Morning Report 31.03.2015 - A day with very little movement precedes Eurozone CPI y/y

Nicholas Ebisch, FX Analyst

Today will be a chance to see if the Eurozone’s QE programme and near-zero interest rates are having any effect on inflation just yet. Eurozone CPI y/y is forecast to come in at -0.3%, but encouraging German data from last week have provided optimism during a time over economic recovery in Europe. Other data on the day includes Canadian GDP m/m and US consumer confidence figures. We may begin to see some market volatility today as there is a good deal of US data later on in the week.


GBP/EUR: Currently trading at 1.3713

Sterling gained around 0.25% on the single currency yesterday. Small moves were to be expected with little data of note being released yesterday.
Attention now turns to EUR CPI Flash Estimate that is being released at 09:00. If this data comes out better than expected, EUR gains on Sterling throughout the day could be seen. This will signify a pickup in economic activity in the Eurozone and indicate that the QE programme is achieving its main objective of combating the deflationary threat. Also with the GBP Current Account being released at 08:30, which has seen larger deficits than forecast for the last year, EUR gains on Sterling could be reinforced today if this trend continues.

GBP/USD: Currently trading at 1.4765

Cable has been slowly but surely declining as the dollar still has the upper hand on sterling at the moment. The mid-1.47 range seems to be a comfortable trading range now that this currency pairing is holding steady below the 1.5 psychological barrier. Provided there is positive US data today and the rest of this week, we may see a run for the mid-1.40’s. Current account balance for the UK comes out this morning, and US consumer confidence figures are out this afternoon.

EUR/USD: Currently trading at 1.0740

Yesterday saw a fairly range bound day of trading for the pairing, but the dollar saw some strength in the afternoon on the back of strong US pending home sale figures. Weakness has greeted the euro this morning on what is a data-heavy day, with disappointing French consumer spending figures and higher German unemployment readings.
Later this morning sees both Euro-zone CPI flash estimate figures and unemployment rate data released, and although both are forecast to remain the same at -0.3% and 11.2% respectively, we could see a lot of market movement should one of the readings fall out of expectations. From the other side of the Atlantic at lunchtime Fed members Lacker and Lockhart will be speaking about US monetary policy and possibly providing hints of when the US rate hike will take place, potentially bringing volatility to the pairing. The day is wrapped up later this afternoon with the important CB consumer confidence survey; with the reading expected to improve, we could see the greenback strengthen against the euro.

GBP/AUD: Currently trading at 1.9420

The pounds accent was boosted yesterday as UK net lending to individuals rose 2.5bn in February, in line with forecast and up from January’s 2.4Bn. US consumer spending failed to aid the Aussie as it rose less than forecast for the month of February. Sterling was able to capitalise, finding almost 2 cent throughout the day.

Although we expect UK data today to have a fairly muted effect on the pairing, another increase in the current account deficit could halt the sterling gains.

GBP/NZD: Currently trading at 1.9759

Sterling gained around 0.1% on NZD yesterday. With very little data released yesterday the general trend of Sterling gains against NZD continued from the back end of last week.
The next piece of data being released of note for NZD is the GDT Price Index tomorrow night. As a leading indicator of the nation’s trade balance, if this release is better than forecast expect some NZD gains against Sterling as a result.


GBP/CAD: Currently trading at 1.8803

Yesterday was another good day for Sterling, closing higher at the 1.8810 mark. A strong Canadian RMPI figure was unable to shift momentum.
This morning brings UK Current Account data which has failed to live up to expectation this year, with the deficit continuing to grow. Forecasters are predicting this will shrink, which could give Sterling more lift. Canadian GDP data is released this afternoon which will put pressure on the Loonie if it drops as expected.

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

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Trends Reverse in a Quiet End to the Week

Raphael Sonabend, FX Analyst

Trends reversed yesterday as the euro fell against counterparts and the US dollar gained. Employment figures from the US saw a fall in claims from 291K to 282K, the lowest figure since the beginning of February 2015. This release tends to only affect in the short-term but traders may have grabbed on to the first piece of strong data after recent weakness in the dollar. It is too early to say if this may be the start of a slight recovery in the dollar but we’ll have a clearer idea after today’s session. A relatively light day on the data calendar will see US data in the spotlight with Final GDP at 12:30 and a speech from Yellen at 19:45.



GBP/EUR: Currently trading at 1.3702

• A solid release from UK retail sales saw an increase of 0.7% as a 0.4% increase was expected. This was the strongest result since November 2014, which is unsurprising as slashed prices have only just properly caught up with shoppers since the aftermath of Black Friday deals. The pound reversed previous trends and rose over a cent on the euro, comfortably breaching the 1.365 mark and heading toward 1.370.
• A quiet day ahead may allow the pound to continue gaining on the euro however recent trends suggest that there is still further potential strength in the single currency.

GBP/USD: Currently trading at 1.4813

• US unemployment claims beat predictions yesterday and hit 282K, forecast to be 291K this was a solid improvement. After UK retail sales saw the pair spike up to just above 1.499, US unemployment pushed the rate back down to below 1.481. For a clearer indication of whether the USD can hold onto these gains or even push on further, we will continue to eye this pairing carefully in today’s session.
• Focus today will be on US final GDP this afternoon then a speech from Yellen tonight. GDP is expected to improve on a quarterly basis from 2.2% to 2.4% and a result within expectations should see further strength on the part of the greenback. Yellen is due to speak on monetary policy and as ever with this controversial topic, volatility is likely to be seen.

EUR/USD: Currently trading at 1.0814

• Euro gains were halted yesterday as the pair peaked at 1.105. The greenback gained significant ground, pushing the rate back down below 1.088 as a solid figure from US unemployment was released.
• Today’s movements will give us a stronger picture of the future of this pairing as it may indicate the potential strength the euro has to fight off the dollar’s advances. Greenback gains can be expected to be reinforced by a strong US GDP figure, which is forecast to be released this afternoon.

GBP/AUD: Currently trading at 1.9017

• Strong gyrations around the 1.90 mark suggest volatility still remains in this pairing but despite this uncertainty, the pound’s gains continued against the Aussie. Limited data from this pair helped Sterling’s advances and US unemployment data was unable to help.
• Following yesterday’s trends US data may not affect this pairing and the pound may continue to gain. Aussie bulls will be hoping for a two-way conflaction between the pairing around midday.

GBP/NZD: Currently trading at 1.9622

• A quiet day from both sides of this pairing yesterday saw the day close barely above opening despite strong movements made throughout. The 1.9652, 1.9482, 1.9560 triangulation suggests that volatility could be lessening in this pair.
• Another quiet day today is likely to see similar movements with the pound potentially coming out on top in an attempt to recover some lost ground. US GDP today could lend a hand to Kiwi strength this afternoon, dependent on Sterling’s own power.

GBP/CAD: Currently trading at 1.8550

• The Loonie gained through yesterday’s session as the Bank of Canada’s governor Poloz said that cutting interest rates in January allowed the Bank to monitor the oil price situation. Defending his decision, Poloz said that the first quarter of this year is likely to be weaker economically but the second half should be strong. CAD traders saw the positives to his words, probably as the negative side had already been priced into the markets and the Loonie gained throughout.
• A quiet day today could allow the Loonie to continue gaining against the pound as no releases are due.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Euro Surges On

Raphael Sonabend, FX Analyst

After a few weeks of consistently strong Eurozone figures and particularly solid German data, business confidence and climate is now on an upward trend. German Ifo business climate registered a fifth consecutive increase yesterday and hit the highest level since July 2014. This strong result helped to consolidate the view that Germany is not only ready but also confident to power the Eurozone once again; this is especially important with the current Greek debt crisis. Today’s trading will focus on UK retail sales at 09:30, US unemployment claims at 12:30 and a speech from the Bank of Canada’s Governor Poloz at 13:30. As the pound comes back into the headlines and the euro takes a step back, slight dollar weakness and increasing euro strength are likely to continue.



