Forex4you - Analytics

Forex4you

492.25 7.25/10
57% of positive reviews
Real

Dollar hits 3-week low on profit-taking and rising wholesale inventories

USD

The dollar weakened on Wednesday, falling to a 3-week low, after traders booked profits on the recent rally, whilst yesterday’s rise in Wholesale Inventories raised concerns the increased stockpiling could be indicative of a slow-down in consumer spending, ahead of key Retail Sales data tomorrow (Thursday).

There was little data out on Wednesday, with MBA Mortgage Applications in week ending June 5 as one of the highlights; the report showed an 8.4% rise.

The Department of Energy published data showing an unexpected fall in Crude Oil Inventories, which further fuelled Oil’s rally above 61 dollars per barrel.

EUR

The euro traded mixed on Wednesday after a lack of data meant it was more influenced by the fluctuations of counterparts and the news influencing them, than its own drivers. It weakened against the pound after U.K Industrial Production beat expectations, and against the yen which fell after commentary from Governor Kuroda talked up the currency.

The continued impasse in Greek bailout-for-reform negotiations also weighed on the single currency after a much anticipated meeting between the Greek Prime Minister Alexis Tsipras,

German Chancellor Angela Merkel, and French President Francois Hollande failed to take place, with the press speculating Tsipras had been snubbed to send a signal that Greece needed to make more concessions, although Merkel and Hollande claimed they had been open to meeting Tspiras, if he wanted, but that he had never asked.

Yesterday saw a major set-back in the search for an accord after Greece send a list of proposals to E.U officials in Brussels who after only a few hours rejected it. On Monday Angela Merkel said: “Time is running out,” and last Friday Tsipras described the latest proposals from creditor institutions as “absurd.”

GBP

The pound soared on Wednesday after Industrial Production showed an above-expectations rise in April.

Data revealed Industrial Production in the U.K rose by 0.4% in April on a mom basis, beating forecasts of 0.1%. Year-on-year it rose 1.2% against 0.6% estimated. According to the Office of National Statistics, who produced the data, the rise represented a 0.05% gain in GDP.

Manufacturing Production rose by 0.2% yoy, however, missing forecasts of 0.4%, and well below the prior 1.1% result. Mom it actually fell by -0.4%, coming out worse than expectations of 0.1%, and also below the previous 0.4% result in March.

The pound was also supported by a GDP figures from the NIESR which showed the GDP estimate increase to 0.6% from 0.5% previously.

JPY

The yen strengthened against the dollar on Wednesday, after comments from the Bank of Japan on a quiet trading day. Late in the New York session the yen was trading at 122.61 per dollar.

Japanese officials have made conflicting comments on currency policy in recent days, underlying the dilemma Tokyo faces ; a weaker yen is good for the nation’s economy but could complicate its relationship with the U.S. BOJ governor Kuroda said it is unlikely to see the yen’s effective exchange rate falling further.

On the data front, April’s machine orders surprised the market on the upside as it jumped 3.8% mom versus -2.1% median forecast after a 2.9% expansion the previous month.

Producer price index contracted only -2.1% in May while markets expected a lower figure of -2.2%.

The yen’s fall has boosted exports and earnings at many companies, a result of the stimulus policies engineered by Prime Minister Shinzo Abe to spur growth and end deflation. Investors have been betting on corporate profits continuing to rise sending Japanese stock to their highest levels for over a decade. Governor Kuroda’s remarks therefore sent the Nikkei, into negative territory for the third successive session

USD

The dollar weakened on Wednesday, falling to a 3-week low, after traders booked profits on the recent rally, whilst yesterday’s rise in Wholesale Inventories raised concerns the increased stockpiling could be indicative of a slow-down in consumer spending, ahead of key Retail Sales data tomorrow (Thursday).

There was little data out on Wednesday, with MBA Mortgage Applications in week ending June 5 as one of the highlights; the report showed an 8.4% rise.

The Department of Energy published data showing an unexpected fall in Crude Oil Inventories, which further fuelled Oil’s rally above 61 dollars per barrel.

EUR

The euro traded mixed on Wednesday after a lack of data meant it was more influenced by the fluctuations of counterparts and the news influencing them, than its own drivers. It weakened against the pound after U.K Industrial Production beat expectations, and against the yen which fell after commentary from Governor Kuroda talked up the currency.

The continued impasse in Greek bailout-for-reform negotiations also weighed on the single currency after a much anticipated meeting between the Greek Prime Minister Alexis Tsipras,

German Chancellor Angela Merkel, and French President Francois Hollande failed to take place, with the press speculating Tsipras had been snubbed to send a signal that Greece needed to make more concessions, although Merkel and Hollande claimed they had been open to meeting Tspiras, if he wanted, but that he had never asked.

Yesterday saw a major set-back in the search for an accord after Greece send a list of proposals to E.U officials in Brussels who after only a few hours rejected it. On Monday Angela Merkel said: “Time is running out,” and last Friday Tsipras described the latest proposals from creditor institutions as “absurd.”

GBP

The pound soared on Wednesday after Industrial Production showed an above-expectations rise in April.

Data revealed Industrial Production in the U.K rose by 0.4% in April on a mom basis, beating forecasts of 0.1%. Year-on-year it rose 1.2% against 0.6% estimated. According to the Office of National Statistics, who produced the data, the rise represented a 0.05% gain in GDP.

Manufacturing Production rose by 0.2% yoy, however, missing forecasts of 0.4%, and well below the prior 1.1% result. Mom it actually fell by -0.4%, coming out worse than expectations of 0.1%, and also below the previous 0.4% result in March.

The pound was also supported by a GDP figures from the NIESR which showed the GDP estimate increase to 0.6% from 0.5% previously.

JPY

The yen strengthened against the dollar on Wednesday, after comments from the Bank of Japan on a quiet trading day. Late in the New York session the yen was trading at 122.61 per dollar.

Japanese officials have made conflicting comments on currency policy in recent days, underlying the dilemma Tokyo faces ; a weaker yen is good for the nation’s economy but could complicate its relationship with the U.S. BOJ governor Kuroda said it is unlikely to see the yen’s effective exchange rate falling further.

On the data front, April’s machine orders surprised the market on the upside as it jumped 3.8% mom versus -2.1% median forecast after a 2.9% expansion the previous month.

Producer price index contracted only -2.1% in May while markets expected a lower figure of -2.2%.

The yen’s fall has boosted exports and earnings at many companies, a result of the stimulus policies engineered by Prime Minister Shinzo Abe to spur growth and end deflation. Investors have been betting on corporate profits continuing to rise sending Japanese stock to their highest levels for over a decade. Governor Kuroda’s remarks therefore sent the Nikkei, into negative territory for the third successive session



To leave a comment you must be or register