Risk warning: Trading CFDs is risky and can result in the loss of your invested capital. Please ensure that you understand the risks involved and do not invest more than you can afford to lose. Read full Risk Disclosure. FT Global Ltd is regulated by the IFSC.
Risk warning: Your capital is at risk. It is possible to lose more than you invest.
  • Contact us
  • FAQ

Forex News Timeline

Thursday, May 25, 2017

PBOC sets USD/CNY at 6.8695 vs 6.8758

PBOC sets USD/CNY at 6.8695 vs 6.8758

USD/JPY was consolidating above the midpoint of the 111 handle recovering two big figures higher (since 18th March) to overnight offers at the 200 smo

USD/JPY was consolidating above the midpoint of the 111 handle recovering two big figures higher (since 18th March) to overnight offers at the 200 smoothed sma. However, the FOMC minutes dented the dollar and yields dropped.  With the spectrum of Trump politics and concerns in the background over the Fed's neutral/hawkish stance, analysts at Brown Brothers Harriman noted that the next support to the downside in DXY at 96.45 is the 61.8% retracement of the rally from last May when it slipped below 92.00: "A bit below there is the low from the November election near 95.90.  A break would bring the minimum measuring objective of the possible head and shoulders top pattern (carved out between November 2016 and March 2017, which we were sceptical of), near 94.80 into view."  USD/JPY's spread is a driving factor with the with yields unable to gather pace above and stay above the psychological 2.3% level in the 10-years. USD/JPY levelsIn a tight range in Tokyo today, technically, the advance was contained by the 38.2% retracement of the latest bullish run around 112.00, explained Valeria Bednarik, chief analyst at FXStreet." Technical indicators have turned lower right above their mid-lines, whilst the price remains trapped between horizontal 100 and 200 SMAs, lacking directional strength in the short term."

Analysts at Nomura offered their projections for the USD/CNY fix today. Key Quotes: "Our model1 projects the fix to be 37 pips higher than the p

Analysts at Nomura offered their projections for the USD/CNY fix today.

Key Quotes:

"Our model1 projects the fix to be 37 pips higher than the previous fix (6.8795 from 6.8758) and 114 pips lower than the previous official spot USD/CNY close of 6.8909.

The basket implied change is 139 pips lower than the previous official spot USD/CNY close (6.8770 from 6.8909)."

South Korea BoK Interest Rate Decision meets expectations (1.25%) in May

Brent oil regained bid tone in Asia to trade above the $54.00 mark on speculation the OPEC is set to extend the oil output cut deal by nine months. P

Brent oil regained bid tone in Asia to trade above the $54.00 mark on speculation the OPEC is set to extend the oil output cut deal by nine months. Prices dipped to a low of $53.65 in the overnight trade as investors reacted to a smaller-than-expected US gasoline stocks draw. The Energy Information Administration data showed gasoline inventories fell only 787,000 barrels, compared with expectations for a 1.2 million barrel draw. The losses in oil prices were capped by the fact that oil inventories registered their seventh straight weekly drop in the week ended May 19 (actual 4.4 million barrels, expected 2.4 million barrels). The focus today is on the OPEC and non-OPEC meeting. Major oil producers are scheduled to decide whether to extend an agreement to cut world supply. The latest report from Goldman Sachs talks about short-term relief from the extended global oil deal and a potential for fresh oil market glut in 2018. As of now, the markets are not worried about Goldman’s long-run bearish call as consensus is growing on extending the cap by another nine months.Brent Oil Technical LevelsBrent was last seen trading around $54.30/barrel. Yesterday’s high of $54.49 if breached would open doors for $55.02 (Mar 2 low) and $55.16 (Feb 16 low). On the lower side, breach of support at $53.83 (session low) could yield a pullback to $53.23 (May 23 low) and $52.47 (50-DMA).    

