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The U.S. dollar moved higher against the yen on Friday as concerns over escalating violence in Iraq fuelled safe haven demand while heightened expectations for more stimulus from the Bank of Japan weighed on the yen.
USD/JPY was up 0.28% to 101.99 late Friday from 101.59 on Thursday. For the week, the pair was down 0.49%.
The pair is likely to find support at 101.59, Thursday’s low and resistance at 102.50.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, amid fears over the impact of reduced oil supply on global growth.
The escalating violence in Iraq overshadowed a report showing that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
Earlier Friday, the Bank of Japan kept monetary policy steady and indicated that the economy was on course to meet its inflation target next year without additional monetary easing.
The central bank said the economy was showing signs of having weathered a sales tax increase that came into effect on April 1 and added that its expected a gentle recovery to continue.
Analysts remain concerned that a slowdown in growth in the second quarter could prompt additional easing by the BoJ.
Elsewhere, the euro edged higher against the yen on Friday, with EUR/JPY rising 0.26% to 138.18, not far from the four month low of 137.71 struck in the previous session. For the week, the pair lost 0.81%.
The single currency has weakened broadly since the European Central Bank cut rates to record lows earlier this month, in order to combat the threat of persistently low inflation in the euro area.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while a speech by BoJ Governor Haruhiko Kuroda on Friday will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 16
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- The BoJ is to publish the minutes of its latest policy
meeting, which contain valuable insights into economic conditions from
the bank’s perspective.
- Japan is also to release data on the trade balance, the difference in value between imports and exports.
- Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The announcement is to be followed by a
press conference with Fed Chair Janet Yellen.
Thursday, June 19- The U.S. is to publish the weekly report on initial
jobless claims as well as a report on manufacturing activity in the
Philadelphia region.
Friday, June 20The Canadian dollar was flat against the U.S. dollar on Friday despite higher oil prices as a result of a Sunni insurgency in Iraq.
USD/CAD was at 1.0855 late Friday, almost unchanged for the day. For the week, the pair was down 0.45%.
The pair was likely to find support at 1.0821, the low of May 30 and resistance at 1.0905, Wednesday’s high.
Brent oil prices rose to a nine-month high on Friday amid concerns over the ongoing Sunni insurgency in Iraq, fueling fears over the impact of reduced output from one of the world's largest crude oil producers.
Brent crude hit a session high of $114.07 a barrel and U.S. crude oil went as high as $107.68 during the session.
While higher oil prices normally boost the commodity-linked Canadian dollar, the flight to safety arising from the conflict and fears over the impact on global economic growth offset that.
The greenback showed little reaction after data showed that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
The report came a day after data showed that U.S. retail sales rose less than expected in May, but the previous month was revised higher.
The Commerce Department said Thursday that U.S. retail sales rose 0.3% in May, falling short of expectations for a 0.6% gain. However, retail sales for April were revised up to a 0.5% gain from a previously reported increase of 0.1%.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 80.75 late Friday.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while Friday’s Canadian data on inflation and retail sales will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 16
- Canada is to publish a report on foreign securities purchases.
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- Canada is to produce data on wholesale sales.
- Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The announcement is to be followed by a
press conference with Fed Chair Janet Yellen.
Thursday, June 19- The U.S. is to publish the weekly report on initial
jobless claims as well as a report on manufacturing activity in the
Philadelphia region.
Friday, June 20The Australian dollar fell from a nine-week high against its U.S. counterpart on Friday, as concerns over escalating violence in Iraq dampened demand for riskier assets.
AUD/USD hit 0.9436 on Thursday, the pair’s highest since April 10, before subsequently consolidating at 0.9402 by close of trade on Friday, down 0.26% for the day but 0.72% higher for the week.
The pair is likely to find support at 0.9347, the low from June 12 and resistance at 0.9436, the high from June 12.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, amid fears over the impact of reduced oil supply on global growth.
The escalating violence in Iraq overshadowed a report showing that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
The report came one day after data showed that U.S. retail sales rose less than expected in May, but the previous month was revised higher.
The Commerce Department said Thursday that U.S. retail sales rose 0.3% in May, falling short of expectations for a 0.6% gain. However, retail sales for April were revised up to a 0.5% gain from a previously reported increase of 0.1%.
Meanwhile, in Australia, official data released Thursday showed that the number of employed people in Australia declined by 4,800 in May, compared to expectations for a 10,000 rise.
Australia's unemployment rate remained unchanged at 5.8% last month, confounding expectations for an uptick to 5.9%.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending June 10.
Net longs totaled 28,247 contracts, compared to net longs of 21,527 in the preceding week.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while the Reserve Bank of Australia will release the minutes of its most-recent policy meeting.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.
Monday, June 16
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The Reserve Bank of Australia is to publish the minutes
of its latest policy meeting, which contain valuable insights into
economic conditions from the bank’s perspective.
- Later Tuesday, the U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- Australia is to publish an index of leading economic indicators.
- Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The announcement is to be followed by a
press conference with Fed Chair Janet Yellen.
Thursday, June 19The New Zealand dollar fell from a five-week high against its U.S. counterpart on Friday, as escalating tensions in Iraq boosted demand for safe-haven assets.
