Top Forex Brokers:Weekly Review for 3.03 - 7.03.2014
Euro: Despite the fact that the published
macroeconomic data were contradictory, the euro also
received support from the last meeting of the ECB.
Regulator kept monetary policy unchanged. The head of
the ECB, Mr.
Draghi was more optimistic, confirming his
readiness to continue to stimulate the economy. But the
market was focused on growth forecast for 2014 and
comments on the improvement of the reports for the last
month. Also reports of normalization of financial market
conditions were positive for Euro.
In details:
Monday: Rate of the
euro retreated from the maximum values against the
dollar, while returning to the levels of the session.
Little support was data on index of industrial activity,
but interest in him was short-lived, and attention
gradually began to switch to U.S. reports, which caused
the fall of the euro currency. Recall that the growth in
the eurozone manufacturing sector weakened in February,
but lesser expected than previously. This was stated in
the final data, which were published earlier today by
Markit Economics. According to the report, the
seasonally adjusted purchasing managers' index for the
manufacturing fell to 53.2 in February from 54 in
January, the highest reading in 32 months. The decline
in February was the first in five months. Result was
also slightly higher than previously estimated - at 53
points. The index currently remains above the mark of 50
points, which separates growth from contraction for the
eighth consecutive month. We also learned that the
manufacturing sector continued to show growth in Germany
in February, and have expanded more than initially
expected. According to the report , the manufacturing
purchasing managers index from Markit / BME fell to 54.8
points in February from January's 32-month high of 56.5
. The originally was reported on the significance of
this indicator at the level of 54.7 points. The index
remained above the neutral mark of 50 points for the
eighth consecutive month. The EUR / USD pair fell to $
1.3759 during the European
session.
Tuesday: The euro
exchange rate has risen sharply against the U.S. dollar
due to the easing of tensions around Russia and Ukraine.
Recall that today Russian President Putin announced the
completion of a series of military exercises in the
western part of Russia, and ordered the troops to return
to base.
The growth is also linked to the expectations
of the ECB meeting on Thursday and the employment report
in the U.S. on Friday. Little impact on the euro was
data that showed prices of producers eurozone declined
in January, more than expected, which was due to falling
energy prices. According to the report, producer prices
fell 0.3 % in January, while offsetting an increase of
0.2 %, which was recorded in December. Many experts
expect that producer prices will remain unchanged.
Excluding energy, producer prices rose 0.1 % after zero
change in December. Energy prices fell by 1.4 % in
January, compared with 0.5 per cent increase in the
previous month. On an annual basis, the decline in
producer prices accelerated in February, 1.4 per cent
from 0.8 per cent in December. Last change coincided
with the estimates of experts. The EUR / USD pair rose
to $ 1.3775: during the European
session.
Wednesday: The euro
exchange rate against the dollar rebounded, but still
continued to trade slightly lower. Impact on the
dynamics had the reported data for the euro area, on
business activity and GDP. The eurozone economy expanded
at a faster pace in the fourth quarter, and confirmed
the initial estimates and forecasts of experts, helped
by an increase in the volume of investment and exports.
The report showed gross domestic product grew by 0.3 %
in the fourth quarter, which corresponded to an estimate
published on February 14. Recall, for the third quarter
the economy expanded by 0.1 %. In annual terms, gross
domestic product grew by 0.5 % after a 0.3 % drop in the
third quarter. Annual rate was also consistent with the
preliminary assessment and expert forecasts. The EUR /
USD pair fell to $ 1.3706, and then recovered slightly
during the European
session.
Thursday: The euro
exchange rate has increased markedly against the dollar,
which was associated with the release of positive data
in Germany, as well as the decision of the ECB. Ministry
of Economy of Germany stated that the volume of orders
in the manufacturing sector in January rose more sharply
than expected, mainly due to strong domestic demand, as
well as orders from countries outside the euro area.
This suggested that the industrial production in
Europe's largest economy should continue to grow.
