Forex Analysis by LiteForex

[MikhailLF]

Morning Market Review
2020-02-17

EUR/USD

EUR shows the flat dynamics of trading against USD during today's Asian session, located close to the record lows of April 2017, updated at the end of last week. Last Friday, investors were focused on ambiguous macroeconomic statistics from the euro area and the US, which, given the lowered demand for risk, did not play in favor of EUR. The euro area's GDP in Q4 2019 increased by 0.1% QoQ, slowing down from the previous value of 0.3% QoQ. In annual terms, GDP has slowed down from 1.2% YoY to 0.9% YoY, with the forecast of 1.0% YoY. At the same time, Employment Change in Q4 2019 accelerated its growth from 0.1% QoQ to 0.3% QoQ, and the trade balance in December increased its surplus to the level of EUR 22.2B. During the day, investors are waiting for the outcome of the Eurogroup meeting, and also expect to receive new comments from the ECB representative Philip Lane.

GBP/USD

GBP is trading slightly up against USD during today's Asian session, consolidating near 1.3050. Investors continue to take a lead from the appointment of a new UK finance minister, who is primarily expected to introduce new fiscal stimulus. Changes in tax policy, in turn, reduce the risk that the Bank of England will be forced to intervene in the situation, which makes GBP attractive for purchase. UK macroeconomic statistics released today slightly supports GBP. Rightmove House Price Index rose by 2.9% YoY in February accelerating from 2.7% YoY. Traders will be focused on the labor market statistics from the UK on Tuesday.

NZD/USD

NZD is showing a moderate decline during today's Asian session, continuing the development of the "bearish" impulse formed last Thursday. The instrument loses about 0.08%, testing the level of 0.6430 for a breakdown. Published on Monday, macroeconomic statistics from New Zealand was largely ignored by investors. Visitor Arrivals in New Zealand in December fell by 0.2% YoY after a decline of 3.5% YoY a month earlier. Analysts had expected a significant increase of 4% YoY. ANZ Monthly Inflation Gauge in January reflected a 0.6% MoM and 3.2% YoY increase in prices, which turned out to be slightly better than the previous values of 0.4% MoM and 3.2% YoY.

USD/JPY

USD shows ambiguous dynamics of trading against JPY during today's Asian session, consolidating near the level of opening at 109.81. Investors focus on weak macroeconomic statistics from Japan, which puts significant pressure on JPY. Japan's GDP for Q4 2019 collapsed by 1.6% QoQ after growth of 0.4% QoQ in the previous period. Analysts had expected negative dynamics, but only at –0.9% QoQ. Industrial production in December fell by 3.1% YoY after a decrease of 3% YoY in November. Capacity Utilization rate in December fell by 0.4% after a decrease of 0.3% in November. The forecasts suggested an increase by 0.2%.

XAU/USD

Gold prices are stable during today's Asian session and are consolidating near local highs at 1584.81, updated at the end of last week. Support for the instrument is still provided by the risk of the further spread of the coronavirus epidemic, which reduces the prospects for global economic growth. Additional support for gold at the end of last week was provided by mixed US macroeconomic statistics. In particular, investors were disappointed with the pace of decline in Industrial Production in January.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair moves flat but at the opening, the price renewed three-year lows, which indicates that the pressure on the instrument maintains. At the beginning of the week, trading activity was low due to the lack of key macroeconomic publications and closed US markets due to President's Day. On Tuesday, investors expect publication of statistics from ZEW on business sentiment in Germany and the EU. Analysts' forecasts are rather ambiguous, however, given the poor statistics of Germany last week, there is no additional support for the euro expected.

GBP/USD

Today, during the Asian session, the GBP/USD pair is trading in different directions, consolidating near the key support level of 1.3000, which the instrument actively tested at the beginning of the week. GBP is supported by expectations of fiscal changes in the UK from the country's new finance minister, Rishi Sunak. The keynote of Sunak’s policy should be an increase in government spending, which will contribute to the growth of the British economy. Today, traders wait for the publication of the UK labor market data for December-January but analysts' forecasts are pessimistic. In particular, a slight slowdown in average wage growth is expected in December. At the same time, the number of Claimant Count Change for January may increase sharply from 14.9K to 22.6K.

AUD/USD

Today, during the Asian session, the AUD/USD pair is actively falling, renewing local lows from February 11. Now, the instrument has lost about 0.33%, testing the level of 0.6700 for a breakdown. Earlier this week, the price was trying to grow after the news that official Beijing promised to introduce new measures to support the economy. In particular, China is expected to cut corporate taxes, as well as increase government spending. Key macroeconomic statistics from Australia and the United States are not expected on Tuesday, so the focus will probably remain on the old drivers. The Australian Q4 2019 wage index, as well as Westpac leading economic indicators index for January will be released tomorrow. Traders are focused on Thursday, when the January labor market report will be published.

USD/JPY

Today, during the Asian session, the USD/JPY pair is falling, returning to the “bearish” dynamics after an uncertain growth at the beginning of the week. Now, the dollar has lost about 0.15%, testing the level of 109.70 for a breakdown. Yesterday's growth of the instrument was facilitated by poor statistics from Japan. Thus, the country's Q4 2019 GDP fell by 1.6% QoQ after an increase of 0.4% QoQ in the previous period. Analysts had expected a decline of 0.9% QoQ. The volume of industrial production in Japan in December fell by 3.1% YoY, accelerating the fall from the previous value of –3% YoY. In monthly terms, the pace of production slowed down from +1.3% MoM to +1.2% MoM.

XAU/USD

Today, during the Asian session, the price for gold is growing moderately, recovering from yesterday's decline in the instrument, which was due to the announcement of new measures to support the Chinese economy. However, investors are still cautious, and the demand for shelter assets remains relatively high. From official Beijing, markets expect another reduction in corporate taxes and increased government spending, which should spur the growth of a slowing economy. In addition, China is taking new measures to prevent the spread of coronavirus. In particular, last weekend, the Chinese government said that banks will be allowed to issue only banknotes that have been disinfected.

 

[MikhailLF]

EUR/USD

EUR shows a slight correctional growth against USD during today's Asian session, retreating from new three-year lows, updated the day before. The reason for Tuesday's strengthening of the "bearish" sentiment was the extremely weak macroeconomic statistics on Economic Sentiment in Germany from ZEW. ZEW Current Situation index in February fell from –9.5 to –15.7 points with a forecast of a decrease to –10.3 points. ZEW Economic Sentiment index for the same period fell from 26.7 to 8.7 points with a forecast of 21.5 points. ZEW Economic Sentiment index in the euro area also sharply decreased from 25.6 to 10.4 points, contrary to forecasts of growth to 30 points. During the day, investors expect publication of information on the Current Account balance and Construction Output in the euro area for December. Closer to the end of the afternoon session, the focus will shift to the publication of the FOMC Meeting Minutes on the interest rate.

GBP/USD

GBP is trading with ambiguous dynamics during today's Asian session, continuing to consolidate near 1.3000. Short-term support for the instrument is provided by the expectation of positive changes in the fiscal policy of the UK government after the appointment of the new Minister of Finance Rishi Sunak. Sunak confirmed his intention to introduce the new state budget on March 11, which strengthened optimism in the market. Macroeconomic statistics published on Tuesday turned out to be contradictory and, on the whole, contributed to the development of negative dynamics for the instrument. In December, Average Earnings Including Bonus slowed down from 3.2% 3MoY to 2.9% 3MoY, which turned out to be worse than market expectations of 3% 3MoY. At the same time, the Unemployment Rate remained at the previous level of 3.8%, and Claimant Count Change in January increased from 2.6K to 5.5K, which is significantly lower than market expectations of 22.6K.

AUD/USD

AUD is showing moderate growth against USD during today's Asian session, correcting after a sharp decline the day before. The instrument adds about 0.13%, testing the level of 0.6700 for a breakout. Strengthening the "bearish" mood was facilitated by recent statements by Apple representatives who expressed doubts about the ability to implement their original sales plan, set three weeks ago. Apple cites a reduction in production and a decrease in demand in China due to the continued spread of coronavirus. Today's Australian macroeconomic statistics provide insignificant support to the instrument. Westpac Leading Index in January showed an increase of 0.05% MoM after rising 0.01% MoM in the previous month.

