Forex – USD Steadies Ahead of Fed Meeting;Yen Unmoved by Potential Japan-U.S. Deal

© Reuters.  © Reuters.

Investing.com – The U.S. dollar steadied on Wednesday in Asia ahead of the U.S. Federal Reserve’s two-day policy meeting.

The Fed is expected to cut the target range for the Fed funds rate by 25 basis points at this week’s meeting.

Stronger-than-expected retail sales and consumer sentiment data, coupled with hopes of a breakthrough in the trade dispute with China, appeared to weaken the argument for easing in recent days.

The that tracks the greenback against a basket of other currencies was little changed at 97.863.

“Speculators are already excessively short in the dollar,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities in Tokyo, in a Reuters report.

“If there are no surprises from the Fed, the speculators will have to give up their dollar shorts. The biggest reaction would be in dollar/yen, because you can’t really buy the pound or the euro at the moment.”

Traders are also keeping an eye out on the Sino-U.S. trade development. U.S. President Donald Trump told reporters on Tuesday that Washington could reach a trade deal with China before the U.S. presidential election.

The president said that China would prefer to deal with someone else, but warned that terms of the deal will be “far worse” if it came after the 2020 election.

“I think there’ll be a deal maybe soon, maybe before the election, or one day after the election. And if it’s after the election, it’ll be a deal like you’ve never seen, it’ll be the greatest deal ever and China knows that,” Trump said.

The pair traded 0.1% lower at 7.0866.

The pair inched up 0.1% to 108.19. The yen was little moved by White House adviser Larry Kudlow’s comments that Trump and his administration may formally announce a trade deal with Japan next week.

The pair slipped 0.1% to 1.2486 as sentiment remained weak amid uncertainty over Brexit.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar slips ahead of Fed rate decision, euro rises

© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul © Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul

By Kate Duguid and Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The U.S. dollar fell on Tuesday in range-bound trading on the eve of an expected interest rate cut by the Federal Reserve, weakened by a fall in oil prices and a stronger euro.

Oil prices dropped about 6% on Tuesday after Saudi Arabia’s energy minister said the kingdom had fully restored its oil production, following an attack over the weekend that shut down 5% of global oil output. That reversed some of the dollar’s gains on Monday when investors rushed into safe-haven assets.

The euro was up 0.59% at $ 1.1065 (), after an influential survey showed a brightening in German investor confidence. The ZEW index improved to -22.5 in September versus forecasts of -37 and the August reading of -44.1.

Thierry Wizman, global interest rates and currencies strategist at Macquarie Group, said he was seeing a bid in the forex market. “It’s maybe why the euro is doing a little better here,” he said. “You also had some good data in Europe as well that has sparked a bit of this euro rally today too.”

While many investors are expecting the Fed to announce a 25 basis point rate cut following the close of its two-day policy meeting on Wednesday, some believe it may be the last rate cut for a while absent more evidence of a U.S. economic slowdown.

“If the Fed does cut 25 basis points, then we think it will be the last time until we really do see signs of recession,” Brown Brothers Harriman strategists said in a note.

Against a basket of its rivals (), the greenback was 0.35% lower to 98.266.

The overnight rate, or the cost for banks and Wall Street dealers to borrow dollars , surged to 10% on Tuesday, the highest level since at least January 2003, according to Refinitiv data.

Analysts attributed quarterly corporate tax payments and settlement of $ 78 billion in Treasury debt supply for the spike on Monday in interest rates in the repurchase agreement market.

“This morning’s funding squeeze has put some upward pressure earlier in the dollar, but that is not likely to be a longer-term driver,” said Erik Nelson, currency strategist, at Wells Fargo (NYSE:) Securities in New York.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Trade optimism pressures yen but markets wary ahead of Fed, BOJ

By Stanley White

TOKYO (Reuters) – The yen was pinned near a six-week low versus the dollar on Friday as signs the United States and China were narrowing their differences over trade ahead of key talks decreased demand for safe haven assets.

That nudged the yuan up to near four-week highs against the U.S. currency in offshore trade, while the euro held steady after swinging wildly on Thursday following the European Central Bank’s surprise decision to resume government debt purchases from November to support a flagging economy.

In the very short-term, guarded optimism about a resolution to the U.S.-China trade war should continue to push Treasury yields higher and weigh on safe-haven currencies.

However, this confidence could be short-lived as the U.S. Federal Reserve is widely expected to cut interest rates next week while the ECB’s easing places pressure on the Bank of Japan to follow suit.