GBP/EUR: Currently trading at 1.3549

• Euro gains pushed on throughout yesterday’s session as strong figures from Germany added to the single currency’s momentum. German Ifo business climate saw a rise from 106.8 to 107.9, 0.5 above the predicted result. The fifth consecutive increase reinforces the view that Germany is back in position to power the Eurozone and we expect the euro to see medium-to-long-term strength on the back of this increased confidence.
• A similarly quiet day today will focus on UK retail sales figures this morning. Forecast to rise from -0.3% to 0.4%, this may allow Sterling to recover some ground against the euro but these potential advances are unlikely to hold. Carney will be speaking in Frankfurt this afternoon at a press conference about his role as Chair of Financial Stability Board, any questions regarding the UK’s recent low inflation result and a potential rate cut, will be keenly eyed by traders.

GBP/USD: Currently trading at 1.4958

• Core durable goods orders out of the US saw a 0.4% fall on the last month’s figure, which aided Sterling’s gains made in yesterday’s session. Orders were forecast to increase as analysts suspected that the effects of a harsh winter had been overcome however the larger drag was a rising dollar, which is impacting upon exports. This negative trend could continue until the dollar falls to more attractive levels.
• Today’s trading will centre on UK retail sales this morning and US unemployment claims this afternoon. With UK sales forecast to improve and US unemployment claims predicted to remain the same, the pound could continue its gains against the dollar.

EUR/USD: Currently trading at 1.1036

• Yesterday saw the euro continue its surge as a positive German Ifo Business Climate figure aided its gains and allowed it to trade above the 1.10 mark. Further good news greeted the euro this morning with the GfK German Consumer Climate figure also impressing, providing increased support for the currency. 
• Data announcements today are limited to the other side of the Atlantic with the only important release this afternoon in the form of US unemployment claims figures. The figure is forecast to remain the same, however we could see some volatility should it fall out of line of expectations.

GBP/AUD: Currently trading at 1.8992

• With the release of US durable goods orders yesterday registering a surprise 1.4% decline, fears increased about the dollar’s current strength. This has had a knock on effect on the Aussie, which has seen the recent GBP/AUD downward trend reversed slightly.
• With UK retail sales forecast to improve this morning, the pound could capitalise on this slight Aussie weakness.

GBP/NZD: Currently trading at 1.9584

• No data out of either country yesterday allowed the pound to continue its gains on the Kiwi after poor trade balance data was released. The pound’s advances are unlikely to push on much longer and a recovery is likely to be seen in the near-term by the Kiwi.
• A solid figure has been predicted for UK retail sales this morning and a result in line (or above) expectations could provide the pound with enough strength to hold off a Kiwi reversal for at least another day.

GBP/CAD: Currently trading at 1.8592

• With another quiet calendar yesterday, Sterling strengthened throughout the most part, shifting momentum in a period that has seen the Loonie dominate of late.   
• Today brings us UK retail sales data, which forecasters expect will show growth from the previous month.  This could give Sterling a boost before Governor Poloz speaks this afternoon, which could cause market volatility.   

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Sterling off the Roof: Has the pound seen a high?

Raphael Sonabend, FX Analyst

As UK CPI saw a record low yesterday and the pound continues on a downward trend, analysts are now asking the question if Sterling has seen its highs for the next few months. UK CPI saw a record low yesterday as the final result registered at 0.0%, not quite deflation but teetering on the crucial edge. This result was not altogether surprising as Carney had previously warned that CPI could fall this low and the real speculation now is whether the BoE will vote to cut rates in their next meeting. This is a real possibility but perhaps unlikely given their unanimous votes to hold rates in the last meeting, even still analysts will be keenly scrutinising every upcoming interview with Carney for clues about a possible rate cut. US CPI saw the first monthly rise in four months, registering at 0.2% and perhaps signifying the beginning of the end of poor figures that were caused by a harsh winter. A quiet day ahead will focus on German Ifo business climate at 9:00 and US core durable goods orders at 12:30. With the German figure set to increase, euro gains could push on for at least another day.



GBP/EUR: Currently trading at 1.3572
Yesterday saw UK CPI falling below expectations to 0.0% and PPI input rising from -3.6% to 0.2%, but below the 1.6% forecast. The drag in CPI was (perhaps surprisingly) not down to falling oil prices but instead recreational goods, food and furniture & furnishing. For the first time on record CPI fell to 0.0% and with the current trend being downward, the next stage for CPI is likely to be deflation. GBP/EUR fell to 1.356 before Sterling resisted further gains and pushed the rate back towards 1.36.
Today’s trading will focus on German Ifo business climate this morning, forecast to improve the euro’s gains are likely to continue through today’s session.


GBP/USD: Currently trading at 1.4874
A CPI filled day yesterday saw the rate spike and fall between ranges of over a cent after each release. UK CPI in the morning saw a fall to 0.0% but the pound quickly recovered this lost ground before US CPI figures saw the rate jump to 1.4984 before falling to 1.4831 throughout the remainder of the day. US CPI rose 0.2% monthly and core CPI saw a similar 0.2% increase. This CPI figure signified the first rise in four months and is the first step toward stabilisation as growth picks up. The result is also a strong sign that the negative effects of a harsh winter have been overcome.
Today’s focus will be on US core durable goods orders at 12:30. Forecast to rise from 0.0% to 0.3%, this is likely to lend a hand to further dollar strength.


EUR/USD: Currently trading at 1.0956
The euro had a good morning yesterday, with German Manufacturing PMI data impressing, but managed to lose its gains later on in the afternoon on the back of higher than forecast US core CPI figures. This morning has seen some gains for the euro, in anticipation of the German Ifo Business Climate survey results, which is expected to increase from the last reading.
The most important announcement out of the US today comes in the form of core durable goods orders, released this afternoon. With the figure forecast to increase by 0.3%, we could see the greenback strengthen and temporarily bring to a halt the euro’s recent gains.


GBP/AUD: Currently trading at 1.8896
With UK CPI falling to 0.0% yesterday on a yearly basis, we saw the recent downward trend continue as higher-yielding currencies continued to strengthen. Strong US CPI data followed, recording a figure of 0.2% which we saw the rate move over a cent in favour of the Aussie.
With no data scheduled for release from either side of the pairing today, traders will be keeping an eye on US core durable goods orders, expected to climb 0.3% which could strengthen the Aussie further.


GBP/NZD: Currently trading at 1.9473
Slow gains were made by the Kiwi throughout yesterday’s session before increasing in momentum prior to the NZ trade balance data, which actually resulted in a figure far below expectations. With 375M forecast, the result of 50M came as a surprise to traders who quickly sold off the NZD, seeing the rate shoot up a cent before continuing to climb in Sterling’s favour. This low result came after dairy exports saw a 41% fall compared to the previous year.
A quiet day ahead could provide the setting Sterling needs to begin recovering lost ground against the Kiwi. After a poor trade balance figure last night, trading is likely to continue in the pound’s favour.


GBP/CAD: Currently trading at 1.8584
The UK CPI figures saw limited impact on this pairing, which was more heavily influenced by the US CPI data that was released soon after. Whilst continuing to fall in the Loonie’s favour, the pound saw slight strength just prior to the US CPI release.
The pound opened today’s session with the upper hand and has been slowly posting gains against the Loonie. A quiet day ahead may allow these advances to continue throughout.








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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

There Will Be Volatility...

Raphael Sonabend, FX Analyst

The euro continued its advances against the majority of counterparts yesterday as Draghi delivered a confident testimony on monetary policy. Draghi denied that the ECB was blackmailing Greece in any form and refused the notion that QE could lead to countries abandoning economic reforms. His own confidence was reflected in the euro whose index saw a strong increase throughout the day. A volatile day lies ahead with UK CPI at 09:30 and US CPI at 12:30. The UK figures are forecast to fall to 0.1%, a low result that in theory should bring Sterling weakness. Unfortunately in practice, we have recently seen Sterling strength after low CPI data and there is therefore the possibility of strong gains. With the chance of strong movements in either direction, all that can be truly known is that volatility will be seen, with the potential to drag on throughout the day’s trading.


