Tag: usd

Trump to Signal New China-US Trade Talks

U.S. President Donald Trump on Wednesday signaled a new direction in U.S.-China trade talks and said any deal would need “a different structure,” fueling uncertainty over current negotiations and sending U.S. stocks lower.



In an early morning post on Twitter, Trump said the current track appeared “too hard to get done” and cited difficulties such as verification, but he gave no other details about what he or his administration was looking for amid ongoing negotiations.

Representatives for the White House did not respond to a request for more information about the president’s statement. Representatives for China’s Foreign Ministry did not immediately respond to a request for comment on Trump’s statement.

“Our trade deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion,” Trump wrote in his post.

via Reuters

Gold Unsteady as Investors Await FOMC Minutes

Gold continues to hug the $1290 line in Wednesday session, where it has hovered for much of the week. Earlier in the day, gold moved close to $1300 but has since retracted. In North American trade, the spot price for one ounce of gold is $1291.20, down 0.01% on the day. New Home Sales dropped to 662 thousand, well off the estimate of 680 thousand. Later in the day, the Federal Reserve releases the minutes from the May policy meeting. On Thursday, the US will publish unemployment claims and Existing Home Sales.

The Federal Reserve will be in the spotlight on Wednesday, as analysts pore over the minutes of the May policy meeting. The Fed did not raise rates at the meeting, but a strong US economy has raised expectations that the Fed will press the rate trigger in June – according to the CME Group, the odds of a June hike stand at 100%. The markets will be looking for some guidance from the May minutes, and if the message from Fed policymakers is hawkish, traders can expect the US dollar to post gains. On Monday, Atlanta Fed President Raphael Bostic sounded positive about the economy, saying the Fed’s employment and inflation goals were close to being met. The Fed expects growth to be around 2.5% in 2018, and inflation has been moving closer to the Fed target of 2.0%.

Earlier this week, there seemed to be some positive momentum regarding the US-China trade talks. However, President Trump voiced skepticism over progress in the negotiations, saying he was ‘not really’ satisfied with the results. Trump’s comments have confused the markets, as Treasury Secretary Steven Mnuchin declared on the weekend that the trade spat was ‘on hold’. The remarks spooked Asian and European stock markets on Wednesday. Investor risk appetite has also waned as there is uncertainty whether North Korean leader Kim Jong-un will meet with President Trump next month. On Tuesday, Trump acknowledged that there was a ‘substantial’ chance that the summit planned with Kim in Singapore on June 12 would not take place. Gold has been unable to take advantage of the nervousness in the markets, as it was unable to consolidate a move towards $1300 on Wednesday, and has fallen back to around $1290.

 

XAU/USD Fundamentals

Wednesday (May 23)

  • 9:45 US Flash Manufacturing PMI. Estimate 56.6. Actual 56.6
  • 9:45 US Flash Services PMI. Estimate 54.9. Actual 55.7
  • 10:00 US New Home Sales. Estimate 680K. Actual 662K
  • 10:30 US Crude Oil Inventories. Estimate -2.5M. Actual
  • 14:00 US FOMC Meeting Minutes

Thursday (May 24)

  • 8:30 US Unemployment Claims. Estimate 220K
  • 10:00 US Existing Home Sales. Estimate 5.56M

*All release times are DST

*Key events are in bold

 

XAU/USD for Wednesday, May 23, 2018

XAU/USD May 23 at 11:00 DST

Open: 1291.41 High: 1298.41 Low: 1288.02 Close: 1291.20

 

XAU/USD Technical

S3 S2 S1 R1 R2 R3
1236 1260 1285 1307 1337 1375

XAU/USD showed little movement in the Asian session. The pair posted gains in European trade but has retracted in the North American session

  • 1285 is providing support
  • 1307 is the next resistance line
  • Current range: 1285 to 1307

Further levels in both directions:

  • Below: 1285, 1260 and 1236
  • Above: 1307, 1337, 1375 and 1416

OANDA’s Open Positions Ratio

XAU/USD ratio is almost unchanged in the Wednesday session. Currently, long positions have a majority (69%), indicative of trader bias towards XAU/USD breaking out and moving to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – British Pound Drops to 2018 Low as Inflation Heads Lower

The British pound has posted considerable losses on the Wednesday session. In North American trade, GBP/USD is trading at 1.3356, down 0.57% on the day. Earlier in the day, the pair touched a low of 1.3305, its lowest level since December. On the release front, British CPI continued to fall, coming in at 2.4%. This was shy of the estimate of 2.5%. Over in the US, New Home Sales dropped to 662 thousand, well off the estimate of 680 thousand. Later in the day, the Federal Reserve releases the minutes from the May policy meeting. On Thursday, the UK releases Retail Sales and the US will publish unemployment claims and Existing Home Sales.

