Forex News from InstaForex

Australia Q2 Current Account Deficit A$15.535 Billion

Australia had a seasonally adjusted current account deficit of A$15.535 billion in the second quarter of 2016, the Australian Bureau of Statistics said on Tuesday.

That beat forecasts for a shortfall of A$20.0 billion following the upwardly revised A$14.9 billion in the previous three months (originally a deficit of A$20.8 billion).

New exports of GDP for the quarter was -0.2 percent - shy of expectations for a flat reading following the 1.1 percent increase in the three months prior.

The balance on goods and services was a surplus of A$10.797 billion, a decrease of A$999 million (8 percent) on the Q1 surplus of A$11.796 billion.

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Japanese Bond Yields Edge Back Toward Positive Returns

Yields on the 30-year benchmark government bond were driven higher to their highest level since March by an increased sell-off in long-dated bonds on Monday. Meanwhile, 10-year Japanese government bond moved closer to positive territory once more.

JGB yields have been rising since the Bank of Japan announced it would conduct a comprehensive assessment of its massive and aggressive monetary policy that was adopted in 2013. Yields have also been rising on bets that the central bank will rein its buying of longer-dated government debt. Yields of 30-year Japanese bond rose for the seventh day in a row to a five-month peak of 0.53% on Monday.

Yield on the 10-year Japanese bond, albeit muted, rose for the fourth straight day by 1 basis point to - 0.02% on Monday, rising close to positive yield territory.

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Fxwirepro: Usd/jpy Recovery Not Convincing, Holds Above 20-Dma Support, But Bias Still Lower

USD/JPY managed to erase losses from lows of 101.20, but upside seems to be loosing traction.

Likelihood of another BoJ disappointment at the Sept 21 meet is rising, putting upside risk to the near-term path for JPY.

Technicals still paint a bearish picture, indicators point south. The major is managing to hold above 20-DMA support currently at 101.52, but momentum signals have turned, and the RSI is now below 50.
USDJPY is attempting a clear break below the 20-DMA, which then see scope for test of 98.90 (trendline).

Major support levels - 101.52 (20-DMA), 101, 100.75 (Aug 3 low), 101.41 (23.6% Fib), 99.54 (Aug 16 low)

Major resistance levels - 102, 102.12 (Sept 7 high), 102.58 (38.2% Fib), 102.62 (50-DMA) ​

Recommendation: Good to short decisive break below 20-DMA, target: 101/ 100.75/ 99.55/ 99

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Wall Street Slightly Changed as Investors Assess U.S. Interest Rate Outlook

U.S. stocks closed slightly changed, however the Nasdaq extended gains, while investors continue to assess the outlook of U.S. interest rates. The Fed has stated in its Beige Book report of anecdotal information that the economy of the U.S. has expanded at a subdued rate during July and August.

The Dow Jones Industrial Average decreased by 0.06 percent, the S&P 500 decreased by 0.02 percent while the Nasdaq Composite gained by 0.15 percent, a record high close. Unsatisfactory predictions from Sprouts Farmers Markets pulled down grocers. Shares of Sprouts dropped by 13.7 percent at $19.68, shares of Whole Foods edged down by 5.3 percent to $29.08 while shares of Kroger fell by 4.1 percent to $31.32. Apple shares increased by 0.6 percent at $108.36. Chipotle Mexican Grill has increased by 5.9 percent.

U.S. airline stocks rose following Delta Air's report that sales trends have improved and Southwest has stated it would slow its rapid growth of flights in 2017. Stocks of Delta increased by 5.6 percent and Southwest rose by 4.7 percent.


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Australia Home Loans Slide 4.2% In July

The total number of home loans in Australia was down a seasonally adjusted 4.2 percent on month in July, the Australian Bureau of Statistics said on Friday - standing at 55,010.

That missed forecasts for a decline of 1.5 percent following the 1.2 percent increase in June.

Investment lending added 0.5 percent to A$11.842 billion, slowing from 3.2 percent in the previous month.

The value of loans slipped 3.1 percent to A$19.946 billion after rising 1.8 percent a month earlier.