According to the report, the orders in the manufacturing
sector in Germany to a seasonally adjusted in January
increased by 1.2% compared with December. Economists’
orders were on growing by 1.1 % compared with the
previous month. It was also reported that domestic
demand rose by 1.6 % m / m in January, while export
orders increased by 1 percent. Orders outside the euro
area rose by 7.2 %, while inside the unit fell 8.8 %
after rising 6.9% in the previous month. Add that at
today's meeting the European Central Bank decided to
leave interest rates unchanged. The Governing Council of
the ECB announced that the main refinancing rate, the
rate on loans and deposits to remain at 0.25%, 1.00 %
and 0.00 % respectively. Recall that the Bank has
lowered the discount rate from 0.5 % to 0.25 % in
November last year. The EUR / USD pair rose to $ 1.3775,
and then retreated slightly during the European session.
The EUR / USD pair rose to $ 1.3860 area on comments of
the M.Dragi . The ECB intended to keep key interest
rates at or below the current for a long time. The ECB
President confirmed that his earlier assessment of the
situation in the economy remained unchanged; the
eurozone is waiting a long period of low inflation and
inflation in the coming months in the region will remain
near current levels. It will gradually rise over the
next period of 2.5 years. ECB chief said that
“recovery in the euro zone continues in slow pace” and
geopolitical risks may adversely affect the growth rate.
Macroeconomic data for the last four weeks have
improved, but “continue to confirm the need to maintain
expansionary policies of the ECB," the chairman of the
central bank.
In his speech M.Dragi once again drew
attention to the fact that the ECB is not targeting the
euro exchange rate, although this is crucial for
economic growth and inflation in the euro
area.
US
Dollar: Conflict in Ukraine has lost its sting a bit,
which reduced demand for safe-haven currencies. As a
result, the dollar was able to demonstrate active
strengthening against the yen.
In details:
Monday: The U.S. dollar strengthened against
major currencies on the back of strong U.S. macro data.
U.S. consumer spending rose in January, more than
forecast, together with a sharp increase in income,
which increased the likelihood that the biggest part of
the economy can sustain growth in early 2014. This was
stated in the report, which was submitted to the
Ministry of Commerce. According to consumer spending,
which accounts for about 70 % of the economy, rose in
January by 0.4 % after a 0.1 % increase in the previous
month, which was revised to 0.4 %. Experts predicted
that the value of this index will rise by only 0.2 %. We
also add that the amount of consumer income increased by
0.3 %, after a zero change in December. As it was
expected the revenues will grow by 0.2%. Today's report
confirms recent data that indicate that Americans are
beginning to overcome the effect of the severe winter,
and confidence in the world's largest economy will
grow.
Manufacturing activity in the U.S. rebounded in February after it’s weakening due to the weather in January, although production decreased. This was published by the Institute for Supply Management (ISM). According to the report, the Purchasing Managers Index (PMI) for the manufacturing U.S. in February rose to 53.2 after an unexpected decline to a minimum of 51.3 in January. Index value above 50 indicates growth in the sector of activity. Economists had expected the index to rise in February to 52.3. In turn, the final data from Markit showed that business conditions in the U.S. manufacturing sector improved in February compared with the previous month, and were slightly higher than those reported in the initial assessment. Corresponding PMI rose to 57.1 points, compared with a final reading for January at 53.7, and a preliminary estimate at around 56.7.
Manufacturing activity in the U.S. rebounded in February after it’s weakening due to the weather in January, although production decreased. This was published by the Institute for Supply Management (ISM). According to the report, the Purchasing Managers Index (PMI) for the manufacturing U.S. in February rose to 53.2 after an unexpected decline to a minimum of 51.3 in January. Index value above 50 indicates growth in the sector of activity. Economists had expected the index to rise in February to 52.3. In turn, the final data from Markit showed that business conditions in the U.S. manufacturing sector improved in February compared with the previous month, and were slightly higher than those reported in the initial assessment. Corresponding PMI rose to 57.1 points, compared with a final reading for January at 53.7, and a preliminary estimate at around 56.7.
Wednesday: The dollar fell
against other major currencies, aided published in U.S.
statistics. As shown by recent data that were presented
Automatic Data Processing (ADP), in February, employment
in the private sector increased markedly, although not
enough to confirm the evaluation of many economists.
According to a report last month, the number of
employees increased by 139 thousand people, compared
with a revised downward indicator for the previous month
at 127 million ( initially reported growth of 175
thousand jobs). Add that, according to the average
forecast of this indicator would grow by 159
thousand
In turn, in February, the index of business activity in the U.S. service sector (ISM Non-Manufacturing) fell to 51.6 points, the minimum for the last four years, with 54 points in January, according to the Institute for Supply Management (ISM). According to experts, the value of this indicator was reduced to 53.8. Exceeding the index level of 50 points indicates growth of business activity in the service sector, while the index value below 50 indicates its decline. All major sub- indices, except one, were in February in the territory of the expansion (more than 50), and some even showed an increase.
