Analyze the forex market

25 January 2018

Forex Today: NZD regains poise, DXY slumps, German Ifo, ECB – Key

Forex News
The US dollar continued to lose ground across the board In Asia and went on to hit fresh three-year lows sub-89 handle, triggering a fresh buying-wave across all the majors.  The Kiwi took this opportunity and staged a solid comeback, reversing more-than-half of the NZ CPI miss induced slide. Both the EUR and GBP reached fresh three-year tops versus its American rival while the Yen clocked a four-month high at 108.93.
Among other related markets, the Asian equities declined on the back of sell-off in tech stocks while weaker USD also roiled the sentiment. Oil prices rallied hard on the back of bullish EIA crude inventory report while the yellow metal jumped to four-month tops, as the bulls now aim for the key $ 1375 barrier.
Main topics in Asia
NZ: CPI rose 0.1% in the last quarter of 2017
"Prices rose 0.1 percent in the December 2017 quarter," Stats NZ reported on Thursday.
Oil and gas firms expected to increase capital spending in 2018
Intentions to boost capex indicates the oil and gas industry is becoming more confident about the oil rally but also hints at increased supplies next year. 
Dollar index hits fresh 3-year low below 89.00
The dollar index (DXY), which tracks the value of the greenback vs. the basket of currencies, fell to a fresh 3-year low of 88.95 in Asia as Trump team at Davos backed US dollar.
S&P affirms Australia's AAA/A-1+ ratings; Outlook remains Negative
The US-based ratings agency, S&P, in its latest credit review report on Australia, affirmed Australia’s sovereign credit ratings at AAA/A-1+ while maintaining a negative outlook.
Key Focus ahead
On Thursday, the EUR calendar remains full of action, with the main risk event likely to be the ECB monetary policy outcome alongside ECB President Draghi’s presser. Markets are expecting the ECB to refrain from using any hawkish language in its statement, given the subdued inflation and recent EUR appreciation. Hence, they believe the ECB would leave any alteration to its QE program for March meeting and stand pat today.


On the data front, the German Ifo business surveys will be reported ahead of the ECB verdict while the UK docket will see the CBI realized sales release. In the NA session, the Canadian retail sales data will draw some attention amidst a slew of the US macro releases, including the jobless claims, new home sales, and goods trade balance data. \
EUR/USD - LT Trendline hurdle breached, can Draghi outdo Mnuchin?
The EUR/USD rose to a fresh three-year high of 1.2416 in Asia, taking the year-to-date gains to 3.33 percent.
GBP/USD: Bulls unstoppable, 1.4300 tested
The GBP/USD pair is seen building on its three-day rally, as the bulls aim to regain the 1.43 handle amid persistent broad-based US dollar weakness and a rally in oil prices.
ECB not seen delivering further hawkish communications - Nomura
In the view of analysts at Nomura, the European Central Bank (ECB) will refrain from delivering any hawkish communication at its monetary policy announcement today, in the wake of recent softer inflation data.
Dollar Crashes, Will ECB Draghi Say Enough to Kill Euro Rally?
It was another crushing day for the U.S. dollar with the greenback trading sharply lower against all of the major currencies. What sets this leg apart from others is that it drove many major currency pairs beyond important support and resistance levels. 

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