BOJ meeting. The central bank shocked the markets at the December meeting with a policy tweak that widened the bank around 10-year JBs to 0.50%, up from 0.25%. The speculation that the BOJ could follow through with additional moves at this meeting has pushed USD/JPY back below the 130 level. On Monday, USD/JPY touched 127.21, its lowest level since May. It seems likely that further moves are coming from the BOJ, but it’s unclear whether the BOJ will announce the changes on Wednesday or will wait until the new BOJ Governor takes over in April. Unlike the Fed, the BOJ appears to have no interest in telegraphing its plans and is keeping mum, which is making this meeting that much more dramatic. I expect to see some volatility from USD/JPY on Wednesday – if the BOJ does make any policy tweaks, the yen will likely continue to improve. Conversely, if the BOJ maintains the status quo, traders will be disappointed at the lack of action and the yen would likely lose ground. The BOJ has spent over six trillion yen ($86 billion) since Friday to defend its new 0.50% cap on 10 JGB, as sellers continue to flood the bond market. The central bank could widen the band to 0.75% or make a radical change and discard its yield curve control altogether. Let’s not forget that the BOJ is expected to increase its inflation forecast at the meeting, which would mark a step closer to normalization and would be bullish for the yen. USD/JPY Technical There is resistance at 129.40 and 130.82 128.40 and 127.54 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bank of Japan stays on hold but policy adjustment is coming

Japan: Even a change in YCC made by Bank of Japan may boost Japanese yen

Kenny Fisher Kenny Fisher 16.01.2023 23:01
USD/JPY is in positive territory on Monday. In the North American session, USD/JPY is trading at 128.50, up 0.52%. The yen had an excellent week, climbing over 3% and trading at levels not seen since May 2022. Will BoJ deliver more policy moves at meeting? The Bank of Japan holds a two-day policy meeting on Tuesday and Wednesday in what could be one of the highlights of the week. BOJ meetings were traditionally sleepy affairs that usually maintained the Bank’s policy settings. That has changed and the December meeting roiled the markets after the BoJ unexpectedly widened the band around 10-year JBs to 0.50%, up from 0.25%. The dramatic move has raised speculation that the BOJ could be planning additional policy changes at the upcoming meeting. The 0.25% cap on 10-year yields was breached on Friday and again today. The central bank has responded by buying over 2 trillion yen worth of JGBs but there is talk that the Bank could further widen the band to 0.75% or even abandon its yield curve control (YCC) policy completely. The yen has gained 14% against the US dollar since November, adding pressure on the BoJ to tighten its ultra-loose policy. If the BOJ does scrap the YCC, it would likely be viewed by the market as similar to a rate hike, which would push the yen higher. The BOJ will also release an updated inflation forecast, which is expected to be revised upwards. Market participants should be prepared for volatility from the yen after the BOJ announcements on Wednesday. In the US, consumer confidence gained strength in December. UoM Consumer Sentiment jumped to 64.6, beating the forecast of 60.5 and above the November reading of 59.7. Inflation expectations for 2023 decreased to 4.0%, down from 4.4%, although long-term expectations inched higher. USD/JPY Technical USD/JPY is testing resistance at 128.40. Above, there is resistance at 129.40 127.07 and 125.92 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY ends nasty slide - MarketPulseMarketPulse
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Economic Outlook For The Eurozone Appears Brighter

Kenny Fisher Kenny Fisher 16.01.2023 13:15
The euro is almost unchanged on Monday, trading at 1.0831. The euro is coming off a strong week, as EUR/USD rose 1.8%. Earlier in the day, the euro hit 1.0874, its highest level since April 2022. Will Eurozone inflation sink? Eurozone inflation has been dropping and slipped into single digits in December. This is a remarkable turnaround after a year in which inflation soared and constantly beat expectations after Russia invaded Ukraine. In December, the ECB projected that inflation wouldn’t fall to the 2% target until 2025, but it now appears that the target could be reached much earlier, perhaps in Q4 of 2023. One of the key drivers of higher inflation was soaring energy prices, triggered by the Ukraine war. Oil and gas prices have since fallen substantially, and a relatively warm winter in Europe and extensive efforts to diversify supplies have eased concerns of an energy crisis in Europe. The downtrend in energy prices could of course change before the winter ends, but in the meantime, inflation is dropping and the economic outlook for the eurozone appears brighter. Last week, Goldman Sachs revised upwards its 2023 GDP forecast for the eurozone from -0.1% to a small gain of 0.6%. The positive news on the inflation front is unlikely to result in any change in policy from ECB policy makers. Headline inflation fell from 10.1% to 9.2% in December, but the core rate, which is a key factor for the ECB, has been rising. The ECB has said more rate hikes are coming in 2023, a stance that was echoed by ECB member Rehn earlier today. In the US, UoM Consumer Sentiment jumped to 64.6 in December, beating the forecast of 60.5 and above the November reading of 59.7. Inflation expectations for 2023 decreased to 4.0%, down from 4.4%, although long-term expectations inched higher. Read next: USD/JPY Pair Is Trading Above 128 Again, The Testimony Of Bank Of England Governor Andrew Bailey May Have Affect On The Pound (GBP/USD)| FXMAG.COM EUR/USD Technical 1.0829 is a weak support line, followed by 1.0691 There is resistance at 1.0921 and 1.1010 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The UK Economy Is Sputtering, GDP For November Outperformed With a 0.1% Gain

The UK Economy Is Sputtering, GDP For November Outperformed With a 0.1% Gain

Kenny Fisher Kenny Fisher 13.01.2023 12:54
The British pound is slightly higher on Friday. GBP/USD is trading at 1.2234, up 0.24%. The pound has enjoyed a solid week, with gains of 1.2%. US inflation drops again US inflation continues to decline and slowed for a sixth straight month in December. Headline CPI fell to 6.5%, down from 7.1% and matching the estimate. The drop was driven by lower prices for gasoline as well as new and used vehicles. Core CPI showed a similar trend, dropping from 6.0% to 5.7%, which matched the forecast. Inflation is coming down slowly and remains much higher than the Fed’s 2% target, as any Fed member will be quick to point out. Still, it’s clear that inflation is on the right path as the impact of the Fed’s aggressive tightening cycle is being felt in the economy. The inflation data came in as expected, but the markets were nonetheless delighted and the US dollar sustained losses across the board on Thursday. The Fed was also pleased that inflation continues to downtrend. After the inflation release, Fed member Harkins said he supports a 25-basis point hike at the February meeting and expects rates to rise “a few more times this year”, with a 25-bp pace being appropriate. This sounds like an acknowledgment that inflation has peaked, although we won’t be hearing the “P” word from any Fed official, for fear of the markets going overboard and loosening conditions, which would complicate the fight against inflation. Other Fed members have come out in support of a 25-bp hike in February and the CME’s FedWatch has pegged the odds of a 25-bp increase at 93%. Barring some unforeseen event, a 25-bp hike looks like a done deal. In the UK, GDP for November outperformed, with a 0.1%, gain, above the forecast of -0.2% but weaker than the October read of 0.5%. The broader picture is not pretty, with GDP falling by -0.3% in the three months to November. The UK economy is sputtering and the Bank of England has its work cut out as it must continue raising rates, despite the weak economy, in order to curb high inflation. The BoE meets next on February 2nd.   GBP/USD Technical GBP/USD tested support at 1.2192 earlier in the day. The next support level is 1.2017 There is resistance at 1.2290 and 1.2366 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bank of England hikes rates and keeps options open for further increases

UK: Low prints on Friday could make British pound (GBP) decrease

Kenny Fisher Kenny Fisher 12.01.2023 16:05
The British pound is drifting for a third straight day. In the European session, GBP/USD is trading at 1.2161, down 0.09%. We could see stronger volatility from the pound before the weekend, with the release of the US inflation report and UK GDP on Friday, both of which are market movers. Will US inflation continue to drop? There is guarded optimism ahead of the US inflation report. Inflation is projected to drop in December, which would be music to the market’s ears. The forecast for headline inflation stands at 6.5%, following the November gain of 7.1%. The core rate, which is more important, is also expected to ease, with a forecast of 5.7% in December, compared to 6.0% in November. The inflation release should result in volatility from the US dollar. If inflation, particularly the core rate, falls as expected or more, the US dollar will likely lose ground, as speculation will increase that the Fed may have to pivot from its hawkish stance and ease up on the pace of rates. Conversely, if inflation does not fall as much as expected, it would vindicate the Fed’s hawkish position, which the markets may have to grudgingly accept. There remains a dissonance between the Fed and the markets, despite warnings by the Fed that the markets are underestimating Fed rate policy. The Fed has insisted that further rate hikes are coming, while there have been market players who are expecting a “one and done” hike in February which will wrap up the current rate cycle. The markets have priced in a peak terminal rate below 5% as well as rate cuts late in the year, while the Fed has been signalling a peak rate of 5-5.25% or even higher. Read next: According to Yomiuri newspaper, Bank of Japan will have a look into the side effects of loose monetary policy| FXMAG.COM In the UK, there are no major releases on Thursday, but Friday will be busy, highlighted by monthly GDP and Manufacturing Production. The markets are braced for soft numbers, which could send the pound lower. GDP for November is expected to contract by 0.2% m/m, following a gain of 0.5% in October. Manufacturing Production for November is forecast to come in at -4.8% y/y, after a -4.6% reading in October. GBP/USD Technical GBP/USD is putting pressure on 1.1832 and could test this line today. The next support level is 1.1726 There is resistance at 1.1913 and 1.2026 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD drifting, UK GDP next - MarketPulseMarketPulse
Forex: On Friday US dollar against Japanese yen increased by 0.9%

According to Yomiuri newspaper, Bank of Japan will have a look into the side effects of loose monetary policy

Kenny Fisher Kenny Fisher 12.01.2023 15:58
The Japanese yen has awoken from this week’s slumber and is sharply higher on Thursday. In the European session, USD/JPY is trading at 130.96, down 1.16%. BOJ may be planning review of policy The BOJ has been in the headlines since the December meeting when it widened the band around its 10-year bond yield target. The move caught the markets flat-footed and the yen gained a staggering 3.8% the same day. The central bank meets on January 17th and 18th and investors will be keeping a close eye on the meeting. There have been reports that the BOJ will raise its inflation forecast at the meeting, and the Yomiuri newspaper reported today that the BOJ will review the side effects of its ultra-loose policy and could take measures to address distortions in the yield curve. The yen has soared in response to this latest report, as any steps towards normalization are bullish for the yen. Will the upcoming meeting be as dramatic as what we experienced in December? That would be a high bar to reach, but the meeting should be treated as a market-mover. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM There is a feeling of optimism ahead of today’s US inflation report. The forecast is for inflation to continue to fall, which is exactly what investors want to hear. The consensus for headline inflation stands at 6.5%, following the November gain of 7.1%. The core rate is also expected to ease, with a forecast of 5.7% in December, compared to 6.0% in November. If inflation, particularly the core rate, falls as expected, the US dollar will likely lose ground, as the Fed would have good reason to slow the pace of tightening and could afford to be less hawkish in its stance. USD/JPY Technical 132.13 has strengthened in resistance following the yen’s strong gains. 133.28 is the next resistance line. 131.68 and 129.49 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen jumps on BoJ report - MarketPulseMarketPulse
Eurozone inflation stickier than expected in February

Eurozone Inflation Has Fallen Back Into Single Digits But The ECB’s Message Remains Hawkish

Kenny Fisher Kenny Fisher 11.01.2023 14:44
The euro is drifting on Wednesday, trading at 1.0730. EUR/USD has climbed about 1% this week, and Monday’s high of 1.0760 is its highest level since June 22nd. Can the euro continue to push higher? ECB unlikely to change aggressive stance Eurozone inflation has fallen back into single digits, raising hopes that inflation may have finally peaked. The headline rate slowed to 9.2% in December, down from 10.1% in November and beating the forecast of 9.7%. The slowdown is welcome news for the ECB, but investors shouldn’t count on the central bank becoming dovish and ending its current rate-tightening cycle, even if inflation continues its downturn in the coming months. The drop in headline inflation has been fuelled by energy subsidies by governments in Germany and other eurozone members, as well as lower energy prices. Core inflation rose to 5.2% in December, up from 5.0% in November, which indicates that underlying price pressures remain strong. The ECB is unlikely to ease its pace of hikes until the core rate shows a sustained fall as well as a drop in wage growth. In the meantime, the ECB’s message remains hawkish. ECB President Lagarde said in December that the markets were underestimating how high rates would go and noting that the ECB was likely to continue raising rates in 50-bp increments “for a period of time”. The US releases December CPI on Thursday, and we’ve seen in recent months how inflation reports can move the equity and currency markets. The consensus for headline inflation stands at 6.5%, following the November gain of 7.1%. The core rate is also expected to ease, with a forecast of 5.7% in December, compared to 6.0% in November. In recent months, soft inflation reports have sent the US dollar lower, as the markets have assumed that the Fed will not be able to continue hiking in the face of falling inflation. I would expect a similar reaction if December’s inflation numbers are lower than expected. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM EUR/USD Technical EUR/USD has support at 1.0711 and 1.0612 There is resistance at 1.0800 and 1.0953 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The Quarterly CPI Release Could Determine The RBA Decision

Kenny Fisher Kenny Fisher 11.01.2023 12:34
The Australian dollar is trading quietly on Wednesday. AUD/USD is at 0.6904, up 0.14%. Australian CPI climbs to 7.3% Australian inflation pushed higher in November, rising to 7.3% following a 6.9% gain in October. This matched the forecast. The trimmed mean rate, a key gauge of core inflation, rose to 5.6% in November, up from 5.4% a month earlier and its highest level since 2018. The drivers behind the increase were higher jet fuel prices as well as accommodation prices. The drop in inflation in October (6.9%, down from 7.3% prior) had raised hopes that inflation might have peaked, but the rise in the November release has dampened such hopes. Retail sales for November jumped 1.4%, buoyed by Black Friday sales. This was much higher than the forecast of 0.6% and the October read of 0.4%. Consumer spending remains strong despite the double-whammy of rising interest rates and high inflation. What will be the RBA’s take on this data? The trimmed mean rate indicates that the rise in inflation is broad-based, a reminder that the RBA has more work to do as it tackles high inflation. The strong retail sales data shows that the economy can still bear further hikes, and the markets have priced in a 25-basis point increase at the February 7th meeting. The RBA rate policy is data-dependent, which means that the quarterly CPI release on January 25th could determine what decision the central bank takes at the meeting. The minutes of the December meeting indicated that the RBA considered three options at that meeting – a 25 bp hike, a 50-bp hike and a pause. In the end, RBA members opted for the 25-bp increase. I would expect the RBA to show similar flexibility at the February meeting. Fed Chair Powell finds himself under constant scrutiny, not just for his comments but also for what he doesn’t say. Powell participated on a panel at a symposium of the Swedish central bank on Tuesday. The topic was central bank independence, and Powell did not touch upon the economy or monetary policy. The markets took this as a dovish sign and the US dollar pared gains as a result. Read next:Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD Technical 0.6931 remains a weak resistance line, followed by 0.7044 0.6817 and 0.6747 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

Australian dollar: RBA is expected to raise the interest rate by 25bp. CPI prints of Australia and the USA to be released day after day this week

Kenny Fisher Kenny Fisher 10.01.2023 17:54
The Australian dollar is in negative territory on Tuesday. In the European session, AUD/USD is trading at 0.6898, down 0.21%. This follows a two-day rally in AUD/USD climbed over 2%. Australian CPI looms It could be a busy week for the Australian dollar, with Australia releasing CPI on Wednesday, followed by the US on Thursday. Australian headline inflation dropped to 6.9% in October, down from 7.3% a month earlier. The markets are bracing for inflation to rise again, with a forecast of 7.3% for December. As well, the trimmed mean rate (core CPI) is also expected to rise to 5.5%, up from 5.3%. The RBA is widely expected to continue its tightening at the February 7th meeting. The markets are currently pricing in a 25-basis point hike at 60%, and this will likely rise if inflation reverses directions and climbs higher on Wednesday, as expected. The RBA is well aware of the pain that high rates are causing to consumers and businesses and remains flexible with its rate policy. The minutes of the December meeting indicated that the RBA considered three options at that meeting – a 25 bp hike, a 50-bp hike and a pause. In the end, RBA members opted for the 25-bp increase. Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM The Fed hasn’t had much success in convincing the markets to adopt its outlook on interest rates. The markets have stubbornly clung to a dovish approach, pricing in a terminal rate of 4.93%. In contrast, the Fed dot plot indicates a terminal rate of 5-5.25%. But you can’t fault the Fed for not trying. On Monday, two non-voting FOMC members reiterated the Fed’s hawkish stance, saying that rates would likely rise above 5%. Atlanta Fed President Rafael Bostic said he expected rates to remain above the 5% level for “a long time” and that he would put rates on hold throughout 2024. Bostic added that if Thursday’s inflation data showed inflation easing, it would strengthen the case for reducing the rate hike at the February meeting to 25 basis points. San Francisco Fed President Mary Daly echoed this stance, saying that holding rates at its peak for 11 months was a “reasonable starting point.” If inflation is stronger than expected, the markets may listen a bit more closely. Conversely, a soft inflation release will make it harder for the Fed to convince the markets that it is not planning to wind up the current tightening cycle with a “one and done” hike in February. AUD/USD Technical AUD/USD has support at 0.6703 and 0.6620 There is resistance at 0.6841 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD edges lower, CPI next - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Says That Inflation Is Close To A Peak

Kenny Fisher Kenny Fisher 10.01.2023 12:29
The Japanese yen continues to have a quiet week. USD/JPY is showing little movement on Tuesday, trading at 131.84. Tokyo Core CPI hits 4.0% Tokyo Core CPI, a key inflation indicator, was higher than expected and in December hit 4.0% for the first time since 1982. This was up from 3.6% in November and above the forecast of 3.8%. Food and energy costs were the drivers behind the uptick, but higher prices were broad-based, casting doubt on the Bank of Japan’s argument that inflation is mainly due to import costs. The BoJ says that inflation is close to a peak, but inflation indicators such as Tokyo Core CPI don’t corroborate that view. The markets were caught flat-footed by the BoJ in December when it suddenly widened the yield curve control band, and wary investors are on the lookout for further policy changes, such as another widening of the band or eliminating its yield curve control target for long-term bonds. Higher inflation is putting pressure on the BoJ to respond, and the monthly policy meetings are no longer sleepy affairs that have no bearing on the markets. The BoJ meets again on January 18th and in addition to announcing policy will update its inflation forecasts. High inflation has taken its toll on consumers, and Household Spending declined in November for the first time since June, with a reading of -1.2%. This was down from 1.2% in October and missed the consensus of 0.6%. The government has introduced an economic stimulus package that includes subsidies for electric bills and is counting on the measures to push inflation lower. Still, the package isn’t expected to make an impact until February, which means inflation could continue to accelerate in January. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM USD/JPY Technical There is weak resistance at 132.13, followed by 133.30 131.25 and 130.60 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Analysis Of The EUR/JPY Pair Movement

Tokyo Core CPI Has Been Moving Steadily Higher And Is Expected To Continue This Trend

Kenny Fisher Kenny Fisher 09.01.2023 13:31
The Japanese yen is calm on Monday and is trading slightly higher, at 132.27. The yen ended the week on a strong note, posting gains of about 1% on Friday. USD/JPY has shown significant volatility since late December. Last week, the pair traded in a range of over 500 points, which included breaking below the 130 line for the first time since May. We could see stronger movement again today, as Japan releases Tokyo Core CPI and Household Spending later in the day. Tokyo Core CPI expected to rise to 3.8% Tokyo Core CPI has been moving steadily higher since January 2022, when it came it a negligible 0.2%. The December report rose to 3.6%, up from 3.4%, and the upward trend is expected to continue, with a forecast of 3.8% for January. After years of deflation, rising prices have become the new norm. The Bank of Japan has repeatedly stated that it will not change its ultra-loose policy due to higher inflation. Governor Kuroda said last month that he expects inflation to fall below the 2% target as the effect of soaring import costs will ease. The BOJ shocked the markets in December by widening the yield curve band, and there is speculation that Kuroda’s successor, who will take over in April, could raise the yield targets on long-term bonds, which would be a major policy change. High inflation has taken a bite out of Household Spending, which fell to 1.2% in October, down from 2.3% a month earlier. The downtrend is expected to continue, with a weak gain of 0.6% expected for November. The US dollar was lower across the board on Friday, after the US posted some soft data. Nonfarm payrolls was slightly better than expected at 223,000, but wage growth headed lower. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. The ISM Services PMI underperformed, slipping to 49.6, down sharply from 56.5 and the forecast of 55.5. This marked the first time the PMI has fallen into contraction territory since May 2020, with a reading below the neutral 50.0 threshold. The drop in wages and the weak services data indicate that the US economy is slowing and is likely to tip into recession, which could force the Fed to reconsider its aggressive rate-tightening policy. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/JPY Technical There is weak support at 132.13, followed by 131.14 133.28 and 134.75 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/CAD Pair Has The Strong Downside Momentum

The Canadian Dollar (CAD) Surged On The Strong Employment Report

Kenny Fisher Kenny Fisher 09.01.2023 13:22
The Canadian dollar has extended its gains on Monday, after climbing close to 1% on Friday. In the European session, USD/CAD is trading at 1.3396, down 0.35%. Canada creates over 100K jobs The final employment report of 2022 was a winner. The Canadian economy surprised with a massive gain of 104,000 jobs, crushing the estimate of 8,000 and up from the November reading of 10,100. The unemployment rate ticked lower to 5.0%, below the estimate of 5.2% and the prior read of 5.1%. The Canadian dollar surged on the strong employment report as well as mixed US numbers, as the nonfarm payrolls was decent but wages and the Services PMI were soft. Canada’s superb job numbers could play a key factor in the Bank of Canada’s rate decision on January 25th as a 25-basis point increase appears more likely. The markets have priced in a 75% likelihood of a 25 bp move, up from 64% prior to the release. Three of Canada’s major banks are saying they are also expecting a 25-bp increase, which would bring the cash rate to 4.5%. There are two key events next week which could provide clues on what the BoC has planned at its next meeting – the BoC Business Outlook Survey and the December inflation report. BoC Governor Macklem has said that future rate hikes will be data-dependent and the central bank and investors will be closely watching the inflation release. In the US, nonfarm payrolls came in at 223,000, down from 256,000 but above the estimate of 203,000. This was a decent release, but investors focussed on the bad news. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. As well, the ISM Services PMI fell into contraction territory for the first time since May 2020. The index slipped to 49.6, down sharply from 56.5 and the forecast of 55.5. A reading below the 50.0 threshold separates contraction from expansion.  The drop in wages and weak services data indicate that the US economy is slowing and is likely to tip into recession. This could force the Fed to ease up on its pace of rate hikes, and as a result, the US dollar was broadly lower on Friday. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/CAD Technical There is resistance at 1.3522 and 1.3609 1.3358 and 1.3271 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Forex: US dollar against Japanese yen amid volatility and macroeconomics

Forex: US dollar against Japanese yen amid volatility and macroeconomics

Kenny Fisher Kenny Fisher 05.01.2023 20:17
The Japanese yen is sharply lower on Thursday. In the North American session, USD/JPY is trading at 133.90 down 0.93%. What a difference a few days can make. The yen was cruising on Tuesday, as it broke below the 130 level for the first time since May. Since then, the dollar has gone on a tear, pushing the yen close to the 134 line. The yen has been showing volatility since the last week of 2022, and it’s a sure bet that the Ministry of Finance and the Bank of Japan, which dislike sharp movements by the yen, will be watching to see if the downtrend continues. Read next: Precious metals: Gold retreats as traders await tomorrow's jobs report| FXMAG.COM In the US, the focus in the latter part of the week has been on employment data, with all eyes on Friday’s jobs report. On Wednesday, JOLTS Job Openings dipped slightly to 10.46 million, and the ISM employment index rose into expansion territory. This was followed by more positive data today – unemployment claims fell to 204,000, down from 223,000. As well, the ADP employment report rose to 225 thousand, up sharply from 127 thousand. The data points to a strong labour market, and this is an important factor in the Fed being able to continue raising rates and count on the economy being able to withstand the tightening. Fed minutes reaffirm hawkish stance The Fed minutes were hawkish, but this shouldn’t surprise anyone, given that Jerome Powell pushed hard against the markets at the December meeting and said rates were not going down anytime soon. The minutes echoed what the Fed has been saying for months, that more evidence was needed to show that inflation was on a “sustained downward path to 2 per cent”. The minutes noted that several members warned against “prematurely loosening monetary policy”. The markets haven’t aligned with the Fed, forecasting a funds rate peak at 4.5%-4.75%. The Fed, on the other hand, expects rates to hit 5% or higher. The Fed has spent a lot of energy pushing back against market speculation about a U-turn in policy, and the minutes contained a warning to the markets not to underestimate the Fed’s resolve to maintain high rates in order to curb inflation. USD/JPY Technical USD/JPY has support at 133.48 and 132.13 There is resistance at 134.56 and 135.85 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen's slide continues - MarketPulseMarketPulse
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

Oanda's Kenny Fisher comments on Euro against US dollar - January 5th

Kenny Fisher Kenny Fisher 05.01.2023 19:44
EUR/USD is almost unchanged on Thursday. The economic calendar is light, with no tier-1 events out of the eurozone. The US releases the ADP employment report and unemployment claims, ahead of the jobs report on Friday. Will eurozone inflation dip? German inflation fell sharply in December, falling to 9.6% from 11.3% in November. This was a positive way to end what was a rough 2022 – annual inflation hit 7.9%, its highest level since 1951. France and Italy’s inflation levels also fell and investors are hoping for a repeat performance on Friday, when the eurozone releases the December inflation report. Eurozone CPI is expected to drop to 9.7%, compared to 10.1% in November. A drop into single digits will be welcome, but much of the decline could be a result of energy subsidies in Germany and elsewhere. ECB President Lagarde has noted that headline inflation could rise once the government subsidies come to an end. Core CPI provides a more accurate indication of whether inflation is really falling, and the forecast is for the core rate to remain unchanged at 5.0%. A decline in the CPI reading will create headlines but is unlikely to sway the central bank from raising rates at the February 2nd meeting, likely by 50 basis points. The ECB is committed to curbing inflation and is unlikely to ease up on rate hikes until it is convinced that inflation is on a sustained downturn. The Federal Reserve minutes reiterated the hawkish message that Jerome Powell had for the markets at the December meeting. FOMC members committed to maintaining a restrictive policy while inflation remained unacceptably high, saying that more evidence was needed to show that inflation was on a “sustained downward path to 2 per cent”. The minutes noted that several members warned against “prematurely loosening monetary policy”. The Fed has been consistent with its hawkish stance for some time, yet there is still a dissonance between the Fed’s message and market pricing. The minutes noted that no FOMC members expect any rate cuts this year, while the markets have priced in a possible small reduction by the end of 2023 and have forecast a funds rate peak at 4.5%-4.75%. The Fed, on the other hand, expects rates to hit 5% or higher. The Fed is not pleased with this disconnect and the minutes contained a warning to the markets not to underestimate the Fed’s resolve to maintain high rates in order to curb inflation. EUR/USD Technical EUR/USD is putting pressure on support at 1.0566, followed by support at 1.0487 There is resistance at 1.0636 and 1.0740 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro calm as data calendar remains light - MarketPulseMarketPulse
The AUD/JPY Currency Pair Is Moving In A Downward Trend

The Situation Of The Chinese Economy Could Be A Serious Problem For The Australian Dollar In Early 2023.

Kenny Fisher Kenny Fisher 05.01.2023 12:12
The Australian dollar has posted limited losses on Thursday. In the European session, AUD/USD is trading at 0.6822, down 0.17%. Australian dollar soars as China mulls coal imports The Australian dollar rocketed higher on Wednesday, rising 1.6% and hitting a 3-week high. This followed reports that China was considering easing its ban on imports of Australian coal. The ban has been in place since 2020, but relations between Australia and China have improved since the new Australian government took office. The move would bolster the Australian economy, although the Australian government was surprisingly low-key, saying that the coal industry had found alternative markets. China is Australia’s number one trading partner, which means that developments in China have a significant impact on Australia and the direction of the Australian dollar. The sharp U-turn in China’s covid policy, from zero-covid to easing restrictions should give a boost to the Chinese economy in the long term. However, we can expect China’s economy to slow down and even contract in the first quarter, due to the surge in Covid cases which is dampening demand for services and also lowering production as many workers report in sick. This could pose a major headwind for the Australian dollar early in 2023. The Federal Reserve minutes reflected the hawkish message that Jerome Powell had for the markets at the December meeting. FOMC members committed to maintaining a restrictive policy while inflation remained unacceptably high, saying that more evidence was needed to show that inflation was on a “sustained downward path to 2 per cent”. The minutes noted that several members warned against “prematurely loosening monetary policy”. Despite the Fed’s hawkish stance, there is still a dissonance between the Fed’s message and market pricing. The minutes noted that no FOMC members expect any rate cuts this year, while the markets have priced in a possible small reduction by the end of 2023 and have forecast a funds rate peak at 4.5%-4.75%. The Fed, on the other hand, expects rates to hit 5% or higher. Minneapolis Fed President Kashkari said on Wednesday that rates could rise to 5.4% or even higher if inflation doesn’t head lower. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6703 and 0.6620 There is resistance at 0.6841 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Oanda's Kenny Fisher talks US dollar against Canadian dollar

Kenny Fisher Kenny Fisher 04.01.2023 23:27
The Canadian dollar is sharply higher on Wednesday. In the North American session, USD/CAD is trading at 1.3492, down 1.29%. It has been a busy start to the new year for the Canadian dollar, which started the week with losses but has bounced back today. US, Canada Manufacturing PMIs slow The first release out of Canada this year was a disappointment. Manufacturing PMI fell to 49.2 in December, down from  49.6 a month earlier, but it managed to match the forecast. This is the fifth straight reading below 50.0, which separates contraction from expansion. Production and new orders were down, and prices continue to increase, forcing manufacturers to pass on the higher costs to clients. Confidence remains weak, and the only good news was a slight gain in employment growth. As we start the new year, the outlook does not look particularly positive for the manufacturing sector. In the US, December manufacturing data was also soft. The ISM Manufacturing PMI contracted for a second straight month, slowing to 48.4 from 49.0 in November. The PMI fell to its lowest level since May 2020, when the coronavirus recovery started. On a positive note, the Employment Index improved and expanded in December to 51.4, up from 48.4 in November. Read next: Canadian dollar jumps, as US Mfg. PMI slips - MarketPulseMarketPulse The Federal Reserve releases the minutes of its December meeting later today. The Fed has pushed back against speculation that it will ease on tightening and Jerome Powell reiterated this message at the December meeting, saying that interest rates could reach a higher peak than previously anticipated and rates could stay high for an extended period of time. If the minutes echo this hawkish stance, and the markets buy what the Fed is selling, the US dollar could gain ground. USD/CAD Technical USD/CAD has broken below support at 1.3628 and 1.3535 and is putting pressure on 1.3476 There is resistance at 1.3709 and 1.3780 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar jumps, as US Mfg. PMI slips - MarketPulseMarketPulse
Corporate Bond Supply Surges in May, Outpacing Previous Years, While Financial Sector Struggles with Low Issuance

