Amana FS Market News
The Japanese yen gained against all major currencies in the last 24 trading hours, while the US dollar is quite underperforming with the US dollar index forming the largest bearish candle in almost a month. Risk currencies are somewhat higher on improved risk sentiment, and the Euro is mixed.
EUR/USD – The Euro vs US dollar pair is forming a second consecutive bullish day, after reaching a multi-month low on Wednesday. The core CPI for the Eurozone met market expectations and came in at -0.5% for July, while the University of Michigan Consumer Sentiment deteriorated in August and was reported at 95.3 - the second lowest level since January. As of 15:56 London time, EUR/USD traded at 1.1407.
GBP/USD – The British pound vs US dollar pair is forming another shy bullish candle after reaching an intraday low following a report that UK ministers start to prepare businesses and households for a no-deal Brexit scenario. There were no major macro-released for the United Kingdom today. At the time of writing, the GBP/USD pair traded at 1.2731.
USD/TRY – The Turkish lira fell sharply today after four consecutive bullish days against the US dollar, as President Trump threatens to impose additional sanctions unless Turkey releases the imprisoned American pastor Andrew Brunson. The USD/TRY pair rose from yesterday’s low of 5.65 up to today’s high of 6.32. At the time of writing, the Lira somewhat recovered and traded at 6.09 against the greenback.
BrentUSD – Brent crude managed to continue its rebound after hitting a four-month low on Wednesday, reaching an intraday high of $72.24. The commodity broke below the important $71.23 mark this week, following reports that US crude oil inventories have unexpectedly increased. Nevertheless, risks of a global supply squeeze and China’s threats of a 25% tariff on US crude imports could support Brent crude in the near term.
The University of Michigan Consumer Sentiment came in at 95.3 in August, missing market forecasts of a 0.2 points increase from July’s reading of 97.9. The August number is the second-lowest consumer sentiment this year after January’s low of 94.4, suggesting that overall financial confidence among US consumers is slightly deteriorating.
The UoM Consumer Sentiment is a composite index based on 500 surveyed consumers, who are asked to rate the current and future economic conditions based on their perceptions. Consumer confidence directly affects private spending, which accounts for the majority of economic activity in a developed country.
Following the release, the US dollar index is slightly lower and reached an intraday low of 96.24. As of 15:14 London time, the DXY slightly recovered and traded at 96.31.
The Euro vs US dollar pair (EUR/USD) is extending its gains for the second consecutive day, after hitting a 13-month low on Wednesday. Easing market concerns over the Turkish lira and a weaker US dollar index supported the pair, which could find short-term resistance at Monday’s high of 1.1432, followed by the previous lower range level of 1.1506. At the time of writing, EUR/USD traded at 1.1413.
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The Russian Federal State Statistics Service reported that the country’s unemployment rate stood at 4.7% in July, unchanged from June and lower than last year’s July reading of 5.1%.
This is the third time in a row that the Russian unemployment rate comes in at a record low of 4.7%, as the Russian economy gained 304 thousand new jobs compared to the same period last year. The total number of unemployed people in Russia now stands at 3.603 million, down from 3.907 million year-on-year.
Russia also reported that wages increased by 8% in July, year-on-year, clearly beating market expectations of a 6.8% gain.
The Russian ruble is mostly unchanged following the release and traded at 67.40 against the US dollar, as of 14:29 London time. The currency managed to rebound modestly after reaching an almost 2-1/2-year high of 69.36 on Monday and seems well supported above the 64.27 level which acted as the upper resistance line of a previous multi-month range. The July 31 low of 62.18 may provide additional support in case the 64.27 level breaks.
To the upside, Monday’s high of 69.36 acts as the first major resistance before we see a potential move higher.
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Statistics New Zealand reported that the country’s Producer Price Index (PPI) reached 1.0% in the June quarter, beating market forecasts of a 0.2% rise. In the previous quarter, producer prices rose 0.6% in New Zealand.