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Gold Declines as Dollar Firms

Gold prices dropped as the U.S. dollar firms while interest rates were left unchanged by the European Central Bank. The ECB's decision started a selling in government bonds and an increase in yields, that has placed pressure on prices of gold, according to BMO Capital Market's Tai Wong.

On the Comex division of the New York Mercantile Exchange, gold for December delivery settled down by 0.6 percent at $1,341.60 per troy ounce. The decline indicated the precious metal's second successive day of losses.

The WSJ Dollar Index increased by 0.3 percent at 86.13.


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China Industrial Production Expands 6.3% In August

Industrial production in China climbed 6.3 percent on year in August, the National Bureau of Statistics said on Tuesday - beating forecasts for a gain of 6.2 percent and up from 6.0 percent in July.

On a monthly basis, output expanded 0.5 percent.

The bureau also said that retail sales advanced an annual 10.6 percent - again exceeding expectations for 10.2 percent, which would have been unchanged from the previous month.

Fixed asset investment gained 8.1 percent on year, beating forecasts for 7/9 percent and unchanged from the July reading.

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Dollar Declines on Fed Official Brainard’s Comment on September Rate Hike

The U.S. dollar declined against a basket of major currencies following a statement from a Federal Reserve official regarding reduced bets on the central bank's interest rate hike in September which also implied a dovish stance. According to Fed board governor Lael Brainard, the fed should not increase rates too quickly since the current rates are propping up the economy.

The dollar index was previously down by 0.22 percent at 95.126. The index significantly declined after the release of Brainard's comments to a session low of 94.935, which reversed the movement minutes later, however has retraced much of the losses. The September fed funds contract FFU6 increased by 1.0 basis point after Brainard's comments.

The dollar declined against the Japanese currency by 0.83 percent at 101.83 yen. However, it reversed previous gains against various emerging market and commodity currencies following statements from Brainard, which includes the Aussie dollar, Russian rouble, and the Brazilian real. The euro previously increased against the dollar at $1.1235.

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Fxwirepro: Usd/sgd Hits Fresh 3-Month High at 1.3685, Bias Remains Bullish

USD/SGD is currently trading around 1.3664 marks.

It made intraday high at 1.3681 and low at 1.3658 levels.

Intraday bias remains bullish till the time pair holds key support at 1.3605 marks.

A sustained close above 1.3660 will test key resistances at 1.3732, 1.3799, 1.3836, 1.3851(March 16, 2016 high), 1.4073 (20D EMA) and 1.4132(20D, 30D and 55D EMA crossover).

On the other side, a daily close below 1.3605 will drag the parity down towards key supports at 1.3538/1.3462/1.3391/1.3347/1.3313/1.3302/ 1.3271 levels.

Important to note here that 20D, 30D and 55D EMA heads up and confirms the bullish trend in a daily chart.

We prefer to go long on USD/SGD only above 1.3685 with stop loss at 1.3605 and target of 1.3799.

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U.S. Stocks Decline as Oil Drops

U.S. stocks and oil have declined, which extends the session of volatility which started while investors focused on the central bank. The Dow Jones Industrial Average decreased by 1.4 percent to 18066.75.

The S&P 500 fell by 1.5 percent to 2127.02 while the Nasdaq Composite was down by 1.1 percent to 5155.25. The CBOE Volatility Index surged by 18 percent to 17.85, which is its highest level since June 28. The energy sector of the S&P 500 was down by 2.9 percent, as shares of Chesapeake Energy led declines, slipping by 8.3 percent to $7.38.

Speculations revolving around the possibility of the Federal Reserve increasing interest rates as soon as next week has contributed to the significant selloff in stocks, however concerns appeared to have lessen following three Fed officials who have stated that there was no hurry to move.

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New Zealand GDP Gains 0.9% In Q2

New Zealand's gross domestic product climbed 0.9 percent on quarter in the second quarter of 2016, Statistics New Zealand said on Thursday.

That missed forecasts for an increase of 1.1 percent and was unchanged from the upwardly revised 0.9 percent growth in the first quarter (originally 0.7 percent).

