Press review - page 93
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The New Zealand dollar rose to a one-month high against its U.S. counterpart on Friday, as disappointing U.S. economic data forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.
Monday, February 17
- Markets in the U.S. are to remain closed for the Presidents Day holiday.
Tuesday, February 18- The U.S. is to release data on manufacturing activity in the Empire State.
Wednesday, February 19- The U.S. is to publish reports on building permits, housing starts and producer price inflation.
- Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Thursday, February 20- The U.S. is to release the weekly report on initial
jobless claims and data on consumer price inflation. The nation is also
to release data on manufacturing activity in the Philadelphia region.
Friday, February 21The pound ended the week at more than three-year highs against the dollar on Friday, after the Bank of England revised up its forecast for growth this year and indicated that it may raise interest rates next year.
Monday, February 17
- Markets in the U.S. are to remain closed for the Presidents Day holiday.
Tuesday, February 18- The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation.
- The U.S. is to release data on manufacturing activity in the Empire State.
Wednesday, February 19- The U.K. is to release official data on the change in
the number of people unemployed and the unemployment rate, as well as
data on average earnings and public sector borrowing. Meanwhile, the BoE
is to publish the minutes of its most recent policy setting meeting.
- The U.S. is to publish reports on building permits, housing starts and producer price inflation.
- Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Thursday, February 20- The U.K. is to produce private sector data on industrial orders.
- The
U.S. is to release the weekly report on initial jobless claims and data
on consumer price inflation. The nation is also to release data on
manufacturing activity in the Philadelphia region.
Friday, February 21Gold and Oil Prices Go Up the Most in three Months (based on forexminute article)
The year 2014 so far has been good for gold and oil. This week, both i.e. oil and gold have hit multi-month peaks this on improved demand prospects in the world's two biggest economies, the United States and China. Also, there is a lot of contribution of poor dollar in the gain the oil and gold have received in the last week.
Earlier on Wednesday, U.S. crude struck the highest level for four months at USD 100.37 a barrel. A similar trend was seen in Brent; it achieved the steepest peak since the start of year at around the USD 110 a barrel mark and according to market observers renewed concerns of colder weather in the U.S. bolstered support for the oil prices.
In its statement earlier the International Energy Agency (IEA) said a pickup in demand in advanced countries, led by the United States is a major reason behind the gain. It says that due to increased demand in the U.S. and other advanced economies even a slowing of emerging market consumption has not been able to affect the oil prices.
Nevertheless, though the demand for oil have slowed to some extent in developing economies, global oil markets are unexpectedly tight as growth in advanced economies picks up. Major growth has been from China and it is the one that is supporting the oil prices this week. The country has increased its imports in crude oil this week.
According to the data from China it is the world`s top energy consumer. It imported a record 6.63 million barrels of crude oil per day in January, up 5.2 percent from December. Thus, so far the country has played a vital role in the gain of crude oil prices.
On the other hand, gold hit a three-month peak at USD 1,321.52 an ounce which is the highest point since November 7. A similar trend was seen in the prices of silver which gained a three-month high at as it reached USD 21.30 an ounce. According to market observers precious metals are continuing to make up ground lost during last year`s slump.
Market observers believe that a lot of contribution in the increase of gold and oil prices is from weak dollar. The USD has been impacted a lot by underwhelming US economic pointers such as retail sales and unemployment claims.
The euro rose to three-week highs against the dollar on Friday as stronger-than-forecast euro zone fourth quarter growth data bolstered the outlook for the recovery in the euro area.
Monday, February 17
- In the euro zone, the eurogroup of finance ministers is to hold a meeting in Brussels.
- Markets in the U.S. are to remain closed for the Presidents Day holiday.
Tuesday, February 18- The euro zone is to publish data on the current
account. Meanwhile, the ZEW Institute is to release its closely watched
report on German economic sentiment, a leading indicator of economic
health.
- The U.S. is to release data on manufacturing activity in the Empire State.
Wednesday, February 19- The U.S. is to publish reports on building permits, housing starts and producer price inflation.
- Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Thursday, February 20- The euro zone is to publish closely watched data on
manufacturing and service sector activity, while Germany and France are
to publish individual reports. Germany is also to publish data on
producer price inflation.
- The U.S. is to release the
weekly report on initial jobless claims and data on consumer price
inflation. The nation is also to release data on manufacturing activity
in the Philadelphia region.
