Daily Market Overview by IFC Markets

[Akriti]

Aussie Gains on Upbeat GDP, USDJPY Capped by Syria and Key 100 Level

Yesterday’s upbeat US ISM Manufacturing PMI reinforced speculation that the Federal Reserve will start unwinding asset purchases, underpinning USDJPY pair. Nonetheless, USDJPY is weighed as a military strike by USA and France against Syria is getting more likely. US congressional leaders are pushing for action while UK parliament denied operation before UN report. The US dollar against the Japanese Yen jumped on manufacturing data to 99.84 but quickly retreated slightly, weighed by key resistance at 100 and ahead of BOJ monetary statement the currency pair most probably will remain in 99.84/99.14 consolidation zone.

Australian economy surprised traders yesterday by growing more than expected, defying forecasts and recent RBA concerns that falling mining investment is hurting its performance.

See more: http://www.ifcmarkets.com/en/market-overview/show/1497

[Akriti]

Yen Weakened as BOJ Held Unchanged Monetary Policy, Eyes on ECB, BOE

Bank of Japan decided to leave its monetary policy unchanged as it was broadly expected, maintaining its key rate near zero levels and monetary base to continue expanding by ¥60-70 trillion yen per annum. In addition, BOJ restated its goal to achieve inflation of 2% and will continue with quantitative and qualitative tools for as long as necessary. The Japanese Yen softened as slight risk improvement was reflected on NIKKEI 225 that rose by 0.08%, pushing the USDJPY pair to inch as high as 99.97. The pair though was capped by concerns on Syria as the Senate Foreign Relations Committee voted in favor of military action. Moreover, in technical terms it would be hard for the USDJPY to overpass the ultra-strong cap at 100 nevertheless an upbeat NFP report could give the appropriate boost to breach it.

See more: http://www.ifcmarkets.com/en/market-overview/show/1498

[Akriti]

Yen Weakened as BOJ Held Unchanged Monetary Policy, Eyes on ECB, BOE

Bank of Japan decided to leave its monetary policy unchanged as it was broadly expected, maintaining its key rate near zero levels and monetary base to continue expanding by ¥60-70 trillion yen per annum. In addition, BOJ restated its goal to achieve inflation of 2% and will continue with quantitative and qualitative tools for as long as necessary. The Japanese Yen softened as slight risk improvement was reflected on NIKKEI 225 that rose by 0.08%, pushing the USDJPY pair to inch as high as 99.97. The pair though was capped by concerns on Syria as the Senate Foreign Relations Committee voted in favor of military action. Moreover, in technical terms it would be hard for the USDJPY to overpass the ultra-strong cap at 100 nevertheless an upbeat NFP report could give the appropriate boost to breach it.

See more: http://www.ifcmarkets.com/en/market-overview/show/1498

[Akriti]

US Dollar Strengthens Ahead of Non-Farm Payrolls, Unchanged ECB and BOE

In yesterday session data favored the greenback that has been strengthening against the Euro, the Japanese Yen and Swissy but has been in consolidation versus the Aussie, the Canadian and the Sterling. In general the US dollar index surged to resistance at 82.62 underpinned by stronger US Jobless claims, followed by private sector ADP non-farm report coming out in line with expectations.

Moreover, the US ISM Non-Manufacturing PMI rose to the outstanding 58.6 for August, beating estimates at 55.2 and was up compared to 56 for July. Confidence indicators are further strengthening increasing potentials for reducing asset purchases in addition to that we are closely monitoring NFP report since this would be a determining factor for Fed’s policy.

See more: http://www.ifcmarkets.com/en/market-overview/show/1499

[Akriti]

Tokyo Wins 2020 Olympics, Advancing USDJPY Capped by 100, USD Lower on Jobs

The most notable currency move early on Monday was by the Japanese Yen, losing sharply against the greenback amid risk-on due to Tokyo winning the bid to host 2020 Summer Olympics as well as on upward revised GDP. Moreover, risk appetite was further supported by China’s surplus widening to $28.5B and its improved inflation data. The USD/JPY jumped from floor at 98.62 to 100.08 forming a trading gap and approaching its Friday high at 100.21, then retreated back to 99.47.