GBP/EUR: Currently trading at 1.3615

• The euro gained on the pound throughout yesterday’s session, aided by Draghi’s testimony on monetary policy in the afternoon. When faced with the controversial question is the ECB blackmailing Greece? Draghi quickly replied with “let me disagree with about everything you said” and after being criticised about QE and the possibility that it will lead to governments abandoning economic reforms, Draghi’s response was simple, he “begged to differ”. Draghi’s cool replies and abundance of rhetorical questions, created an air of confidence that is not usually seen around the usually dovish ECB president. In a series of hawkish responses Draghi flashed his talons, but euro bulls will expect a complete metamorphosis from dove to hawk before a full recovery is seen.
• Today’s focus will be on UK CPI this morning. Forecast to fall from 0.3% to 0.1%, a result of 0.0% or below is a real possibility. A result signifying deflation should bring Sterling weakness however given trends following previous CPI releases, strength has been seen. We therefore anticipate Sterling volatility and significant movement but the direction of which is unpredictable.

GBP/USD: Currently trading at 1.4959

• Yesterday saw trading close barely above opening after a volatile morning was seen. The day began with dollar strength pushing the rate below the 1.484 mark however Sterling recovered lost ground and closed the day around 1.495. Stanley Fischer, the dovish Fed vice Chair, stated that a rate hike is ‘widely expected’ to happen this year however risks remain as the dollar is still too strong. In a confident speech, nothing particularly new was said but this is still one of the most explicit hints we’ve had regarding monetary policy from someone high up in the Fed.
• CPI data from the UK and US will be released today but the UK’s data is likely to take priority. Strong movements are expected following the release of the UK’s inflation data and with the possibility of deflation being seen, volatility is likely as well. With US CPI forecast to increase on a monthly basis, this is only likely to impact upon the pairing if Sterling weakens in the morning.

EUR/USD: Currently trading at 1.0977

• Euro gains continued yesterday against the dollar, closing the day a cent above opening. Draghi’s words in the afternoon saw limited effect on this pairing but releases this morning have aided further euro strength. French manufacturing PMI this morning rose from 47.6 to 48.2 and the German manufacturing PMI also increased, from 51.1 to 52.4. Services PMI from Germany registered a similar increase. As the PMI figures continue to increase, especially in Germany, so too will Eurozone confidence and euro strength.
• Strong figures this morning should allow the euro to continue to climb at least until midday. US CPI figures are forecast to rise from -0.7% to 0.2% and core CPI is forecast to fall from 0.2% to 0.1%. CPI is usually considered to be ‘more important’ and we may therefore see the dollar resist further euro gains if the data comes in line with, or exceeds, expectations.

GBP/AUD: Currently trading at 1.8983

• Aussie strength pushed on yesterday, gaining two cent against the pound as a quiet day aided the Australian dollar. Aussie gains were halted briefly this morning as the Chinese HSBC flash manufacturing PMI figures saw a fall from 50.7 to 49.2. This result, which is below the crucial 50.0 mark, signifies a contraction in the sector and reignites worries about the continuing slowdown. Whilst the pound gained half a cent on the back of this release, the Aussie has already recovered this lost ground.
• Focus today will be on UK CPI figures this morning. Volatility can be expected to follow this result and for Sterling to recover any ground recently lost to the Aussie, a result above expectations will be needed.

GBP/NZD: Currently trading at 1.9529

• Following similar trends to other commodity currencies, the Kiwi gained throughout yesterday’s session against the pound. A quiet day on the data front aided further Kiwi gains.
• Trading today will focus on UK CPI this morning before turning to NZ trade balance tonight. The UK data is forecast to register at 0.1%, dangerously close to the 0.0% mark, and volatile trading can be expected. The NZ figures are forecast to increase from 56M to 375M, a big increase that should lend a hand to NZD strength if accurate.

GBP/CAD: Currently trading at 1.8682

• After early-morning Loonie gains, this pairing moved within a relatively tight range yesterday as the week begun on a quiet note.
• Ahead of today’s UK CPI data the pound is trading on a weaker footing. UK CPI is forecast to drop to almost zero, which is likely to bring volatility in this pairing.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Quiet Trading Ahead of a Volatile Week

Raphael Sonabend, FX Analyst

Euro gains and dollar weakness were seen on Friday despite reverse trends being expected. The Fed member Lockhart, who is usually dovish in sentiment, was particularly hawkish as he said a rate hike could occur in June or July. In the Eurozone, the EU economic summit let nothing pass to reporters and news from the summit was limited. The highest impact data came from Canada, with monthly core CPI figures coming in line with forecast at 0.6% and CPI increasing from -0.2% to 0.9%. This strong figure has demonstrated how the negative effects of falling oil prices can stop impacting so strongly upon inflation. The main event today will be on Draghi’s speech at 14:00; due to testify on monetary policy, volatility can be expected as it always is when this sensitive topic is discussed.



GBP/EUR: Currently trading at 1.3790

• A quiet day on Friday saw slight euro gains throughout the day, closing the session just 10 pips below opening. Volatility was seen in the Asian markets over the weekend but this morning has opened with calmer trading.
• The main focus for today will be on Draghi’s testimony this afternoon, due to speak on monetary policy before the Economic and Monetary Affairs Committee, this could bring euro strength if he is more hawkish than usual. The UK’s CBI industrial order expectations figures this morning are forecast to fall from +10 to +9, which could see Sterling weakness.

GBP/USD: Currently trading at 1.4863

• The dollar fell against the majority of counterparts on Friday, despite the usually dovish Lockhart speaking with hawkish sentiment. Lockhart said he expects a rate hike in one of the June, July or September policy meetings; suggesting June or July is unusually hawkish for him.
• A quiet day ahead will centre on UK CBI industrial order expectations this morning before turning to existing home sales in the US. With UK data predicted to decline slightly and US figures forecast to improve, we may see the dollar recover the ground it lost on Friday. 

EUR/USD: Currently trading at 1.0780

• Despite a quiet day on Friday, the euro managed to gain by almost two cent against the dollar in the afternoon, breaking above the 1.08 mark. Fed member Lockhart’s speech on Friday caused some volatility in the pairing, with the euro coming out on top. 
• Another relatively quiet day awaits us today with ECB president Draghi’s speech in the early afternoon dominating the calendar. We expect to see some volatility in the pairing should Draghi discuss any important details in EU monetary policy. Later this afternoon also sees the release of US existing home sales data, and with the figure set to increase, we may see the greenback strengthen and regain some lost ground from Friday.

GBP/AUD: Currently trading at 1.9100

• Last week proved to be very volatile for the pairing with the overall trend in favour of the Aussie. This trend has continued with the Aussie finding over a cent this morning, currently trading around the 1.91 mark.
• With little in the way of announcements from either side of the pairing today, traders will be looking towards RBA Gov Edey’s comments tomorrow morning followed by UK and US CPI data which has potential to stir the market.

GBP/NZD: Currently trading at 1.9618

• Fairly range-bound trading was seen in Friday’s session with Kiwi gains posted in the morning before Sterling resistance kept further advances at bay. This morning has seen the NZD gain a cent and a half, possibly on the back of last night’s increase in Westpac consumer sentiment from 114.8 to 117.4. These gains seem unlikely to hold as the pound is already recovering these losses.
• This morning’s UK CBI industrial order expectations could prevent further Sterling gains as the figure is forecast to drop off slightly from +10 to +9. If the data improves above predictions, then pound strength should push on throughout the day.

GBP/CAD: Currently trading at 1.8719

• On Friday we saw Canadian retail sales registering a decline of more than expected in January, largely due to lower gasoline prices.  Annual inflation held steady at 1 per cent matching expectations.
• With a quiet calendar before tomorrow’s UK CPI data, we expect today’s activity to be fairly range-bound.

Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

First Day of Spring Eclipsed by Upcoming Canadian Data

Raphael Sonabend, FX Analyst

A fairly quiet day in terms of data yesterday was eclipsed by strong Sterling gains in the morning. These were soon regained by counterparts and commodity currencies fared particularly well towards the end of the day. US figures yesterday were in line with predictions as unemployment claims barely moved and Philly Fed manufacturing index saw a decrease. Today will focus on Canadian data with CPI and retail sales figures at 12:30. Another quiet day is expected in the markets.



GBP/EUR: Currently trading at 1.3799

• The pound climbed to highs of 1.3976 against the euro yesterday before a dip at midday took the pairing back to 1.383 levels. Limited data from the EU economic summit saw no movement in this pair, possibly more reaction will be seen during the second day of meetings today.
• Another quiet day will see trading based on speculation surrounding the EU economic summit. Euro gains posted this morning could be extended throughout the day.

GBP/USD: Currently trading at 1.4744

• After a significant drop against the pound two nights ago, the dollar regained most lost ground yesterday throughout the day. Unemployment claims saw an increase from 290K to 291K whilst the Philly Fed manufacturing index unsurprisingly fell from 5.2 to 5.0. Weak results failed to affect the once-again strengthening dollar.
• With no data of note out today, focus will be on Fed speakers Lockhart and Evans this afternoon. With both speaking on monetary policy, perhaps we’ll gain some insight into these two individuals’ views on the next rate hike.

EUR/USD: Currently trading at 1.0681

• The dollar gained slightly in yesterday morning’s session before range-bound trading was seen throughout the rest of the day. A tight range between 1.07 and 1.06 contained this pair as US unemployment claims saw little change and the Philly Fed manufacturing index fell as expected.
• Today’s focus will be on speeches from Fed doves Lockhart and Evans. Due to speak on their views on monetary policy, potential for further USD weakness if they are as dovish as usual.

GBP/AUD: Currently trading at 1.9210

• Yesterday saw the pound strengthen throughout the first part of the day, peaking at 1.946 before taking a nose dive dropping to 1.926 by the end of the day. Governor Stevens’ upbeat comments earlier today to the American chamber of commerce highlighted the increasing momentum of the US economy and its support for the Aussie. These comments have consolidated the steady AUD strength this morning.
• With no influential data scheduled for release today, we forecast little volatility with traders looking towards UK and US CPI figures on Tuesday.

GBP/NZD: Currently trading at 1.9808

• Similar to other commodity pairings, this pair saw Sterling gains in the morning before the Kiwi regained lost ground and pushed the rate back in its favour, ending the day below 1.98. Solid results from usually low-impact data helped solidify Kiwi gains.
• A quiet day ahead should allow recent trends to continue and the Kiwi could continue its gains against the pound.

GBP/CAD: Currently trading at 1.8696

• The pound surged yesterday morning, before a mid-day reversal gave the Loonie strong momentum closing out the day ahead.
• The focus for today’s session will be the Core CPI and Core Retail sales data from Canada.  Forecasters expect inflation to slow as oil prices still weigh heavily, retails sales is predicted to fall, which could push the Loonie lower against the pound.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Poor US and UK Releases Bring Volatility

Raphael Sonabend, FX Analyst

A data heavy day yesterday saw releases from across the world. The day began with Sterling weakness as UK employment figures saw a generally disappointing result. Although the claimant count change saw another 30K decline, the average earnings index fell below expectations and the unemployment rate remained at 5.7%, despite being forecast to fall. Later in the day the UK annual budget was released but this had a limited effect on the markets. A release that tends to be highly political, this was especially important with the UK elections approaching; the pound was unaffected. In the evening the US Fed conference was as dovish as expected, downgrading short-term inflation and growth forecasts and warning of a strong dollar negatively impacting upon exports. The dollar fell against all counterparts but has since been recovering lost ground. Focus today will be on Eurozone targeted LTRO figures at 10:15, US unemployment claims at 12:30, US Philly Fed manufacturing index at 14:00 and finally the EU economic summit, which will take place throughout the day. A quieter day today should allow the markets a chance to stabilise after yesterday’s volatility.



GBP/EUR: Currently trading at 1.3910

• A day of high-impact data yesterday saw the euro post strong advances in the morning before the pound recovered lost ground in the afternoon. The UK’s employment figures saw a fall in the average earnings index 3m/y from 2.1% to 1.8% whilst unemployment rate remained at 5.7% and had been forecast to drop to 5.6%. A cent gain was made by the euro following this release.
• Today’s focus will turn from the UK to the Eurozone with the EU economic summit taking place today in Brussels and the targeted LTRO figures released this morning by the ECB. The summit will discuss a range of issues, including the situation in Greece and perhaps a clearer indication of the next stage for Greece will be seen.

GBP/USD: Currently trading at 1.4863

• The Fed meeting was as dovish as expected yesterday evening but clearly dovishness had not been priced into the markets. The dollar fell over four and a half cent following the release of the Fed projections and statement yesterday as the Fed warned of consistently low inflation lying ahead. Comparing the individual economic projections of the Fed to the last projections release, the majority of members now feel a rate hike towards 0.5% this year would be an appropriate pace, whist a majority previously agreed on a hike towards 1.0% this year as appropriate. Analysts are generally split over a June or September rate hike.
• Data due today includes unemployment claims and Philly fed manufacturing index out of the US. Whilst the manufacturing index is predicted to increase from 5.2 to 7.2, it could fall below expectations as recent manufacturing figures have been poor.

EUR/USD: Currently trading at 1.0678

• The very dovish tone at yesterday evening’s Fed meeting allowed the euro to benefit quite a lot, enabling the pairing to momentarily reach 1.1025. Fed chair Yellen expressed her concerns over weak US exports caused by a strong dollar, and consistently low inflation, leaving on a knife edge whether an interest rate hike will take place in June or September. The pairing has since corrected itself and has dipped back below the 1.07 mark. 
• This morning sees the Long Term Refinancing Option figure from the Eurozone which states the amount of money that the ECB will loan to banks, we may see some volatility on the back of this. From the US later this afternoon we have both unemployment claims figures and the Philadelphia Fed Manufacturing Index released, with forecasts mixed we expect further uncertainty in this pair.    

GBP/AUD: Currently trading at 1.9356

• Yesterday’s Sterling trends were witnessed in this pairing as the Aussie gained over a cent in the morning before the pound started to recover lost ground. Dovish tones from the Fed yesterday evening may have lent a hand to Aussie weakness.
• A quiet day today will focus on US data, Aussie strength may be possible as US figures are predicted to be strong. Potential for further Aussie weakness if Philly Fed manufacturing index falls below forecasts.

GBP/NZD: Currently trading at 2.0033

• After recent lost ground against the pound, the Kiwi recovered four cent as UK employment figures came out poor. Whilst the jobless rate remained stable, earnings growth fell below expectations and traders took a bearish stance as the gap between inflation and wage growth narrowed. Volatility was seen as the NZ GDP figures came in as expected at 0.8%, the pound soon stabilised the rate before advancing.
• A quieter day lies ahead and our focus will turn away from the UK and NZ and will instead settle on US data. With the manufacturing index set to increase, the NZD may see an opportunity to recapture lost ground.

GBP/CAD: Currently trading at 1.8815

• We witnessed a volatile day of trading yesterday, with the pound suffering considerable losses after average earnings registered a decline on the previous figure.  A partial recovery was made in the afternoon when the Canadian Wholesale sales recorded the largest monthly decline since January 2009, decreasing by 3.1%. 
• A relatively quiet calendar today means that this afternoon’s US unemployment claims data could give Sterling a boost if it increases as predicted.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Data Heavy Day Awaits; Volatility Expected

Raphael Sonabend, FX Analyst

Yesterday saw the euro gain against the majority of counterparts as sentiment figures saw an increase from Germany and the Eurozone. Whilst German ZEW sentiment did not rise as much as predicted, Eurozone sentiment saw a strong rise from 52.7 to 62.4 and the euro gained as a result. Analysts previously speculated that once GBP/EUR broke the 1.40 mark, the rate could surge up to 1.45 or beyond however strong Eurozone figures and a mini-revival back below 1.40 have suggested that the euro has the potential for more strength than previously anticipated. A busy day lies ahead with UK employment figures and the BoE rate votes at 9:30, followed by the Canadian wholesale sales figures and the UK annual budget release at 12:30 and finally the Fed statement and funds rate at 18:00, which will be concluded with the Fed press conference at 18:30. Volatility can be expected as every announcement should be of high-impact.


