INGOT Brokers AU | Fundamental Report (2017-06-26)

Fundamental Report (2017-06-26)


The greenback ended Friday’s session lower to almost its largest one session drop in three weeks, thus closing lower for the week. The recent drop in the dollar came after investors’ raised doubts of another interest rate hike this year amid easing inflation data in the Unites States. Economic data in the U.S this week came as expected by the market with unemployment claims rising to 241 thousand. While the U.S Consumer Price Index (CPI) was weaker than expected thus raising concern whether U.S inflation was on track to reaching Fed target of 1.9 percent. The dollar index dropped to its 4 day lows to trade at 97.24 compared to previous session close of 97.54.

U.S indices closed Friday’s session in mixed territories with the Dow Jones Industrial Average edging lower to give up 2.53, or 0.01 percent, at 21,394.76. On the other hand the S&P 500 was up 3.80 points, or 0.16 percent, to 2,438.30 and the Nasdaq Composite gained 28.57 points, or 0.46 percent, to 6,265.25.

Elsewhere in the United Kingdom, The sterling pound gained some lost ground after falling early in the week amid initiation of Brexit negotiation with the EU. However, investor became optimistic amid members of the Bank of England shifting their stance and leaning towards a rate hike. Furthermore, England policymaker Kristin Forbes urged for a hike on Thursday. GBP/USD rose to currently trade above the 1.2730 levels.

Over in Europe, the euro gained versus its dollar counterpart on Friday amid light trading volumes in a week with no major economic data. However the euro saw support from positive initial negotiation with the United Kingdom. EUR/USD rose to trade above 1.1190 levels.  

Meanwhile, safe haven currency the Japanese Yen moving lower in a week that was lacking major economic data. the Yen gained some strength despite the statement made by Bank of Japan Deputy Governor Kikuo Iwata on Thursday who dismissed the need to raise interest rates any time soon, stressing that the economy still requires support from "powerful" monetary easing, with inflation far from the central bank's 2 percent target.

Commodity dependent currencies, the Aussie dollar and New Zealand dollar gained versus the greenback, the currencies saw support from rise price in commodity prices and recent weakening in the dollar.

Oil dependent currency, the “loonie dollar” lost some of the gains made in the previous session after economic data showed downbeat inflation data weighed on the currency. The Canadian dollar gained versus the greenback in the previous session amid a rebound in Oil prices from seven month lows. Canada’s consumer price index rose by 0.1 percent in May, contrary to analyst expectation of a rise by 0.2 percent.  

Finally, next week will be a busy week in the US as the June consumer confidence indicator, pending home sales, crude oil inventories, revised first quarter GDP and the PCE price index will be published. Furthermore, ECB president Mario Draghi will speak on Monday and Tuesday. While Federal reserve Chair Yellen is scheduled to speak on Tuesday. 



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