There are still expectations of rate cuts after three of the most important central banks reduced their interest rates yesterday aggressively, especially the BoE which reduced rates by 150 basis points. Anyways we wish you a nice weekend and a successful trading day.
Market review
The JPY increased against the EUR and the GBP after the BoE and ECB both reduced their interest rates. The ECB cut rates by 50 basis points to 3.25% on Thursday and signaled that another cut could be possible next month. The BoE slashed a more-than-expected cut of 150 basis points from 4.5% to 3.0%. Economists say more rate cuts would follow. Yesterday the EUR / AUD fell over 2000 pips to 1.6929 before they increased and closed the day at 1.9086 up to 0.8%. Whereas the EUR / USD lost about 2.08% at the day. GBP / USD also fell 2.04% on Thursday with a day-close at 1.5594. Currently the EUR / USD trades around 1.2750 up to 0.8% from a day low of 1.2650, while the EUR / JPY seems to be steady with trading close to the opening at 124.17.
The USD falls against the JPY as investors keep their risk-averse stance given by the battered stocks, some traders said. Equities are regarded as a barometer for investors. Their declines can trigger unwinding carry trades of the investors. That includes selling of low-yielding currencies like the JPY to invest in higher-yielding currencies and assets, they add. Currently the Nikkei trades with a loss of 3%. This could have some further affects on the Japanese currency. The USD / JPY trades currently around 97.50, which is around 0.3% lower than the day-opening of 97.68.
NZD / JPY
Since end of June the NZD / JPY has been trading in Fibonacci fan lines. After breaking through the lower trend line, the market has already tried the second time to come back to these lines. If the pair doesn’t break up through the lower fan line we could expect further bearish movements.
EUR / CAD
As expected the EUR / CAD has shown a very strong bearish trend movement after going through the middle Bollinger band. Now the market has reached the lower band and it seems that the market is oversold. This could be a sign for rising movements in the next few days.
