US Personal Spending up Solidly Q2/16 to Date

US personal consumer expenditures (PCE) increased by 0.4% in May 2016, thereby matching market expectations.

• Controlling for the effect of prices, the volume of spending rose by 0.3% to build on an upwardly revised 0.8% (was 0.6%) April gain.

Nominal spending on non-durable goods rose by 0.6% (mainly reflecting a 0.5% volumes increase), and durable purchases increased by 0.3%. Spending on services rose by 0.4%, although most of the increase reflected higher prices, with 'real' services spending up by 0.1% in the month.
The headline PCE deflator remained under pressure.
May's spending increase outpaced a 0.2% monthly personal income gain. The household saving rate slipped to 5.3% from 5.4% in April, but recent declines have to date only reversed a surprising spike higher during the first quarter to a recent peak of 6.0% in March. The May rate is back at the same level as in December 2015.

EURJPY - Sees Recovery On Correction

EURJPY - The pair remains biased to the upside on correction though retaining its broader medium term downtrend. Support comes in at the 113.00 level where a break will aim at the 112.50 level. A turn below here will target the 112.00 level with a breach turning focus to the 111.50 level. Conversely, resistance lies at the 114.00 level. Further out, resistance comes in at the 114.50 level where a break if seen will threaten further upside towards the 115.00. Further out, resistance resides at the 115.50 level. All in all, EURJPY eyes further bearishness medium term but faces nearer term recovery.

FTSE Not Out of the Woods Yet

The bigger the drop, the bigger the rebound. That is what has happened with the FTSE 100 index in the aftermath of the UK's vote to leave the EU. In fact, the rebound has been so profound that the index has nearly made good all the losses suffered since the Brexit vote. Clearly, some investors who were lucky enough to come through the Brexit-stimulated drop relatively unscathed may now use this opportunity to either cut or reduce their stocks holdings or at least hedge their exposure by shorting the FTSE. This could especially be the case since we are approaching month-end; it would not look good on money managers who hold stocks in sectors that dropped massively post the Brexit vote. Added to this, bearish speculators who missed the original plunge may be tempted to step in and ride the next potential drop. So the FTSE could easily turn back lower.

US$ Index, Long Held Target above 100.50 Remains

Nearer term $ index outlook :
In the Jun 21st email, affirmed the bigger picture view of a bottoming (and potentially major bottoming, see longer term below) from that May 3rd spike low at 91.90. The market has indeed rallied since, breaking above the May 30th high at 95.95 and currently chopping near recent highs at 96.70/85 (also the ceiling of the bullish channel from that May 3rd low). Still a bigger picture bull with the recent break above the ceiling of the bearish channel from Dec adding to that view. On a short term basis however, there is scope for another few days/week of correcting before resuming the larger upmove (see in red on daily chart below). Nearby support is seen at 95.65/80 and the broken ceiling of the bearish channel from Dec (currently at 94.90/05). Resistance remains at the recent highs/ceiling of the bull channel from the May 3rd low (currently at 96.70/85) and 97.25/40 (62% retracement from the Dec high at 100.50). Bottom line : still a big picture bull but risk for a another few days/week of consolidating before resuming the larger upmove.

USD/JPY – Yen Edges Lower, Fed Rate Statement Looms

The Japanese yen has edged lower, as the yen continues to show limited movement. USD/JPY is slightly below the 106 line. On the release front, Japanese Revised Industrial Production slipped to 0.5%, within expectations. In the US, today’s highlights are Core Retail Sales and Retail Sales. The estimate for both reports stands at 0.4%.
USD/JPY continues to show little movement, but the yen has recorded strong gains against the euro and the British pound. EUR/JPY and GBP/JPY are at 3-year lows, in response to continuing uncertainty over the Brexit referendum, as the “Leave” camp has gained strength in recent polls.

Aussie Edges Lower as Australian Business Confidence Softens

The Australian dollar has posted small losses on Tuesday, continuing the lack of activity which marked the Monday session. The pair is trading at 0.7360 in the North American session. On the release front, Australian NAB Business Confidence dipped to 3 points. Later in the day, Australia releases Westpac Consumer Sentiment. In the US, Core Retail Sales matched the forecast with a gain of 0.4%, while Retail Sales edged above the forecast, climbing 0.5%. On Wednesday, the Federal Reserve will release its rate statement, with the markets expecting no change to interest rate levels.

