FXStreet (Córdoba) – According to Mikael Olai Milhøj, Analyst at Danske Bank, the ISM manufacturing index has stabilized but at a weak level and he expects the index to rebound slightly in the coming months.

Key Quotes:

“ISM manufacturing increased slightly to 48.2. in January from 48.0 in December (revised down from 48.2). We and consensus had expected a slightly better print (48.5) but today’s release confirms that ISM manufacturing has stabilised although at a weak level.”

“We expect ISM manufacturing has hit bottom and expect the index to rebound slightly in the coming months. However, the index will likely stay weak as the manufacturing sector still suffers from a combination of the very strong USD, the slowdown in manufacturing globally (especially in China) and the lower activity in the US energy sector. The risk to the economy is that there will be negative contagion effects on the non-manufacturing sectors.”

“While the ISM manufacturing index is important for market sentiment, we think Fed will put more weight on the ISM non-manufacturing index due on Wednesday as it accounts for a larger share of the economy.”

“Besides the release of ISM non-manufacturing on Wednesday, eyes are on the January jobs report on Friday. We expect non-farm payroll increased 200,000 (consensus: 190,000). That said, a weak jobs report will likely weigh on risk sentiment as the financial market
turmoil in the beginning of the year partly reflects US growth concerns. A strong jobs report could calm markets and Fed as it would indicate a solid underlying growth trend in the US.”

According to Mikael Olai Milhøj, Analyst at Danske Bank, the ISM manufacturing index has stabilized but at a weak level and he expects the index to rebound slightly in the coming months.

(Market News Provided by FXstreet)

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FXStreet (Guatemala) – Valeria Bednarik, chief analyst at FXStreet explained the recent price action surrounding USD/JPY.Key Quotes:”The pair showed little signs of life this Monday, falling down to 120.67 after the release of poor US data, but quickly…

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FXStreet (Guatemala) – EUR/GBP remains nervous of the topside, having most recently failed just ahead of the 0.7762 2012 low.

Key Quotes:

“This is quite a pivot point and is regarded as formidable resistance near term. Dips lower are heading towards the support line at 0.7546 but should be finding good support between it and the 0.7492 October high. Such a move would be regarded as a return to point of break out.

The market two weeks ago eroded major resistance at 0.7555/75. We have charted a weekly close above here and above the 23.6% retracement of the move down from the 2009 high – this was located at 0.7614 and suggests that the market has indeed based. The base 0.7492- 0.6937 suggests an upside measured target to approximately 0.8030/50.”

EUR/GBP remains nervous of the topside, having most recently failed just ahead of the 0.7762 2012 low.


(Market News Provided by FXstreet)

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FXStreet (Guatemala) – EUR/JPY has been a one stop shop for the bulls, making a full recovery of the 2016 downside, exceeding this year’s opening price and has recently tracked down the 100 dma at 132.34 today having made a previous day’s high of 132.2…

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FXStreet (Guatemala) – Karen Jones, chief analyst at Commerzbank explained a longer term outlook for EUR/JPY.”Long term Longer term we still have a negative bias.””The market has a 2013-2016 support line at 126.56 that needs to give way on a closing ba…

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FXStreet (Córdoba) – Federal Reserve Vice Chairmen, Stanley Fischer, spoke today in New York about the economic outlook and monetary policy. He said that the FOMC doesn’t know what they will do at the next meeting. Regarding inflation, he explained that it will likely remain low for a longer time than previously expected because of the decline in crude oil prices and the appreciation of the US dollar.

He mentioned again that the Fed expects rate hikes to be gradual and that four rate hikes is among the number being talk about, but the trajectory of rate is not predetermined and it depend on data.

Key Quotes:

“Our decision in December was based on the substantial improvement in the labor market and the Committee’s confidence that inflation would return to our 2 percent goal over the medium term.”

“Once these oil and import prices stop falling and level out, their effects on inflation will dissipate, which is why we expect that inflation will rise to 2 percent over the medium term, supported by a further strengthening in labor market conditions.

“Given the large size of the Federal Reserve’s balance sheet, the FOMC is employing new tools to implement monetary policy. In particular, to raise the federal funds rate we increased the interest rate we pay on reserve balances that depository institutions hold at the Federal Reserve. We also employed an overnight reverse repurchase facility, through which we interact with a broad range of firms to help provide a soft floor for the federal funds rate consistent with our target range.”

“Economic data over the intermeeting period suggested that improvement in labor market conditions continued even as economic growth slowed late last year. But further declines in oil prices and increases in the foreign exchange value of the dollar suggested that inflation would likely remain low for somewhat longer than had been previously expected before moving back to 2 percent

“In addition, increased concern about the global outlook, particularly the ongoing structural adjustments in China and the effects of the declines in the prices of oil and other commodities on commodity exporting nations, appeared early this year to have triggered volatility in global asset markets. At this point, it is difficult to judge the likely implications of this volatility. If these developments lead to a persistent tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States.”

“Now, I expect that in a few minutes one of you will ask not about what we did at our last meeting, but rather what we are going to do at the next one. I can’t answer that question because, as I have emphasized in the past, we simply do not know.”

Federal Reserve Vice Chairmen, Stanley Fischer, spoke today in New York about the economic outlook and monetary policy. He said that the FOMC doesn’t know what they will do at the next meeting. Regarding inflation, he explained that it will likely remain low for a longer time than previously expected because of the decline in crude oil prices and the appreciation of the US dollar.

(Market News Provided by FXstreet)

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FXStreet (Córdoba) – The pound gained momentum during the last Horus and rose across the board, hitting fresh highs versus the euro, the US dollar and also the yen. GBP/JPY broke above 173.60 and climbed to 174.23 reaching the strongest level since January 6.

The pair is holding near the highs and also above 174.00. Last week it peaked at 174.15 but it was rejected and pulled back below 174.00.

GBP/JPY recovery continues

The pound is rising for the third trading day in a row and from January lows, it has risen more than a thousand pips. The recovery has been supported by a more stable pound across the board and a sharp decline of the Japanese currency following the decision of the Bank of Japan to introduce negative rates.

On Friday, the pair posted the first daily close above the 20-day moving average since mid-November and today is holding considerable above. A consolidation around current levels could give further support to the pair.

To the upside, it continues to approach to the 175.00 area that could be a strong resistance: it was a key support during 2015 and a resistance back in 2014.

The pound gained momentum during the last Horus and rose across the board, hitting fresh highs versus the euro, the US dollar and also the yen. GBP/JPY broke above 173.60 and climbed to 174.23 reaching the strongest level since January 6.

(Market News Provided by FXstreet)

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FXStreet (Guatemala) – Analysts at Scotiabank explained that AUD is soft having weakened into the release of softer PMI data from China.

Key Quotes:

“AUD’s subsequent stabilization hints to moderate relief despite the drop in China’s manufacturing measure to a fresh multi-year low of 49.4.

The RBA policy decision is the primary near term risk for AUD, with expectations of a hold at 2.00%.

Only one of 29 Bloomberg survey respondents is looking to a cut at this meeting, however we note that OIS are pricing a roughly 80% chance of a 25bpt cut over the next 12 months. Recent inflation data have served to reduce expectations for easing.”

Analysts at Scotiabank explained that AUD is soft having weakened into the release of softer PMI data from China.

(Market News Provided by FXstreet)

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