INGOT Brokers AU | Fundamental Report (2017-11-02)

Fundamental Report (2017-11-02)


The U.S Dollar index pulled back from 3-1/2-month high versus a basket of major currencies on Thursday pressured by the fed language on its monetary policy and expectations that Jerome Powell is likely going to be the next head of the federal reserve. The U.S dollar index fell against a basket of six major rivals to 94.57.

Regarding the U.S central bank meeting, today the fed has kept interest rates unchanged as was expected. However, the U.S central bank highlighted the robust U.S economic growth which indicates a likely interest rate hike by the end of the year.

Furthermore, The ADP National Employment Report which measures the monthly change in non-farm, private employment came at 235,000 in October well above expectations of 200,000 jobs and more than double the figure seen in September which was 110,000, the APD is released two days before government data, and usually, it is a good indicator for the government's non-farm payroll report.

On the other hand, The Institute of Supply Management PMI for October came at 58.7 missing expectations of 59.5 and below the September reading of 60.8.

Regarding the nomination of the federal reserve, the U.S president Trump is expected to nominate Jerome Powell as the head of the U.S central bank. Jerome Powell is seen as less hawkish compared to other candidates which is capping the dollar; expectations show that The announcement is expected on Thursday.

Regarding the tax reduction, After the one-day postponement of the bill's unveiling on Wednesday, the U.S. lawmakers have made plans to reduce taxes by 6 trillion Dollars over a period of 10 years.

Over in Europe, the common currency fell against the U.S dollar in yesterday session after the europian inflation data came below expectations.however the euro rose in today’s session supported by the weakening of the Dollar, the EUR/USD ended Wednesday session at 1.1618.

Meanwhile, The Cable rose versus the dollar in today’s session ahead of the bank of England interest rate decision, the BOE is likely to raise interest rates for the first time in a decade. The GBP/USD traded lower on Wednesday to settle at 1.3244.

Looking at safe-haven currencies, the Japanese yen fell against its dollar counterpart, the Dollar gained 0.5 percent overnight and approached 114.27, its highest level since July 11, but the yen recovered some of its losses today amid the delay of unveiling the U.S tax reform bill. The USD/JPY rose to trade at 114.14 at the close. Moreover, the USD/CHF rose to trade at 1.0032 at the close.

In the precious metals front, Safe-haven asset gold rose against the greenback on Wednesday to trade at 1274.45 at the close.

Elsewhere in Canada, the loonie rose versus the greenback. The U.S oil inventories fell by nearly 2.5 million barrels. Thus USD/CAD rose to settle lower at 1.2865.

Meanwhile, in Australia, Approvals to build new houses in Australia climbed to a seven-month high, and the trade balance came higher at 1.745 billion beating expectations of 1.2 billion promising signs for growth across the economy.The AUD/USD traded at 0.7675 at the close.


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