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USD/JPY retreated from 6-year high before another attack

 

 

 

FXStreet (Moscow) - USD/JPY retreated from almost 6-year high at 105.70 seen in Asia; it is trading at 105.24.

 

Another volatile day

 

Today the pair became even closer to 6-year highs, but the stronger than expected Non-Manufacturing ISM was not enough to convince the traders to buy more. Partially the cautious behavior of the market may be attributed to the looming Non-Farm Payrolls report. There are arguments for the employment rise, for instance, in form of strong ISM Non-Manufacturing Employment Component. However, there are also some leading indicators pointing to possible weakness of the report. We already know, the ADP reported worse than expected rise in payrolls, ISM Manufacturing Employment Component dropped to 58.1, and Jobless Claims 4-Week Moving Average rose to 302k. We may see another volatile day ahead!

 

What are today’s key USD/JPY levels?

 

Today's central pivot point can be found at 105.13, with support below at 104.89, 104.51 and 104.26 with resistance above at 105.51, 105.76, and 106.14. Hourly Moving Averages are mixed, with the 200SMA bullish at 104.39 and the daily 20EMA bullish at 103.75. Hourly RSI is bullish at 53.

 

 

 


 

 

Sep 05, 2014

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SEB: S&P500 unhealthy price action - eFXnews

 

 

 

FXStreet (Łódź) - As the eFXnews team point out the SEB sees S&P500's action as unhealthy, with another topside spike added on Thursday.

 

Key quotes

 

"Buyers encounter big difficulties to drive the trend further."

 

"A sustained drop under 1.9888/86 remains an elevated risk - and if so, extension towards 1, 965 should be accounted for."

 

"Current intraday stretches are located at 1,988 & 2,008."

 

'This content has been provided under specific arrangement with eFXnews.'

 

 

 


 

 

Sep 05, 2014

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The ECB finally delivered – Danske Bank

 

 

 

FXStreet (Edinburgh) - Pernille Nielsen, Senior Analyst at the Nordic Danske Bank, evaluated yesterday’s announcements by the ECB.

 

Key Quotes

 

“Overall, the measures should support the easing in June, when the ECB introduced a negative deposit rate and announced it would boost liquidity through TLTRO loans”.

 

“At the same time, the ABS purchases will strengthen the effectiveness of the TLTROs as it removes loans from the banks’ balance sheet and hence increases the banks’ lending capacity to the real economy due to capital requirements”.

 

“So far, the size of the ABS and covered bonds purchases is unknown and, according to Mario Draghi, it is difficult to assess the size of the ABS programme as it will include new and existing ABS”.

 

“Draghi stated that the ECB has now reached the lower bound on policy rates”.

 

“The ECB is still unanimous in using unconventional measures should it become necessary to further address risks on inflation”.

 

“The decisions taken by the ECB should underpin anchoring of inflation expectations”. 

 

“The ECB still sees expectations as anchored, but it has seen downside risks to inflation increasing and due to that it eased again”.

 

“The market reaction to the rate cut was pronounced as it was not expected with any greater conviction”.

 

“It is noteworthy to see the steepening in the EUR swap curve from the long end as a sign of the market believing the ECB measures will lift growth and inflation expectations.

 

 

 


 

 

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European stocks edge lower after ECB shock, NFP eyed

 

 


FXStreet (Córdoba) - European stocks were little changed Friday, a day after the European Central Bank (ECB) surprised markets by announcing rate cuts and other measures to support economic growth and fight deflation in the Eurozone. Meanwhile, investors are refraining from taking big positions ahead of the US nonfarm payrolls report.

 

The Stoxx Europe 600 fell 0.32% to 347.77, pulling back from a 2-month high. As for country-specific indexes the UK FTSE dropped 0.29%. The Germany’s DAX 30 was up 0.12% while the France’s CAC 40 shed 0.10%. Spain’s Ibex 35 and Italy’s FTSE MIB were both little changed. 

