X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • What’s next for AUD/USD

    RBA board meeting will take place next week and an increase in Cash rate is expected, How much ? It’s a question. RBA discussion in June brought a hawkish element to the RBA’s monetary policy, noting that the current level of the cash rate is well below the estimated neutral rate, thought to be at least 2.5%. The neutral real interest rate is the real interest rate that is neither stimulatory nor contractionary.

    Based on the RBA’s forecasts for inflation to rise to around 7 percent and for the unemployment rate to decline further in the months ahead, the RBA needs to continue tightening interest rates past the neutral rate to fulfil its pledge that the Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.

    Read More : Daily & Weekly Analysis On Xtreamforex

    Comment


    • Inflation rate of 8.8% expected in August 2022

      The statistics released from 30th August turned out to be quite close to market expectations. The harmonized consumer price index in Germany, was 8.8% with the forecast of 8.8%. The consumer price index in the Eurozone amounted to 9.1% instead of expected 9.0%.The index of business activity in the US manufacturing sector did not change at all over the month and amounted to 52.8, and the number of new jobs created outside the American agriculture sector did not go far from the expected either, 315k against 300k. As a result EUR/USD was moving along the equality line of 1.0000 whole week, fluctuating in the range of 0.9910-1.0078, and completed the five day period at the level of 0.9955.

      The key day will be 8th September when the ECB will decide on the deposit rate and make a statement and comments on its monetary policy. Inflation in the Eurozone rose even more in August: from 8.9% to 9.1%. Many experts believe that the European regulator will raise the rate by 75 basis points at once.

      Read More : Daily & Weekly Analysis On Xtreamforex

      Comment


      • Liz Truss Defeats Rishi Sunak To Become New UK PM

        Liz Truss will become the new UK prime minister on Tuesday after defeating Rishi Sunak in the Tory leadership contest today. The result was closer thank many people had expected, with Truss taking 57% of votes cast. The markets hardly reacted to the news, not least because the outcome was expected.

        While we now know who the new PM will be, the economy will still face significant challenges with several quarters of negative growth upon us amid the energy crisis and soaring inflation. Will the market put its trust on Truss to deliver the goods the economy badly needs ?

        Truss pledged to deliver a bold plan to tackle soaring energy costs and is understood to be considering a freeze on energy bills. But this will by no means be a walk in the park for Truss. She will have to keep a tight fiscal line while trying to tackle the energy and cost-of-living crisis. Truss’s supposed 100bn pound scheme to limit energy price rises might provide some relief in the short-term, but someone will have to pay for it. Unfortunately, it will be the taxpayers.

        Read More : Daily & Weekly Analysis On Xtreamforex

        Comment


        • Australia’s economy grew strongly earlier this year

          The national accounts released today showed the Australian economy in the second quarter expanded by a solid 0.9% and 3.6% YoY. It’s the third consecutive quarter of economic expansion for the Australian economy.

          First quarter of re-opened domestic and international borders was behind a substantial rise in consumer spending and net export growth, offsetting weakness in housing and inventories. Exports of goods and services contributed 1.1% points to GDP growth. The rises were broad-based across rural and mining goods and services exports. Exports of services rose 13.7%, reflecting education-related travel as international students returned to Australia.

          Today’s figures coincided with the start of RBA’s rate hiking cycle in May and come just one day after the RBA raised rates by 50bps to 2.35%, leaving Q3 as the one that should reveal the impact of the RBA’s 225bps of rate hikes to date.

          Read More : Daily & Weekly Analysis On Xtreamforex

          Comment


          • USD/CNH – US Dollar Chinese Yuan Offshore News

            Another news from China which is not good. It is nation’s trade disappointing figures expectation. The yuan fell further, USD/CNH to almost 7.0000. The poor imports figure in particular raised concerns about how weak the Chinese economy has become as it faces troubles. These include the ongoing COVID-related lockdowns and a property sector which has collapsed under the weight of debt. When China sneezes, the world usually catches a cold- and that’s precisely how the markets have reacted so far.

