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Forex World News : Gold Futures Downside seen limited

Forex World News | Gold Futures Downside seen limited

Date : 2021 / 06 / 23

Gold remains supported around $1,760

Tuesday’s downtick in gold prices was amidst shrinking open interest and volume, leaving the probability of a deeper pullback not favoured in the very near term. That said, the $1,760 mark per ounce troy continues to hold the downside for the time being. Occasional bullish attempts are expected to meet the next hurdle at the $1,800 mark.

Traders trimmed their open interest positions in gold futures markets for yet another session on Tuesday, this time by around 2.6K contracts according to flash data from CME Group. It is worth noting that the downtrend in open interest is in place since June 11. In the same line, volume shrank for the third session in a row, now by around 23.6K contracts.

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Forex World News : US Dollar Index pushes higher

Forex World News : US Dollar Index pushes higher

Date : 2021 / 06 / 17

US Dollar Index bid post-Fed

 

The index is up for the third session in a row on Thursday and advances past the key 200-day SMA (91.51), all following Wednesday’s FOMC event.

In fact, the Fed brough forward any chances of starting the tapering talk at its meeting on Wednesday, while the “dots plot” now projects two interest rate hikes by end of 2023. Regarding inflation, the Fed sticks to the view that consumer prices will return to the target at some point in 2022.

In the wake of the Fed’s meeting, yields of the key US 10-year reference leapt to the vicinity of 1.60% from sub-1.50% levels, while the 5-year breakeven eased to 2.41%.

What to look for around USD

The index jumped beyond the 91.00 mark in the wake of the unexpected upbeat tone from the FOMC event on Wednesday. The likeliness that the tapering talk could kick in before anyone has anticipated and the views of higher rates by end of 2023 fuel the change of heart in the buck and the upside in DXY to levels last seen in mid-April. However, the still unchanged view on “transient” higher inflation and hence the continuation of the dovish stance by the Federal Reserve carries the potential to temper the current momentum in the dollar. A sustained break above the critical 200-day SMA should shift the dollar’s outlook to a more constructive one.

Key events in the US this week: Initial Claims, Philly Fed Index (Thursday).

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Forex World News : Inflation fails to lift dollar

Forex World News : Dollar bounces higher as traders brace for inflation data

Date : 2021 / 06 / 11

Here is what you need to know on Friday, June 11:

Markets sustain the upbeat mood and the dollar remains range-bound despite strong inflation numbers. The focus shifts to US Consumer Confidence as well as potential progress in bipartisan talks. A delay of the UK’s reopening is weighing on sterling, oil extends its gains and cryptocurrencies are consolidaing. 

The S&P 500 Index hit yet another record high on Wednesday as investors shrugged off fears the jump in headline inflation to 5%, the highest since 2008. Markets seem convinced that the Federal Reserve would see through rising prices and continue labeling inflation as transitory. 

 

US 10-year bond yields tumbled well below 1.50%, dragging the dollar down with them.  

EUR/USD is changing hands near 1.22 despite the European Central Bank’s decision to keep the pace of bond buying elevated. ECB President Christine Lagarde said that it is premature to talk about exiting the QE program. The bank also upgraded its growth forecasts, as expected.

GBP/USD is hovering under 1.42 amid ongoing Brexit acrimony and reports that Prime Minister Boris Johnson will delay the reopening by four weeks. The last stage of returning to normal is scheduled for June 21 but the fast spread of the Delta variant has pushed policymakers to change their minds. 

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Forex World News : Gold Futures extra upside

Forex World News : Gold Futures extra upside

Date : 2021 / 06 / 11

Gold now targets monthly highs near $1,915

Thursday’s uptick in gold prices was on the back of rising open interest and volume, exposing the continuation of the uptrend in the very near term with the immediate target at the June peaks around $1,915 per ounce troy (June 1).

Open interest in gold futures markets went up for yet another session according to preliminary data from CME Group on Thursday, this time by around 5.3K contracts. Volume followed suit and rose by around 110.5K contracts, reversing the previous daily drop.

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Forex World News : Dollar bounces higher as traders brace for inflation data

Forex World News : Dollar bounces higher as traders brace for inflation data

Date : 2021 / 04 / 12

The dollar gained ground on Monday after last week’s drop as traders assessed the outlook for Treasury yields

 

while awaiting crucial U.S. inflation and retail sales data in coming days.

