Analysis and Recommendation: The USD/JPY dipped 14 points to 124.73 after moving back to recent highs as the greenback rallied this week. The US dollar
The USD/JPY dipped 14 points to 124.73 after moving back to recent highs as the greenback rallied this week. The US dollar dipped from its highs as traders corrected after comments from another Fed member, contradicting Mr. Lockhart’s previous notion that a September rate hike was in the bag.
Traders are bolstering bets the Federal Reserve will raise interest rates before the year is out as the economy appears firmly in recovery mode. Interest-rate futures showed the chances of a Federal Reserve rate increase next month reached 48 percent Thursday, up from 38 percent earlier this week.
“A September rate hike from the Federal Reserve seems to be the consensus among market participants,” said Chris Weston, Melbourne-based chief market strategist at IG Ltd. This “is the first time the market has swung to having September as its base case. It is now clear the Fed’s tolerance of low wages has increased and we’re not going to need to see a dramatic improvement in wage trends before raising the funds rate. This makes the unemployment rate data print the most important aspect in this Friday’s payrolls.”
The Japanese yen is trading at multi-year lows versus the US dollar and sterling. Its depreciation has been more pronounced over the past year, spurred by the Bank of Japan’s (BoJ) additional stimulus in October 2014, when the central bank surprised the market by announcing an expansion of its asset purchase program to an annual pace of 80 trillion yen.
BoJ policymakers have been explicit in their intentions to meet an inflation target of 2% and consistently bullish in their outlook. The market has been sceptical for good reasons. Japan’s economy has struggled to make meaningful improvements since it bounced back from recession late last year, leading the BoJ to push back the timeframe of meeting its inflation target from the fiscal year 2015 to 2016.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
AUD |
Employment Change (Jul) |
38.5K |
10.0K |
7.0K |
|||
AUD |
Full Employment Change (Jul) |
12.4K |
|
24.9K |
|||
AUD |
Unemployment Rate (Jul) |
6.3% |
6.0% |
6.1% |
Upcoming Economic Events that you should be monitoring:
Friday, August 7, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
JPY |
BoJ Press Conference |
|
|
|
|
||
USD |
Nonfarm Payrolls (Jul) |
|
223K |
223K |
|
||
USD |
Unemployment Rate (Jul) |
|
5.3% |
5.3% |
|
||
CAD |
Employment Change (Jul) |
|
5.0K |
-6.4K |
|
||
CAD |
Ivey PMI (Jul) |
|
52.0 |
55.9 |
Government Bond Auctions
Date Time Country
Aug 06 10:30 Spain Auctions Bonos
Aug 06 11:10 France Auctions OATs
Aug 10 17:30 Italy Announces details of BTP/CCTeu on 13 Aug
Aug 11 11:30 UK Auctions 0.125% 2058 I/L Gilt
Aug 12 11:30 Germany Eur 4bn Aug 2025 Bund
Aug 13 11:10 Italy Auctions BTPs/CCTeus
Aug 19 11:30 Germany Eur 5bn Sep 2017 Schatz
Aug 19 11:03 Sweden Holds bond auction
Aug 20 10:30 Spain Auctions Bonos/Obligaciones
Aug 20 11:30 UK Auctions 4.25% 2036 Gilt
Aug 21 17:30 Italy Announces details of CTZ/BTPei on 26 Aug