USD/JPY

USD is rising against JPY during today's Asian session, approaching the local highs updated on December 12. USD adds about 0.15%, testing the level of 110.00 for a breakout. The development of the uptrend in the instrument today is facilitated by the publication of quite weak macroeconomic statistics from Japan. Machinery Orders in December fell by 12.5% MoM and 3.5% YoY after rising by 18% MoM and 5.3% YoY in the previous month. Analysts had expected a decrease of 9% MoM and 1.3% YoY. Japanese Exports went down by 2.6% YoY in January after decline by 6.3% YoY in the previous month. Imports for the same period decreased by 3.6% YoY after a decline of 4.9% YoY in December. The total Trade Deficit in January reached 1312.6B Japanese yen.

XAU/USD

Gold prices are consolidating during today's Asian session near the new local highs (1600.00) after the active growth of the instrument the day before. Demand for the asset increased markedly on Tuesday after a warning from Apple that the company was unlikely to implement its sales plan due to a reduction in production in China amid the continued spread of coronavirus. On Wednesday, investors are focused on macroeconomic statistics from the USA on Construction dynamics and Producer Price Indices for January. In addition, markets are awaiting the publication of the latest Minutes of the FOMC meeting.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is trading in a downward direction, returning to decline after a corrective growth the day before. The strengthening of the euro was mainly due to technical factors, as the single currency remains strongly oversold and is trading near three-year lows. The macroeconomic background, however, did not contribute to the growth of the instrument. Thus, EU Construction Output for December fell by 3.7% YoY after rising by 1.4% YoY in the previous month. Analysts had expected an increase of 1.4% YoY. In monthly terms, the production fell by 3.1% MoM after a slight increase of 0.74% for November. During the day, European investors expect the publication of information on the dynamics of producer prices for January in Germany. In addition, the ECB will publish the Account of Monetary Policy Meeting.

GBP/USD

Today, during the Asian session, the GBP/USD pair is trading near zero, consolidating near local highs since February 11, which were achieved due to a steady GBP decline the day before. The British currency almost completely ignored the strong national statistics on the dynamics of consumer inflation. Instead, investors focused on the prospects for EU-UK negotiations and discussed upcoming fiscal changes and increased government spending. The consumer price index for January sharply accelerated from +1.3% YoY to +1.8% YoY, which was better than market expectations of +1.5% YoY. In monthly terms, however, consumer inflation decreased by 0.3% MoM after December's zero dynamics. Analysts predicted a 0.4% YoY decrease in the index. On Thursday, traders are focused on the UK retail sales statistics for January, as well as the publication of the CBI Industrial Trends Orders for February.

NZD/USD

Today, during the Asian session, the NZD/USD pair is significantly reduced, renewing local lows since November 13. Now, NZD has lost about 0.38% and is preparing to test the level of 0.6350 for a breakdown. The currency is falling amid the publication of optimistic macroeconomic American statistics. Yesterday, traders were pleased by a confident increase in the producer price index and an improvement in the housing market. Building Permits for January increased by 9.2% MoM after a decrease of 3.7% MoM in the previous month. Analysts had expected a decrease of 0.1% MoM. In addition, investors are still wary of a slowdown in the global economy due to continued threats of the spread of coronavirus and a weakening Chinese economy. However, the market appreciated the efforts made by Beijing to contain the epidemic. On Thursday, it became known that the Central Bank of China decided to reduce the interest rate by 10 basis points to 4.05%.

USD/JPY

Today, during the Asian session, the USD/JPY pair shows flat dynamics, consolidating near new record highs, renewed the day before, when the yen showed its strongest decline in 6 months. JPY is under pressure by a poor national macroeconomic statistics, which may indicate the onset of a recession in the country. Data released on Monday reflected a sharp decline in Japan's Q4 2019 GDP by 6.3% YoY after an increase of 1.8% YoY in the previous month. In quarterly terms, GDP lost 1.6% QoQ after a slight increase of 0.4% QoQ earlier.

XAU/USD

Today, during the Asian session, the price of gold is slightly reduced, retreating from local highs, updated due to yesterday’s moderate growth of the instrument. Although the market positively assesses China’s efforts to contain the spread of coronavirus, concerns about negative economic consequences remain, which provides support for shelter assets. Also, uncertain prospects around a possible reduction in the interest rate of the US Federal Reserve positively affect the quotes. The minutes of the Fed meeting published yesterday reflected a certain split in its administration, however, the regulator continues to believe in a strong labor market, and therefore the risks of lowering the rate in the foreseeable future remain insignificant.

 

[MikhailLF]

EUR/USD

EUR shows a slight increase against USD during today's Asian session, consolidating near three-year lows, once again updated on Thursday. Market problems dominate over EUR, which has been showing the worst results since 2015. Negative macroeconomic statistics, the threat of a recession in the German economy, as well as the uncertain prospects for trade negotiations with the UK negatively affect the dynamics of the instrument. At the end of the week, investors expect the publication of statistics on business activity from Europe, but the forecasts again do not promise anything good for EUR. Manufacturing PMI in Germany may fall in February from 45.3 to 44.8 points; Markit Composite PMI may decline from 51.2 to 50.8 points. In addition, on Friday, traders expect the publication of January statistics on consumer inflation in the euro area.

GBP/USD

GBP demonstrates the development of a technical correction against USD during today's Asian session. The instrument adds about 0.08%, testing the level of 1.2890 for a breakout. The decline in the instrument is due to the growth of USD across the entire market, while optimism regarding the appointment of a new finance minister in the UK is gradually fading into the background. Moreover, GBP ignores quite good macroeconomic statistics coming out of the UK recently. On February 19, the market ignored strong data on consumer inflation. Yesterday's Retail Sales data only briefly hindered the decline in GBP. In January, Retail Sales grew by 0.9% MoM after a decline of 0.5% MoM in the previous month. Analysts had expected growth rate at 0.7% MoM. Today, investors are focused on statistics on business activity from Markit in the UK in February.

AUD/USD

AUD declines against USD during today's Asian session, updating record lows of March 2009. The decline in the instrument proceeds against the backdrop of the steady growth of USD, which looks more profitable against the backdrop of European problems and the uncertainty surrounding the pace of development of the world economy. Additional pressure on AUD is still exerted by the Australian labor market report for January published on Thursday. Employment Change in the country grew by 13.5K jobs after an increase of 28.7K over the past period. At the same time, the Unemployment Rate in January unexpectedly increased significantly from 5.1% to 5.3% with a forecast of 5.2%. Friday's data from Australia also cannot help the instrument recover. Commonwealth Bank’s Services PMI fell in February from 50.6 to 48.4 points, with growth forecast to 52.4 points. Composite PMI in February fell from 50.2 to 48.3 points.

USD/JPY

USD shows a correctional trend against JPY during today's Asian session, consolidating near the local highs of April 2019, which the instrument managed to update due to the steady growth of USD over the past two days. JPY remains under pressure amid talk of a possible recession in the Japanese economy. In addition, there is a marked increase in investor interest in risk in the market amid some stabilization of the situation with the spread of coronavirus. Japanese macroeconomic statistics released on Friday also do not provide any support for JPY. The National Consumer Price Index excluding Food and Energy rose by 0.8% YoY in January, slowing down from the previous value of 0.9% YoY. Jibun Bank's Manufacturing PMI fell from 48.8 to 47.6 points in February, with a positive forecast for growth to 49 points.

XAU/USD

Gold prices show steady growth during today's Asian session, updating record highs of February 2013. The quotes are supported by the continuing uncertainty surrounding the further spread of the coronavirus. Despite all the efforts of the Chinese authorities, as well as the relatively stable statistics of cases, investors are extremely sensitive to any new cases recorded outside of China. Additional support for gold is provided by a significant decrease in JPY, as some investors looking for a safe haven in Japanese currency are now more willing to invest in gold. Today investors are focused on the publication of American statistics on business activity from Markit for February. In addition, the markets expect the Fed representatives, such as Lael Brainard, Loretta Mester, and Richard Clarida to speak today.

 

[MikhailLF]

EUR/USD

EUR shows a slight increase against USD during today's Asian session, consolidating near three-year lows, once again updated on Thursday. Market problems dominate over EUR, which has been showing the worst results since 2015. Negative macroeconomic statistics, the threat of a recession in the German economy, as well as the uncertain prospects for trade negotiations with the UK negatively affect the dynamics of the instrument. At the end of the week, investors expect the publication of statistics on business activity from Europe, but the forecasts again do not promise anything good for EUR. Manufacturing PMI in Germany may fall in February from 45.3 to 44.8 points; Markit Composite PMI may decline from 51.2 to 50.8 points. In addition, on Friday, traders expect the publication of January statistics on consumer inflation in the euro area.

