fed fomc

Summary:

  • The Euro continues to be one of the more susceptible currencies as many headwinds build up.
  • Will Russia resume gas supply to Noord Stream?
  • Will the BoC policy decision offer CAD support?
  • BoJ would do whatever is necessary to help the economy grow.

Read next: Recession Fears Are Affecting Brent Crude Prices, Silver Price vs A Hawkish Federal Reserve, Corn At 8-Week Highs 

US Dollar continues to strengthen across the board

The market is reflecting mixed signals for this currency pair. On Monday the Noord Stream, Germany’s biggest pipeline closed for annual maintenance until the 21st July. The maintenance time period has increased speculation on whether or not Russia will resume gas flows after the maintenance has been completed. The Euro continues to be one of the more susceptible currencies as many headwinds build up. The European Central Bank (ECB) is still on track to raise interest rates (at least 25 bps) at their next meeting later on in July.

The US Dollar

The 10 Public Companies With the Biggest Bitcoin Portfolios

FOMC helped Cryptos to hold important levels

Alex Kuptsikevich Alex Kuptsikevich 16.12.2021 08:33
Over the past 24 hours, total crypto market capitalisation rose by 2.1% to $2.24 trillion, recovering to the levels at the start of the week. Yesterday, the figure was close to the $2.0 trillion mark, but demand for risk assets recovery supported cryptos, providing around a 12% rise from the bottom to peak in the following four hours. On balance, the cryptocurrency fear and greed index reclaimed another point, rising to 29. The bulls seem to be putting in the necessary minimum effort to keep the positive picture on the charts of the major cryptocurrencies. But there isn’t much more to do now. Bitcoin is up 1.2% in the last 24 hours, trading at $48.7K. The bulls managed to push BTCUSD into the area above the 200-day moving average but are not getting away from it. Etherereum is adding 3.5%, clinging to the $4K. The strong market reaction after the FOMC pushed ETHUSD above this round level, but we saw some selling pressure in the morning. Short-term traders should closely watch whether the former support has turned into resistance. The pair of major cryptocurrencies appear to have been supported by a general increase in risk appetite in the markets following the FOMC announcements. However, investors should keep in mind that this upward move in traditional financial markets was more of a “buy the rumours, sell the facts” style reaction. Fundamentally, news about the faster QE tapering and greater willingness to raise rates has already been priced in during previous weeks. But at the same time, long-term investors should not lose sight of the natural tightening of financial conditions because of these moves, which will slowly but persistently reduce demand for risky assets. The main risk for the crypto market is that we have seen a monetary regime switch in the last couple of months, which promises to take some of the demand for crypto away..
Article by Decrypt Media

Dollar’s 2021 Rally – Over or Just Resting?

