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EUR/USD Technical Analysis – Price Rebound Eyes Key Resistance Hurdles.
Euro is testing monthly-open resistance with a break of the December highs needed to fuel the next leg. Here are the updated targets & invalidation levels that matter.
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USD/CAD Carves Bearish Series as Canada CPI, Sales Exceed Forecast.
USD/CAD faces a greater risk of giving back the advance from the December-low (1.2624) as it carves a fresh series of lower highs & lows.
DailyFX US AM Digest: USD/CAD Swings Lower after CPI, GDP Data.
Crude Oil Prices Pushed Closer to Breakout By EIA Inventories Data.
Nikkei 225 Technical Analysis: Play Range Until ’18 Trends Emerge.
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SPX Traders ’Bought the Rumor’ on Tax Bill, Now What?
USD Has Little Enthusiasm for Tax Bill; EUR/USD, GBP/USD Gain.
Trade Set-ups Developing in GBP/USD, AUD/USD & Euro-Crosses (Webinar)
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Key Shift in Trader Sentiment May Push Pound Lower.
The combination of current sentiment and recent changes gives us a stronger GBPUSD-bearish contrarian trading bias.
Bitcoin Set to Reverse Higher.
FTSE Technical Perspective – New Record Highs Won’t Come Easily.
NZD/USD Technical Analysis: Struggling to Reverse Down Trend.
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Forecasts.
US Dollar Looks Vulnerable Through the End of 2017.
Fundamental analysis, economic and market themes.
Fundamental Forecast for the US Dollar : Neutral.
US Dollar drops after FOMC despite seemingly hawkish outcome PCE inflation data, GDP update unlikely to discourage USD bears Successful tax cut vote may help, but it might be priced in already.
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Last week’s FOMC monetary policy announcement was billed as decisive for the US Dollar, and on this score, it did not disappoint. Indeed, the outing marked the currency’s most volatile day in over two months. It plunged against all of its major counterparts, tellingly tracking a drop in Treasury bond yields and a flattening of the 2018 tightening path implied in Fed Funds futures.
This textbook response to a “dovish” policy outturn is difficult to reconcile with Fed guidance seemingly steering in the opposite direction. The committee projected three rate hikes next year, topping priced-in bets. It lifted forecasts for growth and employment too. Fed Chair Yellen even stressed that officials’ rosier outlook didn’t reflect anything new on fiscal policy, signaling confidence in underlying economic strength.
A raft of explanations quickly surfaced. Some cited profit-taking, claiming the outcome was already priced in. Others pointed to the disconnect between an unchanged rate hike forecast and the GDP outlook upgrade, saying it meant the Fed is reluctant to tighten even as growth accelerates. Perhaps the most compelling theory blamed year-end flows, with passing event risk allowing traders to juice the last of the year’s top trends.
In any case, the markets weighed up the last of the year’s critical fundamental news-flow and clearly signaled their disposition, hinting that the greenback may face still more selling before the calendar turns to 2018. A revised set of third-quarter GDP statistics and November’s PCE inflation data would probably need to come in a lot better than expected to tip the scales in buyers’ favor in the week ahead.
The fiscal side of the equation remains a wildcard. Last-minute wheeling and dealing among Congressional Republicans appeared to secure enough support to pass long-promised tax cut legislation, with a vote possible as soon as Monday. The markets’ post-FOMC response suggests this has already entered into asset prices, but the Dollar may find a bit of residual support once the “ayes” are counted.
Sideways Trading Through End of 2017 Looks Likely for Euro.
News events, market reactions, and macro trends.
Fundamental Forecast for EUR/USD: Neutral.
- Futures positioning remains a major impediment for the Euro, with net-long positioning at a fresh 2017 high and its highest level since May 2007.
- The ECB won’t be raising rates in 2018 but will continue with its normalization process, likely leaving the Euro without the central bank as a significant driver in the near-term.
- The IG Client Sentiment Index suggests improved conditions for EUR/USD in the coming days.
The Euro finished near the bottom of the major currencies covered by DailyFX Research last week, dropping the most against the antipodean sisters (EUR/NZD -2.34%; EUR/AUD -2.03%), with no other losses in excess of -1%. EUR/USD was barely lower by -0.20% (but finished Friday particularly poorly) and EUR/GBP was a touch higher, by +0.32%.
