Forex Forecast

More Details Slowly Emerge Monday’s meeting of Eurozone finance ministers again stretched beyond midnight, but the headlines produced no major surprises. A few more details on Spain’s bailout emerged, particularly related to the size and the timescales involved – but the details will not be formally set in stone until a second meeting of finance […]

No Conviction FX markets lack strong conviction, as the barrage of headlines coming out of the EU finance ministers meeting and from various ECB officials did not offer anything materially new.

Eurogroup Begins With central bankers out of the limelight after an active week, attention will be back on the Eurozone political establishment and their efforts to consolidate agreements from the recent summit.

Euro Steady At The Lows The speed and scale of the euro’s decline in recent days has been remarkable. Having reached 1.2693 in the immediate aftermath of the EU-Summit, EURUSD finally steadied overnight after setting a new two-year low of 1.2225.

Payrolls Soft, Euro Slumps US nonfarm payrolls rose just 80k in June, undercutting the 100k consensus. Private payrolls were slightly stronger, up 84k but still below the 110k expected in the market.

Payrolls Due Activity was rather subdued overnight as markets await the upcoming payrolls report. The data in itself is important, but markets are already focused on how policymakers are going to react to a potential new leg lower in global growth.

BoJ In The Spotlight Price action in USDJPY may have been subdued in Asia overnight – as befits Payrolls Friday – but the subject of BoJ easing featured prominently in investors’ minds.

Euro Reality Check Markets began the US session in a buoyant mood after three of the world’s key central banks all delivered additional stimulus. The Bank of England and ECB served up £50bn in QE and a 25bp cut in the main refinancing rate cut to 0.75%, respectively – decisions which were largely expected.

Australia’s Trade Deficit Persists The value of Australia’s monthly exports to China hit a record high in May  suggesting fears of an imminent China hard landing are misplaced.

ECB & BoE In The Spotlight The EUR struggled throughout the European session on Wednesday amid very little turnover as the US was on holiday. Nonetheless, with policy decisions looming in the UK and Eurozone on Thursday, activity is unlikely to be light.

Aussie Gets Another Push The Australian dollar received another boost overnight after the latest batch of upbeat domestic economic data. Retail sales easily beat consensus estimates, vindicating yesterday’s RBA decision to water-down its easing bias.