Daily Forex News

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xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Tue Sep 13, 2022 11:21 am

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 : https://www.xtreamforex.com/silver-outshines-gold-as-dollar-slips-xtreamforex/

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xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Wed Sep 14, 2022 10:49 am

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 : https://www.xtreamforex.com/what-will-happen-to-gbp-usd-if-the-uk-surprises-with-higher-cpi/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Thu Sep 15, 2022 11:41 am

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 it 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 : https://www.xtreamforex.com/new-zealand-q2-gdp-beats-expectations/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Fri Sep 16, 2022 11:46 am

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 : https://www.xtreamforex.com/us-dollar-japanese-yen-usd-jpy-analysis-xtreamforex/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Mon Sep 19, 2022 10:56 am

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 : https://www.xtreamforex.com/usd-index-cot-data-from-the-commitments-of-traders-report/

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xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Tue Sep 20, 2022 11:20 am

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 : https://www.xtreamforex.com/reserve-bank-of-australia-raises-rates-again/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Wed Sep 21, 2022 12:04 pm

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 : https://www.xtreamforex.com/snb-could-surprise-again-with-a-larger-than-expected-hike/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Thu Sep 22, 2022 10:09 am

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 : https://www.xtreamforex.com/how-much-fomc-interest-rate-hike-by-fed/

xtreamforex
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Re: Daily Forex News

Postby xtreamforex » Fri Sep 23, 2022 12:20 pm

BOE: Another 50bp hike and we expect more to come

The BOE hiked policy rates by 50bp, bringing the bank rate to 2.25. The extent to which fiscal policy is set to boost demand and hence impact policy setting is still highly uncertain. Call for a 50bp hike in November and December and 25bp in February with risks of skewed towards additional hikes in 2023.

The Bank Of England increased the Bank Rate by 50bp to 2.25% with 5 member voting for 50bp increase, 3 members voting for 75bp and one member voting for 25bp. As expected, BoE announced that outright government bond selling will start with a total reduction in bond holdings of 80 billion pounds over 12 months. The BoE repeated its meeting-by-meeting approach stating that “Policy is not on a pre-set path” giving close to no forward guidance to markets.

One of the key takeaways from the Monetary Policy Summary is that the BoE no longer seem to pencil in a recession by Q4 2022. Note no inflation or growth forecast were published at this interim meeting, but not mentioning a recession gives a hint that the recession won’t hit as soon as BoE predicted in August. This feeds well into our narrative of the Fiscal stimulus providing near-term support to the economy. With newly elected PM Lizz Truss having announced the energy relief plan, which will cap energy prices for households, BoE now sees the peak in CPI inflation to be just below 11% compared to the 13% projected in August.

Read More : https://www.xtreamforex.com/boe-another-50bp-hike-and-we-expect-more-to-come/

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