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Germany Import Price Index (MoM) came in at 0% below forecasts (0.2%) in May
398936 June 28, 2024 14:05 FXStreet Market News
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United Kingdom Gross Domestic Product (QoQ) above forecasts (0.6%) in 1Q: Actual (0.7%)
398935 June 28, 2024 14:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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United Kingdom Current Account below expectations (£-17.6B) in 1Q: Actual (£-20.995B)
398933 June 28, 2024 14:03 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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United Kingdom Gross Domestic Product (YoY) above forecasts (0.2%) in 1Q: Actual (0.3%)
398932 June 28, 2024 14:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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EUR/USD Price Analysis: Trades below 1.0700; remains within the consolidative range
398930 June 28, 2024 13:56 FXStreet Market News
- EUR/USD may test the throwback support of 1.0670 around the lower level within the consolidative range.
- The 14-day RSI consolidates below the 50 level; indicating a consolidative range within levels of 1.0760-1.0670.
- The pair could find an immediate barrier at the 14-day EMA at 1.0728.
EUR/USD retraces its gains registered in the previous session, trading around 1.0690 during the Asian hours on Friday. The technical analysis of the daily chart indicates a bearish bias, with the pair consolidating within a descending channel.
The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting the EUR/USD pair trades within a consolidative range between levels of 1.0760 and 1.0670. If the RSI improves to the 50 level, it would weaken the bearish momentum for the pair.
The EUR/USD pair may test the lower level of the range at 1.0670, which also acts as a throwback support. A break below this level would reinforce the bearish bias, potentially pushing the pair toward the lower boundary of the descending channel near 1.0620.
On the upside, the EUR/USD pair could encounter immediate resistance at the 14-day Exponential Moving Average (EMA) at 1.0728 followed by the upper level of the range at 1.0760. A breakthrough above the latter could lead the pair to test the upper boundary of the descending channel at 1.0780, followed by the psychological level of 1.0800.
EUR/USD: Daily Chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECBÂ’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the EurozoneÂ’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
USD/INR depreciates as Indian Rupee receives support on index inclusion
398928 June 28, 2024 13:05 FXStreet Market News
- The Indian Rupee extends gains due to expected foreign inflows on bonds joining J.P. MorganÂ’s Emerging Market Bond Index.
- Indian equity markets appreciate due to the return of foreign institutional investors and growing purchases in index heavyweights.
- US Core PCE to be released on Friday; expected to decrease YoY to 2.6% from the previous 2.8%.
The Indian Rupee (INR) extends its gains for the second successive session during the Asian hours, which could be attributed to the expectations of foreign inflows. Indian bonds are set to enter the JP Morgan Emerging Market (EM) Bond Index on Friday.
Indian equity markets extend gains due to the return of foreign institutional investors and growing purchases in index heavyweights, amidst a solid economy and prospects of policy continuity.
Indian Rupee traders would likely observe key economic data on Friday, including the Federal Fiscal Deficit for May and FX Reserves for the week ending June 17.
On the US DollarÂ’s (USD) front, Core PCE Price Index inflation is projected to decrease YoY to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve’s (Fed) preferred inflation gauge.
Daily Digest Market Movers: Indian Rupee extends gains on foreign inflows
- Foreign investors have already invested approximately $10 billion into the securities eligible to join JPMorganÂ’s index, according to Business Standard. Meanwhile, Goldman Sachs anticipates at least $30 billion more in inflows in the coming months as IndiaÂ’s weighting on the index steadily rises to 10%.
- Federal Reserve (Fed) Board of Governors member Michelle Bowman noted on Thursday that she is still not ready to support a central bank rate cut with inflation pressures still elevated. Bowman said, adding “We are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to inflation,” per Reuters.
- US Gross Domestic Product Annualized expanded by 1.4% in Q1, slightly higher than the previous reading of 1.3%, but continuing to point to the lowest growth since the contractions in the first half of 2022.
- US Initial Jobless Claims showed on Thursday that the number of people claiming unemployment benefits fell to 233,000 in the week ending June 21, below market expectations of 236,000. The claim count fell for a second consecutive week since hitting the 10-month high of 243,000 earlier in June.
- The first US presidential debate between President Joe Biden and Republican Presidential Nominee Donald Trump began on CNN News. Biden acknowledged that “inflation had driven prices substantially higher than at the start of his term but said he deserves credit for putting ‘things back together again’ following the coronavirus pandemic.” In response, Trump condemned elevated inflation levels. He suggested that tariffs would decrease deficits and urged scrutiny of countries like China, per Reuters.
- The S&P Global Ratings retained its growth forecast for India at 6.8% for FY25, citing high interest rates and government spending boosting demand in the non-agricultural sectors.
- On Tuesday, RBI Governor Shaktikanta Das said that India is on the verge of a major structural shift in its growth trajectory, moving towards sustained 8% GDP growth. Das attributes this growth to several key drivers, including structural reforms such as the Goods and Services Tax (GST), reported by The Economic Times.
Technical analysis: USD/INR falls below 83.50
The USD/INR trades around 83.40 on Friday. The analysis of the daily chart shows a broadening pattern, suggesting a potential correction before a downward movement. The 14-day Relative Strength Index (RSI) is below the 50 level, indicating a bearish bias.