Elsewhere it was a quiet start to a data-heavy week for foreign exchange markets.

The euro dipped back below $1.19 while the British pound briefly fell to a two-month low, with some analysts citing blood clot concerns around AstraZeneca (NASDAQ:AZN)’s COVID-19 vaccine, which the UK has relied heavily on for its aggressive vaccination programme.

The dollar’s fortunes have been tied to the performance of Treasury yields for most of 2021, after concerns about rising inflation in the United States and a stimulus-fuelled economic rebound triggered a significant jump in yields on U.S. government bonds in February.

A fall in U.S. yields last week triggered the worst week for the dollar in 2021, but the currency found some stability on Monday.

Federal Reserve Chairman Jerome Powell said in a U.S. media interview released on Sunday that the U.S. economy was at “an inflection point” and looked set for a strong rebound in the coming months, but he also warned of risks stemming from a hasty reopening.

Investors are now waiting for U.S. March inflation data due on Tuesday.

“We are set to see the first evidence of the much anticipated surge in inflation that is widely expected through the coming months as base effects from a year ago begin to take effect as the sharp declines post-COVID start to fall out of the annual calculations,” said MUFG analysts.

They said the dollar’s fortunes could well “remain linked to 10-year yields”.

The benchmark 10-year Treasury yield was at 1.6462% after dropping to as low as 1.6170% last week. It had surged to a more than a one-year high of 1.7760% on March 30.

The dollar index, which measures the greenback against a basket of currencies, rose 0.1% to 92.275 while the euro dropped 0.2% to $1.1875.

Bitcoin traded above $60,000, closing the gap to its record high.

Against the pound the dollar initially gained before reversing course. The British currency was last up 0.2% at $1.3734 after briefly touching a two-month low of $1.3669.

The dollar fell 0.2% to 109.41 yen versus the Japanese currency.

“USD has some upside potential this week,” Commonwealth Bank of Australia (OTC:CMWAY) strategist Kimberley Mundy wrote in a report.

“Strong U.S. economic data will highlight the divergence between the U.S.’s fast economic recovery and the more stunted recoveries in other developed economies.”

 

The dollar can lift back toward 110 yen, while the euro has scope to retrace most of the recent gains from its almost five-month low near $1.17, she said.

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Forex World News : Euro US Dollar Exchange Rate Slips

Forex World News : Pound US Dollar Exchange Rate Rebound Limited

Date : 2021 / 04 / 09

Euro US Dollar Exchange Rate on Track for Big Gains This Week

Despite the recent strength of the US Dollar (USD) and its advance attempts today, the Euro US Dollar (EUR/USD) exchange rate is on track for big gains this week. The Euro (EUR) was able to capitalise on US Dollar losses. 

Since opening this week at the level of 1.1764, EUR/USD has seen a surge in demand and has regained much of the losses seen over the past month.  

Last night, EUR/USD touched on a high of 1.1924 – the best level for the pair since late-March. While EUR/USD was not able to hold this best level, the pair still trends high in the region of 1.1892 at the time of writing on Friday. 

Euro (EUR) Exchange Rates Slip from Highs amid Unexpected Drop in German Production

The Euro has capitalised on weakness in its rival, the US Dollar, for most of the week. It has also been benefitting from signs and hopes that the Eurozone’s coronavirus vaccination situation is finally improving. 

 

Analysts expect the Eurozone economy will bounce back in the second half of 2020, despite the concerns around the bloc’s slow vaccination rollout. 

However, demand for the Euro slowed towards the end of the week. Its rally against the US Dollar softened, and the shared currency found no support in the latest Eurozone data either. 

This morning saw the publication of Germany’s February industrial production report. The data disappointed with a contraction of –1.6%, well below the expected growth of 1.5%. 

Higher market demand for riskier assets, as well as continued dovishness from the Federal Reserve, accelerated a US Dollar selloff this week. 

What started as selling the US Dollar from highs after a strong rally led to continued losses in the US currency, as markets pulled back on any hawkish Fed speculation. 

The Federal Reserve’s latest meeting minutes and comments from Chairman Jerome Powell both showed that the bank was still nowhere near to taking a more hawkish tone on monetary policy. This made investors more eager to take risks and the safe US Dollar weakened. 