            China’s exports and imports figures were well short of expectations, pointing to weakening domestic and foreign demand. Imports were up just 0.3% on the year in August, a sharp fall from the +2.3% annul reading recorded the month before. Exports were +7.1% y/y again sharply lower compared to 18.0% recorded in July.

            USD/CHN has been rising steadily as monetary policy divergence between the US and China continues to grow. Whereas the Fed is tightening its belt with aggressive rate increases, the PBOC was recently been forced to cut interest rates as data showed the economy was losing steam due to renewed Covid lockdowns and a deepening property downturn. But with the yuan weakening so significantly, the PBOC has tried to stem its decline by using other tools including stronger fixings for the yuan and this week it trimmed forex reserve ratio to 6% from 8% in a bid to support its currency.

            Read More : Daily & Weekly Analysis On Xtreamforex

            Comment


            • Unease Market on Inflation Expectations

              Second quarter GDP for Australia met the market’s expectation at 0.9%, 3.6%yr. As expected, household consumption drove growth in the quarter, consumption’s strong 2.2% gain in the 3 months to June coming as a result of the economy’s progressive re-opening and as spending was supported by both robust nominal income gains and a further reduction in the savings rate. In coming months households will feel the full effect of the rapid rise in interest rates and the hit to real incomes from historic inflation, limiting further upside. We continue to expect from historic inflation, limiting further upside. We continue to expect consumption growth to decelerate to a pace well below trend form fourth quarter 2022 through end of 2023, taking GDP growth with it. At December 2023, annual GDP growth is expected to have slowed to just 1.0%yr.

              Over in the US, this week’s mixed data highlights the variable conditions faced by businesses across the nation. The ISM services PMI edged higher in August; however respondents seemed cautions on the outlook, with the production and new order indexes printing above 60 as employment held around 50- the divide between expansion and contraction.

              Read More : Daily & Weekly Analysis On Xtreamforex

              Comment


              • EUR/USD faces barricades around 0.9863, focus shifts to US Inflation data

                The past week was marked by two important events. The EUR/USD pair updated its 20-year low on Tuesday, September 6th once again, falling to 0.9863. And then the European Central Bank raised its key interest rate for the first time in its history by 75 bps to 1.25% on Thursday, September the 8th, accompanying this act with very hawkish comments.

                Both the events did not come as a surprise to the market and on the whole, were in line with the forecasts that we voiced in the previous review. The pair’s rebound to the upside following the ECB’s decision was not surprising either. Having risen by about 250 points, it peaked at 1.0113 on September 9. This was followed by a correction to the north, and the pair finished at 1.0045 .

                Read More : Daily & Weekly Analysis On Xtreamforex

                Comment


                • Silver outshines gold as dollar slips | Xtreamforex

                  The new week has started with a bang for risk-sensitive assets, including stocks and metals. Silver had risen around 5% so far on the day, and was leading other metals higher. Gold was also up, but not as impressively as silver, with the yellow metal looking to build a base above the $1725 short-term pivotal level. Similarly, the EUR/USD and GBP/USD were up around 1% on the day.

                  Whether the metals can kick on from here or go in reverse depends almost entirely on the direction of USD. It will face a big test on Tuesday with the release of US CPI data which is surely going to be the main focal point for the week. Headline CPI is expected to have cooled to 8.1% on an annual basis from 8.5% in the previous month. Core CPI, which excludes food and energy, is seen accelerating to 6.1% from 5.9% last.

                  Regardless of the CPI prints, the Fed is almost certain to deliver another jumbo-sized, 75-basis-point, rate hike next week. This outcome seems to be priced in by now, which is why the dollar is on a retreat after making solid gains in recent months. On Friday, Fed Governor Christopher Waller said he favors another significant increase in interest rates at the September meeting, something echoed by James Bullard.

                  Read More : Daily & Weekly Analysis On Xtreamforex

                  Comment


                  • What will happen to GBP/USD if the UK surprises with higher CPI?


