Forex and financial news forecast today.


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Wall Street closed with the major indexes near record highs and that positive sentiment fed into early Asia trading. AUD/USD and NZD/USD continued to rally, and the Canadian dollar went along for the ride. The Canadian dollar got an added boost from West Texas Intermediate (WTI) oil prices which climbed to $83.91/barrel following the Energy Information Administration report that U.S. crude inventors decline by 430,000 barrels. Oil traders were expecting inventories to rise by 1.85 million barrels.

On the other hand, Despite the ongoing corrective pullback, EUR/JPY manages to cling to the positive territory for the third week in a row and sheds ground for the first time after ten consecutive daily advances. In addition, the cross has almost fully retraced the January-August drop.

In fact, yields of the key US 10-year benchmark note and the long end of the curve recede from recent tops, prompting the Japanese yen to regain some ground lost vs. its American counterpart. Yields in the front end of the curve, in the meantime, reverse two daily decline and retake the 0.40% level.

Another news is, Earlier in the month, I highlighted the potential for a breakout in the Australian Dollar on the topside, thanks to encouraging seasonality for risk appetite, alongside Australia’s improved terms of trade at a time where markets were excessively short the AUD. Now that the Aussie has reclaimed the 0.7500 handle, the concern lies with whether there is much more fuel in the tank for an extended push higher in the short run or is it time we start to see some profit-taking.

Keep in mind, that the near 5% rise from circa 0.7220 to north of 0.7500 has seen very little in the way of setbacks to even other any chance for dip-buying. Looking at copper, the price has failed continue higher, falling over 4% from the October peak. Tonight, RBA Governor Lowe is scheduled to speak (20:00BST) and given the sizeable repricing in front-end rates with money markets signalling near 50bps of tightening by the end of next year, despite the RBA remaining adamant that they will not raise rates I suspect there will be some pushback by the Governor.

What do you think about it?
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