Przemysław Radomski Przemysław Radomski 17.12.2021 11:21
With the USD Index suffering a ‘sell the news’ event on Dec. 15, the FOMC’s hawkish Summary of Economic Projections wasn’t enough to uplift investors’ optimism. However, while the dollar day traders performed their usual disappearing act, the greenback’s fundamentals were bolstered by the FOMC’s median projection of three rate hikes in 2022. What’s more, while the USD Index initially dipped below 96 and fell below its rising resistance line (which is now support) on Dec. 16, buyers stepped in, and the USD Index bounced. For context, a short-term correction is possible. However, the important point is that the USD Index is likely on a medium-term path to ~98. And with gold, silver and mining stocks often moving inversely to the U.S. dollar, their optimism may disappear over the next few months. Please see below: For context, I warned that a consolidation was likely overdue by highlighting the USD Index’s overbought RSI (Relative Strength Index) readings with the red arrows above. Conversely, the blue vertical dashed lines above demonstrate how the USD Index often bottoms near the end of each month, and rallies often follow. And while the current consolidation may need some more time to run its course, higher highs should materialize over the medium term. To explain, after the USD Index recorded sharp rallies in June and July, consolidation phases unfolded before the uptrends continued. And while the secondary uprisings occurred at more moderate paces, the USD Index still managed to make new highs. As a result, ~98 should materialize during the winter months. Furthermore, if the forecast proves prescient, the USD Index’s strength will likely usher gold back to its previous 2021 lows. Adding to our confidence (don’t get me wrong, there are no certainties in any market; it’s just that the bullish narrative for the USDX is even more bullish in my view), the USD Index often sizzles in the summer sun and major USDX rallies often start during the middle of the year. Summertime spikes have been mainstays on the USD Index’s historical record and in 2004, 2005, 2008, 2011, 2014 and 2018 a retest of the lows (or close to them) occurred before the USD Index began its upward flights (which is exactly what’s happened this time around). Furthermore, profound rallies (marked by the red vertical dashed lines below) followed in 2008, 2011 and 2014. With the current situation mirroring the latter, a small consolidation on the long-term chart is exactly what occurred before the USD Index surged in 2014. Likewise, the USD Index recently bottomed near its 50-week moving average; an identical development occurred in 2014. More importantly, though, with bottoms in the precious metals market often occurring when gold trades in unison with the USD Index (after ceasing to respond to the USD’s rallies with declines), we’re still far away from that milestone in terms of both price and duration. Again, the recent move higher in the USD Index doesn’t necessarily apply in the case of the above rule, as it was not the strength of the USD but the weakness in the euro that has driven it. Likewise, with the USD Index now approaching its long-term rising support line (which is now resistance), a rally above the upward sloping black line above would invalidate the prior breakdown and support a move back above 100. Also, please note that the recent medium-term rally has been calmer than any major upswing witnessed over the last 20 years, where the USD Index’s RSI has hit 70. I marked the recent rally in the RSI with an orange rectangle, and I did the same with the second-least and third-least volatile of the medium-term upswings. The sharp rallies in 2008 and 2014 were of much larger magnitudes. And in those historical analogies, the USD Index continued its surge for some time without suffering any material corrections. As a result, the short-term outlook is more of a coin flip. However, the medium-term outlook remains profoundly bullish, and gold, silver, and mining stocks may resent the USD Index’s forthcoming uprising. Just as the USD Index took a breather before its massive rally in 2014, it seems that we saw the same recently. This means that predicting higher gold prices (or the ones of silver) here is likely not a good idea. Continuing the theme, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the wind remains at the dollar’s back. Furthermore, dollar bears often miss the forest through the trees: with the USD Index’s long-term breakout gaining steam, the implications of the chart below are profound. And while very few analysts cite the material impact (when was the last time you saw the USDX chart starting in 1985 anywhere else?), the USD Index has been sending bullish signals for years. Please see below: The bottom line? With my initial 2021 target of 94.5 already hit, the ~98 target is likely to be reached over the medium term (and perhaps quite soon), mind, though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, the EUR/USD accounts for nearly 58% of the movement of the USD Index, and the relative performance is what really matters. In conclusion, gold, silver and mining stocks pulled rabbits out of their hats on Dec. 16. However, as 2021 has demonstrated, their daily tricks often lose their allure fairly quickly. Moreover, while it’s uncommon for magicians to reveal their secrets, the precious metals tip their hands time and time again. As a result, the USD Index’s daily weakness was likely a corrective downswing, while the precious metals daily strength was likely a corrective upswing. And with a reversal of fortunes likely to occur over the medium term, gold, silver and mining stocks may lose their magic touch. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

