Daily Forex News

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Upcoming News for this Week:- FOMC, RBA, BOE

FOMC

The FOMC increased rates by 75bps increasing the Fed Funds rate from 1.75% to 2.50%. The statement confirmed that spending and production were soft, however job increase remain strong. The Fed put softer data aside by saying that it anticipates ongoing increase in the Fed Funds rate. It was announced by the Fed Chairman Powell that the rate decisions will be made on a meeting to meeting basis which depends on the incoming data. On one side it was announced that another unusual large market rate hike could be expected and it could also be possible to slow down the rate hikes to get more restrictive. For now the Fed is data dependent. IF the labor markets continue to be strong, the Fed will continue hiking. If there are cracks in the labor market, the Fed may pull back the pace of rate hikes.

Read More : https://www.xtreamforex.com/upcoming-news-for-this-week-fomc-rba-boe/

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Upcoming Market Updates: AUD, NZD, EUR, GBP, USD, JPY

AUD: AIG Manufacturing Index, it measures level of a diffusion index based on surveyed manufactures.

NZD: Building Consents m/m, it measures change in the number of new building approvals issued.

JPY: Final Manufacturing PMI, it measures level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

AUD: MI Inflation Gauge m/m, it measures change in the price of goods and services purchased by consumers.

AUD: ANZ Job Advertisements m/m, it measures change in the number of jobs advertised in the major daily newspapers and websites covering the capital cities.

EUR: Spanish Manufacturing PMI, it measures level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

Read More : https://www.xtreamforex.com/upcoming-market-updates-aud-nzd-eur-gbp-usd-jpy/

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Swiss National Bank, CHF

A message from Swiss National Bank was sent to market last week which was that it may take monetary policy measures at any time between regular assessment dates if circumstances require that. Last meeting of SNB on 16th June surprised markets and hiked interest rates by 50bps from record low of -0.75% to -0.25%. There is no schedule meeting of SNB until 22nd September this year. The Central Bank cited increased inflationary pressures as the reason for the rate hike after CPI reached a high of 2.9% YoY in May which was the highest in last 14 years. In June, inflation rose to 3.4% YoY and with CPI for July to be increased today, the SNB knows it may have to act inter-meeting if inflation, continues to rise. The expectation for the July SPI is 3.5% YoY. If the data comes in hotter than expected, be on the lookout for another rate hike before next meeting.

EUR/CHF is trading at its lowest level since Jan 2015 if we look at the weekly timeframe, when SNB dropped the peg of the Swiss Franc to the Euro. The last weekly low was 0.9776, which happened the week after the peg.

Read More : https://www.xtreamforex.com/swiss-national-bank-chf/

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AUD/USD After RBA Meeting

Policy rate as expected by RBA was raised by 50 bps to 1.85% last Tuesday. This is the fourth consecutive hike and steepest in almost 30 years. This helped a little to raise AUD/USD which was down by almost 1% from the beginning of this week. This release leaves the pair to trade below psychological level of 0.70. The recent tensions between China and Taiwan have added to weaker AUD, but some of the factors have been primary driver behind this latest move.

Latest guidance from the RBA that near-term future hikes may not be standing as the one this week was likely the bug factor behind the fall of AUD/USD. RBA also admits that it is trying hard to slow down the inflation, which hit 6.1% in second quarter without any big impact on Australian economy. A cadre of Fed speakers this week haven’t given any indication that Fed is looking to ease up on raising interest rates. Currently, the RBA, like many other major central banks, doesn’t appear capable of keeping pace with the Fed in terms of policy tightening.

Read More : https://www.xtreamforex.com/aud-usd-after-rba-meeting/

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Employment Rate Change In Canada

Employment change in Canada is better than expected and this will help Bank Of Canada to hike again in next meeting which will be in September.

NFP tomorrow, markets will be focusing on the data, and Canada will release the July Employment Change data as well. It is expected that the Unemployment rate will remain unchanged at 4.9%. 25,000 gain for Employment change is expected vs a June reading of -43,200. Most of the job losses from June headline were due to a decrease of 39,100 part-time jobs.

Read More : https://www.xtreamforex.com/employment-rate-change-in-canada/

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RBNZ survey of Expectations, NZD

The expectations form RBNZ ‘s latest survey shows inflation over coming years will remain high. The trend is seen higher in recent quarters looks like arrested and the expectations easing at some of the key medium-term horizons.

Lets look at the details, expectations for inflation one year ahead is consistent at 4.9%. Expectations at this short horizon will follow actual inflation closely. And the latest survey expects the risk of high inflation of 7.3%int the year to June, that lack of movement will be welcome news for the RBNZ.

Central Bank’s main focus is on expecting long horizon for the next couple of years. This is a better guide to how businesses will adjust between prices and wages, and signal if the inflation target is viewed as decent. Today’s news will also have been welcomed by the central bank.