At its December policy meeting, the European Central Bank offered a similar assessment of its rate expectations and forward guidance as it did at the October iteration. Concurrently, it’s near-term GDP and inflation forecasts (2018 and 2019) were upgraded, but the 2020 inflation forecast was not, highlighting the ‘cautious optimism’ policy officials are viewing the recovery.
While this means traders may be disappointed that no rate hikes are coming next year, it does mean that normalization is well under way, which should keep the Euro supported for the foreseeable future. Unfortunately, this leaves the Euro without the European Central Bank as a significant driver heading into 2018. The ripple effects are small, but important: if ECB policy is deemed to be on a set course for the next several months, it may mean price action around typically important releases like the CPI or PMI reports is dampened going forward.
In the week ahead, the Euro sees a quieter economic calendar than last week, no surprise in the run-up to the Christmas holiday. The final Euro-Zone CPI report for November shouldn’t leave much in its wake on Monday. Otherwise, the German IFO report should have minimal impact on price action on Tuesday, as will the final Q3’17 French GDP report on Friday. Likewise, during the week between Christmas and New Year’s, we shouldn’t look to the calendar as a significant source of event risk.
Heading into the final two weeks of 2017, the Euro has firm fundamentals supporting it. Economic data momentum is solid and remains near multi-year highs, with the Euro-Zone Citi Economic Surprise Index finishing Friday at +70.3, up from +60.1 the week prior and still higher than +58.9 a month ago. The final PMI readings for November released thus far have showed that growth momentum in the Euro-area is at its strongest pace since 2011.
Taking a look at market-derived indicators of price pressures, t he 5-year, 5-year inflation swap forwards, one of ECB President Draghi’s preferred g auges of inflation, closed last week at 1.705 %, a touch lower than the 1.708% reading a week earlier, but still higher than the 1.670 % reading a month ago. Given that Euro strength has sustained itself over the past few months, evidence that inflation expectations continue to trend higher should put to rest any near-term concerns that the ECB might have over tapering the pace of its asset purchases as the calendar turns into 2018.
We still believe that the biggest obstacle to further Euro strength lies not with the ECB or upcoming economic data, or even politics heading into the final two weeks of the year; but rather where market positioning stands. T he Euro long trade in the futures market remains crowded among speculators/non-commercial traders .
According to the CFTC’s la test COT report, there were 113.9 K net-long contracts held by speculators for the week ended December 12, the highest level since the week ended May 15, 2007. After positioning peaked in May 2007, EUR/USD dropped over the next four weeks for a loss of just over -3%.
While this isn’t enough information alone to act on a contrarian short Euro position, it is enough of a reason to curb our enthusiasm about the Euro’s otherwise improved fundamentals, suggesting that choppy, sideways range trading is due through the end of 2017 – and if weakness does transpire, it’s merely a saturated market taking profits on Euro longs.
This was originally written on December 17, 2017.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist.
To contact Christopher, him at cvecchiodailyfx.
BoJ Discusses Reversal Rate as The Quest Continues Towards the Elusive 2%
Price action and Macro.
Fundamental Forecast for JPY: Bearish.
Next week brings the final Bank of Japan rate decision for 2017. It’s been a rather quiet year for the BoJ, all factors considered; and quite the respite from the past few years when their very own policies were very much in the spotlight. Last year saw the stealth move to negative rates in January , catching many by surprise and leading to a troubling five-month period that saw USD/JPY drop all the way from above 121.50 to below 100.00. The oncoming ‘reflation trade’ that started around the U. S. Presidential Election in November pushed prices back towards that 120.00 level, falling just short as a double-top was set at 118.67 in December/January. After a pullback in the first quarter of the year, USD/JPY sank into a range that’s lasted ever since, now going on for seven full months.
USD/JPY Has Spent the Bulk of 2017 in a Range-Bound Fashion.