FOMC Meeting Minutes Offer Support To The US Dollar (EUR/USD), Improved Market Attitude Favoured The GBP On Thursday (EUR/GBP, GBP/USD), Market Awaits RBA Monetary Policy - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 26.05.2022 11:58
Summary: Investor confidence in both the Euro and US Dollar causing mixed sentiment for the EUR/USD currency pair. GBP beats Euro and USD despite poor PMI data released on Tuesday. RBA June policy meeting will determine the AUD strength Read next: Hawkish ECB Bodes Well For The Euro, UK PMI Data Disappoints (EUR/GBP), Hawkish SNB Offers Swiss Franc Still Support (USD/CHF), AUD/JPY - Good Morning Forex!  Mixed sentiment for the EUR/USD The market is reflecting mixed market signals for this major currency pair. In the Wake of the FOMC meeting minutes, the US Dollar has found some stability. The market can expect a 50bp interest rate hike at the next two Fed meetings, with a possible pause in the hikes later on in the year. The Euro is also on an upward streak with the strong possibility of the European Central Bank (ECB) tightening monetary policy in July. EUR/USD Price Chart GBP strengthens The market is reflecting bearish market sentiment for this currency pair. On Thursday the GBP recovered some of its losses against the Euro after the UK PMI report on Tuesday. Improved market attitude acted in favour of the Pound Sterling against the Euro on Thursday. However, the outlook for the GBP still looks challenging going forward with an overly cautious Bank of England, high-inflation and global risk aversion. EUR/GBP Price Chart GBP/USD reflecting bullish sentiment Market sentiment for this currency pair is reflecting bullish signals. On Thursday the GBP recovered some of its losses against the US Dollar. Improved market attitude acted in favour of the Pound Sterling against the US Dollar on Thursday. GBP/USD Price Chart Future of the AUD waits the RBA monetary policy decision The market is reflecting bullish signals for this currency pair. The Reserve Bank of Australia (RBA) June policy meeting will likely see a future hike in interest rates. If the RBA tightens their monetary policy the Australian Dollar could strengthen. If the RBA chooses a dovish approach, the Aussie Dollar could struggle. AUD/USD Price Chart Read next: EUR Falls To US Dollar (EUR/USD), Pound Sterling Due To Weaken As UK Recession Looms (EUR/GBP), Market Awaits Fed Meeting Minutes (USD/CHF, GBP/USD)  Sources: finance.yahoo.com, dailyfx.com, poundtserlinglive.com
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Market Has Strong Expectations Of An Even More Hawkish Fed (EUR/USD, USD/CHF), Pound Sterling Tumbled Amidst Investor Sell-off Sentiment (EUR/GBP, GBP/USD)

Rebecca Duthie Rebecca Duthie 14.06.2022 12:19
Summary US Dollar supported by prospects of a hawkish Fed. The Pound sterling remains vulnerable to further losses against the Euro. Read next: US CPI Inflation Acceleration Likely To See Hawkish Fed Retaliation (EUR/USD), On Thursday The Market Expects The BoE Monetary Policy Decision (EUR/GBP)  Expectations of a hawkish Fed is driving the dollar up. The market is reflecting bearish signals for this currency pair. As expectations for the Federal Reserve to continue on its hawkish path, and raise interest rates even higher at the next FOMC heighten, the US Dollar is strengthening. A hawkish move from the Fed will likely drive the US Dollar higher as it will gain a yield advantage over its G10 peers. Uncertainty around driving the US economy into a recession also brings about the appeal for the US Dollars liquidity. EUR/USD Price Chart Pound Sterling tumbles in the wake of investor sell-off sentiment The market is reflecting bullish signals for this currency pair. The Pound sterling remains vulnerable to further losses against the Euro following the losses experienced in the last 24 hours which was driven by the strong risk-off sentiment that has been seen by the global markets, which is also linked to the strong expectations for larger interest rate hikes at the US Federal Reserve. EUR/GBP Price Chart US Dollar/Swiss Franc (USD/CHF) Bullish The market is reflecting bullish signals for this currency pair. With expectations for the US Federal Reserve to further tighten monetary policy, the US Dollar is strengthening against most of its counterparts, including the Swiss Franc. USD/CHF Price Chart UK employment data released UK jobs data was released early on Tuesday, which reflected an employment change for March beating estimates whilst the employment statistic missed expectations. The initial reaction to this data saw the pound sterling weaken against the US Dollar as the ease in the labor market could be a signal towards the start of an economic shift. GBP/USD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD, AUD/JPY)

