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NZD/USD higher as rate hike expectations support (based on investing article)
The New Zealand dollar was higher against its U.S. counterpart on Thursday, as recent news the Reserve Bank of New Zealand will hike rates at its next policy meeting in March supported demand for the kiwi.
NZD/USD hit 0.8248 during late Asian trade, the pair's highest since Tuesday; the pair subsequently consolidated at 0.8227, adding 0.16%.
The pair was likely to find support at 0.8188, Thursday's low and resistance at 0.8299, the high of January 29.
The kiwi remained supported after the RBNZ indicated last week that rates are likely to rise in March, while an upbeat fourth quarter jobs report on Wednesday also provided support.
Statistics New Zealand said the number of people employed in the three months to December increased by 1.1% or 24,000, after an additional 28,000 jobs were created in the third quarter. Market expectations had been for an increase of 0.6%.
The unemployment rate fell to 6.0% in the fourth quarter from 6.2% in the previous quarter, in line with market expectations.
Later in the day, the U.S. was to publish data on the trade balance, as well as the weekly report on initial jobless claims.
2013-02-06 12:00 GMT (or 13:00 MQ MT5 time) | [GBP - Official Bank Rate]
if actual > forecast = good for currency (for GBP in our case)
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UK interest rates remain on hold
UK interest rates have been kept unchanged at their record low of 0.5% by the Bank of England.
The Bank's Monetary Policy Committee (MPC) also left the £375bn quantitative easing stimulus programme unchanged.
"Although the BoE shows every sign of wanting to keep interest rates low for quite a while longer, the economy is tightening faster than they had expected," said Robert Wood, chief UK economist at Berenberg.
"We expect the first rate hike in the first quarter of 2015, with a 30% chance of an increase in the fourth quarter of 2014."
2013-02-06 13:30 GMT (or 14:30 MQ MT5 time) | [USD - Trade Balance]
if actual > forecast = good for currency (for USD in our case)
==========
U.S. Trade Deficit Widens More Than Expected In December
The U.S. trade deficit widened by more than expected in the month of December, according to a report released by the Commerce Department on Thursday.
The Commerce Department said the trade deficit widened to $38.7 billion in December from a revised $34.6 billion in November. Economists had expected a deficit of $36.0 billion.
The wider than expected trade deficit came as the value of imports edged up by 0.3 percent, while the value of exports dropped by 1.8 percent.
FF calendar description :
It provides valuable insight into the bank's view of economic conditions and inflation - the key factors
that will shape the future of monetary policy and influence their interest rate decisions
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Aussie swings on RBA policy statement
The Australian currency swung from highs to lows on Friday following the release of the Reserve Bank of Australia's (RBA) quarterly Statement on Monetary Policy in which the bank reiterated that a sustained period of steady interest rates was necessary.
After shooting up from $0.8942 ahead of the statement to $0.8971 moments after, the currency then plunged 0.40% to trade at $0.8922 as at 1:18am GMT, almost an hour after its release.
"The Australian dollar has depreciated by around 5% since the November Statement in response to economic developments both at home and abroad, according to the bank's statement. This unwound the appreciation over the preceding few months, leaving the currency around 12% lower than it was at the time of the May Statement."
The bank said that, if sustained, lower levels of the exchange rate will assist in achieving balanced growth in the economy.Trading the News: U.S. Non-Farm Payrolls (based on dailyfx article)
The U.S. economy is expected to add another 180K jobs in January, but another dismal print may undermine the bullish sentiment surrounding the dollar, especially if we don’t see a large upward revision to the 74K December reading.
What’s Expected:
Time of release: 02/07/2014 13:30 GMT, 8:30 EST
Primary Pair Impact: EURUSD
Expected: 180K
Previous: 74K
Forecast: 150K to 200K
Why Is This Event Important:
Nevertheless, a positive employment report may encourage the Federal Reserve to reduce the asset-purchase program by another $10B at the March 19 meeting, and the central bank may look to normalize monetary policy sooner rather than later as Fed officials see a stronger recovery in 2014.