Great Britain: According to BRC, food inflation reached 13.3% in December

Kenny Fisher Kenny Fisher 04.01.2023 22:54
The British pound has bounced back on Wednesday and recorded sharp gains. In the European session, GBP/USD is trading at 1.2055, up 0.74%. Food inflation jumps Ask any British consumer, and they’ll tell you that food prices have been going through the roof. The BRC provided data in that regard, stating that food inflation hit a record 13.3% in December, up from 12.4% in November. The BRC put the blame on the Ukraine war, which has resulted in higher prices for energy and raw materials. With the war dragging on and no end in sight, we’re unlikely to see a drop in food prices anytime soon. High inflation and more expensive mortgage payments have squeezed British households, which have been hit by the worst cost-of-living crisis the UK has experienced in years. The OBR projected in November that real household disposable income would fall by 4.3% in 2022-2023. The rise in inflation has been accompanied by weak growth, and the UK is likely already in a recession. Goldman Sachs has forecasted the GDP will contract by 1.2% in 2023, the worst among the G-10 major economies. This is only marginally better than the forecast for Russia, with GDP expected to decline by 1.3%. The Bank of England has been focussed on inflation and raised rates by 50 basis points to 3.5% in December. Inflation eased to 10.7% in December, down from 11.1% in November, which marked a 41-year high. The BoE would prefer not to tighten in such a weak economic environment but has argued that it would be worse to allow inflation to remain at high levels. All signs indicate that the BoE will continue to raise rates in early 2023, starting at the February 2nd meeting. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM In the US, investors will have two key events to digest later today. ISM Manufacturing PMI fell into contraction territory in November for the first time since May 2020, with a reading of 49.0 points. Another weak reading is expected for December, with a forecast of 48.5 points. The 50.0 threshold separates contraction from expansion. The Federal Reserve will release the minutes from its December meeting. At the meeting, Fed Chair Powell sent a hawkish message that interest rates could continue to rise and poured cold water on a dovish pivot. Investors will be looking for clues as to interest rate policy in 2023 and its outlook for the US economy. GBP/USD Technical GBP/USD has support at 1.1949 and 1.1846 There is resistance at 1.2095 and 1.2198 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD pushes above 1.20 - MarketPulseMarketPulse
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Kenny Fisher Kenny Fisher 04.01.2023 12:52
After a dreadful showing on Tuesday, EUR/USD has rebounded today. In the European session, the euro is trading at 1.0618, up 0.66%. Investors eye German CPI German CPI was lower than expected in December. CPI slowed to 9.6%, down sharply from 11.3% in November and below the consensus of 10.7%. This marked the first time that German inflation has fallen into single digits since the summer. Spanish inflation, released last week, also slowed in December. The next test is the release of eurozone inflation on Friday. Inflation is expected to fall to 9.7%, down from November’s 10.1%. The drop in German inflation is welcome news, but two caveats are in order. First, the German government enacted a price cap for electricity and gas in December, which meant that energy inflation slowed in December. However, services inflation, which is a more accurate gauge of price pressures, rose to 3.9% in December, up from 3.6% a month earlier. Second, inflation remains at unacceptably high levels. Germany’s annual inflation in 2022 hit 7.9%, its highest level since 1951. If eurozone inflation follows the German lead and heads lower, can we say that inflation has peaked? Some investors may think so, but I wouldn’t expect ECB policy makers to banter around the “P” word. The central bank reacted very slowly to the surge in inflation and has been playing catch-up as it tightens policy. Lagarde & Co. will therefore be very cautious before declaring victory over inflation. If eurozone inflation drops significantly in the upcoming release, it will provide some relief for the ECB in its battle with inflation. The ECB has adopted a hawkish stance, and the markets are still expecting a 50-bp hike at the February 2nd meeting. In the US, the markets are back in full swing after the holidays. Today’s key events are ISM Manufacturing PMI and the minutes from the Fed’s December meeting. In October, the PMI contracted for the first time since May 2020, with a reading of 49.0 (the 50.0 threshold separates contraction from expansion). Another weak reading is expected, with a forecast of 48.5 points. The Fed minutes will make for interesting reading, providing details about the Fed’s commitment to continue raising rates, which surprised the markets and sent the US dollar sharply higher.   EUR/USD Technical EUR/USD is putting pressure on resistance at 1.0636. Next, there is resistance at 1.0674 There is support at 1.0566 and 1.0487 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The IMF Warned That 2023 Would Be Worst Than 2022, As The US, EU And China Would All See A Decline In Growth

The IMF Warned That 2023 Would Be Worst Than 2022, As The US, EU And China Would All See A Decline In Growth

Kenny Fisher Kenny Fisher 03.01.2023 15:11
The US dollar is showing strong gains against the majors on Tuesday, with the exception of the Japanese yen. EUR/USD has tumbled by 1.27% and is trading at 1.0528 in Europe. Investors eye German CPI EUR/USD is sharply lower today, despite a very light economic calendar. The only release of note is German CPI, which will be released later today. Despite the lack of fundamentals, the US dollar is taking advantage of risk aversion in the markets. There are headwinds everywhere you look. The war in Ukraine, the threat of recession in the US and the eurozone and China’s slowdown all make for a gloomy outlook as we start the new year. Germany’s inflation has been falling, and the downtrend is expected to continue. The consensus for December CPI is 9.0%, compared to 10.0% in November. If the consensus proves accurate, it could put further pressure on the euro, as the ECB may have to reconsider its hawkish stance on rate policy. The International Monetary Fund didn’t bring any festive cheer with its pessimistic message on Monday. The IMF warned that 2023 would be tougher than 2022, as the US, EU and China would all see a decline in growth. Adding to the gloom, the IMF said that it expected one-third of the global economy to be in recession this year. In October, the IMF cut its growth outlook from 2.9% to 2.7%, due to the war in Ukraine as well as central banks around the world raising interest rates. After the Christmas and New Year’s holidays, the markets are easing back in, as the data calendar gets busier as of Wednesday. We’ll get a look at the Fed minutes from the December meeting, which was a hawkish affair that surprised investors and gave the US dollar a boost. On Friday, the US releases the employment report, which always plays an important factor in the Federal Reserve’s rate policy.   EUR/USD Technical EUR/USD is testing support at 1.0528. Below, there is support at 1.0469 There is resistance at 1.0566 and 1.0636 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: EUR/USD slides to three-week low - MarketPulseMarketPulse
Analysis Of The EUR/JPY Pair Movement

Any Strong Movement From The Yen Is Unlikely Today Due To Japanese Markets Are Closed

Kenny Fisher Kenny Fisher 03.01.2023 12:45
The Japanese yen has posted winning sessions for three straight days and is in positive territory on Tuesday. Japanese markets are closed today for a holiday, so any strong movement from the yen is unlikely today. It’s a very light day on the economic calendar. There are no Japanese events, while the US releases Final Manufacturing PMI. Yen keeps rolling Japanese markets remain closed for an extended holiday but the good times continue for the yen. Since falling to 151 in October, the currency has rebounded and earlier today broke below the symbolic 130 level, for the first time since May. If USD/JPY closes the day below 130, that will give support for the downtrend to continue. The next target for a downside push is the 125 line, which has held since April. Investors would love to know what the Bank of Japan has planned in the coming months. The BoJ tweaked its yield curve band in December, a move that blindsided the markets and sent the yen flying higher. With Governor Kuroda winding up his 10-year term in April, there were no expectations that Kuroda would make any significant policy changes, and the focus was on his potential successor. Kuroda has insisted that the tweak was not a prelude to the Bank exiting its massive stimulus program, but the markets aren’t so sure. What is clear is that inflation continues to rise in Japan, which is putting pressure on the BoJ to tighten policy. This could take the form of further widening the yield curve band or eliminating the 0% target for 10-year yields. The BoJ next meets on January 18th and investors will be all ears. BoJ policy meetings used to be sleepy affairs, where board members dutifully announced they were maintaining current policy. This is clearly no longer the case, with the BoJ widening the yield curve band at the December meeting and board members discussing the impact that an exit from stimulus would have on the markets. Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM USD/JPY Technical USD/JPY is testing support at 130.50. The next support level is 129.76, which has held since June There is resistance at 131.25 and 132.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Japanese yen breaks below 130 - MarketPulseMarketPulse  
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

This week seems to be resilient, but Japanese yen fill in a gap

Kenny Fisher Kenny Fisher 02.01.2023 22:04
The Japanese yen is in positive territory on the first trading day of the new year. US and Japan markets are both closed today, and the yen will likely continue to remain calm in holiday-thinned trading. Currently, USD/JPY is trading at 130.65, down 0.34%. Markets keep an eye on BoJ There are no tier-1 events out of Japan this week, but investors will be nevertheless keeping a close eye on the surging Japanese yen. The currency had a long slide for most of 2022 and fell below 151 in October, its lowest level in 24 years. This forced the Ministry of Finance to intervene in the currency markets. The yen has made a remarkable comeback since then, rising about 11%. The Bank of Japan shocked the markets in December when it widened the yield curve band from 0.25% to 0.50%. The move sent the yen sharply higher and has raised speculation that the Bank of Japan could be planning to exit its massive stimulus programme, although the BoJ has denied it has any such plans. The Bank of Japan holds its next meeting on January 18th. What made the BoJ move so dramatic is that the markets were expecting the BoJ to remain in cruise control until BoJ Governor Kuroda’s term ends in April, after a decade at the helm of the central bank. BoJ policy could well change, depending on the new governor, but Kuroda has demonstrated that he is not shy about making policy moves at the end of his term and the markets will watching for further measures which could shake up the Japanese yen. The yen may have bounced back over the past two months, but USD/JPY has still gained 13.7% in 2022, which is the yen’s worst performance since 2013. The driver behind the yen’s descent was the BoJ’s ultra-loose policy, which capped 10-year yields at 0.25%, contributing to a constantly widening US/Japan rate differential. The BoJ’s tweak which widened the yield curve band to 0.50% has given the yen a boost, but we’ll have to wait to see if the yen can hold onto these recent gains. Read next: First Trading Day Of 2023: GBP/USD Is Trading 1.2051, USD/JPY Pair Below 131, The Aussie Pair Is Around 0.68 And EUR/USD Above 1.0680| FXMAG.COM USD/JPY Technical USD/JPY faces resistance at 131.66 and 132.55 There is support at 129.76 and 128.41 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen's rally continues - MarketPulseMarketPulse
Expect the ECB to keep increasing rates at the short-term, at least until the summer

IMF's Georgieva warns of further growth issues. Eurodollar: German Manufacturing PMI edges up, eurozone inflation to be released this week

Kenny Fisher Kenny Fisher 02.01.2023 12:19
Welcome to the first trading day of the New Year. Trading remains thin, as most markets are closed.  In the European session, EUR/USD is trading at 1.0679, down 0.23%. I expect a quiet day for the euro. German Manufacturing PMI improves There are no US events on the schedule. German Manufacturing PMI improved to 47.1 in December, up from 46.2 in November and shy of the consensus of 47.4 points. Manufacturing remains below the 50.0 level that separates contraction from expansion, and expectations remain pessimistic. The silver lining to a gloomy situation is that the outlook has improved slightly, as the December release was the strongest in three months. It was a similar pattern in the eurozone, as the Manufacturing PMI rose to 47.8, up from 47.1 in November, also a three-month high. Manufacturing in Germany and the eurozone has suffered a tough year, and demand remains weak. The global outlook remains uncertain and with the ECB promising further rate hikes, the risk-to-demand outlook is tilted to the downside. Still, December showed an improvement, as concerns over an energy crisis have lessened and inflation has eased. We’ll get a look at key inflation releases this week. German publishes December CPI on Tuesday, followed by eurozone CPI on Friday. Both indicators are pointing to inflation heading lower, which could have an impact on ECB rate policy. The ECB raised rates by 50-bp in December and meets next on February 2nd. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM If anyone needed a sober forecast for 2023, there was one today from the International Monetary Fund. The head of the IMF, Kristalina Georgieva, warned that 2023 would be tougher than last year, as the US, EU and China would see growth slow. Georgieva said that she expected one-third of the global economy to be in recession. In October, the IMF cut its growth outlook from 2.9% to 2.7%, due to the war in Ukraine as well as central banks around the world raising interest rates. EUR/USD Technical EUR/USD is testing support at 1.0674. Below, there is support at 1.0566 There is resistance at 1.0782 and 1.0852 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Australian dollar rose 2% since December 23rd, China's data crucial for Aussie

Kenny Fisher Kenny Fisher 30.12.2022 17:48
The Australian dollar has been rising since last Friday and is in positive territory today. In the European session, AUD/USD is trading at 0.6801, up 0.37%. The final week of the year, bookended by Christmas and New Year’s, is usually quiet, with reduced trading volumes and a very light economic calendar. Still, the Australian dollar managed to put together an end-of-the-year rally, rising around 2% since December 23rd. Australia watching China reopening In a week short on economic news, one of the highlights was China’s announcement that international tourists would no longer be required to enter quarantine upon arrival. This marks another step in China’s rush to reopen, a massive shift from its harsh zero-Covid policy that choked economic activity. The pivot is expected to invigorate China’s economy, which has been experiencing a slowdown. The reopening policy is expected to boost the economy in the long term but has already led to a surge in Covid cases. This has kept many people indoors, hurting businesses, and many workers have reported being sick, which has reduced factory production. The reopening has been abrupt and chaotic, and that is likely to result in a contraction in GDP in the first quarter of 2023. China’s economy is, however, expected to recover, and HSBC is projecting 5% growth for 2023. Read next: Real bargains on Wall Street, Barron's point to, i.a. Google and Amazon as undervalued stocks | FXMAG.COM Australia is watching these developments closely. China is Australia’s largest trading partner, and how well China’s economy performs can have a strong impact on the direction of the Australian dollar. If China’s economy contracts in Q1, Australian exports will suffer and the Australian dollar could be in for a bumpy start to the year. AUD/USD Technical AUD/USD has support at 0.6703 and 0.6620 There is resistance at 0.6841 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie finishes strong in 2022 - MarketPulseMarketPulse
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

Spain: Although headline CPI decreased, core inflation rose 0.6%. Euro hasn't moved significantly

Kenny Fisher Kenny Fisher 30.12.2022 16:18
It’s the last trading day of 2022, and EUR/USD is almost unchanged in what should be a quiet day in the currency markets. In the European session, EUR/USD is trading at 1.0674, up 0.13%. Spain’s CPI drops below 6%  The week between Christmas and New Year’s is usually very light on data, and there were no tier-1 events in Germany or the eurozone this week. Earlier today, Spain released the initial CPI estimate for December, which showed that inflation continues to weaken. CPI dropped to 5.8%, down from 6.8% and below the estimate of 6.0%. Inflation in Spain slowed for a fifth successive month, as energy costs keep coming down. Headline CPI is down sharply from a peak of 10.8% in July, but the news was not all positive, as core inflation rose to 6.9%, up from 6.3%. Read next: Real bargains on Wall Street, Barron's point to, i.a. Google and Amazon as undervalued stocks | FXMAG.COM The Spanish inflation report kicks off a host of eurozone inflation releases next week. Investors will be hoping that the German and eurozone CPI data will mimic the Spanish release and point to inflation heading lower. The ECB will be keeping a close eye on these inflation reports, and the data will be an important factor in the ECB’s decision as to the pace of future rate increases. The ECB delivered a 50-bp hike earlier this month, down from the 75-bp increase in October. ECB President Lagarde warned the markets not to view the move as a dovish pivot and said that more rate hikes were on the way. ECB Vice Vice-President Luis de Guindos reiterated Lagarde’s hawkishness last week, saying that 50-bp rate hikes “may become the norm in the near future.” EUR/USD Technical 1.0660 is a weak support line. Below, there is support at 1.0616 There is resistance at 1.0702 and 1.0778 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro shrugs as Spain's inflation drops - MarketPulseMarketPulse
The USD/CHF Pair Is Likely To Decline More

US dollar has gained impressing 8% this year, but it didn't hurt Swiss franc very much as USD/CHF is only 1% higher

Kenny Fisher Kenny Fisher 30.12.2022 15:59
The Swiss franc is steady on Friday. In the European session, USD/CHF is almost trading at 0.9240, up 0.08%. On Thursday, USD/CHF dropped by 0.6% and hit a low of 0.9210, its lowest level since March 28th. KOF rebounds in December A quiet post-Christmas week wrapped up with the KOF Economic Barometer release today. After losing ground in the past two readings, the index rebounded in December and climbed to 92.2, up from 89.2 in November. This easily beat the estimate of 86.9 points. The main driver for the improvement was stronger manufacturing activity. Earlier this week, ZEW Economic Expectations also headed higher, rising from -57.5 to -42.8 points. The upturn is encouraging, but the indicator is still mired deeply in negative territory, as financial experts remain pessimistic about the Swiss economy’s outlook. As we turn the page to 2023, let’s take a quick look at the highlights of the Swiss franc’s performance over this past year. There have been plenty of ups and downs, but interestingly, USD/CHF is only about 100 points higher from where it was on January 1st. A US dollar rally in September and October saw USD/CHF break parity and hit 1.0148, its highest level since May. Since, then, the momentum has reversed, with the Swiss franc gaining an impressive 800 points since November 1st. Read next: Real bargains on Wall Street, Barron's point to, i.a. Google and Amazon as undervalued stocks | FXMAG.COM The US dollar has enjoyed a strong year, with the dollar index rising 8%, its best performance since 2015. The greenback has been boosted by a drop in risk appetite, but this didn’t hurt the Swiss franc, as both the dollar and the franc are Swiss haven currencies. In a major policy change, the Swiss central bank raised rates three times this year, which helped the Swiss franc keep pace with the US dollar even as the Fed aggressively raised rates. USD/CHF Technical USD/CHF is putting pressure on support at 0.9256. Below, there is support at 0.9159 There is resistance at 0.9377 and 0.9498   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss franc touches 9-month high - MarketPulseMarketPulse
FX Daily: Euro’s attractiveness on the rise

Vice-President ECB's Luis de Guindos hints at 50bp rate hikes as "new norm"

Kenny Fisher Kenny Fisher 29.12.2022 22:51
We’re seeing limited movement in the currency markets this week, which is not uncommon during the week between Christmas and New Year’s. Trading volume remains thin and the data calendar is very light. In the North American session, EUR/USD is trading at 1.0649, up 0.35%. The US released unemployment claims today, one of the highlights in a quiet week. Initial jobless claims climbed as expected to 225,000, up from 216,000. A rise in week-to-week claims should not alarm investors, as there is bound to be some fluctuation in the releases. The 4-week moving average, which smooths out these fluctuations, remained virtually unchanged at 221,000. Will Spain’s CPI continue to decline? There are no tier-1 releases out of Germany or the eurozone this week. On Friday, Spain releases CPI for December, and inflation in the eurozone’s fourth-largest economy could signal what to expect from next week’s German and eurozone inflation releases. Inflation in Spain has been steadily dropping, from a peak of 10.8% in July to 6.8% in November. The downtrend is expected to continue in December, with a consensus of 6.1%. The ECB has sent out hawkish messages lately, with Vice-President Luis de Guindos saying last week that “Increases of 50 basis points may become the new norm in the near term.” De Guindos added that the ECB was concerned that the markets might underestimate the persistence of inflation. Fed Chair Jerome Powell would wholeheartedly agree, as the Fed has found it tough going to convince the markets that it remains hawkish and plans to continue raising rates into 2023. Read next: 2023 Predictions: EUR/USD will eventually fall once the penny drops that Fed rates will remain above 5% for the year. Ivan Brian talks cryptocurrencies and Forex in 2023 | FXMAG.COM The markets jumped on a couple of soft US inflation reports as an indication that the Fed would pivot and become dovish, sending the US dollar sharply lower. It was only after a hawkish Fed meeting earlier this month that the markets seemed to get Powell’s message. Still, the Fed remains concerned that such speculation could loosen market conditions and complicate the Fed’s painstaking battle to curb inflation. EUR/USD Technical EUR is testing resistance at 1.0660. Above, there is resistance at 1.0746 1.0574 and 1.0488 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro higher as US jobless claims rise - MarketPulseMarketPulse
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The British Pound (GBP) Remains Calm Today

Kenny Fisher Kenny Fisher 29.12.2022 14:06
The British pound has shown little movement since before Christmas and remains quiet on Thursday. This is not surprising as trading volumes are down during the holidays and there are few key events on the calendar this week. In the European session, GBP/USD is trading at 1.2023, up 0.07%. There are no tier-1 events out of the UK this week, leaving US data in the spotlight. On the manufacturing front, the Richmond Fed Manufacturing Index rebounded to 1 point in December, up sharply from -9 in November and ahead of the consensus of -4 points. The wage index rose to 35 in December, up from 27 in November, another indication that wage growth remains strong. The US housing sector has been sending mixed signals for November. Existing home sales fell sharply while new home sales rebounded higher. Pending home sales were released on Wednesday, with a disappointing reading of -4.0% m/m, down from 4.7% in October and shy of the consensus of -1.0%. Pending home sales have been in a deep rut, posting a decline for six straight months and 12 of the last 13 months. The housing sector is clearly in trouble, although the silver lining could be that mortgage rates have been declining, which should lead to an increase in house purchases early next year. Today’s highlight is US unemployment claims. Last week’s release rose slightly, from 214,000 to 216,000. The markets are braced for a jump to 225,000, but the markets are unlikely to react to volatility in the week-to-week releases; the four-week moving averages smooths the weekly data and provide a more accurate picture of unemployment. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM GBP/USD Technical GBP/USD has support at 1.1949 and 1.1846 There is resistance at 1.2095 and 1.2198 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Labor Agreements In Early 2023 Would Have An Effect On The Bank Of Japan's Decisions

Kenny Fisher Kenny Fisher 29.12.2022 13:48
The Japanese yen has posted gains on Thursday, putting the brakes on this week’s dollar rally of over 1%. In the European session, USD/JPY is trading at 133.64, down 0.60%. This week has been marked by low liquidity, with many traders closing their books or taking a holiday at the end of the year. Japanese markets have been open all week, and USD/JPY has shown more movement than the other majors. BOJ defends yield curve target In a week that has been light on economic releases, the Bank of Japan has provided plenty of material for the markets. The BoJ shocked the markets last week when it widened the yield curve band on 10-year bonds, from 0.25% to 0.50%. The move had the same effect as a rate hike and sent the yen sharply higher. After the move, Governor Kuroda said that the tweak was aimed at making the yield curve more sustainable rather than removing it. Investors remain unconvinced, with speculation rising that the BoJ could raise the cap to 0.75% or eliminate its yield curve control altogether. The BoJ has tried to dispel speculation that further changes to the yield curve are on the way. The Bank announced on Wednesday and again today unlimited bond purchases, with the aim of defending its yield curve target, which is around 0% for 10-year bonds. The tweak on the yield curve band did not affect this target, which the BoJ has insisted will remain in place. What we are seeing here is a continuation of a cat-and-mouse game between the BoJ and investors, with each side testing the resolve of the other. In October, the yen fell close to 152 before the Ministry of Finance intervened in the currency markets and propped up the yen. Inflation is on the rise in Japan and has climbed to 3.7%, a 40-year high. The BoJ, however, remains unconvinced that inflation is sustainable unless accompanied by stronger wage growth. If labour agreements in early 2023 result in higher wages, the BoJ could raise its yield curve control target, which would be a massive change in policy. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM USD/JPY Technical USD/JPY tested support at 133.62 earlier. The next support level is 132.62 There is resistance at 134.86 and 135.98 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

The Swiss National Bank (SNB) Has Shown That It Is Not Shy About Intervening In The Currency Markets

Kenny Fisher Kenny Fisher 28.12.2022 14:08
Market activity is subdued on Wednesday in thin post-holiday trade. In the European session, USD/CHF is almost trading at 0.9280, down 0.14%. Over the final two months of the year, the Swiss franc has looked sharp against the US dollar. USD/CHF tumbled 5.6% in November and is down another 1.6% in December. The pair fell as low as 0.9215 on December 14th, its lowest level since April. The Swiss National Bank (SNB) is keeping a close eye on the appreciation of the Swiss franc, as this makes Swiss exports more expensive. The SNB has shown that it is not shy about intervening in the currency markets if it believes that the Swissie exchange rate is too high. The SNB has joined the global tightening party in 2022, raising interest rates into positive territory after years of sub-zero rates. The SNB delivered an oversize rate of 0.50% earlier this month, bringing the cash rate to 1.00%. The central bank had an accommodative monetary policy in place for years in order to combat deflation. In the new era of rising inflation, the SNB has switched gears, with 175 basis points of tightening this year. Switzerland’s inflation rate of 3% is much lower than in the eurozone, but this is above the SNB’s target of 0-2%. At the December meeting, the SNB said it would not rule out further tightening, which will largely depend on inflation forecasts. If inflation does not ease, there is a strong likelihood of another rate hike in March. ZEW Economic Expectations climbs It’s a very light calendar this week in Switzerland, with just two events. Earlier today, ZEW Economic Expectations showed a strong improvement with a reading of -42.8 in December, up from -57.5 in November and above the consensus of -50.5 points. This is a step in the right direction, but the latest reading was the 10th straight in negative territory. On Friday, we’ll get a look at the KOF Economic Barometer, which has been on a downturn. The consensus stands at 86.9 for December, following 89.5 in November.  Read next: The Optimism Around China Easing Of Covid Protocols Has Cool Down, The Aussie Pair Is Trading Near 0.68| FXMAG.COM USD/CHF Technical USD/CHF is putting pressure on support at 0.9256. Below, there is support at 0.9159 There is resistance at 0.9377 and 0.9498 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: https://www.marketpulse.com/20221228/swiss-franc-showing-strength/    
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

There Are Many Indications That In Spring In Japan, Large Companies And Trade Unions Will Negotiate Higher Wages

Kenny Fisher Kenny Fisher 28.12.2022 11:57
The Japanese yen continues to lose ground this week and is in negative territory on Wednesday. In the European session, USD/JPY is trading at 134.11, up 0.49%. Post-Christmas holiday trading remains thin, but USD/JPY has made steady gains and climbed 1% this week. The US dollar has recovered somewhat after last Tuesday’s slide when it fell a staggering 3.8% after the BoJ widened its yield curve band. The move blindsided the markets, which had not expected any major policy moves prior to the end of Governor Kuroda’s term in April. Summary of Opinions – no exit from loose policy Investors were all ears as the BoJ released today the summary of opinions from last week’s dramatic meeting. The summary of opinions showed that several of the nine board members said that the tweak to yield control was aimed at enhancing the current stimulus programme rather than ending it. This reiterated what Governor Kuroda stated in a press conference after the meeting. Still, speculation remains high that the BoJ could take further steps that tighten policy, and even exit the Bank’s ultra-loose policy, especially with inflation running at a 40-year high. The summary of opinions indicated that members discussed rising inflation and the possibility that higher wages would remove the risk of a return to deflation. The BoJ has been focused on wages, arguing that strong wage growth will ensure that inflation is sustainable, as opposed to inflation that is driven by higher costs for energy and raw materials. The government is also making wages a top priority, and there are indications that major companies and labour unions will negotiate higher wages in the spring. If the BoJ sees that wages are rising it could raise its yield curve control target, which is currently around 0% for 10-year bonds. The BoJ will likely be back in the headlines shortly, with its next meeting on Jan. 17th and 18th. Read next: Leading Used Tesla Prices Fall Faster Than The Market| FXMAG.COM USD/JPY Technical  USD/JPY is testing resistance at 134.12. Above, there is resistance at 134.82 There is support at 133.25 and 132.29 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Japan: widening bond yield isn't about a prologue to the end of loose monetary policy

Kenny Fisher Kenny Fisher 27.12.2022 23:41
US and Japanese markets are open on Tuesday, but trading remains thin after the Christmas holiday. There are some key Japanese events on the calendar, although US releases are all tier-2 events. In the North American session, USD/JPY is trading at 133.41, up 0.44%. Retail Sales slower in November There are a host of events out of Japan today. Retail sales rose for a ninth consecutive month in November, buoyed by the tourist trade after Japan opened its borders. Still, the gain of 2.6% y/y was well off the 4.4% gain in October and 4.8% in September, and below the consensus of 3.7%. Household and consumer consumption account for more than half of economic growth, so the downtrend is clearly worrying. Japan’s economy contracted in Q3, as a poor global outlook, the slowdown in China and a weak yen put a squeeze on economic growth. Read next:  Inflation continues to rise in Japan, although the levels pale in comparison to what the US, the UK and the eurozone are experiencing. The Bank of Japan’s preferred inflation gauge, BOJ Core PCI, accelerated for a ninth straight month in November, rising to 2.9% y/y, up from 2.8% and above the consensus of 2.7%. Last week, Japan’s Core CPI rose 3.7% y/y in November, its highest level since 1981. Inflation is moving higher as firms continue to pass along higher costs to consumers, unable to absorb the rise in energy, food and raw materials. The rise in inflation hasn’t budged the BoJ, with Governor Kuroda saying that inflation would fall back below the 2% target in 2023. Kuroda stated on Monday that the widening of the yield curve band was not a prelude to an exit from the Bank’s ultra-loose policy. We’ll get more details of that dramatic move later today, with the release of the BoJ Summary of Opinions from last week’s policy meeting. The report should make for some interesting reading. USD/JPY Technical  133.62 is a weak resistance line. Above, there is resistance at 134.12 There is support at 132.80 and 131.83   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen dips, inflation rises - MarketPulseMarketPulse
Analysis Of The EUR/JPY Pair Movement

A Rising Speculation That The Bank of Japan Could Tighten Policy In The Near Term

Kenny Fisher Kenny Fisher 23.12.2022 14:17
The dust is beginning to settle after the Bank of Japan’s stunning move earlier this week.  At its policy meeting, the BoJ widened the yield curve on long-term bonds from 0.25% to 0.50%. The move blindsided the markets, which had anticipated a ho-hum BoJ meeting with no changes in policy. The announcement sent USD/JPY tumbling by over 500 points and has raised speculation that the BOJ could make further changes before BOJ Governor Kuroda wraps up his term in April. The yen has since settled down and the markets are keeping an eye on other releases. National Core CPI for November delivered as expected, as the 3.7% gain matched the consensus and ticked up from 3.6% in October. The BoJ also released meeting minutes, but these were from the October meeting. Some members voiced concern about the strong descent of the yen, saying it caused uncertainty and had many negative effects on the economy. It should be kept in mind that the yen was much weaker in October when these comments were made, but it does indicate that the yen’s strength is of concern to the BOJ. Another interesting comment was that the Bank needed to assess how the markets would react if the BoJ decided to exit its easy policy. After this week’s yield curve move, this point takes on added urgency, with rising speculation that the BoJ could tighten policy in the near term. Markets eye PCE Core Index In the US, there are a host of events today. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. Investors will be paying close attention to the inflation and inflation expectation releases. The US posted strong numbers on Thursday. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The solid is another indication that the economy is well-positioned to handle additional rate hikes, which the Fed has promised as it battles inflation.   USD/JPY Technical  USD/JPY is putting pressure on resistance at 132.83. Above, there is resistance at 134.12 There is support at 131.13 and 130.15 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Canadian inflation report was mixed but there is a strong likelihood that the BoC will raise rates by 25bp

Kenny Fisher Kenny Fisher 23.12.2022 13:26
The Canadian dollar has edged lower on Friday. In the European session, USD/CAD is trading at 1.3600, down 0.33%. We could see stronger movement from the Canadian dollar in the North American session, with key events in both Canada and the US. Canada releases GDP for October, with a forecast of a weak gain of 0.1% m/m. This would be unchanged from September GDP. Canadian consumers have been holding tighter to the purse strings and saving their hard-earned money, as wage growth has failed to keep pace with inflation. The decline in consumer spending has hurt economic growth and there are worrying signs that economic growth has stalled in the fourth quarter. In the US, the week wraps up with a host of events. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. GDP revised upwards, jobless claims beat forecast The US dollar received a lift on Thursday, thanks to some solid US data. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The strong data is another indication that the Federal Reserve needs to maintain its aggressive tightening stance, which has raised the likelihood of higher-for-longer rates. The markets were hoping that Thursday’s Canadian inflation report would provide clues about BoC rate policy, but inflation was mixed. Headline CPI slowed to 6.8%, down from 6.9%, while two core indicators rose slightly. It appears too early to determine if inflation is headed lower, and as thing stands, there is a strong likelihood that the BoC will raise rates by 25 basis points at its January meeting.   USD/CAD Technical There is resistance at 1.3640 and 1.3762 1.3576 and 1.3484 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

USD/JPY: There could be monetary policy shifts before the end of Kuroda's tenure

Kenny Fisher Kenny Fisher 22.12.2022 16:09
The Japanese yen has edged higher on Thursday. In the European session, USD/JPY is trading at 132.09, down 0.27%. The dust has settled after Tuesday’s dramatic events, when the yen shot up 3.7%. This followed the Bank of Japan’s shocking announcement that it would widen its yield curve control on 10-year bonds from 25 bp to 50 bp. The markets were completely blindsided, which could very well be what the BoJ was hoping for. The markets hadn’t expected any policy moves until after BoJ Governor Kuroda ends his term in April, but now there is talk of major policy moves before then, such as raising interest rates out of negative territory. The BoJ releases minutes later today, but these are minutes of the November meeting. Still, with all of the drama that the BoJ has produced this week, investors will be keeping an eye on this release, looking for clues about future policy. National Core CPI next What will be of more interest to the markets is National Core CPI for November, which will also be released later today. The index is expected to inch up to 3.7%, up from 3.6% in October. Japan’s inflation rate is much lower than the US or the UK, but price pressures have nonetheless put the squeeze on households and businesses, which became accustomed to decades of deflation. With economic conditions improving and inflation rising, there has been speculation that the BoJ might consider major policy moves in the short-term, such as exiting from its stimulus programme. The BoJ showed this week that it was willing to make significant moves, and more tightening could be on the way. Read next: Credit Suisse Sold Building In Geneva, Visa Is Building Success At The Expense Of Small Retailers | FXMAG.COM USD/JPY Technical USD/JPY has support at 131.13 and 130.15  There is resistance at 132.83 and 134.12 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen steady ahead of CPI - MarketPulseMarketPulse
The EUR/USD Pair Chance For The Further Downside Movement

