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Forex: Dollar resilience after weaker GDP

US GDP grew at 0.1% annualised in the Q1 advance release, lower than the expected 1.2%.  Note that the ADP release was a touch firmed than expected at 220k, with revisions also positive.  This, together with the fact that data has proven to be better since the weak first quarter, has limited the negative dollar reaction, with cable only 20 pips firmer on the release, USDJPY 25 pips lower to 102.30. EUR is up to intra-day high at 1.3860.

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Forex: Euro pops higher after inflation

The single currency is up 30 pips after the flash CPI estimate. The headline came in at 0.7% vs. an initial expectation of 0.8%. Note that softer German numbers yesterday had served to push down estimates, so in essence this should have been expected. The reaction of the currency reflects the degree to which markets are focusing on deflationary risks at this point in time, with short-covering helping push EURUSD back above the 1.38 level.  We're also seeing overnight rates remain on the high ...

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Forex: Competing euro forces

The last trading day for April and there is plenty for FX markets to be watching. Early on, eyes are on Eurozone inflation data, which could well come in softer than initially expected after the weaker German numbers yesterday. Some see the number as making or breaking whether the ECB acts at next month’s policy meeting. The initial expectation was for a move higher to 0.8% (from previous reading of 0.5%), but there is decent chance that reading will not jump this far after the softer than ...

Denis Sukhotin

Game Over

  It has been over a decade since foreign exchange showed the first signs of gaining wider attention as an asset class in its own right. Even though this change in attitudes coincides roughly with the rapid growth of the online forex industry, I think the connection between the two are incidental, both having taken place amidst far greater changes that have fundamentally altered our economic horizons. A number of contributing factors; economic, technological and cultural, have played a ...

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Forex: Sterling fails at multi-year highs following soft GDP

Ahead of the UK GDP figure release this morning sterling was testing its multi-year highs around the 1.6850 level but the moment the data came out those gains were swiftly eroded.  We are still yet to have seen the near-term up trend break down as GBPUSD currently sits at 1.6800 at the time of writing, but following this morning's data release the upside momentum looks like it could be more of a challenge.

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Forex: Output gaps

We enter the penultimate trading day of the month, with plenty of data to catch the attention of FX markets. Early on, there are indications on German inflation coming through from 08:00 GMT ahead of the preliminary data this afternoon. Thereafter with have UK GDP data at 08:30 GMT.  In contrast to the dip in US output in Q1 (due tomorrow), UK output is seen rising 0.9%, following 0.7% in the previous quarter. Sterling has already been on the firm side over the past week, pushing just above ...

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Forex: Dollar selling for now

We are seeing some dollar selling against both the euro and sterling ahead of what should be a week of greater volatility vs. that which we’ve seen before.  Month end flows are likely to see increased institutional trading going into mid-week. Thereafter, we have inflation data in the Eurozone, together with labour market data in the US at the end of the week. In the background, we are still keeping a wary eye on events in Ukraine, where tensions remain high.  The dollar itself it trading 0.7% ...

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Weekly Look Ahead 28th Apr – 2nd May

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Forex: A reluctant euro

The notable mover in comparative terms yesterday was the single currency, as the ECB President once again laid out the options facing the ECB should deflationary forces continue to materialise. Whilst he said that the stronger currency was increasingly important for policy, the price action on the euro suggest that the market is not yet convinced of the potential for action next month. But there are also legitimate concerns that whatever measures the ECB announce may not have a material ...