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  • The Yen continues retreating. Overview for 21.07.2020


    USDJPY is rising on Tuesday; market players maintain their attitude to risks and do not require “safe haven” assets.

    The Japanese Yen has been cheapening against the USD for the third trading session in a row. The current quote for the instrument is 107.30.

    At the moment, investors hope for the best and barely require “safe haven” assets, thus making the Yen retreat. However, it might even be good for Japan because the strong national currency interferes with the recovery of the country’s economy.

    The statistics published in the morning showed that the Japanese Core CPI didn’t change in June after being 0.2% y/y in the previous month and against the expected reading of -0.1% y/y. The CPI also didn’t change and was +0.1% in June. At least, there was no deflation and that’s good.

    A possibility of deflation scares both politicians and economists because it may eliminate many years of efforts and trillions of Yen spend by the Bank of Japan and the Ministry of Finance to make the country’s inflation stable.

    So, what can the BoJ do to prevent the CPI from “going into the red”? To expand the stimulus measures. However, in this case, the national debt will increase in the shortest time. And that’s a problem which the Japanese authorities don’t know how to solve yet.

    Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

    Comment


    • The Euro updated its 18-month highs. Overview for 22.07.2020


      The major currency pair has reached the high of January 13th, 2019, and is still moving upwards.

      EURUSD is soaring and not afraid of height due to a pretty strong fundamental support. The current quote for the instrument is 1.1535.

      The European currency is supported by the same positive mood as yesterday. We remind you that the EU countries had a long-running summit, where they finally decided on parameters and nuances of their new stability funds to help the European economy to recover. The fund is huge indeed and expected to move the alliance to a new level of a quick economic recovery.

      In this light, market players’ attitude to risk significantly improved, which is quite logical. Europe is united, it sees the problem and solves it together and in concord. The Euro is happy, that’s why its skyrocketing doesn’t surprise anyone.

      There haven’t been any important statistics from the Euro Area and the USA yet. However, today the USA is scheduled to start reporting, for example, on the Existing Home Sales, which is expected to show 4.77M in June after being 3.91M the month before. Improvement of the indicator will be a good sign for the US real estate market. Another report to be published is the HPI, which may add 0.3% m/m in May after being +0.2% m/m the month before.

      Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

      Comment


      • Strength is in the Euro. Overview for 23.07.2020


        After updating the high of October 16th, 2018 yesterday, the major currency pair intends to keep its positive momentum.

        EURUSD is as fresh as paint and might as well continue rising. The current quote for the instrument is 1.1585.

        The high of October 16th, 2018, 1.1602, was updated last night. The key catalyst that helps the Euro to get so much stronger remains the same – a well-coordinated work of the European Union to agree on the stability funds to help the Area’s economy to recover. The sum of €750B is so huge, that all arguments against collapse. It’s the fundamental factor, supported by which the Euro may continue strengthening for a long time.

        In this light, market players prefer to treat escalation of the US-Chinese conflict as though it doesn’t exist but they perfectly understand that it’s temporary.

        Last night, the Ministry of Foreign Affairs of the People's Republic of China announced that on July 21st, the USA issued an order to close the Chinese consular post in Houston. How can it be perceived? Like another step towards deterioration in ГЫ-Chinese relations, nothing else. The conflict escalates, and it’s not only about the spread of the COVID-19.

        In the afternoon, investors should pay attention to the Consumer Confidence in the Euro Area, which may improve up to -12 points in July after being -15 points the month before. In the evening, the USA is going to report on the CB Leading Index in June but it’s unlikely to be interesting.

        Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

        Comment


        • The Australian Dollar is heading downwards. Overview for 24.07.2020


          AUDUSD has been falling for the second trading session in a row despite stable statistics.

          The Australian Dollar is retreating against the USD. The current quote for the instrument is 0.7079.

          The statistics published in the morning showed that the Manufacturing PMI improved up to 53.4 points in July after being 51.2 points the month before. The Services PMI moved from 53.1 points in June to 58.5 points this month.

          The Aussie didn’t respond to these numbers. It seems like all eyes are currently on the escalation of the US-Chinese conflict.

