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Action Insight: Special Reports
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Action Insight is the most popular section of the site, read by traders around the world. Our team of analysts work around the clock, analyzing the markets from technical and fundamental perspectives in providing the reports in this section to you.
- Market overviews covers major happenings in the markets as well as their impacts.
- Technical analysis of specific currency pair will be found in the technical outlook section. Covered pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/CHF, EUR/GBP, GBP/JPY
- Special reports covers medium to longer term forecasts on exchange rates based on fundamentals, central bank meetings previews and reviews, plus any current issues that will have an impact on exchange rates.
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Special Reports |
Written by ActionForex.com |
Feb 03 12 08:50 GMT
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Canada will by no means escape from the recent global economic turmoil. As an economy heavily reliant on exports, the sovereign debt crisis in the Eurozone and the stringent fiscal consolidation to be adopted by the US are expected to hurt Canadian economy. Weakening economic outlook will probably trigger the BOC to lower interest rates later in the year. However, on the whole, we continue to believe that higher commodity prices and Fed's QE3 would drive CAD higher later in the year.
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Special Reports |
Written by ActionForex.com |
Jan 30 12 11:03 GMT
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The dovish January FOMC statement thrilled investors and boosted higher-yield currencies. Australian dollar was one of the beneficiaries. AUD soared against USD after the Fed pushed back the first expected rate hike to late-2014, from mid-2013 as projected in previous statements. Moreover, renewed speculations on QE3 have boosted AUD as well as other cyclical currencies. Australian dollar is expected to rise further in the near-term amid rising likelihood of monetary easing. In the medium- term, AUD will likely trade sub-parity against the USD but upside risks remain there for the commodity currency and any accommodative policy from China should help push the currency higher.
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Special Reports |
Written by ActionForex.com |
Jan 26 12 04:47 GMT
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At the January meeting, the RBNZ left the OCR unchanged at 2.5% and signaled that the pause might be longer than previously anticipated. Despite the seemingly more dovish statement, policymakers saw some improvements in household spending and the housing market. Policymakers believed it’s prudent to keep the OCR on hold at 2.5% but the words “for now” were removed in the statement this time. This probably signals that interest rates will stay at current level longer than previously expected.
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Special Reports |
Written by ActionForex.com |
Jan 26 12 03:50 GMT
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The Fed delivered a dovish policy statement in January, stating the Fed funds rate will stay at exceptionally low level “at least through late 2014”. There were two other notable changes made at the meeting. First, the Fed released interest rate projections of participants. Second, the central bank released a statement on its longer-run goals and strategy, indicating a 2% long-run target for the PCE deflator. The dovish tone of the statement and the press conference was a reflection of the highly uncertain global economic outlook which was supported by FOMC’s downward revision in growth forecast over the next three years. We retain the view that the Fed will implement QE3 in the second half of this year, after completion of operation twist.
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Special Reports |
Written by ActionForex.com |
Jan 19 12 06:58 GMT
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The Chinese economy grew +8.9% y/y in 4Q11, down from +9.1% in the prior quarter. Despite the slowdown, the result beat consensus and brought relief to those who worried that growth would have slipped below 8%. Expansion in the fourth quarter was driven by surge in industrial production and retail sales. For full year 2011, GDP growth reached +9.2%, in line with market expectations. The question now comes to how the world's second largest economy would perform in 2012 given external headwinds and domestic slowdown. In our opinion, a soft landing is a likely scenario and the chance of sub-8% growth is quite low as policy easing by the government helps limit the downside risks to growth. We expect GDP will grow by mid-8% in 2012.
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Special Reports |
Written by ActionForex.com |
Jan 17 12 16:04 GMT
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The BOC expectedly paused in January, keeping the overnight rate at 1% for an 11th consecutive meeting. While policymakers believed economic growth will be "more modest" than previously anticipated, they preferred to stand on the sideline for the time being as historically low interest rates and the well-functioning financial system have been providing stimulus to the economy. Yet, the central bank pledged to monitor the market situation carefully so that it could act swiftly with the aim of keeping inflation at the 2% target in the medium-term.
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Special Reports |
Written by ActionForex.com |
Jan 16 12 06:52 GMT
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The BOC is expected to keep the overnight rate unchanged at 1% in January. While both external economic headwinds and domestic problems are posing threats to Canada's economic outlook, recent encouraging macroeconomic data from the US should help the BOC buy time in assessing the big picture before making a decision. It's likely that the central will leave the monetary policy as it is for the rest of the year. Should the Fed announce in coming meetings that interest rates will stay unchanged at exceptionally low levels longer than mid-2013, the BOC would even be harder to alter its policy.
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Special Reports |
Written by ActionForex.com |
Jan 12 12 15:31 GMT
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After two consecutive months of rate reduction, the ECB decided to leave the main refinancing rate at 1% at the January meeting. Policymakers would like gauge the impacts of previous rate cuts and liquidity provisions on the economy. Meanwhile, President Draghi indicated the 3-year LTRO has benefited banks and supported confidence. This is by no means an end of the easing cycle. Indeed, the ECB will likely lower interest rates further should economic conditions deteriorate.
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Special Reports |
Written by ActionForex.com |
Jan 09 12 17:40 GMT
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Similar to the euro, the British pound will likely weaken against the US dollar amid risk aversion in the first half of the year. Against the euro, the pound had gained for 3 consecutive years since 2009 although the magnitude has been declining. In 2011, EURGBP has been on a down trend since the EU summit as pessimism that EU finance leaders would not be able to derive effective measures to resolve the sovereign debt crisis has made sterling a safe-haven asset in the short-term. We do not expect this to continue this year as the UK has its own fiscal and economic problems to struggle. The disaster these might cause is not less than the debt problems in the17-nation region. An option to alleviate the economic problems would be monetary easing. Without the need of majority vote, the BOE may deliver more dovish stance on the monetary outlook than the ECB in 2012. This would then weaken the British pound.