Singapore Gross Domestic Product (QoQ) below expectations (-1%) in 1Q: Actual (-1.3%)

Analysts at Brown Brother Harriman explained that the USD/JPY exchange rate remains highly correlated with the 10-year yield.  That correlation is nea

Analysts at Brown Brother Harriman explained that the USD/JPY exchange rate remains highly correlated with the 10-year yield.  That correlation is near 0.72 now.  Key Quotes:That correlation is near 0.72 now.   "It had reached 0.78 in early March, was one of the strongest correlations since 2000. The two-year interest rate differential is also important.  The correlation now is a little more than 0.62. " "It had fallen to almost 0.45 in April after peaking near 0.67 in January and February.  Last year, the correlation did not rise above 0.60 in the first half and peaked in August near 0.67."  

Comments from Fed’s Kaplan crossing the wires via Bloomberg and Reuters – The Fed should unwind the balance sheet in a way that minimises impact. The

Comments from Fed’s Kaplan crossing the wires via Bloomberg and Reuters – The Fed should unwind the balance sheet in a way that minimises impact. The Fed minutes released yesterday showed nearly all policy makers agree to reduce balance sheet later this year.Key quotesFed is still below 2% inflation Progress of inflation is slow and even Should remove accommodation patiently Rates hikes could be more gradual than once a quarter US close to getting full employment US can’t grow debt to boost GDP any more  

Singapore Gross Domestic Product (YoY) in line with forecasts (2.7%) in 1Q

Analysts at Nomura noted the accompanying data from the US overnight. Key Quotes: "Existing home sales: Sales of previously-owned home declined 2.3%

Analysts at Nomura noted the accompanying data from the US overnight.Key Quotes:"Existing home sales: Sales of previously-owned home declined 2.3% m-o-m in April slowing to an annualized pace of 5.57m, which is below expectations (Nomura: +1.6% to 5.80m, Consensus: -1.1% to 5.65m). The shortage of inventory levels likely lowered sales in April. Total housing inventory at end-April increased 7.2% m-o-m, but on a y-o-y basis, it was down 9.0%. The month’s supply indicator increased to 4.2 months from 3.8 months in March, but the uptick was due to slower sales in April. National Association of Realtors reported that "Homes in the lower- and mid-market price range are hard to find in most markets.” Looking ahead, although mortgage rates have stabilized somewhat, continued lean supply of previously owned homes may continue to exert upward pressure on home price growth.Q2 GDP tracking update: Existing home sales in April were weaker than expected. Slower sales imply less brokers’ commissions, a component of residential investment, in Q2 than we have previously estimated. Therefore, we lowered our Q2 GDP tracking estimate by 0.1pp to 3.3%."

Currently, AUD/USD is trading at 0.7498, down -0.07% on the day, having posted a daily high at 0.7509 and low at 0.7498. AUD/USD is resting on the 0.

Currently, AUD/USD is trading at 0.7498, down -0.07% on the day, having posted a daily high at 0.7509 and low at 0.7498. AUD/USD is resting on the 0.75 handle after a 50 pip rally post the FOMC minutes overnight. The DXY was down as were US 10-yields when the Fed used the term "transitory" in respect to data monitoring.FOMC: future balance-sheet policy discussed - NomuraUS Dollar pushes lower toward 97 on FOMC minutesThis rattled the markets in an otherwise uneventful session making for the extension of the 10 & 21-DSMA rally in Europe from 0.7442 the low. For here, analysts at Westpac argued that there’s potential for a retest of this week’s 0.7517 peak, given the US dollar remains on the back foot. For the day ahead, RBA's Debelle gives opening remarks followed by a panel discussion at the launch of the FX Global Code in London while from NZ: NZD/USD: awaits the budget announced at 0200GMTIron Ore - Modest seaborne export growth continues - WestpacInsights: Trump administration’s proposed FY 2018 budget - NomuraAUD/USD 1-3 month: Further out, the analysts suggest that the modestly weaker than expected Australian CPI outcome has added yet another factor capping the AUD/USD: "softer commodity prices; a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as we expect. "These leave the AUSD/USD with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end."4 hours chart"The price has managed to recover above its 20 SMA that heads now north around 0.7470, and technical indicators bouncing from their mid-lines, but below previous weekly highs. The Australian macroeconomic calendar will remain empty during the upcoming Asian session, with the pair then probably depending on equities, particularly mining-related ones for direction.  A stronger recovery is likely on an advance beyond 0.7515 this week high and the immediate resistance," - Valeria Bednarik, Chief analyst, FXStreet.    

