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Angus Campbell

Focus on ECB and inflation

Risk assets continue to edge higher with equity indices rebounding from recent sell offs and oil prices bouncing. The dollar rebound though just seems to have run out of steam as yesterday’s better UK retail sails saw GBPUSD recover most of its losses from earlier in the week and some half decent data from the Eurozone has kept EURUSD under pinned, with the latest German GDP data this morning also lending a hand as EURUSD trades at 1.1155. Even USDJPY has retraced having broken back above the ...

FxProTV

FxPro Interview with TipTV – EURUSD and GBPAUD

FxProTV

FxPro Currency Check 0730 21.05.2015

FxPro Currency Check 0730 21.05.2015

Simon Smith

Fed keeps outlook steady

The April FOMC meeting minutes last night did little to change perception on the Fed, namely that a June rate hike is off the agenda (but not totally ruled out) and that the economy does not seem strong enough yet for them to start their much anticipated tightening cycle. There was some dollar volatility around the release, but the net result was that the dollar was little changed and interest rate hike expectations were marginally softer. In the wider picture. FX has stabilised over the past ...

Simon Smith

Some rays of light in Japan

With all the volatility elsewhere, the yen (and in particular USDJPY) has been notable for its stability. This is certainly the nature of yen in recent years, with long periods of going nowhere and shorter periods of strong trends. The GDP data released overnight have pushed USDJPY to the upper end of the recent range, up to the 121 level for the first time since 20th March. The economy grew 0.6% in Q1, firmer than the anticipated 0.4% gain. There were some promising signs in the data, with a ...

Angus Campbell

Deflation, but good deflation

For the first time in over fifty years the UK has experienced consumer prices actually falling rather than rising and as a result sterling has headed lower by over 1% against the dollar. The data was less than expectations, in particular the core figure which strips out the more volatile energy prices, which came in at 0.8% well below the expected 1.0%. Deflation would usually cause widespread panic and is more regularly associated with an economy in the depths of a recession, however this time ...

FxProTV

FxPro Currency Check 0730 19.05.2015

FxPro Currency Check 0730 19.05.2015

Simon Smith

QE front-loading pushing down euro

The single currency taking a bit of a beating early on, which has seen nearly one big figure taken off EURUSD. ECB Governing Council member Coeure has said that the ECB is to front-load QE purchases in May and June ahead of the summer break and this has pushed down bond yields (and hence the euro) as a result. The RBA minutes were marginally dovish, inasmuch as the discussion referenced the potential for further easing should conditions warrant. Recall that the forward guidance was removed from ...

FxProTV

FxPro Currency Check 0730 18.05.2015

FxPro Currency Check 0730 18.05.2015

Simon Smith

The endless euro squeeze higher

The car crash that represents FX developments in Q2 looks set to continue, with price action in EURUSD the most pertinent representation of how the price action in FX over recent weeks has defied the conventional wisdom. Friday saw a fairly substantial squeeze higher of over 1 big figure to make a new high of 1.1467 and we start the European session not that far below. The fact that bond yields have come down from the recent highs last week also underlines the extent to which the euro move ...

FxProTV

FxPro Interview with TipTV – Looking at recent dollar weakness

FxProTV

FxPro Currency Check 0730 15.05.2015

FxPro Currency Check 0730 15.05.2015

Simon Smith

Further highs for cable

Thursday proved to be a steadier day for FX. The main standout was sterling where the push higher that was instigated in the wake of last week's election results continued, cable briefly touching the 1.58 level before pulling-back to the 1.5750 area. This came despite the noises from the Bank of England earlier in the week, the latest downgrades to growth forecasts suggesting that rates are likely to remain on hold for the remainder of the year. In the Eurozone, we saw equities recover in ...

FxProTV

FxPro Currency Check 0730 14.05.2015

FxPro Currency Check 0730 14.05.2015

Simon Smith

Going against the grain

So, once again the grand plan for the year (dollar strength) is close to tatters. This has strong echoes of last year, although at least things went to plan for the first ten weeks of the year. From being 11% up, the dollar is now only 3.5% up on the year (using the dollar index). Furthermore, yesterday the dynamics were working in the opposite direction of the perceived wisdom, with US retail sales data for April coming on the weak side, whilst some of the latest growth data in Europe showed ...

Angus Campbell

BOE Inflation Report sees lower UK growth

Unsurprisingly we have seen the BOE reduce their growth forecasts today and they remain concerned over the supply element of the labour market feeling it will continue to cap wage inflation. However, their inflation projections were broadly unchanged and the theme from the press conference has been that they do expect wage growth to accelerate and inflation to pick up noticeably with pressure building. Sterling against the dollar has erased most of the gains it made following the strong wage ...