Euro and greenback - CB Consumer Confidence catched markets by surprise rising to 5-month high

Kenny Fisher Kenny Fisher 22.12.2022 14:51
EUR/USD continues to drift this week, content to stick close to the 1.06 line. There are no eurozone releases today, so I expect the euro to continue treading in place for the remainder of the day. This week’s data calendar in Europe has been very light, with mostly tier-2 releases. On Thursday, Germany and the US both released consumer confidence data, which pointed to very different consumer mindsets. Germany’s GfK Consumer Sentiment Index remained in deep freeze at -37.8, although the index has been inching higher, courtesy of energy prices stabilizing. Still, the German consumer is deeply pessimistic. At home, high inflation and rising interest rates are squeezing consumers, while the war in Ukraine, which has dampened economic activity, shows no signs of ending anytime soon. The German release mirrored Tuesday’s eurozone consumer confidence, which is also mired deep in negative territory. Contrast this gloomy outlook with the US, where CB Consumer Confidence surprised the markets by climbing to a 5-month high, with a reading of 108.3 in December. This blew past the November reading of 101.4 and the consensus of 101.0. The CB noted that inflation expectations fell to their lowest level since September 2021, in large part due to the drop in gas prices. The strong improvement in consumer confidence is interesting, as the US economy is expected to tip into recession – perhaps consumers are confident that the recession will not be all that bad. ECB’s De Guindos talks hawkish The ECB eased up on the pace of rates at the December meeting, as it delivered a 50-bp increase after two consecutive 75-bp increases. ECB President Lagarde warned that this was not a dovish pivot and that further rates hikes were coming. ECB Vice-President Luis de Guindos sounded hawkish on Thursday, saying, “Increases of 50 basis points may become the new norm in the near term.” De Guindos said the ECB had to do more in the fight against inflation and voiced concern that the markets might underestimate the persistence of inflation. Fed Chair Jerome Powell would likely agree, as the Fed has had a tough time trying to convince the markets that it plans to continue tightening in order to curb inflation. Read next: Tomorrow greenback and Canadian dollar meet key data - Canada's GDP and US Core PCE Price Index - Fed's preferred inflation indicator | FXMAG.COM EUR/USD Technical EUR is testing resistance at 1.0610. Above, there is resistance at 1.0714 1.0484 and 1.0380 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro steady on light data calendar - MarketPulseMarketPulse
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

Tomorrow greenback and Canadian dollar meet key data - Canada's GDP and US Core PCE Price Index - Fed's preferred inflation indicator

Kenny Fisher Kenny Fisher 22.12.2022 14:33
The Canadian dollar continues to have an uneventful week. USD/CAD is unchanged on Thursday, trading at 1.3608 in the European session. Canada’s CPI slows to 6.8% There was mixed news from Canada’s November inflation report and the Canadian dollar showed little reaction. Headline CPI slowed to 6.8%, down from 6.9% in October but above the consensus of 6.7%. However, the trimmed and median core rates, two key measures that the Bank of Canada uses to track core CPI,  were slightly higher in November. This could leave BoC policy makers scratching their heads as to which way inflation is headed – it appears too early to tell if inflation has peaked and is finally moving in the right direction. Investors were hoping the inflation report might provide some clues about what to expect from the BoC at its January meeting. Inflation remains the BoC’s number one priority, and at the December meeting, the BoC rate statement said that inflation was “too high”. The latest data is unlikely to change this view, which means that there’s a strong likelihood of the  BoC delivering a modest hike of 25 basis points, after back-to-back increases of 50 bp. BoC Governor Macklem said earlier this week that the Bank had badly miscalculated the rise in inflation, and I would expect Macklem will want to see strong evidence that inflation has peaked before he will consider wrapping up the current rate tightening cycle. USD/CAD could show some volatility on Friday, with key releases on both sides of the border. Canada will release GDP for October, with a weak gain of 0.1% m/m expected, unchanged from September. The US will publish the Core PCE Price Index for November, the Fed’s preferred inflation indicator. The index is expected to slow to 4.6% y/y, down from 5.0%. Read next: The GBP/USD Pair Is Trading Just Above 1.20, The Australian Dollar Is The Strongest Today| FXMAG.COM USD/CAD Technical USD/CAD is putting on pressure on resistance at 1.3640. Above, there is resistance at 1.3762 There is support at 1.3576 and 1.3454 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar yawns after mixed CPI report - MarketPulseMarketPulse
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Canada: headline CPI is expected to reach 6.7%, but the core inflation gauge may hit 6.4%, much more than a month before

Kenny Fisher Kenny Fisher 21.12.2022 15:25
USD/CAD has posted small gains on Wednesday and is trading at 1.3631 in the European session. Canadian dollar eyes inflation report Canada releases the November inflation report later today. The inflation print will be closely watched by investors, as the releases could signal what action the Bank of Canada takes next. At the BoC meeting earlier this month, the BoC raised rates by 50 basis points for a second straight time, which brought the cash rate to 4.25%. The Bank’s rate statement said that inflation was “still too high” but noted that a drop in core inflation was a possible signal that price pressures were weakening. Today’s report could show a mixed bag, which would leave BoC policy makers scratching their heads about which way inflation is headed. Headline CPI is projected to drop to 6.7%, down from 6.9%, while a key core inflation gauge, BoC Core CPI is expected to rise to 6.4%, up from 5.8%. Inflation remains the BoC’s number one priority, and a soft reading will lend support to the view that the BoC is close to winding up its tightening cycle. Conversely, if CPI is higher than expected, it will mean that the BoC still has more work to do and will continue to tighten until there is evidence of inflation falling lower. BoC Governor Macklem issued a mea culpa on Monday, saying that the BoC had badly miscalculated the rise in inflation and had to respond with steep tightening due to this “very big forecast error.” Macklem added that he believed core inflation would decline in a “meaningful way’ in the spring. Read next: The Yen’s Upswing Was Triggered By The Unexpected Bank of Japan's Move| FXMAG.COM Canada’s October retail sales rebounded on Tuesday. The headline reading jumped 1.4% m/m, up from -0.8% and above the consensus of -0.8%, its best showing in five months. Core retail sales rose 1.8%, after the -0.8% reading last month and above the consensus of 0.8%. The forecast for November is bleaker, with headline retail sales expected to come in at -0.5%. USD/CAD Technical USD/CAD is putting on pressure on resistance at 1.3640. Above, there is resistance at 1.3762 There is support at 1.3576 and 1.3454 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD calm ahead of Canadian CPI - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Yen’s Upswing Was Triggered By The Unexpected Bank of Japan's Move

Kenny Fisher Kenny Fisher 21.12.2022 13:11
The Japanese yen is unchanged on Wednesday, taking a pause after posting huge gains a day earlier. In the European session, USD/JPY is trading at 131.68. BoJ yield move sends yen soaring It was a day to remember for the Japanese yen, which gained a staggering 3.7% against the dollar. USD/JPY fell as low as 130.56, its lowest level since August. The yen’s upswing was triggered by the Bank of Japan, which stunned the markets by widening the yield control band to 50 basis points, up from 25 bp. The move, which was announced at the BoJ’s policy meeting, was completely unexpected as policy makers gave no hints of any changes prior to the meeting. The markets had assumed that any major policy moves would wait until after Governor Kuroda’s term ends in April. The band for 10-year yields has widened, but it’s important to remember that yield curve control policy, although modified, remains in effect, as the target of 0% hasn’t changed. At a press conference after the meeting, Governor Kuroda insisted that the move was not an interest hike. This is technically correct, although the effect of the wider band is the same, as Japanese bonds can now pay higher interest rates since the cap on yields is higher. Now that the dust has settled, the question is what’s next from the BoJ? The tweak to the yield control band can be viewed as a baby step towards normalisation, after decades of an ultra-loose monetary policy. There is now talk of the BoJ raising rates out of negative territory next year, which would mark a sea change in policy. The BoJ meets next in January, and the markets have priced in a rate hike at 22%.   USD/JPY Technical USD/JPY has support at 131.13 and 130.15  There is resistance at 132.83 and 134.12 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Analysis Of The AUD/USD Commodity Currency Pair's Price

Australia: according to RBA meeting minutes, pause in hiking was on the cards

Kenny Fisher Kenny Fisher 20.12.2022 16:16
The Australian dollar has posted sharp losses on Tuesday.  AUD/USD is trading at 0.6647 in the North American session, down 0.77%. Minutes – RBA considered pause The markets were hoping that the RBA minutes would provide clues as to when the RBA might wind up its tightening cycle, and the RBA appeared to deliver the goods. The minutes indicated that the central bank considered pausing its tightening in December, although in the end board members voted for a third-straight hike of 25 basis points. This marked the first time since the tightening cycle started in May that board members made a case for no change and indicates that the current cycle may be close to its end. The minutes noted that according to the Bank’s forecasts, inflation would not return to the 2% to 3% target for several years, and members also stated that no other central bank had yet paused. The RBA is being careful not to show its hand, with the minutes stating that there was “considerable uncertainty” in the economic outlook and that rate hikes were “not on a pre-set path”. With the next rate meeting not until late February, it’s wait-and-see time for the RBA. Inflation remains the RBA’s number one priority, but policy makers are aware of the pain that high inflation and rising interest rates are causing to businesses and households. The RBA would love to pause, but it will need to first see evidence that inflation is definitely on the way down. If the RBA ends tightening too early, there is the danger of a price-wage spiral, which would greatly complicate the battle against inflation. Read next: There are two important releases this week which will be followed by Bank of Canada| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6611 and 0.6535 There is resistance at 0.6752 and 0.6828 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD slides after dovish RBA minutes - MarketPulseMarketPulse
Oanda's Kenny Fisher talks US dollar against Canadian dollar

There are two important releases this week which will be followed by Bank of Canada

Kenny Fisher Kenny Fisher 20.12.2022 15:21
USD/CAD has edged lower on Tuesday. In the European session, USD/CAD is at 1.3626, down 0.19%. We could see stronger movement in the North American session when Canada releases the November retail sales report. Will retail sales bounce back? Canada’s retail sales were soft in October, as the headline reading came in at -0.5% and core retail sales at -0.7%. The markets are expecting a mixed report for November, with a consensus of -0.3% for the headline and 0.8% for core retail sales. This will be followed on Wednesday with the CPI data for November, with headline inflation expected to rise to 7.4%, up from 6.9% a month earlier. The Bank of Canada will be following the retail sales and inflation data carefully. The BoC raised rates by 50 basis points earlier in December, bringing the cash rate to 4.25%. The Bank’s current rate cycle has been steep, with 425 points of tightening in just nine months. BoC Governor Macklem expressed a mea culpa on Monday, admitting that the BoC had missed the boat on rising inflation, which was a “very big forecast error.” Still, Macklem said that a turnaround in inflation was near. Over in the US, the Federal Reserve continues to battle with investors, who are not listening to the Fed’s hawkish message and received a cold shower from a hawkish Fed meeting last week. Former New York Fed President Dudley emphasised this point on Monday, warning that investors were ignoring the Fed at their peril, as the Fed would simply continue to tighten if it saw that conditions were becoming too loose. The Fed has projected a terminal rate of 5.00% to 5.25%, a view seconded by Goldman Sachs. However, the money markets have priced in a terminal rate of 4.88%, somewhat more dovish than the Fed. Read next: The Bank Of Japan's Decision To Allow 10-Year Government Bonds Caused Turmoil In The Financial Markets, USD/JPY Trading Below 133| FXMAG.COM USD/CAD Technical There is weak resistance at 1.3681. The next resistance line is 1.3766 USD/CAD has support at 1.3596 and 1.3484 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes retail sales - MarketPulseMarketPulse
Saxo Bank Podcast: The Bank Of Japan Meeting And More

A Signal That The BankOf Japan Is Tweaking Its Current Ultra-Loose Policy

Kenny Fisher Kenny Fisher 20.12.2022 12:19
The Japanese yen has sent the dollar tumbling on Tuesday. USD/JPY has fallen 3.26% and is trading at 132.44 in Europe. In the Asian session, USD/JPY fell as low as 131.99 but has recovered slightly. BoJ tweaks yield curve control At the end of its policy meeting, the Bank of Japan stunned the markets with a change to its yield curve control (YCC). The BoJ announced it would widen the band around the 10-year bond yield to 50 basis points, up from 25 bp. The move allows long-term interest rates to rise higher and the reaction was deafening, as the yen soared and climbed to its highest level since August 11th. The move was completely unexpected, as the BoJ meeting was expected to be a sleeper with no policy changes. It was just yesterday that I wrote in these pages that the BoJ was not expected to change policy until the changing of the guard in April 2023, when Governor Kuroda steps down. The BoJ move is certainly dramatic but needs to be kept in proportion. The BoJ is maintaining its YCC targets and said it would sharply increase bond purchases. This could be a signal that the Bank is tweaking its current ultra-loose policy and is not planning to withdraw stimulus. The BOJ has staunchly defended its yield cap with massive bond purchases, and this has distorted the yield curve and fueled a sharp drop in the yen, which has contributed to higher costs for imports of raw materials. BoJ policy makers may have become uncomfortable with these side effects and felt that the time was right to take a small step towards normalisation. This ‘baby step’ packed a massive punch as seen in the yen’s reaction, and the markets will be looking for hints at further moves from Governor Kuroda as his term winds down.   USD/JPY Technical USD/JPY has broken below several support levels. The next support level is 131.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Kenny Fisher Kenny Fisher 19.12.2022 21:13
The Australian dollar has posted gains on Monday.  AUD/USD is trading at 0.6717 in the European session, up 0.46%. Will RBA minutes provide any clues?  The Reserve Bank of Australia releases the minutes of the December meeting later on Tuesday. The markets will be looking for some clues as to when the RBA might wind up the current tightening cycle. At the December meeting, the RBA raised rates by a modest 25 basis points for a third straight time. The monthly inflation report showed that CPI dropped to 6.9% in November, although the quarterly inflation releases carry more weight. With the next rate meeting not until late February, it’s wait-and-see time for the RBA. Inflation remains the RBA’s number one priority, but policy makers are aware of the hardship that rising interest rates are causing to businesses and households. If inflation shows some downward movement in the next couple of months, we can expect the RBA to deliver another 50-bp increase in February or perhaps even take a pause. Last week, inflation expectations for November dropped to 5.2%, down from 6.0%, in what could be an indication that inflation is finally heading lower. Read next: John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations| FXMAG.COM US data ended the week on a sour note, as Services business activity and Manufacturing PMIs remained in contraction territory with readings below the 50.0 level. Services fell to a four-month low at 44.4, while manufacturing activity dropped to 46.2, a 31-month low. These weak PMIs have raised fears that a recession is not far away and with rates in restrictive territory, the downturn in economic activity is likely to continue. AUD/USD Technical AUD/USD is testing support at 0.6752. The next support level is at 0.6611 There is resistance at 0.6828 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD moves higher ahead of RBA minutes - MarketPulseMarketPulse
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

Kenny Fisher Kenny Fisher 19.12.2022 20:54
EUR/USD has edged higher on Monday. In the European session, EUR/USD is trading at 1.0610, up 0.24%. The week started on a positive note as German business confidence climbed in December. The Ifo Business Climate index rose to 88.6, up from 86.4 in November and its highest level in five months. Bundesbank revision – growth down, inflation up The Bundesbank does not appear to share in the optimism. Its biannual economic forecast found that Germany’s economy will contract through the middle of 2023, and businesses and consumers will continue to be hit with high energy costs. The war in Ukraine has been weighing heavily on the German economy, and the Bundesbank’s latest economic projection sees a 0.5% decline in GDP in 2023, compared to a 2.4% gain in the June forecast. Inflation has been revised to 7.2% in 2023, up from 4.5% in June. The risk to economic growth has been tilted to the downside, due to possible shortages in energy supplies. As for inflation, the risk is tilted to the upside. The updated forecast mirrors the latest ECB projections for the eurozone, which raised inflation while lowering growth. Read next: John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations| FXMAG.COM With the Bundesbank and the ECB projecting that inflation will accelerate, we can expect further rate hikes from the ECB, which delivered a 50-bp increase last week. The ECB rate statement said rates would have to “rise significantly” in order to curb inflation, and ECB President Lagarde said that the central bank could deliver up to three more rate hikes. Lagarde was hawkish, saying that the 50-bp hike, which came after two 75-bp hikes was not a pivot and that the ECB would not be slowing down. EUR/USD Technical EUR/USD tested resistance at 1.0610 earlier today. Above, there is resistance at 1.0714 1.0610 and 1.0484 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro edges up as Business Climate improves - MarketPulseMarketPulse
Japanese yen: in April 2023 Governor Kuroda retires

Japanese yen: in April 2023 Governor Kuroda retires

Kenny Fisher Kenny Fisher 19.12.2022 20:39
The Japanese yen has started the week in positive territory. In the European session, USD/JPY is trading at 136.22, down 0.38%. The yen is coming off a busy week, as USD/JPY traded in a 350-point range but closed the week almost unchanged. Will Japan change its inflation stance? The markets are keeping an eye on April 2023, when Bank of Japan Governor Kuroda retires and a new governor is appointed. This has raised speculation that the changing of the guard could lead to policy changes at the bank. There was a report today that the BoJ and the government could revise their decade-old statement, which pledges to achieve the 2% inflation target “at the earliest date possible”. This has resulted in the BoJ maintaining its radical stimulus programme and keeping interest rates ultra-low, at a time when other major central banks are busy raising rates in order to curb inflation. This policy was initiated in 2013, when Japan’s economy was marked by deflation. With consumer prices rising and a weak yen contributing to inflation, the statement could be out of date and the new BoJ governor may feel the timing is right to revise the statement, perhaps making the inflation target more flexible. There is rising speculation that the new governor could tweak yield curve control, which has kept a cap on 10-year Japan’s government bonds and fueled the yen’s sharp descent this year. For now, however, it is likely to be business as usual – the BoJ winds up a two-day meeting on Tuesday and is not expected to make any changes to monetary policy. Read next: Russian Drones Attacked Kyiv Again | Most respondents do not want Musk| FXMAG.COM USD/JPY Technical USD/JPY is testing support at 136.48. This is followed by support at 134.78 There is resistance at 137.64 and 138.43 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY dips on possible policy tweak - MarketPulseMarketPulse
Even if New Zealand economy isn't doing that well at the moment, Kiwi looks strong

Even if New Zealand economy isn't doing that well at the moment, Kiwi looks strong

Kenny Fisher Kenny Fisher 19.12.2022 20:31
The New Zealand dollar has started the week on a positive note. NZD/USD is trading at 0.6405 in Europe, up 0.41%. Consumer Confidence falls to record low New Zealand’s Westpac Consumer Confidence dropped to its lowest level since 1988, when records first started. The Q4 reading of 75.6 was sharply lower than the Q3 release of 87.6. Consumers have been hit by a double-whammy of a sharp rise in consumer prices as well as higher borrowing costs. The cost of living has soared with sharp price increases across the board, particularly in food, housing and energy. This has translated into a gloomy mood for consumers as the economic outlook is poor, with a recession projected from mid-2023. Often the lead-up to Christmas provides a boost in consumer confidence but this time around, the holiday season hasn’t provided any cheer to consumers. We’ll get a look at New Zealand ANZ Business Confidence on Tuesday. The index has been in deep freeze, and is expected to improve to -50.0, up from -57.1. New Zealand’s Service PMI remained in expansion territory in November, but fell to 53.7, down from 57.1 a month earlier. This follows last week’s Manufacturing PMI, which slowed to 47.4 in November, down from 49.1 in October. This marked the first back-to-back months of contraction since New Zealand’s first nationwide lockdown in 2020. With a gloomy outlook for global manufacturing, it could be a bumpy start in 2023 for the country’s manufacturing sector. Read next: Ole Hansen: a scenario of much lower oil prices remain remote given the support from OPEC+ production cuts and the US beginning to buy back| FXMAG.COM The New Zealand economy might be struggling, but NZD/USD has been on fire, climbing 14.4% since October 1st. The New Zealand currency received a massive boost as risk appetite soared courtesy of some soft US inflation reports, which raised hopes that the Federal Reserve would pivot. Last week’s FOMC meeting was a rude shock for the markets as the Fed pledged to remain aggressive, and NZD/USD plunged close to 2%. If the markets heed the Fed’s hawkish message, the US dollar could continue to gain ground. NZD/USD Technical NZD/USD is testing resistance at 0.6404. Above, there is resistance at 0.6489 There is support at 0.6294 and 0.6209 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD shrugs off soft consumer confidence - MarketPulseMarketPulse
The EUR/USD Pair Chance For The Further Downside Movement

German and Eurozone manufacturing rise above expectations of 46.1 and 47.1 respectively

Kenny Fisher Kenny Fisher 16.12.2022 16:52
German, eurozone PMIs show improvement EUR/USD is showing limited movement on Friday, with a muted response to today’s German and eurozone PMIs for December. German manufacturing improved to 47.4, up from 46.1 and above the consensus of 46.1. Eurozone manufacturing rose to 47.8, up from 47.1 which was also the consensus. There was also an improvement in the services PMIs, although these remain under 50.0, which indicates contraction. The PMIs indicated a shallower downturn in both manufacturing and services, with an easing in inflation driving improvement in both sectors. ECB talks hawkish Taking a page straight out of the Fed’s book, the ECB eased up at the final meeting of the year with a 50-bp increase. This follows two successive 75-bp hikes and brings its key rate to 2.0%. President Lagarde had a hawkish message for the markets, stating that as many as three more rate increases could be coming. This apparent return to forward guidance is puzzling, as the ECB had previously said rate decisions would be made “meeting-by-meeting” and would be data-dependent. The ECB remains fixated on inflation. The rate statement said that rates would have to “rise significantly” in order to tame inflation. The Bank revised its inflation forecasts upwards and currently sees inflation remaining above its 2% target until 2025, with Lagarde warning that inflation could stay high if wage growth is higher than expected. Lagarde echoed the Fed’s Jerome Powell when she said that the lower rate hike was not a pivot and that the ECB was not slowing down. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM Eurozone inflation eased to 10.0% in November, down from 10.6% a month earlier, but that was clearly not enough to soften the ECB’s hawkish message. Despite the ECB rate hike and promise of more to come, EUR/USD fell by 0.50% on Thursday, as the hawkish Fed meeting soured risk appetite and gave a boost to the US dollar. EUR/USD Technical There is resistance at 1.0605 and 1.0694 EUR/USD has support at 1.0524 and 1.0453 . This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro steady as PMIs edge higher - MarketPulseMarketPulse
Analysis Of The USD/CHF Pair Movements

Even if Switzerland's 3% inflation is quite low, it's still above the target

Kenny Fisher Kenny Fisher 16.12.2022 16:45
SNB raises rates by 50 bp, Swiss franc rises Major central banks were in the spotlight this week, as the Federal Reserve and the European Central Bank raised rates by 50 basis points at their final meeting of the year. These moves overshadowed a 50 bp rate increase by the Swiss National Bank, where rate moves are unusual – this week’s rate increase, which brought the benchmark rate to 1.0%, was only the third hike this year. The driver behind the rate hike was the all-familiar battle to curb inflation. Switzerland’s inflation rate of 3% pales in comparison to the eurozone (10.0%) or the US (7.1%), but is above the SNB’s target of 0-2%. The SNB has been aggressive, raising rates by 50 bp in June and an oversize 75-bp hike in September. After years of negative rates, the Bank has dramatically changed policy, responding to what it called a “challenging situation” in a press release after the meeting. The SNB also reminded the markets that it was “willing to be active in the foreign exchange market as necessary”.  The Bank has not hesitated in the past to intervene in order to prevent the Swiss franc from climbing too high and damaging the export sector. USD/CHF has declined over 7% since November 1st, and the SNB will be watching to see if the Swiss franc’s appreciation continues. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM The markets are still digesting the Fed’s hawkish stance at this week’s meeting. Actually, anyone who has been listening to Jerome Powell and FOMC members would see that the Fed reiterated that it would continue to raise rates and that inflation remained far too high. The markets, however, have been marching to their own beat, expecting that a series of soft inflation reports might change the Fed’s tune. There was talk of the Fed winding up its current rate cycle in February, but the rate statement dampened such hopes, stating that the Fed expected “”ongoing increases” in interest rates.” Powell dismissed the recent drop in inflation, saying more evidence was required that the downward trend was sustainable. It seems a given after this hawkish meeting that the terminal rate is likely to rise above 5%, with some forecasts projecting that rates will go as high as 5.6%. USD/CHF Technical USD/CHF is testing resistance at 0.9285. The next resistance line is at 0.9372 There is support at 0.9228 and 0.9144   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss franc reverses slide after SNB hike - MarketPulseMarketPulse
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Japanese yen lost 1.7%. Oanda's Kenny Fisher says "US/Japan rate differential will continue to widen"

Kenny Fisher Kenny Fisher 16.12.2022 16:34
The Japanese yen is in positive territory, paring some of the sharp losses from Thursday. In the European session, USD/JPY is trading at 137.12, down 0.48%. Dollar rises as Fed hints at more rate hikes The Japanese yen has shown some strength recently, but it was the dollar’s day on Thursday, with broad gains against the majors. USD/JPY jumped 1.7%, briefly punching above the 138 line. The Fed has been consistently sending out a hawkish message, but the markets seemed a bit intoxicated over recent inflation reports which showed a downturn and were lower than expected. To the market’s surprise, Jerome Powell didn’t show much enthusiasm about the recent inflation data, saying that more evidence was needed to convince the Fed that inflation was on a “sustained downward path.” This week’s 0.50% rate hike raised the benchmark rate to 4.50%, its highest level since 2007. The rate statement was hawkish, stating that the Fed expected “ongoing increases” in interest rates. This poured cold water on market hopes that the Fed was poised to wrap up its current rate cycle at the next meeting in February. This message was not new, as Powell has said that he anticipated the terminal rate being higher than the September forecast. The terminal rate is likely to rise above 5%, with some forecasts projecting that rates will go as high as 5.6%. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM The Fed’s hawkish stance will likely mean a bumpy road for the yen. The post-Covid recovery has been slow, and the uncertain global economy outlook is not good news for Japan’s export sector. The Bank of Japan is in no hurry to change its ultra-loose policy, which means that the US/Japan rate differential will continue to widen after the New Year. Inflation is rising in Japan, but the BoJ is an outlier in that inflation is not a number one priority. USD/JPY Technical USD/JPY is testing support at 1.3707. This is followed by support at 1.3620 There is resistance at 138.25 and 138.90 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Fed sends yen sharply lower - MarketPulseMarketPulse
The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

Kiwi: Next meeting of Reserve Bank of New Zealand takes place in February

Kenny Fisher Kenny Fisher 14.12.2022 20:15
Federal Reserve expected to hike by 50 bp All eyes are on the Federal Reserve, which winds up its policy meeting later today. Policy makers are expected to raise rates by 50 basis points at this final meeting of 2022, with an outside chance of a more aggressive 75 basis point hike. This year has set a record for tightening, but despite that, the Fed stills finds itself in an uphill battle to convince the markets that it remains in a hawkish mode. The dramatic inflation report on Tuesday was softer than expected at 7.1%, once again raising risk appetite and sending the US dollar sharply lower. Read next: The Australian Dollar Held Above $0.68, Today The Fed Will Make Its Last Decision Of The Year| FXMAG.COM Any drop in inflation is welcome news for the Fed, but let’s not forget that inflation is still more than three times the Fed target of 2%. The Fed has reiterated that it is committed to curbing inflation and has not given any indications of winding up the current tightening cycle, stating that it expects the terminal rate to be “somewhat higher” than anticipated in September. Despite this, speculation is growing that the Fed might deliver one more rate hike in February, perhaps by 25 bp, and then call it quits. New Zealand releases fourth-quarter GDP later today, and the markets are bracing for a weak gain of 0.8% q/q. This follows the 1.2% gain in Q3, as the economy was boosted by the booming tourist trade as the border reopened. The New Zealand dollar has recovered nicely, gaining about 400 points against the US dollar since October 1st. The Reserve Bank of New Zealand will be on a long break, as the next policy meeting is not until February 22nd. We could see some volatility from NZD/USD in today’s North American session, with the Fed rate announcement and the New  Zealand GDP release. NZD/USD Technical 0.6472 is a weak resistance line. Above, there is resistance at 0.6591 There is support at 0.6388 and 0.6311 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD awaits Fed, GDP - MarketPulseMarketPulse
The Market May Continue To Buy The Pound (GBP) This Week

UK: Inflation and labour market data speak for a 50bp rate hike

Kenny Fisher Kenny Fisher 14.12.2022 19:38
There was good news on the UK inflation front, as the November data pointed to a drop in inflation. CPI fell to 10.7% y/y, down from 11.1% in October and below the consensus of 10.9%. Core CPI eased to 6.3% y/y, down from 6.5% a month earlier, which was also the consensus. Even with the welcome drop in inflation, it still remains in double digits and is more than five times the Bank of England’s target of 2%. The British pound is almost unchanged today, despite the drop in inflation. This is in sharp contrast to the reaction on Tuesday to the drop in US inflation, which fell to 7.3% and was softer than expected. The US dollar was about 1% lower against the majors, as once again a soft inflation report raised hopes that the end of the Fed’s tightening cycle is not far off. All eyes on Federal Reserve The Fed will announce the benchmark rate later today, after Tuesday’s dramatic CPI report. Inflation fell to 7.1%, down from 7.7% and below the consensus of 7.3%. This hasn’t changed the pricing of an 80% likelihood that the Fed will deliver a 50-basis point hike. The markets will be listening carefully to the tone of Jerome Powell’s rate statement and follow-up remarks, hoping for clues about the next meeting in February. There is a strong chance that the Fed will hike by 25 bp in February and then end the current rate-hike cycle at a terminal rate of 4.75%, on the lower side of the 4.75% to 5.25% range that is considered most likely. BoE rate decision next The BoE meets on Thursday and is expected to deliver a 50-basis point hike, which would raise the benchmark rate to 3.50%. This week’s employment and inflation numbers were within market expectations, and a stronger pound has also helped lower the need for a more aggressive 75-bp move. We could see some disagreement among MPC members in today’s vote, which could shed some light on where the BoE goes from here. Thursday’s rate decision is the final one of the year, with the next meeting not until February 2nd. The most likely scenarios are for a hike of either 25 or 50 points. There is speculation that the February meeting could mark the end of the current tightening cycle, but I am sceptical unless inflation has fallen dramatically by then. GBP/USD Technical 1.2240 and 1.2136 are the next support levels GBP/USD is testing resistance at 1.2374. Next, there is resistance at 1.2478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound shrugs as UK inflation dips - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Kenny Fisher USD/JPY - analysis

Kenny Fisher Kenny Fisher 13.12.2022 23:56
The Japanese yen is sharply higher on Tuesday. In the North American session, USD/JPY is trading at 134.97, down 1.95%. US inflation underperforms again The US dollar is in broad retreat after US CPI was softer than expected. The November reading dropped to 7.1% y/y, down from 7.7% in October and slightly lower than the 7.3% consensus. The trend was similar for core CPI, which dipped to 6.0%, down from 6.3% and below the consensus of 6.1%. We’ve seen this story before – equities jump and the US dollar slides after a soft CPI report, as the markets speculate that the Fed could make a dovish pivot in response to falling inflation. What makes this inflation report even more interesting is that the Fed winds up its policy meeting on Wednesday. Today’s CPI data hasn’t changed the pricing of a 50-bp hike tomorrow, which has about an 80% likelihood. The markets will be listening carefully to the tone of Jerome Powell’s rate statement and follow-up remarks, hoping for clues about the next meeting in February. There is a strong chance that the Fed will hike by 25 bp and then take a pause – this would be significant because it would that the rate tightening cycle would terminate at 4.75%, below the 5.00% level or higher which many forecasts projected for the terminal rate. In all the market enthusiasm, investors would be well to remember that even with the recent fall in inflation, it remains more than three times the Fed’s target of 2%. The battle with inflation is far from over and we are yet to hear the Fed utter the magic phrase that “inflation has peaked”.  Jerome Powell and Co. may continue to drum out a hawkish message, but the critical question is whether anyone in the market is listening. . USD/JPY Technical USD/JPY broke below support at 136.20 earlier. This is followed by support at 1.3453 There is resistance at 1.3734 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY takes a tumble after soft CPI - MarketPulseMarketPulse
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