Individually, construction was up 5.0 percent, after a 5.1 percent increase in the previous quarter. All construction sub-industries increased.

On a yearly basis, GDP expanded 3.6 percent - matching expectations and up from 2.8 percent in the three months prior.

Household consumption expenditure was up 1.9 percent, driven by spending on services and durable goods.

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Dollar Declines With Hike Rate Bets

The U.S. dollar declined while investors bet that an interest rate hike by the Federal Reserve in the coming months is unlikely. The Wall Street Journal Index decreased by 0.2 percent at 86.67.

Fed-funds futures has shown that traders and investors have assigned a 48 percent chance of an interest rate hike by December, according to the CME. Data has shown that the likelihood of an increase at the Sept.20-21 Fed meeting is at 15 percent. The dollar declined against the Japanese yen by 0.1 percent at 102.43 while the euro increased by 0.2 percent at 1.1248.

In emerging markets, the dollar increased by one percent to 19.27 against the Mexican peso and it declined by 0.4 percent to 65.15 against the Russian ruble.

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Fxwirepro: Usd/sgd Hovers Around 1.36 Mark, Bias Remains Neutral

The price of long-dated U.S. government bonds have dropped following a short respite, which highlights the uncertainty of investors in the middle of bond valuations and less support for monetary stimulus coming from other major central banks. The movement of prices was due to reports of retail sales and industrial production which drove expectations that an interest rate hike fromt the Federal Reserve by next week is unlikely.

Yield on the benchmark 10-year Treasury note was at 1.703 percent. The 10-year note's yield premium on the two-year note was at 0.965 percentage point. The premium investors declined to 0.75 percentage point during early July, which is the lowest since 2007. The 10-year Treasury yield on Thursday was below 2.273 percent which is the yield settled during the end of last year.

The yield on the two-year note declined to 0.738 percent in comparison to Wednesday's 0.758 percent.

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Oil Headed for Weekly Loss on Prospect of Oil Glut Persistence

Oil is set for a weekly loss on outlook that a global crude will continue as halted supply production resumed and as demand expansion slumped.

Oil futures dropped by 0.6% in New York, adding up the weekly losses to 4.9%. Oil producers Libya and Nigeria, whose supplies have been cut back by local conflicts, are getting ready to bolster exports in the following weeks. The International Energy Agency said on Tuesday that the oil oversupply will persist as demand growth slows and as supply sustains its momentum.

U.S. W.T.I. dropped by 26 cents to $43.65 per barrel while the benchmark Brent dropped by as much as 0.8% to $46.23 per barrel.

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Fxwirepro: South Korean Won Opens Onshore Trade at 1,125.5 Per U.s. Dollar, Consistent Break Above Targets 1,142

USD/KRW is currently trading around 1,123 levels.

It made intraday high at 1,125 and low at 1,107 marks.

Intraday bias remains bearish till the time pair holds key resistance at 1,127 levels.

A daily close above 1,127 will drag the parity higher towards key resistances at 1,142, 1,152, 1,162, 1,176, 1,182, 1,196, 1,201, 1,209 (20D EMA) and 1,220 (March 03, 2016 high) marks respectively.

On the other side, a sustained close below 1,122 will test key supports at 1,107/1,090/1,078/1,063/1,044 levels respectively.
In addition, South Korea’s Kospi was trading around 0.40 percent higher at 2,007.62 points.
We prefer to go short on USD/KRW around 1,125 with stop loss at 1,132 and target of 1,1

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Dollar Gains after U.S. Data Boosts Bets on Fed Rate Increase

The U.S. dollar reached a two-week high against a basket of major currencies as U.S. consumer prices increased more than initially expected during August, which boosted expectations regarding a potential Federal Reserve interest rate hike this 2016. The dollar index last traded as high as 96.108, its strongest level since Sept. 1.

The data regarding the increase in U.S. consumer prices indicated a steady rise of inflation which makes the Fed eligible for a Fed rate hike this year. The core CPI was up by 2.3 percent in the 12 months until August. U.S. short-term interest rate futures are currently indicating a 55 percent likelihood of an interest rate hike by December, according to CME Group's FedWatch Tool.