Rebecca Duthie Rebecca Duthie 04.07.2022 16:40
Summary: During the trading week last week the EUR/USD currency pairs price fell back to near five-year lows. It is expected that the global economic slowdown will affect the Australian Dollar more than the Pound Sterling. Investors looking out for ECB announcements and EU retail data this week. AUD/JPY bearish. Read next: Concerns Over Tight Supplies Is Driving Brent Crude Oil Prices Up, Silver Prices Falling, Favourable Weather, Weak Demand & Tight Supplies - Factors Driving Corn Prices  Euro’s left at the mercy of market sentiment The market is reflecting mixed signals for this currency pair. During the trading week last week the EUR/USD currency pairs price fell back to near five-year lows and may be at risk of remaining under pressure to those levels in the coming days unless the U.S currency falters further in the wake of its stumble on Friday. The Euro is under pressure from the strong US Dollar and neither currencies benefitted last week despite central banks claiming their determination to fight inflation. There was not much activity over the weekend regarding events that could move the market, thus, the global market including the Euro has been left at the mercy of market sentiment. EUR/USD Price Chart EUR/GBP currency pair The market is reflecting mixed sentiment for this currency pair. Investors will be watching the European Central Bank’s (ECB) policy announcements this week as well as the EU retail sales data that is due to be released. The Euro got no support when ECB president Christine Lagarde spoke last week and emphasised the importance of optionality in relation to the size and timing of interest rate changes after the 0.25% uplift in July that was pre-announced last month. EUR/GBP Price Chart AUD expected to be more affected by the economic slowdown than the GBP The Australian Dollar is one of the biggest losers amongst the major currency pairs over the past month and analysts predict this week's Reserve Bank of Australia (RBA) policy update mixed with souring global investor sentiment should keep the currency under pressure from the pound sterling. In addition, it is expected that the global economic slowdown will affect the Australian Dollar more than the Pound Sterling. GBP/AUD Price Chart AUD/JPY currency pair The market is reflecting bearish signals for this currency pair. It is expected by the market that the global economic slowdown will affect the Australian Dollar. The Bank of Japan (BoJ) is currently defiantly maintaining yield curve control despite speculators attacks that are betting that the BoJ will be unable to hold yields down if prices continue to rise. AUD/JPY Price Chart Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

US Dollar Hitting 19-year Highs (EUR/USD, GBP/USD), Russia Cuts Off Gas Taps (EUR/GBP), GBP/AUD Currency Pair & RBA Policy Decision