Friday, February 21Forex Compared to Other Markets (adapted from dailyfx article)
Forex Market (Spot Forex)
The Forex market, sometimes referred to as spot Forex, is the largest market in the world with over $5 trillion in volume each day. Participants buy and sell currencies "Over-the-counter" 24 hours a day, 5 days a week. Some of the more popular benefits to Forex trading are:
- Low cost of trading (spread only)
- No barrier to entry ($50 account minimum)
- Flexible trade sizes in 1,000 unit increments
- No contract expiration dates
Currency Futures MarketThe currency futures market is available through the Chicago Mercantile Exchange (CME) in the United States. While the currencies involved are the same as the spot market, the futures market is noticeably smaller, with around $100 billion in daily trading volume. Currency futures are traded 23 hours a day, 5 days a week and offer similar leverage to what can be found in spot FX trading. But there are a few drawbacks to trading currency futures:Moderate barrier to entry (around $5,000 account minimum)
- Moderate cost of trading (spread + broker commissions + data fees)
- Contract expiration every 3 months
- Larger minimum trade size (10,000 units and up)
Stock MarketThe stock market allows participants to buy and sell ownership in companies that they believe will grow in value over time. Over half of United States' households own stock in some form or another with around $300 billion worth changing hands each day on US exchanges. Most stock exchanges are open only a few hours a day and require a higher margin requirement than the Forex market and currency futures market. A few other differences between trading stocks and spot FX:
Silver Global Price Forecast: The Sterling Opportunity
Precious metals were under pressure last year, but investors continued to accumulate silver while gold had a record amount outflow selling.
We can see this by looking at the physically backed iShares Silver Trust SLV is up 25 million ounces Oct. 31, 2013 since January 2013. While physical holdings in the SPDR Gold Shares GLD shrunk by 28 million in 2013.
Investment demand for silver now accounts for 24% of overall demand, up from only 4% in 2003 after the introduction of ETFs as a liquid trading source. Additionally, silver investors typically include small investors, whereas large institutional investors have steered toward gold ETFs.
Unlike gold… silver is consumed by industrial and medical usage. Silver’s relative affordability and industrial usage is helping bolster silver demand.
Silver is used in consumer electronics like touch screens found in smart phones and tablets, medical equipment. As such, silver has proven virtually indispensable in almost all electronic devices.
Forbes Fundamentals : In this shortened Tuesday-Friday trading week, investors will watch minutes from the Federal Reserve on Wednesday and key U.S. housing and inflation data scattered from Wednesday to Friday.
U.S. stock indices are back near record highs following a storm of corporate and economic news in recent weeks. The appetite for U.S. shares seems as strong as ever.
Investors will examine the details of these minutes for any signs of a possible change in future guidance on interest rates and any hints on the pace at which the Fed will continue to reduce its monthly bond-buying stimulus program. Wednesday also brings updates on U.S. housing construction and the U.S. January producer price index. Earnings are expected from Carlyle Group and Marriott International.
More hawkish than expected = good for currency (for AUD in our case)
==========
Aussie Pares Post-RBA Gain; BlackRock Sees Drop to 85 U.S. Cents
The Australian dollar touched a one-month high after the Reserve Bank said there were further signs easy policy and a weak currency were having an impact. Strength in the Aussie won’t be sustained, BlackRock Inc. said.
The Aussie rose against the yen after the Bank of Japan boosted lending programs. Australia’s currency held a climb against most major peers after minutes of the RBA’s last meeting signaled “a period of stability in interest rates.” Sustained declines in the Aussie would help the nation’s economy adjust to a drop in mining activity, the RBA said, avoiding comments about the currency being too high.
“There is less emphasis on the level of the currency assisting in the rebalancing of the Australian economy,” said Robert Rennie, the global head of currency and commodity strategy at Westpac Banking Corp. in Sydney. “If they wanted to, they could have added more concern that Australia needs a sustainably low level for the currency. The fact that they did not, should help the Aussie dollar pop.”
Australia’s dollar was at 90.43 U.S. cents as of 5:16 p.m. in Sydney, from 90.32 yesterday, and touched 90.81, the highest level since Jan. 13. It gained 0.8 percent to 92.81 yen and climbed 0.4 percent to NZ$1.0833.
The Aussie may climb to 92 U.S. cents, said Rennie.
2013-02-18 03:30 GMT (or 04:30 MQ MT5 time) | [JPY - Monetary Policy Statement]
More hawkish than expected = good for currency (for JPY in our case)
==========
Yen Dropped Against Dollar After BOJ's Statement
Yen dropped against dollar and other major currencies, after the Bank of Japan decided to expand its lending program by 60 trillion to 70 trillion yen per year, in order to realize the targeted inflation of 2%.
BOJ also doubled a core part of a growth lending program to 7 trillion yen, leading to forecasts that next month will witness more stimulus measures added to financial markets. Hence, the government expects the new sales tax increase in April to have a strong negative impact on the economy, so it needed further monetary stimulus to overcome such negative effect.
Nevertheless, USD/JPY gained for the second straight day to record a high of 102.49, while it was trading near 102.05 levels before the released statement. Euro also picked up against yen to reach the highest in three weeks at 140.55 from a low of 139.87.
2013-02-18 14:00 GMT (or 15:00 MQ MT5 time) | [USD - TIC Long-Term Purchases]
if actual > forecast = good for currency (for USD in our case)
==========
US TIC long term flows at -$45.9bn
The US TIC long-term purchases figure for December was -$45.9bn, according to the US Department of Treasury. This compared with a revised -$28.0bn the previous month and a forecast of -$24.7bn