GBP/USD

GBP demonstrates the development of a technical correction against USD during today's Asian session. The instrument adds about 0.08%, testing the level of 1.2890 for a breakout. The decline in the instrument is due to the growth of USD across the entire market, while optimism regarding the appointment of a new finance minister in the UK is gradually fading into the background. Moreover, GBP ignores quite good macroeconomic statistics coming out of the UK recently. On February 19, the market ignored strong data on consumer inflation. Yesterday's Retail Sales data only briefly hindered the decline in GBP. In January, Retail Sales grew by 0.9% MoM after a decline of 0.5% MoM in the previous month. Analysts had expected growth rate at 0.7% MoM. Today, investors are focused on statistics on business activity from Markit in the UK in February.

AUD/USD

AUD declines against USD during today's Asian session, updating record lows of March 2009. The decline in the instrument proceeds against the backdrop of the steady growth of USD, which looks more profitable against the backdrop of European problems and the uncertainty surrounding the pace of development of the world economy. Additional pressure on AUD is still exerted by the Australian labor market report for January published on Thursday. Employment Change in the country grew by 13.5K jobs after an increase of 28.7K over the past period. At the same time, the Unemployment Rate in January unexpectedly increased significantly from 5.1% to 5.3% with a forecast of 5.2%. Friday's data from Australia also cannot help the instrument recover. Commonwealth Bank’s Services PMI fell in February from 50.6 to 48.4 points, with growth forecast to 52.4 points. Composite PMI in February fell from 50.2 to 48.3 points.

USD/JPY

USD shows a correctional trend against JPY during today's Asian session, consolidating near the local highs of April 2019, which the instrument managed to update due to the steady growth of USD over the past two days. JPY remains under pressure amid talk of a possible recession in the Japanese economy. In addition, there is a marked increase in investor interest in risk in the market amid some stabilization of the situation with the spread of coronavirus. Japanese macroeconomic statistics released on Friday also do not provide any support for JPY. The National Consumer Price Index excluding Food and Energy rose by 0.8% YoY in January, slowing down from the previous value of 0.9% YoY. Jibun Bank's Manufacturing PMI fell from 48.8 to 47.6 points in February, with a positive forecast for growth to 49 points.

XAU/USD

Gold prices show steady growth during today's Asian session, updating record highs of February 2013. The quotes are supported by the continuing uncertainty surrounding the further spread of the coronavirus. Despite all the efforts of the Chinese authorities, as well as the relatively stable statistics of cases, investors are extremely sensitive to any new cases recorded outside of China. Additional support for gold is provided by a significant decrease in JPY, as some investors looking for a safe haven in Japanese currency are now more willing to invest in gold. Today investors are focused on the publication of American statistics on business activity from Markit for February. In addition, the markets expect the Fed representatives, such as Lael Brainard, Loretta Mester, and Richard Clarida to speak today.

 

[MikhailLF]

EUR/USD

EUR shows ambiguous dynamics of trading against USD during today's Asian session, correcting after an active growth of the instrument last Friday. The reason for the appearance of active uptrend, in addition to a number of technical factors, was good data on the euro area's business activity for February. Markit Manufacturing PMI rose from 47.9 to 49.1 points with a forecast of a decline to 47.5 points. Markit Services PMI for the same period strengthened from 52.5 to 52.8 points, which also turned out to be better than market expectations. Composite Manufacturing PMI in February rose from 51.3 to 51.6 points with a forecast of 51 points. German data turned out to be positive as well. Markit Manufacturing PMI rose sharply from 45.3 to 47.8 points, while the market expected a decline to 44.8 points. On Monday, traders expect the publication of IFO statistics on business optimism in Germany for February. Otherwise, given the rather meager economic calendar, a rather quiet start to the new week is expected.

GBP/USD

GBP is trading near zero during today's Asian session, consolidating near local highs, updated at the end of last week, when it managed to show corrective growth. Macroeconomic statistics published on Friday from the UK and the US turned out to be mixed, but only strengthened the technical factors for the oversold pound. Markit Services PMI in the UK declined from 53.9 to 53.3 points in February, which was 0.1 points worse than expectations. At the same time, Manufacturing PMI over the same period unexpectedly increased from 50 to 51.9 points with a negative forecast of a decrease to 49.7 points. As for American statistics, it turned out to be noticeably worse. Markit Manufacturing PMI fell in February from 51.9 to 50.8 points, while the same indicator in the services sector fell from 53.4 to 49.4 points, breaking the 50-point barrier.

NZD/USD

NZD shows a slight increase against USD during today's Asian session, retreating from new local lows updated at the end of last week. The instrument opened with a negative gap, and so far only technical factors serve as a reason for its short-term growth, while macroeconomic statistics from New Zealand leave much to be desired. In Q4 2019, Retail Sales in New Zealand slowed from 1.7% QoQ to 0.7% QoQ. Retail Sales ex Autos for the same period increased by 0.5% QoQ after an increase of 1.9% QoQ in the previous period. Credit Card Spending in January increased slightly from 3.5% YoY to 3.7% YoY, but did not reach the expected values of 5.1% YoY. During the day, investors expect publication of Chinese statistics on the dynamics of industrial production and retail sales for January.

USD/JPY

USD is again trading higher against JPY during today's Asian session. USD wins back part of the positions lost at the opening and is preparing to consolidate above 111.60–111.70. Investors assess the prospects for the Bank of Japan to make changes in monetary policy amid the spread of coronavirus outside of China and the release of disappointing statistics on the state of the Japanese economy. Last Sunday, the head of the Japanese regulator, Haruhiko Kuroda, again noted the readiness of the Bank of Japan for the most decisive action in order to offset the consequences of the epidemic for the Japanese economy.

XAU/USD

Gold prices show steady growth during today's Asian session, updating record highs of February 2013. The reason for maintaining the positive dynamics on the instrument is the previous fears regarding the further spread of the coronavirus epidemic. Investors are worried about a new outbreak outside of China, particularly in South Korea. Traders also evaluate the prospects for lowering rates and other monetary changes that leading regulators can make. First of all, the focus is on the People's Bank of China, the Bank of Japan and the ECB.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is growing moderately, developing a correctional impulse formed at the end of the last trading week. The “bullish” dynamics of the instrument is facilitated by technical factors since the European currency has been oversold for a very long time. The instrument is supported by positive macroeconomic statistics from Germany, which slightly diluted the statistical negativity from the EU. Thus, the IFO business optimism index for February rose from 96.0 to 96.1 points against the forecast of a decrease to 95.3 points. The IFO economic expectations index for the same period rose from 92.9 to 93.4 points, which also was better than analysts' forecasts of 92.9 points. The indicator for assessing the current situation for February fell from 99.2 to 98.9, which, however, again turned out to be better than expectations at 98.6 points. During the day, investors expect the publication of updated statistics on German 209 Q4 GDP.

GBP/USD

Today, during the Asian session, the GBP/USD pair is slightly strengthening, being corrected after an uncertain yesterday’s decline. Investors expect new drivers to appear on the market since there was a lack of interesting publications at the beginning of the week, and the risks of a slowdown in the global economy amid the development of the coronavirus epidemic are gradually decreasing. On Tuesday, a block of macroeconomic statistics from the US on the dynamics of housing prices for December will be released. In addition, traders expect the publication of the level of consumer confidence and the speech of the representative of FOMC Richard Clarida. The UK will release CBI's retail report. For February, the sales volume is expected to grow from 0% MoM to +4% MoM.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing, continuing to develop the “bullish” momentum formed at the end of the last trading week. Monday's trading also ended with moderate growth of the instrument, however, due to the negative gap at the opening, the Australian dollar was not able to renew its local highs. Now, the instrument has added about 0.20%, testing the level of 0.6615 for a breakout. In addition to a number of technical factors, the price is supported by some improvement in the situation with coronavirus. Despite the increasing incidence of infection outside of China, official statistics from the PRC indicate that the peak of the epidemic has been overcome. In this regard, the Chinese authorities issued an appeal calling for the restoration of economic activity in areas with low risk of infection.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing slightly, consolidating near 111.00, after an active decline for two consecutive trading sessions. Now, the dollar has added about 0.07% and mainly due to the technical factors. Monday’s US macroeconomic statistics were ambiguous. Thus, the index of national activity of the Federal Reserve Bank of Chicago in January rose slightly from –0.51 to –0.25 points against the forecast of a decrease to –0.92 points. At the same time, the index of business activity in the industrial sector of the Dallas Federal Reserve in February grew only from –0.2 to 1.2 points, which was significantly worse than market expectations of 11.8 points.