Rebecca Duthie Rebecca Duthie 05.07.2022 17:21
Summary: The US Dollar is hitting 19 year highs on Tuesday. Russia turns gas taps off Europe, plunging the Euro. UK strikes over pay began on Tuesday. RBA policy decisions lacked hawkish rhetoric. Read next: A Global Economic Slowdown Is Causing Risk-Off Sentiment, The US Dollar Remains Strong and AUD Expected To Be Currency Most Affected (EUR/USD, EUR/GBP, GBP/AUD  US Dollar Continues on its strengthening path The market is reflecting bearish signals for this currency pair. The US Dollar is hitting 19 year highs on Tuesday, this has been helped by a plunging EUR/USD currency pair, which has set its own 19-year low. Whilst there has been no particular event that has sparked the plunging of the Euro, the combination of a multiple of things has driven its downfall. Hence, the events include Russian gas deliveries for June which was 40% shorter than expected, this has caused European gas prices to remain elevated. In addition, Nord stream is set to close completely for annual maintenance, where it shuts down completely during July 11-21st, the risk, however, is that the pipeline may not come back online. In addition European Central Bank (ECB) representative Nagel did little to help the Euro as he cautioned against using monetary policy to limit risk premia of indebted states, he also stated that an Anti-Fragmentation tool could only be used during exceptional circumstances. Although Bundesbank’s Nagel is part of the minority, this does raise the risk of a watered-down Anti-Frag tool, which has ultimately disappointed the market expectations. EUR/USD Price Chart Russia turns the gas taps off to a pipeline. The market is reflecting bearish signals for this currency pair. The Euro is on its backfoot against the pound sterling in the wake of surging Eurozone energy prices after Russia cut off the taps to a key pipeline. The Euro has been aggressively sold during the Tuesday trading day, starting from 8am London time. This is putting pressure on the Euro. EUR/GBP Price Chart Strikes in the UK began on Tuesday The market is reflecting bearish signals for this currency pair. Strikes in the UK over salaries began on Tuesday and could cut the country's gas output by almost a quarter and could exacerbate supply shortages in the wake of the war in the Ukraine. There is a possibility that around 15% of Norway's oil output could also be cut by Saturday, this is according to a Reuters calculation and is based on the plans of union members to gradually escalate their action over the coming days. Amidst these facts, the US Dollar remains strong. GBP/USD Price Chart GBP/AUD The pound sterling to Australian Dollar currency pair has been volatile, but may still struggle to rise if the US Dollar doesn't hold onto its Tuesday highs in the coming days. The AUD tumbled before most of its currency counterparts on Tuesday in the wake of the Reserve Bank of Australia (RBA) July policy decision, which saw the cash rate lifted by 0.5% for a second time, taking it up to 1.35% for the time being. Despite this move, the decision was widely expected by the markets, however, the statement that came with the policy decision indicated to the markets that the hawkish rhetoric from the RBA was lacking. GBP/AUD Price Chart Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
The US Dollar (USD) Index May Have Created A Potential Resistance

Bearish Outlook For The EUR/USD Currency Pair, Euro & GBP Are Only Two Currencies Dominated By The US Dollar’s Strength (EUR/GBP, USD/JPY, EUR/JPY)

Rebecca Duthie Rebecca Duthie 06.07.2022 15:06
Summary: G20 summit and Fed meeting minutes. Both the Euro and the GBP have remained under pressure from the incredibly strong US Dollar. Cost-of-living-squeeze in Japan. Read next: US Dollar Hitting 19-year Highs (EUR/USD, GBP/USD), Russia Cuts Off Gas Taps (EUR/GBP), GBP/AUD Currency Pair & RBA Policy Decision  USD Could strengthen further in the coming days The market is reflecting mixed signals for this currency pair. The market outlook for the US Dollar seems bullish going forward into the coming days as the Federal reserve minutes are released and the G20 summit. If the Fed minutes reveal a hawkish attitude that surpasses market expectations, the US Dollar could be pushed even higher and could increase the greenback’s rising yield advantage against G10 and emerging market counterparts. EUR/USD Price Chart GBP & Euro Under pressure The market is reflecting bullish signals for this currency pair. Both the Euro and the GBP have remained under pressure from the incredibly strong US Dollar, the negatives for the Euro are well-known across the markets and could likely be exacerbated by two events in July. For the pound sterling, politics is at the forefront of talking in the media, however, from a traders perspective, the pound has been optimistic in terms of being affected by the current difficult situation. It seems that this is the beginning of the end for Prime Minister Boris Johnson, although the current backdrop that plagues the Pound remains unaltered. This has been evidenced by this morning’s soft construction PMI data, while comments made by BoE Chief Economist Pill were not exactly in favour of a larger hike in the Bank rate. EUR/GBP Price Chart USD dominating JPY The market is reflecting bullish signals for this currency pair. Inflation is currently showing signs of becoming more politically based in Japan in the wake of the continuing cost-of-living squeeze. Whilst the market awaits FOMC meeting minutes which could give the US Dollar more support, the rising cost of living in Japan continues to squeeze domestic households' income ahead of Japan's upper house election on Sunday. USD/JPY Price Chart EUR/JPY currency pair The market is reflecting mixed signals for this currency pair. The EUR/JPY currency pair remains at lofty level, however, the trend is being questioned. EUR/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

