Forex Analysis: Euro Relief Rally To Fizzle- FOMC Minutes In Focus

RELATED QUOTES

SymbolPriceChange
GBPUSD=X1.29670.00
USDJPY=X101.4580+0.371
EURUSD=X1.1218-0.0002

Talking Points

  • Euro: IMF Fires Warning Shots, ECB Call For Greater Integration
  • British Pound: BoE Curbs Growth Forecast, Raises Inflation Outlook
  • U.S. Dollar: Index Presses Key Figure, FOMC Minutes In Focus

Euro: IMF Fires Warning Shots, ECB Call For Greater Integration

The Euro advanced to an overnight high of 1.2755 as the EU increased its pledge to keep Greece in the monetary union, but the bearish sentiment surrounding the single currency is likely to gather pace as European policy makers maintain a reactionary approach in addressing the debt crisis.

Indeed, International Monetary Fund Managing Director Christine Lagarde continued to fire warning shots against Greece and said that the region needs a ‘real fix, not a quick fix,’ while Germany policy makers warned that the IMF may scale back its assistance for Greece as the periphery country continues to seek additional assistance.

As the governments operating under the fixed-exchange rate system become increasingly reliant on external support, European Central Bank board member Jozef Makuch argued that monetary policy can ‘not solve the reasons for the crisis,’ and argued that the region needs greater fiscal integration to ‘break the vicious circle’ as EU officials struggle to restore investor confidence.

Although the EURUSD appears to be finding trendline support off of the descending channel carried over from 2011, the fundamental outlook continues to cast a bearish outlook for the pair, and the recent rebound in the exchange rate is likely to be short-lived as the ongoing threat for contagion exacerbates the economic downturn in the euro-area.

British Pound: BoE Curbs Growth Forecast, Raises Inflation Outlook

The British Pound tagged a low of 1.5853 as the Bank of England (BoE) lowered its growth forecast for the U.K. and the sterling may face further declines over the near-term as the central bank keeps the door open to expand its balance sheet further.

However, the BoE scaled back its dovish outlook for inflation as the central bank now sees price growth approaching the 2% target over the near to medium-term, and we may see a growing number of Monetary Policy Committee (MPC) members strike a more neutral tone for monetary policy as they take note of the stickiness in consumer prices. In turn, we anticipate the MPC to carry its wait-and-see approach into the following year, but the bearish trending in the GBPUSD may continue to take shape as market participants maintain bet for more easing.

As the GBPUSD struggles to hold above the 100-Day SMA (1.5869), we may see the pair fallback towards the 38.2% Fibonacci retracement from the 2009 low to high around 1.5680, but we will keep a close eye on the relative strength index as it approaches oversold territory.

U.S. Dollar: Index Presses Key Figure, FOMC Minutes In Focus

The greenback continued to track higher on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a high of 9,993, and the reserve currency may track higher throughout the North American trade as forex traders scale back their appetite for risk.

Fears surrounding the U.S. ‘Fiscal Cliff’ may drag on the dollar, but the FOMC Minutes could prop up the reserve currency over the near-term as the world’s largest economy gets on a more sustainable path. Although Fed doves continue to float the idea of tying monetary policy to specific fundamental goals, the policy statement should take note of the resilience in private sector consumption along with the budding recovery in the housing market, and the recent uptick in employment may encourage a increased number of Fed officials to soften their dovish outlook as the recovery becomes increasingly broad-based.

Should the FOMC endorse a more neutral tone for monetary policy, the shift in central bank rhetoric may sap bets of seeing Operation Twist being extending in December, and the bullish sentiment surround the dollar should gather pace over the remainder of the year as the central bank moves back towards its transmission mechanisms to stimulate economic activity.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

15:00

10:00

Business Inventories (SEP)

0.4%

0.6%

EUR

15:45

10:45

ECB's Jorg Asmussen Speaks on Euro Economy

USD

19:00

14:00

Federal Open Market Committee Meeting Minutes

NZD

21:00

16:00

ANZ NZ Job Ads (MoM) (OCT)

-2.9%

NZD

21:30

16:30

Business NZ Performance of Manufacturing Index (OCT)

48.2

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Bursa caps Teck Guan surge Business Times - 11 minutes ago

    KUALA LUMPUR: Bursa Malaysia yesterday capped the surge in Teck Guan Perdana Bhd’s share price at RM1.78 after the stock hit limit up for two consecutive days. The surge followed Teck Guan’s announcement of a solid results for the second quarter … More »

  • EPF looking at diversification Business Times - 12 minutes ago

    HONG KONG: Malaysia’s largest pension fund is looking to diversify its investment portfolios in a bid to boost returns, according to chief executive officer Datuk Shahril Ridza Ridzuan. The Employees Provident Fund (EPF) planned to invest more in … More »