“We’ve managed to scale back our pessimism about U.S.-China trade talks, which is a supportive factor for now,” said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo.

“Once we start to focus on the Fed’s rate cut, perceptions of the market will change. Treasury yields and dollar/yen look to be too high and are likely to start drifting lower.”

The dollar rose to 108.265 yen , the highest since Aug. 1.

The greenback was up 1.2% versus the yen this week, on course for its best weekly performance since November 2018.

The dollar has also drawn support from a spike in U.S. Treasury yields, with the benchmark 10-year yield at a five-week high.

U.S. President Donald Trump said on Thursday he would not rule out an interim trade pact with China.

The two sides are preparing for new rounds of talks aimed at curbing their trade war, which has dragged on for more than a year, roiling financial markets and threatening to push other economies into recession.

The yen, widely considered a safe-haven currency, tends to rise during times of heightened economic or market stress and vice versa.

China’s financial markets were closed for a public holiday on Friday. In offshore trade, the yuan rose 0.3% versus the dollar to 7.0459, the strongest since Aug. 19.

Sterling was up 0.3% on the dollar this week, on course for its second week of gains after the British Parliament moved to block a so-called no-deal exit from the European Union.

The pound remains vulnerable, however, given the continuing uncertainty over how lawmakers will decide the terms of the UK’s divorce from the EU.

The euro () held steady at $ 1.1068, on course for its second weekly gain against the dollar.

The single currency initially tumbled on Thursday after the ECB cut its deposit rate by 10 basis points to a record low of minus 0.5% and said it would restart bond purchases at a rate of 20 billion euros a month from Nov. 1.

The rate cut was widely expected, but the revived bond purchases were a surprise. Still, the euro managed to claw back losses as the ECB’s comprehensive stimulus package now shifts the spotlight to the Fed and BOJ policy meetings next week.

Financial markets have fully priced in a rate cut at the Fed’s Sept. 17-18 policy meeting. Most economists expect additional monetary policy easing in October and December.

The Fed cut rates in July for the first time since 2008.

Trump has publicly criticized the Fed for not cutting rates more aggressively, but positive economic data has cast some doubt on the need for extensive easing.

The BOJ is also brainstorming ways to deepen negative interest rates at minimal cost to commercial banks, as it considers adopting it as a main policy response to a slowing economy, sources familiar with the bank’s thinking said.

The BOJ’s next policy decision is due Sept. 19.

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Risk-on ahead of European markets open

The aussie and kiwi lead the way in the currencies space

WCRS 12-09
ForexLive

As such, the aussie and kiwi are holding firmer to start the session with the yen lagging on the day as equities and bond yields are higher so far today.

US futures are up by 0.4% and markets are liking the positive headlines so far this week, so expect that to stay the course ahead of the ECB monetary policy decision later today.

Looking ahead, the ECB is the key risk event to watch out for today so the euro will be of key focus to markets in the session ahead.

I would expect risk to stay more upbeat ahead of the ECB before we take stock again on how should markets proceed after the decision and Mario Draghi’s press conference.

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Cautious optimism supports dollar ahead of ECB

By Tom Westbrook

SINGAPORE (Reuters) – Fragile investor confidence supported the dollar and weakened the yen on Wednesday but currency markets kept to tight ranges ahead of series of major central bank meetings over the next week.

Investor focus for now is centered on the European Central Bank’s meeting on Thursday, which is expected to push interest rates even further into negative territory.

The ECB could set the tone for upcoming rate-setting decisions by the U.S. Federal Reserve and the Bank of Japan next week, and for the broader global risk appetite.

For now, a cautious risk-on mood has prevailed after political crises that had hobbled markets, from Britain to Hong Kong, abated, taking the shine off safe-haven assets.

Bonds slid overnight and the yen hit 107.65 per dollar, its lowest since Aug. 1.

Overhanging the relief buying, however, are signs of a slowdown in global demand, which have offset recent positive developments in U.S.-China trade negotiations.

The euro (), which has shed 3% since June, was flat at $ 1.1047. The dollar was flat against the Australian dollar at $ 0.6860 and steady on the yen and the New Zealand dollar .

“Expect a quiet day of trading, with some support of risk, as a broader cyclical rotation continues,” Australia and New Zealand Banking Group analysts said in a note.

“Speculation over whether the ECB will enact a new QE program on Thursday continues to ebb and flow.”

ECB policymakers are leaning toward a package that includes a rate cut, a pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.