Robert Kaplan, president of the Federal Reserve Bank of Dallas, is speaking in Toronto, noting that the US cannot grow debt to boost GDP any more.

Robert Kaplan, president of the Federal Reserve Bank of Dallas, is speaking in Toronto, noting that the US cannot grow debt to boost GDP any more.

Japan Foreign investment in Japan stocks dipped from previous ¥372.2B to ¥-26.4B in May 19

Analysts at Nomura offered a review of the FOMC minutes. Key Quotes: "FOMC minutes: In the minutes prepared for the 2-3 May FOMC meeting, the commit

Analysts at Nomura offered a review of the FOMC minutes.Key Quotes:"FOMC minutes: In the minutes prepared for the 2-3 May FOMC meeting, the committee reinforced our view that the FOMC will raise short-term interest rates in June if the economy continues to perform in line with the FOMC’s expectations. Incoming data so far have been mixed. Although there has been continued improvement in labor markets, with the unemployment rate ticking down further to 4.4% in April, inflation data were disappointing in March and April." "However, the minutes indicate that the FOMC members concurred with the view that some of the weakness in March CPI inflation was likely due to transitory factors like wireless telephone services, although this interpretation was made without weaker-than-expected CPI data in April, which became available a week after the May meeting. Nevertheless, the recent low readings in the unemployment rate may counterbalance disappointing inflation data, in our view." "The minutes also highlighted further discussion of future balance sheet policy. The minutes indicated that the FOMC prefers adjusting the “caps,” or limits, for the dollar amounts of Treasuries and agency MBS that would be allowed to roll off every three months. Further, the committee expected that once the caps reach their “fully-phased-in levels”, the Fed would maintain the caps until the size of the balance sheet was normalized. This indicates that the committee is unlikely to let 100% of maturing US Treasuries and MBS run off, even after the tapering period ends, which should slow the pace of balance sheet normalization."

Currently, NZD/USD is trading at 0.7045, down -0.08% on the day, having posted a daily high at 0.7052 and low at 0.7043. Forex today: FOMC no surpris

Currently, NZD/USD is trading at 0.7045, down -0.08% on the day, having posted a daily high at 0.7052 and low at 0.7043.Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higherNZD/USD is steady in early subdued Asia post the FOMC minutes and subsequent weakness in the greenback.  The bird took advantage of the expectations for a positive budget coming up later in Asia while the FOMC minutes failed to June's nail in the coffin at the same time. There was talk of tapering in due course by way of settlement at maturity, but the lack of conviction from the Fed over the data had the market a little spooked. However, commodities and risk helped NZD/USD to 0.7057 retaining positive momentum. Analysts at Westpac expect a limited range between 0.7050-0.7100 for today.NZ: Budget likely to show that economy’s performance is generating greater revenue - BBHNZD/USD 1-3 month:  Further out, analysts at Westpac argue that the Fed’s tightening cycle plus US fiscal expansion should eventually reassert upside pressure on US interest rates and the US dollar, pushing NZD/USD below 0.6800 by year end. "US factors should outweigh local factors which are mostly supportive."NZD/USD levelsImmediate resistance remains at 100-day SMA near 0.7050-58 region where stops are tipped. Then, through 0.7047 as being Tuesday's high opens 0.7088 and 0.7148 resistances. To the downside, 0.7020, 0.700, 0.6980 and the 50 daily sma at 0.6949 are the key supports. 

