Dollar Drops Against Yen on Trade Data

 

shutterstock_262120577On Wednesday in Asia, the greenback inched weaker compared to the yen as Japan trade indicated a surprise increased on exports and investors noted the most latest  tweet by President Donald Trump indicated he would sign an executive order on Wednesday to build a wall on the border with Mexico.

USD/JPY moved hands at 113.59, down 0.18%, while GBP/USD increase 0.05% to 1.2528 after a court decision on Tuesday on the measures the government may take to exit from the European Union trade bloc.  USD/CHF increased 0.05% to 1.0013, and USD/CAD drop 0.18% to 1.3135.

In the meantime, the dollar stayed mildly supported on Wednesday morning, in spite of continuing worries over new U.S. President Donald Trump’s protectionist policies.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, increased 0.11% at 100.37, after hitting a six-week low of 99.89 on Tuesday.

After Trump tweeted that he will take executive action to build a wall along the U.S.-Mexico border, USD/MXN changed.  Trump repetitively demanded Mexico would be forced to pay for the construction.

Prior to the  tweet, the U.S. greenback was fetching about 21.4850 pesos and after it was sent, it was gathering as much as 21.56 pesos.That’s still lower than the record high levels over 22 pesos touched earlier this month.

On Tuesday, the greenback staged a rebound in the U.S. with sentiment turning more positive on economic development outlooks that should be prompted by tax reductions and higher infrastructure spending under the new government.

While the Canadian inched  higher against its U.S. counterpart on Tuesday as worries eased that Canada could be hit by any changes to the NAFTA trade deal  and oil prices firmed.

USD/CAD hit lows of 1.3209 and previously  at 1.3224, down 0.11% from Monday’s close.

The pound declines to the day’s lows on Tuesday as a presiding that British Prime Minister Theresa May must pursue parliamentary approval before triggering the procedure to leave the European Union looked questionable to hamper the government’s ideas.

On Additional News

On January 25, the Australian and New Zealand dollars change lower against their U.S. counterpart, following weak inflation data from Australia and as demand for the dollar stayed widely supported.

AUD/USD dropped 0.66% to 0.7532, the lowest since January 20.

Earlier on  Wednesday, the Australian Bureau of Statistics reported that the consumer price index increases 0.5% in the 4th quarter of 2016, disappointing anticipations for an increase of 0.7 percent.

Year-on-year, consumer prices increased 1.5% in the last quarter, lower than the expected 1.6% increased.

NZD/ USD drops 0.29% to trade at 0.7228, off the prior session’s two-and-a-half month peak of 0.7279.

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January 16 to 20 Forex Weekly Outlook

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On Friday, the U.S. greenback declined against the other major currencies and the greenback index posted its biggest weekly drop since late October as optimism chilled over President-elect Donald Trump’s economic policy proposals

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, declined 0.29% to 101.17 on late Friday.

During the week, the index shed 1.0%, marking its poorest weekly performance since late October.

On earlier Friday, The index had increased after upbeat U.S. retail sales statistics boosted the economic outlook.

It was reported that in December,  the Commerce Department reported retail sales increased 0.6%, while November’s sales were revised up to indicate a 0.2% increase.

However,  the greenback retraced gains during doubts over the incoming Trump administration’s plans for fiscal stimulus, deregulation and tax reductions.

On Wednesday, the greenback decline suddenly  and reach five week low against the euro, yen and Swiss franc on Thursday as Trump frustrated traders who had been expecting he would address economic and fiscal policies in his first formal news conference as U.S. president-elect.

Earlier this month, the dollar index rallied to 14-year high on expectations that Trump’s policies would speed up growth and inflation and prompt the Fed Reserve to increase  interest rates more rapidly.

On January 20, 2017, Trump will officially take office.

On late Friday, USD/JPY declined  0.14% in 114.53 and the pair dropped 2.23% for the week, its poorest week since late July.

The euro also pressed higher, with EUR/USD at 1.0644 in late trade, after touching an intra-day low of 1.0596 following the U.S. retail sales report. For the week, the euro increased 1.08% compared to the greenback.

Sterling inched higher; with GBP/USD  easing up 0.12% to 1.2174 but stayed under pressure before a speech on the U.K.’s Brexit plans that Prime Minister Theresa May will make on Tuesday.

In the week onward, financial markets will continue to concentrate on U.S. President-elect Trump ahead of his inauguration on January 20, Friday.

Investors will be looking forward to Tuesday’s strongly expected Brexit speech and Thursday’ policy statement by the European Central bank.

China’s data on 4th quarter growth will also be closely observed.