Rising oil prices were the main driver of the higher PPI reading, as businesses paid 5.5% more for petrol and 9.8% more for diesel. The rising fuel prices spilt over to other industries such as road transport, which saw an increase in input prices of 2%.
The Kiwi moved higher following the release, but an improved risk appetite was also beneficial for the NZD this morning. The New Zealand dollar was up 0.30% against the greenback in the last 12 trading hours and traded at 0.6605 as of 9:27 London time.
Market participants are likely taking profits after the pair reached the lowest level since early 2016, following a sell-off in risk currencies amid a deteriorating risk sentiment last week.
Further to the upside, the pair might face resistance in the 0.6670-0.6690 range, which aligns with the low of July 3 and the lower channel line. To the downside, Wednesday’s multi-year low of 0.6543 will likely act as short-term support for the pair.
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During a speech in Canberra today, Reserve Bank of Australia Governor Philip Lowe said that the central bank will likely hold interest rates steady for a while yet, as Australian inflation is still below the 2-3% target and the labour market is still not at full capacity. Lowe also mentioned that a lower AUD exchange rate would be beneficial for the export-oriented Australian economy.
RBA left interest rates unchanged at 1.50% at its last meeting, where they have stood since August 2016.
Lowe has previously said that, in order for wage pressures to start building, the unemployment rate should reach 5% which is a sign of full employment in Australia. The Australian unemployment rate currently stands at a multi-year low of 5.3%.
The Australian dollar started the trading day mixed, slightly underperforming against the Euro and Japanese yen but gaining against the US dollar. As of 8:15 London time, AUD/USD traded at 0.7266 after reaching a one-and-a-half-year low of 0.7201 on Wednesday.
To the upside, the previous lower range support at 0.7310 will likely act as a major resistance for any up-move, followed by the August 3 low of 0.7347. The Wednesday low of 0.7201 could also be a short-term obstacle for Aussie-sellers to push the pair lower.
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- EUR/USD pair continued to trade towards the 1.1400 level ahead of the release of key eurozone inflation data this morning
- GBP/USD pair remained depressed towards the 1.2700 level as the UK Conservative party scaled-up planning for a Brexit no-deal scenario
- USD/JPY pair remained directionless despite rising Asian equity markets
EUR/USD : The euro currency held steady towards the 1.1400 level against the greenback on Friday, as the U.S. Dollar Index eased lower from its best trading levels of the year so far. The pullback in the U.S. Dollar could be attributed to improving market sentiment and much weaker than expected U.S. housing data on Thursday. EUR/USD traders remained cautious ahead of the release of key eurozone cpi data this morning as expectations are tilted to the downside. As of 06.40GMT the pair traded 0.04% higher, at 1.1378.
GBP/USD : The British pound remained depressed around the 1.2700 level Vs the U.S Dollar on Friday, as the UK Conservative party stepped up plans for a Brexit no-deal scenario. Newly appointed Brexit Secretary Dominic Raab announced that he intends to publish at least eighty technical notices between now and the end of September, aimed at instructing United Kingdom households and business how to prepare in the event of a collapse in talks with the European Union. As of 06:45GMT the pair traded 0.08% higher, at 1.2722.
USD/JPY : The U.S Dollar continued to lack direction against the Japanese yen currency on Friday, despite easing Sino-U.S. trade tensions and rising Asian equity markets. The USD/JPY struck a cautious tone, with the pair trading just below the 111.00 level, as investors prepared for the United States and China’s first trade talks since June, which are happening next week in Washington. As of 06:45GMT the pair traded 0.02% lower, at 110.88.
USD/CAD : The U.S Dollar held firm towards the best trading levels of the week against the Canadian Dollar on Friday, as falling oil prices continued to weigh heavily on the loonie. The USD/CAD pair looked past strong private sector jobs figures from the Canadian economy on Thursday. The Canadian ADP jobs report beat market expectations, showing that 11,600 new jobs had been created during the month of July. As of 06:50GMT the pair traded 0.01% higher, at 1.3155.