Dollar Climbs To Over 4-month High Versus Euro On Powell's Remarks

Trading 11 fév 2020 Commentaire »

The U.S. dollar spiked up to a multi-month high against the euro in early New York deals on Tuesday, after Federal Reserve Chair Jerome Powell remarked that the economy appeared resilient to the global headwinds and the current stance of monetary policy would remain appropriate.

The greenback rallied to more than a 4-month peak versus the euro and a 1-1/2-month high against the franc following Powell's remarks.

In prepared remarks to the House Committee on Financial Services, Powell said that some of the trade uncertainties have waned recently, but risks to the outlook remain.

The Fed is closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy, he said.

The Fed chief noted that the current stance of monetary policy would support continued economic growth, a strong labor market, and inflation returning to the 2 percent objective.

"As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate," he added.

The greenback hit more than a 4-month peak of 1.0891 versus the euro and a 1-1/2-month high of 0.9789 against the franc, from Monday's closing values of 1.0911 and 0.9773,respectively. Next key resistance for the greenback is seen around 1.07 versus the euro and 1.00 against the franc.

The greenback, though, retreated to 109.75 versus the yen, from a 4-day high of 109.95 set at 3:00 am ET. If the greenback slides further, 108.00 is likely seen as its next support level.

Meanwhile, the greenback fell to a 5-day low of 1.2961 against the pound, compared to yesterday's closing quote of 1.2915. The next possible support for the greenback is seen around the 1.32 level.

Data from the Office for National Statistics showed that the UK economy logged flat growth in the fourth quarter.

Gross domestic product remained unchanged on quarter, as expected, after expanding 0.5 percent in the third quarter.

The greenback was weaker against the loonie and the kiwi, reaching 1.3288 and 0.6409, down from its early high of 1.3320 and a 3-month high of 0.6378, respectively. The greenback may locate support around 1.30 against the loonie and 0.66 versus the kiwi.

The greenback fell to a 4-day low of 0.6725 against the aussie, from yesterday's closing quote of 0.6686. The greenback is poised to challenge support around the 0.71 mark.

Data from the Australian Bureau of Statistics showed that Australia's home loans rose in December.

The new loan commitments for housing rose a seasonally adjusted 4.4 percent month-on-month in December. On an annual basis, loans increased 14.0 percent.

Looking ahead, at 10:35 am ET, Bank of England Governor Mark Carney will testify before the House of Lords Economic Affairs Committee in London.

Federal Reserve Governor Randal Quarles will give a speech about bank supervision at the Yale Law School Dean's Lecture in Connecticut at 12:15 pm ET.


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ECB's Lagarde Urge Fiscal, Structural Policies To Help In Boosting EZ Economy

Trading 11 fév 2020 Commentaire »

European Central Bank President Christine Lagarde said on Tuesday that fiscal and structural policies must be adopted to support monetary measures in boosting the euro area economy.

"Monetary policy cannot, and should not, be the only game in town," Lagarde said in her introductory statement at a European Parliament plenary session in Brussels.

"Other policy areas - notably fiscal and structural polices - also have to play their part," she said.

Such measures can boost productivity growth and lift growth potential, thereby underpinning the effectiveness of ECB's stimulus measures, Lagarde said.

The ECB has the main refinancing rate at record low and the deposit rate is in negative territory. The bank is also running an asset purchase scheme, in addition to several unconventional measures to support the Eurozone economy.

"The longer our accommodative measures remain in place, the greater the risk that side effects will become more pronounced." Lagarde said.

ECB policymakers are fully aware that the low interest rate environment has a bearing on savings income, asset valuation, risk-taking and house prices, she said.

They are closely monitoring possible negative side effects to ensure the adverse effects do not outweigh the positive impact of ECB measures on credit conditions, job creation and wage income, the ECB chief added.


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*ECB's Lagarde: Monetary Policy Cannot, And Should Not, Be The Only Game In Town

Trading 11 fév 2020 Commentaire »

ECB's Lagarde: Monetary Policy Cannot, And Should Not, Be The Only Game In Town


The material has been provided by InstaForex Company - www.instaforex.com

UK Consumer Spending, Confidence Climbs In January

Trading 11 fév 2020 Commentaire »

UK consumer spending grew strongly at the start of the year and consumer confidence hit its highest level in more than three years, survey data from Barclaycard showed Tuesday.

Consumer spending grew 3.9 percent year-on-year in January, led by a 4.3 percent increase in fuel spending and a 3.7 percent climb in supermarket sales.