XAU/USD

Today, during the Asian session, gold prices are slightly falling, being corrected after yesterday’s “bullish” surge, thanks to which the instrument renewed highs of January 2013. The appearance of correctional dynamics is due to the Chinese authorities’ calls to gradually restore economic activity in the country against the background of a noticeable stabilization of the situation with new coronavirus diseases. At the same time, the market is concerned about new outbreaks of infections outside of China, particularly in South Korea, Italy, and Iran.

 

[MikhailLF]

EUR/USD

EUR shows negative dynamics against USD during today's Asian session, retreating from local highs since February 12, updated the day before. EUR is noticeably pressured by the weakening of the European economy amid continuing risks of the spread of the coronavirus epidemic. An outbreak in Italy threatens to exacerbate negative economic results in the country, reduce tourist popularity and push the economy towards a technical recession. A possible recession threatens the largest economy in Europe as well. At the same time, macroeconomic statistics from Germany published on Tuesday turned out to be neutral. According to updated data, German GDP for Q4 2019 increased by 0% QoQ and 0.4% YoY. Excluding seasonal adjustments, the German economy added 0.3% YoY.

GBP/USD

GBP is falling against USD during today's Asian session, again correcting after the growth the day before, which led to the renewal of local highs of February 19. The instrument loses about 0.10%, testing the level of 1.2980 for a breakdown. The growth of GBP on Tuesday was facilitated by the correctional sentiment against USD, while there are still not many fundamental reasons for the recovery of the pound. CBI Distributive Trades Survey published yesterday indicated an increase in sales volumes in February of only 1.0% MoM, while investors had expected an increase of 4% MoM. BRC Shop Price Index (it was released during today's Asian session) accelerated its decline from –0.3% YoY to –0.6% YoY.

AUD/USD

AUD shows a decline against USD during today's Asian session, returning to record lows, updated earlier this week. Pressure on the instrument is exerted by negative macroeconomic publications from Australia. Construction Work Done in Q4 2019 sharply decreased by 3% QoQ after a slight increase of 0.4% QoQ in the previous quarter. Analysts had expected negative dynamics, but expected a decrease of 1.0% QoQ. Negativity from Australia contrasts markedly with a number of optimistic US publications coming out on Tuesday. According to December results, the US Housing Price Index increased by 0.6% MoM after rising by 0.3% MoM in the previous month. S&P/Case-Shiller Home Price Indices accelerated over the same period from 2.5% YoY to 2.9% YoY, ahead of its forecasts (2.8% YoY).

USD/JPY

USD significantly strengthens against JPY during today's Asian session, correcting after the collapse of quotations for three consecutive trading sessions. The surge in demand for JPY is associated with an aggravation of the situation around the spread of coronavirus after official statistics indicated an increase in the incidence outside of China. The current positive dynamics of the instrument is due to technical factors, as well as to the publication of good data from the USA on the dynamics of Housing Prices, which are likely to support the general increase in inflation in the country. Japanese investors are focused on statistics from Japan, which will appear this Friday. The data on the labor market, retail sales and industrial production dynamics, as well as the pace of housing construction started in early 2020, are expected to be published.

XAU/USD

Gold prices show growth during today's Asian session, correcting after a sharp decline in quotations yesterday. The instrument is testing the level of 1645.00 for a breakout. Analysts attribute the appearance of negative trading dynamics on Tuesday to the fixation of long profits after updating seven-year highs. At the same time, investors are still frightened by statistics on the spread of the incidence of coronavirus outside of China, which supports gold quotes. Additional support for the instrument is provided by talks about the possible introduction by the leading regulators of changes in monetary policy in order to mitigate the negative consequences of a slowdown in the global economy. A number of analysts believe that the Fed may return to the idea of cutting rates already at the March meeting.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is steadily strengthening, renewing local highs since February 12. The growing risks of the further spread of coronavirus outside of China contribute to a noticeable increase in volatility, which supports EUR. At the same time, investors are worried about EU statistics, which indicates a slowdown in economic growth. Moreover, traders are increasingly talking about a possible recession in the German or Italian economies. On Thursday, the market is focused on a block of statistics on EU business sentiment for February. With the opening of the American session, analysts are waiting for the publication of data on the dynamics of US Durable Goods Orders, as well as updated data on Q4 2019 US GDP.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing slightly, being corrected after yesterday’s decline, which has thrown off GBP from local highs of February 19. GBP is under pressure of the expectations that the Bank of England may decide to lower the interest rate closer to the summer. Such a decision can be made to support the national economy due to the negative effects of coronavirus and uncertainty regarding trade negotiations between the UK and the EU. In turn, the instrument is supported by optimistic forecasts regarding the new budget, which is due to be submitted on March 11 by Finance Minister Rishi Sunak. The market expects a significant increase in budget spending, which should contribute to the restoration of the British economy.

NZD/USD

Today, during the Asian session, the NZD/USD pair shows flat dynamics, trading near local lows since October 17. Now the instrument has added insignificant 0.02% and is preparing to retest the level of 0.6300 for a breakout. NZD maintains multidirectional dynamics amid the publication of ambiguous macroeconomic statistics from New Zealand. Thus, ANZ Business Confidence for January fell from –13.2 to –19.4 points with a forecast of –7.9 points. NBNZ Own Activity for the same period decreased from +17.2 to +12% with an optimistic forecast of +24.7%. Q4 2019 private capital expenditures fell by 2.8% QoQ after a weakening of 0.4% QoQ in the previous period. Analysts had expected an increase of +0.4% QoQ. Investors were also disappointed with data on the dynamics of exports from New Zealand. At the end of January, the indicator slowed down from +$5.5 billion to +$4.73 billion, which was worse than market expectations and helped to reduce the trade surplus.

USD/JPY

Today, during the Asian session, the USD/JPY pair is falling, returning to a downtrend in the short term after an attempt at yesterday’s corrective growth. USD and JPY are fighting for the title of the safest currency amid a notable increase in risks due to the spread of coronavirus and a slowdown in the global economy. Yesterday, USD was supported by positive data from the United States. So, New Home Sales for January grew by 7.9% MoM after rising 2.3% MoM last month. Analysts had expected an increase in dynamics to +3.5% MoM. A large block of key statistics from Japan will be released on Friday. Investors are interested in data on the dynamics of retail sales, the labor market, and industrial production for January.

XAU/USD

Today, during the Asian session, gold prices show a positive trend, continuing the development of the “bullish” impulse formed yesterday. Demand for the instrument is again noticeably recovering amid growing risks of the spread of coronavirus. Numerous outbreaks of disease outside of China have scared investors who are looking for rescue in shelter assets. Also, amid the spread of the epidemic, the market actively talked about possible stimulation measures that the leading Central Banks of the world will take if necessary. In particular, the Fed and ECB are expected to reduce rates.

 

[MikhailLF]

EUR/USD

EUR shows a slight decrease against USD during today's Asian session, correcting after a sharp yesterday's increase in the instrument which led to the renewal of local highs of February 6. The reason for the strengthening of the "bullish" sentiment on Thursday was the weak macroeconomic statistics from the US, which only strengthened market concerns about a possible interest rate cut by the Fed. In turn, European data came close to their forecasts, although they did not radiate much optimism either. One way or another, published statistics confirmed that the US economy grew by 2.1% YoY in Q4 2019. At the same time, GDP Price Index for the same period slowed down from 1.5% to 1.3%, which turned out to be worse than market expectations of 1.4%. Personal Consumption Expenditures Prices also weakened from 1.6% QoQ to 1.3% QoQ with a neutral outlook. Today, investors are focused on German data on Unemployment Rate and Consumer Inflation for February. The US will publish statistics on Personal Income and Spending for January.

