Forex Forecast

USDJPY Searching For Fresh Support US dollar bulls have been wounded by Friday’s weaker than expected US payrolls report, but our view is unchanged – we still expect a durable US recovery; we still expect the Fed to gradually back away from QE3 as other major central banks maintain an easier bias; and we still […]

EURCHF Prints 1.20 After a stronger than expected Swiss CPI, EURCHF came under heavy pressure with the pair briefly trading at the 1.20 level. Poor liquidity conditions and a wave of euro selling across the board were the main drivers.

Swiss CPI Set To Fall Again Subdued trading in Asia meant EURUSD was confined to a 25-pip range. The price action in USDJPY and AUDUSD was somewhat more lively but flows were light across the board in pre-holiday trade. Newswires would have been mostly silent were it not for Japan’s Finance Minister Azumi defending his […]

Policy Perceptions Hit Risk Risk appetite remains soft globally as it is clear the key central banks within G10 are in no mood to offer fresh accommodation. Add softer US data and a weak Spanish auction into the fray and sentiment was bound to suffer.

Weak Spanish Bond Auction The euro continued to cede ground overnight but rather than US policy expectations as the key driver, Eurozone issues are playing a greater role and the newsflow out of Spain is still worrying. A bond auction was poorly received and the Prime Minister warned that the country’s situation is of ‘extreme […]

QE3 Prospects Dim The dollar rallied strongly in the wake of the FOMC minutes – EURUSD fell from 1.3340 to 1.3320 and USDJPY surged towards 83 as it became clear that the Fed is some distance away from pushing for fresh stimulus.

UK Construction PMI Jumps UK data once again surprised to the upside, offering further indications that the UK economy is emerging better out of its slump than some of its neighbours. March construction PMI rose to 56.7 vs 53.4 consensus, following the strong manufacturing data yesterday.

RBA Keeps Cash Rate Steady The RBA kept the cash rate unchanged at 4.25% overnight, very much in line with consensus. The rates market had 8 bp of easing priced in though in advance, and AUD jumped 20 pips immediately. The more dovish policy statement quickly put an end to the rally and AUD soon […]

RBA & FOMC Minutes Due US markets followed most of Europe higher as the market continues to react positively to the rebound in manufacturing indices in the US and China. Fears of a new downturn in output have been allayed for the time being, but we expect most central banks to continue voicing caution over […]

PMI Data Mixed In Europe After a strong Asian session, risk assets pared some of their gains in Europe. Risk opened on a firm note after China’s official manufacturing PMI released over the weekend came in at 53.1 (cons. 50.8), substantially beating consensus opinion.