The Bank Of England Is Likely To Continue Raising Rates Despite Weak Economic Conditions

Kenny Fisher Kenny Fisher 13.12.2022 13:35
The British pound remains calm this week and is trading at 1.2286, up 0.20%. It is a busy week on the economic calendar, but GBP/USD isn’t showing much interest. Today’s UK employment data was within market expectations, which resulted in a muted reaction from sleepy sterling. The unemployment rate ticked upwards to 3.7%, up from 3.6%. Wage growth climbed to 6.1%, up from 5.9% and above the consensus of 5.8%. Wages remain well below the inflation level of 11.1%, but will still be of concern to Bank of England policy makers, who will want to avoid the spectre of a wage-price spiral, which would make the battle against inflation that much more difficult. This may not be something that the BoE can control, with the threat of public workers going on strike to demand more pay. The BoE is likely to continue raising rates, despite weak economic conditions, as defeating inflation remains its first priority.  The BoE meets on Thursday and is expected to raise rates by 50 basis points, which would bring the cash rate to 3.50%. US CPI expected to dip All eyes are on the US inflation report for November, which will be released later today. The consensus stands at 7.3%, following a 7.7% gain in October. The timing of the report is interesting, as it comes just one day before the Federal Reserve meeting on Wednesday. Inflation fell in October and was softer than expected, and the US dollar took a plunge, as the markets became hopeful of a dovish pivot from the Fed. If inflation is again lower than expected, the dollar could find itself under pressure, although the markets could be more cautious with a Fed meeting just around the corner.   GBP/USD Technical 1.2240 and 1.2136 are the next support levels There is resistance at 1.2374 and 1.2478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Even if New Zealand economy isn't doing that well at the moment, Kiwi looks strong

New Zealand: Manufacturing PMI contracts to 49.3. Reserve Bank has some time to think about next moves as the next meeting takes place at February 22nd

Kenny Fisher Kenny Fisher 08.12.2022 18:23
The New Zealand dollar is slightly higher on Thursday. In the North American session, NZD/USD is trading at 0.6376, up 0.34%. New Zealand manufacturing in trouble New Zealand’s manufacturing sector is showing signs of strain, as high costs and hiring challenges in a tight labour market remain key problems. Manufacturing PMI contracted in October, for the first time since August 2021, dropping from 51.7 to 49.3. We’ll get a look at the November report next week. Manufacturing Sales slipped 4.9% in Q2, and third-quarter data will be released on Friday. Another decline is expected, with a consensus of -2.4%. The Reserve Bank of New Zealand remains in hawkish mode and hiked by 75 bp at its last meeting, bringing the cash rate to 4.25%. The RBNZ considered a full-point increase, which is indicative of how seriously policy makers view the threat of high inflation, which has hit 7.2%. Read next: Amazon, Google, Microsoft And Oracle Received A Cloud Deal From The Pentagon| FXMAG.COM The RBNZ now has a long break until the next meeting on February 22nd, which will give it plenty of time to gauge the effect of its steep tightening on the domestic economy. The Federal Reserve will hold two more meetings before then – one on December 14th and one on February 10th. The markets have priced in a 50-bp increase at next week’s meeting, which takes place just a day after the November inflation report. With the Fed’s focus on inflation, recent CPI reports have been major market movers for the US dollar, and I expect the same from next week’s report. Investors will also be keeping a close eye on Friday’s inflation data out of the US – the Producers Price Index and UoM inflation expectations. NZD/USD Technical NZD/USD faces resistance at 0.6497 and 0.6585 There is support at 0.6327 and 0.6239   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD extends gains ahead of Mfg. Sales - MarketPulseMarketPulse
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

Despite Grim Background the Bank OF England Will Have To Keep Raising Rates

Kenny Fisher Kenny Fisher 08.12.2022 14:54
The British pound is in negative territory on Thursday. In the European session, GBP/USD is trading at 1.2174, down 0.29%. We’ll get a look at inflation expectations in both the UK and the US on Friday, ahead of the key US inflation report next week. It has been a rather quiet week on the economic calendar, save for the November PMIs out of the US and the UK. The PMIs reflect the different directions taken by the UK and US economies. In the UK, the Services PMI remained in negative territory, unchanged at 48.5. This points to contraction in the services sector, which has been hit by the cost-of-living crisis and economic uncertainty, which has dampened consumer spending. In the US, Services PMIs rose to 56.5, above the previous read of 54.4 and the consensus of 53.5. The services sector is showing expansion and this will lend support to the argument that the US economy is resilient enough to absorb additional rate hikes, as the Fed continues to battle high inflation. BoE expected to raise by 50 bp Like the Federal Reserve, the BoE has also circled inflation as public enemy number one, but Governor Bailey doesn’t have a strong economy to work with. With GDP in negative territory and inflation at a staggering 11.1%, the economy may already be experiencing stagflation. Despite this grim background, the BoE will have to keep raising rates in order to get the upper hand on inflation and keep inflation expectations in check. The BoE is expected to raise rates by 50 bp next week, which would raise the cash rate to 3.50%. As rates continue to rise, there is the danger of the recession becoming deeper and lasting longer. This winter is likely to bring a rash of strikes from public workers, which will keep the BoE on guard for signs of a wage-price spiral, which could complicate the Bank’s efforts to curb inflation.   GBP/USD Technical 1.2169 and 1.2027 are the next support levels GBP/USD is testing support at 1.2169. Below, there is support at 1.2027 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The Next Decision Of The Bank Of Canada Will Be Between A 25bp Rate Hike And A Pause

Kenny Fisher Kenny Fisher 08.12.2022 14:44
Bank of Canada surprises with 50 bp hike The Bank of Canada delivered a second straight 50-bp hike on Wednesday, which brought the cash rate to 4.25%. The markets had been split on whether the BoC would raise by 50 bp or 25 bp, pricing in 33 bp ahead of the decision. The move didn’t have an effect on the Canadian dollar, which closed the day unchanged. The BoC decided on the larger rate move due to strong growth, a tight labour market and high inflation. The rate statement noted that inflation is “still too high” but added that core inflation has been falling, which may indicate that inflationary pressures are “losing momentum.” What’s next for the BoC? The rate statement contained a significant hint that the Bank may be close to winding up the current tightening cycle, stating that the BoC was “considering whether the policy rate needs to rise further”. This was in contrast to the October meeting when the BoC stated it “expects that the policy interest rate will need to rise further.” This appears to be a dovish shift, in that additional rate hikes are longer a given. The BoC meets next in late January, and the Bank’s rate decision could again go down to the wire, only this time it will be a choice between a 25 bp increase and a pause. Policy makers have some time to gauge the effect of high rates on the domestic economy and they will also be keeping a close eye on developments in Europe, China and the US. Ahead of next week’s CPI report, the US releases PPI and UoM Inflation Expectations on Friday. There are signs that inflation is weakening, and if this is reflected in Friday’s data, the financial markets could get a boost and the US dollar could lose ground, a scenario we’ve become accustomed to seeing whenever inflation underperforms.   USD/CAD Technical There is weak resistance at 1.3681. The next resistance line is 1.3766 USD/CAD has support at 1.3596 and 1.3484 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Corporate Bond Supply Surges in May, Outpacing Previous Years, While Financial Sector Struggles with Low Issuance

Dollar gained on the back of the US jobs report. Challenges for BoE Bailey

Kenny Fisher Kenny Fisher 06.12.2022 23:47
The British pound has recovered after starting Tuesday with losses. In the North American session, GBP/USD is trading at 1.2247, up 0.40%. The US dollar is finally showing some improvement this week after a recent rough spell against the pound. The dollar received a boost from Friday’s employment report, which showed that job creation and wage growth were stronger than expected. This dampened market hopes of a Fed pivot, although Jerome Powell has strongly signalled that the Fed will ease the pace of rates, likely with a 50 bp hike next week. GBP/USD has put together four straight winning weeks, gaining a massive 900 points during that time. Still, it’s important to remember that the pound’s recent upswing is more a story of US dollar weakness rather than newfound pound strength, and the outlook for the pound does not look all that promising. Read next: To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA | FXMAG.COM The UK economy is in recession, and this week’s PMIs are another indication of weak growth. Manufacturing and Services PMIs both came in under 50.0, which points to contraction. Construction PMI slowed to 50.4, which points to virtually no growth. This was down from 53.2 and below the consensus of 52.0. Inflation is at a staggering 11.1%, GDP is showing negative growth and unemployment is expected to rise. One can feel for BoE Governor Bailey, who is expected to bring down inflation and somehow restore economic growth, all with the wave of the rate wand. Of course, there are no magic solutions to the UK’s deep economic problems, and Bailey would probably agree with the stance of many central bankers that “too much is better than too little” – better to raise rates more than needed rather than not do enough and have high inflation fester. The trick for Bailey will be to continue raising rates and curb inflation while guiding the weak economy to a soft landing. GBP/USD Technical 1.2169 and 1.2027 are the next support levels GBP/USD is testing resistance at 1.2234. Above, there is resistance at 1.2307 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound edges higher - MarketPulseMarketPulse
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Kenny Fisher Kenny Fisher 06.12.2022 17:00
The Canadian dollar is slightly lower on Tuesday. In the European session, USD/CAD is trading at 1.3620, up 0.24%. What does the Bank of Canada have planned? The Bank of Canada has been aggressive in its tightening, including a whopping full-point hike in July, which brought the cash rate to 2.50%. The BoC has been gradually easing since then, raising rates by 75 bp and then 50 bp, bringing the cash rate to 3.75%. Will the trend continue on Wednesday? According to the markets, probably yes. There is a 72% chance of a 25 bp move, with a 28% likelihood of a second straight 50 bp move. Read next: To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA | FXMAG.COM At the October meeting, there was a 50/50 split over whether the BoC would raise rates by 50 or 75 bp, and the Bank opted for the more conservative move. With the Canadian economy showing signs of slowing down amidst an uncertain global outlook, a modest 25-bp hike would make sense. Still, it must be remembered that inflation remains very high at 6.9% and the BoC has shown that it is willing to keep the rate pedal on the floor if necessary. If the BoC goes for the 50 bp increase, it would be viewed as a hawkish surprise which would likely boost the Canadian dollar. What can we expect from the BoC in 2023? The terminal rate is projected at around 4.5%, which would mean several more rate hikes early in the New Year. Of course, rate policy will be heavily dictated by key data such as employment, consumer spending and inflation. In addition, the BoC will want to keep pace (or close to it) with the Federal Reserve, which is widely expected to raise rates by 50 bp next week. USD/CAD Technical USD/CAD is testing resistance at 1.3619. Above, there is resistance at 1.3762 There is support at 1.3502 and 1.3359 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The AUD/USD Pair’s Downside Remains Off The Table

The RBA Is Likely To Resume Its Rate Hikes In February

Kenny Fisher Kenny Fisher 06.12.2022 14:12
The Australian dollar is in positive territory on Tuesday, after sustaining losses of 1.4% a day earlier. In European trade, AUD/USD is trading at 0.6721, up 0.35%. RBA raises cash rate by 25 bp The Reserve Bank of Australia lifted interest rates by 25 basis points, bringing the cash rate to 3.1%. This is the highest the cash rate has been since 2012, and there was some speculation that the RBA might take a pause from raising rates. One can also make the argument that with the next rate meeting not until February 7th, there will anyway be a “default pause” in January. As the move was widely expected, the Australian dollar has had a muted reaction to the move. There wasn’t much for investors to glean from Philip Lowe’s rate statement, which was almost identical to the November statement. Lowe noted that the RBA expects to increase rates, but “is not on a pre-set course” and rate decisions would be data-dependent. This last point may seem obvious, but events such as consumer spending, employment and inflation will be key drivers which determine rate policy in the early part of 2023. There is a great deal of uncertainty as to the terminal rate, which forecasts ranging from 3.3% all the way to 3.8%. What is clear is that the RBA is likely to resume its rate hikes in February, barring a remarkable decline in inflation. The markets will have to quickly shift attention from the RBA to GDP, which will be released on Wednesday. GDP for Q3 is expected to slow to 0.7%, down from 0.9%. A reading that is wide of the mark could result in some volatility from AUD/USD.   AUD/USD Technical AUD/USD faces resistance at 0.6760 and 0.6878 There is support at 0.6676 and 0.6558 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

European Commission predicts eurozone economy may shrink in this and next quarter

Kenny Fisher Kenny Fisher 05.12.2022 23:09
EUR/USD is steady at the start of the week. In the North American session, EUR/USD is trading at 1.0534, down 0.06%. The US dollar has been struggling and fell 1.5% against the euro last week. The euro rally fizzled on Friday, as the US employment report was stronger than expected. The economy created 263,000 jobs in November, slightly lower than the October reading of 284,000 but well above the consensus of 200,000. Wage growth impressed, as the reading of 5.1% y/y was up from 4.9% and beat the forecast of 4.6%. The labor market continues to show a surprising resiliency and the increase in wage growth will drive inflationary pressure. The Fed is expected to ease rates to 50 bp in December, but the strong labour market indicates that the economy can absorb further rate hikes in the New Year. Investors were hoping for a weak jobs report which would force the Fed to scale back its hikes and fuel a stock market rally, but the strong data has dashed those hopes. Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM The eurozone continues to struggle and today’s data didn’t help things. German and Eurozone services PMIs remained in decline, with readings below 50.0. Eurozone retail sales fell by 1.8%, a 10-month low, while Investor Confidence remains deep in negative territory, at -21.0. Despite recent gains, the outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone is grappling with double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until there are unmistakable signs that inflation is finally on the way down. EUR/USD Technical There is resistance at 1.0629 and 1.0714 EUR/USD has support at 1.0459 and 1.0374 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro dips lower on weak euro data - MarketPulseMarketPulse
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The European Commission Expects The Eurozone Economy To Decline

Kenny Fisher Kenny Fisher 02.12.2022 12:16
EUR/USD is unchanged on Friday, trading at 1.0524. US nonfarm payrolls expected to drop to 200K The week wraps up with one of most important releases on the calendar, US nonfarm payrolls. The robust labour market is showing signs of cooling down, as rising interest rates have slowed economic activity. Nonfarm payrolls have been falling and the trend is expected to continue, with a consensus of 200,000 for November, down from 261,000 a month earlier. With the Fed holding its policy meeting on December 14th, the NFP report will be closely watched by policy makers, who have relied on a strong job market to press ahead with an aggressive rate cycle. The US dollar has been in retreat since Jerome Powell’s speech on Wednesday. The speech was balanced, with Powell reiterating that inflation remained too high and rates would continue to rise higher. Still, the markets focussed on the fact that Powell strongly hinted the Fed would ease rates at the December meeting with a 50-bp hike, and the optimism sent equities higher and the dollar lower. The euro has made the most of the dollar’s weakness, and EUR/USD posted its best month since 2012, with gains in November of 5.3%. Still, the euro has been on a prolonged decline and started 2022 close to 1.14. The outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone has been hit hard by double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until it is convinced that inflation has peaked. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM EUR/USD Technical EUR/USD faces resistance at 1.0583, followed by a monthly line at 1.0683 There is support at 1.0490 and 1.03537 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Reserve Bank Of Australia Would Bring The Cash Rate To 3.10%

Kenny Fisher Kenny Fisher 02.12.2022 12:12
The Australian dollar’s has posted small gains today and is trading at 0.6816. After starting the week with sharp losses, AUD/USD has rebounded and hit a 13-week high on Thursday, at 0.6845. All eyes on US nonfarm payrolls Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp. Reserve Bank of Australia Governor Lowe issued a shocking apology about rate policy earlier in the week. Lowe said that it was regrettable that people listened to the RBA saying it wouldn’t raise rates before 2024. but then delivered seven oversized rate hikes in 2022. Many Australians took out mortgages based on the RBA assurance but are now getting squeezed by huge mortgage payments. The RBA meets next Tuesday and is widely expected to raise rates by 25-bp, which would bring the cash rate to 3.10%. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM AUD/USD Technical AUD/USD testing resistance at 0.6829 earlier today. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canada’s Economy Showed A Massive Gain In Jobs

Kenny Fisher Kenny Fisher 02.12.2022 10:21
The Canadian dollar continues to show limited movement. In the European session, USD/CAD is almost unchanged at 1.3433. We are likely to see stronger movement in the North American session, as both the US and Canada release the November employment reports. US nonfarm payrolls expected to soften Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Canada’s economy showed a massive gain in jobs in October, with 108,300. This was ten times the estimate of 10,000. November is expected to show a small gain of 5,000, with the employment rate projected to tick higher to 5.3%, up from 5.2%. Canada’s economy is generally performing well, and today’s employment report is the final key release prior to the Bank of Canada’s rate meeting on December 7th. The Bank of Canada has been aggressive in its tightening, in order to curb inflation which is running at a 6.9% clip. Like the Fed, the BoC is looking for signs that inflation has peaked, but until then we can expect oversize rate hikes to continue, with a 50-bp hike likely next week. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp.   USD/CAD Technical USD/CAD has support at 1.3398 and 1.3300 There is resistance at 1.3478 and 1.3576 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Has A Potential For Drop

German retails sales don't steal the show from euro which looks quite good versus greenback

Kenny Fisher Kenny Fisher 01.12.2022 23:50
The euro has climbed to its highest level since June 29th, as the US dollar continues to struggle. In the North American session, EUR/USD is trading at 1.0496, up 0.85%. German retail sales slide German consumers are being squeezed by the double-whammy of rising interest rates and double-digit inflation, and the October retail sales report shows that consumer spending was sharply lower. Retail sales dropped 2.8% YoY, versus 1.2% in September and a consensus of -0.6%. On an annualized basis, retail sales plunged 5.0%, much worse than the September read of -0.9% and the consensus of -2.8%. The soft retail sales report couldn’t dampen the shine on the euro, which has climbed sharply as the US dollar can’t find its footing. The dollar found itself in full retreat after Fed Chair Jerome Powell’s speech on Wednesday. Powell’s comments were balanced and didn’t stray from the steady stream of Fedspeak we’ve been hearing for weeks, but investors still treated the speech as dovish, sending equity markets higher and the US dollar lower. The markets were delighted that Powell essentially confirmed that the Fed would ease policy as soon as the December meeting. After four straight rate increases of 75 basis points, the Fed is poised to deliver a milder 50-bp hike, with perhaps smaller hikes in the new year. Read next: Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse Powell said that smaller rate increases were less important than the question of high to hike and for how long. Powell added that the direction of inflation remains “highly uncertain”, and that more evidence was needed to demonstrate that inflation had peaked. As well, he said that rates will likely rise “somewhat higher” than the September forecast. That certainly sounds like a hawkish stance, but the markets chose to focus on Powell’s broad hint that the Fed would likely begin lowering rates as soon as next week. The Fed may not consider that a dovish pivot, but the fact remains that Powell’s comments have renewed optimism, sending stocks higher and the US dollar lower. EUR/USD Technical EUR/USD is testing resistance at 1.0490. Above, there is resistance at 1.0583 There is support at 1.03537 and 1.0264 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Kenny Fisher talks weaker greenback versus Swiss franc - December 1st

Kenny Fisher Kenny Fisher 01.12.2022 23:39
The Swiss franc continues to gain ground as the US dollar has weakened broadly in the wake of Fed Chair Powell’s comments on Wednesday. In the North American session, USD/CHF is trading at 0.9384, down 0.74% US dollar slides as Powell signals 50-bp hike It may not have been a dovish pivot, but the financial markets saw a green light after Jerome Powell’s comments on Wednesday. Powell’s speech was essentially a rehash of the Fedspeak we’ve been hearing over the past several weeks, but his broad hint that the Fed would ease the December rate hike to 50 basis points (after four straight hikes of 75 bp) gave investors the excuse to buy equities. Read next: There Is A Chance That The RBA Will Again Raise Rates By 25bp| FXMAG.COM Powell said that slowing down at this point “is a good way to balance the risks”, as the Fed Chair is trying to slow the economy while at the same time avoiding a recession. The markets responded by pricing in a 50-bp rate hike at 80%, up sharply from 65% prior to Powell’s remarks. This sent financial markets higher but pushed the US dollar sharply lower, with USD/CHF dropping close to 1% on Wednesday. Powell’s message was balanced, as he reiterated that rates could rise higher than previously anticipated and for a longer period in order to tame inflation. The Fed remains committed to bringing inflation lower, and Powell said  “substantially more evidence” was needed to convince the Fed that inflation was actually declining. The markets, however, chose to go on an equity spree, buoyed by expectations that the Fed has decided to ease the pace of rate hikes. This week’s data continues to raise concerns about the Swiss economy.  The KOF Economic Barometer slowed to 89.5, down from 90.0 and shy of the estimate of 91.3. The ZEW Expectations survey also slowed to -57.5, down from -53.1 and well off the consensus of -41.9. Retail sales for October, released today, were a huge disappointment at -2.5%. This follows a 2.6% gain in September and missed the consensus of 3.3%. The Swiss franc has enjoyed a superb November, as USD/CHF has plunged 5.5%. If this trend continues, we could see the Swiss National Bank express some concern about the rising Swiss franc, which could drag down the key export sector. USD/CHF Technical USD/CHF  is putting pressure on support at 0.9366. The next support level is 0.9277 There is resistance at 0.9482 and 0.9577 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss franc climbs as US dollar sags - MarketPulseMarketPulse
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

There Is A Chance That The RBA Will Again Raise Rates By 25bp

Kenny Fisher Kenny Fisher 01.12.2022 13:14
AUD/USD continues to power upwards and hit 10-week highs earlier today. The Australian dollar climbed 1.5% on Wednesday and has edged higher today. In the European session, AUD/USD is trading at 0.6796, up 0.14%. US dollar slides after Powell speech Fed Chair Jerome Powell spoke on Wednesday and gave the markets what they wanted to hear with regard to the December rate hike. Powell strongly hinted that the Fed would slow the pace of rate increases at the December 14th meeting, after four successive 75-bp hikes. Powell said that slowing down at this point “is a good way to balance the risks”, as the Fed Chair is trying to slow the economy while avoiding a recession. The markets duly responded by pricing in a 50-bp rate hike at 80%, up sharply from 65% prior to Powell’s remarks. This sent financial markets higher, while the US dollar was broadly lower. Investors focussed on Powell’s hint that rate hikes will slow at the next meeting, choosing to ignore his comments that rates could rise higher than previously expected and for a prolonged period in order to curb stubborn inflation. The likely easing to 50 bp was a green light for the markets, and what is down the road can be worried about another time. In Australia, Private Capital Expenditure disappointed in Q3 with a reading of -0.6%. This was below the Q2 reading of 0.0% and way off the consensus of 1.5%. The RBA meets on December 6th after having eased on rate hikes, with two straight increases of 25-bp. The cash rate is currently at 2.85%, and there is a good chance that the RBA will again raise rates by 25 bp next week, as it looks to fight inflation while guiding the economy to a soft landing.   AUD/USD Technical AUD/USD is testing resistance at 0.6829. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

Oh my... New Zealand's ANZ Business Confidence plunged reaches shocking -57.1

Kenny Fisher Kenny Fisher 30.11.2022 22:53
The New Zealand dollar has extended its gains on Wednesday. In the North American session, NZD/USD is trading at 0.6235, up 0.54%. Business Confidence slides New Zealand’s ANZ Business Confidence has been in a deep freeze for months, but things got even uglier in November, with a reading of -57.1. This followed the -42.7 reading in October and missed the consensus of -39.5. The plunge in business optimism comes despite an improvement in the economy and the easing of Covid restrictions. It has been much the same story with consumer confidence, which remains weak. The double-barreled punch of high inflation and rising interest rates has dampened the moods of consumers and businesses, and with inflation running at a 7.2% clip, the Reserve Bank of New Zealand will have little choice but to continue raising rates into 2023. Read next: On Friday greenback and Loonie may be fluctuating| FXMAG.COM The Federal Reserve remains in the spotlight, and Fed Chair Powell will be under close scrutiny when he delivers a speech today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication of just how dependent market movement has become on rate policy. Powell is expected to discuss inflation, which has been losing steam, but the Fed is still not ready to say inflation has peaked. Inflation may have fallen to 7.7%, but as Fed member John Williams warned earlier this week, inflation remains “far too high”. Investors are gearing for the tightening cycle to continue into 2023, but there’s uncertainty, likely shared by Fed members, as to when the rate hikes will end. The most likely scenario is that the Fed will raise rates to about 5%, but inflation, which has been stickier than the Fed expected, will have to cooperate in order for the Fed to wind up the current tightening cycle. NZD/USD Technical NZD/USD is testing resistance at 0.6209. Above, there is resistance at 0.6331 There is support at 0.6130 and 0.6008   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD rises despite soft bus. confidence - MarketPulseMarketPulse
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

On Friday greenback and Loonie may be fluctuating

Kenny Fisher Kenny Fisher 30.11.2022 19:02
The Canadian dollar has posted slight gains on Wednesday. In the North American session, USD/CAD is trading at 1.3541, down 0.28%. Will Powell’s speech be a market-mover? All eyes are on Fed Chair Powell, who will deliver a speech later today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication that market movement has become very dependent on rate policy. The Fed is expected to ease up on its pace of rates at the December meeting and deliver a 50-bp hike, after back-to-back increases of 75 bp. Still, the markets haven’t excluded the possibility of another 75 bp move. Investors are hoping to glean some clues from Powell as to when the Fed plans to wind up the current tightening cycle. Read next: EU works on a price cap on Russian oil. According to Craig Erlam (Oanda) OPEC+ think of a production cut| FXMAG.COM After the US inflation report underperformed, the markets climbed sharply and the US dollar sagged on speculation of a dovish pivot from the Fed. This exuberance didn’t last long, as one Fed member after another sent out a hawkish message, warning that inflation was not yet beaten and the rate hikes would continue. There is some uncertainty as to when the Fed funds rate will peak, with most forecasts projecting a range between 4.75%-5.25%. The Canadian dollar has just ended a nasty slide which saw it lose almost 300 points. We could see further volatility on Friday, when both Canada and the US release employment reports. The ADP payrolls report, released today, showed a small gain of 127, 000 jobs, down from 239,000 and shy of the consensus of 200,000. The report is not considered an accurate indication for nonfarm payrolls on Friday, and the ADP recently changed its methodology, which raises further questions about its accuracy. The forecast of nonfarm payrolls is 200,000, which would be a significant drop from the previous reading of 200,000. USD/CAD Technical USD/CAD tested support at 1.3576 earlier. Below, there is support at 1.3478 There is resistance at 1.3656 and 1.3782 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar ends slide, Powell next - MarketPulseMarketPulse
Eurozone inflation stickier than expected in February

Eurozone: November CPI Fell Sharply To 10.0%

Kenny Fisher Kenny Fisher 30.11.2022 15:09
It continues to be a quiet week for the euro. In the European session, EUR/USD is trading at 1.0363. Eurozone inflation falls to 10.0% The ECB’s number one priority has been bringing down inflation, which has hit double-digits. ECB policy makers are no doubt pleased that November CPI fell sharply to 10.0%, down from 10.6% a month earlier. This beat the consensus of 10.4%, and the euro has responded with slight gains. The drop in eurozone inflation was the first since June 2021, and investors will be hoping that this indicates that inflation is finally peaking. On Tuesday, German CPI showed a similar trend, falling to 10.0%, down from 10.4% (10.3% est). Still, eurozone Core CPI remained unchanged at 5.0%, matching the forecast. One inflation report is not sufficient to indicate a trend, and with inflation still in double digits, nobody is declaring victory in the battle against inflation. Still, the drop in German and eurozone inflation increases the likelihood of a 50 basis-point increase at the December 12th meeting, following two straight hikes of 75 basis points. With market direction very much connected to US interest rate movement, a speech from Fed Chair Jerome Powell later today could be a market-mover. Powell is expected to discuss inflation and the labour market, and his remarks could echo the hawkish stance that Fed members have been signalling to the markets over the past several weeks. The market pricing for the December meeting is 65% for a 50-bp move and 35% for a 75-bp hike, which means that the markets aren’t all on the Fed easing rates. Even if the Fed does slow to 50 bp in December, it will still be a record year of tightening, at 425 basis points.   EUR/USD Technical EUR/USD is testing resistance at 1.0359. Above, there is resistance at 1.0490 There is support at 1.0264 and 1.0131 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Monthly Reports Are More Volatile And May Not Mark A Changing Trend

Kenny Fisher Kenny Fisher 30.11.2022 14:52
The Australian dollar has extended its gains on Wednesday. AUD/USD is trading at 0.6723 in Europe, up 0.54%. Australian inflation falls below 7% Australia inflation surprised on the downside with a 6.9% gain (YoY) in October. This was down sharply from the 7.3% clip in September and beat the consensus of 7.4%. The burning question on everyone’s lips, is, of course, “has inflation finally peaked?” Before the champagne bottles come out, it’s worth noting that a new method was used to calculate October CPI – under the old method, CPI would have been 7.1%, a less dramatic decline. Core CPI ticked lower to 5.3%, down from 5.4%. Australia recently added monthly inflation reports to supplement the quarterly releases, and the monthly reports are more volatile and may not mark a changing trend. Investors and policy makers will have to wait for the next quarterly CPI release in January to get a better handle on which direction inflation is headed. There was positive news from the construction sector, as Construction Work Done rebounded in Q3 with a strong gain of 2.2%, above the consensus of 1.5%. This follows a -3.8% read in Q2 and was the first gain since Q3 2021. The markets will be paying close attention to Jerome Powell, who is expected to touch upon inflation and the labour market in a speech later today. The Fed has orchestrated an effective Fedspeak blitz, with Fed members presenting a hawkish outlook for rate policy, even though the Fed has signalled it will ease up on rates in December and hike by “only” 50 basis points. This year will set a record for Fed tightening, with 425 basis points if the December increase is 50 bp. With the battle against inflation far from over, the last thing the Fed wants to temper any market exuberance, as a higher stock market could drive more inflation.   AUD/USD Technical AUD/USD continues to test resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

Japanese yen gains on the back of situation in China

Kenny Fisher Kenny Fisher 29.11.2022 21:39
The yen is in positive territory for a second straight day. In the North American session, USD/JPY is trading at 138.60, down 0.23%. Earlier, in the day the yen pushed below the 138 line but was unable to consolidate. The widespread protests in China over the country’s zero-Covid policy has unnerved investors, as the unrest is expected to worsen supply chain disruptions and chill domestic spending. The Chinese government has cracked down on the protests, and won’t be easing up on its covid policy until the number of cases drops sharply. The protests have dampened risk appetite and the Japanese yen, a traditional safe-haven, has posted modest gains. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Federal Reserve continues to telegraph a hawkish message to the markets, with the Fed’s meeting two weeks away. Fed member Bullard said on Monday that the markets are underestimating the Fed, adding that the terminal rate could be in the range of 5%-7%. The markets aren’t buying into that forecast, as they have priced the terminal rate at about 5%. The Fed has been signalling that it will raise rates at the December meeting by 50 basis points, but the markets aren’t entirely convinced. The likelihood of a 50-bp move has fallen to 67%, with a 33% chance of a 75-bp move. Just two weeks ago, the ratio was 80-20 in favour of a 50-bp hike. The markets are hunting for clues about the Fed’s plans, and will be listening carefully to Jerome Powell, who is expected to touch on inflation in a speech on Wednesday. Japan’s retail sales for October slowed to 4.3%, down from an upwardly revised 4.8%. This missed the consensus of 5.0%, but retail sales have now recorded gains since March, when Japan began easing border restrictions as Covid cases subsided. USD/JPY Technical There is resistance at 139.82 and 141.58 USD/JPY is testing support at 138.62. Below, there is support at 137.39 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen extends gains - MarketPulseMarketPulse
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Canadian dollar may fluctuate on Friday as jobs market data is released in the USA and Canada