GBP/USD

GBP is trading near zero against USD during today's Asian session, trading near the local lows of February 20. Pressure on GBP intensified amid growing concerns about Britain’s ability to negotiate a trade deal with the EU. The day before, UK officials reiterated that they were not ready to make concessions to the detriment of the country's sovereignty for the sake of concluding a deal with the EU. In addition, investors are somewhat disappointed with the Treasury’s reaction to the plans of the new UK finance minister, Rishi Sunak, to sharply increase government spending and reduce taxes. Apparently, Sunak will not be able to implement the initial plan, which may push the Bank of England to new measures to stimulate the national economy.

AUD/USD

AUD declines against USD during today's Asian session, updating record lows of March 2009. The instrument loses about 0.63%, testing the level of 0.6520 for a breakdown. Investors are again selling AUD amid growing risks of the further spread of coronavirus outside of China, which is increasingly threatening global financial stability and pushing regulators to new stimulation measures. Uncertain macroeconomic statistics from the USA published the day before contributed to the appearance of a moderate growth of the pair, of which there is currently no trace. Friday's data from Australia so far remain without attention. Meanwhile, Private Sector Credit in January accelerated from 0.2% MoM to 0.3% MoM, which turned out to be better than market expectations. In annual terms, the indicator grew by 2.5% YoY after an increase of 2.4% YoY in the previous month.

USD/JPY

USD is actively falling against JPY during today's Asian session. The instrument loses about 0.58%, testing the level of 109.00 for a breakdown. JPY again seized the initiative for some period and now it attracts investors as a safe asset. In turn, the macroeconomic statistics from Japan published today leaves much to be desired. Tokyo Core CPI slowed down in February from 0.7% YoY to 0.5% YoY, which turned out to be worse than market expectations of 0.6% YoY. Unemployment Rate in January rose sharply from 2.2% to 2.4% with a neutral forecast. Retail Sales in January rose by 0.6% MoM after rising by 0.2% MoM in the previous month. Analysts had expected the increase of 2.4% MoM. Industrial Production Rates in January continued to decline by 2.5% YoY after a decrease of 3.1% YoY in December. Analysts predicted a more significant decrease of 9.5% YoY. In monthly terms, production slowed down from 1.2% MoM to 0.8% MoM with a forecast of growth of 0.2% MoM.

XAU/USD

Gold prices show an uncertain downtrend during today's Asian session, correcting after rising for two consecutive sessions. Quotations are still supported by increased risks of the further spread of coronavirus outside of China. In addition, markets are concerned about a possible reduction in interest rates by leading regulators. Macroeconomic statistics from the USA published the day before did not add optimism to USD; however, low demand for risk continues to support it as well.

 

[MikhailLF]

EUR/USD

EUR has shown ambiguous growth against USD during today's Asian session, updating monthly highs at the opening. The growth of the instrument was slightly corrected and EUR retreated from its highs to 1.1050, maintaining the general "bullish" sentiment. Investors are still focused on macroeconomic statistics from Germany, which appeared at the end of last week. Investors were optimistic about the decrease in Unemployment Change in Germany in February by 10K after a decrease of 4K in the previous month. Experts expected the growth by 3K. At the same time, the Unemployment Rate in February remained at the same level of 5%. Consumer inflation data also supported EUR. German Consumer Price Index in February showed an increase of 0.4% MoM and 1.7% YoY, which was slightly better than market expectations of 0.3% MoM and 1.7% YoY. Harmonized Price Index for the same period accelerated from 1.6% YoY to 1.7% YoY, exceeding forecasts.

GBP/USD

GBP shows corrective growth against USD during today's Asian session, retreating from the lows of October 2019, updated at the end of trading last week. The instrument is testing the level of 1.2820 for a breakout. The development of corrective sentiment, in addition to the technical factors of short profit taking, is facilitated by the publication of contradictory macroeconomic statistics from the US last Friday. In particular, investors were disappointed by the weak dynamics of Personal Spending of US citizens. In January, the growth in spending dynamics slowed from 0.4% MoM to 0.2% MoM, which turned out to be worse than market expectations of 0.3% MoM. At the same time, the Chicago PMI in February increased from 42.9 to 49 points against the forecast of growth to 45.9 points. Michigan Consumer Sentiment Index for the same period slightly strengthened from 100.9 to 101 points. During the day, investors expect the publication of macroeconomic statistics on business activity in the manufacturing sector of the UK and the USA.

AUD/USD

AUD has shown a sharp increase during today's Asian session, quickly retreating from record lows updated last Friday. Macroeconomic statistics from Australia provides moderate support for AUD on Monday, while USD remains vulnerable after hints of a possible reduction in interest rates by the Fed. Commonwealth Bank’s Manufacturing PMI rose from 49.6 to 50.2 points in February against a forecast of growth of only 49.8 points. At the same time, AiG Manufacturing PMI fell in February from 45.4 to 44.3 points. The inflation data from TD Securities also turned out to be negative. In February, prices fell by 0.1% MoM after rising by 0.3% MoM in January. Pressure on the instrument is provided by weak data from China, which continue to testify to the negative consequences of the spread of coronavirus in China and beyond. Caixin Manufacturing PMI in February fell sharply from 51.1 to 40.3 points, which was worse than market expectations of 45.7 points.

USD/JPY

USD is strengthening against JPY during today's Asian session, correcting after a sharp decline at the end of last trading week. The growth of USD is largely technical in nature, while the market still cannot decide on the safest assets amid the growing risks of the spread of coronavirus. Published macroeconomic statistics from the US and Japan last Friday turned out to be mixed, but Japanese data had a slightly greater effect. The statistics of the new week so far remain in the background. Japan's Manufacturing PMI from Jibun Bank in February rose from 47.6 to 47.8 points, which turned out to be better than neutral market forecasts. Capital Spending in Q4 2019 decreased by 3.5% QoQ after an increase of 7.1% QoQ in the previous period. Analysts had expected a positive trend to remain at 1.6% QoQ.

XAU/USD

Gold prices are recovering during today's Asian session, correcting after a sharp decline at the end of last week, when traders fixed long profits. Meanwhile, support for the instrument is still provided by the situation with the spread of coronavirus outside of China. Demand for safe assets is also supported by the expectation of new stimulus measures from leading financial regulators. Amid a sharp decline in the US stock market, US Fed Chairman Jerome Powell issued a statement calling the coronavirus a serious dynamic risk for the US economy, not excluding new support measures through interest rate cuts.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is trading in an upward direction, continuing the development of the “bullish” rally from February 21. Now EUR is adding about 0.20% and is testing the level of 1.1150 for a breakout. It is supported by expectations of easing monetary policy by the US Federal Reserve. The risks of a decrease in the rate by the regulator significantly increased after last Friday, the head of the regulator Jerome Powell noted that he was ready to act to neutralize the negative effect of the coronavirus epidemic. Macroeconomic statistics released on Monday were ambiguous again. EUR was supported by Manufacturing PMI in Europe. So, in February, the German Markit PMI rose from 47.8 to 48.0 points, which was better than analysts' neutral forecasts. EU PMI rose from 49.1 to 49.2 points, which also exceeded experts' expectations.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing within the correction, departing from local lows renewed at the end of the last trading week. The instrument is under pressure by the start of trade negotiations between the UK and the EU, which may be complicated, given the position of London on this issue. The parties need to agree on the access of the UK to a single market, as well as resolve the issue with the Irish border. In some cases, the EU insists on compliance with European laws, which Boris Johnson categorically rejects. Monday’s Macroeconomic UK statistics did not significantly support GBP. Thus, Manufacturing PMI for February fell from 51.9 to 51.7 points against the forecast of a decrease to 51.8 points.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing uncertainly, continuing to develop the correction impulse formed yesterday. The dynamics is developing against the background of the publication of the minutes of the RBA meeting, which indicates a decrease in the interest rate from 0.75% to a new record low of 0.50%. Although market forecasts presupposed that the rate would not be changed during this meeting, investors were optimistic about the decision of the Australian regulator and only strengthened the belief that the Fed could also decide to mitigate monetary policy. Australia's macroeconomic statistics released on Tuesday was ambiguous. Traders were disappointed by the negative dynamics of building permits (–15.3% MoM compared to the previous +3.9% MoM) but supported the data on the dynamics of new home sales in January from HIA: +5.7% MoM +2% MoM in December.