GBP/EUR: Currently trading at 1.3893

• Strong gains of almost two cent were made by the euro yesterday, even as German ZEW economic sentiment registered a fall below expectations. Coming in at 54.8, which was below the forecast 58.9 but above the previous 53.0, traders coupled this with a rise in Eurozone ZEW sentiment and the euro continued gaining. This gain in sentiment is likely down to increased optimism now that progress (albeit limited) has been made regarding the Greek debt crisis.
• Focus today will be on the UK employment data this morning. Strong results are forecast including a rise in average earnings 3m/y from 2.1% to 2.2% and a fall in the unemployment rate from 5.7% to 5.6%. This afternoon’s UK annual budget release could bring volatility as this will be especially important with the upcoming general election.

GBP/USD: Currently trading at 1.4741

• After dollar weakness was seen last Monday, the greenback has since been recovering lost ground and managed to push the rate back below the 1.473 mark. US building permits saw a rise above forecasts yesterday, increasing from 1.06M to 1.09M, which was above the expected 1.07M. Unsurprisingly housing starts registered another fall as the harsh US winter has been reflected in recent housing data.
• Arguably one of the most important data-days of the month, today will bring employment figures and the Bank of England rate votes out of the UK in the morning then the Fed statement from the US in the afternoon. Whilst the Bank votes are not expected to change today, analysts do anticipate another split vote sometime in the upcoming months and therefore each member and their comments after this release will be keenly eyed. A volatile day can be expected as traders prepare to scrutinise the Fed’s every word tonight.

EUR/USD: Currently trading at 1.0604

• Yesterday’s higher-than-forecast ZEW economic sentiment survey figure gave the euro a much needed helping hand that allowed this pairing to break back above the 1.06 mark.
• No announcements of note out of the Eurozone today will leave this pairing dependent on this evening’s US Fed releases. As recent US export figures have been negatively affected by a strong dollar, we expect the Fed chair Yellen to be particularly dovish. After announcing the removal of the word ‘patient’ in regards to the next interest rate hike, perhaps we’ll be graced with the Fed’s new word-of-the-month tonight, which analysts can then keenly evaluate for the rest of the month.

GBP/AUD: Currently trading at 1.9400

• The Aussie regained two cent yesterday morning but the pound spent the rest of the day reclaiming this lost ground. No data out of either country allowed this pair to trade on the back of the RBA’s monetary policy meetings minutes. Further warnings of an over-valued Australian dollar have brought some Aussie weakness and we anticipate this to continue over quieter days.
• Excitement is expected today as the UK is due to release employment figures and announce the results of the BoE bank rate votes. Data is expected to be strong and the pound could therefore continue to gain on the Aussie for the rest of the week as no more data is due. 

GBP/NZD: Currently trading at 2.0234

• Poor figures from the GDT price index yesterday saw the pound gain three cent on the Kiwi. After a previous result of +1.1%, this month’s figure saw a decrease of 8.8%. The biggest drags on this figure were Rennet Casein and Milk Fat, which registered falls of -15.2% and -8.4% respectively. Following threats to Fonterra last week, this poor figure would have increased pessimism surrounding the dairy market and therefore negatively impacted upon the New Zealand Dollar.
• Today’s focus will be on this morning’s UK employment data, before turning to the afternoon’s UK annual budget release then tonight’s NZ GDP figures. With UK data forecast to be strong and the NZ GDP figure predicted to fall, the pound could continue to advance on the Kiwi.

GBP/CAD: Currently trading at 1.8864

• For the most part we saw Loonie gains yesterday, even after Canadian Manufacturing Sales data came in worse than predicted falling by 1.7 per cent in January.  The pound was able to reverse some of the losses before closing.
• A busy day ahead firstly brings us employment data from the UK, with the claimant count predicted to drop.  We then have Wholesale sales data out from Canada, which forecasters are predicting will show a decline in sales.  Taking centre stage will be the UK budget just after mid-day which investors will be homing into.  All in all we expect a positive day for sterling.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Dollar Weakness Following a Harsh Winter

Raphael Sonabend, FX Analyst

A limited amount of data-releases yesterday saw relative quiet in the FX markets. The impact of the US’ harsh winter on data has been registered by dollar bears and the greenback saw weakness against the majority of counterparts. A strengthening dollar has unsurprisingly seen negative impacts upon exports and this adds to speculation that tomorrow’s minutes will be particularly dovish. Today’s focus will be on German ZEW economic sentiment at 10:00, Canadian manufacturing sales at 12:30 and US building permits at 12:30.


GBP/EUR: Currently trading at 1.3962

• A quiet day on the data-front saw fairly range-bound trading throughout yesterday’s session. Peaking at 1.4071 and hitting a bottom at 1.3956, the euro has since been gaining on the pound this morning.
• This morning’s euro gains are likely in anticipation of the German ZEW economic sentiment figures which will be released later this morning. With a gain from 53.0 to 58.9 predicted, the euro’s advances could push on throughout the day.

GBP/USD: Currently trading at 1.4787

• Sterling gained against the dollar throughout yesterday’s session as consistently poor US results have finally impacted upon the greenback. The empire state manufacturing index fell from 7.8 to 6.9, capacity utilisation rate declined from 79.1% to 78.9% and finally the industrial production rate saw a monthly rise from -0.3% to 0.1%. As New Orders have seen a decline and price pressures remain subdued, firms are less optimistic than they have been previously. If negative sentiment spreads to consumers, the greenback could see further weakness.
• A quieter day today will see the focus on US building permits early this afternoon, recent housing data has been below expectations and this trend could be seen again today as housing starts are forecast to decline by 0.02M.

EUR/USD: Currently trading at 1.0588

• Dollar weakness was seen in this pairing yesterday as poor US data was released throughout the day. The euro pushed the rate back above the 1.06 level as manufacturing figures came out below expectations yesterday afternoon. Pessimistic sentiment has been prevalent in recent surveys as a particularly unforgiving winter, coupled with a strong dollar, have impacted negatively upon exports. 
• Euro gains could be seen again in today’s session as the German ZEW economic sentiment is forecast to rise from 53.0 to 58.9, Eurozone ZEW sentiment is predicted to increase from 52.7 to 58.2 and US housing starts is forecast to fall by 0.02M.

GBP/AUD: Currently trading at 1.9321

• Yesterday saw the rate fluctuate significantly between 1.92 and 1.94 in anticipation for the RBA minutes in the overnight session. The Bank suggested that a rate cut is more-than-likely in the wake of bleak economic growth figures. Since the announcement we have witnessed support for the Aussie, with the rate falling over a cent this morning. 
• Once traders have fully digested lasts night’s announcement we expect today to remain fairly quiet as no economic data is scheduled for release today.

GBP/NZD: Currently trading at 2.0024

• This pair traded between a tight two-cent range yesterday as no data of significance was released from either country. The day closed with the Kiwi having gained just over a cent, possibly in anticipation of today’s GDT price index release.
• Data today will be dominated by New Zealand with both the GDT price index and the current account figures due. The former release could come at any time but is usually in the early afternoon, volatility could be seen prior to this. The current account figures are forecast to increase from -5.01B to -3.12B, Kiwi gains could therefore continue.

GBP/CAD: Currently trading at 1.8892

• A fairly quiet day yesterday saw the pound gain throughout, despite Canadian foreign securities purchases registering a strong increase. This morning has since seen strong Loonie gains of almost a cent, despite poor figures forecast for this afternoon.
• This afternoon’s Canadian manufacturing sales monthly figures are predicted to drop off from 1.7% to -1.1% but the Loonie’s strength this morning could suggest that this will have limited impact.

Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

A Quiet Day Brings Opportunity for Respite

Raphael Sonabend, FX Analyst

Last week saw strong gains and losses made throughout the week across the FX markets. The dollar regained its position as an unstoppable force and the euro’s weakness also saw no end. With Putin still missing, oil still falling and Greece and Germany still in a standoff, volatility in the markets is likely to continue as geopolitical tension increases. The current victors of this uncertainty are a strengthening US dollar and the German economy, which is benefitting from increasing exports due to a weakening euro. As the dollar continues to strengthen, there has been speculation that Wednesday’s Fed statement will be particularly dovish as a strong dollar is negatively impacting on exports. Today’s focus will be on Draghi’s speech at 18:45, in which he is due to talk on “the future of the finance industry – between growth and regulation”, opportunities for hawkish sentiment will be present as always.



GBP/EUR: Currently trading at 1.4029

• Strong Sterling gains last week were met with resistance on Thursday and euro strength was consolidated the day after. The weekend saw euro weakness in the Asian markets but limitations have still been seen on the pound as trading continues around the 1.40 mark.
• A quiet day lies ahead with focus on Draghi speaking tonight in Frankfurt on “the future of the finance industry”. Opportunities for hawkish sentiment will be ever-present and euro traders will be keenly analysing his every word.

GBP/USD: Currently trading at 1.4778

• Further lower-than-expected results out of the US failed to halt dollar gains as the rate briefly pushed below the 1.47 mark last Friday. Slight gains have since been made by the pound. US monthly PPI fell to -0.5% whilst a rise to 0.2% was predicted, preliminary UoM consumer sentiment also saw a considerable fall from 95.4 to 91.2. These two surveys are often linked in trends and a decrease in both is not altogether surprising. The decrease in sentiment was due to pessimism surrounding a particularly cold winter and therefore rising heating costs.
• A quiet day from both countries could see the pound recover more ground on the back of poor US data last Friday. The US utilisation figures this afternoon are unlikely to see much impact, especially with only a limited change predicted.

EUR/USD: Currently trading at 1.0528

• The euro continued to weaken last Friday, despite US figures coming in below expectations. This weakness was extended in the Asian markets however today has seen a slight correction back towards 1.055.
• Today’s trading will likely focus around Draghi’s speech this evening. Traders will be studying his every word for signs of hawkishness but one eye will also remain on reports and speculation ahead of Wednesday’s Fed meeting.

GBP/AUD: Currently trading at 1.9364

• The latter part of last week provided significant support for the Aussie as we saw the rate plummet over 5 cent since the sterling gains were halted on Wednesday morning. 
• With geopolitical tension continuing to rise, higher-yielding currencies will be subject to further volatility this week. Focus will be on tomorrow morning’s RBA monetary policy meeting minutes and traders will be looking for any insight as to whether the normally conservative RBA will soon cut rates again.

GBP/NZD: Currently trading at 2.0088

• Since the RBNZ held the cash rate last Wednesday, the Kiwi’s gains have been seemingly unstoppable, pushing the rate below the 2.01 level and continuing to gain. This morning has seen the rate level out slightly but this is too early to call an end to NZ dollar gains. 
• A quiet day today may allow Kiwi gains to push on but a recent strengthening in the pound and strong UK figures predicted throughout the week, could signify the start of a Sterling correction. 

GBP/CAD: Currently trading at 1.8900

• The Loonie’s gains were halted on Friday when data released showed the economy lost jobs in February and the jobless rate rose to 6.8 per cent, from 6.6 per cent in January. Currency strategists believe this to be the knock on effect of lower oil prices.
• Today brings news of Canada’s foreign securities purchases, which forecasters are predicting will show a drop in demand. This news could give Sterling a lift as we begin the week.

Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Currency markets normalize with little on calendar

Morning Report 13.03.2015

Nicholas Ebisch, FX Analyst

Dollar and Euro gain as sterling fell across the board yesterday. Negative data on Wednesday seems to have had a delayed effect on the pound’s value.

Mixed data from the US does little to deter the strengthening of the dollar. Meanwhile, the euro has retraced some of its losses from the week as markets continue to stabilize from volatility near the start of the week. With very little on the European calendar again today, we look toward Canadian employment change and the unemployment rate, as well as PPI m/m data from the US at 12:30. Additionally, there is preliminary University of Michigan consumer sentiment data out of the US at 2:00 PM.


GBP/EUR: Currently trading at 1.40127

• Yesterday saw the GBP/EUR pairing drop briefly below the 1.40 mark. This came on the back of Bank of England Governor Mark Carney warning that the UK economy needs to be cautious of falling inflation levels, which may have delayed any expectations of an interest rate rise in the UK.
• With a quiet day on the data front for the UK and the Eurozone, strong PPI and Consumer Sentiment data released this afternoon in the U.S. may cause the single currency to fall again against its major trading pairings.

GBP/USD: Currently trading at 1.4863

• Following the release of UK trade balance, along with an unexpected decline in US retail sales of 0.1% on a monthly basis, the pound was able to resist further decline against the dollar yesterday morning. However, Gov Carney’s comments yesterday afternoon stated that with low inflation outside of the UK along with a strong pound, the central bank could push back a rate hike. We therefore witnessed the pound lose another half cent marking a 20-month low against the dollar.
• The pound will more than likely take another hit today with the release of US PPI data forecast to improve by 0.2% on a monthly basis.

EUR/USD: Currently trading at 1.0607

• A war of words between Athens and Berlin has seen the euro remain under significant pressure in this pairing as investors look to shield their assets from the euro zone turmoil and plant them in the safe-haven dollar. Greek PM Alexis Tsipras sought to reassure euro zone partners that Greece would stick to its bailout agreement with its international creditors but it will take more than reassurance to lift the euro from its current lows.
• This afternoon sees the release of Producer Price Index data from the US (12:30) and Consumer Sentiment data (14:00). A positive reading from both here will go a long way towards convincing the market that an interest rate hike is on the horizon and would further strengthen demand for the greenback.

GBP/AUD: Currently trading at 1.9350

• Due to a continuously strengthening US dollar and Gov Carney’s comments stating that the central bank are in no hurry to raise UK interest rates, the downward trend continued yesterday as we witnessed the rate move more than 3 cent throughout the course of the day, reaching a day 10 low of 1.9289. The trend has been met by resistance this morning, currently trading at 1.935
• With no data scheduled for release from either side of the pairing today, investors will be keeping an eye on US PPI data this afternoon, forecast to improve on last month’s reading which could provide further support for the Aussie.

GBP/NZD: Currently trading at 2.0240

• Along with the other commodity currencies, the kiwi gained against the pound yesterday, strengthening with news of a growing positive US outlook. This coupled with Wednesday’s rate decision by the RBNZ allowed the kiwi to mount solid gains before closing.
• With no pairing specific data out today, rate direction may be driven by US producer price index which forecasters expect will show a positive change. This could give the kiwi more momentum as the week comes to a close.

GBP/CAD: Currently trading at 1.89113

• The Loonie gained more than a cent yesterday riding the wave created by a strengthening US economy. Although the NHPI data from Canada did not meet expectation, dropping 0.1% in January, it wasn’t enough of a surprise to quash the Loonie’s gains. A statement by Governor Carney yesterday signalled there was no rush to raise interest rates, moving support away from the Pound.
• The main focus for today is on Canadian employment data in the afternoon, which forecasters predict will show a negative change. This could cause a dent in what has been a strong period for the Loonie.

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

A quiet day sees spotlight on Eurozone meetings

Nicholas Ebisch, FX Analyst A quieter day may see the reversal of some Friday’s market movements. The US dollar strengthened on Friday about one percent against sterling and significantly against other currencies as the US jobs report and unemployment rate beat expectations. With the dollar index at a new record high of over 97, some natural market stabilization is likely as the only high-impact event on the calendar today is the Eurogroup meetings.

