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Forex-Sterling soars on upbeat U.K. economic outlook, euro fights back

Author: James Spencer / In News

Sterling was the largest mover on major currency markets last week which was primarily driven by the latest in a batch of more promising indications on Britain’s economic prospects ahead of elections this coming May. In Europe, all eyes are focused on Greece and the associated risks to the euro while the yen steadily maintained a leap driven by the Bank of Japan’s confirmation that it did not see the necessity to print more money to jumpstart its economy. Average wage growth, for long is largely the missing ingredient in Britain’s economic recovery, soaring to 2.1 % in December which limit inflation that fell 0.3 % last month and driving sterling nearly 1 % higher to 73.64 pence per euro. Generally, the argument in favour of the pound which is now trading at a 6-year high against a basket of currencies in which the U.K. will prove a more secured bet than its […]

What could overturn the bull market?

Author: Erik Kearney / In News

The markets have been, by far accommodating in 2015 but a sense of vulnerability is keeping the overexcitement at bay. Playing these fears we have come up with a short list of black-swan type events that have the propensity to have the same sort of effect as the unravelling of the Swiss franc against the euro. It is rare that the Swiss National Bank surprises the impact given the massive trading losses on some currency trading desks and in retrospect, the move was in fact predictable given the euro’s precipitous decline in recent months and the prospect of the ECB implementing massive quantitative easing. U.S. Monetary Policy Mistake The Federal Reserve is facing a very hard challenge after seven years of near-zero interest rates, it will need to carefully approach a communication needle to ease markets into a potential rate hike in 2015. Cyber-Attacks on Financial/Government Infrastructure A more solid […]

BoJ require assessment of the bigger picture before easing

Author: Tim Messenger / In News

The Yen is beginning to become challenging for the Japanese economy as both inflation and consumer sentiment continue to diminish. Inflation presently sits at 0.5 % (precluding the sales tax hike and food prices) and might possibly even head towards negative territory. The purpose why consumer sentiment has declined is due to the frail yen and weak confidence that will likely to follow the currency on any additional downward moves. This present impediment concerns the BoJ as it is cautious to ease policy even further as the yen will further plunge to a fragile state. Inflation has attained such lowly levels in a no small part due to the dropping commodity prices, specifically oil. Diminishing commodity prices should be an benefit for both commodity and consumers via lowly prices along with lower cost correspondingly, hence increasing the likelihood of cost-push inflation. Moreover, prices are beginning to outperform wages so with a […]

Higher beef prices along with failing dollar push commodities index forward

Author: Gordon Smith / In News

According to NAB, hefty increase in beef prices and lesser increase in dairy, lamb and vegetable prices counterbalance the mixed performance in the grains industry. Economists at various agribusiness said that the coming months are optimistically looking great and positive. Moreover, beef is firmly staying at such elevated high levels with dairy looking like it might have taken the plunge in order to provide assistance and support to dairy prices in the domestic prices. Lamb prices were in the rise while the failing dollar would act as a cushion to fibres and grains markets from lower prices on the international markets. This year, dairy production is predicted to increase by 1.5 % and sugar by 5 % whereas wool and cotton were speculated to contract correspondingly. NAB forecast the Australian dollar to fall to a low of U.S. $ 0.74 cents this year and U.S. $0.73 cents by the year 2016. The […]

Gold turns up as Fed minutes demonstrate patience on rate hike

Author: David Gibson / In News

Gold was able to rise last week rebounding above a six-week low following minutes from the Federal Reserve’s recent meeting which revealed policymakers concerned about increasing its interest rates much too soon. Minutes from the Federal Open Market Committee’s recent January meeting expressed concerns that the raising interest rates much sooner could result in a cold drop on the U.S. economic recovery. Policy makers likewise also upset over the effects of the dropping “patient” from the central bank’s interest rate guidance. Spot gold likewise went up 0.1 % to $1,209.56 an ounce following an earlier fall to a six-week low at $1,197.56 U.S. gold futures for April delivery, which settled down $8.40 or 0.7 % at $1,200.20 per ounce. Platinum prices surged following its recent slide to their lowest in 5 1/2 years. This should place a short-term bottom in gold which will confirm what some in the market have suspected, that […]