NZD/USD hit 0.8699 on Thursday, the pair’s highest since May 7, before subsequently consolidating at 0.8665 by close of trade on Friday, down 0.26% for the day but 1.9% higher for the week.
The pair is likely to find support at 0.8604, the low from June 12 and resistance at 0.8699, the high from June 12.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, after insurgents took control of the Iraqi cities Mosul and Tikrit, fuelling fears over the impact of reduced oil supply on global growth.
The escalating violence in Iraq overshadowed a report showing that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
The kiwi rallied more than 1% against the greenback on Thursday after the Reserve Bank of New Zealand raised its benchmark interest rate to a five-year high of 3.25% from 3.00% and suggested that borrowing costs could rise again this year.
Commenting on the decision, RBNZ Governor Graeme Wheeler said "it is important that inflation expectations remain contained and that interest rates return to a more neutral level."
Data from the Commodities Futures Trading Commission released Friday showed that speculators modestly decreased their bullish bets on the New Zealand dollar in the week ending June 10.
Net longs totaled 16,855 contracts as of last week, compared to net longs of 17,531 contracts in the previous week.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while first quarter growth data out of New Zealand will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday, as there are no relevant events on this day.
Monday, June 16
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- New Zealand is to release data on the current account.
- Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The announcement is to be followed by a
press conference with Fed Chair Janet Yellen.
Thursday, June 19The pound rose to almost five-year highs against the dollar on Friday, one day after Bank of England Governor Mark Carney said U.K. interest rates could rise sooner than investors expect.
GBP/USD was up 0.24% to 1.6968 late Friday, after rising as high as 1.6990 earlier in the session, close to the five year high of 1.6898 set on May 6. The pair ended the week with gains of 0.99%.
Cable is likely to find support at 1.6920, Friday’s low and resistance at the 1.7000 level.
Sterling’s gains came after Carney said Thursday that rapid economic growth and the steep decline in the jobless rate mean that the time to begin raising interest rates is growing closer.
"There's already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced. It could happen sooner than markets currently expect," the BoE governor said.
Official data on Wednesday showed that the U.K. unemployment rate fell to a five-year low of 6.6% in the three months to April.
Carney said the bank will monitor the labor market closely to determine the right moment to start raising rates and reiterated that when rates do start to rise they will do so only gradually.
The comments prompted investors to bring forward expectations for a rate hike by the BoE. Some market watchers already expect the central bank to start raising rates from their record low 0.5% late this year.
In the U.S., data on Friday showed that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
Elsewhere, sterling rose to one-and-a-half year highs against the broadly weaker euro on Friday, with EUR/GBP down 0.30% to 0.7981 at the close of trade, extending the week’s losses to 1.32%.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while U.K. data on retail sales and consumer prices will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 16
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The U.K. is to release data on consumer price inflation, which accounts for a majority of overall inflation.
- Later Tuesday, the U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- The BoE is to publish the minutes of its latest policy setting meeting.
- Later
Wednesday, the Federal Reserve is to announce its federal funds rate
and publish its rate statement. The announcement is to be followed by a
press conference with Fed Chair Janet Yellen.
Thursday, June 19- The U.K. is to release data on retail sales, the
government measure of consumer spending, which accounts for the majority
of overall economic activity.
- The U.S. is to publish
the weekly report on initial jobless claims as well as a report on
manufacturing activity in the Philadelphia region.
Friday, June 20The broadly weaker euro slid lower against the dollar on Friday, re-approaching four-month lows as concerns over the escalating conflict in Iraq bolstered safe haven demand for the dollar.
EUR/USD was down 0.08% to 1.3541 at the close, not far from the four-month trough of 1.3502 reached on June 5. For the week, the pair lost 0.38%.
The pair is likely to find support at the 1.3500 level and resistance at 1.3601, the high of June 10.
The single currency has weakened broadly since the European Central Bank cut rates to record lows earlier this month, in order to combat the threat of persistently low inflation in the euro area.
Concerns over the ongoing Sunni insurgency in Iraq hit market sentiment on Friday, amid fears over the impact of reduced oil supply from one of the world’s largest producers on global economic growth.
The dollar was little changed after a report showed that U.S. consumer sentiment unexpectedly deteriorated in June.
The preliminary reading of the University of Michigan's consumer sentiment index for June came in at 81.2, down from 81.9 in May, missing expectations for an uptick to 83.0.
Elsewhere Friday, the euro slumped to one-and-a-half year lows against the stronger pound, with EUR/GBP down 0.30% to 0.7981 late Friday, extending the week’s losses to 1.32%.
Sterling strengthened broadly after Bank of England Governor Mark Carney said on Thursday that U.K. interest rates could rise sooner than investors expect.
The euro edged higher against the yen, with EUR/JPY rising 0.26% to 138.18, not far from the four month low of 137.71 struck in the previous session. For the week, the pair lost 0.81%.
In the week ahead, investors will be focusing on the outcome of Wednesday’s Federal Reserve policy meeting, while Monday’s preliminary report on euro zone inflation will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 16
- The euro zone is to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation.