On Additional News

On January 16, Martin Luther King Day,  U.S. financial markets will be closed.  Bank of England Governor Mark Carney is scheduled  to speak at an event in London.

On Tuesday, January 17, New Zealand is to announce private sector statistic on business confidence.

New York Fed Reserve President William Dudley is to talk at an event in New York and the U.S. is also to announce the Empire State manufacturing index.

The U.K. is to publish data on inflation. U.K. Prime Minister Theresa May is scheduled to speak regarding starting proceedings for Britain’s exit from the EU.

The ZEW Institute is to report on German economic sentiment.

On  January 18, the U.K. is to post its monthly jobs report.

The euro zone is to publish revised data on inflation.

The U.S. is to release figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at an occasion in San Francisco.

The Bank of Canada is to release  its current monetary policy decision and hold a press conference to talk about the economic outlook.

Thursday, January 19, Australia is to release  its monthly employment report.

The European Central Bank (ECB) is to publish its current monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.

Canada is to report on manufacturing, sales and foreign securities purchases.

Fed Reserve Chair Janet Yellen is to speak at an event at Stanford.

Friday, January 20, China is to publish statistics on 4th quarter progress along with figures on industrial production.

The U.K. is to publish statistic on retail sales. Canada is to round up the week with statistic on retail sales.

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Dollar Dips, Sterling Slides Again

 

cropped-cropped-shutterstock_450140326.jpgOn Monday, the greenback inched lower against a basket of the other major currencies, while sterling was suddenly lower as fears over prospects for a ‘hard Brexit’ weighed.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, eased to 102.08.

After Friday’s U.S. nonfarm payrolls report for December, demand for the dollar continued to be underpinned which indicated a slowdown in hiring, but the fastest wage progress in more than seven years, supported the case for rate hikes this year.

The Fed Reserve increased interest rates in December and indicated that it anticipates to hike rates three more times in 2017.

Higher rates increase the greenback  by making the currency more attractive to yield-seeking investors.

On Monday, Boston Fed President Eric Rosengren called for the U.S. central bank to step up the pace of interest rate increases, notice that inflation could overshoot its target if it does not.

The greenback was lower compared to the yen, with USD/JPY is sliding 0.45% to 116.48, down from an intra-day high of 117.53.

The euro pushed higher, with EUR/USD increases 0.2% to 1.0554.

The pound was suddenly lower compared to the greenback and the euro, with GBP/USD hitting lows of 1.2125, the lowest level since October 28, before pulling back to 1.2144.

EUR/GBP hit peaks of 0.8690, the strongest level since November 15 and was previously at 0.8688, up 1.33% for the day.

The selloff in sterling came after British Prime Minister Teresa May stated on  Sunday that the country would not be keeping “bits” of European Union membership.

The statements were seen as a sign that the UK won’t try to negotiate continued full access to the European single market when it exit the European Union.

Sterling unsuccessful to find support after May stated on Monday it was wrong to say a “hard Brexit” was inevitable.

Somewhere else, “the Turkish lira fell to a fresh record low against the dollar on Monday after ratings agency Moody’s said that bank profits will be hit by an increase in bad loans this year and warned of a “general worsening” in the investment climate in the country.,” according to the report.

After starting the day at 3.6433, USD/TRY  jumped 2.48% to trade at 3.7342.

On Additional News

On Tuesday, the greenback slipped as the yuan steadied on a jump in Chinese factory gate prices.

The dollar index declined 0.16% to 101.76 at 02:15 ET. It was flat at the 6.88 yuan mark.
China’s PPI was up 5.5% in the December vs. forecast rise of 4.5%.

That was the fastest pace of development in Chinese factory gate prices in five years as commodity price increases.

This year, the Chinese statistic could increase expectations of global reflation. The greenback  fell back to the 115 level against the yen.

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January 2 – 6 Forex Weekly Outlook

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On Friday, the greenback dropped against a basket of the other major currencies as traders gain profits in the wake of a late year rally that propelled the dollar to 14-year peaks.

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, declined 0.28% to 102.29 late Friday, off the 14-year peak  of 103.65 hit on December 20.

For the year, the index increased approximately 3.7% after rallying in the 4th quarter on the back of anticipations for a quicker pace of rate hikes from the Fed Reserve and surged fiscal spending under the incoming Trump administration.

The euro pressed higher in holiday thinned trade, with EUR/USD  ending at 1.0517, increase 0.29% for the day. The euro temporarily hopped as high as 1.0653 during Asian trade, the strongest level in two weeks, before retracing gains.

The single currency ended the year down 3% against the dollar, its 3rd consecutive yearly dropped.

The pound was also higher, with GBP/USD is advancing 0.71% to 1.2350 in late trade.

