Forex – Yen, Swiss Franc Higher in Risk off Trade; Aussie Hits 1-Month Lows

© Reuters.  © Reuters.

Investing.com – The yen and the Swiss franc pushed higher against the U.S. dollar on Thursday as weak Chinese economic data and doubts over whether the U.S. and China will be able to reach a preliminary trade deal underpinned demand for safe haven assets.

Against the , the dollar was down 0.2% at 108.58 by 04:16 AM ET (09:16 GMT). The greenback was down 0.2% against the at 0.9873.

U.S.-China trade negotiations have ‘hit a snag’ over farm purchases, with Beijing not wanting a deal that looks one-sided in favor of the U.S., the Wall Street Journal reported on Wednesday.

Adding to pressure on risk appetite, Chinese retail sales, industrial output and investment data were weaker than expected, sending the , already knocked by soft local employment data, to a one-month low of 0.6793.

The unexpectedly downbeat China data highlighted continued pressure on the world’s second-largest economy and subsequent risks to global growth.

The yen showed little reaction after data overnight showing that Japan’s economy slowed sharply in the third quarter, growing just 0.2% as exports fell amid ongoing trade tensions.

The was little changed at 1.004 after hitting a one month low of 1.0995 in U.S. trade.

In the Eurozone, data showed that Germany escaped a recession in the third quarter, as the economy grew 0.1%, but a global slowdown, Brexit uncertainty, and fallout from the U.S.-China trade war continued to cloud the outlook.

The edged down to 98.18 from a one month high of 98.30 reached in the previous session.

Federal Reserve Chair Jerome Powell on Wednesday told Congress that the negative interest rates sought by Trump aren’t appropriate for a U.S. economy with ongoing growth, a strong labor market and steady inflation.

Meanwhile, was little moved at 1.2852, stuck in a tight range this week, in a limbo ahead of a Dec. 12 election.

–Reuters contributed to this report

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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Market update: Yen crosses higher on trade talk

No big moves so far

There has been one market moving headline so far today. It came from the Financial Times in a report saying the US is considering or ‘debating’ dropping the tariffs on China that were imposed Sept 1.

The report was foreshadowed by an earlier report saying China was asking (demanding?) that those tariffs be lifted as part of a Phase One deal.

Yen crosses rose as the FT story did the round with USD/JPY rallying to 108.75 from 108.60. There are similar-sized moves elsewhere that have boosted S&P 500 futures and weighed on gold.

Myself, I’m a bit more skeptical that this is unequivocally good news. Indeed, it would be great to get those tariffs removed but both stories hint at a tug-of-war in the White House about how to respond. If they balk, the deal could unravel.

That said, Xi’s big speech was constructive as he said China will strengthen IP protections and open up its markets.

Aside from yen crosses, there isn’t much to report on in the FX market. the euro is a touch soft after a weak finish yesterday. AUD/USD is steady at 0.6885 ahead of the RBA in about 30 minutes.

No big moves so far
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Intel results push Wall Street higher

© Reuters. Traders work on the floor of the NYSE in New York City © Reuters. Traders work on the floor of the NYSE in New York City

By Arjun Panchadar

(Reuters) – U.S. stock indexes rose on Friday after strong results from Intel added to what has largely been a better-than-expected third-quarter earnings season so far and offset a dour forecast from Amazon.com.

Intel Corp (O:) jumped 7% and was on course for its best day since January 2018 after issuing an upbeat forecast, helping lift the Philadelphia Semiconductor index (). The stock was also among the biggest boosts to all three major U.S. indexes.

Shares of Amazon.com Inc (O:) dropped 2.9% after the e-commerce giant forecast revenue and profit for the crucial holiday quarter below estimates, citing fierce competition.

The wider consumer discretionary sector () fell 0.7% and was one of the biggest decliners among the 11 major S&P 500 sectors.

