INGOT Brokers AU | Fundamental Report (2017-07-28)

Fundamental Report (2017-07-28)

Overview

On Thursday, the greenback recovered most of the losses it incurred Wednesday on after investor digested in the U.S Federal Reserve’s Federal Open Market Committee Statement, despite the release of mixed economic data. The dollar found support from profit-taking and massive selling in the Swiss Franc as the CHF/USD tumbled by more than 1.45%.

The Fed voted to leave benchmark rates unchanged at 1.00-1.25% on Wednesday.

The dovish tone in the U.S Federal Reserve’s Federal Open Market Committee Statement weighed heavily on the greenback; in the statement, Policymakers indicated that they were slightly concerned in regards to the recent sluggish inflation pace, which remains under the Fed reserve target of 2%. Furthermore, Policymakers hinted that the Central bank would start shrinking its $4.5 trillion dollar balance sheet “relatively soon” which economist and Analyst in major banks around the world believe that would start in September.

Regarding economic data, New Home Sales in the United States came at 610K compared to previous month sales of 605K. Moreover, on Thursday, upbeat durable goods orders for June offset the impact of downbeat initial jobless claims the came lower than market expectation.

Initial Jobless claims came in weaker than expected to advance by 10,000 to  244,000 compared to an expected decline of 7,000.

On the other hand, Durable goods orders beat expectations to rise by 6.5% compared to economist expecting an increase of 0.3%.     

The US Dollar Index, which measures the strength of the US Dollar against a basket of major currencies surged on Thursday to recover some losses from Wednesday's session. Trading above 14-month lows the dollar index surged by 0.47% to trade at 93.75 at the close.

Elsewhere in Great Britain, the sterling pound lost some of it’s the gains in the previous after the dollar rallied intraday. The GBP/USD shed 0.40% to trade at 1.3066 at the close.

Meanwhile, the European Euro ended the session in negative territories after hitting new highs early in the session versus the dollar to hover 2-year highs after profit-taking weighed on the currency; the EUR/USD dropped 0.50% to settle at 1.1675 after hours.

Furthermore, in Japan, the Japanese Yen was out muscles by the greenback on Thursday, the Yen lost on Thursday amid the intraday recovery in the dollar and rising political uncertainty in Japan. The USD/JPY added 0.08% to end the session at 111.25.

Meanwhile, Commodity Based currencies ended Thursday's session in red territory as the Aussie dollar lost after advancing for three consecutive trading sessions, and Kiwi dollar fell amid strength on the greenback. The AUD/USD declined by a margin of 0.50% to trade near 2-year highs at 0.7956.on the other hand, The NZD/USD fell by 0.41% to end the session at 0.7488.

Over in Canada, the loonie dollar saw a halt to its seven-day rally versus the greenback on Thursday, after advancing for seven consecutive sessions the loonie erased the gains made in the previous three trading sessions versus the dollar. However, dollar’s gain was limited by the rise in Oil prices, a major Canadian export; The USD/CAD ended the session higher by a margin of 0.90% to settle at 1.2553 at the close.

 

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