USD/JPY

Today, during the Asian session, the USD/JPY pair is declining and is currently compensating for yesterday's growth of the American currency. The “bearish” dynamics develops against the expectations of easing of the US Federal Reserve monetary policy due to the coronavirus epidemic. Goldman Sachs analysts believe that the regulator may decide to lower the rate at the meeting on March 18, and during the year will resort to another decrease of 0.50%. Monday’s US macroeconomic statistics also put pressure on the instrument. So, the Markit for February showed a slight decrease from 50.8 to 50.7 points. ISM Manufacturing PMI fell from 50.9 to 50.1 points, which was significantly worse than market forecasts for a decrease to 50.5 points. The production index of gradual acceleration of inflation from ISM in February fell from 53.3 to 45.9 points with a forecast of 51.0 points.

XAU/USD

Today, during the Asian session, the gold prices are rising, recovering from a sharp decline last Friday due to a sharp closing pf the positions by investors. Now, the price is supported by the spread of coronavirus. Investors are preparing for a possible easing of monetary policy by the world's leading central banks. Today, the RBA unexpectedly lowered its rate, which only strengthened the market's belief that the Fed would soon decide to decrease it, too.

 

[MikhailLF]

EUR/USD

EUR is correcting against USD during today's Asian session, falling after an 8-day rally, which brought EUR to new highs since the beginning of the year. The steady increase in EUR over the past two weeks was caused by the closure of part of the carry trade positions against the backdrop of increasing risks of the spread of the coronavirus epidemic. Now, under the threat of lower interest rates by global financial regulators, the focus of attention of European investors is changing significantly. The finance ministers and bank managers of the largest economies in the world (G7) agreed on readiness for the most decisive action to protect the global economy. After a telephone conversation, having held an emergency meeting, the Fed lowered the interest rate immediately by 0.50%, reducing speculation regarding the March meeting of the regulator to nothing. However, some analysts believe that at the scheduled meeting in March, the regulator can go for additional stimulation measures.

GBP/USD

GBP is trading near zero against USD during today's Asian session, awaiting the emergence of new drivers. GBP managed to recover slightly the day before, having received support from the sudden reduction in the interest rate by the Fed. However, the general negative sentiment regarding the situation with the coronavirus epidemic and the uncertain prospects of trade negotiations between the UK and the EU kept the currency near the lows of October 2019. In addition, after the Fed's action, investors expect similar actions from the Bank of England. Analysts estimate that the British regulator may reduce the interest rate by 0.25% at a meeting on March 26, and by the end of the calendar year may take another similar reduction.

NZD/USD

NZD shows ambiguous trading dynamics against USD during today's Asian session, trading near zero. The "bullish" impulse that has formed in the market after an unexpected decrease in the interest rate by the Fed is rapidly weakening, and investors expect similar actions from other regulators. The RBNZ will hold a meeting on the rate on March 25, and so far the risks of easing monetary policy are very high. New Zealand macroeconomic statistics released today do not strengthen the instrument. Building Permits in January decreased by 2% MoM after growth by 9.8% MoM in the previous month. Analysts had expected decline of 0.9% MoM. ANZ Commodity Price Index collapsed by 2.1% MoM in February after a decline of 0.9% MoM in January. Analysts had expected decrease of 0.8% MoM.

USD/JPY

USD is strengthening against JPY during today's Asian session, recovering from a sharp fall of the instrument yesterday, which took place against the background of a sudden decrease in the interest rate by the Fed immediately by 0.50%. USD is adding about 0.10%, testing the levels of 107.40-107.50 for a breakout. The reason for the emergence of positive dynamics was the technical factors of correction of short profit, as investors are still worried about uncertain prospects and show considerable caution. In addition, the market does not receive the most confident macroeconomic statistics. Jibun Bank Services PMI in Japan fell from 51 points to 47 points in February, which, however, was 0.3 points better than market expectations. Caixin Services PMI fell from 51.8 to 26.5 points over the same period.

XAU/USD

Gold prices rose sharply at yesterday's trading, completely leveling the negative dynamics of the instrument at the end of last trading week. A slight increase can be seen during today's Asian session; however, the "bullish" activity is noticeably reduced. The reason for the surge in purchasing activity for the instrument was a sudden decrease in the interest rate by the Fed after a conference of G7 finance ministers. The US regulator set a precedent, and now investors are even more nervous, expecting similar actions from other banks. The focus of investors today is a block of macroeconomic statistics from the US on business activity from ISM and Markit. In addition, closer to the end of the afternoon session, the Fed will publish its updated economic review, the so-called Beige Book.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is growing slightly, being corrected after yesterday’s active decline, when the euro moved away from local highs of the beginning of the year and stopped the protracted “bullish” rally. The weakening of the instrument was facilitated by a decrease in the Fed interest rate at an emergency meeting of the regulator by 50 basis points to 1.25%. Now, investors expect the European regulator to lower the deposit rate next week, and may also expand the quantitative incentive program. Macroeconomic statistics from Europe published on Wednesday were ambiguous. Thus, German Composite Markit PMI for February fell from 51.1 to 50.7 points with a neutral forecast. EU Composite Markit PMI adjusted from 52.8 to 52.6 points, which also was worse than market expectations.

GBP/USD

Today, during the Asian session, the GBP/USD pair is trading flat, consolidating near local highs since February 28. Since Tuesday, the pound has been developing a slight correction, which is supported by a sudden decrease in the interest rate of the US Federal Reserve and expectations of the first results of trade negotiations between the UK and the EU. Also, on March 11, traders wait for the publication of the UK budget from the new Minister of Finance, Rishi Sunak, which is expected to significantly increase budget spending and bring several changes to the country's fiscal policy. On Thursday, traders are focused on the publication of data on the dynamics of approved mortgages in the UK in January from the BBA. At the end of the afternoon session, Mark Carney, the head of the Bank of England, will speak.

AUD/USD

Today, during the Asian session, the AUD/USD pair shows flat dynamics, consolidating near the level of 0.6620 and maintaining the “bullish” momentum formed at the beginning of the week. Support for the Australian currency is provided by positive national macroeconomic statistics, as well as a decrease in the interest rate of the US Federal Reserve by 50 basis points. On Wednesday, investors with a fair amount of optimism met data on the dynamics of Australia's GDP. Q4 2019 GDP grew by 0.5% QoQ, which was 0.2% better than market expectations. In annual terms, economic growth accelerated from +1.7% YoY to +2.2% YoY, exceeding market forecasts of +1.9% YoY. However, Thursday’s statistics leaves much to be desired. Export volumes from Australia in January decreased by 3% after an increase of 1% over the previous period. Imports in January fell by 3%, which ultimately led to a reduction in the trade surplus from 5376 million to 5210 million Australian dollars.

USD/JPY

Today, during the Asian session, the USD/JPY pair is falling again, retreating after yesterday’s correctional growth, which was supported by the publication of moderately optimistic macroeconomic statistics from the USA. Now, the dollar has lost about 0.16%, testing the level of 107.30 for a breakdown. Yesterday’s data indicated a sharp increase in the February US ISM Non-Manufacturing PMI from 55.5 to 57.3 points, which was significantly better than market expectations of 54.9 points. ISM Non-Manufacturing Employment also rose significantly from 53.1 to 55.6 points with a forecast of 54.1 points. ISM Non-Manufacturing New Orders for the same period increased from 56.2 to 63.1 points against market expectations for growth of only 56.3 points.

XAU/USD

Today, during the Asian session, gold prices show flat dynamics, consolidating after a sharp increase on Tuesday, when the US Federal Reserve unexpectedly cut its interest rate by 50 basis points at once, recognizing a significant negative risk from the further spread of the coronavirus epidemic. Also, the American regulator was one of the first to decide on a significant easing of monetary policy, and now the market expects similar actions from almost all the world's leading central banks. Moreover, analysts believe that the Fed will take another reduction before the end of this year. On Thursday, investors are focused on a block of macroeconomic statistics from the United States on the dynamics of applications for unemployment benefits and production orders for January. The centerpiece of all macroeconomic publications is Friday when the US unveils February labor market data.

 

[MikhailLF]

EUR/USD

EUR is consolidating together with USD during today's Asian session. The instrument is trading near 1.2330, slightly departing from the local highs of August 2019, updated the day before. EUR is supported by alarming market sentiment due to the further spread of the coronavirus epidemic and the measures taken by the world's leading financial regulators to maintain economic growth. On Tuesday, the Fed sharply cut interest rates by 0.50%, setting an example to all other regulators who are just thinking about support measures. EUR was also supported by macroeconomic data from the US, released yesterday. Nonfarm Productivity in Q4 2019 slowed down from +1.4% QoQ to +1.2% QoQ, which turned out to be worse than neutral forecasts of investors. Factory Orders in January fell by 0.5% MoM after an increase of 1.9% MoM in December. Analysts had expected negative trend to appear, but counted on only –0.1% MoM decline.

