WWM - Analytics

    WWM

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    Forex:  Euro Rallies to 1.1340 on Extended Buying. GBPUSD Rose to 1.4375. SNB Leaves Rate Unchanged, USDCHF Fell to 0.9680.

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    EURUSD: The euro is well bid as it rose to the high of 1.1340 from the low of 1.1220 ( 120 pips) in Europe against the weaker US dollar after the Fed scaled back on its 2016 forecast of 4 rate hikes to 2 and held intrest rates steady. The Fed repeated its rhetoric on dependency on economic data in the US and global macro. The Fed also downgrades their GDP outlook. Commodities are higher. European stocks are lower in Europe. Dax is -2.02%, Euro Stoxx -2.08%. Euro cross rates did little, EURUSD rally mostly USD driven. 

    GBPUSD: The pound was equally bid in Europe against the lower US dollar and rose to 1.4375 from 1.4220 ( 155 pips) on extended buying while the dollar fell across the board. The immediate market focus will be the Bank of England monetary policy announcement today at 12:00 GMT. The BOE is expected to keep their official rate unchanged at 0.5% and QE unchanged at GBP 375B. However, the MPC policy members may give a cautious stance on inflation outlook. FTSE -0.67%to 6134.22 as of 11:00GMT.

    USDJPY: The USDJPY fell from 112.27 to 111.20 (-107 pips) in Europe on extended USD selling as the US dollar fell with yen buying interest.  US yields lower in Asia. The US 2-year yields fell 16 bp. Nikke closed lower -0.22% at 16,936. 

    USDCHF: The Swiss National Bank leaves their monetary policy unchanged at -0.75% interest rate on sight deposits and the 3month Libor target at -1.25% to -0.25%. They have repeated the rhetoric that the swiss franc is significantly overvalued and will intervene as needed which was failed to weaken the franc. Combined with the weak US dollar and resumption of swiss buying interest, the USDCHF fell from 0.9782 to 0.9680 (-102 pips) in Europe with a small rebound to 0.9702 into the NY open.

     


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