Pound Sterling Offered Support After News That Boris Johnson Is Set To Step Down (EUR/GBP, GBP/USD), FED FOMC Meeting Minutes (EUR/USD), Japan’s Upper House Elections (USD/JPY)

Rebecca Duthie Rebecca Duthie 07.07.2022 16:36
Summary: ECB and FOMC meeting minutes release. UK Prime Minister set to step down. GBP is little changed. Japan’s upper house elections. Read next: Bearish Outlook For The EUR/USD Currency Pair, Euro & GBP Are Only Two Currencies Dominated By The US Dollar’s Strength (EUR/GBP, USD/JPY, EUR/JPY)  ECB & Fed FOMC meeting minutes. The market is reflecting bearish signals for this currency pair. The Euro has been under big pressure in the wake of global recessionary fears gripping the markets and causing its price to break below multi-decade lows. Earlier in Thursday's trading day, the Euro had managed to recover from some of the lows seen on Wednesday after the Federal Reserve's FOMC meeting minutes were released. Later on Thursday the meeting minutes of the last European Central Bank (ECB) meeting are due to be released and almost any hawkish rhetoric could benefit the Euro. EUR/USD Price Chart Boris Johnson set to step down The market is reflecting mixed signals for this currency pair. Boris Johnson is set to resign in the wake of many high-profile resignations within his government in protest of Boris Johnson’s continuing leadership, the current Prime Minister is set to address the media later on Thursday. This news has aided the EUR/GBP currency pair in its downward momentum. In addition, the Euro itself isn’t faring well amidst economic concerns, the potential for widening periphery bond spreads as the European Central Bank raises rates, and ofcourse the possibility of complications in restoring Russian gas inflows to Germany via Nord Stream 1 which is also due to undergo routine maintenance from next Monday until the 21st July. EUR/GBP Price Chart Strong US Dollar. The market is reflecting mixed signals for this currency pair. The US Dollar continues to strengthen in the wake of the Fed FOMC meeting minutes released late on Wednesday, and the continuing hawkish rhetoric. The GBP is little changed in most corresponding currency pairs. GBP/USD Price Chart Rising cost-of-living in Japan The market is reflecting bullish sentiment for this currency pair. The rising cost-of-living in Japan continues to squeeze domestic households' income ahead of Japan's upper house election on Sunday. The release of the Fed's FOMC meeting minutes has offered the US Dollar more support on Thursday whilst inflation is currently showing signs of becoming more politically based in Japan in the wake of the continuing cost-of-living squeeze. USD/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com  
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Euro Sell-off Sentiment Continues Into The Weekend (EUR/USD), UK PM Boris Johnson’s Resignation Offers GBP Support (EUR/GBP), Dovish BoJ Continues (AUD/JPY, USD/JPY)