GBP/USD

GBP shows a slight increase against USD during today's Asian session, trading near local highs of February 26, updated the day before. Moderate support for GBP is provided by weakening expectations of lower interest rates by the Bank of England. The new head of the British regulator, Andrew Bailey, who is due to take office March 16, said the Bank of England should not rush to cut rates after the Fed. First of all, according to Bailey, it is necessary to assess the risks of the spread of the virus and its economic consequences. Additional support for the instrument is provided by weak positions in USD, which turned out to be vulnerable after an unexpected decrease in the interest rate of the Fed on Tuesday. In turn, the growth of GBP above 1.3000 is hindered by the uncertain situation around the trade negotiations between the UK and the EU. Boris Johnson remains adamant and he declares his readiness to leave the negotiations without an agreement if the EU does not reduce its requirements.

AUD/USD

AUD is falling against USD during today's Asian session, developing a weak correctional impulse formed yesterday. Pressure on the instrument is exerted by weak macroeconomic statistics from Australia, as well as the general negative market background associated with the spread of coronavirus and the efforts of world regulators to minimize damage to the global economy. AiG Performance of Services Index in February fell from 47.4 to 47.0 points, which turned out to be worse than market expectations. Retail Sales in January fell by 0.3% MoM after a decline of 0.7% MoM in the previous month. Analysts had expected zero dynamics. On Friday, investors focus on the publication of the February report on the US labor market.

USD/JPY

USD continues to develop negative dynamics against JPY, updating record lows. The instrument is trying to consolidate below 105.90, a local low of September 2019. Demand for JPY again began to recover in the market after a sudden decrease in the interest rate by the Fed on Tuesday, which gave rise to a new wave of concern in the market regarding the further spread of the coronavirus epidemic. JPY is also supported by Friday's macroeconomic data from Japan. Labor Cash Earnings in January increased by 1.5% YoY after a decrease of 0.2% YoY last month. Analysts expected growth by 1.3% YoY. Overall Household Spending in January remained negative, but the indicator increased slightly compared to the previous month: –3.9% YoY against –4.8% YoY.

XAU/USD

Gold prices show growth during today's Asian session, continuing the development of the "bullish" momentum formed on Tuesday. Yesterday, the quotes rose by more than 1%, as investors continued to avoid risky transactions amid the spread of the coronavirus epidemic outside of China. Investors were particularly worried about the outbreak in the United States, as a result of which the authorities in California were forced to declare a state of emergency, and the Fed unexpectedly lowered interest rates by 0.50% on Tuesday, trying to minimize the negative consequences for American business.

 

[MikhailLF]

EUR/USD

Today, during the Asian session, the EUR/USD pair is actively falling, retreating from record highs, renewed yesterday. The weakening of EUR is facilitated by technical factors, as well as the slow recovery of US stock markets, which opened at the beginning of the week with a sharp decline. Now, the instrument has lost about 0.80%, testing the 1.1350 the level of for a breakdown. However, the price receives moderate support from yesterday’s German macroeconomic statistics. Thus, industrial production in January grew by 3% MoM after a decrease of 2.2% MoM last month. Analysts predicted the appearance of positive dynamics only at the level of +1.5% MoM. In annual terms, the decline in production slowed down from –5.3% YoY to –1.3% YoY, which also was noticeably better than the forecasts of –4.5% YoY. On Tuesday, investors expect the publication of updated data on EU Q4 2019 GDP.

GBP/USD

Today, during the Asian session, the GBP/USD pair again reverses downwards and retreats from local highs of early February, renewed on Monday. The appearance of a “bearish” dynamics is facilitated by corrective sentiment in favor of USD, which finally recovers after a sudden decrease in the Fed’s interest rate last week. Additional pressure on GBP has poor UK macroeconomic statistics. Thus, retail sales for February, according to data from the Confederation of British Industrialists, decreased by 0.4% YoY after zero dynamics last month. Real dynamics was half the market expectations. Tomorrow, a large block of macroeconomic statistics: data on the dynamics of GDP, industrial production and the balance of trade in goods for January will be released.

NZD/USD

Today, during the Asian session, the NZD/USD pair is moderately declining, consolidating after the ambiguous dynamics of the beginning of the week, which was characterized by the highest level of activity. The instrument decreases due to the increase in correctional sentiment in favor of USD, which was oversold after the US Federal Reserve cut its interest rate by 50 basis points last week. Tuesday’s ambiguous macroeconomic statistics have added pressure on the course. Q4 2019 sales in the industrial sector of New Zealand increased by 2.7% QoQ after a decrease of 0.3% QoQ in the previous period. However, the indicator was noticeably worse than market expectations of +4.3% QoQ.

USD/JPY

Today, during the Asian session, the USD/JPY pair is actively growing. Now, the dollar has added about 1.75%, testing the level of 104.20 for a breakout. Thanks to the active actions of the “bulls”, the instrument managed to compensate for the decline in the instrument at the beginning of the week and move away from record lows since September 2016. The development of upward dynamics contributes to the strengthening of USD throughout the spectrum of the market, which remains subject to panic. Macroeconomic statistics from Japan, released earlier this week, which previously had been neglected, also put pressure on JPY. The country reported a further slowdown in the economy. Q4 2019 GDP decreased by 1.8% QoQ after weakening by 1.6% QoQ in the third quarter. Over the year, the Japanese economy collapsed by 7.1% YoY after a decline of 6.3% YoY in the third quarter.

XAU/USD

Today, during the Asian session, gold prices are falling, continuing the development of the “bearish” impulse formed yesterday when the instrument retreated from its record highs since December 2012. The development of negative dynamics is facilitated by the strengthening of the position of USD, which is again in demand against the background of a complicating economic situation in the world. Markets reacted extremely violently to the collapse of oil prices, and they also expect a further easing of monetary policy by the leading central banks in response to the spread of the coronavirus epidemic.

 

[MikhailLF]

EUR/USD

EUR is growing against USD during today's Asian session, correcting after sharp fall the day before. Moderate support for EUR is provided by data from the euro area released on Tuesday. Employment Change in Q4 2019 increased by 1.1% YoY, maintaining the same pace despite forecasts of a slowdown to 1.0% YoY. In quarterly terms, employment accelerated from 0.2% QoQ to 0.3% QoQ, which met market expectations. Eurozone GDP in Q4 2019 increased by 0.1% QoQ and 1.0% YoY, slightly ahead of its preliminary estimates (0.1% QoQ and 0.9% YoY). The focus of European investors remains on the ECB meeting on interest rates on Thursday. It is expected that the European regulator can follow the example of the Fed and will consider the possibility of easing monetary policy in the region. However, the ECB has not so many opportunities in this regard. The interest rate remains at zero level, and the deposit rate remains at –0.5% per annum.

GBP/USD

GBP is showing moderate growth against USD during today's Asian session, recovering after sharp fall the day before. Amid some panic in the market due to collapsed oil prices, USD received a powerful impetus for growth on Tuesday and rose significantly against almost all its major competitors. Today corrective sentiment reigns supreme, and investors expect new growth drivers. Traders are focused on macroeconomic statistics from the UK on the dynamics of Industrial Production and GDP growth in January. The US will publish statistics on Consumer Inflation. It is expected that amid the slowdown in global economic growth in February, Consumer Inflation in the US may decline from 2.5% YoY to 2.2% YoY.

AUD/USD

AUD is showing moderate growth against USD during today's Asian session, correcting after a collapse the day before. The instrument adds about 0.20% and tests the level of 0.6500–0.6510 for a breakout. Some support for AUD is provided by macroeconomic statistics from Australia. Home Loans in January grew by 3.1% MoM after growth of 3.5% MoM in December. Analysts had expected a sharp decline in the growth rate of the indicator to 0.5% MoM. Investment Lending for Homes in January also increased from 2.8% MoM to 3.6% MoM. Only Westpac Consumer Confidence Index was disappointing: in March, the indicator decreased by 3.8% MoM after a steady growth of 2.3% MoM in February. Analysts had expected negative trend to appear, but counted on only 0.4% MoM decline.