On the other hand, concerns have been building that global central banks are reaching the limits of their stimulus options, especially those with negative interest rates and sub-zero long-term sovereign bond yields.

“Given the chance that the ECB fails to match market expectations for easing policy, the balance of risks favors higher EUR/USD and European FX outperformance,” ING forex strategists said in an overnight note.

Much of the positive mood in recent days has been driven by optimism that a high-level meeting of U.S. and Chinese negotiators at Washington next month can deliver some sort of trade-war circuit breaker.

That was tamped down somewhat by White House trade advisor Peter Navarro on Tuesday, when he urged patience about resolving the two-year trade dispute between the world’s two largest economies and said to “let the process take its course.”

But the prospect of a breakthrough stoked appetite for Asian currencies such as the trade-exposed South Korean won , which drifted higher in Asian trading hours and to around 1189.50 per dollar, close to its highest since Aug. 2.

The yen, already under pressure as investors spurned safe havens, was further sold overnight after Reuters reported BOJ policymakers are more open to discussing the possibility of expanding stimulus at their board meeting on Sept. 18-19.

And the pound has held on to last week’s gains after British parliament passed a law compelling Prime Minister Boris Johnson to seek a delay to the Oct. 31 date for leaving the European Union. Sterling last traded at $ 1.2353.

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Aussie modestly higher ahead of European markets open

Major currencies are mostly little changed overall

WCRS 20-08
ForexLive

The aussie is holding a little higher after the RBA minutes release continued to suggest that the central bank will likely stay on hold at its September meeting.
WIRP AU 20-08

The kiwi is also lifted higher as such but the rest of the major currencies remain more subdued to start the new day. Changes against the dollar are less than 0.1% and the trading ranges remain relatively narrow ahead of European trading.

As for risk sentiment, equities are hold more steady around flat levels awaiting for fresh direction. With the market focus slowly shifting towards Jackson Hole, only trade headlines will matter at this point in between now and then.

Looking ahead, do continue to keep an eye on the bond market in the days ahead. Treasury yields are holding a little lower currently and a bigger drop may see other asset classes start reacting more profoundly once again.

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Forex – Sterling Rebounds as Dollar Flat Ahead of Expected Rate Cut 

© Reuters.  © Reuters.

Investing.com – The pound rebounded slightly on Wednesday after falling to a two-year low, while the U.S. dollar was flat ahead of an expected Federal Reserve rate cut.

A reduction of at least a quarter-point at 2:00 PM ET (18:00 GMT) from the Fed is priced in, with investors focused on Chairman Jerome Powell’s press conference a half-hour later for clues on further easing in the light of slowing global growth, notably caused by fallout from the trade conflict with China.

The , which measures the greenback’s strength against a basket of six major currencies, was flat at 97.838 by 10:18 AM ET (14:18 GMT).

The dollar was unmoved against the Japanese yen, with flat at 108.54.The Bank of Japan left rates steady on Tuesday but could ease monetary policy if global developments drag on the economy.

Sterling recovered, with up 0.5% to 1.2211, in a move that had no obvious triggers but which followed two days of sharp losses that made it ripe for a technical correction.

The pound had fallen to a two-year low of 1.2158 after newly elected Prime Minister Boris Johnson and his new cabinet of die-hard Brexiteers stepped up their rhetoric and their preparations for taking the U.K. out of the European Union by October 31, a timeframe that leaves little or no time to renegotiate a transitional deal to guarantee continued smooth trade between the two.

The currency is expected by many to fall further as Johnson’s plan to leave the EU is widely seen as likely to hurt the U.K. economy. While the Bank of England is expected to keep interest rates steady at its meeting on Thursday, the implied odds of a rate cut later have risen in recent days.

Elsewhere, was down 0.2% to $ 1.1136 after data showed that the euro zone’s gross domestic product grew only 0.2% in the second quarter. The third quarter has also started weakly, with the core consumer price index falling to 0.9% in July, barely half the European Central Bank’s target for headline inflation.

lost 0.2% to 1.3120.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – U.S. Dollar Rises Ahead of Expected Fed Cut; Pound Tumbles

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was stronger against other currencies on Monday ahead of an expected Federal Reserve rate cut later in the week.

The , which measures the greenback’s strength against a basket of six major currencies, rose 0.1% to 97.847 by 10:34 AM ET (14:34 GMT).

The Fed is expected to cut rates by at least 25 basis points, its first rate cut in a decade. Chances of a 50-basis-point cut fell after upbeat data, including Friday’s GDP report.