How To Trade This Event Risk
Bullish USD Trade: NFP Increases 180K+; Unemployment Holds at 6.7%
- Need to see red, five-minute candle following the print to consider a short trade on EURUSD
- If market reaction favors a long dollar trade, sell EURUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bearish USD Trade: December Employment Report Falls Short of Market Forecast- Need green, five-minute candle to favor a long EURUSD trade
- Implement same setup as the bullish dollar trade, just in the opposite direction
Potential Price Targets For The ReleaseEURUSD :
Despite strong ADP Employment Figures ahead of the NFP release last month, US Non-Farm Payrolls for December came in much weaker than market expectations and pushed the USDollar lower across the board. Surveys called for a net positive 196K reading, but figures indicated a weak 74K change. It is worth noting that further potential downside was at least limited by a strong upward revision from 203K to 241K for the November period. Market participants will surely be looking for another upward revision here in addition to a strong print to support the greenback. As for insight into this print, the ADP Employment Figures on Wednesday came in slightly below expectations, but the ISM Non-Manf. Employment component saw a month over month increase. With US yields, USD/JPY and the S&P 500 all at critical levels, a disappointing print could prove disastrous for the greenback moving into the end of the trading week. The lack of a strong upward revision for the December figure will also likely be viewed poorly by market participants.
2013-02-07 13:30 GMT (or 14:30 MQ MT5 time) | [USD - Non-Farm Employment Change]
if actual > forecast = good for currency (for USD in our case)
==========
Nation adds 113,000 jobs
- Jobless rate falls to five-year low
- Construction, manufacturing, wholesale trade, and mining see gains
The nation added a net of 113,000 nonfarm payroll jobs last month, dropping the unemployment rate of 6.6 percent, lowest in the past five years, the the U.S. Bureau of Labor Statistics says Friday. Employment grew in construction, manufacturing, wholesale trade, and mining. Both the number of unemployed persons, at 10.2 million, and the unemployment rate, at 6.6 percent, changed little in January. Since October, the jobless rate has decreased by 0.6 percentage point.US jobs data leaves markets confused
Markets were uncertain how to react to the worse than expected non-farm payrolls, given the headline figure of 113,000 was lower than forecast but the jobless rate at 6.6% was slightly better than the predicted 6.7%, our market reporter Nick Fletcher writes.
Initially the FTSE 100, up 16 points before the data was released, fell back to show a 10 point loss, but this was soon reversed and the index is currently virtually unchanged.
Dow futures, up around 52 points ahead of the jobs report, are now down 42 points. The US dollar initially slipped back against the yen and the pound.
NFP In Focus But Watch Gold For Dollar's Direction (based on Forbes article)
Investors and dealers live for market volatility, it creates trading opportunity, and today's North American jobs reports should not disappoint even the neutral observer. The release of last month's employment reports for the U.S. and Canada came in far below expectations, with the weather being blamed for the bulk of setbacks. Canada actually lost jobs while the U.S. created few, both well off market expectations (74k and -46k, respectively). Today, particularly for the U.S., another sub-par performance and future Federal Reserve taper actions will surely be called into question. Even for the good health of the typical global investor, this market requires a healthy nonfarm payrolls (NFP) report, or one that is close to consensus (+185k and an unemployment rate +6.7%), to keep the investment ship afloat. Any serious deviation from expectations and we will have a foreign exchange (forex) market second guessing not just the Fed's monetary position but others’ as well.
Time To Buy Social Networks? Twitter, LinkedIn Down But Not Out
While Twitter and LinkedIn may not be running quite as fast as Facebook, the recent sell-off may be premature.
This week, two social network wunderkinds, Twitter and LinkedIn, saw their stock crash after Wall Street didn’t like what it heard of quarterly earnings. Twitter, in its first earnings report as a public company, surprised investors with slowed user growth. Meanwhile, LinkedIn gave an unexpectedly cautious first quarter outlook.
The 10% stock drop for Twitter after hours on Wednesday and LinkedIn’s similar fall on Thursday reflected the Street’s concern about future prospects for the two young web companies — in contrast to increasing optimism about Facebook’s ad machine. Facebook stock is up over 17% year to date, compared to declines for the other two.
But while Twitter and LinkedIn are not running quite as smoothly as Facebook, the recent sell-off may be premature. Both companies have mitigating factors that may make up for disappointing earnings in the short term.
AUDUSD Fundamentals (based on dailyfx article)
Fundamental Forecast for Australian Dollar: Neutral
The Australian Dollar produced its strongest rally in four months last week, adding 2.39 percent against its US namesake. On the domestic front, the currency reveled in the outcome of the RBA monetary policy announcement, where Governor Glenn Stevens and company seemingly buried any lingering interest rate cut expectations. Meanwhile, risk appetite staged an impressive recovery, helping to support confidence-geared assets including the Aussie. The benchmark S&P 500 stock index touched the lowest level since mid-October early in the week but prices swiftly recovered to produce their first positive five-day run in a month.