Dollar Jumps on Sentiments U-Turn, But Upside Still Capped
The sharp turn in risk sentiments overnight pushed "safe-haven" currencies generally higher. Among them, Dollar is currently outperforming both Swiss Franc and Yen. On the other hand, Australian Dollar is leading other commodity currencies lower. Euro and Sterling are mixed, with the Pound having a slight upper hand.
Technically, the...
Fed Indicated that QE Tapering is Premature and Bar to Adjust Policy is High
The December FOMC meeting contained little news. However, Chair Powell sent a clear indication that tapering is “premature” for the time being and that the bar to adjust the monetary policy is higher. The Fed left all measures unchanged at the meeting. The Fed funds rate stays at 0-0.25%...
Crude Oil Rebounded as US Inventory Declined. Petroleum Inventory Mixed
The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks sank -11.71 mmb to 1321.88 mmb in the week ended January 22. Crude oil inventory dropped -9.91 mmb (consensus: +0.43 mmb) to 476.65 mmb. Stockpile decreased in 4 out...
Germany Slashes Growth Forecast, UK Tightens Border, Risk Appetite Recedes
Dollar, Yen and Swiss Franc strength again today, as dragged down by the decline in European stocks. DOW future is also losing -300pts at the time of writing. Sentiments are slightly weighed down by UK's plan to impose tougher border measures. Germany slashed this year's growth forecasts. Commodity currencies...
Dollar Mixed Awaiting FOMC, Sterling Attempting Upside Breakout
Markets are generally staying in consolidative mode for now, except that Sterling appears to be the stronger one. There is no follow through selling in Dollar so far, as traders await some guidance from FOMC statement and press conference today. Australian Dollar has little reaction to stronger than expected...
Dollar Turns Soft as European Stocks Surge, Sterling and Commodity Currencies Jump
European stocks are trading generally higher today but no equivalent strength is see in the US pre-markets. Investors seemed to be lifted by news that EU, with backing from Germany, is going to introduce restrictions on COVID-19 vaccines over sudden supply cuts by AstraZeneca and Pfizer. There is little...
Worsened Demand/Supply Balance Suggests Limited Upside for Crude Oil Prices in Near-Term
Crude oil prices consolidate narrowly around 11-month high. After rebounding about 20% from the March low, upside momentum appears fading. Traders are increasingly concerned about the demand outlook which could be hurt by resurgence in coronavirus cases in China. The Chinese government reported 793 new cases last week, compared...
Euro, Sterling and Swiss Interplay Eyed as Volatility in Stocks and Yields Shrugged
The forex markets are very quiet in Asian session today as consolidative trading continues. The sharp decline in US treasury yields overnight, and the pull back in Asian stocks, triggered little reaction in currencies. Dollar and Yen are the slightly firmer ones for today so far, while commodity currencies...
Euro Lost Upside Momentum While Stocks Pull Back after German Ifo
As European stocks turned south after initial trading, US futures also also dragged down. Overall market sentiments turned mixed after a bright start in Asia. Dollar is recovering mildly but commodity currencies remain the strongest one so far, as led by New Zealand Dollar. There is apparently some pressure...
Asia Opens in Risk On Mode, New Zealand Dollar Outperforms
It's the same old story as Asian markets open in risk-on mode. Commodity currencies strengthen broadly, but led by New Zealand Dollar this time. On the other hand, Swiss Franc, Yen and Dollar are the weaker ones, while Euro and Sterling are mixed. Trading could be subdued today with...
FOMC Preview – Cautious about Economic Weakness but Fiscal Stimulus should lend Support
The FOMC meeting in the coming week will not bring any change in the monetary policy. Economic activities have moderated since the December meeting, while resurgence in the coronavirus cases could hurt economic activities more seriously than previously expected. Yet, roll-out of more fiscal stimulus and positive vaccination progress...
Euro Reversed Initial Selloff after ECB, Turning the Corner?
Euro has surprisingly ended as the strongest one last week. While a rebound against Dollar was expected, the turnaround against commodity currency, in a risk-on week, was impressive. Though, as discussed below, the common currency still has a lot to prove. Sterling also overwhelmed New Zealand Dollar slightly and...
CFTC Commitments of Traders – Traders Bet on Higher Euro as ECB Shrugged Off its Strength
As suggested in the CFTC Commitments of Traders report in the week ended January 19 NET SHORT of USD Index futures +370 contracts to 14 277. Speculative long positions gained +1 492 contracts, and short positions increased +1 862 contracts. The greenback's correction proves to be short-lived. The ECB...
CFTC Commitments of Traders – Crude Oil Bets Trimmed Sharply on Price Correction
According to the CFTC Commitments of Traders report for the week ended January 19, NET LENGTH for crude oil futures sank -19 133 contracts to 508 584 for the week. Speculative long position slumped -27 482 contracts, while shorts fell -8 349 contracts. As we predicted in last week's...
Dollar Rebounds Broadly as Risk Appetite Recedes
Dollar rebounds broadly today following receding risk appetite. Investors are apparently paring their gains in stocks. Swiss Franc and Euro are the next strongest, followed by Yen. On the other hand, Australian Dollar and Sterling are the worst performing. In particular, the Pound was weighed down by sharp deterioration...
Euro Rebounds Against While Stock Traders Take Profit
The forex markets are reversing some of this week moves today, as stock investors are also taking some profits ahead of the weekend. Euro is the better performing so far, followed by Swiss Franc, Dollar and Yen. Meanwhile, Sterling and commodity currencies are the weaker ones. As for the...
ECB Gets Slightly More Hawkish, Revealing that it might Not Use All of PEPP Envelope
The ECB left its powder dry in January. While continuing to warn of the downside risks on the Eurozone and global economy, the central bank delivered a hawkish tweak about operation of the Pandemic Emergency Purchase Program (PEPP). On the monetary policy measures, the central bank left the size...
Euro Recovers as ECB Sees Less Pronounced Downside Risk, Dollar Softens after Jobless Claims
Euro recovers mildly in early US session, after ECB said downside risks to the economic outlook are less pronounced. Though, it remains one of the worst performing for the week, together with Dollar, Yen and Swiss Franc. The greenback is clearly still under pressure for now, after worst than...
BOJ Downgraded Economic Outlook for FY2020, Inflation to Fare Better During Forecasting Horizon
The January BOJ is non-eventful. Cautioning that risks to the economic outlook is tilted to the downside, the central bank announced to leave all its stimulus measures unchanged. In contrast to speculations, the central bank did not adjust the implicit trading band of the 10-year JGB yield.
There is a...
Euro Vulnerable as ECB Awaited, Strong Risk-On Sentiment Continues
Euro recovers mildly today but stays as one the weakest, along with Dollar, Yen and Swiss Franc. Strong risk-on sentiments pushed major US indices to new records overnight. Commodity currencies are generally strong on the sentiments. Canadian Dollar was additionally lifted by the not-so-dovish BoC statement, but it's awaiting...