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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U.S. Natural Gas Futures Struggles Near Two-Week Lows During Warmer Weather

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On Monday, U.S. natural gas futures fight back near a two-week low, as predictions indicating warm weather, decreasing  in key regions in the U.S. during the next few weeks reduced demand for the heating fuel.

Delivery of natural gas for February on the NYMEX decline to a session low of $3.145 per million British thermal units, a level not perceived since January 10.

It was previously at $3.189 by 9:35AM ET (14:35GMT), down 1.5 cents, or about 0.5%.

The more-actively traded March deal declined 0.7 cents, or 0.2%, at $3.204.

The previous week, prices of the heating fuel displayed a weekly loss of over 6% on predictions for warmer winter weather.

In recent weeks, natural gas markets have been volatile, adjusting course quickly in response to shifting outlooks in near term weather patterns.

Prices normally increase during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating.

Temporarily, market players looked forward to weekly storage data schedule on Thursday, which is expected to indicate a draw in a range between 105 and 117 billion cubic feet in the week ended January 20.

That compares with a withdrawal of 243 billion cubic feet in the prior week, 211 billion a year before and a five-year average decline of 176 billion cubic feet.

According to the U.S. Energy Information Administration,  total natural gas in storage presently stands at 2.917 trillion cubic feet, 12.9% lower than levels at this time a year ago and around 2.6% below the five-year average for this time of year.

On Additional News

On Tuesday, a weaker greenback supported crude prices gain in Asia with the currency on a trade-weighted basis temporarily dropping below one hundred  for the first time since mid-November before improving slightly on concerns of a major shakeup to the global trading administration.

After dropping to 99.5,  the U.S. dollar index increase 0.14% to 100.09 in early Asia. Crude is denominated in dollars, making a weaker dollar a benefit to key buyers such as China and India.

Suddenly, higher production by U.S. shale drillers and other producer countries weigh up on crude prices in the U.S. with Brent and West Texas Intermediate settling down in spite of efforts to reduce global  production by approximately 1.8 million barrels per day by OPEC and non-OPEC countries.

Global benchmark Brent crude increases 0.29% to $55.52 a barrel on London’s Intercontinental Exchange, while U.S. crude on the NYMEX increased 0.49% to $53.01 a barrel.

While Oil prices inched higher during European morning hours on Tuesday, recovering  from the previous session’s losses  during ongoing indications that major oil producers are sticking to their pledge to reduce back production.

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U.S. Natural Gas Declines to 1-Week Low on Bets For Bearish Storage Data

After the opening bell on Wednesday, U.S. natural gas futures dropped for the second day in a row, declining near one week low, as weather predictions for the end of January turned warmer, which should reduce demand for the heating fuel.

In recent weeks, natural gas markets have been volatile, adjusting course quickly in reaction to changing outlooks in near term weather patterns.

After increasing  almost 2.7% to a session high of $3.513 per million British thermal units, a level not seen since January 3, Delivery of Natural gas for February on the NYMEX declined about 3% to a session low of $3.310 per million British thermal units, a level not perceived since January 12.

It was previously at $3.320 by 9:00AM ET (14:00GMT), down 9.2 cents, or about 2.7%, after plunging 0.7 cents, or 0.2%, the day earlier.

In the meantime, market players looked forward to weekly storage data scheduled on Thursday, which is expected to indicate a draw in a range between 220 and 230 billion cubic feet in the week ended January 13.

Which compares with a withdrawal of 151 billion cubic feet in the  preceding week, 178 billion a year before and a five year average decline of 170 billion cubic feet.

Currently, total natural gas in storage stands at 3.160 trillion cubic feet, according  to the  U.S. Energy Information Administration (EIA), 10.3% lower than levels at this time a year ago and approximately 0.1% below the five-year average for this time of year.

On Additional News

Crude oil prices inched higher in Asian trade on inspiring statistics,  which indicated oil production by the OPEC was dropping, pushing the market closer towards a rebalance.  However, any increase could be balanced by the possible expansion in U.S. shale oil output.

On the NYMEX, light, delivery of sweet crude futures  in February CLG7, +1.31%  traded at $51.52 a barrel, up $0.44, or 0.9%, in the Globex electronic session.

March Brent crude LCOH7, +1.52%  on London’s ICE Futures exchange rose $0.49, or 0.9%, to $54.41 a barrel.

According to OPEC’s recent data, the production by the 13-member bloc contracted by 221,000 barrels a day in December from the prior month. Generally, the cartel produced nearly 33.1 million barrels a day in December.