The big item of pertinence circling around the Bank of Japan, and likely to be on full display next week is the bank’s outlook towards stimulus. The stimulus program that came into markets around the election of Prime Minister Shinzo Abe has continued to drive into Japanese markets going on five years now. And while inflation initially showed a promising response, eclipsing the BoJ’s 2% target temporarily in 2014; those hopes have fizzled in the years since as the Japanese economy has moved back towards the deflationary cycle that defined the economy for much of the past thirty years.
For the past year, inflation has remained between .2 and .7% in Japan , and this is with an outsized stimulus program in effect. After four consecutive months at .4% this summer, a quick visit to .7% in August and September led into a drop back-down to .2% in October. So, it would appear that we remain very, very far away from attaining the BoJ’s goal, with little hope in the immediate sights.
In September, we started to hear machinations around a potential increase in stimulus . This is when incoming BoJ member, Gouishi Kataoka, dissented at the BoJ’s rate decision. Dissent within the BoJ isn’t necessarily new, as we regularly heard prior board members Takahide Kuichi and Takehiro Sato dissent at meetings in the past. But their dissent was largely looking for an end to stimulus, or at least less of it; and the thought was that we’d seen more unanimity when their terms ended in July of this year. But, with Mr. Kataoka coming into the BoJ in July, the dissent continued, and this time in the opposite direction as the proposition was to see even more stimulus in the effort of driving the Japanese economy towards the 2% inflation target.
This theme saw a twist last month. BoJ Governor Haruhiko Kuroda mentioned the ‘reversal rate’ in a speech, and questions began to populate as to whether the head of the BoJ was dropping hints towards an eventual stimulus exit. Reversal rate is the rate at which rate cuts become detrimental for an economy, and given how loose policy has been for so long in Japan, this could be denoting a higher bar for future stimulus endeavors. This was initially interpreted as Gov. Kuroda noting that additional rate cuts may actually do damage to the Japanese economy, and this put market participants on high alert for a potential announcement moving the bank away from their gargantuan stimulus program in the coming months. But – in a clarification after the fact, we learned that ‘reversal rate’ entered the conversation at the prompting of Mr. Kataoka, in order to flag risks around additional easing; and now it seems as though this inclusion of the term ‘reversal rate’ is actually in order to lay the groundwork for even more stimulus in the future.
The BoJ appears committed here, and given the Japanese economy’s continued struggle to attain the elusive 2% inflation target, it would appear as though we’re nowhere near the conversation of stimulus exit.
The forecast for the Japanese Yen will be set to bearish for the week ahead.
--- Written by James Stanley , Strategist for DailyFX.
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GBP Set to Rally as Preliminary Brexit Shackle is Removed.
Fundamental analysis and financial markets.
Brexit shackle removed but trade talks will be long and complex. Next week’s economic calendar is full of potential market moving events. Double head and shoulders broken, EUR/GBP heading south.
Fundamental Forecast for GBP: Bullish.
We have turned bullish on GBP, especially against EUR after Friday’s announcement that the EU will recommend that the second phase of Brexit talks can start. Removing this fundamental block should allow GBP to drift higher against the EUR in the medium-term, especially as the ECB has no intentions of moving rates higher in 2018 with inflation at its current lowly rate.
We would take care with any EUR/GBP short position next week however as the economic calendar is packed with central bank meetings and market moving data. UK monetary policy will remain unchanged when the Bank of England meet on Thursday December 14 but commentary from Governor Mark Carney may suggest that inflation in the UK is still far too high, prompting thoughts of another 0.25% rate hike in H1 2018. We will get a look at the latest UK inflation data on Tuesday December 12 at 09:30am and updated wages and employment numbers are released at the same time on Wednesday December 13.
A look at the chart below shows EUR/GBP has completed a pair of head and shoulder formations since late September and with the neckline broken, the downside beckons for the pair. Fibonacci retracement at 0.86920 has already been touched and will be broken soon, leading to the 76.4% retracement level at 0.85480. Furthermore, the pair are trading below all three ema bands, while the stochastic indicator points lower.
Chart: EUR/GBP Daily Time Frame ( April – December 8 , 2017)
You can check out our latest Q4 trading forecast for Sterling here.
--- Written by Nick Cawley, Analyst.
