The US dollar jumped today as traders digest the news about quantitative easing tapering by the Federal Reserve. Excessive monetary stimulus was detrimental for the dollar and its reduction helped the currency to gain. The Fed announced yesterday that it is going to reduce the size of its monthly asset purchases by $10 billion to $65 billion per month. Such move was not completely unexpected, but some market participants had though […]
Read moreThe Mexican peso advanced today as economic growth in the United States improved prospects for Mexico’s exports to its neighbor and the biggest trading partner. US gross domestic product rose 3.2 percent in the fourth quarter of 2013. It was slower than predicted 3.3 percent and third quarter’s 4.1 percent, but growth was still relatively strong. This helped the peso, which also rose with the aid of the positive general market […]
Read moreThe Australian dollar managed to rise today even as fundamentals were not supportive, both domestically and overseas. It looks like monetary tightening of various central banks made the traders’ sentiment good enough to overcome adverse factors. Australian import prices fell 0.6 percent and export prices were down 0.5 percent in the fourth quarter of 2013 from the third quarter. The HSBC Purchasing Managersâ Index for China dropped to 49.5 in January […]
Read moreLoonie is struggling to regain some of the ground it lost in earlier trading against the greenback. However, there isn’t a lot to support the Canadian dollar right now, and so it is expected to continue to struggle. The Canadian dollar is expected to perhaps drop as far as 85 cents against the US dollar by the middle of 2014. The Canadian dollar has been struggling to regain ground lost earlier by a combination of factors contributing to a generally lackluster […]
Read moreEUR/USD had a muted reaction on the Federal Reserve tapering yesterday, but came crushing down today after traders digested the news. Even worse-than-expected reports from the United States did not prevent the dollar from gaining on the euro. US GDP grew 3.2% in the fourth quarter of 2013 according to the advance estimate. The actual change was smaller that predicted 3.3% and previous quarter’s 4.1%. (Event A on the chart.) Initial jobless claims […]
Read moreThe New Zealand dollar dropped today as the nation’s central bank kept monetary policy unchanged, refraining from an interest rate hike. At the same time, the tone of the statement was very hawkish and suggested that monetary tightening will occur soon. The Reserve Bank of New Zealand kept its key interest rate at 2.5 percent. Governor Graeme Wheeler was very upbeat in the statement and hinted that a rate hike is not […]
Read moreThe US dollar rose today after the Federal Reserve performed quantitative easing tapering yesterday. Surprisingly, the Forex market did not react very strongly to the news and the dollars’ gains were not particularly big. The Fed announced yesterday that it is going to reduce the size of monthly purchases by yet another $10 billion. The statement said: Beginning in February, the Committee will add to its holdings of agency mortgage-backed securities at a pace […]
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