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GBP/EUR: Currently trading at 1.3872 Last week saw the pairing reach its strongest levels since 2007, as the combination of ECB quantitative easing details, positive UK manufacturing & PMI figures and strong US data managed to sink the Euro. A quieter week in terms of announcements is scheduled for the UK this week, so we expect the pairing to be influenced from events in Europe. Today’s Eurogroup meetings, in what is otherwise a quiet day, may bring some volatility to the pairing, as Greece’s reform plans are likely to be further discussed.  GBP/USD: Currently trading at 1.5109 After US data on Friday showed that 295,000 jobs had been added in the February month, representing the best stretch of job creation in nearly 15 years, along with a reduction in the unemployment rate to 5.5%, we saw rate fall by just over a cent briefly hitting a low of 1.50. We expect this trend to continue today with the release of the labor market conditions index this afternoon. However, the Eurogroup meeting today could generate significant volatility which could have a knock on effect on the pairing.  EUR/USD: Currently trading at 1.0887 Non-Farm Payroll figures from the US managed to impress on Friday afternoon, coupled with the announcement of a drop in the US unemployment change. This allowed the dollar to strengthen further against the Euro, enabling the pairing to drop below the 1.09 mark. With no major data releases from the US today, all focus today will be on the Eurogroup meetings in which the next steps regarding Greece’s economic reform plans following their loan extension are likely to be discussed. We may therefore see some volatility affect the pairing if any major steps are announced  GBP/AUD: Currently trading at 1.9530 Last week proved to be a strong week for the Aussie as the pairing fell just under 3 cent to close on Friday around the 1.95 mark. Last night saw AUD job advertisements rise by 0.9% after a previous increase of 1.2% representing a ninth consecutive increase.  For the most part, today should be a quieter day for the pairing until the release of AUD business confidence figures later tonight (00:30) which could shake the pairing if the reading fall either side of the forecasted level.  GBP/NZD: Currently trading at 2.0477 The Kiwi was unable to hold on to gains made during Friday’s session, as momentum shifted back with the Pound. Today’s calendar brings little activity, with the focus being on Manufacturing Sales data from New Zealand.  We expect little change, with the Pounds recent strength being the undertone before Wednesdays RBNZ rate statement.  GBP/CAD: Currently trading at 1.9021 We closed out the week with Canada’s Building permits and trade balance falling short of expectation.  This reversed the early morning gains made by the Loonie. A relatively quiet day on the calendar, with the only real driver being Housing Starts data from Canada which is being predicted to decline. With this in mind, stress is on the Loonie carrying a downside risk. This blog is prepared by Caxton FX Ltd for information purposes only and may contain ntain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade. Copyright © 2014 Caxton FX, All rights reserved

Super Mario's QE Ready to Fix the Eurozone's Leaks

Raphael Sonabend, FX Analyst

Draghi’s optimism saw volatility throughout euro markets as Eurozone growth and CPI forecasts were revised up across the board and he announced that QE is ready to go with no changes being made to their initial plan. Whilst he warned that low, negative inflation figures will be seen this year, the ECB predicted that a rise would begin in late-2015 and the 2% goal is within reach. Euro strength was seen during Draghi’s speech however these failed to hold and counterparts quickly recovered lost ground. Today’s focus will be on the much-awaited US employment figures at 13:30. Non-farm employment change is predicted to fall slightly but so is the unemployment rate; mixed figures could bring some volatility. Recent confidence in the dollar suggests that traders will focus on whichever figure registers as stronger and greenback strength could continue.



GBP/EUR: Currently trading at 1.3820

• Heavy volatility was seen yesterday during the ECB conference in which Draghi readied the Eurozone for the start of quantitative easing and announced the inflation target is within reach. Eurozone forecasts were revised upwards with growth increased from 1% to 1.5% and set to hit 2.1% in 2017 whilst inflation is set to fall before late-2015 until it rises to 1.8% in 2017. The day closed with Sterling having recovered all lost ground.
• No data out of either country today will allow traders to digest yesterday’s news. Slight euro gains have been made in this morning’s session but Sterling resistance is likely to continue.

GBP/USD: Currently trading at 1.5216

• Dollar gains continued yesterday in anticipation of today’s non-farms payroll data. US unemployment saw a rise to 320K from 313K but employment data was overshadowed by the speculation surrounding today’s release.
• US data in focus today with non-farm employment change and unemployment rate figures both due. Non-farm employment change is forecast to fall from 257K to 240K whilst the unemployment rate is predicted to fall to 5.6%. After rumours that the figures will be stronger than forecast, poor data could see a Sterling recovery in today’s session.

EUR/USD: Currently trading at 1.1002

• Euro volatility was seen again in this pair as a spike to 1.1114 was quickly reversed back down below 1.099. Whilst Draghi spoke with confidence and optimism, forward-looking traders clearly chose to favour ‘safer’ investments, this trend is likely to continue until Eurozone data is consistently strong.
• EUR/USD traders will turn their attention to US employment change figures this afternoon. Recent bullish sentiment in favour of the greenback could be reversed if figures come out below expectations.

GBP/AUD: Currently trading at 1.9490

• Sterling gains pushed up throughout the day, peaking at 1.963 before the Aussie resisted further losses. As the Aussie is so heavily influenced by US data, AUD strength may have been supported by the optimism that is surrounding US non-farms data.
• With no data due from either side of this pairing, this pair will be US-data dependent. The unemployment figures this afternoon are forecast to be mixed, with falls in both unemployment rate and employment change.

GBP/NZD: Currently trading at 2.0388

• A quiet day from both countries yesterday saw the Sterling gain on the Kiwi throughout the day. As this pair broke the 2.035 support level two days ago and fell to 2.005, Sterling reversed these recent Kiwi gains and pushed the rate back towards 2.039.
• Pound strength could continue as no data is due until Wednesday’s RBNZ rate statement. The possibility of further Kiwi gains remains if US employment data this afternoon is strong.

GBP/CAD: Currently trading at 1.8985

• After the Bank of England announced rates would be remaining at 0.5%, the pound gained against the Loonie until the 1.906 mark was broken. Canada’s Ivey PMI figures exceeded expectations and hit 49.7, close to the neutral 50.0 mark but a contraction nonetheless and the Loonie continued to weaken.
• CAD strength has been seen this morning despite poor figures forecast for this afternoon’s Canadian data. Building permits is forecast to fall from 7.7% to -4.2% whilst the trade balance is predicted to fall to -0.9B from -0.6B.

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This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

Services PMI Disappoints Traders

Raphael Sonabend, FX Analyst

The final of the three UK sectors released their data yesterday in the form of services PMI. A rise was predicted from 57.2 to 57.6 but instead a fall to 56.7 was seen. The three sectors combined saw a slight acceleration in economic growth, driven by the construction and manufacturing expansion increases. New jobs also rose to the second-fastest rate since records began. USD strength continued yesterday despite ADP non-farm employment change falling below predictions and the Loonie gained significantly as the Bank of Canada held the overnight rate. Today will bring the UK official bank rate at 12:00, Eurozone ECB press conference and US unemployment claims at 13:30 and the Canadian Ivey PMI at 15:00. The main focus of the day will be on the ECB press conference as the bank is due to give details on the Eurozone’s upcoming quantitative easing scheme. Potential for strong euro movements if particularly hawkish.



GBP/EUR: Currently trading at 1.3806

• A climb of just under a cent was seen yesterday morning in anticipation of a strong figure from UK services PMI, unfortunately this was not registered and the figure actually decreased to 56.7. Whilst a decline was seen, employment rose at the second-fastest rate since the survey began and all three PMI surveys combined signalled an acceleration in economic growth.
• This morning’s BoE bank rate and asset purchase facility announcements are likely to be passed over quickly as our main focus for the day will be on the ECB press conference this afternoon. As there was no conference in February this will be the first since the announcement of quantitative easing and the ECB will provide the details for their scheme. If traders are satisfied with the levels of optimism and confidence the ECB portray, then there is the potential for strong euro movements.