“We’ve had some misses … mostly due to trade war concerns, but overall, it looks like we’re headed for a fairly good earnings season,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

After a rocky start to the month mainly on trade tensions and geopolitical worries, the benchmark S&P 500 index was set for its best week in six, while the Nasdaq eyed its biggest percentage gain in seven weeks.

Investors are also counting on the Federal Reserve to lower borrowing costs for the third time this year at its policy meeting next week after a clutch of poor economic data earlier in October.

Bets for a rate cut have surged to over 93% from 53% last month, according to CME Group’s FedWatch tool.

At 10:28 a.m. ET the Dow Jones Industrial Average () was up 103.09 points, or 0.38%, at 26,908.62, while the S&P 500 () was up 4.86 points, or 0.16%, at 3,015.15. The Nasdaq Composite () was up 19.81 points, or 0.24%, at 8,205.61.

Boeing Co (N:) dropped 1.3% after Indonesian authorities looking into the Lion Air crash said the world’s largest planemaker failed to grasp risks in the design of cockpit software on its 737 MAX jet.

Apparel maker VF Corp (N:) fell 8% after reporting lower-than-expected second-quarter revenue, hurt by sluggish demand for its North Face and Vans brands.

Shares of Charter Communications Inc (O:) gained 7.1% after the cable operator posted better-than-expected quarterly results as it attracted more customers for its broadband services, offsetting a drop in pay TV subscribers.

Visa Inc (N:) rose 1.5% after the world’s largest payments processor beat quarterly profit estimates, helped by growth in overall customer spending.

The next round of earnings due next week includes Apple Inc (O:), Alphabet Inc (O:), Pfizer Inc (N:) and Merck & Co Inc (N:).

Advancing issues outnumbered decliners by a 1.26-to-1 ratio on the NYSE and by a 1.56-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and three new lows, while the Nasdaq recorded 57 new highs and 44 new lows.

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 as Johnson Calls for Election; Dollar Moves Higher on PMI Data

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Investing.com – The British pound slipped against the U.S. dollar on Friday in Asia after U.K. Prime Minister Boris Johnson said U.K. lawmakers should back an early Dec. 12 general election to get more time to scrutinize the Brexit deal, creating more uncertainties surrounding the country’s departure process.

The pair slipped 0.1% to 1.2842 by 12:05 AM ET (04:05 GMT).

EU officials will meet later in the day to decide how long they will extend Britain’s deadline to depart from the bloc.

Meanwhile, the that tracks the greenback against a basket of other currencies inched up 0.1% to 97.470.

The greenback was boosted after the Markit purchasing managers’ index came in higher than expected, at 51.5 compared to 51.1 in the prior month.

The data raised expectations that the Federal Reserve will cut borrowing costs for a third time this year even further.

The central bank’s policymakers will meet next week. U.S. President Donald Trump has pushed for even more rate cuts, pointing to falling interest rates at other central banks around the world.

“The Federal Reserve is derelict in its duties if it doesn’t lower the Rate and even, ideally, stimulate. Take a look around the World at our competitors. Germany and others are actually GETTING PAID to borrow money. Fed was way too fast to raise, and way too slow to cut!” the president tweeted.

The pair was unchanged at 1.1102 after the European Central Bank (ECB) left monetary policy unchanged on Thursday.

Outgoing ECB President Mario Draghi rejected criticism of his negative interest rate policy and his insistence on resuming outright purchases of government bonds from next month.

“The improvements in the economy have more than offset the negative side effects” on the financial system, Draghi said at his regular press conference.

He added that he wasn’t unduly concerned about the dissent against September’s multi-faceted package of easing measures, saying that all the key economic data from the euro zone in the course of the last month had justified the actions.

“I’ve taken this as part and parcel of the ongoing debate and discussions,” Draghi said.

The pair traded 0.04% higher at 108.64.

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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European shares end the day higher, but the week is mostly lower

The UK FTSE is up on the week.

The European shares ending the day higher with the UK FTSE leading the way to the upside.  It rose 1.02% on the day. The German Dax was up 0.75%. France’s CAC and Italy’s FTSE MIB lagged. 