Spending on non-essentials grew 4 percent with expenditure at health and beauty stories rising 5.9 percent. Entertainment spending grew 6.8 percent, driven by a 22 percent jump in cinema spend as crowds flocked to see the movie 1917.

Holiday pursuits saw a 4.2 percent and 3.2 percent increase in spending at travel agents and airlines, respectively.

Meanwhile, the chilly weather led to a fall in spending in restaurants for a third straight month, down 3.5 percent. In contrast, take away expenditure grew 11.4 percent. Sales of clothing and electronics also declined.

The survey found that 42 percent consumers were upbeat about the country's economic prospects, the most positive figures reported since September 2016, and 74 percent also felt confident about their household finances, the highest seen since February 2019.

That said, 51 percent of UK adults believe the pace of economic growth could decline in the next few months and 56 percent said they have become more conscious of their personal impact on the environment and consequently intend to change their behavior.

Further, a third of shoppers also plan to reduce their purchases of plastics. Spending at discount stores grew 9.5 percent in January.

The consumer spending data is for the period from December 23, 2019 to January 24, 2020 and the consumer confidence survey was carried out between January 24 and 27 by Longitude Research on behalf of Barclaycard among 2,004 respondents.


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Powell Says The Fed Is Closely Monitoring The Coronavirus Outbreak

Trading 11 fév 2020 Commentaire »

Federal Reserve Chairman Jerome Powell said the central bank is closely monitoring the emergence of the coronavirus in testimony before the House Financial Services Committee on Tuesday.

Powell noted in prepared remarks that some of the uncertainties around trade have diminished following the signing of the phase one U.S.-China trade deal but cautioned risks to the outlook remain.

"In particular, we are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," Powell said.

However, Powell pointed out that the U.S. economy has recently appeared resilient to global headwinds, with economic activity increasing at a moderate pace over the second half of last year.

The Fed chief said the diminished uncertainty surrounding trade and signs global growth may be stabilizing led the central bank to leave interest rates unchanged at the last two monetary policy meetings.

Powell reiterated the Fed's belief that the current stance of monetary policy will likely remain appropriate as long as long as incoming information about the economy remains broadly consistent with its outlook for continued growth.

"Of course, policy is not on a preset course. If developments emerge that cause a material reassessment of our outlook, we would respond accordingly," Powell said.

Powell noted the U.S. faces some important longer-run challenges, citing lower labor force participation by individuals in their prime working years than in most other advanced economies as well as troubling labor market disparities across racial and ethnic groups and across regions of the country.

The Fed Chairman also pointed to subpar productivity growth throughout the economic expansion and argued finding ways to boost labor force participation and productivity growth should remain a national priority.

Powell also warned that the low interest rate environment may limit the ability of central banks to reduce rates enough to support the economy during a downturn.

"The current low interest rate environment also means that it would be important for fiscal policy to help support the economy if it weakens," Powell said.

"Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn," he added.

Powell is scheduled to appear before the Senate Banking Committee on Wednesday as he continues his semi-annual testimony to Congress.


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*Dollar Appreciates To Over 4-month High Of 1.0891 Vs Euro On Powell's Remarks

Trading 11 fév 2020 Commentaire »

Dollar Appreciates To Over 4-month High Of 1.0891 Vs Euro On Powell's Remarks


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Dollar Drops Before Powell’s Testimony

Trading 11 fév 2020 Commentaire »

The U.S. dollar was lower against its most major opponents during the European session on Tuesday, as investors awaited testimony from Federal Reserve Chairman Jerome Powell to see whether he would downplay the risks posed by the coronavirus.

Powell will testify before the House at 10:00 am ET.

The Chairman is expected to sound fairly upbeat about the outlook for U.S. economic growth and will face pointed questions from lawmakers related to the impact of the spreading coronavirus.

The Fed had adopted a 'wait-and-see' attitude, after reducing interest rates three times in 2019.

Powell will face the Senate Banking Committee on Wednesday.

Fed Vice Chair Randal Quarles, Minneapolis Fed President Neel Kashkari and Federal Reserve Bank of St. Louis President James Bullard are scheduled to speak at separate events later in the day.

The dollar was also weighed by improving risk sentiment, as the new coronavirus cases slowed in China.

In remarks on state television, Xi Jinping vowed to win the fight against the coronavirus outbreak.

Jinping said that China will speed up the development of drugs aimed at treating the deadly pneumonia-like virus.

The greenback dropped to 1.2943 versus the pound, following a gain to 1.2894 at 3:15 am ET. The next possible support for the greenback is seen around the 1.32 level.

Data from the Office for National Statistics showed that the UK economy logged flat growth in the fourth quarter.