Pound Sterling US Dollar Exchange Rate Forecast GBP USD to Drop on Strong US Jobs Data

Euro Rallied Yesterday following Shock ECB Decision

The euro (currency : EUR) stole the limelight in the global currency markets yesterday afternoon, as the latest European Central Bank policy announcement saw President Mario Draghi announce a distinctly underwhelming set of monetary policy alterations. 

Hawkish Yellen Improves Fed December Rate Hike Predictions

However, thing are different, very different, on the other side of the Atlantic. Draghi’s US counterpart, Federal Reserve Chair Janet Yellen, made some eyebrow-raising comments to Congress shortly after the Italian moneyman had left the stage. 

Sterling reverses losses against the US dollar

A relatively quiet day for sterling saw the currency make gains against a weakened US dollar, and trade largely sideways versus the euro. German factory orders were shown to have fallen throughout September but, with UK housing inflation also contracting throughout the month, sterling was unable to capitalise on this. US trade balance data provided the main point of interest during the afternoon, and as this figure reported a larger deficit than forecast, sterling was able to capitalise and reverse the small losses suffered on Monday.

Manufacturing production data will be released from the UK this morning, and should provide further insight into the health of this sector. With manufacturing growth seemingly on target throughout September, investors will be hoping for a positive reading following the previous month’s contraction.

If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.

Source:smartcurrencyexchange.com

Euro continues along the same trajectory

The euro managed to hold its own on Wednesday, with most of the news in the arena coming from elsewhere. Against its two major currency pairs, the single currency remained around the same level as Tuesday. Against sterling it strengthened due to poor manufacturing data from the UK but these gains were eradicated in the afternoon; compared to the US dollar it weakened slightly in the morning, amid fresh hopes for easing measures by the Bank of China were looking more likely.

With the week remaining muted for the euro, this morning we had very weak industrial production from France – showing a 0.8% drop, when 0.3% growth had been anticipated.

New Zealand suffers as central bank cuts interest rates.

It was an occupied day for New Zealand yesterday, reinforcing in expectation of the official money rate and Rate articulation; at the same time, fell after the discharge. The money rate was sliced from 3.00% to 2.75% as the New Zealand national bank turns around the driven ascent in rates throughout the most recent year. The national bank highlighted that further rate cuts will be information ward and now a few reporters anticipate that rates will be cut further one month from now again until it come back to the 2.5% figure last seen in October 2013. 

Somewhere else, the Canadian dollar revitalized as national bank voted to keep premium rates on hold at 0.5%, whilst building grants beat desires, in any case, still edged around 0.6% in July.

Amlin purchase bid boosts sterling

With very little economic news of note discharged on Tues, sterling announce gains against each the monetary unit and North American nation dollar as news poor of a £3.5 billion bid by a Japanese company, Mitsui Sumitomo Insurance, to buy Great Britain nondepository financial institution Amlin.

With investors recently pushing back dates on once the Bank of European country (BoE) area unit doubtless to boost interest rates within the Great Britain, sterling has found itself fraught, falling to its lowest levels since Gregorian calendar month towards the tip of last week. However, with a major purchase of sterling doubtless to require place within the wake of this deal, sterling found support across the board. Confidence appearance set to come back to British people economy generally

Revised Eurozone growth figures do little to help boost the euro

Yesterday was another muted day for the euro as the only significant data releases consisted of revised growth figures for the Eurozone, which came out at 0.4%, slightly better than the forecasted 0.3%, and the trade balance data for Germany which came out close to expectations and again highlighted the power of the German economy to generate exports. Against sterling, the euro briefly weakened to its worst level in three-weeks but did regain some ground in the afternoon. The euro was largely unchanged for the second day in a row against the US dollar, with the US markets opening again yesterday after Labour Day.

It would appear that the quiet week will continue for the single currency as there is no news out on Wednesday. This means that the euro is more susceptible than usual to events elsewhere.

If you are looking to buy or sell euros, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.

Busier today following Labour Day in the US

Yesterday was a quiet day for data releases in the US, with only JOLTs job openings data released, which showed a figure that was slightly better than expected. This shows that there are continued job opportunities, which could be why the US Federal Reserve are not too worried about last week’s slump in non-farm employment change. We saw some movement in the US dollar, as sterling strengthened as a result of takeover talks at insurance giant Amlin.

There are more data releases from the US on the table today compared to the last couple of days. The weekly unemployment claims is expected to show a slight drop, while import prices are expected to decrease further due to the strengthening US dollar.

If you are looking to buy or sell US dollars, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.