Kenny Fisher Kenny Fisher 29.11.2022 21:34
The Canadian dollar has steadied on Tuesday, after starting the week with sharp losses. In the European session, USD/CAD is trading at 1.3444, down 0.37%. Canada’s GDP expected to slow Canada will release third-quarter GDP later today, with a consensus of a 1.5% gain. This follows a strong Q2 gain of 3.3%.  The economy has been losing steam as interest rates continue to rise, and there are forecasts for negative growth as early as Q1 of 2023. Last week’s retail sales report did not impress. Retail sales for September came in at -0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. The Canadian dollar should be busy on Friday, as both Canada and the US release the November employment report. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Fed doesn’t hold a policy meeting until December 14th but Fed members continued to hit the airwaves on Monday. James Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. John Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Lael Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fedspeak blitz could continue right up the meeting, as the Fed needs the markets to buy into its message that inflation has not peaked and the Fed remains hawkish and plans to keep raising rates. USD/CAD Technical USD/CAD is facing resistance at 1.3478 and 1.3576 There is support at 1.3398 and 1.3300 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steadies ahead of GDP - MarketPulseMarketPulse
The Australian Dollar (AUD) Has Recovered Most Of Those Losses

The Australian Dollar (AUD) Has Recovered Most Of Those Losses

Kenny Fisher Kenny Fisher 29.11.2022 12:30
The Australian dollar has rebounded on Tuesday after a poor start to the week. In the European session, AUD/USD is trading at 0.6737, up 1.28%. What goes down … can go right back up. This has been the story early this week for the Australian dollar, which tumbled 1.5% on Monday but has recovered most of those losses today. The Australian dollar was hit hard after a weak retail sales report and widespread unrest in China over the country’s zero-covid policy. The unrest in China has put a damper on risk appetite, as the result is likely to exacerbate supply chain disruptions and dampen domestic spending. Investors may have sensed an opportunity for profit-taking after the massive slide on Monday, which would help explain the rebound today. Fed members keep up the blitz The Fed doesn’t hold a policy meeting for another two weeks, but the Fedspeak blitz, which started after the soft US inflation report sent the markets in a tizzy, continued in earnest on Monday. Fed member Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. Fed member Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Fed member Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fed has been aggressive in telegraphing the markets that its rate cycle is far from over, a message we’re likely to continue to hear in the coming weeks.   AUD/USD Technical AUD/USD is testing resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

Kenny Fisher Kenny Fisher 28.11.2022 19:49
It has been a busy start to the week for EUR/USD, which gained 100 points earlier in today but has given up almost all of these gains. In the North American session, EUR/USD is trading at 1.0384. German CPI projected to decline Inflation is running at a double-digit clip in the eurozone and Germany, and the ECB is keeping a careful eye on Tuesday’s German CPI for November, with a consensus of -0.2%, compared to a gain of 0.9% in October. Could this be the long-sought peak in inflation? If so, it would allow the ECB to ease up on its pace of rate hikes. The ECB was late getting into the hiking game, as Lagarde & Co. clearly underestimated the stickiness of inflation, which has hit 10.4% in Germany and 10.7% in the eurozone. Read next: Commodities: Crude oil suffers from situation in China| FXMAG.COM The ECB has been aggressive and raised rates by 75 basis points in October, but the main deposit rate is at a relatively low 2.00%. The ECB has moved away from forward guidance and is relying instead on a meeting-by-meeting, data-driven approach. The markets have priced in a 50-bp increase at the December 12th meeting, but the release of German CPI on Tuesday and Eurozone CPI on Wednesday could change expectations. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. The US will release GDP for Q3 and the Core PCE Price Index, the Fed’s preferred inflation indicator. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on what the Fed does at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%. EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro eyes German CPI - MarketPulseMarketPulse
The USD/JPY Price Seems To Be Optimistic

Bank Of Japan Governor Kuroda Said That The Tightening Labour Market Will Push Wages Higher

Kenny Fisher Kenny Fisher 28.11.2022 14:10
After strong gains last week, the Japanese yen has extended its gains on Monday. USD/JPY is trading at 138.23 in the European session, down 0.67%. Yen jumps on China unrest China has applied its Covid-zero policy with a heavy hand, but Covid cases continue to rise nonetheless. The mass lockdowns have triggered widespread protests, which some injuries reported. The unrest is likely to exacerbate supply-chain disruptions and dampen domestic demand, which has hurt risk appetite. This has resulted in flows to haven assets, such as the Japanese yen. USD/JPY dropped as much as 1% earlier today, but the dollar has managed to recover some of these losses. The yen also received a boost after Bank of Japan Governor Kuroda said that the tightening labour market will push wages higher. Kuroda has long insisted that rising inflation has driven by import costs and the weak yen and is transient. Higher wages would indicate that inflation is sustained, which could result in the BoJ making some changes in its ultra-loose policy. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%.   USD/JPY Technical There is resistance at 139.82 and 141.58 There is support at 137.39 and 135.63 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Australian Dollar (AUD) Is Particularly Sensitive To Developments In China

Kenny Fisher Kenny Fisher 28.11.2022 12:18
The Australian dollar has started the trading week with sharp losses. AUD/USD is down 0.70% in Europe, trading at 0.6704. China jitters send Australian dollar tumbling Covid cases continue to rise in China despite the government’s zero-Covid policy, and the mass lockdowns have triggered protests across China. The demonstrators have clashed with police and some have even called for Chinese President Xi to step down. The scale of the unrest has sent jitters through the global markets, which are expected to cause new supply-chain issues and chill domestic demand. The unrest in China has put a damper on risk appetite and sent the US dollar higher. The Australian dollar is particularly sensitive to developments in China, as the Asian giant is Australia’s number one trading partner. The Australian dollar fell more than 1% earlier today but has pared some of those losses. Still, if there is further negative news out of China, the Aussie will likely lose more ground. Adding to the Australian dollar’s woes was a soft retail sales report for October. Retail sales fell 0.2% MoM, down from 0.6% in September and below the consensus of 0.4%. It was the first decline since December 2021 and will renew concerns that the domestic economy is slowing down due to the Reserve Bank of Australia’s steep rate-hike cycle. The RBA has eased the pace of hikes but remains wary of a wage-price spiral, and  Governor Lowe has warned that the central bank will not hesitate to return to oversize rate hikes if needed. After an abbreviated week due to the Thanksgiving holiday, it’s a busy week for US releases. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase.   AUD/USD Technical AUD/USD is testing support at 0.6706. Below, there is support at 0.6633 There is resistance at 0.6820 and 0.6903 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Members Remained Concerned About Inflation Becoming Entrenched

Kenny Fisher Kenny Fisher 25.11.2022 14:32
US markets are open for limited hours today, and investors are focussed on the World Cup and Black Friday rather than the US dollar. EUR/USD is trading quietly at 1.0392, down 0.18%. German data has not been spectacular this week, but nonetheless is moving in the right direction, as the German economy is in decent shape. Germany’s GDP for Q3 was revised upwards to 0.4% QoQ, up from 0.3% and ahead of the consensus of -0.2%. This follows a 0.1% gain in GDP in Q1 and is all the more impressive, considering the headwinds on the global scene, in particular the war in Ukraine. Germany has made a mammoth effort to stockpile energy supplies and end its dependence on Russia, which should mean that an energy crisis can be avoided this winter. German Consumer confidence remains weak but improved slightly for a second straight month. The November reading rose to -40.2, up from -41.9, although shy of the consensus of -39.6. Business confidence also edged higher earlier this week, as did Business Expectations. ECB says more rate hikes needed The ECB minutes, released on Thursday, indicated that ECB members remained concerned about inflation becoming entrenched. Members were clear about the need to raise rates in order to bring inflation back down to the 2% target, and most members supported the 75-bp hike at the October meeting, with a few voting for a 50-bp move. The markets have priced in a 50-bp increase at the December 15th meeting, after ECB policymakers hit the airwaves and urged that the ECB slow down the pace of rate hikes. Still, with inflation at a crippling 10.6%, there’s little doubt that the ECB will have to continue raising rates, and the markets expect the deposit rate, currently at 1.5%, to hit 3.0% in 2023.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Saxo Bank Podcast: The Bank Of Japan Meeting And More

In Japan Deflation Seemed A Permanent Part Of The Economic Landscape But Inflation Hits High

Kenny Fisher Kenny Fisher 25.11.2022 12:42
USD/JPY has reversed directions and posted gains on Friday, after three straight losing sessions. The yen is trading at 139.39, up 0.54% on the day. US markets are open for limited hours due to the Thanksgiving holiday, and there are no US releases on the schedule. Tokyo inflation hits 40-year high The caption above may sound dramatic, but inflation in Japan is far from the levels we’re seeing elsewhere, such as double-digits in the UK and the eurozone. Still, Japan finds itself dealing with rising inflation, after decades where deflation seemed a permanent part of the economic landscape. Tokyo Core CPI rose to 3.6% in November, nudging above the consensus of 3.5% and the consensus of 3.4%. This marked the highest reading since April 1982. There’s no arguing that core inflation isn’t accelerating – Tokyo Core CPI has strengthened for six straight months and BOJ Core CPI for ninth consecutive months. This extended uptrend belies BOJ Governor Kuroda’s insistence that cost-push inflations is only temporary and that an ultra-accommodative policy is needed to ensure that inflation becomes sustainable. The BOJ is not showing any inclination to change policy and the recent improvement in the yen means one less headache, as the need for a currency intervention has diminished. It’s likely to be business as usual for the BOJ until the spring of 2023, with two key developments on the calendar – wage negotiations and a new governor for the central bank. The Federal Reserve remains in a hawkish mode, sort of. The Fed’s stance, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that it will reduce the size of rate hikes “soon”, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. This mixed message has created uncertainty about what it means for the US dollar – will “lower for longer” raise risk sentiment and weigh on the dollar, or will investors view the Fed as remaining hawkish and stick with the US dollar? We’ll have to wait and see how the markets answer this question.   USD/JPY Technical USD/JPY faces resistance at 139.62 and 140.37 There is support at 138.43 and 137.19 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
According To UOB Group New Zealand Dollar (NZD) Could Dip To 0.6240

The RBNZ Has Signalled That Household Spending Will Have To Drop

Kenny Fisher Kenny Fisher 25.11.2022 11:06
The New Zealand dollar has edged lower on Friday. In the European session, NZD/USD is trading at 0.6244, down 0.33%. Retail sales post modest gain It wasn’t a spectacular rebound by any means, but New Zealand’s retail sales showed a gain in Q3. Headline and core retail sales both rose a modest 0.4% QoQ. This follows a soft Q2, when headline retail sales came in at -2.2% and the core release at -1.5%. The reaction of NZD/USD was subdued, likely a result of the Thanksgiving holiday, with US markets open for limited hours today. Retail sales data may not be as positive in Q4, with the Reserve Bank of New Zealand hiking rates by a massive 0.75% this week. The RBNZ has signalled that household spending will have to drop in order to curb inflation, and with more rate hikes still to come, it’s clear that household spending will come down during the current rate-hike cycle. The Federal Reserve has telegraphed to the markets that it will continue to raise rates, despite the last inflation report, which was softer than expected. The Fed’s message, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that the pace of rates will be easing, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. There is uncertainty as to whether this “lower for longer” stance is bullish or bearish for the US dollar, a question we’ll have to wait for market participants to answer.   NZD/USD Technical NZD/USD faces resistance at 0.6283 and 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Japan: Manufacturing PMI declined to 49.4. It's the first contraction since 2020

Kenny Fisher Kenny Fisher 24.11.2022 22:36
The Japanese yen has posted strong gains for a third straight day. USD/JPY is trading at 138.43, down 0.82% on the day. US markets are closed for the Thanksgiving holiday, but that hasn’t put a damper on the yen’s impressive rally. Inflation has been on the rise in Japan, although at much lower levels than we’re seeing in Europe and the United States. The Bank of Japan’s preferred indicator, BOJ Core CPI, accelerated in October for a ninth straight month, rising to 2.2%.  We’ll get a look at Tokyo Core CPI for October later today, which is expected to edge up to 3.5%, up from 3.4% in September. The indicator has accelerated for five consecutive months. Japan’s manufacturing contracts Japan’s economy remains fragile, and the manufacturing sector hit a snag earlier today. Manufacturing PMI fell to 49.4 in  October, down from 50.7, which was also the consensus. This marked the first contraction in two years – the 50.0 level separates contraction from expansion. Manufacturers in Japan and elsewhere are grappling with higher input costs, while domestic and external demand has weakened, and this situation is unlikely to improve until inflation turns lower and growth recovers. The Fed minutes were viewed by the markets as dovish, which has pushed the US dollar lower today. The minutes noted that the Fed plans to implement smaller rate hikes “soon”, and the markets are expecting that already at the December meeting, the Fed will raise rates by “only” 50 bp, after four straight hikes of 75 bp. Although inflation remains a huge concern for Fed members, there is no agreement on the terminal rate. The 4.75%-5.25% range appears a safe bet, at least for now, which means that the current rate-hike cycle is on schedule to wind up in early 2023. USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen extends rally - MarketPulseMarketPulse
Reserve Bank of New Zealand went for a 75bp rate hike. New Zealand increased by 1.5%

Reserve Bank of New Zealand went for a 75bp rate hike. New Zealand increased by 1.5%

Kenny Fisher Kenny Fisher 24.11.2022 22:05
The New Zealand dollar continues to gain ground this week. In the North American session, NZD/USD is trading at 0.6267, up 0.35%. New Zealand will release retail sales for Q3 later in the day. The markets are expecting a small gain of 0.5%, which would be a turnaround from a disappointing -2.2% in Q2. Consumers continue to struggle with high inflation and rising interest rates, and after back-to-back declines, a gain in retail sales would be welcome news. Read next: G7 work on a Russian oil price cap, gold has gained as dovish Fed signals spread through the market| FXMAG.COM RBNZ delivers record hike The Reserve Bank of New Zealand delivered a huge 75-bp hike on Wednesday, which raised the cash rate to 4.25%. The move had been priced in by the markets, but the New Zealand dollar jumped 1.5%, thanks to the oversize move and a broadly-lower US dollar. The cash rate is the highest among major central banks, but there’s more to come. The RBNZ has projected a terminal rate of 5.5% in 2023, which means more rate hikes in 2023. Inflation has been stickier than the RBNZ anticipated, and the bank’s Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” The statement said that inflation is expected to accelerate to 7.5% in Q4 and would not fall to the midpoint of the 1%-3% target until 2025. The RBNZ is ready for a long fight with inflation, but it remains to be seen if the bank can guide the economy to a soft landing. The Fed minutes reiterated that lower rates are on the way, which we’ve been hearing from a stream of Federal members over the past two weeks. The minutes were vague as far as a timeline, noting that smaller rate increases would happen “soon”, as the Fed continues to evaluate the impact of the current policy on the economy. Members also voiced concern that inflation was yet to show any signs of peaking. Still, the markets viewed the minutes as dovish, which is weighing on the US dollar today. NZD/USD Technical NZD/USD is testing resistance at 0.6283. Above, there is resistance at 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD higher ahead of retail sales - MarketPulseMarketPulse
The Entire Movement Of EUR/USD Pair Still Looks More Like A Flat

EUR/USD: The Eurozone Readings Were Just Bad

Kenny Fisher Kenny Fisher 24.11.2022 13:26
EUR/USD is unchanged on Thursday, trading at 1.0393. With the US markets closed for the Thanksgiving holiday, we’re unlikely to see much movement from the US dollar. German business confidence edged slightly higher in November. The Ifo Business Climate index rose to 86.3, above the previous reading of 84.5 and the consensus of 85.0. Business confidence has been on a prolonged downturn – the index was above the 100 level in the summer of 2021 but has steadily deteriorated since then. Ifo Business Expectations accelerated as well, to 93.1, up from 84.2 but shy of the consensus of 93.8. Germany releases consumer confidence on Friday. Consumer confidence has been mired in negative territory, which is expected to edge up to -39.6, up from -41.9. German PMIs were lukewarm for October. Both the service and manufacturing PMIs remained in contraction territory, with readings below 50.0. The eurozone readings were just as bad, and France, the number two economy in the bloc, reported a contraction in business activity for the first time since March 2021. The ECB minutes will be released later today, although, like the Fed minutes, they may amount to little more than a repeat of what central bank members have been telegraphing to the markets. The ECB meets on December 15th and it’s uncertain if the bank will press the rate pedal with a third consecutive 75-basis points hike, or opt for a smaller 50 bp move. Inflation rose to 10.7% in October, up from 9.9% and there are no signs of a peak. ECB member Robert Holzmann said this week that he favors a 75-bp hike, but other members are fearful of a deep recession and want the ECB to ease up on the pace of hikes. The Fed minutes stated that members were in agreement that lower rates are coming. This wasn’t anything new, as Fed members have been saying this for the past few weeks. The Fed doesn’t want to be pinned down, saying only that an easing in the pace of rates would happen “soon”. Members also noted that inflation hasn’t shown any signs of easing. The markets have priced in a 50 bp hike at the December 14th meeting, at around 65%, with a 35% of a 75 bp increase. With a nonfarm payroll and an inflation release ahead of the meeting, this rate projection will almost certainly change.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Bank Of England Has Warned That Negative Growth Will Extend All The Way

The Bank Of England Has Warned That Negative Growth Will Extend All The Way

Kenny Fisher Kenny Fisher 24.11.2022 11:33
The British pound has steadied on Thursday, after soaring 1.4% a day earlier. In the European session, GBP/USD is trading at 1.2074, up 0.17%. The pound has enjoyed a splendid November, gaining 5.3%. The upswing has been impressive but is more a case of a broad pullback in the US dollar rather than newfound strength in the pound. The UK economy is likely in a recession, and the outlook is as gloomy as a rainy November day in London. The October Manufacturing and Services PMIs remained mired in negative territory, pointing to contraction. The labour market has been a bright spot but that could soon change, with the Bank of England projecting that unemployment will double to 6.5%. The UK economy declined by 0.2% in Q3, and the BoE has warned that negative growth will extend all the way to the first half of 2024. With these formidable economic headwinds, it’s difficult to make a case for the pound continuing its upswing. Inflation has hit a staggering 11.1%, despite the BoE raising the cash rate to 3.0%. The bank pressed harder on the rate pedal at the last meeting, raising rates by 75 basis points. The BoE expects rates to peak at 5%, which means there’s a lot more tightening on the way. The bank will have to tread carefully in order not to choke off economic growth as it continues to tighten in order to curb red-hot inflation. Fed says pace of hikes will ease The Fed minutes reiterated what the Fed has been telegraphing for weeks; namely, smaller rates are on the way. Fed members agreed that smaller rate increases would happen “soon”, as they continue to evaluate the impact of the current policy on the economy. Members also noted that inflation was yet to show any signs of a peak. The markets aren’t completely convinced that we’ll see lower rates at the December meeting – the odds of a 75 basis point move are at 65%, with a 35% chance of a 50 bp increase. GBP/USD Technical 1.2040 and 1.1875 are the next support levels There is resistance at 1.2192 and 1.2357 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Pound Is Now Openly Enjoying A Favorable Moment

UK: Recession seems to be very close or there already. Wages go up, what does not help BoE

Kenny Fisher Kenny Fisher 23.11.2022 22:04
The British pound has posted sharp gains on Wednesday. In the North American session, GBP/USD is trading at 1.2063, up 1.51%. The pound hasn’t been at these levels since mid-August. UK PMIs continue to decline The UK economy is likely in a recession, and today’s soft PMI data will only raise concerns about the economic outlook. October’s PMIs remained in contraction territory, with the Services PMI coming in at 48.2 and the Manufacturing PMI at 46.2, both unchanged from September. Read next: Canada: Shrank retail sales may decrease chances of a 50bp rate hike| FXMAG.COM The UK labour market has been a bright spot in the gloomy economic picture, but tight conditions have pushed wages higher, which is making it more difficult for the Bank of England in its fierce battle with inflation. The BoE is projecting that unemployment will rise to 6.5% and the country will experience negative growth in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The Fed minutes, which will be published later today, may not contain any nuggets for the markets. The Fed has embarked on a coordinated campaign to convince the markets that it has no plans to pivot on policy and that rates will keep heading higher longer than anticipated.  The soft US inflation report triggered exuberance in the markets, with a belief that the Fed would become more dovish. However, as Fed members have been stating for the past couple of weeks, inflation remains unacceptably higher and the fight to curb inflation is far far from over. FOMC policy-makers are united in the need to continue raising rates, and the minutes should shed light on whether they are also in agreement on the end-point for the current rate-hike cycle. GBP/USD Technical GBP/USD is testing resistance at 1.2068. The next resistance line is at 1.2192 There is support at 1.1875 and 1.1767 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Sterling soars despite soft PMIs - MarketPulseMarketPulse
The USD/CAD Pair Has The Strong Downside Momentum

Canada: Shrank retail sales may decrease chances of a 50bp rate hike

Kenny Fisher Kenny Fisher 23.11.2022 21:50
The Canadian dollar has edged lower on Wednesday. In the North American session, USD/CAD is trading at 1.3428, up 0.42%. Is Canada heading towards a recession? The Canadian consumer is in a sour mood. I don’t blame her, given the cost-of-living crisis and higher mortgage payments due to rising interest rates. Retail sales for September slipped 0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. Read next: The RBNZ Statement Forecasted That The Economy Will Tip Into Recession In June 2023| FXMAG.COM The decline in consumer spending could well be a result of the Bank of Canada’s concerted effort to beat inflation with a steep rate-hike cycle, which has raised the cash rate to 3.75%. Despite this, inflation has been stickier than expected, currently at 6.9%. The drop in retail sales will put a damper on expectations of a 50-basis point hike at the December meeting, as the Bank of Canada will likely deliver a modest 25-bp hike. Inflation, the bank’s number one priority, remains very high at 6.9%, as the BoC’s aggressive rate-hike cycle is yet to show results. The benchmark rate is currently at 3.75%, and like the Federal Reserve, there’s more life remaining in the current rate-tightening cycle. The BoC is closely monitoring employment and retail sales data, as strong numbers will make it easier for the bank to continue hiking as policy makers look for that elusive peak in inflation. The bank will have little choice but to continue raising rates until it sees indications that inflation is peaking, and is expected to continue raising rates into next year. Higher and higher rates make it ever more difficult for the BoC to guide the economy to a soft landing without tipping into a recession. The Canadian dollar could show stronger movement later in the day, with two key events on the calendar. BoC Governor Macklem will testify before a parliamentary committee in Ottawa, while the FOMC releases the minutes of its meeting earlier this month, where it raised rates by 75 basis points. USD/CAD Technical USD/CAD  is putting pressure on resistance at 1.3455. Next, there is resistance at 1.3523 There is support at 1.3341 and 1.3218 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD eyes Macklem, FOMC - MarketPulseMarketPulse
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

The RBNZ Statement Forecasted That The Economy Will Tip Into Recession In June 2023

Kenny Fisher Kenny Fisher 23.11.2022 12:18
The New Zealand dollar has extended its rally on Wednesday. In the European session, NZD/USD is trading at 0.6181, up 0.47%. RBNZ delivers record hike The Reserve Bank of New Zealand pushed the rate pedal to the floor today, with a supersize rate hike of 75 basis points, a record high. This raised the cash rate to 4.25%, up from 3.5% and the highest level since 2008. The move was widely expected, but nonetheless, it sent bond yields and the New Zealand dollar higher. The RBNZ is forecasting that the cash rate will peak at 5.5% in 2023, which means there’s plenty of life left in the current rate-tightening cycle, with the RBNZ currently boasting the highest cash rates among the major central banks. The bank has designated inflation as public enemy number one, but despite a series of oversize hikes, there are no signs that inflation has peaked. In the third quarter, CPI was almost unchanged in Q3, nudging lower to 7.2%, following a 7.3% gain in Q2. This figure caught the RBNZ off guard, as the bank projected that CPI in Q3 would slow to 6.4%. The Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” How will New Zealand’s economy fare after the latest rate hike? The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. Still, the RBNZ statement forecasted that the economy will tip into recession in June 2023 and that inflation would accelerate to 7.5% in the fourth quarter and would not fall back to the midpoint of the 1%-3% target until 2025. The RBNZ has taken off the gloves, but the prolonged battle against inflation will not end anytime soon. The US will release the FOMC minutes later today, which could impact on the movement of NZD/USD. Investors will be looking for hints about what the Fed has planned at the December 12th meeting. The markets have priced in a 50-basis point hike, although there is an outside chance of a 75 bp increase.   NZD/USD Technical There is resistance at 0.6217 and 06283 0.6139 is providing support, followed by 0.6095, a monthly support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Canada: Retail sales declined, what can make a 50bp rate hike a less probable variant

Kenny Fisher Kenny Fisher 22.11.2022 22:04
The Canadian dollar is in positive territory on Tuesday. In the North American session, USD/CAD is trading at 1.3400, down 0.39%. Canada’s retail sales decline The Canadian consumer was not in a spending mood in September, as retail sales declined by 0.5%, following a 0.4% gain a month earlier. The forecast stood at -0.4%. Core retail sales fell by 0.7%, worse than the consensus of -0.4% and the prior reading of 0.5%. Despite the weak data, the Canadian dollar has managed to post gains today, thanks to a broad US dollar pullback. Read next: Elon Musk net worth has dropped by 37% in 2022| FXMAG.COM The drop in retail sales will put a damper on expectations of a 50-basis point hike at the December meeting, as the Bank of Canada will likely deliver a modest 25-bp hike. Inflation, the bank’s number one priority, remains very high at 6.9%, as the BoC’s aggressive rate-hike cycle is yet to show results. The benchmark rate is currently at 3.75%, and like the Federal Reserve, there’s more life remaining in the current rate-tightening cycle. The BoC is closely monitoring employment and retail sales data, as strong numbers will make it easier for the bank to continue hiking as policy makers look for that elusive peak in inflation. The recent US inflation report triggered a wave of exuberance, sending equity markets higher and the US dollar on a nasty slide. Investors became more confident that Fed was close to a pivot in its aggressive policy and risk sentiment soared. The Fed has pushed back hard, with Fed members delivering hawkish statements and projections, which has chilled risk appetite and stabilized the US dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%. USD/CAD Technical USD/CAD tested resistance at 1.3455 earlier in the day. Next, there is resistance at 1.3523 There is support at 1.3341 and 1.3218 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

The RBNZ May Want To Make A Loud Splash At Tomorrow’s Meeting

Kenny Fisher Kenny Fisher 22.11.2022 15:11
The New Zealand dollar has rebounded on Tuesday with strong gains. In the European session, NZD/USD is trading at 0.6151, up 0.83%. Will RBNZ go all out? The Reserve Bank of New Zealand has been tightening aggressively, delivering five straight 50-point hikes. The cash rate is currently at 3.5%, but this hasn’t achieved the goal of taming red-hot inflation. In the third quarter, CPI was almost unchanged, nudging lower to 7.2%, after a 7.3% gain in Q2. This was much higher than the RBNZ’s projection of 6.4%. With inflation expectations at 40-year highs, there is pressure on the bank to press the rate pedal to the floor. The RBNZ will make its rate decision on Wednesday, with the markets expecting a 75-point hike, which would be the bank’s largest rate increase on record. Policy makers are confident that the economy can withstand a 75-point increase. The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. There is clearly a risk that a jumbo rate hike will cause a harder landing than the RBNZ would like, but inflation remains priority number one. With the next rate decision not until late February, the RBNZ may want to make a loud splash at tomorrow’s meeting. The recent US inflation report unleashed a wave of exuberance, sending equity markets higher and the US dollar on a nasty slide. Investors became more confident that Fed was close to a pivot in its aggressive policy and risk sentiment soared. The Fed has pushed back with Fed members delivering hawkish statements and projections, which has chilled risk appetite and stabilized the US dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%.   NZD/USD Technical There is resistance at 0.6072 and 0.6202 0.5955 and 0.5871 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Expresses Concern About The Decline In The Yen (JPY)

Kenny Fisher Kenny Fisher 22.11.2022 12:27
The Japanese yen has stabilized on Tuesday and is trading at 141.58, down 0.37%. USD/JPY rocketed higher on Monday, gaining 1.2%. BoJ Core CPI jumps to 2.7%  With inflation continuing to gain traction in Japan, there shouldn’t have been much surprise that BoJ Core CPI accelerated in October for a ninth successive month. Still, the 2.7% gain was much stronger than the prior reading of 2.0% and the consensus of 2.2%. The reading comes on the heels of National Core CPI, which rose to 3.6%, up from 3.0%. The Bank of Japan is unlikely to change its ultra-loose policy, even with inflation rising and a weak yen contributing to higher costs for households and businesses. The yen is well below the highs we saw in late October, when USD/JPY breached the 150 level and triggered a currency intervention. I am doubtful that such unilateral moves can have a lasting effect, but it is a tool that the government likes to resort to in order to dissuade speculators from pushing the yen lower. What may lead to a change in BoJ policy is the changing of the guard at the central bank. Governor Kuroda is scheduled to step down in April, after a 10-year stint as head of the bank. There have been calls to re-examine the bank’s policy, which has been in place for years. Sayuri Shirai, a former BOJ board member and candidate for a deputy BOJ governor, does not favor sharp rate hikes but has urged the bank to review its stimulus policy, show some flexibility and simplify its communication with the markets. This kind of thinking will be a breath of fresh air at the BoJ, whose policy meetings are usually drab affairs that are ignored by the markets, as the BoJ simply reiterates its policy and expresses concern about the decline in the yen. The most recent US inflation report was softer than expected, sending equity markets flying and the US dollar sliding lower. The Fed has responded with a steady stream of hawkish statements from Fed members, which has succeeded in dampening risk appetite and stabilizing the dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%   USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/JPY Price Seems To Be Optimistic

Japanese yen has lost ca. 20% this year. Kenny Fisher talks USD/JPY

Kenny Fisher Kenny Fisher 21.11.2022 22:58
The Japanese yen is getting pummeled at the start of the trading week.  In the North American session, USD/JPY is trading at 141.90, up 1.09%. Will BoJ Core CPI continue its upswing? Japan releases BoJ Core CPI, the Bank of Japan’s preferred inflation indicator later today. The indicator has accelerated for eight consecutive months, as inflation continues to move higher. National Core CPI, released last week came in at 3.6%, up from 3.0%. A higher-than-expected reading is unlikely to lead to any change in policy at the BoJ. Governor Kuroda has insisted that inflation is temporary and should peak around 3%.  The bank’s uncompromising stance, which has capped interest rates on Japanese government bonds, has resulted in the yen sliding about 20% against the dollar this year. Rather than stem the yen’s decline with interest rate hikes, the government has responded with massive currency interventions. Such unilateral moves are unlikely to have a lasting effect, with the Fed still aggressively raising rates and the US/Japan rate differential only getting wider. Federal Reserve members have been delivering hawkish messages to the markets, in a coordinated response to the rash exuberance in the markets following the US inflation report. The Fed speak campaign has dampened risk appetite and dashed hopes of a Fed U-turn on rate policy, which has helped the dollar recover some of its recent losses. The Fed has long insisted that one or two reports showing weaker inflation is not proof of a trend, although the markets have gone in a tizzy whenever inflation has softened. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. USD/JPY Technical USD/JPY has support at 141.55 and 140.70 There is resistance at 142.74 and 144.20   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY jumps to 142, BOJ Core CPI next - MarketPulseMarketPulse
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

RBA's is ready to go back to bigger hikes. Wage growth reached 3.1% in the third quarter

Kenny Fisher Kenny Fisher 21.11.2022 16:43
The Australian dollar has posted losses over three straight days and is sharply lower on Monday. In the North American session, AUD/USD is trading at 0.6610, down 0.96%. RBA shifts gears The Reserve Bank of Australia has changed course and eased up the pace of hikes, but with inflation still accelerating, is it too soon? After a string of 50-bp increases, the RBA has slowed down and delivered two straight hikes of 25 bp. The RBA was the first major central bank to make the shift, and the Federal Reserve is widely expected to ease to a 50-bp increase at the December meeting. Read next: Eurozone may find it hard to soak up big rate hikes. German PPI decreased by over 4%...| FXMAG.COM The thinking behind smaller rate hikes is it will cause less of a shock to the economy and ease the pain that households and businesses are going through as rates go up and up. At the same time, the RBA has circled inflation as public enemy number one, and it will have to keep hiking until it detects a peak in inflation. The RBA may be easing up on the pace of rates, but Governor Lowe is using the jawbone tactic to dampen any expectations that the central bank is winding up its tightening. To this end, Lowe has warned that the bank would not hesitate to return to oversize rate hikes if needed. The RBA is keeping a close eye on wage growth, which jumped to a nine-year high in Q3, gaining 3.1%. The RBA is wary of the spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate its efforts to curb inflation. The steady stream of hawkish statements from Fed members has chilled risk appetite and dashed hopes of a Fed U-turn on rate policy. The US dollar has bounced back after taking a beating following the inflation report earlier this month. The Fed has long insisted that one or two reports showing weaker inflation does not make a trend, although risk sentiment has nonetheless when inflation drops. If November’s inflation data is lower than anticipated, we can expect risk appetite to rise again, at the expense of the US dollar. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. AUD/USD Technical AUD/USD is testing support at 0.6609. Below, there is support at 0.6541 There is resistance at 0.6704 and 0.6772 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends slide - MarketPulseMarketPulse
The EUR/USD Pair Chance For The Further Downside Movement

Eurozone may find it hard to soak up big rate hikes. German PPI decreased by over 4%...