Just a few weeks ago, there was a strong likelihood that the Bank of England would raise interest rates at the May policy meeting. However, a spate of weak economic releases and falling inflation resulted in policymakers standing pat, leaving rates at 0.50%. Are we in for a repeat performance in August? Inflation levels continue to drop, with April CPI falling to 2.4%, down from 2.5% a month earlier. The markets are eyeing two key indicators later in the week – Retail Sales and Second Estimate GDP. If these releases miss expectations, an August rate hike will be in serious doubt. Earlier in the week, the markets priced in an August hike at 50%, but this dropped to just 33% after Wednesday’s weak inflation data. The pound is also under pressure, and the downward spiral is likely to continue if this week’s indicators do not perform well.

On Tuesday, Bank of England Governor Mark Carney testified before a parliamentary committee. Carney acknowledged that growth in the first quarter was weak, blaming “temporary and idiosyncratic factors”, such as massive snowstorms which hampered economic growth. The BoE has forecast growth in Q1 of just 0.4%. As for monetary policy, Carney was subtle, saying that “interest rates are more likely to go up than not, but at a gentle rate”. The markets clearly have their doubts about a rate hike in August, as Wednesday saw the pound fall and the likelihood of an August rate hike drop, following another drop in inflation.

  Fed Minutes to Drive Market as Trade Concerns Recede

  Another Turkish Lira flash crash

GBP/USD Fundamentals

Wednesday (May 23)

  • 4:30 British CPI. Estimate 2.5%. Actual 2.4%
  • 4:30 British PPI Input. Estimate 1.0%. Actual 0.4%
  • 4:30 British RPI. Estimate 3.4%. Actual 3.4%
  • 4:30 British Core CPI. Estimate 2.2%. Actual 2.1%
  • 4:30 British HPI. Estimate 4.4%. Actual 4.2%
  • 4:30 British PPI Output. Estimate 0.3%. Actual 0.3%
  • 6:00 British CBI Realized Sales. Estimate 4. Actual 11
  • 9:45 US Flash Manufacturing PMI. Estimate 56.6. Actual 56.6
  • 9:45 US Flash Services PMI. Estimate 54.9. Actual 55.7
  • 10:00 US New Home Sales. Estimate 680K. Actual 662K
  • 10:30 US Crude Oil Inventories. Estimate -2.5M. Actual
  • 14:00 US FOMC Meeting Minutes

Thursday (May 24)

  • 4:00 BOE Governor Mark Carney Speaks
  • 4:30 British Retail Sales. Estimate 0.8%
  • 8:30 US Unemployment Claims. Estimate 220K
  • 10:00 US Existing Home Sales. Estimate 5.56M

*All release times are DST

*Key events are in bold

GBP/USD for Wednesday, May 23, 2018

GBP/USD May 23 at 10:35 DST

Open: 1.3432 High: 1.3442 Low: 1.3305 Close: 1.3356

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3088 1.3186 1.3301 1.3402 1.3494 1.3613

GBP/USD ticked lower in the Asian session. The pair posted considerable losses in European trade and has inched higher in the North American session

  • 1.3301 is providing support
  • 1.3402 is the next resistance line
  • Current range: 1.3301 to 1.3402

Further levels in both directions:

  • Below: 1.3301 and 1.3186 and 1.3059
  • Above: 1.3402, 1.3494, 1.3613 and 1.3712

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Wednesday session. Currently, long positions have a majority (60%), indicative of trader bias towards GBP/USD continuing to head lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

London House Prices Drop 0.2% in March

House prices in London tumbled in March, with the annualised rate of inflation dropping to minus 0.7%, the steepest fall since 2009, according to official Land Registry figures for March.