Follow Nick on Twitter nickcawley1.
Gold Prices Off Key Support - FOMC Rally Eyes Initial Resistance Hurdles.
Short term trading and intraday technical levels.
Fundamental Forecast for Gold: Neutral.
Gold prices respond to critical support; post-FOMC rally under review W hat’s driving gold prices? Review DailyFX’s 4 Q Gold Projections Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT to discuss this setup.
Gold prices snapped a three-week losing streak with the precious metal up 0.44% to trade at 1253 ahead of the New York close on Friday. The advance comes on the heels of the FOMC policy meeting and amid continued strength risk markets with the all three major U. S. equity indices poised to close higher on the week.
The FOMC raised interest rates by 25bps as expected this week with the updated quarterly projections showing an upwardly revised print on forecasts for both GDP and employment (unemployment down to 3.9% from 4%). Interestingly enough, expectations for the Core Personal Consumption Expenditure (PCE) remained unchanged at 1.9%, just shy of the central bank’s 2% inflation target.
This suggests that while growth prospects remain firm, the central bank continues to expect subdued underlying price growth to carry over into next year. With inflation remaining the laggard of the Fed’s dual mandate of price stability and full employment, the committee will likely be in no hurry to aggressively hike rates next - a positive for the yellow metal. Heading into next week, the focus is on a break of a key range between 1240-1267 as we look for further signs of basing in gold prices.
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A summary of IG Client Sentiment shows traders are net-long Gold - the ratio stands at +4.33 (81.3% of traders are long)- bearish reading Long positions are 1.6% lower than yesterday and 0.4% higher from last week Short positions are 6.9% lower than yesterday and 14.7% lower from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias .
Last week we noted that gold prices had, “approached a key support confluence highlighted in our 4Q Gold Forecast at 1240/43 . This region is defined by the 61.8% extension of the decline off the yearly highs and the 50% retracement of the December advance with the long-term 200-week moving average converging on up-slope support just lower… Bottom line: from a trading standpoint I’d be looking for either evidence of an exhaustion low into this support zone OR a breach above yearly trendline resistance before tempting long exposure here heading into the Fed next week.”
Gold registered a low of 1236 before reversing higher with the advance now eying initial resistance at 1263/67 – a critical pivot zone. Subsequent topside objectives are eyed at 1285 (slope resistance / 100-day moving average) with a breach / close above 1295 would be needed to mark resumption of the broader uptrend. Such a scenario sees targets at the 2017 high-day close at 1346 backed by 1355 and the 2016 high close at 1366 .
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A closer look at near-term price action further highlights this support zone and heading into next week, the focus remains higher against this key threshold. A break below this threshold would shift the focus lower targeting 1219 & critical support / bullish invalidation at 1204/09 (an area of interest for exhaustion / long-entries IF reached).
Bottom line: We’ll be looking for further evidence that a near-term low may be in place. From a trading standpoint, our outlook remains weighted to the topside for now while above 1240.
---Written by Michael Boutros, Currency Strategist with DailyFX.
Follow Michael on Twitter MBForex contact him at mboutrosdailyfx or Clic k H ere to be added to his distribution list .
USD/CAD Resilience Vulnerable to Strong Canada Inflation Figures.
Central bank policy, economic indicators, and market events.
Fundamental Forecast for Canadian Dollar: Neutral.
USD/CAD trades near the monthly-high (1.2902) as the Federal Open Market Committee (FOMC) appears to be on course to further normalize monetary policy in 2018, but a marked pickup in Canada’s Consumer Price Index (CPI) may rattle the near-term resilience in the exchange rate as it puts pressure on the Bank of Canada (BoC) to follow a similar path to its U. S. counterpart.
Fresh forecasts from Fed officials suggest the central bank will stay on its current course of delivering three rate-hikes per year, and the hiking-cycle may prop up USD/CAD over the near-term especially as the BoC endorses a wait-and-see approach for monetary policy.
With Fed Fund Futures showing budding expectations for a March rate-hike, the pair stands at risk for a more meaningful recovery going into the end of 2017, but key data prints coming out of Canada may spark a bearish reaction in the dollar-loonie exchange rate as the headline reading for inflation is expected to climb to an annualized 2.0% from 1.4% in October.