                    US released its August CPI report. The headline was 8.3% YoY and expectation of 8.1% YoY and a July reading of 8.5% YoY. Headline inflation is decreasing. However, the Core CPI print for August was 6.3% YoY vs an expectation of 6.1% YoY and a previous reading of 5.9% YoY. After the release of the data, the USD shot higher, pushing GBP/USD lower by nearly 150 pips near 1.1530.

                    Can a similar situation occur tomorrow for the UK when it releases its own August CPI data ? The headline print is expected to be 10.2% YoY vs a July reading of 10.1% YoY. In addition, the Core CPI is expected to be 6.3% YoY vs a 6.2% YoY reading in July. August’s reading was the highest since February 1982, the BOE has already told us that it expects CPI to reach as high as 13% in October and that the UK economy will enter a recession in Q4. Therefore, unlike that of the US in which Fed is not expecting a recession, higher CPI readings shouldn’t do as much damage to the GBP to the FTSE, as markets are already pricing in an element of higher inflation and lower growth.

                    Read More : Daily & Weekly Analysis On Xtreamforex

                    Comment


                    • New Zealand Q2 GDP Beats Expectations

                      New Zealand’s GDP rebound by 1.7% in the second quarter, close to the forecast and the RBNZ’s expectation. Services grew strongly as tourists started to return. New Zealand’s GDP rose but 1.7% on the June Quarter, much in line with 1.6% forecast, as well as the 1.8% rise that the Reserve Bank expected in its August Monetary Policy Statement. In contrast, the result beat the median market forecast for 1% rise.

                      The bounce in the second quarter followed a 0.2% dip in the first quarter. Assessment at the time was due ti disruptions to activity from the peak of the Omicron wave, and the absence of the usual uplift in tourist spending at that time if year. Both of those effects were reversed out in the second quarter; the border reopening led to a strong lift in tourists during what would normally have been the seasonal lull.

                      Read More : Daily & Weekly Analysis On Xtreamforex

                      Comment


                      • US Dollar Japanese Yen (USD JPY) Analysis | Xtreamforex

                        The Japanese Yen is on a wild ride lately. But there were some surprise moves earlier, an explanation of these moves could give some explanation on whether or not the USDJPY has hit a ceiling. There are some important implications for the future of the yen, and something traders need to be very careful.

                        The yen has been weakening generally because the BOJ isn’t raising rates while other central banks are raising. The BOJ isn’t likely to raise rates in the foreseeable future, which makes the currency ripe for carry trading. The USDJPY spiked higher after US CPI figures came out, because of speculation of an even stronger move by the Fed at the upcoming meeting.
                        Couples of decades ago the pair moved to similar levels, prompting a response from authorities. In that case, the pair got up to 147.00 and there was joint action from the US and Japan
                        .
                        The Bank Of Japan does conduct the operation, but it’s at the direction of the Ministry of Finance, who pay for the move. The BOJ will buy yen on the market in a very large volume, enough to push the exchange rate down by several thousand pips all at once. The move is not pre-announced, and can happen more than once. The idea is precisely to keep the market from trying to push the pair up by burning out many of the long positions, and threatening to repeat at any moment.

                        Read More : Daily & Weekly Analysis On Xtreamforex

                        Comment


                        • USD Index COT Data from the commitments of traders report

                          US bond yields have continued to rise in an almost parabolic fashion, with 1 year note now just shy of 4%, and the 2-year at 3.8% with an increasingly inverted yield curve. And large speculators are not shy in capitalizing on these lower bond prices- which move inversely to bond yields. Last week they were net-short the 2 year treasury note by-358k contracts, which is their most bearish position since April 2021.

                          The net-short exposure over time it could be argued it is approaching a sentiment extreme.

                          Net-short exposure hasn’t ever spent much below -350k.
                          It’s 3-year Z-score is -2.3 standard deviations.
                          It’s 1-year SD is 2.9
                          There are 4.6 bears for every bull.