See more: http://www.ifcmarkets.com/en/market-overview/show/1500

[Akriti]

Risk-on Amid Chance of Syria War Avertion, USD/JPY Revisits 100

Risk appetite improves as there is hope that the war in Syria may be avoided, riskier currencies like the Aussie were underpinned while safer Japanese Yen is losing ground again. The Euro has been stronger than its major counterparty, the US dollar, due to recent uncertainty over Fed asset purchases tapering. The same applies for the sterling against the greenback that advanced near a 7-month high at 1.5750. The US dollar against the Canadian remained under selling pressure falling earlier to support at 1.0355 and now is bouncing on profit taking.

See more: http://www.ifcmarkets.com/en/market-overview/show/1501

[Akriti]

Asian Markets Mixed, USD/JPY and AUD/USD Get Softer Running Out of “Gas”

War in Syria became a less likely event as a diplomatic solution for handing chemical weapons to international control is getting more certain. US President Barack Obama asked the Congress to delay its vote for next week and he said that the credibility of this proposal as well as Syria’s true intentions must be verified.

US Equity markets were well underpinned as fears of war are fading with S&P 500 advancing for a second consecutive day by 0.73% and the Dow Jones Industrial Average Index surged by 0.85%. Risk-on paused earlier today as the Asian stocks were mixed with Hang Seng printing losses, NIKKEI steady and S&P/ASX 200 gaining.

See more: http://www.ifcmarkets.com/en/market-overview/show/1502

[Akriti]

Aussie Drops on Sluggish Employment Data, Greenback Weaker Across the Board

The Australian dollar weakened after the Employment data surprisingly decreased in August by 10.8K, while it was expected to increase by 10.2K, the July figure was revised downward from -10.2K to -11.4K. The Unemployment rate increased to 5.8% in August up from 5.7% in July in line with expectations. As a result the AUDUSD declined from almost 3-month high at 0.9354 down to a previous resistance level at 0.9229, ahead of 38.2% Fibonacci retracement of 0.8890 to 0.9354, at 0.9180. The Reserve Bank of Australia may hold its dovish attitude as the employment sector worsens and a September currency exchange rate moving against Glenn Stevens hopes that a falling exchange rate could support Australian economy.

See more: http://www.ifcmarkets.com/en/market-overview/show/1503

[Akriti]

Major Currency Pairs Stall Before Fed’s Meeting Next Week

Currency markets consolidate ahead of the Federal Reserve meeting next week. Speculation that the Central Bank would unwind asset purchases faded as the August NFP report was weaker than anticipated and July employment was revised downward. Still Reuters and Bloomberg surveys among well-known economists indicate that there is more than 60% chance for asset tapering, but the pace is expected to be lower than would have been should the NFP was in line with projections. We would expect the Fed to announce reduction of its QE program by $10B to $75B.

See more: http://www.ifcmarkets.com/en/market-overview/show/1504

[Akriti]

Greenback Weakens as Less Dovish Fed Candidate, Larry Summers Withdraws

The US dollar was smashed across the board against its major counterparties after the most probable candidate to take Ben Bernanke’s seat as a Federal Reserve Chairman, Lawrence Summer’s withdrew his candidacy. U.S President’s adviser Summers decided to withdraw because of concerns of Democratic senators and market participants that were lobbying against him. Summers was considered more hawkish compared to the next most possible candidate Janet Yellen, and his removal weighed on the greenback.

The US dollar index dipped from Friday close at 81.44 to Monday open at 81.00 as investors saw less dovish candidate leaving the scene and opening the way for the more dovish currently vice chairman, Yellen.

See more: http://www.ifcmarkets.com/en/market-overview/show/1505