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Special Reports |
Written by ActionForex.com |
Jan 09 12 07:53 GMT
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We expect the movement of Japanese yen this year will be directed by factors including BOJ’s intervention, risk appetite and Fed’s QE3. Optimism of FOMC policymakers and the fiscal situation in the US will exert downward pressure on USD/JPY in the first half of the year but the BOJ will likely defend the level of 75 via intervention. Upside of the currency pair will also be capped by sluggish US economic growth and probable implementation of Fed’s QE3 later in the year. In this case, USD/JPY will likely be range-bounded this year.
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Special Reports |
Written by ActionForex.com |
Jan 06 12 12:25 GMT
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Sovereign debt problems in the Eurozone will continue to dominate financial markets this year. While we believe European finance ministers will eventually resolve the crisis, the situation will probably worsen in the medium-term. The euro, which got hammered in 2011, will remain under pressure in months ahead. In our opinion, high risk premium regarding owning the single currency and ECB's monetary easing are key factors dragging on the currency.
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Special Reports |
Written by ActionForex.com |
Jan 04 12 10:36 GMT
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The US dollar is expected to outperform other major currencies in the first half of 2012. The key reasons for the greenback's glitter are the ongoing sovereign debt crisis in the Eurozone and the relatively strong economic improvement in the US. It is, however, rather difficult to forecast the outlook of the US dollar in the second half of the year as uncertainties related to the pace of recovery in European economies, fiscal tightening in the US and the FED's implementation of QE3 heighten. Moreover, the ability for China to avoid hard landing would be another factor affect USD's outlook.
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Special Reports |
Written by ActionForex.com |
Jan 04 12 03:49 GMT
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The FOMC minutes for the December meeting suggested the Fed will focus on communication strategy at meetings this year. Members agreed to include their “projections of appropriate monetary policy” into the Summary of Economic Projections (SEP) beginning in January. The SEP will also unveil “participants' current projections of the likely timing of the first increase in the target rate” given their projections of future economic conditions. Moreover, there will be “qualitative information regarding participants' expectations for the Federal Reserve's balance sheet” and introduction of a more formal inflation-targeting framework.
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Special Reports |
Written by ActionForex.com |
Dec 21 11 11:20 GMT
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The BOE minutes indicated that policymakers voted unanimously in December to leave the Bank rate at 0.5% and the asset purchase program at 275B pound. While all of them believed the current global and domestic economic situations did not warrant for monetary easing, they were split on the implications of the November inflation report. While some believed further expansion of the asset buying program would be inevitable, others viewed that the risks to inflation around the target were more balanced in the medium-term.
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Special Reports |
Written by ActionForex.com |
Dec 20 11 04:14 GMT
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The RBA minutes for the December meeting indicated that the rate cut in the month was mainly driven by the dire situation in the Eurozone (in November, the rate cut was due to weaker-than-expected inflation). Domestic economic situation has softened but it has not weakened to an extent that a reduction in interest rate was needed. Indeed, policymakers continued to believe that growth would be close to trend in coming few years. The central bank did not give any hint of monetary policy outlook. However, given the highly uncertain global economic outlook, especially in the Eurozone, and the moderation in inflation, further easing is likely to be seen in as soon as early 2012.
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Special Reports |
Written by ActionForex.com |
Dec 15 11 11:08 GMT
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The SNB left the target range for 3-month Libor at 0-0.25% and the "minimum exchange rate" at CHF1.20 per EUR. The decision was widely expected by the market but we believe the central bank might raise the limit of EURCHF in coming months should the economic outlook deteriorates further. Indeed, firms in the country have been urging the central bank to further curb the currency's strength to boost exports. The SNB revised lower economic and inflation forecasts. While growth is expected to slow further, recession remains unlikely given the data released since the previous meeting.
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Special Reports |
Written by ActionForex.com |
Dec 14 11 04:22 GMT
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The Fed decided to leave the policy rate and operation twist unchanged. This is expected as recent economic data in the US improved but sovereign debt problems in the Eurozone remained a great uncertainty. Policymakers would prefer to stand on the sideline and monitor the developments for the time being. In the accompanying statement, the Fed changed to a mildly more positive tone amid acknowledgement of positive domestic developments since the last meeting.
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Special Reports |
Written by ActionForex.com |
Dec 13 11 01:24 GMT
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Swiss franc remained fragile, hovering within a narrow trading range of 1.22-1.24, amid speculations that the SNB would intervene against appreciation of the currency. Economic growth and inflation have moderated since the last meeting. Together with persistent risks of sovereign crisis in the Eurozone, policymakers would likely delivered a rather downbeat statement, warning against further deterioration in domestic and global economic prospects.
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Special Reports |
Written by ActionForex.com |
Dec 12 11 13:05 GMT
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The December FOMC meeting will likely be a non-event. With operation twist started and recent economic data improved, policymakers would prefer to stand on the sideline and monitor the developments. The meeting would again focus on tools to improving communication with the market. However, we do not expect any material outcome at least until January when Chairman Ben Bernanke holds a press conference and when the latest economic projections are released.
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Special Reports |
Written by ActionForex.com |
Dec 08 11 15:52 GMT
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As expected the ECB lowered the main refinancing rate by -25 bps to 1.0%. In addition, several new easing measures, including 3-year LTRO, increase in collateral availability and reduction in requirement ratio, were also announced. ECB staff downgraded the economic outlook but revised up inflation forecasts for 2012. It's probably the stubbornly high inflation that refrained policymakers from cutting interest rates by -50 bps.
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