Analysts at ANZ offered a breakdown of the various Central Banks from overnight.  Key Quotes: "The Fed: “Most participants judged that if economic i

Analysts at ANZ offered a breakdown of the various Central Banks from overnight. Key Quotes:"The Fed: “Most participants judged that if economic information came in about in line with their expectations, it would soon be appropriate for the Committee to take another step in removing some policy accommodation. A number of participants pointed out that clarification of prospective fiscal and other policy changes would remove one source of uncertainty for the economic outlook.” “Soon” points to June, though the picture is caveated by “it would be prudent” to wait for evidence that a recent slowdown in economic activity had been transitory. Senior ECB officials continued to counter growing market expectations that there may be a meaningful shift in ECB forward guidance with both Draghi and Constancio reinforcing the view that the ECB will fully implement its QE programme (EUR60bn per month until year end). Draghi also noted that underlying inflation remains subdued despite the increasingly solid recovery in activity. His comment that QE may have more side-effects than negative interest rates would seem to imply that he is not an advocate of changing the outlined sequencing (i.e. rates will rise sometime after QE ends subject to inflation recovering). The Bank of Canada maintained its benchmark interest rate at 0.5%, noting that monetary policy “stimulus is appropriate at present.” Canada’s adjustment to the oil price decline is “largely complete”. Markets took the slight shift in language as a move to a less dovish tone and the balance of risks shifting towards hikes as opposed to cuts."

After an unsuccessful attempt to break above the 1.12 handle at the beginning of the NA session, the EUR/USD pair gathered momentum and rose to 1.1220

After an unsuccessful attempt to break above the 1.12 handle at the beginning of the NA session, the EUR/USD pair gathered momentum and rose to 1.1220 following the release of the FOMC meeting minutes. As of writing, the pair is trading at 1.1218, holding on to its daily gains. The general assessment of the economy was largely unchanged according to the minutes as the members saw the job market strong and the consumer confidence solid. On the other hand, policymakers agreed that they need to see the data to continue to improve to verify that the recent slowdown in the economic activity was temporary. Although the expectations of a June rate hike solidified above 80% according to the CME Group FedWatch, the probability of two more rate hikes in 2017 eased to 46% from 50%, pushing the US Dollar Index below 97. As of writing, the index was down 0.34% on the day, at 96.95.CME Group FedWatch suggests traders still see high probability of June hikeTomorrow's economic docket will feature the weekly initial jobless claims, wholesale inventories and the trade balance data from the United States and strong readings could allow the investors to start pricing the possibility of two more rate hikes in 2017, helping the greenback recover its recent losses.Technical outlookThe immediate resistance for the pair could be seen at 1.1265 (May 23 high) before 1.1300 (Nov. 9 high) and 1.1365 (Aug. 18 high). To the downside, supports are located at 1.1200 (psychological level), 1.1170 (daily low) and 1.1100 (May 19 low).Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higher

After starting the day higher, the major equity indexes in the U.S. were able to hold on to their gains after the May 2-3 FOMC meeting minutes showed

After starting the day higher, the major equity indexes in the U.S. were able to hold on to their gains after the May 2-3 FOMC meeting minutes showed that the policymakers are likely to stay on hold on rate hikes as they need to make sure that the recent U.S. economic slowdown is transitory. Furthermore, the members also reiterated that the consumer confidence remained high, boosting the market sentiment.Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higherThe Dow Jones Industrial Average added 74.51 points, or 0.36%, to 21,012.42, the S&P 500 was up 5.25 points, or 0.22%, closing at its record high at 2,403.25 and the Nasdaq Composite gained 24.31 points, or 0.40%, to 6,163.02. Commenting on the FOMC minutes, "absent a material slowdown in the economy, Federal Reserve officials, acknowledging support from strengthening global growth, appear poised to stay on track toward interest rate normalization," Quincy Krosby, chief market strategist at Prudential Financial, told Reuters.Headlines from the U.S. session:US debt limit next major risk factor? - NomuraU.S. Treasury's Mnuchin urges congress to raise debt limit prior to August breakCME Group FedWatch suggests traders still see high probability of June hikeUS Dollar pushes lower toward 97 on FOMC minutesFOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soonUS Existing Home Sale: Down in April, up 4.1% so far 2017 - Wells FargoInsights: Trump administration’s proposed FY 2018 budget - NomuraFive takeaways from Trump's first budget - BBH