Good morning from beautiful Hamburg and welcome to our latest Daily FX Report. When Russia’s currency depreciation bottomed on Jan. 30, one investor announced it was loading up on rubles to the tune of $7.9 billion. Now, after the world’s biggest rally, that same investor is selling. The investor? Russia. Deputy Finance Minister Alexey Moiseev said on Tuesday the ruble is “very strong” and the ministry has started buying foreign currencies. The ruble’s 42 percent surge from a record low at the end of January has hit resistance at about 49 rubles against the greenback as verbal interventions by policy makers in April gave way to the central bank buying dollars. Given the timing of the Finance Ministry’s purchases exactly as the ruble bottomed in January, some analysts say they’re taking more notice of the ministry’s strategy.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspectiv
The euro tumbled the most in two months after a European Central Bank official said policy makers plan to boost bond purchases before an anticipated mid-year lull. The single currency slumped after Executive Board member Benoit Coeure said the ECB will increase purchases under its quantitative-easing program from 60 billion euros ($67 billion) in May and June, ahead of a drop-off in market liquidity. The euro extended losses versus the dollar after a report showed residential construction in the U.S. surged in April to the highest in more than seven years, supporting the Federal Reserve’s move toward raising interest rates. The euro dropped 1.5 percent to $1.1150 as of 5 p.m. in New York, the most since March 19. It slipped 0.9 percent to 134.57 yen. The dollar rose 0.6 percent to 120.69 yen. Improving economic data from the euro area has fueled speculation policy makers may curtail asset purchases before a September 2016 end date, lifting the euro from a 12-year low. ECB President Mario Draghi attempted to quell such talk last week, saying the program would be implemented “in full.” The euro fell versus 15 of 16 major peers as Coeure’s comments about injecting money. Accelerated stimulus in Europe contrasts with monetary policy in the U.S., where the Fed is inching closer to raising interest rates for the first time since 2006. Residential construction in the U.S. surged in April, a report showed Tuesday, boosting the case for higher borrowing costs. Housing starts jumped to a 1.14 million annualized rate, the most since November 2007, according to data from the Commerce Department. The Fed releases minutes from its April 29 meeting on Wednesday.
Daily Technical Analysis
GBP/CHF (Daily)
After the sharp sell-off in January based on the Swiss National Bank the GBPCHF was able to recover most of it’s losses. The currency pair is building a triangle and touched both trendlines. It’s might be possible that the price will continue the recovery if the next resistances will be broken significant. The Indicators are showing a undecided range at the time.
Support & Resistance (Daily)
This document is issued and approved by Varengold WPH Bank AG. The document is only intended for market counterparties and intermediate customers who are expected to make their own investment decisions without undue reliance on the information set out within the document. It may not be reproduced or further distributed, in whole or in part, for any purpose. Due to international laws/regulations not all financial instruments/services may be available to all clients. You should have informed yourself about and observe any such restrictions when considering a potential investment decision. This electronic communication and its contents are intended for the recipient only and may contain confidential, non public and/or privileged information. If you have received this electronic communication in error, please advise the sender immediately, and delete it from your system (if permitted by law). Varengold does not warrant the accuracy, completeness or correctness of any information herein or the appropriateness of any transaction. Nothing herein shall be construed as a recommendation or solicitation to purchase or sell any financial product. This communication is for informational purposes only. Any market or other views expressed herein are those of the sender only as of the date indicated and not of Varengold. Varengold reserves the right to consider any order sent electronically as not received unless it is confirmed verbally or through other means.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.