After one of the US Dollar’s most bearish weeks of the year so far, the currency steadied slightly today and pushed EUR/USD back from its highs. 

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Forex World News : Pound US Dollar Exchange Rate Rebound Limited

Forex World News : Pound US Dollar Exchange Rate Rebound Limited

Date : 2021 / 03 / 29

Pound US Dollar Exchange Rate Sees Fresh Advance Attempts

 

Strength in both the Pound (GBP) and US Dollar (USD) has been mixed, and the Pound US Dollar (GBP/USD) exchange rate has seen volatility as a result. With key UK growth data due on Wednesday, the Pound could see further gains this week. 

Last week was a particularly mixed week for GBP/USD. After opening the week at the level of 1.3868, GBP/USD plummeted and touched on a monthly low of 1.3675, before rebounding towards the end of the week. 

 

GBP/USD closed last week at the level of 1.3788, recovering around half of the week’s losses. This morning, GBP/USD is continuing to attempt a recovery and is trending in the region of 1.3836. 

While Sterling investors await UK growth data, US Dollar investors are awaiting key US Non-Farm Payroll data at the end of the week. 

Pound (GBP) Exchange Rates Attempt Fresh Advances as UK Continues to Reopen 



The Pound has seen weeks of strong performance. Speculation that Britain will be one of the first major economies to recover from the coronavirus pandemic continues to support the British currency. 

This week, England’s gradual economic reopening continues. Groups are now allowed to meet outside. 

According to Yohay Elam, Analyst at FXStreet, reopening continuing without interruption so far continues to support the Pound

Like the Pound, the US Dollar has been broadly appealing in recent weeks. Over the past week or so especially, a fresh rise in coronavirus ‘third wave’ fears and strong US data have made the US Dollar highly appealing as a safe haven currency. 

US bond yields have been rising as well. This is making markets more confident that US inflation will rise as well, which is leaving the US Dollar with even stronger demand. 

US inflation and economic expectations continue to rise, even after the Federal Reserve maintained a fairly dovish tone in its most recent policy decisions and comments. 

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Forex World News : Dollar Strengthens Ahead of Powell, Yellen Testimony

Forex World News : Dollar Strengthens Ahead of Powell, Yellen Testimony

Date : 2021 / 03 / 23

At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.2% at 91.877, just below recent highs.

USD/JPY was down 0.1% at 108.69, EUR/USD fell 0.1% to 1.1925, after Germany, the euro zone’s largest country, extended its lockdown until April 18, while GBP/USD fell 0.2% to 1.3833.

Elsewhere, NZD/USD fell 1.2% to 0.7076, hitting a three-month low, after the New Zealand government announced new measures to try and cool its fast-growing property market by increasing the supply of houses and removing tax incentives for speculators. This dragged the risk-sensitive AUD/USD lower, with this pair 0.8% lower at 0.7685. 

That said, attention Tuesday will be on Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, who are scheduled to make their first joint appearance before the U.S. House Committee on Financial Services. 

The dollar has appreciated some 2% this month, boosted in part by rises in U.S. Treasury yields, something that Fed officials have signalled that they are prepared to live with.

Powell and Yellen are expected to be asked about the Treasury’s and Federal Reserve’s pandemic response, as well as the potential risks from the Fed’s super-easy policy including how far bond yields will rise. 

Ten-year U.S. bond yields eased to 1.67% in early Tuesday trade, after climbing above 1.75% last week.

“DXY [the dollar index] remains supported largely by the sluggish roll-out of vaccines and new lockdowns in Europe – remember European FX has a 77% weight in the DXY. But arguably DXY should have done even better given the 70bp+ rise in US 10-year yields this year,” said analysts at ING, in a research note.

Also of interest this week, the U.S. Treasury will sell $60 billion of two-year notes later Tuesday, $61 billion of five-year notes on Wednesday and $62 billion of seven-year notes on Thursday.

The Treasury will have to sell a lot of paper to fund the substantial budget deficit. Although recent auctions have proceeded smoothly, the $62 billion seven-year note auction, in late February, saw the lowest demand ratio for that maturity on record and prompted a sharp rise in yields.

Elsewhere, USD/TRY rose 1.3% to 7.8956, continuing to weaken after Monday’s sharp 7.5% drop in the wake of President Recep Tayyip Erdogan replacing hawkish central bank governor Naci Agbal with Sahap Kavcioglu over the weekend.