 

On Thursday, the ECB took a step forward and cut all 3 of its main interest rates and announced it will start purchasing non-governmental securities and asset-backed securities (ABS) next month. However, the bank refrained from committing to unlimited sovereign QE.

 

Equities markets received the ECB news with optimism. The Stoxx Europe 600 rallied 1.1% yesterday, closing at its highest level since July 3.

 

Today, Eurozone GDP for the second quarter matched expectations of a 0.7% growth YoY.

 

In the FX market, majors are taking a breather after yesterday’s fireworks. EUR/USD is nearly flat at the 1.2950 area after bottoming at a 14-month low of 1.2919 on the back of ECB expansionary measures. GBP/USD is trading at 1.6320, after hitting 7-month trough of 1.6285 while USD/JPY is also flat at the 105.20 region, having pulled back modestly from a 6-year peak of 105.70.

 

As for commodities, gold recovered a tad after hitting a fresh 3-month low. The metal was 0.2% up at $1,264 an ounce while crude oil rose 0.52% to $94.93 a barrel.

 

 

 


 

 

Sep 05, 2014

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EUR/USD could slump further on positive NFP - FXStreet

 

 

FXStreet (Łódź) - FXStreet Chief Analyst Valeria Bednarik observes that ahead of the US NFP release EUR/USD is consolidating losses sustained after the ECB monetary policy announcement yesterday, near the 1.2921 low. 

 

Key quotes

 

"Today, the market expects the US economy to add 225K and unemployment rate to retrace back to 6.1%."

 

"The dollar may look exhausted in the short term, yet if numbers outcome such expectations, will probably continue advancing: a break through the 1.2920 mentioned low should see a quick slide towards 1.2880 price zone, while if the downward acceleration extends, next target stands at 1.2845."

 

"If the reading however disappoints, market may take the opportunity to profit from recent slide, generating an upward corrective movement: 1.3000 critical figure is the first level to watch, while if above, 1.3050 is next."

 

 

 


 

 

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AUD/USD around 0.86 in 12m view – Rabobank

 

 

FXStreet (Edinburgh) - Senior Currency Strategist Jane Foley at Rabobank expects the pair to range bound between 0.92 and 0.93 in the short term and to slip towards 0.86 in 12m.

 

Key Quotes

 

“Over the past year or so, one of the greatest fears regarding the outlook for the Australia economy has related to concerns over a lack of alternative investment spending (in anything other than residential property)”.

 

“Although a number of labour market indicators have picked-up since the start of this year, the weakness in capital expenditure has suggested that future employment growth could be weak”.

 

“Last week, however, official data showed that Q2 capital expenditure grew a better than expected 1.1% q/q, suggesting that Australia is finally managing to re-invent itself following the end of the mining investment boom. This piece of data will certainly have fed the AUD’s current resilient tone”.

 

“Looking forward we expect that soft economic data releases will wear down the current resilient tone of the AUD”.

 

“While the official Capex data should bolster the mood of the policy makers, it is clear that headwinds still cloud the outlook and this suggests risk that the RBA could again attempt to jawbone the AUD to lower levels”.

 

“Over the coming 3 mth we expect the AUD/USD 0.92 to 0.93 to contain most activity. On a 12 mth view, we look for a move towards 0.86. This assumes a broad based recovery for the USD as the first hike in the Fed funds rate near”.

 

 

 


 

 

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UK IP and construction data to hint at steady Q3 GDP growth - RBS

 

 

FXStreet (Łódź) - Ross Walker, Senior UK Economist at RBS remarks that the UK industrial production and construction data, due out next week, will provide more information on the possible Q3 GDP outcome. 

 

Key quotes

 

"Underlying trends and survey data suggest a steady pace of economic expansion in Q3."

 

"Although modest downside risks are becoming more evident, July is probably a little too early for any significant euro area contagion to affect output."

 

"We forecast growth of 0.2% m/m in IP and 0.7% m/m in construction." 

 

"These early data, together with this week’s variable PMI surveys, would be consistent with Q3 GDP growth of 0.7%-0.8% q/q in Q3 (vs 0.8% q/q in both Q1 and Q2)."