House prices across the UK fell by 0.2% in March, with prices dropping across much of the south of England.



Property experts in London said buyers are “sensing blood in the water”, with sellers forced to cut prices steeply to ensure a sale.

Jonathan Hopper of Garrington Property Finders said: “London is paying a painfully high price for its stellar run of price rises and a correction is now under way in several parts of the capital.

“Sellers are being forced to trim their expectations and astute buyers are increasingly sensing blood in the water.”

via The Guardian

Bank of Canada (BoC) Expected to Hold Rates Next Week

Normally, we’d preview the Bank of Canada’s next policy decision closer to the actual date. But all the relevant data has been published, so why wait? Unless the central bank scraps its story, it will leave the benchmark rate at 1.25 per cent on May 30.


usdcad Canadian dollar graph, May 23, 2018

Canada’s dollar dropped half a cent against its U.S. counterpart on Friday, probably because new readings on inflation and retail sales suggest the economy is chugging along, not racing ahead at a pace that would alarm policy makers. The prices of financial assets linked to short-term interest rates put odds of an interest-rate increase next week at about 25 per cent.

Via Financial Post

EU Still Expanding But Growth is Slowing Down

Euro zone economic growth slowed much more sharply than expected this month, a business survey showed, which along with weaker inflation has intensified concerns there will be no return to the bloc’s recent boom times.



The European Central Bank will end its asset purchase program this year and hike interest rates in 2019, a Reuters poll found last month, although policymakers may be concerned to see inflation easing along with growth.

While the expansion still remained relatively strong, growth slowed to a 20-month low in the bloc’s largest economy, Germany, and the lowest in a year in a half in No. 2 economy France, according to the latest IHS Markit purchasing managers’ surveys.

via CNBC

UK Inflation Falls to 12 Month Low

UK inflation unexpectedly fell further last month to the lowest level in more than a year, as lower airfares provided some relief for cash-strapped Britons.



The consumer price index dropped from 2.5% in March to 2.4%, according to the Office for National Statistics (ONS). Economists had expected the annual rate of growth in prices to remain unchanged.

This decline will be welcomed by consumers under sharp pressure from rising prices since the Brexit vote, when a sudden drop in the value of the pound pushed up the cost of imported goods.

via The Guardian

Safe Haven Currencies Rise on Trade Uncertainty

Investors sold equities on Wednesday and raced to buy Japanese yen and government bonds from the United States and Germany on fears that setbacks to U.S-China trade talks would undermine increasingly fragile-looking world growth.



The yen JPY=EBS rose more than 1 percent against the dollar, U.S. bond yields, which move inversely to price, fell to eight-day lows.

World shares meanwhile slipped half a percent to a two-week low as weak euro zone data added to negative sentiment following U.S. President Donald Trump’s comments on the crucial trade talks.

Investors were also eyeing Turkey and Italy, with the former seemingly headed for a full-blown economic crisis as the Turkish lira plunged to new record lows.

Italian borrowing costs resumed their rise to hit new multi-month highs on fears that an incoming coalition will sharply boost government spending.

via Reuters

Trump Hints at Upcoming Good News for US Auto Workers

U.S. President Donald Trump, who has repeatedly pledged to revive American manufacturing, on Wednesday said “big news” was coming that would be welcomed by U.S. autoworkers but he gave no details.

“There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!” Trump said in a tweet.



The United States is in the middle of a renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico, but the talks have been stalled by a dispute over auto provisions.

via Reuters

US Single Home Sales Fell in April

Sales of new U.S. single-family homes fell less than expected in April, but data for the last three months was revised lower.

The Commerce Department said on Wednesday new home sales dropped 1.5 percent to a seasonally adjusted annual rate of 662,000 units last month. March’s sales pace was revised down to 672,000 units from the previously reported 694,000 units.



Economists polled by Reuters had forecast new home sales, which account for about 11 percent of housing market sales, falling 2.0 percent to a pace of 679,000 units in April.

The government also revised sales data going back to 2013. The benchmark revisions showed sales in the first three months of the year not as strong as previously reported.

New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They rose 11.6 percent from a year ago.

Via CNBC