INGOT Brokers Australia | Fundamental Report (2017-06-28)

Fundamental Report (2017-06-28)

Overview

The dollar against a the world seven major currencies, the fall in the greenback came after the euro surged more than 1 percent on Tuesday, amid a shift in European Central Bank’s president Mario Draghi to a more hawkish tone in his speech. The dollar tumbled despite the release of better than expected economic data, and Fed Chair Yellen Unchanged position in regards to another rate hike this year whom said in speech on Tuesday reassuring that another rise in rates this year is appropriate. She also said “We intend to very gradually shrink our balance sheet, we will not be selling assets and we’ve been providing more and more detail on that”. On the other hand, better than expected economic data failed push the dollar higher as sentiment continued to weigh on the greenback. The Consumer Confidence Index rose to 118.9 in June, contrary to analyst’s expectation of a drop.

The dollar index, which measures the strength of the greenback against the world seven major currencies. The index tumbled by 1.06 percent to settle at 96.08.

Meanwhile benchmarks in the United State ended Tuesday’s session lower as the drop in dollar weighed on market sentiment .Dow Jones Industrial Average dropped by  98.89 points, or 0.46 percent to trade at 21,310.66. Meanwhile the S&P 500 fell by 19.69 point or 0.81 percent to settle at 2,419.38. On the other hand, NASDAQ 100 index tumbled by 105.99 point or 1.83 percent to 5,671.60.     

Elsewhere in the United Kingdom, The sterling pound surged as the currency saw support from Bank of England’s Financial Stability Report that indicated bank would increase capital storage to shield against any unexpected market fluctuations. GBP/USD rose to trade above 1.2800 levels late in the session.     

Over in Europe, the euro was the biggest gainer of the session after ECB president Mario Draghi’s hawkish remarks regarding monetary policy. In his speech ECB President Mario Draghi’s said that central could adjust its monetary stance of sub-interest rate and massive bond purchases. Furthermore, the president also said the inflation has rebounded as of late. The currency also saw support from previous session economic data as The Ifo business climate index rose by a larger than expected margin to show a reading of 115.1 points to help the Euro gain against the greenback. The EUR/ rose by more than 1 percent to trade above 9 month highs the 1.1330 levels.    

  

In Japan, safe haven currency Japanese Yen lost ground versus the greenback, despite general weakness in the dollar on Wednesday. USD/JPY rose by 0.44 percent to settle at 112.34 at the close.   

Commodity dependent currencies, the Aussie dollar and New Zealand dollar edged lower to versus the greenback, due to traders short covering and taking profit from recent bullish trend, The AUD/USD edged lower to almost unchanged levels to trade above 0.7580 levels, and NZD/USD traded lower down to 0.7265 levels.  

In Canada, Oil dependent “loonie dollar” continued to gain ground versus the dollar to shrug off the some losses in the incurred early in the week. Moreover, the loonie saw support from rising oil prices to end the session higher against the greenback. The USD/CAD fell by 0.36 percent to end the session at 1.3198.

Finally, looking ahead this week as investor will keep an on several upcoming major economic events, As Bank of England Governor Carney, Bank of Canada Governor Poloz, Bank of Japan Governor Kuroda and most importantly European Central Bank President Draghi are Scheduled to speak on Wednesday. Moreover, investor will keep lookout for other Major economic data released this week, U.S. Pending Home Sales, China Manufacturing Purchasing Managers Index, Germany Unemployment Change, U.K. Gross Domestic Product, Eurozone Consumer Price Index, and Canada Gross Domestic Product.

           

 

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