GBP/USD: Currently trading at 1.5249

• Whilst the ADP non-farm employment change figures had been forecast to decline, they fell more than predicted by 7K; 212K is still a solid result and helped further greenback gains. The real focus for employment data will be on tomorrow’s non-farm payrolls. Later in the afternoon, US ISM non-manufacturing PMI saw a slight increase to 56.9 from 56.7 and above the forecast 56.5.
• Despite a poor result from UK Halifax HPI this morning, the pound has been recovering lost ground against the dollar, possibly in anticipation of midday’s bank rate announcement. The announcement itself will be the standard no change and no comment. US data focus will be on the unemployment claims data this afternoon. There is the possibility for dollar weakness if the ECB press conference this afternoon is particularly hawkish.

EUR/USD: Currently trading at 1.1043

• Yesterday saw a strong day for the greenback against the euro as the pair broke below the 1.11 mark and reached its lowest level since 2003. Speculation towards strong non-farms figures allowed the dollar to continue its advance over the euro.
• Today’s most important event comes in the form of the ECB Press Conference where details of the QE programme are due to be announced. We therefore expect a day of volatile trading on the back of this meeting.

GBP/AUD: Currently trading at 1.9498

• Following UK PMI Services data yesterday morning registering an unexpected decline, we saw the rate continue to move in favour of the Aussie. In the overnight session, this position was solidified as Australian retail sales registered an increase in line with forecasts and the trade deficit widened to -0.98B from -0.50B.
• With no influential data scheduled for release from either side of the pairing today, investors will be keeping an eye on the US unemployment claims announcement this afternoon. With a decline predicted, support for the Aussie could be seen.

GBP/NZD: Currently trading at 2.0258

• The Kiwi continued to post gains in yesterday’s session, aided by poor services PMI data out of the UK. A lack of data out of New Zealand proved beneficial for the NZD as it gained three cent throughout the day. Sterling has since recovered two cent this morning but it is too early to say if this is the start of a reversal or just a dead cat bounce.
• Little data out of either country could prove beneficial for the pound as it continues to gain on the Kiwi. The official bank rate from the UK is unlikely to bring much movement and our focus will instead be on US data this afternoon. A strong figure from US unemployment could provide Kiwi support.

GBP/CAD: Currently trading at 1.8932

• The Loonie gained three cent on the pound yesterday as the Bank of Canada held their overnight rate at 0.75%. Whilst this decision was widely expected, clearly the more dovish traders chose to hold off on trades until the final result was announced. 
• The Canadian Ivey PMI will take the spotlight for today and with a strong rise from 45.4 to 49.4 predicted, Loonie strength is likely to continue. With a result forecast so close to the neutral mark, even a slight increase above predictions could take the figure above 50.0 and signify an expansion.

Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.

UK Services PMI Predicted to Climb

Raphael Sonabend, FX Analyst

A strong gain in UK construction PMI failed to support Sterling gains as the dollar continued to strengthen against counterparts and traders invested in this safe haven currency. The rise in construction was the sharpest in four months and analysts said the result was in line with recent positive sentiment however risks lie ahead as orders could subdue on the back of uncertainty prior to the general election. Data around the world was similarly strong as Canadian GDP rose by 0.3% compared to the month before and the NZ GDT price index saw the sixth consecutive rise. The final of the three UK sectors will release their PMI data today and services is often considered to be the most significant. A forecast rise from 57.2 to 57.6 is likely to lend a hand to Sterling gains. The US ADP employment figures at 13:15 should be taken with a pinch of salt as they often miss predictions, following this the US non-manufacturing PMI figures and Canadian rate statement will be released at 15:00. Whilst analysts are generally in agreement that the Bank of Canada will hold rates at 0.75%, more dovish traders see a cut as a real possibility and we therefore anticipate Loonie volatility before this release.



GBP/EUR: Currently trading at 1.3795

• Another solid result from UK data saw construction PMI rise to 60.1 from 59.1 and this rate climbed half a cent. The euro quickly recovered lost ground but a Sterling bounce saw another push towards 1.376. Construction activity saw the sharpest climb in four months and was led by the fastest increase in new orders since October 2014.
• Services PMI is often seen as the most important of the three PMI releases and with an improvement forecast, the pound could continue to gain on the euro. Eurozone retail sales, which will be released soon after the PMI data, is likely to be overshadowed but if a loss is registered as predicted, could lend a hand to Sterling gains.

GBP/USD: Currently trading at 1.5355

• Slight volatility was detected in this pair yesterday as positive UK data battled with a naturally strengthening dollar. As UK construction saw a solid 1.0 rise and fears subdued over the negative effects of low oil prices, the Sterling failed to post and hold gains against the greenback.
• The pound has been strengthening in this morning’s session, possibly in anticipation of services PMI later this morning. This afternoon’s US ADP non-farm employment change figures are forecast to rise from 213K to 219K however this often falls far from predictions and volatility is likely to be seen following this release. Our focus for the afternoon will be on the US ISM non-manufacturing PMI figures, with a fall predicted from 56.7 to 56.5, this could pave the way for Sterling gains, especially if services come out strong.

EUR/USD: Currently trading at 1.1130

• This pair traded between a one cent range yesterday as the euro and dollar fought for the upper hand. Strong Spanish unemployment change figures yesterday morning failed to support euro gains but at midday a natural correction saw a reversal of euro losses. Later in the afternoon the greenback once again had the upper hand and has since been gaining on the euro.
• This morning has seen the euro lose ground, possibly on the back of Spanish services PMI falling to 56.2, despite a rise to 56.9 predicted. Focus for today will be on the ADP non-farm employment change data out of the US this afternoon. Uncertainty surrounds this release as it frequently misses the mark and volatility could be seen.

GBP/AUD: Currently trading at 1.9626

• Following the significant rate drop early yesterday morning, the pairing remained fairly stable, trading between 1.96 and 1.97 throughout the course of the day. Other than the brief price action this morning caused by the announcement of Aussie GDP figures, the lack of volatility has continued.
• Today could provide an opportunity for the pound to recover some of the recent losses with the release of UK PMI services data later this morning, forecast to improve on last month’s reading. Early tomorrow morning Aussie retail sales and trade balance data will be released. Volatility could be seen following these releases as retail sales is expected to climb 0.4% and the deficit is forecast to widen.

GBP/NZD: Currently trading at 2.0312

• The Kiwi posted gains of over a cent and a half yesterday as the Global Dairy trade auction rose for the sixth consecutive time, this month with a 1.1% climb. Another strong climb in cheddar saw a 10.8% increase whilst whole milk powder fell by 1.0%.
• The pound has started to resist gains this morning in anticipation of a strong figure from services PMI later this morning. With a solid rise predicted, Sterling could continue to recover lost ground throughout today’s session.

GBP/CAD: Currently trading at 1.9217

• The Loonie managed to gain over a cent and a half yesterday as Canadian GDP registered a monthly rise of 0.3%, above the 0.2% forecast and well above the previous -0.2%. This strong result was driven by the oil and gas extraction and the finance and insurance sectors. This release should reassure more dovish traders that the Bank of Canada will hold the overnight rate later today.
• The pound has been steadily recovering ground in today’s session and with services PMI forecast to be strong, this recovery could be accelerated later this morning. The Bank of Canada’s rate statement and overnight rate later today will hold our attention for this afternoon, forecast to remain at 0.75%, this may help the Loonie limit Sterling gains.

Subscribe to our morning, weekly or monthly reports here and make sure you never miss an update: https://www.caxtonfx.com/currency-banking/the-caxton-account#Free-currency-reports

This blog is prepared by Caxton FX Ltd for information purposes only and may contain personal views that are not the opinion of the company. This is not an offer to purchase or sell any security or an investment advertisement. Caxton FX Ltd is authorised and regulated by the Financial Conduct Authority, although foreign exchange transactions with Caxton FX are regulated by HM Revenue and Customs. This email does not constitute advice for any foreign exchange transaction, nor is it intended as a solicitation for funds or recommendation to trade.