 

 

 


 

 

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Session Recap: Majors take a breather ahead of NFP

 

 

FXStreet (Córdoba) - The European session brought some calm to the FX market as investors remain sidelined, digesting ECB moves and awaiting the US nonfarm payrolls report.

 

EUR/USD has recovered only modestly after yesterday’s selloff as investors refrain from taking big positions ahead of the nonfarm payrolls. EUR/USD climbed to the 1.2960 from a 14-month low of 1.2919 . GBP/USD also edged a tad higher, regaining the 1.6300 level to trade flat at the 1.6315 zone. USD/JPY pulled back after hitting its highest level since October 2008 at 105.70.

 

European economic data had virtually no impact on currencies as all eyes are now poised on US jobs report. However, following Thursday’s ECB surprise and given that the strength of the US economy has been largely priced in, data could take a back seat this month.

 

Consensus look for a strong labour market performance: a 209K gain in payrolls and the unemployment rate to fall to 6.1%. 

 

Main Headlines in Europe:

 

Germany Industrial Production n.s.a. w.d.a. (YoY) rose from previous -0.5% to 2.5% in July

 

All eyes on US Non farm Payrolls – Danske Bank

 

What lies ahead of the EUR/USD? – Scotiabank and OCBC Bank

 

Gold recovers from fresh 3-month lows

 

EMU: GDP up 0.7% in Q2, as expected

 

European stocks edge lower after ECB shock, NFP eyed

 

 

 


 

 

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USD/CAD capped around 1.0890

 

 

FXStreet (Edinburgh) - The greenback is extending the consolidation pattern vs. its Canadian counterpart on Friday, taking the USD/CAD to the 1.0880/75 region.

 

USD/CAD eyes on US, Canadian docket

 

Spot continues to retrace the weekly peaks just below the 1.0950 level ahead of key releases from the labour markets in the US and Canada. While market expectations point to a creation of 225K jobs in the US economy in August, Canadian employment is expected to increase by 10K and the jobless rate to stay unchanged at 7.0%. “With market perceptions of US divergence only likely to have been strengthened further this week, there is a very strong possibility that the CAD continues to trade with a stronger tone on the European crosses (EUR, GBP, NOK, SEK & CHF), depending on the tone of today’s data releases from North America”, observed Stephen Gallo, European Head FX Strategy at BMO.

 

USD/CAD levels to watch

 

The pair is now advancing 0.08% at 1.0885 with the next resistance at 1.0890 (high Sep.5) followed by 1.0910 (high Sep.4) and finally 1.0943 (high Sep.3). On the downside, a break below 1.0857 (100-d MA) would open the door to 1.0821 (low Sep.4) and then 1.0810 (low Aug.29).

 

 

 


 

 

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USD/CAD consolidating under 1.0900

 

 

FXStreet (Córdoba) - After the release of employment data from the United States and Canada, USD/CAD fell to 1.0838 and then rose to 1.0902, in a few minutes. Afterwards move toward the 1.0880/90 area, where it was trading before economic data. 

 

During the last hours USD/CAD has remained steady trading below 1.0900, slightly above the price it had a week ago. 

 

USD/CAD technical outlook

 

“The short-term charts for USDCAD are getting a little messy which is reflective of the high degree of uncertainty and the tumbling degree of conviction in this market after all the recent swings in spot”, said the Rates, FX and Commodities Research Team from TD Securities. 

 

According to them the lack of upside momentum “leaves the process of lower highs in place since the late August rejection of the upper 1.09s. We have no strong views here at the moment and feel the market may continue to range-trade for a few more weeks.”

 

 


 

 

Sep 05, 2014

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Japan's August Eco Watchers Survey points to the economy’s fading growth momentum - BNP Paribas

 

 

FXStreet (Łódź) - Raymond Van Der Putten, economist at BNP Paribas, comments on the poor Japan Economy Watchers Survey results, published today. 