Rebecca Duthie Rebecca Duthie 08.07.2022 12:36
Summary: Noord stream 1 gas pipeline to begin maintenance. Gains for the GBP suggest that the currency has been holding some political risk premium. AUD/JPY bullish. USD/JPY Read next: Pound Sterling Offered Support After News That Boris Johnson Is Set To Step Down (EUR/GBP, GBP/USD), FED FOMC Meeting Minutes (EUR/USD), Japan’s Upper House Elections (USD/JPY)  Sell-off sentiment for the Euro continues The market is reflecting bearish signals for this currency pair. The sell-off sentiment for the Euro is showing no sign of stopping going into the weekend, the woes around the Euro continue to stack up, with latest concerns becoming stronger around the repairing of the Noord Stream gas pipeline. The pipeline has been labelled a risk to both the EU economy and the German economy should Russia cut the gas flow or undersupply. In addition, the Fed’s FOMC meeting minutes for June reiterated the Fed’s commitment to aggressively hiking interest rates despite risk of slow economic growth. EUR/USD Price Chart Boris Johnson stepping down offers GBP support The market is reflecting bearish signals for this currency pair. The EUR/GBP pair fell by around 1% on Thursday in the wake of UK Prime Minister Boris Johnson’s resignation announcement; he will remain in power until a replacement is found. The pound sterling gains suggest indication that the currency has been holding some political risk premium that looks to have converted to a certain extent. Euro currency risk remains a domino effect of many events. EUR/GBP Price Chart Dovish BoJ continues The market is reflecting bullish signals for this currency pair. The border weakness of the Japanese Yen has been felt. The Monetary of the Ministry of Finance (MoF) in Japan and by extension includes the Bank of Japan (BoJ), is going in the complete opposite direction to other global central banks (with the exception of the People’s Bank of China. The BoJ recently committed to extending their yield curve control program (YCC) and are close to holding 50% of all Japanese government bonds (JGBs) on issue. The Reserve Bank of Australia (RBA), on the other hand, has committed to aggressive monetary policy tightening, offering the AUD support. AUD/JPY Price Chart USD/JPY Bullish The market is reflecting bullish signals for this currency pair. The Japanese Yen has been facing weakness across the board as the Bank of Japan (BoJ) continues to adopt dovish monetary policy and the Federal Reserve adopts the opposite approach and continues on with their aggressive monetary policy. The US Dollar continues to strengthen. USD/JPY Price Chart Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

EUR/USD Attempts Parity (EUR/USD), Noord Stream Maintenance Is Underway (EUR/GBP), BoC Policy Decision Due Wednesday (GBP/CAD), USD/JPY

Rebecca Duthie Rebecca Duthie 11.07.2022 16:42
Summary: The Euro continues to be one of the more susceptible currencies as many headwinds build up. Will Russia resume gas supply to Noord Stream? Will the BoC policy decision offer CAD support? BoJ would do whatever is necessary to help the economy grow. Read next: Recession Fears Are Affecting Brent Crude Prices, Silver Price vs A Hawkish Federal Reserve, Corn At 8-Week Highs  US Dollar continues to strengthen across the board The market is reflecting mixed signals for this currency pair. On Monday the Noord Stream, Germany’s biggest pipeline closed for annual maintenance until the 21st July. The maintenance time period has increased speculation on whether or not Russia will resume gas flows after the maintenance has been completed. The Euro continues to be one of the more susceptible currencies as many headwinds build up. The European Central Bank (ECB) is still on track to raise interest rates (at least 25 bps) at their next meeting later on in July. The US Dollar continues to rise across the board, and investor attention will be aimed in the direction of the US CPI inflation data release for June on Wednesday. EUR/USD Price Chart   EUR/GBP mixed sentiment The market is reflecting mixed signals for this currency pair. The pound sterling will continue to be affected by external events whilst politics grabs headlines. The Euro continues to be negatively affected by a combination of events. One of the main events being whether or not Russia will turn the taps back on for gas supplies through the Noord Stream once the maintenance is over, if they do not, the possibility of a recession in the Euro area will increase largely. EUR/GBP Price Chart GBP/CAD hovers around 10-year lows The markets are keeping alert as they await the Bank of Canada’s (BoC) policy decision on Wednesday. Although the GBP/CAD currency pair hovers near 10 year lows, both currencies remained little changed on Monday and were both middle-of-the road performers amongst major currencies. GBP/CAD Price Chart BoJ representative speaks The market is reflecting mixed sentiment for this currency pair. A Bank of Japan (BoJ) representative warned the market that the current economic outlook remains uncertain due to the rising commodity prices and that the BoJ would do whatever is necessary to help the economy grow. The same representative also said that Japan’s financial system is robust, the economy is starting to improve and that the central bank would keep interest rates stable at the current or lower levels. USD/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com

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