The U.S. dollar against the Japanese yen eased by 0.1 percent to 102.20 yen while the euro was steady at $1.1160.

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Australia House Prices Rise 2.0% In Q2

House prices in Australia were up 2.0 percent on quarter in the second quarter of 2016, the Australian Bureau of Statistics said on Tuesday.

That missed forecasts for 3.0 percent following the 0.2 percent decline in the previous three months.

By region, capital city residential property price indexes rose in Sydney (+2.8 percent), Melbourne (+2.7 percent), Brisbane (+1.1 percent), Canberra (+2.2 percent), Adelaide (+0.8 percent) and Hobart (+0.7 percent) and fell in Perth (-1.2 percent) and Darwin (-2.4 percent).

On a yearly basis, house prices advanced 4.1 percent - also missing estimates for 5.2 percent and down from 6.8 percent in the three months prior.

Annually, residential property prices rose in Melbourne (+8.2 percent), Canberra (+6.0 percent), Hobart (+4.9 percent), Brisbane (+4.3 percent), Sydney (+3.6 percent) and Adelaide (+3.5 percent) and fell in Darwin (-6.5 percent) and Perth (-4.8 percent).

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Asian Stocks Flat while Traders Await Prior to Central Bank Meeting

Asian stocks were flat while Japanese shares fluctuated prior to the policy meetings from the Bank of Japan and the Federal Reserve. The MSCI Asia Pacific Index declined by less than 0.1 percent.

Japan's Tokyo index increased by 0.1 percent while the yen traded at 101.87 against the dollar. Australia's S&P/ASX 200 Index was down by 0.1 percent while New Zealand's S&P/NZX 50 climbed by 0.2 percent. The South Korean Kospi index slipped by 0.2 percent. Futures on the FTSE A50 Index was down by 0.2 percent during the most current trading, as the Hang Seng Index jumped by 0.1 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gained by 1.6 percent. The Shanghai Composite Index climbed by 0.8 percent as the Hang Seng Index was up by 0.9 percent.

Uncertainty regarding the monetary policy has sparked volatility in global markets during the past two weeks, as traders were divided on what the BOJ's action would be in its review.

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Fxwirepro: Usd/sgd Hits Fresh 2-Week Low at 1.3510, Consistent Break Below Targets 1.3462

USD/SGD is currently trading around 1.3530 marks.

It made intraday high at 1.3546 and low at 1.3510 levels.

Intraday bias remains bearish till the time pair holds key resistance at 1.3605 marks.

A daily close below 1.3510 will drag the parity down towards key supports at 1.3462/1.3391/1.3347/1.3313/1.3302/ 1.3271 levels.

Alternatively, a sustained close above 1.3605 will test key resistances at 1.3698, 1.3732, 1.3799, 1.3836, 1.3851(March 16, 2016 high), 1.4073 (20D EMA) and 1.4132(20D, 30D and 55D EMA crossover).

Important to note here that 20D, 30D and 55D EMA heads up and confirms the bullish trend in a daily chart. Current downside movement is short term trend correction only.

We prefer to go short on USD/SGD only below 1.3510 with stop loss at 1.3605 and target of 1.3462/1.3391.

News are provided by InstaForex
 
Asian Stocks Rally After Fed

Asian stocks rallied, South Korea's won firmed while regional bonds increased following the central banks' announcement. The MSCI Asia Pacific excluding Japan Index increased by 1.3 percent.

Producers of raw-materials were the largest gainers on the MSCI index of Asian shares outside of Japan. The won increased the most while the dollar held losses from the last session. Hong Kong Kong's Hang Seng Index gained by 1.4 percent while the Hang Seng China Enterprises Index climbed by 2.1 percent. New Zealand's 10-year bonds increased by one percent, pulling down the yield by 11 basis points to 2.50 percent.

Ten-year bond yields in Australia declined by 2.06 percent while the 10-year bond of South Korea was down 1.53 percent.

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