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The New Zealand regained ground against its U.S. counterpart on Friday, as weaker than expected U.S. employment data forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.
NZD/USD rose to 0.8700 on Tuesday, the pair’s highest since August 2, 2011, before subsequently consolidating at 0.8600 by close of trade on Friday, up 0.63% for the day but still 0.64% lower for the week.
The pair is likely to find support at 0.8513, the low from April 3 and resistance at 0.8700, the high from April 1.
The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000.
The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.
The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.
The kiwi rallied to the highest level since August 2011 earlier in the week boosted by a stronger growth outlook and hopes that China will soon take steps to shore up slowing economic growth.
The New Zealand dollar has been well-supported in recent weeks as the Reserve Bank of New Zealand began to tighten monetary policy, while growing expectations for monetary stimulus in China, a key export market for New Zealand, also benefitted the kiwi.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending April 1.
Net longs totaled 18,480 contracts as of last week, compared to net longs of 18,213 contracts in the previous week.
In the week ahead, market players will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting for further clues on the future course of monetary policy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 7
- Markets in China will be closed for a national holiday.
Tuesday, April 8- New Zealand is to publish private sector reports on business confidence.
Wednesday, April 9- The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, April 10- New Zealand is to release private sector data on manufacturing activity.
- In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, April 11The pound ended the week lower against the U.S. dollar on Friday after reports showed that all three U.K. PMI surveys for March fell short of expectations, while data on Friday showed that the U.S. economy added slightly fewer than expected jobs last month.
GBP/USD touched lows of 1.6556, the weakest since March 26 and was last down 0.14% to 1.6574. For the week, the pair last 0.54%.
Cable is likely to find support at 1.6480 and resistance at 1.6660, Thursday’s high.
The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000. The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.
The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.
The pound remained softer after data on Thursday showed that the U.K. service sector continued to expand steadily in March, albeit at the slowest pace in nine months.
The Markit/CIPS services purchasing managers index ticked down to 57.6 last month from 58.2 in February. Analysts had expected the index to decline to 58.1.
The index remained well above the 50 level that separates growth from contraction, and signaled another month of robust growth in the sector, which comprises more than three-quarters of the U.K. economy.
Earlier in the week, reports showed that the manufacturing and construction PMI’s for March also came in below market expectations but still pointed to robust first quarter growth in the U.K.
Elsewhere, sterling was almost unchanged against the euro on Friday, with EUR/USD settling at 0.8268 at the close of trade. The euro fell sharply against the pound on Thursday after the European Central Bank it would use unconventional measures if necessary to stave off the risk of deflation in the euro zone.
In the week ahead, markets will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting. Thursday’s monetary policy announcement by the Bank of England will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
Tuesday, April 8
- The U.K. is to release a report on industrial and manufacturing production, a leading indicator of economic health.
Wednesday, April 9- The U.K. is to produce data on the trade balance, the difference in value between imports and exports.
- Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
Thursday, April 10- The Bank of England is to announce its benchmark interest rate.
- In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, April 11The dollar pulled back from one-month highs against the euro on Friday after the release of data showing that the U.S. economy added slightly fewer than expected jobs in March.
EUR/USD ended Friday’s session down 0.12% to 1.3703, after falling to a five-week low of 1.3673 earlier. For the week, the pair lost 0.52%.
The pair is likely to find support at 1.3673 and resistance at 1.3730, Friday’s high.
The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000. The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.
The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.
The shared currency remained under pressure after the European Central Bank said Thursday it would use unconventional measures if necessary to stave off the risk of deflation in the euro zone.
ECB President Mario Draghi said the governing council was "unanimous" in its commitment to using all unconventional instruments within its mandate to cope with the risk of low inflation becoming entrenched. He added that the bank discussed the possibility of negative deposit rates.
The central bank left rates on hold at a record low 0.25% at its monthly meeting, despite data earlier in the week showing that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.
The ECB targets an inflation rate of just under 2%.
In the week ahead, markets will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting. German trade data will also be watched in data light week.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Tuesday as there are no relevant events on these days.
Wednesday, April 9
- Germany is to produce data on the trade balance, the difference in value between imports and exports.
- The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
- Thursday, April 10
- In the U.S., the Labor Department is to release its weekly report on initial jobless claims.
Friday, April 11Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video April 2014
newdigital, 2014.04.07 12:41
Weekly Forex Outlook & Review for the 7th to 11th of April
2014-04-08 02:50 GMT (or 04:50 MQ MT5 time) | [JPY - Interest Rate]
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BoJ Maintains Monetary Stimulus, Upbeat Economic View
The Bank of Japan kept its current monetary stimulus unchanged on Tuesday as it projects upbeat economic outlook even though the first sales tax hike since 1997 is set to oscillate consumer spending.
The Policy Board, governed by Haruhiko Kuroda, unanimously decided to continue to expand the monetary base at an annual pace of about JPY 60-JPY 70 trillion.
The annual pace of purchase of government bonds will remain at about JPY 50 trillion. The central bank launched its large stimulus April last year, when it vowed to end deflation and shore up consumer price inflation to 2 percent in two years time horizon.
The BoJ left its economic assessment unchanged from last month. Japan's economy has continued to recover moderately as a trend, albeit with some fluctuations due to the consumption tax hike, the bank said in a statement.