In turn, in February, the index of business activity in the U.S. service sector (ISM Non-Manufacturing) fell to 51.6 points, the minimum for the last four years, with 54 points in January, according to the Institute for Supply Management (ISM). According to experts, the value of this indicator was reduced to 53.8. Exceeding the index level of 50 points indicates growth of business activity in the service sector, while the index value below 50 indicates its decline. All major sub- indices, except one, were in February in the territory of the expansion (more than 50), and some even showed an increase.
British
Pound: The British data has not given much reason
for optimism, as reports on business activity in the
industrial, construction and service industries showed a
fall, though they still retained in the growth zone.
However, in the service sector index fell less than
expected, which had moderate support the British
currency, as it gives reason to expect to maintain high
rates of economic growth. Meeting of the Bank of
England, as expected, did not bring anything new, and
response from the pound was not
caused.
In
details:
Monday: The pound showed sharp fluctuations
against the dollar, but in general, was trading in a
small range. On the dynamics of trade influenced the
British data, which showed that the UK manufacturing
sector continued its expansion in February, registering
with several large paces than in the previous month. It
became known from the survey results, which were
released Markit Economics and the Royal Institute of
Purchasing and Supply (CIPS). According to the report,
the seasonally adjusted purchasing managers' index for
the manufacturing sector rose in February to a level of
56.9, compared with 56.6 in January, the figure for
which was revised down from 56.7. A reading above 50
indicateed an increase in activity, while a drop below
indicates contraction. The index currently remains above
the neutral point of the eleventh month in a row. The
GBP / USD pair traded in the range of $ 1.67650 -$
1.67550 during the European
session.
Tuesday: Pound rose slightly against the U.S.
dollar, as a territorial dispute between Ukraine and
Russia began to be resolved. Pressure on the currency
was presented data that showed British construction
sector continued its expansion in the month of February,
but sharply slowed its pace of growth compared to the
month of January, as adverse weather conditions violated
activity. This was stated in the report, Markit
Economics. According to the index of purchasing managers
in the construction sector fell last month to a level of
62.6 points, compared with a 77 -month high in January
at around 64.6 points. Many experts expected that this
figure will decrease only to 63.6 points. I also add
that the index remains above the level of 50.0 points,
which separates growth from contraction since last May.
Studies have also found that higher levels of production
and new orders led to a further sharp rise in employment
and procurement. The number of new jobs has reached
three-month high in February. The total purchase price
inflation accelerated to a five-month low in January, as
the pressure on the "chain" of supplies contributed to
the growth of the burden. As a result, the average price
charged by subcontractors, increased at a record pace on
record. The GBP / USD pair rose to $ 1.6718 during the
European session, but then retreated
slightly.
Wednesday: Pound has risen
considerably against the U.S. dollar, which was helped
by the submitted data and expectations of tomorrow's
meeting of the Bank of England. As it became known, the
UK services sector continued to show a steady expansion
in February, but a little slow pace compared to the
previous month. Support the sector continued to provide
a significant increase in new orders. The data
demonstrated that the PMI for the services sector by
Markit Economics fell to 58.2 in February from 58.3 in
January. The latter value was the lowest since June last
year, but continued to show a sharp increase in activity
on a monthly basis. Experts had expected a decline of
the index to 58.0. Add growth recorded for 14
consecutive months. Recent increase in activity was
supported by new orders. Since the number of orders
continued to grow rapidly, the company decided to raise
the number of staff in accordance with the current
volume and future activities
The GBP / USD pair rose to $ 1.6727 during the European session.
The GBP / USD pair rose to $ 1.6727 during the European session.