 

Key quotes

 

"Today’s Economic Watchers Survey confirms the fading growth momentum in the economy."

 

"In August, the current condition index dropped sharply by 3.9 points to 47.4. This decline is partly related to unfavourable weather (slow moving typhoons that caused heavy rainfall) and rising prices for fuel and materials."

 

"On the other hand, a growing number of respondents noted that the fall in demand after the VAT-hike had been waning."

 

"Today’s survey will increase calls on the BoJ to step up its asset buying programme."

 

"However, we are rather doubtful of such a change in policy."

 

"More asset buying may lead to a further depreciation of the yen and worsening purchasing power."

 

 


 

 

Sep 08, 2014

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Troika awaiting Cypriot foreclosure law details

 

 

FXStreet (Łódź) - EU officials informed on Monday that the Troika hasn't received the new Cypriot bill adopted on Saturday, speeding up foreclosures on business loans and mortgages and aimed at making way for the release on the next, 10 billion euro tranche of bailout money.

 

The controversial bill allows financial institutions to seize delinquent borrowers' properties already after two years, and not after 15 years as it is currently established. 

 

The EU stressed that the disbursement of aid, which could be approved at the Eurogroup meeting on Friday, couldn't be done without the details of the foreclosure law. 

 

The Irish and Greek bailout proceedings are also to be discussed during the Eurogroup meeting.

 

 


 

 

Sep 08, 2014

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Troika awaiting Cypriot foreclosure law details

 

 

FXStreet (Łódź) - EU officials informed on Monday that the Troika hasn't received the new Cypriot bill adopted on Saturday, speeding up foreclosures on business loans and mortgages and aimed at making way for the release on the next, 10 billion euro tranche of bailout money.

 

The controversial bill allows financial institutions to seize delinquent borrowers' properties already after two years, and not after 15 years as it is currently established. 

 

The EU stressed that the disbursement of aid, which could be approved at the Eurogroup meeting on Friday, couldn't be done without the details of the foreclosure law. 

 

The Irish and Greek bailout proceedings are also to be discussed during the Eurogroup meeting.

 

 


 

 

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GBP/USD on its way to 1.6000? – Westpac

 

 

FXStreet (Edinburgh) - Robert Rennie, Analyst at Westpac, notes the likeliness of the sterling to test the 1.6000 level vs. the greenback in the near term.

 

Key Quotes

 

“While there are significant unknowns about the event itself given the structure of the vote (16 year olds but no expats?), potential turnout and the very simple yes/ no question, the recent trend in the polls confirms the outcome will be extremely close”.

 

“However, the weekend poll clearly demonstrates a clear narrowing in views and this now means that this is a critical driver for the £ and financial markets will follow each and every twist closely”. 

 

“Given the poll takes place in the same week as the first of the TLTROs and the September FoMC where the Fed is expected to debate 'new language on interest rates' we would expect to see further weakness in the £ and € and strength in the US$”.

 

“Even if, as I hope and expect, a no vote is the final outcome, it's likely that we will see further weakness ahead for the £. With the 1.6280 level broken this morning, the potential for a push down to 1.60 looks possible in the near term”.

 


 

 

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EUR/USD treading water around 1.2950

 

 

FXStreet (Edinburgh) - The EUR managed to bounce off overnight lows near 1.2930, lifting the EUR/USD to the 1.2950/55 band.


EUR/USD supported near 1.2930

 

After dipping to overnight lows near 1.2930 at the beginning of the week, spot managed to rebound and regain the mid-1.2900s so far. Data wise in the euro region, investor’s confidence gauged by the Sentix index unexpectedly dropped to -9.8 for the month of September vs. 2.0 forecasted and August’s 2.7, although the result did not curb the upbeat momentum surrounding the single currency today. “Technically, the $1.3000-50 area needs to be overcome to signal a correction, we suspect, instead of a consolidation phase. On the downside, the next big target is just below $1.28”, noted analysts at BBH.

