Fundamental analysis for February 24, 2016

February 24, 2016

The dollar started the week with strengthening against its rivals. The US currency and the stock assets grew together amid oil prices rising. The dollar was slowed down a bit by Markit Manufacturing PMI for February that had fallen to its lowest level of 51.0 since October 2012. The previous value was 52.4 and the forecast was 52.3.

The German's GDP in the 4th quarter increased by 0.3% compared with the previous quarter, which corresponds to the growth rate in the 3rd quarter. This figure confirmed the preliminary assessment. Thus, the GDP growth rate amounted to 1.1% in annual terms. By the end of the trades the pair EUR/USD slightly strengthened.

The GBPUSD fell and the reason of its fall was the potential Brexit. The aggressive pound selling was Mayor of London Boris Johnson's statements, where he supported the British exit from the EU. The Prime Minister David Cameron confirmed the holding of a referendum on 23rd of June this year. In light of these developments Citibank raised its estimate of the Brexit probability up to 30-40% from 20-30% previously. The pair GBP/USD sharply fell to the new minimums.

The Bank of Japan governor Haruhiko Kuroda said on Tuesday that he saw no direct connection between the monetary base increase and the inflation expectations. Still we believe that Kuroda overestimated the impact of monetary policy major changes on public opinion. The pair USD/JPY is consolidating.

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January 18, 2017
Stock markets continued to stabilise
German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...
January 18, 2017
Pound Sterling soars on PM May's Brexit speech
The British pound posted strong gains yesterday with the Prime Minister Theresa May outlining her vision for Brexit and the parliamentary approval of the Brexit deal...
January 18, 2017
Sterling remains in the spotlight
The Sterling/Dollar exploded into extreme gains on Tuesday with prices clipping above 1.2400 after Prime Minister Theresa May’s optimistic Brexit speech signaled that the United Kingdom was seeking a deal which would satisfy both parties...

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