Markets expect an additional reduction to rates in September, with more than a 50% chance of a third cut by the end of the year.

Meanwhile, U.S. President Donald Trump continued to criticize the Fed, tweeting that “a small rate cut is not enough, but we will win anyway!”

Trump has been critical of the central bank for failing to cut rates sooner.

The dollar rose against the Japanese yen, with up 0.1% to 108.69.

Sterling fell to its lowest rate in more than two years amid fears that the U.K. will leave the European Union without a deal. Michael Gove, the recently appointed cabinet boss in the new government, wrote in the Sunday Times that the U.K. government is assuming a no-deal Brexit.

Newly-appointed U.K. Prime Minister Boris Johnson hopes to meet with EU leaders to negotiate a deal, but EU officials have said they will not change the terms of the draft agreement made by former PM Theresa May.

slumped 1% to 1.2255, while was flat at 1.1128, and was unmoved at 1.3163.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – U.S. Dollar Near Flat Ahead of Fed; Sino-U.S. Trade Talks in Focus

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was near flat on Monday in Asia as traders remained cautious ahead of the highly anticipated U.S. Federal Reserve decision due later this week.

Policymakers are widely expected to deliver their first rate cut in more than a decade amid concerns over slowing growth and subdued inflation.

The central bank has faced repeated criticism from President Donald Trump over its rate increases and the ongoing reduction of its balance sheet. Trump believes the measures are holding back growth.

The U.S. Dollar that tracks the greenback against a basket of other currencies was little changed at 97.722 by 11:35 AM ET (03:35 GMT).

The greenback was near two-month highs last week. Last Friday, data showed U.S. grew at a 2.1% annualized rate in the second quarter, weaker than the 3.1% pace in the first quarter but stronger than the 1.8% forecast by economists.

Looking ahead, U.S. job report for July is due later this week. Analysts expect the economy to add 160,000 jobs, slowing from 224,000 in June. The unemployment rate is expected to tick down to 3.6%.

The pair was down 0.1% to 1.2370. The pound has now fallen more than 5% against the U.S. dollar since May, largely on fears of a no-deal Brexit.

The Bank of England is expected to keep rates on hold at its meeting on Thursday.

The pair slipped 0.1%. The Bank of Japan is expected to hold rates unchanged on Tuesday when it meets. Governor Haruhiko Kuroda’s briefing will follow the meeting on the same day.

Meanwhile, the pair gained 0.2% to 6.6911. Chinese and U.S. officials will meet on Tuesday for two days of trade talks, according to reports. It is suggested neither side is expecting much hope for a breakthrough. Vice Premier Liu He is expected to lead the talks for China.

The talks will come after a truce reached by President Donald Trump and Chinese leader Xi Jinping on the sidelines of the G-20 summit Japan in June.

“There is still a huge gap between the two sides on key sticking points,” said Robin Xing, chief China economist at Morgan Stanley (NYSE:) in Hong Kong, in a Bloomberg report. “So far there is still no clear path toward a comprehensive deal.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Pound Slips, Euro Remains Near 2-Month Lows Ahead of ECB Policy Meeting

© Reuters.  © Reuters.

Investing.com – The euro remained near 2-month low against the U.S. dollar on Thursday in Asia ahead of the European Central Bank’s (ECB) policy meeting due later in the day.

The pair was little changed at 1.1136 by 1:04 AM ET (05:04 GMT).

Some traders expect dovish guidance from the central bank, which paves the way for easing in September.

The euro is now down about 2% in July on speculation of an ECB easing amid continuing concerns surrounding the Sino-U.S. trade war.

Meanwhile, data that showed Germany’s manufacturing sector contracted at the quickest pace in seven years and French business growth has also unexpectedly slowed also sent the euro lower.

Meanwhile, the pair slipped but was off session lows. Boris Johnson on Tuesday won the contest to be the next British prime minister and raised concerns of a no-deal Brexit.

The pair inched up 0.1% to 6.8753. PBOC sets USD/CNY reference rate for Thursday trade at 6.8737 versus Wednesday’s 6.8860.

The that tracks the greenback against a basket of other currencies was unchanged at 97.460. Officials from the U.S. and China will resume in-person trade talks in Beijing as soon as next week, Treasury Secretary Steven Mnuchin said.

“I would say there are a lot of issues,” Mnuchin said. “My expectations is this will be followed up with a meeting back in D.C. after this and hopefully we’ll continue to progress.”

The pair slipped 0.1% to 108.08.

The pair and the pair also slipped 0.1%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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