Further, the bank said business sentiment has continued to improve, although some cautiousness about the outlook has been observed.
"Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike," the bank added.
The central bank expects consumer prices, excluding the direct impact of the sales tax hike, to increase around 1.25 percent for some time.
The majority of policymakers observed that risks to the outlook include developments in the emerging and commodity-exporting economies, the prospects for the European debt problem, and the pace of recovery in the U.S. economy.
Sayuri Shirai said the pace of improvement in the employment and income situation in Japan should be added to the list of risks.
2014-04-08 08:30 GMT (or 10:30 MQ MT5 time) | [GBP - Manufacturing Production]
if actual > forecast = good for currency (for GBP in our case)
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U.K. Industrial Production Growth Tops Expectations
U.K. industrial production grew more-than-expected in February, driven by strong contribution from oil and gas extraction.
Industrial production grew 0.9 percent in February from month ago, when it remained flat, the Office for National Statistics said Tuesday. The February rate far exceeded the 0.3 percent expected growth.
Manufacturing output climbed 1 percent, which was faster than the 0.3 percent rise seen in January. Economists had forecast output to grow by 0.3 percent again in February.
The annual increase in industrial production slowed marginally to 2.7 percent in February from 2.8 percent in January. But the rate exceeded the 2.2 percent growth forecast by economists.
Meanwhile, manufacturing output grew at a faster pace of 3.8 percent annually after rising 3.2 percent a month ago. The annual growth in output was expected to slow marginally to 3.1 percent.
AUDUSD Technical Analysis (based on dailyfx article)
EURUSD Technical Analysis (based on investing article)
The euro rose against the dollar on Tuesday as investors avoided the greenback ahead of the release of the minutes from the Federal Reserve's March policy meeting on Wednesday, while broad demand for emerging-market currencies pushed the U.S. currency lower as well.
In U.S. trading, EUR/USD was trading at 1.3800, up 0.43%, up from a session low of 1.3738 and off a high of 1.3808.
The pair was likely to find support at 1.3673, Friday's low, and resistance at 1.3820, Wednesday's high.
The dollar weakened as investors avoided the U.S. currency ahead of Wednesday’s minutes of the Fed’s March meeting, which could provide insight as to the direction of monetary policy.
Last week’s U.S. payrolls report came in slightly below expectations, which spooked investors, as Fed Chair Janet Yellen has said slack labor markets will call for accommodative policies to stay in place for some time.
Demand for the euro remained firm after European Central Bank officials on Monday stressed that while fresh easing measures may be needed to steer the euro zone away from deflationary pressures, implementation of such tools is not imminent.
Last week the ECB left the door open to further stimulus measures, saying that unconventional monetary policy instruments may be necessary to avert the risk of ongoing low inflation in the euro zone.
Elsewhere, emerging-market currencies rose across the board on sentiments that even though the Federal Reserve will continue to unwind its bond-purchasing program this year, policy will remain loose and make higher-yielding currencies more attractive.
The euro was down against the pound, with EUR/GBP slipping 0.30% to 0.8249, and down against the yen, with EUR/JPY trading down 0.50% at 140.97.
The yen rose against most currencies after BoJ Governor Haruhiko Kuroda indicated that the bank was unlikely to implement further stimulus measures at present. He added that growth and inflation were likely to continue to pick up in the coming months despite a sales tax increase in April.
Earlier Tuesday, the BoJ voted to keep its key policy target of increasing base money unchanged at an annual pace of ¥60 trillion to ¥70 trillion after ending its two-day policy meeting.
On Wednesday, Germany and the U.K. are to produce data on the trade balance, the difference in value between imports and exports.
Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
2014-04-09 01:30 GMT (or 03:30 MQ MT5 time) | [AUD - Home Loans]
if actual > forecast = good for currency (for AUD in our case)
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Australia Home Loans Rise 2.3% In February
The total number of home loans issued in Australia was up a seasonally adjusted 2.3 percent on month in February, the Australian Bureau of Statistics said on Wednesday - standing at 52,460.
That beat forecasts for an increase of 1.5 percent following the flat reading in January.
Investment lending climbed 4.4 percent on month to A$10.737 billion after falling 3.7 percent in the previous month.
The total value of housing loans gained 2.9 percent to A$27.644 billion.
2014-04-09 06:00 GMT (or 08:00 MQ MT5 time) | [EUR - German Trade Balance]
if actual > forecast = good for currency (for EUR in our case)
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German Exports Fall More Than Forecast In February
Germany's exports declined more than expected in February, but imports continued to rise for the second consecutive month, official data revealed Wednesday.
Exports fell 1.3 percent in February from January, which was the second fall in three months, Destatis said. Exports were forecast to fall 0.5 percent after expanding 2.2 percent in January.
At the same time, imports gained 0.4 percent month-on-month, faster than the expected 0.1 percent growth. However, the rate slowed from the 4.1 percent increase seen in January.
As a result, the trade surplus fell to EUR 15.7 billion, from EUR 17.3 billion in January.
On a yearly basis, exports advanced 4.6 percent and imports climbed 6.5 percent in February.
According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 13.9 billion in February compared to a EUR 15.7 billion surplus in the prior year.