 

EUR/USD levels to watch

 

As of writing the pair is losing 0.02% at 1.2948 and a breakout of 1.2990 (high Sep.5) would aim for 1.3110 (low Sep.2) and then 1.3154 (high Sep.4). On the flip side, the initial support aligns at 1.2920 (low Sep.4) ahead of 1.2788 (61.8% of 1.2042-1.3995) and finally 1.2755 (low Jul.9 2013).

 

 


 

 

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USD/CAD regains 1.0900

 

 

FXStreet (Edinburgh) - The greenback is inching higher on Monday, pushing the USD/CAD back to levels above the 1.0900 mark.

 

USD/CAD supported near 1.0800

 

Recent pullbacks in spot found decent support in the vicinity of 1.0800 the figure, although any bullish attempt seems to struggle to overcome the upper 1.09s so far. In the data front, Canadian Building Permits advanced 11.8% inter-month in July, surpassing estimates albeit lower than June’s print (16.4%). In the opinion of Shaun Osborne, Chief FX Strategist at TD Securities, “From the Bank of Canada’s perspective, Friday’s employment figures contribute to the narrative of continued slack in the economy, which will be absorbed gradually as the latter regains a stronger performance in the second half of the year… funds will spend some time trading in the 1.08-1.10 range and remain somewhat vulnerable to a drop to the 1.07s”, signaled Shaun Osborne, Chief FX Strategist at TD Securities.

 

USD/CAD relevant levels

 

The pair is now advancing 0.22% at 1.0904 with the next resistance at 1.0910 (high Sep.4) followed by 1.0943 (high Sep.3) and finally 1.0956 (high Aug.27). On the downside, a break below 1.0841 (low Sep.5) would open the door to 1.0821 (low Sep.4) and then 1.0810 (low Aug.29).

 

 

 


 

 

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Support level at the price of 1.5020 is on the test - ForexTrading.TV

 

FXStreet (Łódź) - Petar Jacimovic, currency analyst at ForexTrading.TV, points out that the GBP/CHF support level at the price of 1.5020 is on the test.

 

 

 


 

 

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USD/JPY pushes to fresh daily highs

 

 

 

FXStreet (Córdoba) - USD/JPY has advanced slightly Monday, reaching fresh daily highs at the beginning of the New York session, but still not able to pick up momentum to retest last week’s 6-year highs.

 

USD/JPY has risen modestly throughout the day, and printed a fresh daily high of 105.47 in recent dealings as the dollar recovers from post-NFP lows against the yen. US nonfarm payrolls showed the US added the fewest jobs in 8 months in August (142K vs 225K exp.), hitting the greenback across the board.

 

However, the setback of USD/JPY was contained by the 104.65 area and the pair managed to close the week above the 105.00 mark. At time of writing, the pair is trading at 105.40, recording a 0.31% gain on the day.

 

The calendar is light for the American session, but traders will be watching the Bank of Japan meeting minutes to be published next Asian session.

 

USD/JPY technical outlook

 

“The intraday outlook is rather negative, for a slide through 104.70, en route to 103.50”, said Stoyan Mihaylov, analyst at Deltastock. “Crucial on the upside is 105.70”.

 

 

 

 


 

 

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Market uncertainty grows as poll points to possible Scottish yes vote - TD Securities

 

 

 

FXStreet (Łódź) - The TD Securities team of analysts comment on the possible consequences of a "yes" vote and of a "no" vote in Scotland's independence referendum scheduled for 18 September.

 

Key quotes

 

"The Sunday Times YouGov poll over the weekend became the first major poll to show a majority Yes vote in favour of Scottish independence, with a 51-49 margin excluding undecided votes."

 

"There are still significant uncertainties over the accuracy of polling in this situation that will likely leave significant uncertainty over markets right up through the September 18th referendum."

 

"Market reactions (cable down 1.5%, 2-5y area rallying 6bps, first BoE hike pushed back from Feb15 to May15) confirm our bias that cable is likely to underperform into the referendum, with a Yes vote likely triggering a further 2-3% fall, with a rally in 2s and steepening out the curve, with 10s more uncertain, and the market pushing back the BoE’s first hike by up to 12 months."