The threat for above-target inflation may heighten the appeal of the Canadian dollar its raises the risk of seeing Governor Stephen Poloz and Co. adopt a more hawkish tone in 2018, and the central bank may increase its efforts to prepare Canadian households and businesses for higher borrowing-costs as officials note ‘ higher interest rates will likely be required over time .’ On the other hand, a below-forecast CPI print may fuel the near-term resilience in USD/CAD as it raises the BoC’s scope to retain the current policy for the foreseeable future. Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!
USD/CAD Daily Chart.
Near-term outlook for USD/CAD remains clouded with mixed signals as the pair marks a failed attempt to test the monthly-high (1.2902), with the pair stuck in a narrow range as the 1.2620 (50% retracement) region offers support. Keep in mind, the Relative Strength Index (RSI) highlights a similar dynamic as it struggles to push back into overbought territory, but the broader outlook remains supportive as the oscillator preserves the bullish formation carried over from August.
With that said, topside targets remain on the radar for USD/CAD, with a break of the near-term range raising the risk for a move back towards the 1.2980 (61.8% retracement) to 1.3030 (50% expansion) region. Want to learn more about popular trading indicators and tools such as the RSI? Download and review the FREE DailyFX Advanced Trading Guides !
Australian Dollar May Have Risen As Far As It’s Going This Year.
Financial markets, economics, journalism and fundamental analysis.
Fundamental Australian Dollar Forecast: Neutral.
The Australian Dollar got a boost from the general US Dollar weakness engendered by the Fed Then blockbuster local data helped the bulls cause even more This week won’t offer them similar opportunities however.
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The Australian Dollar was borne aloft last week by updrafts foreign and domestic.
It was helped by the general US Dollar weakness which followed Wednesday’s monetary policy call from the Federal Reserve. While the Fed was far from dovish, it did stick with its central prescription of three interest rate hikes in 2018. Rightly or wrongly there were clearly those who wanted to hear of more and the greenback struggled when they didn’t.
But that wasn’t the Aussie Dollar’s only prop. Australian data came charging home in very sprightly fashion too. Consumer confidence hit four-year highs according to a monthly snapshot from major lender Westpac . Then came news that the Australian economy added more than 61,000 jobs in November, blowing expectations for an already chunky 19,000 clean away. This was the strongest monthly showing since October 2015, with full-time employment growing encouragingly.
Given all of the above, it’s no wonder that the Aussie rose.
But what of the coming week? Well, it will contain the last trading sessions before markets head into the Christmas break. This could make for thinner trading and exaggerated moves. It may also be that investors will rethink that immediate Fed reaction, re-learn the clear fact that the US central bank remains the most hawkish developed-market monetary authority by a country mile and buy the Dollar back a bit.
It’s certainly much more hawkish than the Reserve Bank of Australia.
Don’t forget that that last US rate hike finally eroded the Australian Dollar’s long-held yield advantage over the greenback, putting the upper limit of the Fed funds target band at 1.50%- the same as Australia’s record-low official cash rate. The Fed may only be set to hike rates three times in the coming year, but that’s still three more times than the RBA will do so, according to current futures-market pricing.
The USD side of AUD/USD is all too likely to dominate but much may depend on the week’s most significant Australian news release, the RBA’s policy meeting minutes from December 5. In recent pronouncements the central bank has seemed a bit less worried about inflation’s weakness and a bit less inclined to worry aloud about the baleful effects of Australian Dollar strength on its inflation-targeting mandate.
To be sure it still mentions both, but not with the urgency it once did. If the minutes show it in similarly relaxed frame of mind about both, the Australian Dollar could score some more gains, but overall a more neutral tone is probably likely for AUD/USD.
--- Written by David Cottle, DailyFX Research.
Contact and follow David on Twitter: DavidCottleFX.
The New Zealand Dollar and The Tides of Change Ahead of the RBNZ.
Price action and Macro.
Fundamental Forecast for NZD: Bearish.