Sterling declined approximately 16% against the greenback  for the year during concerns over the economic fallout from the June 23 vote to leave the European Union.

The greenback was higher compared to the yen, with USD/JPY increased 0.34% at 116.95. On the year, the greenback posted its first yearly loss against the yen in five years, declining approximately 2.9%.

In the week onward, investors will be looking forward  to Friday’s U.S. employment report for December together with Wednesday’s minutes of the Fed’s December meeting.

U.S. data on manufacturing and service sector activity will also be in emphasis.

Market observers will also be in anticipation of euro zone inflation data on survey data from the UK on manufacturing, service and construction sector activity.

On Additional  News

On January 2, financial markets around the globe will be closed for the New Year holiday.

On January 3, financial markets in New Zealand and Japan will stay closed for holidays.

China is to post,it’s Caixin manufacturing PMI. In the euro zone, Germany is to release preliminary inflation statistic and a report on the adjustment in the figure of people unemployed.

The U.K. is to release survey statistic on manufacturing activity.  The Institute for Supply Management is to publish data on manufacturing activity.

On January 4, the U.K. is to publish survey data on construction activity.  The euro zone is to post preliminary data on inflation.

The Fed Reserve is to post, it’s December minutes of the meeting.

On January 5, China is to post, it’s Caixin services PMI. The U.K. is to publish survey data on service sector activity.

The U.S. is to publish the ADP nonfarm payroll report and statistic on unemployed privileges. The ISM is to report on non-manufacturing activity.

On January 6, Australia is to publish trade data. Germany is to report on factory orders and retail sales.

Canada is to post its monthly jobs report together with trade data.

The U.S. is to round up the week with the closely observed report on nonfarm payrolls along with data on trade and factory orders.

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December 26 – 30 Forex Weekly Outlook

On Friday, the U.S. dollar inched a little lower compared to a basket of currencies in pre-holiday trade, falling from its 14-year-peak as investors took profits in the run-up to the Christmas weekend.

The U.S.dollar index, which gauges  the greenback’s strong point against a trade-weighted basket of six major currencies, plunged 0.1% to 103.00 by late Friday. On Tuesday, the index increased to 103.62, the strongest level since December 2002.

During the week, the index gained lower  than 0.1% in thinning trading ahead of the year-end holiday period.

The dollar stayed well-supported thanks to bets of higher U.S. development and a quicker pace of interest rate surged under incoming president Donald Trump.

The Fed Reserve hiked interest rates for the 1st time in a year earlier this month and expected three more increases in 2017.

Higher rates increase the dollar by making the currency more attractive to yield-seeking investors.

Compared to the yen, the greenback decline to 117.34 on Friday, retreating from a 10-1/2 month peak of 118.65 set  the previous  week. The pair lost 0.5% on the week, snapping a six-week win streak.

Temporarily, the euro tacked on 0.2% to end at 1.0456 by late Friday, recovering from 1.0352 on Tuesday, the lowest since January 2003.

Somewhere else, the British pound declined  to a seven-week low of 1.2229, pressured by renewed improbability over the process by which Britain will exit the European Union.

In the week onward, trading volumes are projected to stay light because of the Christmas holiday and as many traders already closed books before the  year end, decreasing liquidity in the market and increasing the volatility.

The U.S. is to release reports on consumer confidence, pending home sales, and jobless privileges, as traders look for additional signal on the strength of the economy and indications on the future path of monetary policy.

Somewhere else, Japanese inflation statistics will also be in emphasis as investors weigh the need for additional stimulus in the world’s 3rd largest economy.

On Additional  News

On December 26, the Bank of Japan will announce minutes of its latest policy meeting.

To make up for Christmas Day falls on a Sunday, stock markets in Australia, New Zealand, Europe, the U.K., Switzerland, Canada and the U.S. will stay closed.

All floor trading for precious and base metals choices  will be close for the Christmas holiday.

On December 27, Japan is to release data on inflation, employment and household expenditure.

Markets in the U.K. and Canada will stay closed for Boxing Day. The U.S. is to release private sector data on consumer confidence.

On Wednesday, December 28, Japan is to produce statistic on industrial output and retail sales. The U.K. is to release industry data on mortgage approvals.  The U.S. is to publish data on pending home sales.

On Thursday, December 29, the U.K. is to post industry data on housing costs.

The euro zone is to release a report on the money supply development and private loans. The U.S. is to create data on weekly jobless claims, wholesale inventories and the trade deficit.

On December 30, in the euro zone, Spain will post monthly inflation statistics.

The U.S. is to recap the week, with data on manufacturing activity in the Chicago-region.

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