The group still needs to reduce to approximately 31.8 million barrels a day in order to meet the level it promised in its output cut agreement signed the previous year.

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Oil Prices Drop as Increasing U.S. Production Could Offset OPEC Cuts

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On Monday, oil prices dropped as investors anticipate figures from OPEC later this week, which will give additional awareness into demand and supply movements.

On Tuesday, oil markets were mixed, supported by development in U.S. crude output and Saudi Arabia said it would strictly follow to a commitment to reduce production, but held back by doubt in financial markets that glut would be curbed.

In an effort to clear a global glut that has depressed prices for more than two years, The Organization of the Petroleum Exporting Countries (OPEC) has settled to reduce production by 1.2 million barrels per day (bpd) to 32.5 million bpd from Jan. 1.

Russia and other key exporters outside the Organization of the Petroleum Exporting Countries (OPEC) have stated they will also cut production.

However, investors have questioned that the Organization of the Petroleum Exporting Countries (OPEC) and its partners can trim production enough to drive up prices.

This Wednesday, January 18, OPEC releases its monthly output data, offering early indications on the agreement  signed late in 2016.

On the NYMEX, delivery of crude oil futures in February declined 12 cents, or 0.2 percent, to $52.25 a barrel.

Benchmark Brent crude oil increased 41 cents a barrel, or 0.7%, at $55.86 and U.S. West Texas Intermediate crude increase  27 cents, or 0.5%, to $52.64 a barrel.

The analyst believes that for the first quarter of 2017, the price of oil will be about the $55 a barrel-mark, until the real effect of the reductions are felt. Others offer hope for $60 per barrel.

However, anticipations  of  increasing  oil production in the United States, along with the U.S. federal holiday on Monday capped price gains.

Goldman Sachs  stated it anticipates YoY U.S. oil output to increase by 235,000 barrels per day in 2017, take into consideration wells that have been drilled and are expected to begin producing in the first half of the year.

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The Dollar Increases, Aussie Declines as Q3 GDP Enters Negative Territory

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On Tuesday, the greenback increase, as forex traders continued to anticipate a strong interest rate increase from the Federal Reserve in Washington D.C. this December.

The dollar closed up on the US Dollar index.

The EUR/USD declined, closing at 107.21, a decline of 0.40%.

The GBP/USD declined, finishing the day at 1.2676, a decrease of 0.44%.

The USD/JPY was, by contrast, increase to 113.98, a surge of 0.15%.

“Influencing the price of that currency pair was Monday’s news that Japan’s SoftBank was poised to invest $50 billion in the U.S., creating upwards of 50,000 jobs, in the coming year.”

President-elect Donald Trump broadcasted the news at Trump Tower in New York City after meeting with the company’s CEO, Masayoshi Son, a Japanese technology investor and billionaire, and detailed it last night during a rally in North Carolina.

On the social media site Twitter Inc . (NYSE: TWTR), the president-elect proclaimed that Son told him that Softbank “would never do this” if Trump had not won the presidential election against former U.S. Secretary of State Hillary Clinton.

On Additional News

The Aussie declined in Asia on Wednesday as 3rd quarter GDP posted an unexpected drop.

AUD/USD was quoted at 0.7423, down 0.51%, while USD/JPY increased  0.22% traded at 114.72.

The U.S. dollar index, which gauges  the greenback compared to a basket of currencies, increased 0.07% to 100.58.

In Australia a busy data day with the AIG construction index  for November at 46.6, increase slowly from 45.9 and 3rd quarter GDP down 0.5%, well below the 0.3% increase seen quarter-on-quarter and at a 1.8% 2.5% pace year-on-year, compared to an increase of 2.5% expected.

The GDP decline, the biggest since the year 2008, is likely one of the biggest prediction misses by the Reserve Bank of Australia, which may have expected GDP progress of approximately 0.5%, according to calculations done by economists. While the Reserve Bank of Australia expects GDP to rebound in the 4th quarter, the softer-than-expected results will put additional emphasis on approaching labor market data and lead to an explicit easing bias from current bias which is tilted towards neutral.

Suddenly,  the dollar increase on irresistible expectations of the first rate hike in a year by the Federal Reserve the upcoming week.

In the U.S., data presented that the trade deficit broadened to a four month peak of $42.6 billion in October from a revised $36.2 billion in September, as imports increased to the highest level in 14 months.

On another report presented that the labor productivity rallied in the 3rd quarter, with the fastest rate of  development in two years.  Factory orders increase to 2.7%, more than the 2.6% increase seen MoM for October.

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