Thursday: Pound fell to session low against
the dollar, despite the significant growth earlier that
allowed establishing a new high. Such a significant
swing pair was noted after the announcement of the Bank
of England of its rate decision and asset purchase
program. Note that the Bank of England today did not
bring any surprises, once again leaving the rate at a
record low 0.5%. Last time the Central Bank changed the
level of rates March 5, 2009, lowering it by 0.5% to
0.5%. Was also decided to keep the size of the asset
purchase program at ? 375 billion, the Central Bank said
that keep rates at the current level as long as the
unemployment rate / p Britain will not fall to the level
of 7% , which will not happen until 2016 . Experts
pointed out that it is clear that the authorities want
to keep policy accommodative as long as possible, to
ensure the stability of the economic recovery. However,
the picture on the labor market combined with data on
growth suggests that the Bank is unlikely to convince
markets that rates increase.
Little impact on the pound had previously presented data which showed that house prices rose by 2.4 percent in February, compared with an increase of 1.1 percent in January, which significantly exceeded the average forecast experts at 0.6 percent. We also add that in the last three months (February), housing prices were 7.9 percent higher than a year earlier, compared with 7.2 percent in the previous three-month period (January). In Halifax reported that the improvement of the economic situation, the fall in unemployment and an increase in confidence helped boost demand, but the pressure on household finances and slowing inflation restrained growth in housing prices. The GBP / USD pair rose to $ 1.6795during the European session.
Little impact on the pound had previously presented data which showed that house prices rose by 2.4 percent in February, compared with an increase of 1.1 percent in January, which significantly exceeded the average forecast experts at 0.6 percent. We also add that in the last three months (February), housing prices were 7.9 percent higher than a year earlier, compared with 7.2 percent in the previous three-month period (January). In Halifax reported that the improvement of the economic situation, the fall in unemployment and an increase in confidence helped boost demand, but the pressure on household finances and slowing inflation restrained growth in housing prices. The GBP / USD pair rose to $ 1.6795during the European session.
Japanese
Yen:
Earlier in the week, amid reports on launch
of North Korea's two medium-range missiles, the USD /
JPY pair noted 4- week low at 101.20, but later started
pretty strong fortification, which was stimulated by a
temporary silence in the Russian - Ukrainian conflict.
Additional support the couple received from an index
Nikkei, as well as on reports that the Bank of Japan was
considering buying foreign bonds as part of its
quantitative easing
program.
In
details:
Monday: The yen rose against all major
currencies as a result of increased demand for
safe-haven currencies, after entering the Russian armed
forces on the territory of Ukraine. It was learned that
U.S. Secretary of State tomorrow John Kerry will travel
to Kiev to meet with Ukrainian leaders and offer
support. Tension in the region has reached its peak
since the “cold war”. The USD / JPY pair dropped to
Y101.20 during the European
session.
Wednesday: The yen fell
against the dollar at the fastest pace in the last seven
weeks after Russian President Vladimir Putin said that
he sees no urgent need for the introduction of Russian
troops on the territory of Ukraine, as well as that
culminated in the Russian military exercises in no way
connected with the situation in Ukraine. The USD / JPY
pair rose to Y102.50 during the European
session.
Thursday: The yen touched week low against
the dollar after the Japanese government announced that
the state pension fund (GPIF), is the largest in the
world, no longer need to focus on investment in domestic
bonds, taking into account the acceleration of inflation
in the country. The report, prepared by the group, says
that GPIF should seek opportunities for investment that
could bring him an annual income of 1.7% plus the cost
of increase of salaries of employees. The USD / JPY pair
rose to Y102.81 during the European
session.
Canadian
Dollar: The
Canadian dollar rose against the U.S. dollar on a
background of the outcome of the meeting of the Bank of
Canada. Central Bank of Canada said that the downside
risks to inflation are still important, despite the
recent increase in consumer prices. Given the
significant weakness of the economy and competition in
the retail sector, inflation is likely to remain well
below the target level of 2 % this
year.
Bank of Canada, as expected, on Wednesday
left its benchmark one-day interest rate unchanged at 1%
level. The bank said that “in general, the fundamental
drivers of growth, inflation in Canada continue to
gradually strengthen," and the balance of risks”
remained within the zone for which the current stance of
monetary policy is appropriate”, while the risks
associated with elevated imbalances households” have not
changed significantly."
Australian
dollar: The Australian dollar strengthened slightly
updating lows after Australia's central bank left
interest rates unchanged at a record low 2.5 %. In its
statement accompanying RBA Governor Glenn Stevens noted
that the recent decline in the Australian dollar will
balance economic growth, but the rate remained in high
by historical standards.
