INGOT Brokers AU | Fundamental Report (2017-10-30)

Fundamental Report (2017-10-30)


The U.S Dollar index remained near its three-month highs versus a basket of major currencies on Monday as the single currency fell after the latest europian central bank meeting and the ongoing tension in Spain regarding Catalonia independence.

The U.S dollar index edged lower against a basket of six major rivals dipping 0.1 percent to 94.82, but remained near its three month high of 95.150 on Friday.

The federal reserve will hold a two-day meeting on Tuesday and Wednesday and will likely keep interest rates at its current levels however the expectation suggest an interest rate hike is likely to be seen in December.

Regarding the nomination of the federal reserve governor, the U.S president Donald Trump is leaning towards Jerome Powell to be the next head of the U.S federal reserve.Furthermore, the other potential nominee John Taylor the Stanford University economist is considered more hawkish than Powell.

In the economic news front, the Gross Domestic Product came better than expectations by 0.5 percent at three percent but below the previous quarter which was 3.1 percent.

Over in Europe, the common currency fell against the U.S dollar after the europian central bank announced its plans to extend its bond purchases to September 2018 and reducing its monthly purchases to 30 billion euros at the beginning of 2018.

Meanwhile, in Spain, the sacked Catalonian president Carles Puigdemont called for a democratic opposition to the government's takeover of the region after its declaration of independence from Spain. The EURUSD fell to trade at 1.1607.

Meanwhile, The Cable also fell versus the greenback pressured by retail sales that dropped in October while traders were keeping an eye on Bank of England next meeting on the 2nd of November to decide whether it will proceed with an interest rate increase. The GBP/USD traded lower to settle at 1.3131.

Looking at safe-haven currencies, the Japanese yen advanced against its dollar counterpart after scoring a three-month high of 114.45 yen on Friday. The USD/JPY fell to trade at 113.67 at the close.

Regarding bank of Japan meeting, the Bank is expected to keep short-term interest rates at minus 0.1 percent and the 10-year government bond yield near zero percent. Furthermore, Japan reported retail sales for September were up by 2.2 percent, compared with a 2.5 percent gain on year expected.

In the precious metals front, Safe-haven asset gold rose against the greenback on Friday to trade at 1273.55 at the close. After U.S dollar hit three-month highs on Friday following the drop in the single currency.

Elsewhere in Canada, the loonie gained some of its losses incurred versus the greenback; the loonie found support from oil prices. As a result, The USDCAD edged lower to settle at 1.2808 at the close.

Meanwhile, in Australia the deputy prime minister was dismissed from his seat because he held dual citizenship in New Zealand, risking a one-seat majority for the conservative government.The AUD/USD traded at 0.7676 at the close.

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