Forex News from InstaForex

[IFX Gertrude]

Oil Prices Rise on Reports of Kuwait’s Deeper-than-Expected Production Cuts



Oil prices rose on Friday as sentiment was lifted by reports that Kuwait was cutting its production by more than initially anticipated beginning January as it fulfills its commitment to a coordinated effort by crude producers to curb a global oil glut.

International Brent crude oil futures traded up 20 cents or 0.37% from their last close at $54.22 per barrel. U.S. WTI crude futures also rose 24 cents or 0.47%, trading at $51.14 per barrel.

Prices edged up after OPEC member Kuwait told its customers that it will reduce its supply starting January as part of its commitment to a deal between OPEC and other producers to lower output by around 1.8 million bpd to help rebalance the oil markets.

Kuwait Petroleum Corporation stated that it has told its customers that it will cap its production in accordance with the OPEC deal. Traders observed that prices rose as KPC indicated that it was cutting supplies more than previously anticipated and beyond the operational capacity

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[IFX Gertrude]

Japan November Trade Surplus Y152.513 Billion



Japan posted a merchandise trade surplus of 152.513 billion yen in November, the Ministry of Finance said on Monday.

That was shy of expectations for a surplus of 227.4 billion yen following the 496.2 billion yen surplus in October.

Exports were down 0.4 percent on year to 5.956 trillion yen, beating expectations for a decline of 2.3 percent following the 10.3 percent fall in the previous month.

Exports to all of Asia gained 3.4 percent on year to 3.235 trillion yen, while exports to China alone climbed 4.4 percent to 1.103 trillion yen.

Exports to the United States skidded an annual 1.8 percent to 1.211 trillion yen, while exports to the European Union slid 2.2 percent to 633.258 billion yen.

Imports slipped an annual 8.8 percent to 5.804 trillion yen versus expectations for a decline of 12.1 percent following the 16.5 percent tumble a month earlier.

Imports from the rest of Asia dropped 7.7 percent on year to 2.883 trillion yen, while imports from China alone slid 9.9 percent to 1.4876 trillion yen.

Imports from the United States fell 5.1 percent to 630.121 billion yen, while imports from the European Union dropped 13.3 percent to 716.954 billion yen.

The adjusted trade surplus was 536.1 billion yen, missing expectations for 590.5 billion yen and up from 474.3 billion yen in October.

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[IFX Gertrude]

Japan Exports Edged Up in November as Yen Weakens



Japan's export performance rose robustly in November as the yen continued to weaken and the improvement in overseas demand buoyed shipments from the trade sector. Exports slipped 0.4 percent in the year to November, according to the Ministry of Finance (MOF) data. However, it exceeded economists' expectations of a 2.0 percent annual decline.

The value of exports to China increased at an annual 4.4 percent, the first rise in nine months as a result of higher shipments of automobile parts. Exports in terms of volume climbed 7.4 percent from a year earlier, as external demand begin to show signs of regaining ground. Data has shown that exports dropped in November at a slower pace due to the declining value of car and steel shipments in comparison to the previous month. Exports to the United States edged down 1.8 percent year-on-year against the 11.2 percent annual decline in October.

The trade balance arrived at a surplus of 152.5 billion yen ($1.29 billion). The yen dropped 8.4 percent in November, which resulted in pulling up the value of Japanese exports.

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[IFX Gertrude]

RBA Minutes: Economy Expected To Rebound Next Year



Members of the Reserve Bank of Australia's monetary policy board said that the country's economic growth has slowed in recent months but is expected to rebound after the first of the year, minutes from the December 6 meeting revealed on Tuesday.

Policymakers expect higher commodity prices to boost national income, the minutes showed. The global economy has been generally more positive in recent months.

Inflation is expected to remain low, while wages appear to be on an upward trend. "The board had sought to balance the benefits of lower interest rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets," the minutes said.

At the meeting, the bank decided to hold its benchmark lending rate steady at the record low of 1.50 percent.

Higher commodity prices underpinned a rise in terms of trade, although they remain much lower than they have been in recent years. Higher prices are providing a boost to national income.

"Members noted that these factors had assisted the economy in its transition following the mining investment boom and that an appreciating exchange rate could complicate the adjustment," the minutes said.

Regarding the labor market, the bank said the unemployment rate has declined this year, while employment growth overall has slowed. The forward-looking indicators point to continued expansion in employment in the near-term.

The bank also observed that conditions in the housing market have strengthened overall, although they vary considerably around the country. Further, the bank said housing credit has picked up a little, although turnover of established dwellings is lower than it was a year ago.

"The board judged that holding the stance of policy unchanged would be consistent with sustainable growth in the economy and achieving the inflation target over time," the minutes said.

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[IFX Gertrude]

Dollar Trims Losses Following Janet Yellen Comments



The dollar pared losses after Federal Reserve Chairwoman Janet Yellen restated her confidence in the U.S. job market. The WSJ Dollar Index rose 0.2 percent to 93.22.

Yellen has recently discussed the developments in the labor market which have pulled down the unemployment rate to 4.6 percent. The central bank has improved its projections for the interest-rate hike in 2017. The optimism of the Fed drove the dollar to a 14-year peak as higher rates make U.S. assets more appealing to yield-seeking investors. The dollar was lower against the Japanese yen at 0.6 percent to ¥117.145. It follows a sharp drop in the Japanese yen in recent weeks that has helped boost Japanese exports and inflation expectations.