USD/JPY

USD is falling against JPY during today's Asian session, retreating from local highs, updated the day before. On Tuesday, USD showed strong growth across the entire spectrum of the market, supported by rising fears amid collapse in oil prices. Meanwhile, USD is under pressure due to the possibility of a further reduction in the interest rate by the Fed. Many analysts believe that the US regulator may go for an additional reduction of 0.50% by the end of March, which will contribute to a noticeable outflow of USD buyers. During the day, investors expect the publication of statistics from the US on consumer inflation. Forecasts suggest a slight decline, but USD may partly ignore weak data, as rates and the coronavirus epidemic still dominate the minds of investors.

XAU/USD

Gold prices are recovering during today's Asian session, correcting after a sharp decline at the beginning of the week, when quotes retreated from their record highs since December 2012. The instrument adds about 0.77% and is actively testing the level of 1660.00 for a breakout. Hopes for new measures to support the global economy have a positive effect on the dynamics of USD. At the same time, investors remain wary of the uncertain situation with the coronavirus epidemic and the recent collapse in oil prices caused by the price war between Saudi Arabia and Russia. Finally, gold is supported by expectations of the next reduction in the interest rate by the Fed at the meeting on March 18.

 

[MikhailLF]

EUR/USD

Today, during the Asian trading session, the EUR/USD pair is growing moderately, being correcting upwards after a two-day decline. USD is under pressure despite the publication of positive US macroeconomic statistics on Monday. Thus, the Consumer Price Index for February grew by 0.1% MoM and 2.3% YoY, which was slightly better than market expectations of 0.0% MoM and +2.2% YoY. Core CPI s. a. for the same period increased from 266.48 to 267.07 points. On Thursday, European investors wait for the EU statistics on industrial production for January, as well as the ECB's interest rate decision with the following press conference. It is expected that the European regulator will lower the rate, which may have negative consequences for the banking sector of the region, which in this case will need additional support.

GBP/USD

Today, during the Asian trading session, the GBP/USD pair shows ambiguous dynamics and is leaning towards a slight correction after an active decline for two consecutive sessions. The instrument is under significant pressure of the Bank of England’s unexpected decision on lowering interest rates by 50 basis points to 0.25% in order to support weakening markets amid the spread of the coronavirus epidemic and a widespread economic slowdown. The decision to soften monetary policy was adopted unanimously by all nine board members. Additionally, the pound is negatively affected by poor macroeconomic statistics from the UK. Thus, Industrial Production for January decreased by 2.9% YoY after a decrease of 1.8% YoY last month. Analysts had expected a decrease of 2.6% YoY. GDP for January showed zero dynamics, while experts expected a slight increase of +0.2% MoM. Nevertheless, despite such powerful negative factors, the pound remains relatively stable. It is partly due to the traders’ hopes for a new UK budget presented in parliament on Wednesday.

AUD/USD

Today, during the Asian trading session, the AUD/USD pair is falling, continuing the development of the “bearish” momentum. Now, the Australian dollar has lost about 0.35% and is testing the 0.6450 the level of for a breakdown. The instrument is under pressure by uncertain macroeconomic statistics from Australia, published on Wednesday. In particular, the Westpac Consumer Confidence Index fell by 3.8% MoM in March after rising 2.3% MoM in the previous month. Experts expected a decrease of only 0.4% MoM. The US published optimistic data on the dynamics of consumer inflation, although traders were also scared by the figures on the state of the budget for February. According to a published report, its deficit reached $235 billion, while last month it was only $33 billion.

USD/JPY

Today, during the Asian trading session, the USD/JPY pair shows ambiguous trading dynamics, while maintaining a negative mood. Despite yesterday's publication of positive US macroeconomic statistics on consumer inflation, the dollar is currently giving way to the yen in the race for the “safest” currency. Meanwhile, macroeconomic statistics from Japan published on Thursday are poor. Thus, the February domestic price index for corporate goods slowed down from +1.5% YoY to +0.8% YoY, which was worse than market expectations +1.0% YoY. The producer price index of goods for the same period fell by 0.4% MoM after rising by 0.1% MoM last month. The indicator also was worse than its forecast, which suggested a decrease of 0.3% MoM. Additional pressure on the dollar against the yen is having a rapid reduction in the difference in interest rates between the Fed and the Bank of Japan. Considering that the American regulator may decide on another rate cut before the end of March, this negative factor will only strengthen.

XAU/USD

Today, during the Asian trading session, gold prices show ambiguous dynamics, trying to be corrected after an active decline in the instrument for three consecutive sessions. It is facilitated by a slight weakening of the US currency, which occurs despite the publication of US optimistic macroeconomic statistics on consumer inflation. Demand for gold also increased after yesterday’s emergency meeting of the Bank of England, during which the regulator decided to reduce the interest rate by 50 basis points. On Thursday, traders are focused on the ECB meeting, which may also end with a softening of monetary policy.

 

[MikhailLF]

EUR/USD

EUR is showing corrective growth against USD during today's Asian session, recovering from an active decline for three consecutive sessions, which allowed the instrument to retreat from the January 2019 highs. The growth of EUR is facilitated by the weakening of USD in the market after the speech of Donald Trump, which frankly disappointed investors. Trump announced a ban on entering the US from 26 eurozone countries for a month, and also allowed the introduction of additional tax and credit exemptions for small and medium-sized enterprises. However, investors have not heard anything about new measures to combat coronavirus, in particular regarding the development of a vaccine. Meanwhile, the ECB held a meeting on monetary policy on Thursday, at which the president of the regulator, Christine Lagarde, announced new measures to stimulate the economy. The Bank kept rates at the previous minimum levels and noted that it would increase the volume of additional net asset purchases by EUR 120B. In addition, Lagarde called on EU leaders to take the most decisive actions aimed at stabilizing the economic situation in the region, pointing out the high risks of delay.

GBP/USD

GBP is developing an active downtrend against USD in trading this week, updating the local lows of October 2019 closer to the end of the weekly session. GBP remains under pressure amid growing panic and market uncertainty. Earlier in the week the Bank of England quite unexpectedly decided to reduce the interest rate immediately by 0.50%, bringing it to the level of 0.25%. The regulator explained this decision by the desire to help a rapidly slowing economy amid the spread of the coronavirus epidemic and the introduction of new bans from various states. Additional pressure on the instrument was provided by macroeconomic statistics from the UK on the dynamics of industrial production and the growth rate of GDP in January. Investors are focused on the publication of the Bank of England Meeting Minutes, from which the markets will be able to learn about the updated forecasts of the regulator in the near future.

NZD/USD

NZD shows a slight increase during today's Asian session, correcting after an active decline the day before. The instrument adds about 25 points and is actively testing the level of 0.6150 for a breakout. The development of the uptrend in the pair proceeds against the background of a slight decrease in USD, which is undergoing sales after the speech of US President Donald Trump the day before. Investors were disappointed with Trump's statements, as they expected to hear about concrete steps to develop a vaccine and curb the spread of the disease within the country. Additional support for NZD on Friday is provided by published data on Business NZ PMI. In February, the indicator rose sharply from 49.6 to 53.2 points, significantly exceeding forecasts of growth to 50.3 points. At the same time, the Food Price Index for the same period slowed down from 2.1% MoM to 0.0% MoM, being worse than forecasts of 0.2% MoM.

USD/JPY

USD is strengthening against JPY during today's Asian session, continuing to develop an unsteady "bullish" momentum that formed the day before. The growth of the instrument is facilitated by technical factors, while USD remains vulnerable after Donald Trump's controversial speech the day before. In addition, markets were unsatisfied with the publication of statistics on industrial inflation in the US for February. Today’s Japanese statistics provides insignificant support for JPY. Tertiary Industry Index in January increased by 0.8% MoM after a decline of 0.3% MoM last month. Analysts had expected positive trend to emerge, but counted on 1.2% MoM growth.

XAU/USD

Gold prices show multidirectional dynamics during today's Asian session, consolidating after a sharp decline the day before, which was triggered by profit taking on the instrument and an increase in demand for USD as a safe haven currency. At the same time, investors were disappointed by Donald Trump's speech, in which he announced a ban on entry into the US from 26 European countries, but did not touch on the development of other measures to combat coronavirus. Meanwhile, disturbing news about the spread of the coronavirus epidemic provoked another panic sale on the stock market, which could push the leading financial regulators to new measures to support the economy.