The UK FTSE is up on the week.

For the week, the major indices were mostly lower, however, with the excetption being thie UK FTSE which rose by 1.11%.  Spain’s Ibex was unchanged.

Below is a summary of the week moves (the US markets are obviously stilll open and moving).  The worst performer in Europe was the Portugal PSI20 which fell -1.64%. The German Dax fell -0.70% and France’s CAC fell -0.88%. US shares are also lower for the week with the Nasdaq index and small caps Russell 2000 down the most. 

  The weekly changes of the major EU and NA stock indices

The 

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Here is what’s driving gold prices higher. Forecasts out to end-2019.

A useful summary indeed, comments from UBS (in brief from a longer note):

Investors turning to gold amid 

  • escalating trade risks
  • likely impact of higher tariffs on growth and inflation
  • Dovish Fed expectations 
  • concerns about the potential for FX intervention
  • Global yields continue to fall
  • Latest headlines on some potential de-escalation of trade tensions seem insufficient to trigger a correction in gold, suggesting that there is a relatively high threshold for easing investor concerns. Persistent uncertainty is likely to keep gold well supported. 

Forecast:

  • We continue to see gold rallying to as high as $ 1,600 between now and year-end
  • a potential pit stop around $ 1,580
A useful summary indeed, comments from UBS (in brief from a longer note):

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Aussie modestly higher ahead of European markets open

Major currencies are mostly little changed overall

WCRS 20-08
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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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Forexlive America’s FX news wrap: The dollar moves higher after stronger GDP

Forex news for New York trading on July 26, 2019

a snapshot of other markets near the session close is showing:

  • Spot gold rose $ 2.91 or 0.21% $ 1417.44
  • WTI crude oil futures rose $ 0.12 or 0.23% and $ 56.14
  • Bitcoin on Coinbase down $ 34 at $ 9841.  Last Friday the digital currency traded at $ 10,536

In the US stock market, the major indices closed with strong gains. The NASDAQ and S&P index both closed at record high levels. European shares closed mostly higher/but mixed.

The final numbers are showing:

  • The S&P index closed up.  The high reach 3027.98. The low extended to 3012.59
  • The NASDAQ index closed up  The reached 8339.64. The low extended to 8291.12.
  • The Dow closed up 62. The high reached 27213.70. The low extended to 27123.125

Below are the %changes, %highs and %lows for the major indices in North American and Europe. In the US, the Nasdaq rose 1.11% but that was beat by the smaller cap Russell 2000 index which gained 1.25% today. In Europe, the UK FTSE rose 0.80%, but the Spain, Italian and Portugal stocks declined. 

US stocks head higher with record closes for the Nasdaq and S&P

In the US debt market, yields are ending marginally lower with a flatter yield curve (30 year yields fell -1.7 basis points, while two year yields were down only -0.6 basis points). 

The US yields are marginally lower

In Europe the benchmark 10 year yields ended the session mixed, with the larger industrial countries seeing investor demand, while the more riskier southern Mediterranean countries seeing investors fleeing.

The European yields are ending mixed.Today was GDP day in the US. The 2Q advanced report was released (it will have I think 3 other revisions) with annualized growth pegged at 2.1%. That was above economists estimates or 1.8% and above the estimates from the NY Fed’s GDP model (1.3%) and the NY Fed’s model (1.6%).  The core PCE price index did come in weaker at 1.8% vs 2.0% estimate but it beat the 1Q rate of 1.1%. The GDP price index was higher at 2.4% vs 2.0%.   Not so great in the report was that inventories, trade and busines investment slumped. The great in the report was that consumption surged 4.3% (vs 4.0% estimate and 1.1% in the 1Q). 

The dollar, which was higher coming into the session, got even stronger in the NY session (but gave up some of those gains into the close).   Neverthess, it was a good day for the dollar. 

The % changes of the major currencies

In addition to the GDP not hurting the greenback, there was chatter from White House’s Larry Kudlow who said that the US rules out intervention on the dollar, and added that he disagrees with the notion that Trump wants a weaker dollar.