          Political dialogue between the countries deteriorated after the Ministry of Foreign Affairs of the People's Republic of China announced the closure of the American consular post in Chengdu. Earlier, the USA did the same in Texas – the response was not long in coming.

          Earlier this week, United States Secretary of State Mike Pompeo called the relationship between Washington and Beijing adversarial. The USA believes that Chinese actions are a menace to the free world and should act preventively – this is how they see the situation in the White House.

          For Australia, possible problems of the Chinese foreign policy are risky, because Beijing was and is Australia’s key trade and economic partner.

          Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

          Comment


          • The Euro is ready to consolidate. Overview for 28.07.2020


            After updating another two-year high, the major currency pair started consolidating.

            EURUSD stopped skyrocketing and is trying to reach stability not far from its highs. The current quote for the instrument is 1.1726.

            The USD has been once again failed by the number of new coronavirus cases in the USA. This growth is a rather alarming signal for market players. In addition to that, they are waiting for the US Federal Reserve meeting this week in order to understand how the regulator estimates the current stimulus measures or the country’s economy may require more.

            The regulator is expected to keep its monetary policy parameters intact, for example, the interest rate at 0.00-0.25%, and comment on the inflation issue.

            The statistics published yesterday showed that the Durable Goods Orders in the USA added 7.3% m/m in June after expanding by 15.7% m/m in May and against the expected reading of +7.0% m/m. The indicator itself is extremely volatile but any improvement should be considered as a positive factor.

            The components of the report showed that the Core Durable Goods Orders added 3.3% m/m in June after being +3.6% m/m in the previous month. Also, Orders for Non-Defense Capital Goods excluding aircraft jumped by 3.3% m/m after a 1.6% m/m gain in May.

            Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

            Comment


            • EURUSD is standing still. Overview for 29.07.2020


              The major currency pair has been consolidating for the second consecutive day; it is barely moving today.

              EURUSD is consolidating not far from two-year highs and trying to hold its positions. The current quote for the instrument is 1.1730.

              The statistics published yesterday showed that the CB Conference Board dropped got worse by dropping from 98.3 points in June to 92.6 points in July. The predicted reading implied some sort of decline but only to 94.0 points.

              The components of the report show why the indicator decreased: the Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – decreased from 106.1 points in June to 91.5 points this month. The percentage of consumers expecting business conditions will improve over the next six months declined from 42.4% to 31.6%, while those expecting business conditions will worsen increased from 15.2% to 19.3%.

              It’s not the best signal for market players to get.

              Yesterday, the US Federal Reserve started its another meeting, which will be over on Wednesday night. No changes or revisions in the regulator’s monetary policy are expected but investors are hoping that the Fed will comment on inflation and may change the future outlook in it. For example, the regulator may target inflation in order to compensate for previous declines, and that may be a trigger for the USD movement tonight.

              Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

              Comment


              • EURUSD is barely moving. Overview for 30.07.2020


                The major currency pair is slightly correcting on Thursday morning without any particular direction.

                EURUSD got everything it needed and started consolidating. The current quote for the instrument is 1.1754.

                Yesterday, the US Federal Reserve finished its meeting. The interest rate remained unchanged at zero and the regulator reminded that it was ready to implement all available tools and mechanisms to continue supporting the country’s economy in its recovery.

                According to Fed Chairman Jerome Powell, some of the consumer spending indicators decreased since the end of June and that’s not a good signal. Powell said that the unemployment was clearly rising among particular groups of the working-age population, such as women, Afro-Americans, Latin Americans, and employees in a low-income bracket

                At the moment, according to the Fed’s estimations, investments in fixed capitals of companies and enterprises didn’t show significant improvements.

                Powell said that the future monetary policy would depend on activities on all levels of the country’s government.

                Investors weren’t surprised or happy with the results of the meeting because they are absolutely neutral. Over the last several months, market players got used to volatility, constant changes in directions, and verbal interventions – none of them happened this time, that’s why financial markets are consolidating, mostly from sheer boredom.

                Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                Comment


                • New highs in EURUSD: the sky is the limit. Overview for 31.07.2020


                  EURUSD has been trading upwards since June 25th; the asset continues forming a stable uptrend.