Gross domestic product remained unchanged on quarter, as expected, after expanding 0.5 percent in the third quarter.

The greenback pulled back to 1.0921 against the euro, from a rally to 1.0906 at 2:15 am ET, which was its strongest since October 2. On the downside, 1.12 is possibly seen as the next support level for the greenback.

After rising to a 1-1/2-month high of 0.9788 versus the franc in the Asian session, the greenback retreated to 0.9765. The greenback is seen locating support around the 0.96 level.

The greenback eased off to 109.82 against the yen, from a 4-day high of 109.95 at 3:00 am ET. If the greenback slides further, 108.00 is likely seen as its next support level.

The greenback edged down to 1.3288 against the loonie, from yesterday's closing value of 1.3317. Further downtrend may take the greenback to a support around the 1.30 region.

In contrast, the greenback recovered to 0.6703 against the aussie, from an early 4-day low of 0.6719. The greenback is poised to challenge resistance around the 0.625 mark.

Data from the Australian Bureau of Statistics showed that Australia's home loans rose in December.

The new loan commitments for housing rose a seasonally adjusted 4.4 percent month-on-month in December. On an annual basis, loans increased 14.0 percent.

The greenback held steady against the kiwi, after falling from a 3-month high of 0.6378 hit in the Asian session. At yesterday's trading close, the pair was valued at 0.6384.

Looking ahead, European Central Bank President Christine Lagarde will deliver a speech before the European Parliament in Strasbourg at 9:00 am ET.

Federal Reserve Chair Jerome Powell testifies on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC at 10:00 am ET.

At 10:35 am ET, Bank of England Governor Mark Carney will testify before the House of Lords Economic Affairs Committee in London.

Federal Reserve Governor Randal Quarles will give a speech about bank supervision at the Yale Law School Dean's Lecture in Connecticut at 12:15 pm ET.


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BoE's Cunliffe: Cross Border Firms' Supervision Needs To Reciprocal

Trading 11 fév 2020 Commentaire »

UK needs to work closely with the EU to have deep supervisory cooperation in all areas of cross border financial activity, Bank of England Deputy Governor Jon Cunliffe said on Tuesday.

"Effective supervision of systemically important firms in business as usual cannot be achieved with multiple hands on the steering wheel," Cunliffe said at the German Economic Council Annual Finance Conference, Berlin.

Firms need clear and consistent messages, he added. Therefore, arrangements for shared supervision need to be worked out carefully and, crucially recognize the primacy of the lead supervisor.

Further, these arrangements need to be reciprocal and proportionate. This means the degree of assurance depends on the degree of risk, Cunliffe noted.

The UK left the European Union on January 31, ending 47 years of membership. Although UK is not a member of the EU, the Withdrawal Agreement provides for a transition period until December 31, 2020.

The Withdrawal Agreement provides for negotiations to begin on the EU-UK future relationship.


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*BoE's Cunliffe:shared Supervision Over Cross-border Firms To Be Formed Carefully

Trading 11 fév 2020 Commentaire »

BoE's Cunliffe:shared Supervision Over Cross-border Firms To Be Formed Carefully


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February 11, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 11 fév 2020 Commentaire »

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On December 13, the GBPUSD pair looked overpriced around the price levels of 1.3500 while exceeding the upper limit of the newly-established bullish channel.

On the period between December 18th - 23rd, bearish breakout below the depicted channel followed by temporary bearish closure below 1.3000 were demonstrated on the H4 chart.

However, immediate bullish recovery (around 1.2900) brought the pair back above 1.3000.

Bullish breakout above 1.3000 allowed the mentioned Intraday bullish pullback to pursue towards 1.3250 (the backside of the broken channel) where bearish rejection and a new wide-ranged movement channel were established between (1.3200-1.2980).

Moreover, new descending highs were recently demonstrated around 1.3200 and 1.3080.

During the past few days, signs of bullish rejection were temporarily manifested around 1.2980-1.3000 before obvious bearish breakdown could occur.

Intraday technical outlook is supposed to remain bearish as long as the pair maintains its movement below 1.3080 (the most recently-established descending high).

Conservative traders were advised to wait for bearish breakdown below 1.2980 as a signal for further bearish decline towards 1.2890 and possibly 1.2780.

In the Meanwhile, Intraday traders were advised to watch price action carefully around 1.2890 where the lower limit of the movement channel comes to meet the pair.

Since Yesterday, early signs of bullish rejection have been expressed allowing another bullish pullback to occur towards 1.3000 where price action should be watched carefully.

On the other hand, any bearish decline towards the next key-level (around 1.2780) should be watched for bullish rejection and a valid BUY entry.

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