Those comments were followed by a report from CNBCs Kayla Tausche that Trump convened Cabinet meeting to discuss ideas to weaken USD.   The meeting that took place was later explained to be a presentation by Peter Navarro who advocated for a lower dollar, but that the Pres. put the kaboosh on the idea (and even stopped the presentaton short of its conclusion) after strong opposition from Treasury Secretary Mnuchin and Kudlow.   Later in the day, Trump seemed to have turned a new leaf on the his thoughts on the dollar saying:

  • US has a very powerful dollar
  • Dollar is currency of choice, euro is not doing so well, and my favorite
  • It’s a beautiful thing to have a strong dollar

Larry Kudlow must have finally gotten his full attention.

A look at some of the major currencies:

  • GBPUSD. The GBPUSD was one of the weakest of the currencies today, trending lower to the lowest level in 27 months and closing near the session lows at 1.2375 (the high today was up at 1.2460).  Last week, the pair closed at 1.2496 and peaked at 1.25198 on Wednesday.  The prior low was earlier in the month at 1.23815.  That level will be eyed in the new trading week as a barometer for the dip buyers, or the sellers looking for more of an unravel.  When you go out the day at the year’s low, the new week will make the next judgement for the pair.
  • EURUSD. The EURUSD this week took out the May 2019 year low at 1.11064 yesterday when it printed 1.11007 after the ECB rate decision and start of the Draghi press conference. However, the new low could not be sustained and the price shot back higher to 1.1187 before settling mid range in trading yesterday. Today the pair moved lower but could not reach the 1.1100-06 lows (the low reached 1.1111 and we are closing at 1.1128).  The 100 hour MA is falling and not far above at 1.1152. As that MA comes lower, the traders will have to make up their minds on whether the sellers had their shot and failed (in which case the 100 hour MA is broken to the upside), or make the judgement that the price has come this far, so it might as well extend the low trading range for the year (469 pips in total) and do more downside exploring.  
  • The USDJPY extended to the highest level since July 9th, reaching 108.82. The pair is going out at 108.68.  There were two separate hourly bar highs at 108.81 and 108.82, with each rejected.  For the week, the pair moved from a low of 107.69 on Monday. to the high today.  Despite the fact, that the range for the week was only 113 pips, it did stay above it’s 100 hour MA since breaking above on Tuesday. That MA comes in at 108.276 currently and moving higher.  

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Forex – Dollar Pushes Higher; Sterling Sags on Brexit Fears

© Reuters.  © Reuters.

Investing.com – The U.S. dollar pushed higher against a currency basket on Tuesday, helped by a rise in U.S. Treasury yields, while the British pound closed in on 27-month lows amid growing fears over the prospect of a no-deal Brexit.

The against a basket of six major currencies rose 0.2% to 97.17 by 03:25 AM ET (07:25 GMT).

The gained 0.24% to 108.10 yen.

The slid 0.17% to 1.1187, amid growing expectations European Central Bank President Mario Draghi will signal a rate cut in September at a policy meeting later this week to combat risk from global trade tensions.

“It is going to take a bold stroke by the ECB to both satisfy markets clamoring for incremental easing and make a difference to the economy, all the while remaining inside its institutional setting and not destabilizing the financial system,” wrote Carl Weinberg, chief international economist at High Frequency Economics.

was 0.24% lower at 1.2442, within striking distance of a 27-month low of 1.2382 reached last week.

The pound was on the back foot due to the likelihood that Britain’s ruling Conservative party would elect Boris Johnson as its new leader and prime minister, replacing Theresa May. The result of the weeks-long internal party election will be announced on Tuesday.

There is growing speculation Johnson will pull Britain out of the EU on Oct. 31 without a trade deal in place.

The slipped 0.34% to 0.6734, pressured in part by news the Reserve Bank of New Zealand taking a fresh look at unconventional monetary policy strategies, with interest rates already at a record low of 1.5%.

–Reuters contributed to this report

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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