Kenny Fisher Kenny Fisher 21.11.2022 15:50
EUR/USD has resumed its downswing and is in negative territory on Monday. In the North American session, the euro is trading at 1.0238, down 0.81%. The ECB holds its final policy meeting of the year on December 15th, and it’s practically a given that the ECB will raise rates. But by how much? The current benchmark rate of 1.50% is low compared to other central banks, but the ECB is well aware that a weak eurozone economy will have trouble absorbing further oversize hikes. The ECB’s rate-tightening cycle has been steep, with an increase of 200 basis points in just three months. Still, inflation continues to soar, hitting 10.6% in October, up from 9.9% a month earlier. With inflation in double-digits, there is strong pressure to deliver a 50-bp increase next month. However, policy doves would like to see slower rates of 25-bp in order to minimize an economic slowdown. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM German PPI slides There was a surprise from Germany’s PPI today, which fell by 4.2%, its first decline since May 2020. The consensus stood at 0.9%. Is the sharp decline a mere blip, or does it point to lower inflation in the eurozone’s largest economy? We’ll get a look at German and eurozone CPI reports next week, and a drop in inflation will raise speculation that inflation may have finally peaked. The Federal Reserve’s barrage of hawkish statements from Fed members has chilled risk appetite and hopes of a Fed pivot. The US dollar has bounced back after taking a beating following the soft inflation report earlier this month. The Fed has long insisted that one or two reports showing inflation is lower does not make a trend, although risk sentiment has soared on every soft inflation report. If November’s inflation data is lower than anticipated, we can expect risk appetite to jump at the expense of the US dollar. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. EUR/USD Technical 1.0359 and 1.0447 are the next resistance lines EUR/USD is testing support at 1.0238. Below, there is support at 1.0150 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drops below 1.03 as risk aversion climbs - MarketPulseMarketPulse
Corporate Bond Supply Surges in May, Outpacing Previous Years, While Financial Sector Struggles with Low Issuance

Canada's CPI inflation prints didn't surprise, consensus points to a 25bp rate hike, but chances of a greater variant are still there

Kenny Fisher Kenny Fisher 18.11.2022 14:39
The Canadian dollar is trading quietly on Friday. USD/CAD is trading at 1.3337 in the European session, up 0.09%. RMPI, IPPI inflation indicators next Inflation was in the spotlight this week, as Canada released the CPI report for October. CPI climbed 6.9% YoY and rose 0.7% MoM, with both readings matching the consensus. However, the Bank of Canada’s measures for core inflation rose slightly. The data will do little to help the Bank of Canada in its deliberations ahead of a rate meeting on December 7th. The markets have priced in a 25-bp hike, with a 35% of a larger increase. The BoC has been tightening rates at full speed, raising the benchmark rates by some 350 basis points since March to 3.75%. Inflation is the BoC’s number one priority, but policy makers are on the lookout for an indication that inflation has peaked, which would provide the green light to ease the pace of tightening. Today’s inflation releases, the Raw Materials Price Index and Industrial Product Price Index, will be watched closely by the BoC, as will next week’s retail sales reports. Read next: UK: retail sales print turned out to be a propeller for pound sterling| FXMAG.COM The soft US inflation report last week sent the stock markets flying higher, as risk sentiment soared. Investors took the inflation data as an indication that the Fed was close to a pivot in its aggressive monetary policy. The Fed responded with a full court press, with Fed members hitting the airwaves and making hawkish remarks about rates. The latest appearance was from Fed member Bullard, who called on the Fed to raise rates to a minimum of 5.-5.25%. Bullard also presented a hawkish scenario in which the funds rate would not peak until 7%. The Fed offensive has had the desired effect, dampening investors expectations of a U-turn in policy, which would have complicated its efforts to tame inflation. This has helped steady the US dollar, which took a beating after the inflation report. USD/CAD Technical USD/CAD faces resistance at 1.3353 and 1.3471 There is support at 1.3218 and 1.3136 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes inflation data - MarketPulseMarketPulse
Forex: What to expect from British pound against US dollar - January 17th

UK: retail sales print turned out to be a propeller for pound sterling

Kenny Fisher Kenny Fisher 18.11.2022 13:30
The British pound has pushed above the 1.19 line on Friday. GBP/USD is currently trading at 1.1924, up 0.49%. Retail sales bounce back Retail sales showed some life in October, posting a gain of 0.6% MoM. This was a strong rebound from the -1.5% reading in September and above the consensus of 0.0%. The gain is welcome news and has provided the pound with a boost today. Still, consumer spending has a long road to recovery, as retail sales came in at -6.1% YoY. This beat the September figure of -6.8% and the forecast of -6.5%, but the struggling UK economy will need a sharp turnaround in consumer spending, a key driver of economic growth. Consumer confidence remains in deep-freeze but improved slightly in October to -44, up from -49 in September. Read next: Japan: Core CPI inflation soars 3.6% exceeding market expectations. Even if this value is not odd-looking amid current international "standards", still, it's the highest in 40 years| FXMAG.COM With the UK economy in a recession, the government’s bleak Autumn Statement was no surprise. Finance Minister Hunt announced a mix of tax hikes and spending cuts. There wasn’t much for Britons to cheer about in the austerity budget, but perhaps there is a sense of relief that it is a step in the direction to restore fiscal responsibility, after the shenanigans of Liz Truss and her mini-budget caused a financial crisis. The BoE is projecting that unemployment will rise to 6.5% and the country will experience negative growth in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The Federal Reserve has kept up its hawkish talk in an effort to dampen investor exuberance after the last inflation report fueled speculation that the Fed planned a pivot in policy. Fed member Bullard weighed in this week, urging the Fed to raise rates to at least 5%-5.25%. Bullard went even further, presenting a scenario in which the funds rate would climb as high as 7%. The message helped dampen risk appetite, sending equity markets lower and the US dollar higher. GBP/USD Technical There is resistance at 1.1961 and 1.2030 GBP/USD has broken below support at 1.1896 and 1.1786. Below, there is support at 1.1660 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound rises as retail sales rebound - MarketPulseMarketPulse
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Japan: Core CPI inflation soars 3.6% exceeding market expectations. Even if this value is not odd-looking amid current international "standards", still, it's the highest in 40 years

Kenny Fisher Kenny Fisher 18.11.2022 11:49
The Japanese yen has edged higher on Friday and is trading at 139.90 in the European session. Japan’s Core CPI beats forecast Inflation continues to creep up in Japan. Core CPI accelerated to 3.6% in October, up from 3.0% in September and edging above the consensus of 3.5%. These levels pale in comparison to what we’re seeing in the US, the UK and elsewhere, but Japan hasn’t seen these levels of inflation in 40 years. The country has a deflationary mindset, which leads firms to absorb higher costs for fear of losing customers. However, as inflation continues to move higher, that trend is changing and consumers are feeling the pain of higher prices. Read next: High Inflation Print In Japan | Most Fed Members Remain Relatively Hawkish| FXMAG.COM Despite rising inflation and a weak yen, the Bank of Japan is resolute in maintaining its ultra-loose policy in order to support the weak economy. The BoJ has been an outlier as it has capped interest rates while the global trend has been to raise rates, arguing that cost-push inflation is only temporary. BoJ Governor Kuroda has said that inflation should peak after hitting 3%. Kuroda might want to consult with Jerome Powell or Christine Lagarde about making assumptions about inflation peaks, as they found out to their chagrin that inflation was much stickier than they had anticipated. Fed continues tightening talk Ever since the last US inflation report sent the equity markets soaring and the US dollar sliding, the Fed has circled the wagons and telegraphed a hawkish message to the markets. The latest salvo came from Fed member Bullard, who urged the Fed to raise rates to 5%-5.25% at a minimum. Bullard also presented a hawkish scenario in which the funds rate would climb all the way to 7%, a message investors clearly didn’t want to hear. Retail sales and unemployment claims were better than expected, another indication that the US economy remains resilient handle further rate hikes. The Fed’s coordinated message and the solid data have quelled the stock market rally and boosted the US dollar. USD/JPY Technical USD/JPY is testing support at 139.95. Below, there is support at 138.09 There is resistance at 141.01 and 142.87 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY calm as inflation rises higher - MarketPulseMarketPulse
The Market May Continue To Buy The Pound (GBP) This Week

Bank of England expects that the UK economy growth will remain negative until 1H24

Kenny Fisher Kenny Fisher 17.11.2022 18:45
The British pound is sharply lower on Thursday as the US dollar has rebounded against the major currencies. In the North American session, GBP/USD is trading at 1.1787, down 1.07%. We continue to see sharp swings from the pound in November. Autumn Statement emphasises austerity Jeremy Hunt’s Autumn Statement was much more in keeping with the difficult economic times than the ill-fated mini-budget back in September, which set off a financial crisis and emergency intervention from the Bank of England. The Finance Minister’s budget outlined major spending cuts and tax hikes and Hunt stated that the government and the BoE were working in “lockstep”.  The fiscal austerity in the new budget is a step in the right direction, but the pound nevertheless has taken a tumble today. Read next: Eurozone headline inflation reached a record high in October, The UK’s future prospects for future economic development, CHF is the second best performing currency for 2022| FXMAG.COM The Office for Budget Responsibility (OBR) forecast indicated that the UK is currently in a recession, which will see unemployment jump from 3.5% to 4.9%. The BoE’s outlook is even worse, with unemployment forecast to hit 6.5% and negative growth expected in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The investor euphoria which sent the stock markets rallying after the soft inflation report has taken a pause, and the US dollar has rebounded. Fed policy members sought to dispel any thoughts of a Fed pivot, reminding the markets that the Fed was planning to raise rates higher than they had anticipated. The hawkish Fed speak may or may not have convinced investors to settle down, but a strong US retail sales report clearly did the job. The headline and core releases both posted strong gains of 1.3%, dampening sentiment that the Fed was turning dovish. US consumers continue to spend despite inflation and rising rates, an indication that the Fed can continue to raise rates and probably avoid a deep recession. Interest rates are expected to peak at 5% or slightly higher, which means that the Fed is highly likely to continue tightening into next year. GBP/USD Technical There is resistance at 1.1961 and 1.2030 GBP/USD has broken below support at 1.1896 and 1.1786. Below, there is support at 1.1660     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound takes a dive, retail sales next - MarketPulseMarketPulse
The USD/JPY Price Seems To Be Optimistic

Kuroda (Bank of Japan) shares his thoughts on inflation in 2023

Kenny Fisher Kenny Fisher 17.11.2022 15:43
The Japanese yen continues to flirt with the 140 level. In the European session, USD/JPY is trading at 140.25, up 0.51%. Japan releases the October National CPI later today, which is expected to rise to 3.5%, following the September reading of 3.0%. Inflation has been on the rise and is above the BoJ’s target of 2%, although these are levels that other major central banks can only dream about. The Bank of Japan has no plans to change its ultra-loose policy, even though inflation is above the target and the yen remains weak. BoJ Governor Kuroda reiterated his well-worn script earlier today that the rise in inflation is transitory, adding that he expects CPI to drop below 2% in fiscal year 2023. The yen has been on a tear in November, with gains of close to 6%, but that is more a case of dollar weakness rather than any newfound yen strength. With the Fed planning another oversize rate hike in December, the US/Japan rate differential will continue to weigh on the yen. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM Fed sends a hawkish message The investor exhilaration which sent the stock markets rallying after the soft inflation report has taken a pause. Fed policy makers responded with a hawkish message, reminding the markets that the Fed was planning to raise rates higher than they had anticipated. The Fed speak may or may not have convinced investors to settle down, but a strong US retail sales report clearly did the trick. The headline and core releases both posted strong gains of 1.3%, dampening sentiment that the Fed would pivot and ease its tightening. The US economy remains resilient and appears able to absorb further rate hikes without triggering a deep recession. Interest rates are expected to peak at 5% or slightly higher, which means that the Fed is highly likely to continue tightening into next year. USD/JPY Technical USD/JPY has support at 140.30 and 139.66 There is resistance at 141.08 and 141.86 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen dips ahead of key inflation data - MarketPulseMarketPulse
Anticipating a Bearish USD Index: Analysis and Target Levels

The Reserve Bank Of Australia Will Be Wary Of A Spectre Of A Wage-Price Spiral

Kenny Fisher Kenny Fisher 17.11.2022 13:07
The Australian dollar is considerably lower on Thursday. In the European session, AUD/USD is trading at 0.6671, down 1.02%. Employment data shines Australia’s tight labor market got even tighter in October. Total employment jumped by 32,200, up from just 900 in September. The numbers were especially encouraging as full-time employment jumped by 47,100, up from 10,900 prior. The unemployment rate of 3.5%, which was already running at a 50-low, inched lower to 3.4%. The excellent numbers are unlikely to change the Reserve Bank of Australia’s rate policy. The RBA has eased the pace of rate hikes considerably, with two straight increases of a modest 0.25%. The markets have priced in another 0.25% hike at the December 6th meeting, which would bring the cash rate to 3.10%. With rates expected to peak in early 2023 around 3.5% or 3.6%, the end appears in sight for the current rate-tightening cycle. The robust labour market has put upward pressure on wages, which burst higher on Wednesday with a gain of 3.1% YoY in the third quarter, its strongest quarterly gain since 2013. The Reserve Bank of Australia will be wary of a spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate efforts to curb inflation. US retail sales for October pointed to consumer resilience, despite high interest rates and stubbornly sticky inflation. The headline and core releases both came in at 1.3%, above expectations and a strong rebound from the September data (0.0% headline, 0.1% core). This indicates that the US economy can handle additional rate hikes, with the Fed expected to raise rates to 5.0% or slightly higher. With the benchmark rate sitting at 4.0%, investors would do well to keep in mind that there is still some life left in the current rate-tightening cycle.   AUD/USD Technical 0.6603 and 0.6490 are providing support There is resistance at 0.6750 and 0.6821 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

USD/CAD: Bank of Canada is expected to hike the interest rate by 50bp

Kenny Fisher Kenny Fisher 16.11.2022 17:29
The Canadian dollar has edged lower on Wednesday, trading at 1.3254, down 0.18%. Canadian dollar eyes inflation The Canadian dollar has performed well in the month of November, with gains of 2.7%. The unexpectedly soft inflation report out of the US ignited risk appetite, sending equities soaring and the US dollar sharply lower. USD/CAD is having a quiet day, but that could change in the North American session, with the release of Canada’s October inflation report. The markets are bracing for a spike in inflation, with an estimate of 0.7% MoM, compared to 0.1% in September. Inflation hit 6.9% in September, a slight drop from 7.0% in August. The markets are expecting another 6.9% gain for October, and an unexpected reading could trigger some volatility from USD/CAD. The Bank of Canada has tightened rates to 3.75%, which is a very aggressive rate-tightening cycle. The markets are expecting another 0.50% increase in December, and BOC Governor Macklem has borrowed the Fed script, saying that more rate hikes are needed in order to curb inflation. Like the Fed, Macklem has left open the possibility of reducing the pace of rate hikes in order to guide the economy to a soft landing and avoid a recession. A major concern for the BoC is that inflation expectations remain high, which risks triggering a wage-price spiral that would result in inflation climbing higher. A soft inflation report today would go a long way in assuaging the BoC’s concerns over inflation and inflation expectations. The Fed is doing its best to dampen speculation that it plans to pivot in its rate policy and that the rate-hike cycle is almost completed. Fed policy makers have sounded hawkish since the inflation report sent the markets into a tizzy, as any dovish signals could hurt the Fed’s battle with high inflation. The Fed’s message remains that the fight with inflation is not over and even though there could be an easing of the pace of hikes next month, the Fed expects a higher terminal rate than it did in September. USD/CAD Technical USD/CAD faces resistance at 1.3353 and 1.3471 There is support at 1.3218 and 1.3136 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of inflation - MarketPulseMarketPulse
The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

Kenny Fisher Kenny Fisher 16.11.2022 12:28
The British pound has moved higher on Wednesday. In the European session, GBP/USD is trading at 1.1934, up 0.56%. The pound roared on Tuesday, gaining close to 1% and punching past the 1.20 line for the first time in three months. It has been a busy time for sterling, which has been marked by sharp swings that would make an exotic currency blush. The pound’s volatility has been especially pronounced in the month of November. The US dollar has hit a rocky patch and the pound has taken full advantage, climbing 3.5% this month. It’s up, up, up for UK inflation UK inflation continues to rise and hit a staggering 11.1% in October, a 41-year high. The upward trend continued despite the government introducing an energy price guarantee. Inflation jumped from 10.1% in September and ahead of the consensus of 10.7%. Core CPI remained unchanged at 6.5%, but was higher than the forecast of 6.4%. The Bank of England hasn’t been able to stem rising inflation despite tightening policy but will be hoping that its jumbo 0.75% hike earlier in November will take a bite out of the next inflation report. The UK economy is facing a double-whammy of high inflation and a recession, and all eyes will be on Finance Minister Jeremy Hunt, who will announce the government budget on Thursday. Hunt will aim to restore the government’s credibility and stability, after the recent political soap opera which resulted in three different prime ministers in a matter of months and significant financial instability. The UK employment report on Tuesday was lukewarm, with unemployment ticking higher to 3.5%, up from 3.4%. The Bank of England will be concerned about the increase in wage growth, which will create even more inflation. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. The BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy.   GBP/USD Technical GBP/USD has pushed above resistance at 1.1878. The next resistance is 1.2030 1.1767 and 1.1660  are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Declining gross domestic product of Japan hasn't supported Greenback

Kenny Fisher Kenny Fisher 15.11.2022 21:57
The Japanese yen hit its highest level since August 29th, as the currency powers higher. In the North American session, USD/JPY is trading at 139.17, down 0.53%. The US dollar can’t find its footing, and even a soft GDP reading out of Japan hasn’t put a dent in the current yen rally. The economy declined in the third quarter for the first time in a year. GDP fell by 1.2% YoY, much weaker than the consensus of a 1.1% gain and the 4.6% gain in Q2. The usual suspects were the drivers of the decline in GDP – weak global growth and rising inflation. In addition, the weak yen, which recently fell to 32-year lows, has contributed to higher prices. The yen has reversed its fortunes since the unexpectedly soft US inflation report and has soared 6.4% in November. Fed sends a hawkish message The investor exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped on the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sending a hawkish message to the markets, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she was in favor of slowing the pace of rate hikes, but that further hikes were still required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, in sharp contrast to the markets, which chose to focus on the fact that inflation fell sharply from 8.2% in September. The Fed is committed to curbing inflation and is far from convinced that inflation has peaked, even though inflation appears to be trending in a downward direction. USD/JPY Technical USD/JPY is testing support at 1.39.66. Below, there is support at 138.69 There is resistance at 140.88 and 141.61 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen rises despite GDP decline - MarketPulseMarketPulse
The Market May Continue To Buy The Pound (GBP) This Week

What do we learn from the UK labour market data?

Kenny Fisher Kenny Fisher 15.11.2022 21:48
The British pound has reversed directions on Tuesday and posted sharp gains. In the European session, GBP/USD is trading at 1.1902, up 1.22%. The pound has punched above 1.19 for the first time since August 19th. UK wage growth a headache for BOE The UK employment report was soft, with unemployment ticking higher to 3.5%, up from 3.4%. Unemployment rose by 3.3 thousand, down from 3.9 thousand but well off the consensus of -12.6 thousand. The BoE will be most concerned about the increase in wage growth, which will create even more inflation, at a time when inflation is above 10%. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. There isn’t much slack to speak of in the labour market and the BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy. The Fed may be breathing a bit easier today, as the exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped all over the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sticking to a hawkish script, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, a possible rebuke of the exuberance shown by investors to the drop in inflation. GBP/USD Technical GBP/USD has broken through several resistance lines today. The next resistance lines are 1.2030 and 1.2224 1.1703 and 1.1648 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound soars despite weak job data - MarketPulseMarketPulse
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Whether There Will Be Another Soft RBA Decision Will Depend On The Data

Kenny Fisher Kenny Fisher 15.11.2022 13:26
The Australian dollar continues to gain ground and hit a two-month high earlier today. In the European session, AUD/USD is trading at 0.6756, up 0.85%. RBA to limit forward guidance The Reserve Bank of Australia minutes noted that the use of forward guidance had been useful during the Covid pandemic, but it would no longer remain a tool unless “appropriate”. The RBA said that rates “are not on a pre-set path” and it will determine the size and timing of future hikes based on incoming data and the outlook for inflation and employment. The takeaway from the minutes is that the RBA will not always provide forward guidance on interest rates, as it wants the flexibility to determine rate policy based on incoming data rather than be tied to its guidance. The RBA has eased its tightening, with two straight hikes of 0.25%, and is signalling to the markets that it could pause its rate-hike cycle or resume oversize rates, depending on the data. The RBA’s rate cycle has been steep, with 250 points in tightening since May. Despite this, inflation remains stubbornly high, and the RBA has revised upwards its inflation forecast for the end of 2022 to 8.0%, up from 7.8%. The central bank had expected inflation to slow to 3%, the top of its inflation target range, by December 2022, but that has been revised to 2025. The Federal Reserve is also looking at easing its tightening, as the markets have priced in a 0.50% increase at the December meeting. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller, as Fedspeak remains hawkish, despite the unbridled euphoria in the financial markets after last week’s soft US inflation report. The Fed remains committed to curbing inflation, and a dovish pivot would make its rate tightening less effective.   AUD/USD Technical AUD/USD is testing resistance at 0.6729. Above, there is resistance at 0.6821 There is support at 0.6603 and 0.6490 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Pound Is Now Openly Enjoying A Favorable Moment

United Kingdom: delayed budget announcement goes public this week. On Tuesday we get to know the health of labour market

Kenny Fisher Kenny Fisher 14.11.2022 22:15
The British pound has started the week with considerable losses. In the North American session, GBP/USD is trading at 1.1733, down 0.83%. US dollar claws back It was a week to forget for the US dollar, which tumbled against the major currencies. The pound jumped on the bandwagon and soared 4% last week. The driver behind the dollar’s slide was the October US inflation report, as headline CPI dropped to 7.7%, down from 8.2% in October. Core CPI also slowed and both readings were below expectations. This sent risk appetite through the roof, as equities climbed sharply while the dollar tumbled. Investors may have gone overboard in their exuberant reaction to the inflation report, and as a result, we’re seeing the dollar bounce back against the pound and most of the majors today. The US inflation report sent the financial markets into a tizzy last week because it raised expectations that the Fed will ease up on tightening. The markets have currently priced in a 0.50% hike at the December meeting; prior to the inflation release, it was close to a coin toss between a 0.50% and 0.75% increase. A 0.50% move would still mark an oversize hike, but the markets are acting as if the Fed has made a pivot, and there is growing speculation that the Fed will cut rates in the second half of 2024. This could be little more than wishful thinking by investors – the battle against inflation is far from over and the Fed hasn’t signalled that it is turning dovish. In fact, the Fed has warned that the terminal rate could be higher than previously expected. Whether the markets are ignoring that hawkish message at their peril remains to be seen. In the UK, it’s a busy week on the economic calendar, including the Autumn Statement, which was delayed from October due the resignation of Lizz Truss. Tuesday’s employment report is expected to show a drop in unemployment numbers and an increase in wage growth, so it could be another busy day for the British pound. GBP/USD Technical GBP/USD is testing resistance at 1.1767. The next resistance line is 1.1844 1.1609 and 1.1466 are providing support   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound fall, jobs report next - MarketPulseMarketPulse
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Aussie versus Greenback - Reserve Bank of Australia could go for a 25bp rate hike

Kenny Fisher Kenny Fisher 14.11.2022 16:35
The Australian dollar is in negative territory today, after posting huge gains last week. In the European session, AUD/USD is trading at 0.6690, down 0.22%. The US dollar took a nasty spill last week, and the Australian dollar made the most of it, gaining 3.6%. The US dollar was slammed after a soft inflation report, with headline and core inflation slowing in October and beating the forecasts. This lit up risk appetite and sent the Australian dollar to its highest level since September 22nd. The soft inflation report had such a strong effect on the greenback because it has raised expectations that the Fed will ease up on its rate tightening. After four consecutive hikes of 0.75%, the markets have now priced in a 0.50% increase at the December meeting. That would still represent an oversize hike, but investors have been looking for a reason to rush into stocks and the drop in inflation provided that excuse. It’s still too early to tell if inflation has peaked, but the Fed has tweaked its terminology, with Fed members now describing rate policy with words like “gradual” and “measured”. The Fed hasn’t sent out any signals that it is planning a dovish pivot. Quite the contrary; the Fed has stated clearly that the terminal rate could be higher than it had expected, but the markets appear to be ignoring this message and expectations are rising that the Fed will lower rates in the second half of 2023. RBA raises inflation forecast In Australia, inflation is also the number one priority. The Reserve Bank of Australia has raised its inflation forecast, with a peak expected at 8 per cent in December and has said inflation will not decline to the 2 per cent target until 2025. The RBA is likely to raise rates by 0.25% for a third straight time at the December meeting. RBA Deputy Governor Michele Bullock said last week that the RBA could have raised rates more sharply to bring inflation down faster, but that a “scorched earth” policy would have meant the loss of strong job gains. AUD/USD Technical There is resistance at 0.6821 and 0.6934 AUD/USD tested support at 0.6667 earlier today. Below, there is support at 0.6574 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar takes a pause - MarketPulseMarketPulse
The Fed Doesn’t Want To Be Responsible For A Needlessly Sharp Downturn

The Soft US Inflation Report Has Raised Expectations About Fed's Decision

Kenny Fisher Kenny Fisher 14.11.2022 12:33
After a huge rally last week, the Japanese yen has reversed directions today. USD/JPY is trading at 140.21, up 0.99%. On the economic calendar, Japan releases GDP for the third quarter. There are no economic events in the US today. A week to remember The US dollar dropped like a stone last week, courtesy of a soft inflation report that saw both the headline and core readings fall in October. Both readings were lower than expected, and investors pounced on the news, as stock markets soared and the US dollar took a tumble. The yen made the most of the dollar’s misery, as USD/JPY slumped by a massive 5.3% last week and dropped to a 10-week low. The market reaction to the inflation data looks a bit extreme, and this explains the dollar’s comeback today. The soft inflation report has raised expectations that the Fed will put the brakes on its tightening, after pushing full speed ahead with four straight jumbo hikes of 0.75%. Fed policy makers aren’t bandying around the magical word “peak” to describe inflation just yet, but we are now seeing a change in terminology, such as “gradual” and “measured”. What is interesting is that the markets have gone giddy over a drop in inflation but appear to be ignoring the Fed’s warning that rates could end up higher for longer than expected. I don’t detect any signs of the Fed going dovish, but the markets are expecting a pivot, as there is already talk in the markets of the Fed cutting rates in H2 of 2023. The dollar is dusting itself off after last week’s disaster, and the yen may have trouble holding onto last week’s impressive gains. The Fed will almost certainly raise rates in December by at least 0.50%, and with the Bank of Japan maintaining a cap on JGB yields, the US/Japan rate differential will continue to widen. That spells trouble for the yen, which has lost about 20% against the dollar this year.   USD/JPY Technical USD/JPY is testing resistance at 139.91 and 141.61 There is support at 137.34 and 135.90 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Dollar to Japanese yen - Oanda's Kenny Fisher points to the greenback's frailty

Kenny Fisher Kenny Fisher 10.11.2022 23:16
The Japanese yen has skyrocketed in today’s North American session. USD/JPY is trading at 141.81, down 3.1%. US inflation drags down the dollar The October inflation report was lower than expected, triggering a mass rush from the US dollar. The yen has jumped on the bandwagon and risen to its highest level since September 22nd. Inflation didn’t exactly tumble, but investors seized on the fact that both the headline and core readings were lower than projected, raising hopes of a soft landing for the economy. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. Despite the festive mood on Wall Street today, the Fed hasn’t turned dovish – a 0.50% rate hike is still a sizeable move, and the terminal rate could end up being as high as 5.50% The yen has steamrolled the dollar today, but will this be just a blip in the yen’s prolonged descent? Today was all about US dollar weakness rather than any newfound strength in the yen. The next Fed meeting is a month away, with additional inflation and employment releases prior to the meeting. If those releases are stronger than expected, expectations of a 0.75% hike will grow and the US dollar will likely move higher. The US/Japan rate differential continues to widen and will keep weighing on the yen, with no sign that the Bank of Japan will throw the currency any lifelines. The dollar may have taken a licking today, but tomorrow is a new day. USD/JPY Technical USD/JPY has broken below several support levels today. The next support level is 139.66 147.07 and 147.74 are the next resistance levels This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen soars after US inflation surprise - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

Needless to say - greenback plunged after the inflation release, so Sterling gained. If released next week GDP come at less than -0.5%, pound may recede

Kenny Fisher Kenny Fisher 10.11.2022 20:41
The British pound has soared today, following the US inflation report. GBP/USD is trading at 1.1661, up a massive 2.7%. US dollar retreats as inflation falls The October inflation report was lower than what everyone had expected, which has triggered strong volatility in the currency markets. The US dollar is sharply lower against the majors, as the markets are expecting the Fed to ease up on interest rates after today’s favourable inflation data. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. The Fed may end up delivering a 50 bp move in December, but investors should remind themselves that this doesn’t mean the Fed is going soft. It wasn’t too long ago that a 0.50% hike was considered ‘supersize’; it’s only in comparison to 0.75% or full-point moves that a 0.50% increase can be considered dovish. Secondly, Fed Chair Powell said at last month’s meeting that the terminal rate would be higher than previously expected, a clear sign that the Fed remains hawkish. The UK releases key data on Friday, and the markets are braced for soft readings. GDP for the third quarter is expected to slow to -0.5% QoQ, down from 0.2% in the second quarter. Manufacturing Production for September is expected at -0.4%, which would mark the third decline in four months. If these releases are weaker than expected, the pound could give back some of today’s huge gains. GBP/USD Technical There is resistance at 1.1767 and 1.1844 1.1609 and 1.1505 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD rockets as US inflation dips - MarketPulseMarketPulse
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Further Volatility Of The AUD/USD Pair In Today Session Is Expected

Kenny Fisher Kenny Fisher 10.11.2022 12:13
The Australian dollar has extended its losses today. AUD/USD is trading at 0.6412, down 0.29%. The US dollar has rebounded after a 3-day slide, which saw the Australian dollar climb over 200 points. The Aussie has coughed up half of those gains since Tuesday, and we could be in for further volatility in today’s North American session, as the US releases the October inflation report. Investors are somewhat confused, thanks to mixed signals from both the Federal Reserve and last week’s US employment report. The Fed meets next in mid-December, and it’s close to a toss-up as to whether the Fed will raise rates by 0.50% or 0.75%. At the last meeting, at which the Fed hiked by 0.75%, Fed Chair Powell hinted at easing up on rates but also said that the terminal rate would likely be higher than previously expected – this mixed message makes it difficult to peg the Fed as being hawkish or dovish. US inflation expected to remain hot Last week’s employment report was mixed, as unemployment and wage growth climbed, while nonfarm payrolls fell but still exceeded expectations. This makes today’s inflation report all the more important for the Fed ahead of the December meeting. A hot inflation report would likely boost the likelihood of a 0.75% hike, which would be bullish for the US dollar. CPI is expected to dip to 8.0%, down from 8.2%, which although a slight improvement, would indicate that inflation remains very high. Australia is also dealing with high inflation, and Melbourne Institute Inflation Expectations for October reinforced concerns that inflation is yet to peak. Inflation Expectations rose to 6.0%, up sharply from 5.4% in September, and the first acceleration in four months. The economy is showing signs of slowing down, and a report from the National Australian Bank on Wednesday projected that GDP would fall to 0.8% in 2023 and interest rates would peak at 3.6% next year. The cash rate is currently at 2.85%, which means that the RBA is likely to continue raising rates into 2003.   AUD/USD Technical AUD/USD is testing resistance at 0.6411. Above, there is resistance at 0.6549 There is support at 0.6239 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bitcoin's Volatility Continues: Failed Breakout and Accumulation Signal Positive Outlook

"Liquidity crisis" of FTX definitely doesn't play in favour of the digital assets market