The New Zealand Dollar spent much of this week clawing back losses that had very much dominated the currency’s price action over the past few weeks. Bigger picture, we can really draw back to July to focus in on when the pain really started to show for the Kiwi. This is when NZD/USD was trading over the psychological level of .7500, and this came on the heels of an aggressive rally that took two-and-a-half months to build-in over 700 pips on the pair. But in the three months since, the entirety of those gains have been eradicated. This bearish move in the New Zealand Dollar saw another fresh wave of selling on last month’s news around New Zealand elections, and after catching a bounce at the 2017 low last week, prices spent most of this week trudging-higher.
NZD/USD Daily: Corrective Gains for the Kiwi After Last Week’s Bounce at 2017 Low.
After newly-installed Prime Minister Jacinda Ardern’s Labour party crafted a coalition with the NZ First Parties, a blip of strength had temporarily showed-up in the Kiwi spot rate . This was very much driven by the prospect of an increase in the minimum wage; with the hope being that higher wages as brought upon by legislation could force stronger rates of inflation which, eventually, can put the Reserve Bank of New Zealand in a spot where they have to hike rates. But – that strength was short-lived, as Ms. Ardern is also promoting a modification to the Reserve Bank Act, and this can radically change the way that the RBNZ does business.
The proposed change would make the RBNZ also accountable for full-employment . This would be the incorporation of an additional mandate, on top of the RBNZ’s current focus of inflation. The change would effectively put the RBNZ in a spot where they have to try to balance the forces of inflation and employment, similar to the Federal Reserve utilizing a dual mandate versus the single mandate of Central Banks like the ECB. This is also happening while lawmakers consider an additional committee to manage the cash rate, and this invites a whole host of uncertainty around the future of the Kiwi-Dollar spot rate, along with that of the RBNZ itself.
On top of all of that potential change, next week sees Interim RBNZ Governor Grant Spencer conduct his first full monetary policy statement, and this also happens to be the first RBNZ rate decision under the new Labour-led government. There are no expectations for any moves on rates, and for the next expected adjustment, markets are currently looking out to Q4 of 2018 for a potential hike. The one possible area for change at next week’s rate decision is an adjustment to inflation expectations in order to account for the weaker currency. In Graeme Wheeler’s final press conference as the head of the bank in August, the RBNZ said that they anticipate rates staying on hold until at least September of 2019. Since then, we’ve seen inflation come-in at 1.9% versus the RBNZ’s projection of 1.6%, and the additional slide in NZD will likely necessitate a small adjustment for forward-looking inflation figures.
While stronger rates of inflation could eventually drive rates-higher, the prospect of change within the Reserve Bank Act will likely continue to dampen demand for NZD, at least in the near-term, as the rest of the world becomes more familiar with what a Jacinda Ardern-led New Zealand will end up looking like. The one thing that does appear certain is that Ms. Ardern is not satisfied with business as usual, and this can lead to further change. Markets, generally speaking, abhor change as this presents risk; and while the potential around those changes remain uncertain, we will likely see some element of risk aversion until market participants can gain more clarity. The forecast for next week will be set to bearish on the New Zealand Dollar.
--- Written by James Stanley , Strategist for DailyFX.
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Daily Forex Market Outlook.
The buying in equities may have tapered out for today, but the bullish move remains in play. Commodities fell along with equities mainly due to the strengthening of the dollar. The Euro lost ground in anticipation of a rate cut next week, and the only other currency that made decent gains today outside of the dollar was the yen. Next Monday, Trichet will be speaking to the European Parliament. This speech will have significant impact on the euro if he signals that he will not be cutting rates, since a cut has been priced in. The actual rate decision will be on Thursday. The other big news events are on Friday in the form of employment numbers and a speech by Bernanke. The employment data will be more important. If it comes in as expected or better look for the market to latch on with optimism, while a larger number will kill it.
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Risk Disclaimer: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals and Forex broker reviews. The data contained in this website is not necessarily real-time nor accurate, and analyses are the opinions of the author and do not represent the recommendations of DailyForex or its employees. Currency trading on margin involves high risk, and is not suitable for all investors. As a leveraged product losses are able to exceed initial deposits and capital is at risk. Before deciding to trade Forex or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite. We work hard to offer you valuable information about all of the brokers that we review. In order to provide you with this free service we receive advertising fees from brokers, including some of those listed within our rankings and on this page. While we do our utmost to ensure that all our data is up-to-date, we encourage you to verify our information with the broker directly.

