Over the weekend, the latest Chinese trade data was sharply weaker than expected with a February deficit of US$23bn following a US$31.9bn January surplus, the first deficit for 11 months. Annual exports fell over 18% while imports posted gains of around 10%. Data is always volatile surrounding the lunar new-year period, but underlying trends were weaker and there was a deterioration in risk appetite given fresh concerns over weaker Chinese growth. There was also a sharp decline in the benchmark Shanghai equities index of close to 3% on Monday which reinforced the more defensive tone. Read the rest of this entry »
Forex Day Trading Blog
Trading conditions were inevitably subdued ahead of Friday’s crucial US payrolls report. There were gains for the Australian dollar with an AUD/USD move above 0.91 in a continuing short squeeze as RBA head Stevens expressed doubts whether there could be further interest rate cuts.
There was also still a strong underlying Euro tone in Europe with the currency gaining further support from the more hawkish than expected ECB stance on Thursday as the dollar remained generally on the defensive. In this context, EUR/USD was well supported with solid support above 1.3850. Read the rest of this entry »
Ranges were very narrow ahead of the US open on Thursday with a high degree of caution ahead of key event risk surrounding the ECB policy meeting.
As expected by a large majority of analysts, the ECB left interest rates on hold at the latest policy meeting with the benchmark repo rate unchanged at 0.25%. There has been some speculation over a cut at this meeting and the decision pushed the Euro higher with a move to near 1.3770 before fading back to the 1.3750 area. Read the rest of this entry »
Risk appetite continued to stabilise in Asia on Wednesday with USD/JPY holding above 102.0. The Euro-zone PMI services-sector data was slightly stronger than expected with a final February reading of 52.6 from a flash 51.7, the only major disappointment again being the French performance. The Euro was unable to gain any traction and EUR/USD dipped to lows near 1.3700. Read the rest of this entry »
The general theme during Tuesday was an improvement in risk appetite which curbed demand for defensive assets. In this context, the Japanese currency was strongly correlated with geo-political stresses and yen weakness remained dependent on an easing of market tensions. Overnight, Russian President Putin announced an ending of military exercises near Ukraine which helped ease immediate fears over an escalation in the dispute. Read the rest of this entry »