 

"In the case of a Yes vote, we would expect GBPUSD to trade in a range of 1.5450-1.5722 in the aftermath while Dec15 short sterling still offers value in the case of a Yes vote, while the nearer contracts are likely in the middle of their potential ranges."

 

"In the case of a No, EURGBP is likely to retrace as low as 0.7950."

 

"UK markets will now likely trade from poll to poll, with the next major poll from TNS BMRB potentially released Tuesday morning."

 

 

 

 

 


 

 

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USD/JPY extending gains above 105.00 - FXStreet

 

 

 

FXStreet (Łódź) - As FXStreet Chief Analyst Valeria Bednarik observes, USD/JPY is climbing steadily above the 105.00 level on Monday.

 

Key quotes

 

"USD/JPY is extending the bounce from its 100 SMA, currently around 105.10 and immediate short term support."

 

"In the same time frame, indicators head higher above their midlines, lacking momentum at the time being, while the 4 hours chart shows indicators also well into positive territory, but with no strength."

 

"Above 105.45, January high, the pair will likely retest past week one of 105.70, in route to 106.00."

 

 

 

 

 

 

 


 

 

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UK: Annual Industrial Production dips 1.6% in May

 

 

 

FXStreet (Łódź) - Year-over-year UK Industrial Production fell by 1.6% in May, following a 2.0% drop in April, National Statistics informed on Tuesday. This is a more positive result that the forecasted 2.1% decrease. UK Industrial Production rose by 1% between April 2012 and May 2012, in comparison with the 0.4% decline registered between March 2012 and April 2012 and against expectations of a 0.2% drop.

 

On an annual basis UK Manufacturing Production fell by 1.7% in May, after decreasing 1.5% in April and above expectations of a 1.9% decline. Between April 2012 and May 2012 UK Manufacturing Production rose 1.2%, following a 0.8% drop between March 2012 and April 2012 and exceeding market consensus of 0.1% growth.

 

 

 

 


 

 

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GBP/USD 1.6000 A Big Level...Will It Hold? - ForexTrading.TV

 

 

 

FXStreet (Łódź) - Nick Jordan, currency analyst at ForexTrading.TV wonders whether the GBP/USD 1.6000 level will hold.

 

 

 


 

 

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Credit Agricole: Recent GBP drop connected with Scottish independence vote - eFXnews

 

 

 

FXStreet (Łódź) - The eFXnews team comment on Credit Agricole 's observation that since the beginning of July GBP/USD fell to 1.611 from 1.719 and as the drop accelerated last week it is most probably due to the market pricing in risks of Scotland voting 'yes' in the independence referendum.

 

Key quotes

 

"Position squaring explains some of the move, as the UK economic data has modestly decelerated in Q3 and the market has cut back some its long GBP holdings. However, nearly half of this move has taken place over the past the week, suggesting that the market has started to price in the risks of a breakup."

 

"We take a stab at the potential implications of a 'yes' vote on September 18, which in our view are considerable. The biggest risks are the destabilization of the banking system and the potential for a sharp rise in the UK’s debt burden."

 

"Furthermore, the debt build-up could also weaken the growth prospects for Scotland (and the rest of the UK) but it would not have currency control to lessen the impacts."

 

"Indeed, the BoE would still dominate Scotland monetary policy."

 

"Corporate investment and consumer spending is likely to grind to a halt amid economic and regulatory uncertainty."

 

"All told, the long-term outcome of a possible 'yes' vote is a re-run of the Eurozone crisis – namely the dangers associated with fiscal sovereignty and a shared currency."

 

"While we stick to our view that Scotland will likely vote 'no,' be prepared for sharp drop in GBP if the Scot’s decide to leave."

 

'This content has been provided under specific arrangement with eFXnews.'

 

 

 


 

 

Sep 09, 2014

OctaFX.Com News Updates

 

 

 


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