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Forex: US Tax Bill passes and “status-quo” for the Bank of Japan.
On Wednesday, the US Senate approved the tax bill 51 for and 48 against, while the House of Representatives gave it final approval, passing it for the second time in two days after a procedural foul-up forced another vote. The bill passed the House with a vote of 224-201, with no Democrats voting for it and some Republicans members also voting no. The bill now heads to President Trump for his signature. The markets remain concerned as to how much stimulus the bill will give to an already .
Forex: Wednesday Report – Tax Bill passed by Senate in quiet session.
The House of Representatives voted on the Tax Bill early Tuesday local time. The Tax Bill was passed by a margin of 24 votes, with 227 Yay and 203 Nay. A procedural issue during the vote means the House has to vote on the Bill a second time, as the Bill passed by the house was in violation of Senate rules. Once these violations are amended the House will vote again, with this second vote believed to be only a formality. The Senate voted overnight and the Bill was passed by 51 to 48. The House .
Forex: USD “treading water”
USD is “treading water” ahead of the expected enactment of President Trump’s tax bill. The initial euphoria of lower corporation tax, that many believed would see a repatriation of USD back into the US has begun to come into doubt. With the bill likely to be passed into law before the end of the year, many believe there will be no rush for Corporations to move funds back to the US as the repatriation of foreign profits is a permanent measure that companies will avail themselves of over a .
Forex: US Tax Bill Moves Closer to Being Made Law.
USD strengthened on reports that the US Tax Bill is moving closer to being ratified. Many top Republicans are confident that Congress will pass the Tax Bill this week. Once the Senate ratifies the bill, which could happen as early Tuesday, President Trump could sign and bring the Bill into law by the end of the week. However, as with most things in politics, there is a degree of concern in the markets that things may not go as smoothly as hoped. With a slim 52-48 Senate Republican majority .
Forex: Central Banks Monetary Policy Unchanged.
Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that “further modest increases” in interest rates are probable, as the Bank tries to bring inflation in line with its 2% target in the coming years. The MPC appeared to be unconcerned with inflation rising to 3.1% last month and voted unanimously at their December meeting to leave interest rates at current levels. The MPC is waiting to see where inflation will be in early 2018, along with .
Forex: No Surprises as Fed Raises Rates.
The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike continues the Fed’s gradual move toward higher rates, which were cut to virtually zero during the financial crisis. The latest hike is the 3rd time this year that the Fed has raised rates, reflecting its confidence that the economy is robust and growing. In the statement that followed the decision, the Fed suggested that the upcoming tax cuts .
Forex: Trump Suffers a Setback, Oil Gains and GBP Stumbles.
President Trump suffered a major setback as the once strictly Republican state of Alabama has, for the first time in 25 years, elected a Democrat to the US Senate. Democrat Doug Jones staged a stunning come-from-behind win against GOP Roy Moore in, what many believe, will trigger a political earthquake that will be felt nationally and internationally. The vote had been nip-and-tuck and, with 99% of the vote in, Jones was holding a 50% to 49% lead. The win puts the Democrats just two seats away .
Forex: Lackluster Markets Await Central Banks.
Markets were somewhat lackluster on Monday, and that trend appears set to continue Tuesday as traders await a host of Central Bank meetings starting on Wednesday, with the Federal Reserve expected to hike rates at their last FOMC meeting of 2017. With the markets “pricing-in” a hike of 0.25%, we are likely to see a degree of USD volatility as positions are squared and new positions opened. The focus will be on the outlook for next year and beyond, with the markets debating the impact of coming .
Forex: Central Bank Meetings Dominate the Week.
With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled this week. Wednesday, December 13th at 19:00 GMT will see the US Federal Reserve release its quarterly economic projections and the Federal Open Market Committee (FOMC) release its statement. The markets have been focusing on the FOMC December meeting and the forecast hike in interest rates by 0.25%. The Fedwatch tool is projecting the probability of such a .
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