Pound knocked down, Yellen next in focus

6 June, 2016

The Pound was knocked down by more than 1% against USD in early hours of Asian trading session after The Daily Telegraph released a survey of nearly 19,000 subscribers showing that 69% are intending to vote for a Brexit at the June 23 referendum. This was the most shocking survey released so far, and with only 18 days until the referendum the GBP is extremely sensitive to opinion polls. Yougov and TNS online polls didn’t help either as both revealed the leave campaign has picked up momentum and lead over remain voters. It is becoming extremely worrying for financial markets and expect more sterling losses if polls continued to indicate a Brexit lead. From a technical perspective GBPUSD imminent support stands at 1.4330, however don’t expect the pair to respect any technical or fundamental indicator as polls will continue to dictate the move until June 23.

Last week’s U.S. non-farm payrolls report sent markets through a roller-coaster. Only 38K jobs were added to the economy versus expectations of 164K, this was the fewest number of jobs since September 2010, and to add salt to the wound, April figures were revised down by 37K jobs to 123K. Unemployment rate fell to 4.7% from 5% which seemed to offset the NFP weakness, but that was mainly due to Americans dropping from the labor force. In short this was a terrible report and Fed officials who spent reasonable efforts to readjust market expectations would probably need now to readjust their language.

When the Fed increased rates for the first time in a decade in December 2015 the last 3-month average jobs added to the economy was 241.3K.  The 3-month average jobs heading into 14-15 June Fed meeting is 115.6K, not even half the number seen in Q4 2015. Markets now are pricing less than a 4% chance for a hike in June and around 30% for July.

With only some tier-two economic data on the U.S. calendar the week ahead, all eyes will be on Chair Janet Yellen. Her speech today will be the only key event to change market sentiments, she can either stick to her opinion that rates will rise in the coming months or acknowledge that the labor market is deteriorating and therefore a cautious approach is required. If she sounded less worried on latest NFP report the U.S. dollar will bounce back, but don’t expect to recover all of Friday’s losses as investors likely to remain skeptical ahead of next Fed meeting.

Japanese policy makers who were counting on tighter U.S. monetary policy to weaken the Yen are extremely disappointed. Yen strength has become a nightmare for Japans businesses and USDJPY which lost more than 3.3% last week is only 100 pips above May 3 low. It only requires another wave of volatility across equity markets to send the pair below 105.50.


Source link  
USD and Oil in focus

The USD lifted again against all majors, as US retail sales m/m came in strong at 0.5%, in line with expectations. At the same time the previous month was...

Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...

Recession fears rise as trade war heats up

It has been an interesting first half for 2018. Economic fundamentals and politics took center stage as both fought for market influence.


Relentless rout for emerging currencies

While the speed of selling has slowed down compared to the early part of the week, emerging market currencies have continued to show...

Yuan weakness accelerates

Concerns over the possibility of an upcoming trade war are expected to remain front and center of investor focus once again today. Although the trading atmosphere is not quite as negative...

Lira jumps higher on Erdogan victory

All eyes are on the Turkish Lira this morning with the currency rallying sharply in early trade today, following the news that Turkish President Recep Tayyip Erdogan...


Trade war fears ease, but for how long

Global stocks have bounced back to life after China's central bank calmed markets by urging investors to stay calm and rational. While this move by...

Oil slips further ahead of OPEC meeting

Oil markets have suffered another blow today as US oil inventories showed an increase of 2.07M barrels (-2.1M exp), while at the same time US gasoline...

Trade war fears to dominate market

After imposing tariffs on steel and aluminum imports on its closest allies, the U.S. will be facing enormous criticism at the G7 summit on Friday in Quebec...


In the past 24 hours Bitcoin has gained 8.52% and reached $7426.37. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.1166% and is now at $1.1665. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 11.67% and is now at $494.326. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7AvaTradeAvaTrade69%
8HotForexHotForex68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: