Dollar Notches 8th Decline for Worst Stumble in Nearly 6 Years
The Dollar keeps notching records...unflattering ones. With the Dow Jones FXCM Dollar Index (ticker = USDollar) closing down another 15 points just above the 16,000-level, the benchmark has extended its slide to an eighth straight trading session. This painful decline matches the worst performance for the benchmark since July of 2007. That said, of the only six times in the Index's history that it has posted bear waves of this consistency, this is the 'weakest'. Through this decline, the USDollar has shed only 102 points. This compliments the deceleration of global equity indexes as their 'rebound' hits levels that venture into the outright 'bull trend' category. There is a considerable difference between corrections and true trend - one of conviction, momentum and potential follow through.
Risk trends are the immediate concern for the greenback as the pressure is palpable. Equity indexes across the globe have put in for flattering rebounds as the 'risk premium' fed into the volatility measures (like the VIX) were worked off. From traders, the ambitious speculative shorts disarmed while the aggressive bulls bought the biggest dip in months. Yet after the Nikkei 225 retraced 38 percent of its January declines, the
British Pound Posts Its Biggest Rally in Months, But Is This Momentum?
As expected, the scheduled event risk for the pound this session would prove a serious market-mover for the currency...even though the outcome obscured the outlook for rate watchers. Back in August, the Bank of
Australian Dollar Tumbles after Unemployment Rate Hits 10-
The Australian dollar suffered a massive hit to open Thursday's trading session. The monthly labor statistics are a market-moving series for the Aussie currency; but when there is a tremulous rate forecast in at stake, its importance is magnified. The 3,700 net jobs lost through the past month (against a 15,000-gain expected) was a relatively modest decline, but the jobless rate more than made up for it. The 6.0 percent print was a tick higher than expected and boosted the unemployment level to its highest in a decade. This is a serious hurdle for the currency to finally find traction on speculation for its first rate hike timeframe. The 6 bp drop in the 2-year yield (to 2.81 percent) reflects this.
Euro May Regain Fundamental Strength if ECB Continues to Write Off Deflation
The case for a fresh round of preemptive stimulus from the ECB that seemed so strong after the November rate cut and even the December hold is quickly evaporating. This past session, multiple ECB members (including Coeure and Hansson) talked down the risk of deflation - one of the few official justifications of preventative QE. Without stimulus to curb rates, the euro will rely on general risk trends and the yield reach.
Yen Crosses at Risk of Reversal as Equities' Recovery Slows
Alongside the notable deceleration in equity indexes' rally, we have seen the risk-sensitive yen crosses similarly lose their momentum. Three months ago, a market that was unfettered by general sentiment issues would see these pairs continue their rise on the outlook for more stimulus. Yet, that forcible yen-devaluation expectation is cooling. The IMF recently remarked further easing from the BoJ wasn't needed.
US Oil Fails Again to Overtake
Crude briefly rallied above
Emerging Markets Leverage the Recent Period of Calm
Risk premium in the Emerging Market seems to be deflating. The region's volatility index continues to retreat from its five month high and the MSCI ETF is keeping its positive bearings. Policy officials seem to be taking advantage of this. Slovenia sold
Gold Advance Ends in the Same Manner it Unfolded - With Little Conviction
After five days of advance, gold finally posted a red bar. Yet, the
Consumer Inflation Expectation (FEB)
AUD action likely to be limited ahead of employment data.
RICS House Price Balance (JAN)
Est. revised up 1% since last week.
Employment Change (JAN)
Last month's print was a disappointment and sent the AUD/USD pair falling more than 80 pips. Fundamental developments since then include
Unemployment Rate (JAN)
Full Time Employment Change (JAN)
Part Time Employment Change (JAN)
Participation Rate (JAN)
German Consumer Price Index (MoM) (JAN F)
Estimates for the final print currently match the preliminary print of -0.6% MoM.
German Consumer Price Index (YoY) (JAN F)
German CPI - EU Harmonised (MoM) (JAN F)
German CPI - EU Harmonised (YoY) (JAN F)
Greece Unemployment Rate (NOV)
New Housing Price Index (MoM) (DEC)
New Housing Price Index (YoY) (DEC)
Advance Retail Sales (JAN)
Advance Retail Sales has managed to stay positive since March, but a recent decline in automobile purchases and the weather situation in the Northeast are negative factors for this reading.
Advance Retail Sales ex Autos (JAN)
Advance Retail Sales ex Auto and Gas (JAN)
Initial Jobless Claims (
Continuing Claims (
Business Inventories (DEC)
Upcoming Events & Speeches
Indonesia Central Bank Rate Decision (EM)
South Korea Rate Decision (EM)
European Central Bank Monthly Report
Fed Chair Janet Yellen Testifies to Senate Committee
US to Sell
Argentina Publishes New National CPI Indices
RBA Christopher Kent Speaks on Australian Economy
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