                  After a short pause, the major currency pair continues rising and has already updated its closest highs. The current quote for the instrument is 1.1893.

                  The USD has been stabbed twice and each time was more surprising than the other. And if the statistics could have been predicted one way or another, Donald Trump – certainly not.

                  So, the latest data showed that the US GDP lost 32.9% q/q in the second quarter, which is the worst reading since the Great depression time. The major part of this decline was in April when the tertiary industry was completely shut down. Starting from May, the sector started reviving slowly but the rising impulse was too weak but the activity is still restricted due to an increasing number of new COVID-19 cases in the USA.

                  This problem will continue keeping market players on the edge in their expectations relating to the GDP in the third quarter.

                  It goes without saying that the indicator might have lost much more if it hadn’t been for the stimulus package of $3 trillion but the current plunge is still very impressive.

                  The second negative factor came from US President Donald Trump, who, referring to the plummeted GDP, poor economic situation, and the COVID-19 pandemic, said that he didn’t exclude the [possibility of postponing the presidential elections scheduled for November. It was an unpleasant surprise for the “greenback” enthusiasts because any political uncertainty raises risks, which are already too high.

                  Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                  Comment


                  • The Euro is taking a break. Overview for 03.08.2020


                    After skyrocketing in July, EURUSD is consolidating.

                    The major currency pair is looking stable on Monday amid neutral external background. The current quote for the instrument is 1.1730.

                    The first August week will bring a lot of important news and statistics but it will be a bit later. So far, EURUSD is consolidating.

                    The statistics published in the afternoon showed that the final report of the Eurozone Manufacturing PMI increased up to 51.8 points after the preliminary estimate of 51.1 points, although it wasn’t expected to be revised. The same indicator but for Germany went from 50 points to 51 points. It’s good news for the Euro.

                    Later in the evening, the USA will also report on the Manufacturing PMI, both from Markit and ISM. In both cases, the indicator is expected to improve, which is good for the USD. In addition to that, there will be reports of the Construction Spending in June and ISM Manufacturing Prices in July.

                    However, investors’ attention is mostly focused on the increasing number of new coronavirus cases. According to the World Health Organization, the total number over the entire pandemic period exceeded 18 million people. Another thing that worries market players is pessimistic comments from the White House about plans to help the country’s economy and its immediate effect. This factor prevents the “greenback” from recovering.

                    Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                    Comment


                    • The Euro is looking up again. Overview for 04.08.2020


                      Tuesday starts with new growth in the major currency pair.

                      After having a quiet trading session yesterday, EURUSD is growing on Tuesday morning. The current quote for the instrument is 1.1770.

                      The numbers from the USA published yesterday were quite good. For example, the ISM Manufacturing PMI showed 54.2 points in July, which is better than expected, after being 52.6 points in the previous month. The ISM Manufacturing Prices improved from 51.3 points in June to 53.2 points in July. The Construction Spending m/m lost 0.7% m/m in June after being -1.7% m/m the month before.

                      The final report on the Eurozone Manufacturing PMI showed 51.8 points in July against the first estimate of 51.1 points, although it wasn’t expected to be revised.

                      Today is going to be a calm day when it comes to macroeconomic statistics. The Euro Area is scheduled to report on the PPI in the afternoon, which may recover by 0.6% m/m in June after losing the same in May. Later, the USA will publish the Factory Orders, which may add 5.1% m/m in June after expanding by 8.0% m/m in the previous month.

                      Investors’ attitude to risks is slowly reviving and that supports the European currency.

                      Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                      Comment


                      • The Euro is accompanied by small purchases. Overview for 05.08.2020


                        On Wednesday morning, EURUSD is still rising; investors are interested in risks.

                        The major currency pair remains strong in the middle of the week. The current quote for the instrument is 1.1810.

                        There were few numbers worth paying attention to yesterday. For example, the Euro Area reported on the PPI, which added 0.7% m/m in July after losing 0.6% m/m in the previous month.

                        The USA reported on the Factory Orders in June, which showed +6.2% after being +7.7% m/m the month before and against the expected reading of +5.1% m/m. The Factory Orders report may be a leading indicator to the Retail Sales and such an improvement may be pretty good for the American economy.