  • 3 investment lessons from the House of Cards
    3 investment lessons from the House of Cards Truewealth Publishing - 16 minutes ago

    The political drama House of Cards – on Netflix at an internet connection near you – is about the fictitious rise to power in the American political system of ruthless politico Frank Underwood and his wife, Claire. Frank and Claire are fearlessly … More »

  • Sharp says to invest 57.4 billion yen in OLED business
    Sharp says to invest 57.4 billion yen in OLED business Reuters - 16 minutes ago

    TOKYO (Reuters) - Japan's Sharp Corp said on Friday it will invest 57.4 billion yen($567.81 million) in its organic light-emitting diode (OLED) business as part of a shift towards the production of displays ... … More »

  • Tokyo shares down by break on Deutsche Bank worries AFP - 25 minutes ago

    Tokyo shares fell Friday morning as Deutsche Bank's woes dented financial stocks while exporters turned down on the stronger yen. The benchmark Nikkei 225 index dropped 1.55 percent or 258.10 points to ... … More »

  • Bank Stocks Decline in Asia as Deutsche Bank Concerns Increase Bloomberg - 31 minutes ago

    Declines in Bank of Communications Co. and Mitsubishi UFJ Financial Group Inc. on Friday have put an index of Asian banks on course for its lowest close in two weeks after Bloomberg News reported about 10 hedge funds doing business with the German … More »

  • China says to remove consumption tax on non-luxury cosmetic products Reuters - 33 minutes ago

    Beijing (Reuters) - China will remove consumption tax on non-luxury cosmetic products with effect from Oct. 1, the finance ministry said on Friday. The ministry also adjusted the consumption tax on high-end ... … More »

  • United States investing in Niger air base
    United States investing in Niger air base AFP News - 43 minutes ago

    The United States is investing in a military air base capable of deploying drones in Niger's central city of Agadez, the Pentagon confirmed. The United States already has a military presence in the country's southwestern capital of Niamey, where it … More »

  • Elliott takes 8.1 percent stake in Mentor Graphics Reuters - 44 minutes ago

    Mentor Graphics is the latest technology firm the hedge fund has targeted, following successful campaigns at Qlik Technologies, Riverbed, Informatica and Compuware, which all sold to private equity firms after Elliott invested. Elliott said in a … More »

  • PBOC Seen Switching to Monetary Tightening as Soon as 2017 (1) Bloomberg - 45 minutes ago

    Seven expect the PBOC will make its next broad policy move by guiding interests in a corridor using changes to short, medium and longer-term lending facilities. Just one economist forecasts the next policy move will be a change to benchmark … More »

  • Venezuela expects non-OPEC nations like Russia to join in output cuts
    Venezuela expects non-OPEC nations like Russia to join in output cuts Reuters - 47 minutes ago

    Venezuelan President Nicolas Maduro said on Thursday he expects non-OPEC oil-producing countries, like Russia, to support OPEC's efforts to boost oil prices by reducing crude output. The Organization of the Petroleum Exporting Countries (OPEC) on … More »

  • Russia aims to keep oil output around current level after OPEC deal Reuters - 49 minutes ago

    Russia is aiming to keep its oil production at near-record levels despite OPEC's decision to modestly reduce its output, Russian Energy Minister Alexander Novak said on Thursday. Oil producers' group OPEC agreed on Wednesday to limit its output to … More »

  • Ringgit opens lower on falling oil prices Business Times - 53 minutes ago

    The ringgit opened lower against the US dollar today on the back of falling oil prices. A dealer said investors questioned if members of the Organisation of the Petroleum Exporting Countries (OPEC) would stand by the proposal to cut oil output in … More »

  • Hong Kong Stock Selloff Pares Best Quarterly Advance Since 2009 Bloomberg - 54 minutes ago

    The Hang Seng Index dropped 1.3 percent as of 10:17 a.m. local time, paring its gain since the end of June to 13 percent. Bank of Communications Co. led a measure of financial companies lower, sliding 2.8 percent. Property companies fell for a … More »

  • Hedge Funds Are China’s Newest Export as Quants Flock Abroad (1) Bloomberg - 1 hour 1 minute ago

    Quantitative money managers from the world’s second-largest economy are opening offshore funds at a never-before-seen pace, according to Marlon Sanchez, the Asia-Pacific head of prime finance at Deutsche Bank AG. XY Investments, founded by an … More »

  • Caribbean at Keppel Bay unit selling at 2010/11 prices
    Caribbean at Keppel Bay unit selling at 2010/11 prices The Edge Property - 1 hour 8 minutes ago

    A 1,227 sq ft unit at Caribbean at Keppel Bay is on the market with a price tag of $1.8 million ($1,467 psf), according to a listing on TheEdgeProperty.com. The three-bedroom unit is situated in one of the blocks fronting the outdoor water … More »

  • Unit at Hilltops sold for $2,419 psf
    Unit at Hilltops sold for $2,419 psf The Edge Property - 1 hour 12 minutes ago