Kenny Fisher Kenny Fisher 09.11.2022 23:30
US stocks declined as the midterm election results are still not clear, but still seems to favor a divided government outcome. ​ Wall Street is having an election hangover that most likely saw an end to Biden’s blue wave. ​ Traders can now go back focusing on everything with inflation. ​ Votes are still being counted and the Georgia Senate race will go to a runoff next month. ​ Republicans look like they will get the job done with taking control of the House, but their majority lead will be a small one. What is complicating today’s mood on Wall Street is that the liquidity crisis for FTX is spilling over into other cryptos. ​ FTX was viewed as one of the so-called safe crypto players and their demise is raising concerns that other key crypto companies could be vulnerable here. The Solana token has been in freefall as SBF’s trading firm, Alameda Research, was an early supporter of the Solana project. China Producer prices in China have fallen into negative territory for the first time in almost two years as both China’s domestic demand is weak and their key trading partners are entering recession territory. China is also continuing to struggle with COVID as Guangzhou has to return to mass testing. ​ Five of the 11 districts will have mass testing and that is leading to concerns that a relaxation in covid protocols might be distant. Oil Crude prices tumbled on concerns that China is losing this battle with COVID and after the EIA report showed stockpiles rose to the highest levels since July 2021. ​ The weekly oil inventory data showed gasoline demand bounced back and that should still support a moderating demand outlook. ​ Production jumped higher and above the 12 million bpd level, but no one is thinking this will continue. ​ Supplies are still mostly tight and that should help limit the selling pressure that is hitting crude prices. Oil’s weakness could have been much more significant if Republicans had a stronger performance last night. ​ A strong red wave by Republicans would have meant greater pressure to ramp up production and help make the US energy independent. Gold Gold prices are softening ahead of Thursday’s US inflation report. Bullion traders have seen this movie before; a rally before a key inflation report just to see strong selling pressure return after inflation shows it’s not ready to moderate that much. ​ Gold could consolidate around the $1700 level but if the strong dollar trade gains traction leading up to CPI day, selling pressure could target the $1685 region. Cryptos Sam Bankman-Fried was supposed to be bulletproof. SBF was crypto’s ‘White Knight’ and the implosion of FTX means no one is safe. The stabilization period for crypto is over and now we wait to see if other contagion risks emerge. Binance was expected to save the day and buy FTX.com, but the deal appears to have hit a roadblock. CoinDesk reported that Binance was unhappy in the due diligence stage after reviewing FTX’s internal data and loan commitments. Cryptos are under intense pressure as contagion risks remain elevated from the FTX liquidity crisis. No one wants to touch anything that has ties with FTX and that is troubling news. No one is talking about buying this crypto dip until we see FTX secure funding and exhaustion happens with the selling of other tokens with ties to it. ​ Bitcoin plunged below the $16,000 level as the crypto rout worsens. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US Close: Election Hangover, China inflation and lockdown hopes, Oil drops, Gold rally stalls, Crypto Turmoil - MarketPulseMarketPulse
S&P 500 ended the session 1.4% higher. This evening Japan's inflation goes public

US dollar has got back in the game and a 50bp rate hike may deliver greenback with fuel. US inflation released tomorrow is expected to show lower values

Kenny Fisher Kenny Fisher 09.11.2022 23:22
EUR/USD has reversed course today and is in negative territory. In the North American session, the euro is trading at 1.0043, down 0.30%. US dollar bounces back The US dollar has rebounded after a 3-day slide against the major currencies. The dollar downswing started on Friday after a lukewarm employment report raised expectations that the Fed will deliver a “modest” 50-basis point, rather than a 75 bp move at the December meeting. This was followed by a short covering move on Monday which sent the dollar sharply lower, as risk appetite jumped ahead of the US midterms and Thursday’s inflation report. The euro made the most of the dollar’s weakness, rising 250 points in an impressive 3-day rally. The US dollar has rebounded against the majors today, including the euro. With the Federal Reserve remaining aggressive, even a 0.50% should be enough to give the dollar a boost, as rate differentials continue to widen. Inflation is running at a double-digit clip in the eurozone, but it’s doubtful that the ECB will keep pace with the Fed, as the eurozone economy remains weak and higher rates are likely to tip the economy into a recession. The markets are keeping an eye on the US midterm elections, which are tighter than expected, as the Democrats are fighting to retain control of both the House and the Senate. Investors are focussing on Thursday’s October US inflation report, which will be a key factor in Fed rate policy. Inflation is expected to have eased slightly, with headline inflation dropping to 8.0% (8.2% prior) and core inflation slowing to 6.5% (6.6%).  A drop in the October reading will raise expectations for the Fed to raise rates by 0.50% at the December meeting. EUR/USD Technical EUR/USD faces resistance at 1.0134 and 1.0293 There is support at 1.0047 and 0.9888 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro backtracks after strong rally - MarketPulseMarketPulse
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Bank Of Japan Remains An Outlier Amongst The Major Central Banks

Kenny Fisher Kenny Fisher 09.11.2022 13:37
The Japanese yen has steadied after posting strong gains on Tuesday. In the European session, USD/JPY is trading at 145.67, up 0.03%. Japan recorded stronger-than-expected gains in household spending and retail sales, but it’s questionable whether this positive trend will continue. Inflation hit 3% in September for the first time in over 30 years, raising concerns, but inflation is still at levels that other major central banks can only dream of.  The government is hoping that the finance package that was announced on Tuesday will reduce inflation and boost growth. Still, the outlook for the yen, which has been on a prolonged downturn against the dollar, remains grim. The Bank of Japan is unlikely to veer from its ultra-loose policy, despite the declining yen and rising inflation, unless inflation continues to rise. The Federal Reserve is expected to deliver additional oversize rate hikes, which will widen the US/Japan rate differential and likely push the dollar lower. At the BoJ’s meeting in late October, it was business as usual as policy makers maintained their dovish guidance. The BoJ remains an outlier amongst the major central banks, with a growing realization that any changes in policy will have to wait until Governor Kuroda’s term ends in April 2023. In the US, the dust from the mid-term election hasn’t yet settled. The Republicans are expected to retake the House, but with a very slim majority, while the makeup of the Senate is unlikely to be determined for several weeks. The election hasn’t had much impact on the movement of the US dollar, as investors are focussed on the US inflation report on Thursday.   USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

The China Is Yet To Exit Its Strict Zero-Covid Policy

Kenny Fisher Kenny Fisher 09.11.2022 12:22
The Australian dollar is in negative territory today after an impressive rally. AUD/USD is trading at 0.6487, down 0.27%. US dollar steadies after selloff The US dollar has been in retreat since Friday, after a mixed nonfarm payroll report raised the likelihood of the Fed easing up in December and raising rates by just 0.50%, rather than 0.75%. The Australian dollar took full advantage of the US dollar selloff, rising over 200 points in a 3-day rally. AUD/USD rose to a 6-week high on Tuesday, but it’s hard to see the US dollar continuing to weaken much further. The Federal Reserve is sticking to its hawkish script and said at last week’s meeting that the terminal rate would be higher than previously anticipated. As well, with a gloomy global outlook, risk appetite will be under pressure, making the US dollar more attractive to investors. The Australian dollar faces other headwinds as well. China, Australia’s largest trading partner, is experiencing a slowdown as the country is yet to exit its strict zero-Covid policy. The RBA has eased up on rates, with two straight hikes of just 0.25%, even though inflation hasn’t shown signs of peaking. With the Fed expected to deliver hikes of 0.50% or 0.75%, the US/Australia rate differential is widening, which will weigh on the Australian dollar. The US midterms remain inconclusive, with tight races in both the House and the Senate. The Republicans were expected to easily take the House, but the race is tighter than expected. The Senate may not be decided for weeks if a runoff is required in Georgia. Any fluctuations in the currency markets are likely to be short-lived, with investors looking ahead to Thursday’s CPI report. . AUD/USD Technical There is resistance at 0.6549 and 0.6631 AUD/USD has support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Bio
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Kenny Fisher seems not to see Aussie keeping takings intact

Kenny Fisher Kenny Fisher 08.11.2022 21:52
The Australian dollar has posted sharp gains, as the US dollar is lower against the majors in the North American session. AUD/USD is trading at 0.6542, up 0.97%. Business confidence slows to zero Australia’s NAB Business Confidence for October slipped to zero, down from 5 points in September. The significant decline is reflective of a drop in orders, higher rates at home and a gloomy global negative outlook. The soft data comes on the heels of Westpac Consumer Sentiment, which plunged by 6.9% to 78 points, its lowest level since April 2020, when the Covid pandemic had just started. Inflation is galloping at a 7.3% clip, China’s economy is weakening and the energy crisis in Europe is likely to worsen in the winter. These headwinds are not about to go away, which does not bode well for the Australian economy. The Australian dollar has fallen sharply in 2022, although we’re seeing a rebound, with gains of 2.9% on Friday, courtesy of the US nonfarm payrolls, and strong gains today as well. The US dollar’s decline on Friday and again today are against all the majors, which means that this is a case of US dollar weakness rather than Australian dollar strength. I would be surprised if the Aussie can hold onto these recent gains, as the currency faces plenty of headwinds. In the US, the midterm elections are being held today, which is widely being viewed as a referendum on President Biden’s performance. The economy is giving mixed signals and Biden’s popularity is sagging, which could result in the Republicans taken control of both the House and the Senate. If the Republicans grab either one, it will translate into deadlock in Washington and a weakened President Biden. The election could move the US dollar if we see a Democratic surprise or a clean sweep by the Republicans. AUD/USD Technical AUD/USD is testing resistance at 0.6545. Next, there is resistance at 0.6631 There is support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD resumes rally with massive gains - MarketPulseMarketPulse
Reserve Bank of New Zealand went for a 75bp rate hike. New Zealand increased by 1.5%

The next decision of RBNZ may be mainly based on the inflation print, which is expected to hit 3.62% in the fourth quarter

Kenny Fisher Kenny Fisher 08.11.2022 15:24
The New Zealand dollar has edged lower today. NZD/USD is trading at 0.5932, down 0.15%. NZ Inflation Expectations climb New Zealand continues to grapple with high inflation and this has led to a rise in inflation expectations as well. For Q4, inflation expectations stand at 3.62%, up from the Q3 reading of 3.07%. With no new inflation data prior to the November 23rd meeting, the inflation expectations release could play a key role in determining the Reserve Bank of New Zealand’s next rate move. Inflation ticked lower to 7.2% in Q3, down from 7.3% in the second quarter. Still, one inflation report does not reflect a trend, and it’s too early to say if inflation has peaked. What is clear is that inflation remains more than three times the RBNZ’s target of 2%, and a rise in inflation expectations is another signal that the fight against inflation is far from over. Governor Orr, who was just given another 5-year term at the helm of the central bank, has his hands full as he tries to guide the economy to a soft landing and avoid a recession. The RBNZ began its tightening cycle ahead of the other major central banks and has hiked rates to 3.50%. The aggressive rate policy hasn’t brought down inflation, but it has hurt consumers and businesses who are struggling with the double-whammy of red-hot inflation and rising interest rates. The financial markets are in caution mode today, as investors await the US midterm results.  The Republicans are expected to retake the House and possibly the Senate. Unless the Democrats pull a last-minute rabbit/donkey out of their hat, we are in for a deadlock in Washington, which will tie Biden’s hands for the next two years. With the US economy possibly headed for a recession, gridlock in Washington could unnerve investors and weigh on the equity markets, and the US dollar could be the big winner. NZD/USD Technical There is resistance at 0.6001 and 0.6095 There is support at 0.5871 and 0.5800   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD dips as inflation expectations rise - MarketPulseMarketPulse
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Still, The Outlook For The Yen (JPY) Does Not Look Good

Kenny Fisher Kenny Fisher 08.11.2022 14:50
The Japanese yen continues to have a quiet week. In the European session, USD/JPY is trading at 146.34, down 0.18%. Household spending rebounds Japan’s household spending bounced back in September, with its first gain in three months. Household spending rose 1.8% MoM, despite higher inflation. This reading follows a strong retail sales report for September, with a gain of 1.1%. The sharp drop in Covid cases in September contributed to the strong numbers. The question is whether the uptick in household and consumer spending will last. Inflation hit 3% in September for the first time in over 30 years, and inflation above the 3% level starts to squeeze spending in real terms. The government is hoping that the finance package that was announced today will reduce inflation and boost growth. The Japanese yen has improved lately and joined the bandwagon on Friday, as the US dollar retreated after a mixed nonfarm payrolls report. Still, the outlook for the yen, which has plummeted about 20% this year against the dollar, does not look good. The Bank of Japan hasn’t budged from its ultra-loose policy, despite the declining yen and rising inflation. The Federal Reserve is far from winding up its aggressive rate policy, with inflation still running high. With the BoJ maintaining a cap on JGB yields, the US/Japan rate differential continues to widen, which is pushing the yen lower. At the BoJ’s meeting in late October, the BOJ maintained all policy settings as well as its dovish guidance. Essentially, it was more of the same from the BoJ, with a strong likelihood that the BoJ will not make any changes before Governor Kuroda ends his term in April 2023. USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Commodities: EU Members Manage To Agree On Price Caps For Russian Oil

Kenny Fisher points to unsureness of the COVID situation considering crude oil price

Kenny Fisher Kenny Fisher 07.11.2022 23:42
Oil Oil’s early boost from a weakening dollar could not last as energy traders debate whether optimism was premature over an easing of Covid rules in China. Chinese officials continue to push back on the idea that a relaxation in Covid rules is coming. ​ Crude prices still seemed destined for a move above the $100 a barrel level but that might have to wait until we see a clear peak in cases. ​ China’s covid cases are at a six-month high and that might support holding onto their zero-Covid policy a little while longer. ​ A China reopening is coming but no one can say for sure when that might happen. Gold gains as dollar dips Gold prices are higher as dollar weakness returns ahead of the midterm elections and a pivotal inflation report. ​ The best-case scenario for gold is for a Republican sweep and further signs pricing pressures are easing. ​ Gold looks like it will closely track the dollar and that means it will hinge on this week’s inflation report. Leading up to the key inflation report, gold seems poised to form a trading range between the $1660 and $1690 zone. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil waiting to pop, gold enters trading range - MarketPulseMarketPulse
The EUR/USD Pair: There Are Still No Sell Signals

German economy faces headwinds, Lagarde is determined to hit 2% inflation. Latest NFP makes 50bp probable, but it's premature to be sure

Kenny Fisher Kenny Fisher 07.11.2022 23:21
EUR/USD has extended its impressive rally and is trading at 1.0019, up 0.60% on the day. The US dollar was broadly lower on Friday after the nonfarm payroll report and the euro rocketed 2.1%. German industrial orders rebound The week started on a high note in Germany, as Industrial Production for September rose for the first time in two months, up 0.6% MoM. This followed a -1.2% reading in August and beat the forecast of 0.2%. The reading was surprisingly strong, given that industrial companies continue to complain about bottlenecks and a  shortage of products. Last week, German Factory Orders fell by 4.0% and the war in Ukraine and the energy crisis remain significant headwinds for German industry and the economy as a whole. The grim economic outlook is a major headache for ECB policymakers, who must maneuver delicately between soaring inflation and a weak eurozone economy. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to 10.7% in October, up from 9.9% in September. The ECB will have to double down on its rate hikes in order lower double-digit inflation and ECB President Lagarde has said that she will use “all the tools” available to bring inflation back to the ECB’s 2% target. The US dollar retreated against all the major currencies on Friday, and the euro took full advantage, with gains above 2%. Investors were looking for any excuse to plow into equities after a dreadful spell, and the employment report provided the opportunity, as nonfarm payrolls fell to 200,000, down from 315,000, the lowest level since December 2020. As well, unemployment rose from 3.5% to 3.7%, while the increase in wage growth was conveniently ignored. The likelihood of the next rate hike being 0.50%, rather than 0.75%, has risen since the NFP release, which sent the dollar sharply lower. Still, the rate forecasts are sure to change, with another NFP release and two inflation reports still to come before the meeting. EUR/USD Technical EUR/USD faces resistance at 1.0047 and 1.0134 There is support at 0.9888 and 0.9801 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Soaring euro punches past parity - MarketPulseMarketPulse
Analysis Of The AUD/USD Commodity Currency Pair's Price

RBA's Lowe seems to be pointing to seeking for a happy medium

Kenny Fisher Kenny Fisher 07.11.2022 22:07
AUD/USD is almost unchanged today, after sharp gains on Friday. In the North American session, AUD/USD is trading at 0.6470, down 0.02% on the day. Aussie soars after nonfarm payrolls  The US dollar declined against all the major currencies on Friday, after a mixed nonfarm payrolls report left investors in a dovish mood. The October reading of 261,000 was down from the previous reading of 315,000 and marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. Investors are expecting that the labor market will continue to soften and that the Fed will lean toward a 50 basis point hike rather than 75 bp, and this sent the dollar sharply lower after the NFP report on Friday. Still, with the Federal Reserve expected to raise rates to 5% or even higher next year, I expect the US dollar to remain attractive to investors. The RBA is treading carefully, as seen with its modest hike of 0.25% last week. Governor Lowe said that the central bank was on a “narrow path” that required “striking the right balance between doing too much and too little.” The RBA finds itself in a pickle, as its steep tightening cycle is slowing growth and hurting businesses and households. At the same time, inflation remains red-hot at 7.3%, fuelled by high food prices. Inflation still remain the RBA’s number one priority, but it has eased up on the size of the hikes, hoping that inflation will peak shortly and a recession can be avoided. The RBA monetary policy statement was gloomy, with a warning that tough times lie ahead. The central bank is projecting a GDP of 3% over 2022, slowing to 1.5% in 2023. Inflation is expected at 4.75% over 2023, higher than the 4.25% forecast in its previous policy statement. The forecasts are based on the cash rate peaking at 3.5% in mid-2023. AUD/USD Technical There is resistance at 0.6549 and 0.6631 There is support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar rally takes a breather - MarketPulseMarketPulse
Reserve Bank of New Zealand went for a 75bp rate hike. New Zealand increased by 1.5%

On the very last day of Forex trading last week New Zealand dollar to greenback skyrocketed by almost 3%!

Kenny Fisher Kenny Fisher 07.11.2022 15:49
The New Zealand dollar is steady today, after ending the week with huge gains. NZD/USD is trading at 0.5934 in the North American session. US dollar slides after NFP The US dollar was broadly lower on Friday, after the nonfarm payroll report sent mixed signals about the strength of the labor market. The October reading of 261,000 was stronger than the consensus of 200,000, but it marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. The mixed numbers left investors in a dovish mood and the US dollar paid the price. NZD/USD climbed a remarkable 2.7%, as investors gave a strong thumbs-up to risk currencies like the New Zealand dollar. The job data has led to the markets raising the likelihood of a 50 basis points hike in December – the CME’s Fed Watch has pegged a 50 bp increase at 56% and a 75 bp move at 34%. Still, with the Federal Reserve expected to raise rates to 5% or even higher next year, I would not be surprised to see the US dollar quickly recover from Friday’s tumble. Investors were looking for anything to send the equity markets higher, and the mixed NFP report was their excuse, even though US job creation was stronger than expected. New Zealand will release Inflation Expectations on Tuesday. The Reserve Bank of New Zealand will be watching carefully, as it continues its titanic battle with inflation. Last week’s employment numbers indicated that the labour market remains tight – unemployment is very low and wage growth is moving higher. This makes the RBNZ’s battle with inflation will continue and we can expect another oversized rate hike at the November 23rd meeting – perhaps as high as 75 bp. The risk of a wage-price spiral is a key concern for policy makers, and if the upcoming Inflation Expectations accelerates, it would be a worrisome signal that inflation is still on the upswing. NZD/USD Technical There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar flies after US NFP - MarketPulseMarketPulse
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

Kenny Fisher Kenny Fisher 07.11.2022 12:56
The Canadian dollar is almost unchanged today, trading at 1.3483. Canadian dollar flies on job gains It was a day to remember for the Canadian dollar, which rocketed almost 2% higher on Friday. The driver behind the spike was a massive gain in jobs at 108, 300 in October, up from 20,000 in September. The reading crushed the forecast of 10,000. Wage growth rose to 5.5%, up from 5.2%, while the unemployment rate was unchanged at 5.2%. The employment gain was especially impressive as it was spread across the economy and was made up entirely of full-time jobs. The Bank of Canada, which hiked rates to 3.75% after a 50 basis point increase in late October is likely to respond with additional oversize hikes. The markets have priced in a 70% chance of a 50 basis point increase in December, and the terminal rate is projected at 4.5%.  At the October meeting, BoC Governor Macklem said that the BoC was closer to ending the tightening cycle, while acknowledging that the BoC was far from achieving its goal of lowering inflation to its 2% target. Headline inflation has slowed to 6.9%, but core inflation has persisted. In the US, the nonfarm payrolls sent mixed and somewhat confusing signals to the market. The October reading of 261,000 was stronger than the consensus of 200,000, but it marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. Bottom line? The jobs report indicates that the labour market remains robust and although a 50-bp hike is likely, a 75-bp move remains a possibility. There is one more employment report and two more inflation releases ahead of the December 14th FOMC decision, each of which should be treated as a market-mover.   USD/CAD Technical USD/CAD faces resistance at 1.3420 and 1.3586 There is support at 1.3364 and 1.3248 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Any Misses In The Forecasts For The Job Reports Could Make Volatility From The USD/CAD Pair

Kenny Fisher Kenny Fisher 04.11.2022 14:21
The Canadian dollar is usually quiet before North American markets open, but it is sharply higher today. USD/CAD is trading at 1.3644 in Europe, down 0.73%. US nonfarm payrolls expected to slow The week wraps up with the October employment reports from the US and Canada. The highlight will be the US nonfarm payrolls report, which, although still a key event, has been somewhat overshadowed by Fed rate meetings and inflation releases. Still, the release will be carefully watched by Fed policymakers and it will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NFP release could provide some volatility in the currency markets in the North American session. A stronger-than-expected reading would raise the likelihood of a 0.75% hike and would likely boost the dollar. Conversely, a soft reading would reinforce expectations of the Fed easing to 0.50%, which would be bearish for the dollar. Canada is expected to post lukewarm job data for October. The unemployment rate is forecast to tick up to 5.3% from 5.2%, with a consensus of 10,000 new jobs, down from 21,100 new jobs in September. Any misses in the forecasts for the Canadian and US job reports could trigger volatility from USD/CAD in the North American session. The Fed raised rates by 0.75% at this week’s meeting, as expected, but there was a double message for the markets. The rate statement was dovish, stating that the Fed might take a pause in order to see how the rate hikes were working. However, Fed Chair Powell was hawkish in his post-meeting comments, saying that there was no sign that inflation had peaked and that it was “very premature to talk about pausing rate hikes”. The unexpected hawkish tone sent equities lower and boosted the US dollar.   USD/CAD Technical USD/CAD is putting strong pressure on support at 1.3656. Below, there is support at 1.3478 1.3757 and 1.3901 are the next lines of resistance This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Has Little Choice But To Deliver An Oversize Rate Hike

Kenny Fisher Kenny Fisher 04.11.2022 14:02
EUR/USD has rebounded and is in positive territory. In the European session, the euro is trading at 0.9794, up 0.45%. The upswing has ended a 3-day slide, in which the euro fell as much as 270 points. German factory orders sink The manufacturing sector in the eurozone continues to struggle. German and eurozone manufacturing PMIs are mired in contraction territory and German Factory Orders for September, published today, declined by a sharp 4.0%. A weak global economy has dampened manufacturing activity, and the war in Ukraine and the energy crisis in Western Europe will likely continue to take a toll on the eurozone economy. The grim economic outlook is a major headache for ECB policymakers, who must maneuver delicately between soaring inflation and a weak eurozone economy. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to a staggering 10.7% in October, up from 9.9% in September. The ECB has little choice but to deliver an oversize rate hike in order to tackle double-digit inflation, and ECB President Lagarde has said that she would use “all the tools” available to bring inflation back to the ECB’s 2% target. All eyes are on today’s US nonfarm payroll report. The labour market has been resilient in the face of steep rate hikes, although we are seeing a jump in job cuts. The consensus for the October NFP stands at 200,000, lower than the September reading of 263,000. The release will be carefully watched by the Fed, as the strength of the labor market is an important factor in the December rate decision. The markets have priced in a 50/50 toss-up between a hike of 0.50% or 0.75%, which could translate into volatility for the US dollar in today’s North American session.   EUR/USD Technical EUR/USD is putting pressure on resistance at 0.9818. Next, there is resistance at 0.9956 0.9669 and 0.9531 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The RBA Steep Tightening Cycle Is Slowing Growth And Hurting Businesses

Kenny Fisher Kenny Fisher 04.11.2022 11:32
AUD/USD continues to show strong volatility and is sharply higher today. In the European session, the Australian dollar is trading at 0.6338, up 0.81%. This follows losses of almost 1% on Thursday. RBA sees lower growth, higher inflation The RBA monetary policy statement was gloomy, with a warning that tough times lie ahead for the Lucky Country. The central bank is projecting a GDP of 3% over 2022, slowing to 1.5% in 2023. Inflation is expected at 4.75% over 2023, higher than the 4.25% pace in its previous policy statement. The forecasts are based on the cash rate peaking at 3.5% in mid-2023. The RBA raised the cash rate to 2.85% earlier this week, with a 0.25% hike, and Governor Lowe said that the central bank was on a “narrow path” that required “striking the right balance between doing too much and too little.” The RBA finds itself in a pickle, as its steep tightening cycle is slowing growth and hurting businesses and households. At the same time, inflation remains red-hot at 7.3%, fuelled by high food prices. Inflation remains the RBA’s number one priority, but it has eased up on the size of the hikes, hoping that inflation will peak shortly and a recession can be avoided. The week wraps up with the US nonfarm payrolls report, which has been overshadowed by Fed meetings and inflation releases. Still, the release is carefully watched by Fed policymakers and today’s data will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NDP could provide some volatility in the currency markets in the North American session.   AUD/USD Technical There is resistance at 0.6403 and 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Asia morning bites - 16.05.2023

Kenny Fisher comments on USD/JPY - 03/11/22

Kenny Fisher Kenny Fisher 03.11.2022 23:58
The yen has been steady for most of the week and is hovering around the 148 line. In the North American session, USD/JPY is trading at 148.09, up 0.12%. Yen yawns after Fed rate hike The Federal Reserve’s rate meeting roiled the financial markets and sent the US dollar sharply higher against the majors, but the Japanese yen defied the trend and has held its ground. The recent interventions by Japan’s Ministry of Finance (MOF) appear to have chilled the appetite of speculators to test the yen, as the MOF may have drawn its ‘line in the sand’ at the 150 level. Still, USD/JPY has been on a prolonged descent, losing 22% of its value this year, and I would not be surprised to see the yen resume its downturn shortly. The Bank of Japan has shown time and time again that it is committed to an ultra-loose policy in order to support the economy, and has no interest in throwing a lifeline to the struggling yen, even with inflation rising. The US/Japan rate differential, which continues to widen, will weigh heavily on the yen, and unilateral currency interventions are unlikely to stem this downturn. After the dramatic FOMC meeting, the US nonfarm payroll report, which will be released on Friday, is almost a footnote. The consensus stands at a modest 200,000 new jobs for October, below the 260,000 reading in September. Investors will be keeping a close eye on wage growth, which came in at a strong 5.0% in September and is expected to drop to 4.7%. With the December rate hike currently a toss-up between 0.50% and 0.75%, a stronger-than-expected NFP would raise the likelihood of a 0.75% and boost the dollar. Conversely, a soft reading would reinforce expectations of the Fed easing to 0.50%, which would be bearish for the dollar. USD/JPY Technical USD/JPY is testing resistance at 148.08. Above, there is resistance at 149.76 147.43 and 145.16 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen holds own against dollar, NFP next - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

Today's 75bp rate Bank of England rate hike is record-braking, but in contrary to Fed, BoE says that "terminal rate would be lower than what the markets have priced in"

Kenny Fisher Kenny Fisher 03.11.2022 15:27
The British pound is sharply lower today. In the European session, GBP/USD is trading at 1.179, down 1.83%. It has been a dreadful week for the pound, which has declined by 3.7%. Bank of England delivers 75 bp hike The Bank of England delivered as advertised, raising rates by a super-size 75 basis points today in a 7-2 vote. This was the sharpest rate hike since 1989 and brings the cash rate to 3.0%. The jumbo rate hike comes at a delicate time, with the BoE warning that the UK is in a “prolonged recession”. The BoE is projecting inflation will hit 11% before the end of the year and estimates that the recession could last two years. The Bank said that further rate hikes would be needed, but the terminal rate would be lower than what the markets have priced in, which is 5.2%. The BoE has not only witnessed a tumultuous period since the last meeting in September, but had to make its rate decision and forecasts without knowing government policy. A budget was supposed to be released last week but has been delayed until November 17th. Former Prime Minister Liz Truss’ ill-fated mini-budget led to a near financial crisis and forced the BoE to buy massive amounts of bonds. Thankfully, stability has returned and the BoE began selling bonds earlier this week. The BoE’s message to lower expectations about future rate hikes runs contrary to what Fed Chair Powell said at the Fed meeting on Wednesday. Powell warned that there were no signs that inflation had peaked and said that rates will peak at a higher level than previously expected. This hawkish message sent equity markets sharply lower and boosted the US dollar against all the major currencies except the Japanese yen. The double-barreled punch of a hawkish Fed and grim warnings from the BoE have sent the pound reeling close to 2% today. GBP/USD Technical There is resistance at 1.1346 and 1.1506 1.1118 and 1.1045 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD plunges on Powell, BOE warning - MarketPulseMarketPulse
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

Issues of country's trading partnets may influence New Zealand's economy, financial stability report finds

Kenny Fisher Kenny Fisher 03.11.2022 13:29
The New Zealand dollar is sharply lower today. In the European session, NZD/USD is trading at 0.5761, down 0.95%.   Fed raises rates 0.75%, says more to come   It was a roller-coaster day for the financial markets on Wednesday, courtesy of Federal Reserve Chair Jerome Powell. There were no surprised faces after the Fed raised rates by 75 basis points, as the move had been well-telegraphed by the Fed. Equity markets initially rose, but then took a tumble after Powell delivered a hawkish message in his post-meeting comments. Powell stated that there was no indication that inflation had peaked and that it was “premature” to talk about a pause in rate hikes.   At the same time, Powell signalled that the Fed would slow the pace of tightening in December, which is what investors wanted to hear. Inflation remains the Fed’s top priority, and the battle to curb inflation is far from over. Powell’s hawkish message to the markets sent the US dollar higher against all the major currencies, with risk currencies like the New Zealand dollar taking a tumble, as the kiwi has fallen to a 2-week low.   In New Zealand, the semi-annual financial stability report, released on Wednesday found that the country’s financial system remains resilient, but there were plenty of ‘buts’ that followed. The report noted that households and businesses were being hit hard by rising interest rates and it expected the sharp drop in house prices to continue. The report warned that the global economic outlook was uncertain and a downturn in any of New Zealand’s trading partners could lead to lower demand for exports, which would have a negative impact on the economy.   NZD/USD Technical   There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689       This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD dives as Fed pledges more tightening - MarketPulseMarketPulse
The EUR/USD Pair Is Showing A Potential For Bearish Drop

We could say European Central Bank doesn't have a wide range of options

Kenny Fisher Kenny Fisher 02.11.2022 15:30
EUR/USD is in positive territory today. In the European session, the euro is trading at 0.9905, up 0.32%. German, eurozone manufacturing PMIs fall The manufacturing sector in the eurozone continues to struggle, as PMIs in Spain, Italy and France slowed in October and remained in contraction territory, with readings below 50.0. German and eurozone Manufacturing PMIs also pointed to a downturn in manufacturing. Final Manufacturing PMI in Germany was revised to 45.1, down from 45.7, with the eurozone Manufacturing PMI coming in at 47.2, revised from 47.4. With winter approaching and an energy crisis looming in Western Europe, there’s little reason to expect any significant improvement in manufacturing data. The economic outlook remains uncertain, leaving in question what the ECB has in store at the December meeting. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to a staggering 10.7% in October, up from 9.9% in September. The ECB has little choice but to deliver an oversize rate hike in order to tackle double-digit inflation, and ECB President Lagarde said as much on Tuesday, warning that the central bank would use “all the tools we have available to bring inflation back to the ECB’s 2% target. The focus is on the Federal Reserve, which winds up its 2-day policy meeting later today. This would bring the benchmark rate to 4.0%. The question on the minds of investors is what happens next? The final meeting of the year is on December 14th and hopes that the Fed will downshift their tightening pace at that meeting have faded, as inflation has been stickier than the Fed expected. The markets will be listening closely to Fed Chair Powell’s comments today, hopeful for some insights into what the Fed has planned for December and early 2023. EUR/USD Technical EUR/USD faces resistance at 0.9956. Next, there is resistance at 1.0105 0.9870 and 0.9818 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro shrugs after soft manufacturing data - MarketPulseMarketPulse
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

NZD/USD - In New Zealand employment went up by over a percent (Q/Q)

Kenny Fisher Kenny Fisher 02.11.2022 14:44
NZD/USD is sharply higher today. In the European session, the New Zealand dollar is trading at 0.5883, up 0.71%. New Zealand employment data shines New Zealand posted a strong employment report for the third quarter, indicative of a robust labour market. Employment rose 1.3% QoQ, up from 0.0% in Q2 and above the consensus of 0.5%. The unemployment rate remained at 3.3%, just shy of the consensus of 3.2%. As wage inflation remained unchanged at 3.8% YoY, above the estimate of 3.4%. The labour market continues to suffer from staff shortages and capacity limits, which has contributed to spiralling inflation. This report will add to the pressure on the Reserve Bank of New  Zealand to continue to raise rates. The RBNZ has raised the cash rate to 3.50%, its highest since 2015. Still, the steep tightening has failed to curb inflation, and the central bank is likely to respond with a 75-basis point hike later this month, after five straight hikes of 50 basis points. Inflation in Q3 came in at 7.2%, and the RBNZ finds itself much further behind inflation than it had anticipated. The hot inflation report has raised expectations that the central bank will raise rates to a peak of  5.0% or even higher in early 2023. This leaves the RBNZ with little choice but to continue with oversize rate hikes, despite the spectre that further oversize rate hikes will tip the economy into a recession. The spotlight is on the Federal Reserve, which winds up its 2-day policy meeting later today. This would bring the benchmark rate to 4.0%. The question on the minds of investors is what happens next? The final meeting of the year is on December 14th and hopes that the Fed will downshift their tightening pace at that meeting have faded, as inflation has been stickier than the Fed expected. The markets will be listening closely to Fed Chair Powell’s comments today, hopeful for some insights into what the Fed has planned in the next few months. NZD/USD Technical There is resistance at 0.5906 and 0.5999 There is support at 0.5782 and 0.5689   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar jumps on solid jobs report - MarketPulseMarketPulse
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Inflation Remains The RBA’s Number One Priority

Kenny Fisher Kenny Fisher 02.11.2022 13:47
AUD/USD has posted strong gains today. In the European session, the Australian dollar is trading at 0.6424, up 0.48%. The Australian dollar rose as much as 0.80% after the Reserve Bank of Australia raised rates by 25 basis points on Tuesday, but couldn’t consolidate and ended the day virtually unchanged. Lowe urges caution The RBA rate hike raised the cash rate to 2.85%, its highest level since April 2013. The RBA has raised rates by a steep 275 basis points since May but has now downshifted, with small increases of 25 bp in October and November. The slower pace is noteworthy because inflation remains red-hot. Governor Lowe said on Tuesday that he expected to raise rates further in order to tame inflation, and acknowledged that the central bank was on a “narrow path” which required “striking the right balance between doing too much and too little.” Inflation remains the RBA’s number one priority, even if the price is a recession. At the same time, Lowe is well aware that soaring inflation and high interest rates are taking a toll on businesses and households, and Lowe seems eager to limit rate increases to 0.25% or even pause, if possible. The RBA’s rate policy will be data-dependent, and so far the economy has shown that it can withstand steep tightening. Still, there are signs of a slowdown, such as in manufacturing. The October PMI slowed to 49.6, down from 50.2. This marks a third successive month of flat results, with readings close to 50.0, which separates expansion from contraction. All eyes are on the Federal Reserve, which winds up its 2-day policy meeting later today. The Fed is widely expected to hike rates by 0.75%, which would bring the benchmark rate to 4.0%. The Fed is likely to raise rates to 5% early next year, which means the tightening cycle will continue into 2023. Investors will be listening closely to Fed Chair Powell’s comments, looking for clues as to whether the Fed plans to ease in December, or will we see another 75 bp hike. . AUD/USD Technical AUD/USD continues to test resistance at 0.6403. Above, there is resistance at 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Thursday's Bank's of England decision may be record-breaking!