- The U.S. is to produce data on industrial production and manufacturing activity in the Empire State.
Tuesday, June 17- The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
- Later Tuesday, the U.S. is to produce data on housing starts, building permits and consumer prices.
Wednesday, June 18- The Federal Reserve is to announce its federal funds
rate and publish its rate statement. The announcement is to be followed
by a press conference with Fed Chair Janet Yellen.
Thursday, June 19- The Eurogroup of euro area finance ministers are to hold meeting in Brussels.
- The
U.S. is to publish the weekly report on initial jobless claims as well
as a report on manufacturing activity in the Philadelphia region.
Friday, June 20Week Ahead: Markets Watch Iraq, Oil, Fed, Earns
Sky high stock markets face threats this coming week with the unfolding crisis in Iraq that has pushed oil prices up to a nine month high, and the Federal Reserve’s policy statement that may give some clues on the timing of higher interest rates.
On Wednesday, the Fed will finish its two-day policy meeting and is expected to continue reducing its huge bond-buying stimulus measure by $10 billion a month.
Further, investors will as usual pounce on any hints — real or imagined — as to when when the Fed is likely to begin raising interest rates.
This week also bring a huge amount of corporate news as mergers and acquisitions activity continues at pace and companies reporting earnings will include Oracle, FedEx and Adobe Systems.
Also, Amazon.com may unveil a smartphone product on Wednesday.
The initial public offering of London-based trading information company Markit is expected at some stage this week.
US industrial production updates are due on Monday, with US housing starts and building permits expected on Tuesday.
Stock markets have been on a tear for a long time, with equities making up a growing slice of the public’s wealth.
Boston Consulting Group reported recently that global private financial wealth grew 14.6 per cent to $152 trillion at the end of 2013, with stock market wealth driving this growth.
The events of the coming week could test the market’s confidence.
an employee of Greenpeace has lost €3.8 million in donations by gambling in the foreign exchange markets – he bet on the euro tumbling. He should have used the the Martingale betting system as would any professional speculator and just kept doubling down til he won!
The environmental organization Greenpeace has been rocked by a financial scandal. An employee in the Greenpeace headquarters in Amsterdam lost a total of 3.8 million euro in currency transactions.
India’s Forex Reserves Surge to $312.58 Billion in Week through June 6
The Indian foreign exchange reserves accelerated to $312.58 billion in the week through June 6, an increase of $203.2 million, according to data compiled by the Reserve Bank of India.
The growth, the first one after two successive weeks of decline, was mainly due to a quick jump in the value of international currency holdings. The forex reserves had earlier declined by $273.8 million to stand at $312.38 billion in the week through May 30. In the week through May 23, the reserves had lost $2.26 billion to stabilize at $312.65 billion, reported the Times of India.
RBI’s data showed that foreign currency assets, which constitute the largest segment of the foreign exchange reserves, rose by $338.9 million to $285.63 billion in the week through June 6. The foreign currency holdings had declined by $269.3 million to stand at $285.29 billion in the week ending May 30. Foreign currency assets, which are usually denominated in the U.S. dollar, take into account the depreciation or appreciation of non-US currencies held in reserves such as the yen, pound, euro and sterling.
The country’s reserve position at the International Monetary Fund rose by $37 million to close the week at $1.71 billion. The valuation of India’s special drawing rights (SDRs) shot upwards by $2.7 million to $4.45 billion. Nonetheless, the valuation of gold reserves declined over the week after having stagnated at $20.79 billion from May 2. The value of gold reserves fell by $175.4 million to close the week at $20.79 billion.
2014-06-16 03:20 GMT (or 05:20 MQ MT5 time) | [AUD - RBA Assist Gov Kent Speech]
Unemployment Rate To Remain Elevated In Coming Years - RBA's Kent
Labour demand has improved over the recent months after the slowdown in labour demand and supply in the recent past, although the jobless rate is expected to remain elevated in the coming years, Christopher Kent, Assistant Governor of the Reserve Bank of Australia, said on Monday in his address on Labour Market Developments.
In the previous year, demand for labour was affected by the decline in mining investment, decline in trade, high level of exchange rates and weak growth of public demand.
The labour supply was affected as a consequence of a discouraging effect from the decline in demand and also due to ageing population, he said.
Kent noted that wages declined steadily due to the labour demand-supply weakness.
"The decline in wage growth has contributed, at the margins, to a turnaround in the real exchange rate and helped cushion the effect of slower growth of domestic demand on employment growth. It has also helped to contain domestic cost pressures thereby offsetting the effect of the lower exchange rate on consumer prices" Kent said.
While noting that the demand for labour has improved over recent months, with some of that reflecting a 'catch-up' after a period of weak employment growth last year, Kent said some forward-looking indicators are higher than they have been, though they are still at levels consistent with only moderate employment growth in the next few months. The Assistant Governor added that the central bank's latest forecasts are for employment growth to pick up gradually over the next two years.
The unemployment rate, though forecast to remain high in the upcoming years, is expected to decline later in 2015 when GDP growth is expected to pick up, he added.