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XE Market Analysis: It Isn’t Over till It’s Over as Trade Fears Persist

By: xemarketanalysis

OVERVIEW Commodity currencies are trading lower as the US Administration considers new $100 billion tariffs on Chinese imports. US non-farm payroll data is expected to show another solid growth. USD/DXY Index currently holding to close the week on a high for the second successive week. HIGHLIGHT The New Zealand Dollar is the biggest loser as commodity currencies come under pressure once again. Read more

XE Market Analysis: Dollar Rallies as Trade Rhetoric Calms

By: xemarketanalysis

OVERVIEW Risk appetite recovers amid a calmer view of trade war risks. Stock markets rally strongly, European markets up over 2%. GBP under pressure from weak services data. EUR also under pressure from softer data. US trade deficit hits 9.5 year high. HIGHLIGHT The Dollar is rallying across the board today versus the Japanese Yen where it reached a 3-week high, bolstered by a rebound in global stock markets and signs of the US looking to resolve a trade dispute with China. Read more

XE Market Analysis: China Strikes Back with Trade Tariffs

By: xemarketanalysis

OVERVIEW A cautious tone came down upon the financial markets today as China responded to the US with trade tariffs on US goods. The construction sector in the UK literally froze in March as the beast from the East put this sector into contractionary territory in March. Inflation in Europe ticked higher, while the unemployment rate dropped. US service sector activity slows albeit from buoyant levels. HIGHLIGHT China struck back in the looming trade war with the US by imposing a 25% tariff on 106 US goods, with soybeans being the focus. US DOLLAR The Dollar continues to trade in a quiet range against the Euro as the service sector PMI reading came in weaker than expected at 58.8 from 59.5 previously. BRITISH POUND The Pound continues to prove resilient as the market shrugged off the weaker than expected construction data in the expectation that activity will bounce back again in April. EURO Unemployment in the EU dropped to 8.5% while the inflation rate rose from 1.1% to 1.4%. CANADIAN DOLLAR The Canadian Dollar is weaker against its US counterpart, pulling back from an earlier five-week high amid rising trade tensions. Read more

XE Market Analysis: EU Manufacturing Sector Stumbles

By: xemarketanalysis

OVERVIEW EU manufacturing sector drops more than expected in March. UK manufacturing inches higher according to the Purchasing Manager's Index. The Reserve Bank of Australia leaves rates on hold at 1.5%. US manufacturing slowed to 59.3. HIGHLIGHT The factory boom in the EU continues to wane into March. Read more

XE Market Analysis: US and China Trading Tariffs Keep Investors Nervous

By: xemarketanalysis

OVERVIEW The Sterling is a top performer among G10 currencies. EUR is weak in the holiday-thinned market. Japan Tankan tick lower on strong JPY. USD DXY Index down 0.11% over fears that global trade war will slow economic growth. HIGHLIGHT The Sterling is carrying the crown of the top performer among the G10 currencies. Read more

The Fed between Scylla and Charybdis: an update

By: New_Deal_democrat

About three years ago, I wrote that in raising rates the Fed was caught between the Scylla of higher long rates killing the housing market and the Charybdis of falling long rates causing a yield curve inversion, and that "The Fed has to hope that long rates remain in a narrow band of stability." https://bonddad.blogspot.com/2015/05/analyzing-crosscurrents-maturing.html So far, long rates have remained within the safe zone. Read more

The EU and UK Take a Few Modest Economic Hits

By: HaleStewart

At the end of 2016, economic news from the EU started turning more bullish. Sentiment indicators from Markit economics were the first to pick this up which was followed by loan growth, retail sales, and finally industrial production. Mario Draghi - the head of the ECB – has noted this trend on several occasions, most recently in his opening statements of the latest ECB policy announcement: Let me now explain our assessment in greater detail, starting with the economic analysis. Read more

Australia is in Good Economic Shape

By: HaleStewart

We’ve gotten the latest round of AIG industry PMIs for Australia’s construction, manufacturing and service sectors. All three are expanding. Although the manufacturing index dropped 1.2 points, tt has been above a 50 reading for 17 months, indicating continued growth. Read more

The New and Improved Fed is Definitely More Hawkish

By: HaleStewart

WE have a new Fed Chairman: Jerome Powell. We also have a new Fed, in the sense that the FOMC Committee released their revised economic projections at their latest meeting: The median GDP increased .2% for 2018 and .3% for 2019. Read more

Weekly Indicators: flatter yield curve balance lower long rates edition

By: New_Deal_democrat

February data included a decline in consumer confidence from both sources, and a decline in the Chicago PMI, which was nevertheless still positive. Nominal personal income and spending increased, but in real terms income was flat. House prices continued to increase strongly YoY. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more

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