Thursday's Bank's of England decision may be record-breaking!

Kenny Fisher Kenny Fisher 31.10.2022 21:03
After a splendid week, in which GBP/USD jumped 2.8%, the pound has reversed directions and is sharply lower today. In the North American session, GBP/USD is trading at 1.1489, down 1.07% on the day. Markets eye Bank of England The Bank of England is on track to deliver its largest interest rate hike since 1989 on Thursday. The markets are expecting a rate increase of 75 basis points, which would bring the cash rate to 3 per cent. There had been talk of a supersize full-point increase earlier in the week, but the change of Prime Minister and BoE bond purchases have pushed down borrowing costs. The driver behind another oversize rate hike, is of course, soaring inflation. Headline inflation hit 10.1% in September, up from 9.9% in August. The BoE stated in October that it expects inflation to hit a staggering 11% before its peaks. Such inflationary pressures leave the BoE little choice but to remain aggressive until inflation shows signs of easing. A complication for the BoE is the delay in the budget, which was supposed to be released prior to this week’s meeting but has been pushed off to November. The BoE will now have to publish economic forecasts without the benefit of knowing the details of the government’s fiscal plan. The latest forecasts are expected to show that the economic outlook continues to deteriorate and that the recession will be worse than previously anticipated. The Federal Reserve will also be in the spotlight this week, with a policy meeting on Wednesday. On Friday, the Fed’s preferred inflation indicator, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That virtually cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. The US economy is showing signs of slowing down after a steady diet of oversized rate hikes and the global economic environment remains weak. Still, the Fed is committed to curbing inflation, even if the price is a recession. GBP/USD Technical There is resistance at 1.1658 and 1.1755 GBP/USD is testing support at 1.1506. Below, there is support at 1.1367 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Sterling sinks at start of week - MarketPulseMarketPulse
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Kenny Fisher comments on Australian dollar to US dollar - 31/10/22

Kenny Fisher Kenny Fisher 31.10.2022 20:56
AUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down 0.24%. Will RBA deliver a 0.50% hike? The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank’s focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before – the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday –  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed’s preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. AUD/USD Technical AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends losses ahead of RBA meeting - MarketPulseMarketPulse
Analysis Of The AUD/USD Commodity Currency Pair's Price

It Tricky To Predict The Extent Of The Rate Hike By The RBA

Kenny Fisher Kenny Fisher 31.10.2022 17:47
AUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down o.24%. Will RBA deliver a 0.50% hike? The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank’s focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before – the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday –  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed’s preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. . AUD/USD Technical AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Things May Soon Get Better In The Chinese Markets

On Friday we learned that we can't expect any move of Bank of Japan "anytime soon" - as Governor Kuroda said

Kenny Fisher Kenny Fisher 31.10.2022 12:32
USD/JPY ended last week with strong gains and the uptrend has continued today. In the European session, the yen is trading at 148.23, up 0.51%. Yen slips as BOJ stays the course All eyes were on the Bank of Japan rate meeting, which wrapped up on Friday. It was business as usual for the BoJ, which maintained its dovish stance. Governor Kuroda said that the BoJ had no plans to raise rates or shift policy “anytime soon”. The BoJ has maintained an ultra-loose policy for years, but there has been speculation that the Bank might make some changes, as the yen has tumbled and inflation is higher than it has been in years. Kuroda’s remarks poured cold water on any such thoughts, as the BoJ remains focused on supporting the weak Japanese economy by means of an ultra-accommodative policy. Clearly, the BoJ has no interest in raising rates to support the yen, although Kuroda paid the usual lip service to the yen’s descent, saying that its rapid fall was “negative and undesirable”. Investors were not impressed and the yen fell close to 1% on Friday. In the US, the Fed is widely expected to raise rates by 0.75% on Wednesday. Inflation has been falling slightly, but core inflation has been rising, which has put to rest hopes that solid data might induce the Fed to ease up on tightening. The Core PCE index, the Fed’s preferred inflation gauge, rose 5.1% in September, up from 4.9% in August and just shy of the consensus of 5.2%. The Fed continues to view inflation risks as weighted to the upside and is unlikely to ease rates unless it is satisfied that inflation has peaked.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen falls to 148 - MarketPulseMarketPulse
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The Recent Interest Rate Hike By The Bank Of Canada Was Deemed Dovish

Kenny Fisher Kenny Fisher 28.10.2022 14:41
The Canadian dollar is lower today. In the European session, USD/CAD is trading at 1.3617, up 0.39%. Markets eye Canada’s GDP The week wraps up with Canada’s GDP for August. The economy is expected to have expanded by 0.1%, which would be unchanged from July. The economy is likely heading into a recession, and Finance Minister Chrystia Freeland stated recently that the coming months would be a “challenging economic time.” The government’s key priority is curbing high inflation, which has eased slightly. In September, inflation fell to 6.9%, down from 7.0% in August. Still, this was higher than the consensus of 6.7%, as soaring food prices kept inflation from falling further. The good news is that inflation appears to have peaked from the June level of 8.1%, which marked a 40-year high. The bad news is that core inflation was unchanged at 5.3% in September, a sign that inflation remains sticky, despite the Bank of Canada’s aggressive rate-hiking cycle. High inflation pushed the BoC to deliver another oversize rate on Wednesday, but the 0.50% hike was considered dovish, as the consensus stood at 0.75%. The cash rate is now at 3.75%, its highest level since 2008. Although inflation is far from being beaten, Canada’s economy is clearly slowing down as a result of the steep increase in rates, and the BoC is easing up on the rate pedal just a bit, in the hopes of guiding the economy to a soft landing and avoiding a recession. High rates are weighing on households and businesses and the BoC is concerned that further oversize rates may pose a risk to financial stability. The US releases Personal Income and Spending data later today as well as the Fed’s preferred inflation indicator, the Core PCE Price Index. The index is expected to rise to 5.2%, up from 4.9%, but I don’t expect today’s numbers to change the Fed’s plan to raise rates by 0.75% next week. . USD/CAD Technical There is support at 1.3656 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The USD/JPY Price Reversed From The Lower Limit

BOJ Governor Kuroda Has Insisted That Will Not Consider Tightening Policy

Kenny Fisher Kenny Fisher 28.10.2022 10:42
USD/JPY is in positive territory today. In the European session, the yen is trading at 146.94, up 0.47%. BoJ maintains policy All eyes were on the Bank of Japan, which wrapped up a crucial 2-day policy meeting on Friday. The meeting came just days after Japan’s Ministry of Finance (MOF) intervened in the currency markets after the yen had fallen close to the 152 line, a new 32-year low. Finance Minister Shunichi Suzuki would not confirm that the MOF had intervened for the second time in two months, but issued a blunt warning, declaring that the government was “facing off with speculators via markets.” This set the stage for today’s BOJ meeting. In the end, it was business as usual, as the Bank maintained ultra-low interest rates and kept its dovish guidance. The BoJ remains an outlier with its loose policy, as most other major central banks are tightening in order to curb inflation. What was noteworthy was that the central bank revised upwards its inflation forecast for fiscal 2023. Headline inflation was raised to 1.6%, up from 1.4% in July, and core inflation to 2.9%, up from 2.3% in July, with the BoJ warning that risks were skewed to the upside. The Bank also lowered its growth forecast for fiscal 2022 and 2023. Inflation has pushed above the BoJ’s target of 2%, but BOJ Governor Kuroda has insisted that he will not consider tightening policy until it is clear that inflation is sustainable. There was a hint from the Bank that this may not be so far off, as today’s BOJ quarterly report, noted that rising inflation is expected to “lead to sustained price rises accompanied by wage gains”. The yen has paid the price for the BoJ’s ultra-loose policy, tumbling some 20% against the dollar this year. With the BoJ making it clear that it won’t be throwing any lifelines to the yen, the currency will be under pressure from the widening US/Japan rate differential, unless the MoF continues to intervene in the currency markets. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
New Zealand - Business confidence dropped, inflation in Q3 hit 7.2% (YoY) | RBNZ is expected to hike the rate by 75bp

New Zealand - Business confidence dropped, inflation in Q3 hit 7.2% (YoY) | RBNZ is expected to hike the rate by 75bp

Kenny Fisher Kenny Fisher 27.10.2022 21:09
NZD/USD continues to gain ground and is higher for a third straight day. In the North American session, the New Zealand dollar is trading at 0.5865, up 0.60%. Business confidence drops The ANZ Business Outlook Survey for October, released yesterday, painted a grim picture of the health of the New Zealand economy. Business confidence fell to -42.7, down from -36.7 in September. The last time that business confidence was in positive territory was in May 2021, meaning that the lack of any optimism by businesses is nothing new. What does give cause for worry is the rise in inflation expectations, which rose to 6.13%, up slightly from 5.98% in September. The uptick in inflation expectations is clearly linked to the rise in inflation for Q3, which came in at 7.2% YoY in Q3, after a 7.3% gain in Q2. This was higher than the consensus of 6.6%. On a quarterly basis, CPI jumped 2.2%, up from 1.7% and much higher than the consensus of 1.6%. This nasty surprise means that the Reserve Bank of New Zealand will likely respond with an oversize hike of 0.75% at the November 23rd meeting. The cash rate is currently at 3.5% and the hot inflation report has analysts projecting that the cash rate won’t peak until 5.0% or even higher in early 2023. It’s difficult to see how such a steep rate-tightening cycle will not trigger a recession, but the Reserve Bank appears to have little choice but to remain aggressive, given that the Bank is further behind inflation than it had expected. What is especially troubling about inflation is that it remains broad-based and core inflation continues to move higher. In the US, third-quarter GDP roared back at 2.6%, following two consecutive quarters of negative growth, which technically met the definition of a recession and garnered lots of headlines. This was higher than the 2.4% consensus and indicates that the economy is in good shape. What is less encouraging is that consumer spending has slowed, with personal consumption rising by 1.4%, down from 2.0% in Q2. NZD/USD Technical NZD/USD is testing resistance at 0.5835. Next, there is resistance at 0.5912 There is support at 0.5774 and 0.5616 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends rally - MarketPulseMarketPulse
Saxo Bank Podcast: The Bank Of Japan Meeting And More

Bank's of Japan policy may be considered as not that convincing. This week's meetings play a vital role

Kenny Fisher Kenny Fisher 27.10.2022 16:29
USD/JPY is showing little movement today, after gaining 1% on Wednesday. In the European session, USD/JPY is trading at 146.15, down 0.16%. Earlier in the day, USD/JPY touched a low of 146.11, its lowest level since October 7th. Yen is on a roll, but for how long After falling close to the 152 line last Friday, the Japanese yen has turned things around. Japan’s Ministry of Finance (MOF) intervened on Friday and Monday, in what has been described as “stealth intervention” as the MOF has refused to comment.  The MOF has engaged in sharp rhetoric against the yen’s prolonged slide, and Finance Minister Shunichi Suzuki has been blunt, saying that the government was “facing off with speculators via markets.” The currency intervention appears to have worked, with the yen improving to around 146. This latest round of interventions is much larger than the one in September, which only slowed the yen’s decline for a few days. Still, I remain sceptical about whether unilateral action such as intervention is the answer to the yen’s woes. Japan has maintained a monetary policy mix that is contradictory and likely unsustainable. The Bank of Japan has kept its ultra-loose policy, in order to support the fragile economy. This has meant intervening in the fixed-income markets in order to cap yields on 10-year JGB at 0.25%. The price for this policy has been a tumbling yen, as the US/Japan rate differential continues to widen as the Fed continues its aggressive tightening. The MOF has thrown a lifeline to the yen by intervening, but it’s far from clear that this will be an effective policy. This sets the stage for a key Bank of Japan meeting today and Friday, and the meeting could well be a “do or die” moment for the Japanese yen. If the BoJ’s message to the markets is business as usual, the yen will likely be under pressure, and the ball could revert back to the MOF and the possibility of further intervention if the yen sags and approaches the 150 line. USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen hits 3-week high as BOJ meets - MarketPulseMarketPulse
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Bank of Canada didn't go for 75bp, but... if Fed do so, the rate differential will be larger

Kenny Fisher Kenny Fisher 27.10.2022 16:12
The Canadian dollar is in negative territory today. In the European session, USD/CAD is trading at 1.3607, up 0.39%. Bank of Canada surprise The Bank of Canada unleashed a dovish surprise on Wednesday as it raised rates by 0.50%, below the consensus of a 0.75% hike. This follows the 0.75% hike in September and brings the cash rate to 3.75%, its highest level since 2008. The BoC acknowledged that there is no “meaningful evidence” that inflation is falling and said that it still expects to have to increase rates, given that inflation remains high. This raises the question of why did the BoC not press the pedal to the floor and deliver a 0.75% hike if inflation remains persistently high? The answer lies in the growth forecasts that the BoC released at the meeting. GDP for Q4 2022 is expected to slow to 0.5% YoY, while GDP in 2023 has been slashed to 0.9%, down from the previous estimate of 1.7%. The Bank said that the economy could produce two quarters of negative growth. If this does happen, the economy would technically be in a recession. The economy is clearly slowing down as a result of the steep increase in rates, and the BoC is easing up, in the hopes of guiding the economy to a soft landing and avoiding a recession. High rates are weighing on households and businesses and the BoC may be concerned that further oversize rates may pose a risk to financial stability. The BoC’s 0.50% hike could pose a headwind for the Canadian dollar. If the Federal Reserve raises rates by 0.75%, as is widely expected, this will lead to a widening in the US/Canada rate differential. The Canadian dollar has taken advantage of recent weakness in the US dollar and has risen about 2 per cent since October 17th. USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar dips after BoC's dovish hike - MarketPulseMarketPulse
The EUR/USD Pair Is Showing A Potential For Bearish Drop

We could say European Central Bank has three variants to choose from today

Kenny Fisher Kenny Fisher 27.10.2022 12:06
EUR/USD is in a holding pattern ahead of today’s ECB rate meeting. In the European session, the euro is trading at 1.0068, down 0.16%. ECB projected to hike by 0.75% The ECB holds its policy meeting later today, amidst difficult economic conditions in the eurozone. Inflation jumped to 9.9% in September, up sharply from 9.1%. The manufacturing and services sectors are in decline and confidence levels are low. The markets have priced in a 0.75% hike and there has even been talk of a jumbo full-point increase. Could the ECB surprise with a lower-than-expected hike of 0.50%? Earlier this week, the Bank of Canada and Reserve Bank of Australia both delivered smaller hikes than expected, at 0.50% and 0.25%, respectively.  The message from both central banks is that they are close to ending their rate-tightening cycles and expect inflation to peak in the next several months. Read next: ECB is expected to hike by 75bp. USD is not that powerful at the moment, and it seems that a less hawkish move may be on the cards| FXMAG.COM Will the ECB follow suit? It’s possible but unlikely. The ECB only entered the tightening game in July, and the current benchmark of 1.25% remains out-of-sync with inflation, which is close to double-digits and the ECB needs to be aggressive if it hopes to beat inflation. The benchmark rates are much higher in Canada (3.75%) and Australia (2.60%) and have slowed economic growth, while the ECB’s low benchmark rate has not had the same effect. Still, the weak eurozone economy could tip into recession as a result of sharp rate hikes, which means that a 0.50% hike cannot be completely discounted. We can expect some movement from EUR/USD in response to the ECB decision – an increase of 0.75% or 1.00% will be bullish for the currency, while a 0.50% hike would disappoint investors and likely send the euro lower. EUR/USD Technical There is resistance at 1.0095 and 1.0154 0.9924 and 0.9814 are the next support levels   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD eyes ECB rate decision - MarketPulseMarketPulse
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Worrying signs from German economy | ECB decides on interest rate shortly. Euro may rise if Lagarde tease next hikes.

Kenny Fisher Kenny Fisher 26.10.2022 22:21
EUR/USD continues to power forward and has breached the parity line for the first time since September 20th. The euro is red hot, having gained 2.1% this week, as the US dollar has hit a bump in the road and is lower against all the major currencies. In the North American session, EUR/USD is trading at 1.0069, up 1.02%. The German economy, the largest in the eurozone, continues to show signs of weakness. September PMIs pointed to contraction in manufacturing and business activity, and these are unlikely to rebound as the Ukraine war continues and an energy crisis looms, with winter close by. The Ifo Business Confidence index fell for a fourth straight month in October and GfK Consumer Sentiment, which will be released tomorrow, is expected to remain deep in negative territory. ECB expected to hike by 0.75% The ECB meets on Thursday, with policy makers having to contend not only with a gloomy economic outlook in the eurozone, but also with spiralling inflation, with no sign of a peak. Eurozone CPI jumped to 9.9% in September, up sharply from the 9.1% rise in August. The markets have priced in a supersize 0.75% hike, which would bring the cash rate to 2.0% and investors will be looking for the Bank to declare its commitment to bring inflation back to the 2% target. A jumbo full-point increase remains a slight possibility, given that inflation is close to double-digits. Investors will be monitoring the follow-up press conference, and the euro’s direction tomorrow could depend on ECB President Lagarde’s message to the markets. If Lagarde signals that further rate hikes are coming, the euro will likely gain ground. Conversely, a dovish stance from Lagarde could cut short the euro’s rally. EUR/USD Technical EUR/USD has broken above 0.9846 and is testing resistance at 0.9985. The next resistance line is 1.0095 There is support at 0.9753 and 0.9643 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD punches above parity, ECB next - MarketPulseMarketPulse
Craig Erlam and Jonny Hart talk UK Autumn Statement and more

New UK PM, Rishi Sunak, delays publication of budget

Kenny Fisher Kenny Fisher 26.10.2022 22:16
The pound has extended its gains and has gained 2.3% this week. In the European session, GBP/USD is trading at 1.1581, up 0.75% on the day. Sunak delays budget Incoming UK Prime Minister Rashi Sunak faces profound challenges on the economic front. Sunak will be looking to settle things down after a dizzying pace of developments. He is the third prime minister in just two months, after Liz Truss lasted just 44 days in office. Truss’ mini-budget, which included sharp tax cuts was savagely criticised and almost triggered a financial crisis. Sunak will undoubtedly be more cautious and has postponed the government’s annual budget from October 31st to November 17th. The delay gives Chancellor Jeremy Hunt some time to figure out how to address a budget deficit of around 40 billion pounds. Hunt will want to ensure that the budget does not trigger a negative reaction from nervous markets after Truss’s ill-fated mini-budget shook the UK’s credibility in the financial markets and sent GBP/USD to a record low. The pound wasn’t fazed by the budget delay, as investors appear willing to give Sunak a bit of breathing room as he takes over as Prime Minister. For the BoE, which meets next week, the budget delay complicates matters. The Bank will now have to publish economic forecasts without the benefit of knowing the details of the government’s fiscal plan. The delay has raised the likelihood of a full-point hike to 37%, with a 63% likelihood of a 75 bp increase. The BOE remains committed to taming inflation, which has hit 10% in a weak economy that may already have tipped into recession. GBP/USD Technical GBP/USD is testing resistance at 1.1558. The next resistance line is 1.1644 There is support at 1.1471 and 1.1328 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound surges higher, UK budget delayed - MarketPulseMarketPulse
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Expected 75bp Bank of Canada rate hike will remind us of 2008

Kenny Fisher Kenny Fisher 26.10.2022 13:22
The Canadian dollar has extended its gains today, as the US dollar has retreated against all the major currencies. In the European session, USD/CAD is trading at 1.3547, down 0.44%. Earlier, USD/CAD dropped as low as 1.3512, its lowest level in three weeks. Read next: NASDAQ Futures Down More Than 1.5%, Xi Jinping Pushes Out Youth League Members From Politburo, Spotify Users Up 20% YoY| FXMAG.COM Bank of Canada likely to remain hawkish All eyes are on the Bank of Canada, which will meet later today. The markets have priced in a 75 basis point hike, which would be a repeat of the September rate increase. The Bank has embarked on a steep rate tightening cycle, having hiked 300 points since March. A 75 bp move today will bring the benchmark rate to 4 per cent, its highest level since the 2008 global financial crisis. Of course, the economic picture is not nearly as grim as it was then, but inflation has been more stickier than expected, and the BoC has declared that its first priority is to curb inflation. In September, headline inflation ticked lower to 6.9%, down from 7.0%, but core inflation rose to 6.0%, up from 5.8%. Until this report, the markets had been expecting the BoC to deliver a 50 bp hike at tomorrow’s meeting, but the September inflation data has raised the likelihood that policy makers will come out with guns blazing and increase rates by 75 bp. At the same time, there is an outside chance that the Bank will opt for a 50 bp hike, mindful that higher rates are weighing heavily on consumers and businesses and a recession could be lurking just around the corner. With inflation driving the Bank of Canada’s rate policy, I would not be surprised to see some volatility from the Canadian dollar in the North American session.   USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines       This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD hits 3-week high ahead of BoC - MarketPulseMarketPulse
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Australian inflation hit 7.3%, what triggers thinking of a 50bp RBA rate hike

Kenny Fisher Kenny Fisher 26.10.2022 13:15
AUD/USD is sharply higher for a second straight day. In the European session, the Australian dollar is trading at 0.6484, up 1.412. After losing over 1% on Monday, the Aussie has roared back with gains of over 2.7%. Australia’s inflation jumps to 7.3% Australia’s inflation report is the driver behind today’s gains, as third-quarter inflation was stronger than expected. Headline CPI jumped 7.3%, its highest level since 1990. This was way up from 6.1% in Q2 and above the consensus of 7.0%. The key core inflation indicator climbed to 6.1%, up from 4.9% and above the consensus of 5.6%. The unexpected rise in inflation upsets the apple cart for the RBA, which lowered its October rate hike to 0.25%, after four straight increases of 0.50%. The RBA would have liked to continue with a small hike at next week’s meeting and there has even been talk of a pause in rate hikes. The hot inflation report changes this thinking dramatically. It’s difficult to see how the RBA can ignore the jump in inflation, which is a painful reminder that inflation is yet to peak. The central bank will likely have to respond with a 0.50% increase, and the Australian dollar has soared today as a result. As the inflation report is the last key release before next week’s meeting, the RBA won’t have any additional data which could temper the need for a 0.50% hike. The RBA will have little choice but to continue with oversize rates until inflation is beaten, which could take a while yet. The central has projected that inflation will hit 7.5%, with some analysts expecting it to rise closer to 8.0%. That means that the cash rate, which is currently at 2.6%, is unlikely to peak until it rises to 3.5% or slightly higher. AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 .   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends rally as inflation outperforms - MarketPulseMarketPulse
bybit-news1

Bank of Canada may raise the interest rate by 75bp. Soon US Dollar will be most probably helped by the same move of Fed

Kenny Fisher Kenny Fisher 25.10.2022 19:57
The Canadian dollar is showing some strength in today’s North American session. USD/CAD is trading at 1.3649, down 0.41%. Bank of Canada expected to hike rates by 0.75% This week’s calendar is unusually light, with only two events out of Canada. Both releases, however, could have a significant effect on the movement of the Canadian dollar. The Bank of Canada will make its rate announcement on Wednesday, with the August GDP release on Friday. What can we expect from the BoC? The Bank has not been shy about raising rates, having hiked some 325 points this year. Similar to the case in the United States, inflation has proven to be stickier than anticipated, as the sharp rate-hike cycle is yet to cause a peak in inflation. In September, headline inflation ticked lower to 6.9%, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn and rose unexpectedly to 6.0%, up from 5.8% and above the forecast of 5.6%. Until a couple of weeks ago, the markets had been expecting the BoC to deliver a 0.50% hike at tomorrow’s meeting, but the September inflation data has raised the likelihood that policy makers will come out with guns blazing and increase rates by 0.75%. This would bring the cash rate to an even 4.0% and would be the highest rate level in the G-7. The steep rise in rates may not have curbed inflation, but it has caused significant economic pain to households and businesses and raises the likelihood of a recession. The BoC would love to ease up on oversize rate hikes but has made clear that inflation is public enemy number one and until inflation shows signs of peaking, it will continue to raise rates. A 0.75% hike will help the Canadian dollar keep pace with its US cousin, as the Federal Reserve is almost certain to deliver a 0.75% hike next week. USD/CAD Technical USD/CAD is testing support at 1.3656. Below, there is support at 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar rises, markets eye BoC - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

Sunak is ahead of significant obstacles, but him taking up the position seems to be in favour of markets

Kenny Fisher Kenny Fisher 25.10.2022 18:24
The pound has posted sharp gains today. In the European session, GBP/USD is trading at 1.1353, up 0.66%. Will Sunak be up to the job? Rashi Sunak is the new Prime Minister of the UK, the latest move in what has been a dizzying pace of political developments in the UK. Lizz Truss managed to stick around 10 Downing Street for a mere 44 days, after a mini-budget with unfunded tax cuts was a disaster and forced her to pack her bags. Sunak, a former finance minister, should fare better, but all agree that he faces an uphill battle in righting the leaky economy. Given all that has transpired over the past few weeks, if Sunak can re-establish a feeling of normalcy in the government, that will be a modest achievement. The challenge for Sunak will be immense. Inflation is running at 10% and the weak UK economy may already be in recession. The most recent data shows consumer spending, manufacturing and business activity on the decline. The cost-of-living crisis is getting worse and real earnings are falling, which could lead to worker unrest. Sunak has shown he is a capable politician but will need to keep the Conservative party united behind him if he is to succeed, with the opposition hoping they can capitalize on the political havoc and force a general election. The markets have reacted favorably to Sunak taking over as Prime Minister, as the British pound and UK gilts are higher today. Next week will be anything but dull, as the government is scheduled to deliver a budget on October 31st and the Bank of England holds its policy meeting on November 3rd. With inflation showing no signs of peaking, the BoE is widely expected to deliver an oversize interest rate in order to curb inflation.  A 0.75% hike is most likely, although there is an outside chance of a supersize full-point increase. GBP/USD Technical GBP/USD tested resistance at 1.1373 earlier in the day. The next resistance line is 1.1471 There is support at 1.1266 and 1.1093 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD jumps as Sunak takes the reins - MarketPulseMarketPulse
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

A Brutal Start To The Week For The Australian Dollar (AUD)

Kenny Fisher Kenny Fisher 25.10.2022 14:30
AUD/USD has steadied today after two days of sharp swings. In the European session, the Australian dollar is trading at 0.6317, up 0.09%. It was a brutal start to the week for the Australian dollar, which sank 1.1 per cent on Monday. The manufacturing and services PMIs both slowed in October, pointing to weaker economic activity. Manufacturing expanded but softened, as the Manufacturing PMI slowed to 52.8, down from 53.5. The Services PMI declined to 49.0, down from 50.6 points and its lowest level since September 2021. The decline in business activity is attributable to the continuing rise in interest rates and economic uncertainties. Australia’s labour market remains strong, but the steady diet of rate increases has slowed economic activity. Australia’s CPI expected to climb Australia releases CPI for Q3 on Thursday. The markets are bracing for an uptick in inflation. Headline CPI is expected to rise to 7.0%, up from 6.1% in Q2. Core inflation is projected to rise to 5.6%, up from 4.9%. The RBA says inflation will peak in Q4 2022 at 7.5% but will not fall back to the RBA’s 2% target until 2024. Tomorrow’s inflation report is the last key event before the RBA meets next week, which gives the inflation data added significance and could have a strong impact on the Australian dollar. The RBA surprised the markets with a 0.25% hike earlier this month, which was smaller than expected. The RBA appears to have completed its front-loading, which saw the central bank deliver four straight increases of 0.50%. The markets are expecting another 0.25% hike at the meeting next week, with the RBA hopeful that inflation will start to ease shortly without the need for oversize rate hikes, which would make a recession more likely. . AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 . This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Japan's Finance Ministry Is Trying To Encourage Speculators To Bet Against The Japanese Yen (JPY)

Kenny Fisher Kenny Fisher 25.10.2022 13:27
The Japanese yen is almost unchanged today, after being whipsawed over the past two sessions. In the European session, USD/JPY is trading at 1.48.93, down 0.06%. It’s been a roller-coaster ride for the yen, as USD/JPY rose 1.7% on Friday and declined by 0.9% on Monday. It’s clear that the driver behind this volatility has been intervention by Japan’s Ministry of Finance (MOF), although officials in Tokyo are keeping mum. The MOF intervened in late September, at a cost of around 2.8 trillion yen ($19.8 billion). Friday’s intervention was about double the size, and Monday was likely about the same. Th