Forex Forecast

USDJPY Sails Above 80 USDJPY stayed above the 80.0 level during New York hours on Thursday as data in the US continued to be positive. Durable goods orders bounced back in September, growing by 9.9% m/m (consensus: 7.5%), after a 13.1% m/m drop in August.

UK GDP Boosts Cable UK GDP came in well above consensus at 1.0% q/q (cons. 0.6%) boosting Cable by 70 pips. This fresh upside follows yesterday’s gains after Prime Minister Cameron indicated that UK economic data would continue to improve.

Policy Continuity at RBNZ? Newly-appointed Governor Wheeler at the RBNZ made no adjustment to policy settings at his first policy decision overnight. What’s more, large parts of the policy statement were almost identical to the final statement issued by former- Governor Bollard.

Riksbank Is Next The FOMC kept policy unchanged, as expected. The statement was largely left unchanged from the September issue except for noting that “household spending has advanced a bit more quickly and business fixed investment has slowed”.

A Barrage of Soft Euro Data The euro fell on the back of weaker than expected German PMIs – both the manufacturing and the services surveys disappointed. Thirty minutes later, all three components of the German IFO also came in soft, triggering a further round of euro selling.

Robust Australian CPI Inflationary pressures in Australia during Q3 were considerably higher than consensus expectations. The trimmed mean core reading came in at +2.4% y/y (cons. 2.2%) and the headline printed +2.0% y/y (cons. 1.6%).

BoC Stays Hawkish The BoC kept its policy stance unchanged on Tuesday, disappointing the CAD bears. The overnight lending rate was held at 1.0% as expected, but more importantly the central bank maintained that some “modest withdrawal of monetary policy stimulus will likely be required over time”.

A Dovish BoC? The BoC is due to meet today with many expecting a significant watering down of the explicit tightening bias. This would seem to be warranted given core CPI has significantly undershot forecasts made in the previous monetary policy report (core CPI was expected to stand at 1.9% y/y at end-Sept whereas it […]

BoJ Speculation Already Underway There is still one week to go before the BoJ’s Oct. 30 policy announcement, yet unusually, media speculation has already begun about whether further easing is likely to emerge from the meeting.

BoC In Focus Limited data releases in the US saw currencies trade in ranges on Monday during New York hours. USDJPY inched closer to the 80.0 level as JPY weakness continued following a weak September trade report (which showed exports fell by 10.3% y/y) and news reports which suggested that the BoJ is leaning towards […]

JPY Weakness Yen weakness was the standout theme overnight in the European session. Domestic data in Japan showed further weakness in the current account (exports fell around 10% y/y), and the wider economy through a soft Tankan print, while renewed dovish rhetoric from the central bank also prompted some selling.