The Turkish lira and Russian rouble both declined to session lows versus the greenback on reports that the Russian ambassador to Turkey was assassinated in a gun attack at an art gallery in the Turkish capital of Ankara. The lira last fell by nearly 0.6 percent at 3.525 a dollar and the rouble reached a session low of 62.045 a dollar before backtracking to 61.854, as stated in the Reuters data.

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[IFX Yvonne]

Dollar Climbs to 14-Year High



The dollar soared to a fresh 14-year peak, as the Japanese yen fell after the Bank of Japan's decision to leave its monetary policy unchanged. The dollar index rose more than 0.1 percent at 103.31 after reaching 103.65, its highest since December 2002.

The BOJ's upbeat outlook follows amid an 11 percent decline in the yen since the U.S. presidential election and the earlier week's Federal Reserve meeting which sent the dollar surging. The benchmark 10-year Treasury yield rose beyond two basis points at 2.562 percent. The dollar rebounded against the yen after the Bank of Japan left policy unchanged as predicted.

The euro edged down 0.1 percent versus the dollar and the British pound slipped 0.2 percent. The greenback rose 0.6 percent at 117.72. The Turkish lira was stable at 3.5300 liras per dollar.


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[IFX Gertrude]

New Zealand GDP Expands 1.1% In Q3



New Zealand's gross domestic product was up 1.1 percent on quarter in the third quarter of 2016, Statistics New Zealand said on Thursday.

That beat forecasts for an increase of 0.8 percent following the 0.7 percent gain in the previous three months.

Business services advanced 2.0 percent on quarter, due to scientific, architectural and engineering services, the bureau said.

Transport was up 3.7 percent, due to increases in road, air, and transport support services.

Manufacturing was up 1.2 percent, due to food, beverage, and tobacco manufacturing; and transport equipment, machinery and equipment manufacturing.

Construction was up 2.1 percent, due to increases in all the construction sub-industries. In all, 13 of the 16 GDP industries saw an increase in the third quarter.

Expenditure on gross domestic product grew 1.4 percent in Q3.

Household consumption expenditure was up 1.6 percent, driven by spending on services and non-durable goods.

Investment in fixed assets was up 1.4 percent, due to increased investment in transport equipment and residential building. Exports of goods and services fell 0.7 percent.

Imports of goods and services added 1.2 percent, due to imports of transport equipment, including aircraft purchases.

Inventories ran down $200 million, due to a decrease in manufacturing inventories.

Also on Thursday, the bureau said that New Zealand posted a seasonally adjusted current account deficit of NZ$1.899 billion in the third quarter of 2016.

The services surplus fell NZ$16 million to NZ$1,006 million in the third quarter. The investment income deficit added NZ$71 million to NZ$2,040 million in the latest quarter.

The balance of goods was a NZ$686 million deficit (NZ$190 million larger than Q2 deficit).

For the year ended September 2016, the current account deficit was NZ$7.5 billion.

New Zealand's external debt position was NZ$148.5 billion (58.0 percent of GDP) at 30 September 2016, up from a revised NZ$141.4 billion (55.9 percent of GDP) at 30 June 2016.

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[IFX Gertrude]

Dollar Loses Ground Ahead of Holidays



The dollar fell from its 14-year peak against a basket of currencies, ahead of the holidays and the release of a batch of U.S. economic data. The dollar index was last at 103.02.

The greenback's retreat was limited as the Federal Reserve indicated further rate hikes next year, somewhat on expectations for speedy economic growth under the upcoming Trump Administration. The market is currently focused on the huge batch of U.S. economic data, which includes revised GDP for July-Sept, weekly initial unemployment claims and durable goods orders. The euro climbed 0.4 percent to $1.0424 and the yen rose 0.25 percent to 117.55 a dollar.

The Swedish crown tracked its largest gains in around ten months against the euro after the central bank of Sweden voted to extend its bond buying programme. The euro was down nearly one percent to 9.6077 crowns, its largest one-day decline since February.

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[IFX Gertrude]

Fxwirepro: Usd/krw Remains Well supported Above 1,200 Mark, sustained Close Above 1,206 Targets 1,220



USD/KRW is currently trading around 1,203 levels.

It made intraday high at 1,203 and low at 1,201 marks.

Intraday bias remains neutral till the time pair holds key support at 1,195 levels.

A daily close above 1,206 will drag the parity higher towards key resistances at 1,209 (20D EMA), 1,220 (March 03, 2016 high) and 1,244 marks respectively.

On the other side, a sustained close below 1,195 will test key supports at 1,182/1,172/1,168/1,160/1,152/1,146/1,132/1,127/1,117/1,111/1,101 levels respectively.

Important to note here that 20D, 30D and 55D EMA heads up and confirms the bullish trend in a daily chart.

We prefer to take long position in USD/KRW around 1,201, stop loss at 1,195 and target of 1,220/1,228.

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[IFX Gertrude]

Gold Steady as Traders Focus on Fed Rate Hikes



Gold prices eased as the dollar gained in thin trading and on expectations that the U.S. Federal Reserve will raise interest rates more in 2017. Spot gold edged down 0.27 percent at $1,128.4 an ounce.

U.S. gold futures for February delivery settled down 0.22 percent at $1,130.70 an ounce. Recent evidence of U.S. economic strength could incite the Fed to tighten credit again sooner than later. Higher rates tends to discourage purchasing of non-interest paying bullion, that is priced in dollars. SPDR Gold Trust said that holding were down 0.43 percent to 824.54.

Silver fell 0.94 percent at $15.78 per ounce. Platinum slipped 0.78 percent to $907.80 while palladium dropped for the seventh consecutive session, by 0.57 percent to $653.72 per ounce.

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