The USD/INR pair tests the immediate support at the 50-day Exponential Moving Average (EMA) of 83.40. A break below this level could potentially strengthen the bearish bias, which could lead the pair toward the lower boundary of the broadening pattern, around the 83.30 level.
Resistance on the upside is anticipated near the upper boundary of the broadening formation, around 83.70, followed by the psychological level of 84.00.
USD/INR: Daily Chart
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Indian Rupee.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | INR |
|---|---|---|---|---|---|---|---|---|
| USD | Â | 0.16% | 0.13% | 0.16% | 0.22% | 0.36% | 0.37% | 0.03% |
| EUR | -0.16% | Â | -0.03% | 0.00% | 0.06% | 0.20% | 0.21% | -0.13% |
| GBP | -0.13% | 0.03% | Â | 0.00% | 0.07% | 0.22% | 0.24% | -0.11% |
| JPY | -0.16% | 0.00% | 0.00% | Â | 0.03% | 0.19% | 0.19% | -0.13% |
| CAD | -0.22% | -0.06% | -0.07% | -0.03% | Â | 0.13% | 0.15% | -0.18% |
| AUD | -0.36% | -0.20% | -0.22% | -0.19% | -0.13% | Â | 0.01% | -0.33% |
| NZD | -0.37% | -0.21% | -0.24% | -0.19% | -0.15% | -0.01% | Â | -0.34% |
| INR | -0.03% | 0.13% | 0.11% | 0.13% | 0.18% | 0.33% | 0.34% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than IndiaÂ’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
Japan Construction Orders (YoY) down to 2.1% in May from previous 26.4%
398927 June 28, 2024 13:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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Japan Housing Starts (YoY): -5.3% (May) vs previous 13.9%
398926 June 28, 2024 13:03 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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Japan Annualized Housing Starts declined to 0.81M in May from previous 0.88M
398925 June 28, 2024 13:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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Dollar holds slightly firmer ahead of European morning trade
398924 June 28, 2024 12:45 Forexlive Latest News Market News
The dollar is holding slightly higher across the board so far today, as we head into the final stretch of June and Q2 trading. The main pair to watch is still USD/JPY, with price now testing waters above the 161 mark. Where art thou Tokyo?
USD/JPY daily chart
As a reminder, the pace of the weakness in the Japanese yen is a key factor to watch in case for intervention. Before the Japan MOF and BOJ stepped in the last time, we saw a surging run of roughly 500 pips in two days. This time, the run higher of 600 pips has took nearly a month. That said, it is very much one-way traffic and we’ve now crossed the key threshold of 160. Is that reason enough to keep a lid on things before they get too far again?
Otherwise, it seems like the nature of intervention by Japanese officials is getting rather predictable. Then again, they can’t do much else considering the fundamentals in play I guess.
Looking elsewhere, EUR/USD is down 0.15% to 1.0685 and GBP/USD down 0.13% to 1.2623 on the day. Just be mindful of large option expiries for the former, layered around 1.0650 to 1.0725.
Besides that, commodity currencies are struggling despite the risk mood holding up. AUD/USD is down 0.3% to 0.6623, not helped by overnight comments from RBA deputy governor Hauser here surely. Meanwhile, USD/CAD is seen up 0.2% to 1.3730 as it keeps a bounce off its 100-day moving average from earlier this week.
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NZD/USD drops closer to mid-0.6000s, its lowest level since mid-May ahead of US PCE
398923 June 28, 2024 12:40 FXStreet Market News
- NZD/USD attracts fresh sellers on Friday amid a goodish pickup in the USD demand.Â
- The FedÂ’s hawkish outlook and rising US bond yields lift the USD to a two-month top.
- The market attention remains glued to the release of the crucial US PCE Price Index.Â
The NZD/USD pair comes under some renewed selling pressure following the previous day’s brief pause and dives to its lowest level since mid-May during the Asian session on Friday. Spot prices currently trade just above mid-0.6000s, down 0.35% for the day, and now seem to have confirmed a bearish breakdown through the 50-day Simple Moving Average (SMA).
The US Dollar (USD) regains positive traction following Thursday’s softer US data-led decline and climbs to a nearly two-month peak amid the Federal Reserve’s (Fed) hawkish outlook. In fact, the recent comments by a slew of influential FOMC members suggested that the US central bank is in no rush to start its rate-cutting cycle, triggering a fresh leg up in the US Treasury bond yields. Apart from this, some repositioning trade ahead of the crucial US inflation data provides an additional boost to the buck, which turns out to be a key factor exerting downward pressure on the NZD/USD pair.Â
The New Zealand Dollar (NZD), on the other hand, is weighed down by expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates earlier than projected. This, to a larger extent, overshadows a generally positive tone around the equity markets and fails to lend any support to the risk-sensitive Kiwi, suggesting that the path of least resistance for the NZD/USD pair is to the downside. Traders, however, might prefer to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index for cues about the Fed’s future policy decisions and rate-cut path.
A lower-than-expected PCE deflator or a number that is in line with market expectations will back the case for two rate cuts by the Fed this year, which, in turn, could weaken the USD. Meanwhile, any upward surprise should push back the expected timing for the first Fed cut and trigger a fresh leg up for the buck. Hence, the data will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the NZD/USD pair. Nevertheless, spot prices seem poised to register heavy weekly losses and prolong a nearly three-week-old downtrend.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the FedÂ’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the FedÂ’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.