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Forex World News : Dollar Edges Higher Treasury Yields Rise After Powell’s Comments

Forex World News : Dollar Edges Higher Treasury Yields Rise After Powell's Comments

Date : 2021 / 03 / 18

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.2% at 91.602, climbing from the low of 91.295 seen earlier in the session. 

USD/JPY was up 0.3% at 109.18, near the nine-month high hit earlier this week, as the Bank of Japan starts its two-day policy meeting, ending on Friday. A Nikkei report earlier Thursday said the BOJ is expected to slightly widen an implicit band at which it allows long-term interest rates to move around its 0% target.

EUR/USD fell 0.2% to 1.1957, but not far removed from its one-week high of 1.1989, while the risk-sensitive AUD/USD climbed 0.2% to 0.7812.

Chairman Jerome Powell made it pretty clear, as he handed down the central bank’s latest policy decision on Wednesday, that the Fed would be sticking to its easy money policies for some time, even while predicting a strong economic recovery and a jump in inflation above target.

The Fed predicted that the economy would grow 6.5% in 2021, the largest annual jump in GDP since 1984 and a hefty increase from the 4.2% growth projected just three months ago. It saw core personal consumer expenditures – its favored measure of inflation – at 2.2% by the end of the year, and remaining marginally above 2% for the next two years.

The yield on the benchmark 10-Year U.S. Treasury note climbed above 1.73%, its highest level in more than a year, providing support for the greenback in the wake of Powell’s dovish comments.

“Four out of eighteen FOMC members see a rate hike in 2022 compared to only one in December,” said analysts at Nordea, in a research note, “which is another way of showing that the Fed has turned more upbeat, but they remain extremely cautious in terms of sounding just barely tightening biased and a clear consensus still refrains from hinting of any hikes at all.”

Elsewhere, GBP/USD fell 0.1% to 1.3948, having gained around 0.5% overnight. The Bank of England is not expected to change its monetary policy stance when it meets later Thursday, but it probably will emphasize its high bar for tightening monetary policy even as the economic outlook brightens.

Looking at the emerging markets, USD/TRY rose 0.8% to 7.5601, ahead of a meeting by Turkey’s central bank, which is expected to result in a rise in borrowing costs.  The Indonesian rupiah was stable after Bank Indonesia left its key rate unchanged, while the Brazilian real was holding on to a 0.8% gain after the Brazilian central bank delivered the biggest interest-rate increase in more than a decade in order to tame inflation, hiking by 75 basis points to 2.75%, and becoming the first Group of 20 country to lift rates this year.

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Forex World News : Dollar Strengthens as Treasury Yields Rise

Forex World News : Dollar Strengthens as Treasury Yields Rise

Date : 2021 / 03 / 15

The dollar pushed higher in early European trading Monday, helped by a jump in Treasury yields on inflation concerns ahead of this week’s meeting of the Federal Reserve.

At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.2% at 91.817, climbing from the one-week low of 91.364 seen at the end of last week.

USD/JPY was up 0.2% at 109.23, EUR/USD fell 0.2% to 1.1928, after rising last week for the first time in three weeks, GBP/USD fell 0.1% to 1.3912, while the risk-sensitive AUD/USD dropped 0.4% to 0.7734.

Traders have started to become wary of rising inflationary pressures on the back of massive fiscal stimuli and pent-up consumer demand as the vaccination campaign ends lockdowns.

U.S. producer prices had their biggest annual gain in over two years, data showed on Friday, and this is before President Joe Biden’s $1.9 trillion Covid relief package comes into effect.

Benchmark 10-Year Treasury yields were at 1.62% on Monday, close to Friday’s top of 1.64%.

This will put the spotlight on the U.S. Federal Reserve’s two-day policy meeting, ending on Wednesday. Expectations are low that the central bank will announce major policy changes at its second meeting of the year, but it’s likely to raise its estimates of 2021 growth and inflation while making its first quarterly economic forecasts of the year.

“ [Fed chief] Jay Powell will be faced with a truck-load of inflation questions on Wednesday, and if he keeps referring to inflation being allowed to ‘moderately overshoot’, then we should expect long bond yields to continue up since inflation expectations will likely follow,” said analysts at Nordea, in a research note.

Both the Bank of Japan and the Bank of England are also set to hold policy meetings later in the week.

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