    In the prime Cairnhill Circle neighbourhood, a 1,550 sq ft, three-bedroom unit at Hilltops changed hands for $3.75 million ($2,419 psf), according to a caveat lodged on Sept 15. The unit was purchased for $5.54 million ($3,576 psf) in November … More »

  • Alarm Bells Sound in New York as Duterte’s Audit Roils Mines (1) Bloomberg - 1 hour 15 minutes ago

    The threat to shutter about three-quarters of the nation’s mines risks savaging the country’s reputation among investors, according to the head of a company whose operations face suspension. “I just came from New York, and investors are very … More »

  • Senator: Education Dept. mishandling Corinthian student debt
    Senator: Education Dept. mishandling Corinthian student debt Associated Press - 1 hour 20 minutes ago

    The Education Department is pursuing debt collection — rather than debt relief — for nearly 80,000 former students of Corinthian Colleges, despite federal and state findings that the now-defunct for-profit ... … More »

  • US-Philippines military alliance 'ironclad': Pentagon chief
    US-Philippines military alliance 'ironclad': Pentagon chief AFP News - 1 hour 22 minutes ago

    US Defense Secretary Ashton Carter said America's alliance with the Philippines remains "ironclad" even though the Asian ally's leader has vowed to end joint military exercises. The Pentagon chief's remarks came as he headed for a security summit … More »

  • China Inc. Sells Unpaid Bills to Banks as Debt Web Spreads (1) Bloomberg - 1 hour 35 minutes ago

    Resorting to a method of raising cash faster known as factoring, Sany Heavy Equipment International Holdings Co., a Chinese machinery maker, said in earnings reports that it began selling receivables at a discount. Rival Zoomlion Heavy Industry … More »

  • Global equity deals rise in third quarter but down 30 percent year-to-date - Thomson Reuters data Reuters - 1 hour 45 minutes ago

    Global equity fundraising rose in the third quarter, Thomson Reuters data showed on Friday, but failed to make up for the sharp slowdown of the first half of 2016, when volatile markets deterred listings. Bankers said a robust pipeline of deals may … More »

  • Yen Halt Near 100 Signals Japan Doesn’t Need Direct Intervention Bloomberg - 1 hour 45 minutes ago

    Japan’s currency has appreciated to within 0.1 percent of 100 three times since it last traded stronger than that level five weeks ago, then retreated. Traders say it is running into waves of sell orders every time it approaches, spurring … More »

  • Oil prices down on profit-taking after two-day jump
    Oil prices down on profit-taking after two-day jump Reuters - 1 hour 49 minutes ago

    Oil prices dropped on Friday on profit-taking, after rising 7 percent in the past two sessions, amid doubts that OPEC's first planned output cut in eight years would make a substantial dent in the global crude glut. The Organization of the … More »

  • Windfall in District 20
    Windfall in District 20 The Edge Property - 1 hour 50 minutes ago

    The bigger profit of $6.1 million accrued to a two-storey bungalow at Windsor Park Estate, which was sold for $8.6 million, or $1,203 psf on land area. Since the seller purchased the freehold property with a land area of 7,147 sq ft in June 2006 at … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.156-0.004-2.50%
    N21.SI
    0.117+0.010+9.35%
    40F.SI
    0.114+0.002+1.79%
    40E.SI
    3.96-0.06-1.49%
    Z74.SI
    0.7450.0000.00%
    G13.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.164+0.016+10.81%
    40N.SI
    0.117+0.010+9.35%
    40F.SI
    0.69+0.04+5.34%
    BHU.SI
    0.215+0.010+4.88%
    1A4.SI
    1.65+0.07+4.43%
    BVA.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.20-0.06-23.08%
    AWI.SI
    0.2350.0000.00%
    BTF.SI
    0.255-0.020-7.27%
    F86.SI
    0.13-0.01-7.14%
    5MQ.SI
    0.45-0.03-6.25%
    T55.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3656+0.0016+0.12%
    USDSGD=X
    1.5317+0.0017+0.11%
    EURSGD=X
    1.7708+0.0027+0.15%
    GBPSGD=X
    74.2940+0.223+0.30%
    SGDJPY=X
    5.6775-0.0065-0.11%
    SGDHKD=X
    3.0329+0.01+0.33%
    SGDMYR=X
    9,521.8594-20.8535-0.22%
    SGDIDR=X
    4.8852-0.0018-0.04%
    SGDCNY=X
    1.0411+0.0002+0.02%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,326.90+0.90+0.07%
    GCZ16.CMX
    19.17-0.01-0.07%
    SIZ16.CMX
    95.01-0.66-0.69%
    ^XAU
    2.18-0.01-0.30%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.12-0.01
    ^FVX
    1.56-0.01
    ^TNX
    2.28-0.01
    ^TYX