Read More : https://www.xtreamforex.com/rbnz-survey-of-expectations-nzd/

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US CPI Preview: Are we past peak inflation?

Price pressure may show slowing down while the Fed’s preferred Core CPI measure shows that underlying inflation is still rising.

Tomorrow the US Bureau of Labor Statistics will release the July Consumer Price Index report.

Economists are expecting CPI headline to come in at 0.2% MoM , 8.8% YoY, with the core CPI report expected to print at 0.5% MoM, 6.1% YoY. Last month’s headline CPI printed 9.1% YoY, while the core CPI was 5.9%.

The biggest factor could be the gas prices, which have now fallen for over 50 days straight. Analysists estimated that the gas prices fell at least 10% in July from June levels, likely subtracting 0.5% or more off the headline CPI reading this month. Food prices were also lower to some extent in July than August, setting up a dynamic where the headline inflation reading may show price pressures fading while the Fed’s preferred “core” CPI measure shows that underlying inflation is still rising as home prices and pent-up demand for economic reopening offset the more volatile components.

Read More : https://www.xtreamforex.com/us-cpi-prev ... inflation/

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USD/CAD: A Tale Of Two Labor Markets

Traders are still trying to digest last week’s US jobs report, but one thing is clear that The US labor market is outperforming Canada’s labor market.

Markets are starting to settle into the traditional “Dog Days of Summer” trade, major indices, commodities and currency pairs seeing relatively little movement on the day ahead of tomorrow’s highly expected UC CPI report.

Traders are still trying to digest last week’s US jobs report, but one thing is clear: The US labor market is outperforming Canada’s market. Whereas the US just saw its strongest job growth in five months, a new revolving low in its unemployment rate, and has fully recovered all of the job losses since the start of the pandemic, Canada has now seen two consecutive months of outright declines in full-time employment.

Central banks world wide remained hyper-focused on inflation, but an outright contraction in employment, especially against a backdrop of falling commodity prices and a slowing global economy, could certainly prompt some to slow or pause their tightening cycles. This now is the reality that the BOC has to wrestle with, presenting a possible bullish catalyst for the US dollar relative to the loosie.

Read More : https://www.xtreamforex.com/usd-cad-a-t ... r-markets/

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Weak US CPI, EUR/USD

It was the sort of movement which was needed. The most anticipated US inflation report lived up to expectations in terms of market impact as the dollar plunged and everything else went up, including all foreign currencies, gold ,BTC, and stocks. Among the majors, the EUR/USD has finally broken out of its tight consolidation phase, suggesting more short-term gains could in the days ahead, despite all the troubles for the Eurozone.

Driven by sharp declines in energy and gas prices, the 8.5% annual inflation read was relatively sharply weaker from 9.1% recorded in June. It is still uncomfortably high, but investors will take some comfort in that it was the first headline CPI reading that came below expectation in 11 months.

July was a strong month for employment, but not so strong for inflation, investors will look for signs on how the American consumer’s outlook is shaping on the economy and inflation prospects. Consumer sentiment will be in news on Friday. Thanks to soaring prices of everything from gas to food, consumer sentiment in US has been dropping rapidly in recent months, mirroring the situation in Europe and the rest of the world.

Read More : https://www.xtreamforex.com/weak-us-cpi-eur-usd/

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Gold Loses Some Sheen as Hawkish Fed Outweighs Softer Inflation

It’s been difficult for Gold to keep its bullish movement even though inflation data supporting the view that the Fed’s rate hikes are slow. Perhaps a bit of base and stability is needed for gold to gear up for a clean breakout above $1800.

After the soft CPI data and today’s weaker than as it was expected PPI data added to the belief that inflation has reached it’s peak. As a result, US stocks initially expand their gains to three-month highs, before easing back.

Investors are betting that softening inflation will allow the Fed to increase interest rates less aggressively. We can also see bond yields rise with the 10-year breaking the high of 2.816%, with production rise with the 10 year breaking Wednesdays high of 2.816%, with the production in Europe also rising. This kept a cover on Gold and Silver, however the dollar did dell against most of the currencies-especially those risk sensitive commodity dollars.

Investors of Gold will be keeping a close eye on bond production. For as long as they don’t rise too much then we should see the metal start continue to shine as it has done over the past 3 weeks.

Rebound in the production of bonds underscores uncertainty about the future path of inflation and interest rates. A couple of Fed officials have already said the Fed wants to see more evidence that inflation is on a down path. With odds of 75 basis point hike having dropped, the Fed is careful not to push too hard against that, but at the same time leave the door open for such an aggressive hike should incoming data from now until mid-September show another upsurge in prices or if employment once again probes to be very hot.

Read More : https://www.xtreamforex.com/gold-loses-some-sheen-as-hawkish-fed-outweighs-softer-inflation/