                          Read More : Daily & Weekly Analysis On Xtreamforex

                          Comment


                          • Reserve Bank of Australia raises rates again

                            The Reserve Bank Board should slow the pace of rate increases once it reaches its assessment of neutral. That is particularly because of the treacherous lags that will have built up as the inevitable result of such a sharp rate increase in rates, from 0.1% back in May.

                            The Governor has certainly indicated that intention, both in the speech to the Australian Business Economists on September 8 and in the Parliamentary hearing last Friday.

                            The scaling back to a slower pace of tightening could begin from the October meeting, with the cash rate having reached the neutral zone at 2.35%.

                            There has always been some uncertainty as to whether a starting point of 2.35% would be too far below the Governor’s assessment of neutral. He has argued in the past that the real neutral is at least zero, implying a 2.5% nominal rate given longer term inflation expectations. That is above the 2.35% starting point for the October meeting.

                            That 1% growth rate now has some downside risks but for now given the current momentum in the economy, it’s decided not to mark 2023 growth down any further. It’s also noted that since the forecast is 1% growth rate in 2023 we have revised down our 2022 growth rate from4.4% to 3.4% meaning that the level of GDP by end 2023 will be considerably lower than we had expected when we first made the 1% growth forecast.

                            Read More : Daily & Weekly Analysis On Xtreamforex

                            Comment


                            • SNB could surprise (again) with a larger than expected hike

                              The central bank entered ZIRP between 2011-2015 before switching to NIRP with a rate of -0.75%, where it remained until June this year. And with seemingly few paying attention, they not only hiked rates but came out swinging with a 50 bp hike and sent shockwaves across currency markets. This quickly saw the yen strengthen as traders assumed the BOJ would be next to follow, but we’re still waiting and will likely be for some time. But the main point is that the SNB is likely to hike again tomorrow, and it would be wise to at least be prepared for a larger hike than some expect.

                              A recent poll saw economists up their 50bp hike for the SNB to 75bp. But in light of Sweden’s Riksbank hiking by 100bp, wholesale prices in Germany exploding higher and the potential for the Fed to hike by 100bp, the potential for the SNB to join to 100bp club. Besides, they hiked by 50bp when the consensus was for no change at all and have a track record with an element of surprise. Furthermore, the Swiss government upgraded 2022 CPI from 2.5% to 3%, and for 2023 from 1.4% to 2.3%- so perhaps they know something.

                              There are some examples of a strong bullish trend on a currency chart, than CHF/JPY right now. Momentum has been increasing during each impulse move higher, the moving averages are in bullish sequence and fanning out, and prices are respecting the closest average as support.

                              Read More : Daily & Weekly Analysis On Xtreamforex

                              Comment


                              • How Much FOMC Interest Rate Hike By Fed?

                                The Federal Reserve Open Market Committee lifted the federal funds rate to the 3.0% to 3.25% range and reaffirmed a continuation of its balance sheet runoff. The Fed updated its language stating the “recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to pandemic, higher food and energy prices, and broader price pressures”.

                                The Summary of Economic Projections was updated from June:-

                                The median projection for real GDP growth was downgraded in 2022. The forecast for 2023,2024,2025 and the longer run came in at 1.2%, 1.7%, 1.8% and 1.8% respectively.

                                The median unemployment rate forecast was 3.8% for 2022. 4.4% for 2023, 4.4% in 2024 and 4.3% in 2025. The longer-run estimate of the unemployment rate stayed the same at 4.0%.

                                On inflation, the median estimate for core PCE was assumed to be 4.5% in 2022, 3.1% in 2023, 2.3% in 2024 and 2.1% in 2025.
                                The median projection for the fed funds rate was lifted to 4.4% in 2022, 4.6% in 2023, 3.9% in 2024, and 2.9% in 2025. The long-run neutral rate was assumed to be 2.5%.

                                Read More : Daily & Weekly Analysis On Xtreamforex

                                Comment

                                Announcement

                                Collapse
                                No announcement yet.

                                Unconfigured Ad Widget

                                Collapse

                                Unconfigured Ad Widget

                                Collapse
                                Plus500 offers only CFD service
                                Working...
                                X