                        Later in the afternoon, the USA will start reporting on its labor market in July. As a rule, the first report is the ADP Non-Farm Employment Change, which may show 1.2M after being 2.369M in June. Any increase is a good sign for the “greenback” and the bigger the reading – the better for the USD.

                        All key numbers on the employment will be published on Friday, as usual.

                        Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                        Comment


                        • The Pound is keeping its positive momentum. Overview for 06.08.2020
                          Forex Forecasts and Analysis" on our website.

                          Comment


                          • The Yen stopped rising. Overview for 07.08.2020


                            At the end of the first August week, USDJPY slowed down its growth; at the moment, it is consolidating.

                            The Japanese Yen reached stability against the USD on Friday afternoon. The current quote for the instrument is 105.62.

                            Market players are still very careful when it comes to risks and continue buying “safe haven” assets. Stock markets are currently moving quite high and require correction but lack reasons for that. The coronavirus pandemic remains very alarming, although people got used to it.

                            In the morning, Japan published several interesting reports. For example, Household Spending showed -1.2% y/y in June after being -16.2% y/y in the previous month. The indicator was expected to improve and show -7.8% y/y but the reality turned out to be much better. Of course, Japanese consumers “recovered from coma” after the pandemic but they are still very cautious in their spending because no one knows what may happen to the country’s economy in the future.

                            The Average Cash Earnings showed -1.7% y/y in June after being -2.3% y/y in May and against the expected reading of -3.0% y/y.

                            The Leading Indicators improved from 78.4% in May to 85.0% in June. It’s another good signal.

                            In general, the economic environment in Japan is slowly getting better but it’s too early to talk about proper recovery.

                            Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                            Comment


                            • The USD got more expensive. Overview for 10.08.2020

                              EURUSD fell a little bit due to the American statistic but not for long.

                              The major currency pair is rather inactive on Monday morning while investors are collecting the latest data to decide on where to move today. The current quote for the instrument is 1.1790.

                              So, market players have already “processed” the statistics on the US labor market published last Friday. The Unemployment Rate improved up to 10.2% in July after being 11.1% in June and against the expected reading of 10.5%. However, two more percent and ebullience may fade to be replaced by hard work to correct mistakes.

                              The NFP Change showed 1.763M in July against market expectations of 1.53M. In the previous month, the indicator was 4.791M and the problem is that the recovery will take much time.

                              The Average Hourly Earnings in the USA added 0.2% m/m in July, which is much better than expected. Last month, the indicator showed -1.3% m/m and that was painful.

                              Basically, the numbers were pretty positive but it can be clearly seen that it’s getting more and more difficult for the labor market to show stable results because the stimulus measures taken by the government haven’t been implemented completely for the sector yet. Despite rather cheap loans, companies still find it difficult to obtain credits and use them to create new jobs because they have no idea what possible prospects might be. As long as the entire world is unstable and the coronavirus pandemic is still here, any progress will be extremely slow.

                              Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

                              Comment


                              • The Australian Dollar is in the “black” again. Overview for 11.08.2020

                                Despite some weak statistics, AUDUSD found a reason for growth for the first time in several days.

                                The Australian Dollar is rising against the USD on Tuesday morning. The current quote for the instrument is 0.7180.

                                The key reasons why the Aussie is getting stringer are the USD behavior and market players’ attitude to risks. For Australia, the news is not so good because of the US-Chinese conflict. Earlier, China introduced sanctions against some of the American politicians. Today, US President Donald Trump said that there wouldn’t be any countermeasures because the USA had already done it.

                                China is the most significant trade and economic partner of Australia, that’s why it’s very important for the Aussie that the Chinese economy had as few problems as possible.

                                The morning statistics from Australia showed that the NAB Business Confidence in the country dropped to -14 points in July after being 1 point in the previous month. Any reading above 0 indicates the improvement of conditions and vice versa.

                                At the same time, the overall situation in the Australian economy seems rather neutral. The labor market is trying to adjust to new market reality and it’s clear that it is quite flexible for succeeding in it sooner or later. It’s very important for the national currency to avoid any abrupt slumps – everything else can be dealt with.

                                Forecasts for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

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