Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 24 JULI 2013

• Euro May Rise as Improved PMI Readings Boost ECB Policy Outlook
• US Dollar May Fall Further if New Home Sales Data Underperforms
• Australian, NZ Dollars Sink as Chinese PMI Data Proves Disappointing

The preliminary set of July’s Eurozone PMI figures headlines the economic calendar in European trading hours. Expectations point to moderation, with the region-wide index expected to show manufacturing- and service-sector activity shrank at the slowest pace since March 2012. News-flow from the currency bloc has increasingly outperformed relative to consensus forecasts (according to data compiled by Citigroup), which seems to have been at least somewhat supportive for ECB policy expectations. Meanwhile, the Euro continues to track closely with the front-end yield spread, suggesting another upside surprise this time around may underpin the rates outlook as help the single currency extend gains.

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DAGELIJKSE MARKT ANALYSE 25 JULI 2013


• Dollar Recovers but Doubt Reigns Over EUR/USD, GBP/USD Reversals
• British Pound Ready for this Week’s Top Event Risk: UK 2Q GDP
• Australian Dollar Sent on a Wild Ride After 2Q CPI, China Data Releases
• Euro Advances as Eurozone Economy Reading Turns Positive
• New Zealand Dollar Rallies Despite RBNZ Hold, High Currency Lament
• Japanese Yen Crosses Advance…But Not on Carry
• Gold Drops for the First Time in 5 Days with Dollar Rebound

Dollar Recovers but Doubt Reigns Over EUR/USD, GBP/USD Reversals
Confronted with a serious, technical breakdown and a rebound back within a well-formed range; the USDollar followed the easier path this past session. The hearty 0.6 percent rally for the Dow Jones FXCM Dollar Index no doubt has many thinking we have seen a lasting, bullish reversal for the pained currency. However, the backdrop for fundamentals and market conditions don’t support such a proactive assessment by the reserve currency. Looking to the S&P 500 as a proxy for the combined influence of traditional risk appetite and confidence founded in stimulus, the 0.4 percent dip – the biggest in four weeks – hardly turned the bulls off the scent. We need something definitive to upset the balance of moral hazard and yield chase. The improvement in the July Markit manufacturing report and 8.3 percent jump in pending home sales erodes the argument for a Taper delay, but not materially enough unite the speculative masses on a shared timeframe. The same will be true of Thursday’s initial jobless claims and durable goods numbers. While they are meaningful reads of economic activity, they do not have the clout to sway the Fed’s timetable to ease off QE3. That definitive move may not come until next week’s GDP and NFPs.

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DAGELIJKSE MARKT ANALYSE 26 JULI 2013

• Dollar Tumbles after Fed Mouthpiece Suggests Fed Guidance Change
• British Pound: Why a Drop after UK 2Q GDP Hits Robust Expectations?
• Euro: Greece Moves to Ensure EU Rescue Payout Approval Friday
• Australian Dollar Suffering as Confidence in RBA Rate Hikes Builds
• Japanese Yen: BoJ Seeing Success as Inflation Rises, But Not Yen Crosses…
• New Zealand Dollar Post-RBNZ Rally to Best Day in 13 Months
• Gold Eases Higher as Hilsenrath Revives Taper Talk, Gold Producer Suffers Low Prices

Dollar Tumbles after Fed Mouthpiece Suggests Fed Guidance Change
The dollar was slowly retracing the previous session’s undeserved strength Thursday when the market caught wind of a ‘Taper’ headline. Later in the US trading session, Wall Street Journal report Jon Hilsenrath – considered the unofficial mouthpiece for the Fed – released a report suggesting the Federal Reserve would keep its $85 billion-per-month stimulus program untouched next week and that they would look to ‘refine’ their ‘easy-money message’. Waking the market up from its volatility lull was worth a market-wide selloff for the dollar and a few enticing technical breakouts from pairs like USDJPY and GBPUSD. However, there is likely little more to be garnered from this newswire item than a jolt from traders asleep at the wheel. There was an exceptionally low probability that the central bank would have Tapered at its July meeting – economists and speculators that do expect it ‘soon’ expect it will happen at the September gathering. Furthermore, clarifying the message that the central bank will not raise rates for some time misses the object of the market’s focus. Interest is in the first reduction in the ongoing QE3 program as that will be the first step towards the eventual exit – and speculators are forward-looking animals.

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DAGELIJKSE MARKT ANALYSE 29 JULI 2013

• Japanese Yen Outperforms as Markets Position for Volatile Week Ahead
• British Pound May Rise on Mortgage Approvals, Follow-Through Limited
• US Economic News-Flow May Set the Stage for Further US Dollar Selling

The Japanese Yen outperformed in otherwise quiet overnight trade, rising as much as 0.5 percent on average against its leading counterparts. The move closely tracked a drop in the benchmark Nikkei 225 stock index as eroding risk appetite encouraged an unwinding of carry trades funded cheaply in the perennially low-yielding currency. As we discussed earlier, the move seems to reflect protective profit-taking ahead of the volatility that is likely to surround the hefty dose of high-profile event risk due to cross the wires this week.

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DAGELIJKSE MARKT ANALYSE 30 JULI 2013


• Dollar Rebound Lacks Strength, Dow Showing Extreme Breakout Risk
• Euro: Will Spain 2Q GDP Leverage Volatility Ahead of ECB Decision?
• British Pound Adrift as Market Awaits BoE Decision
• Japanese Yen Crosses Following Nikkei 225 Plummet
• Australian Dollar to Weigh in on RBA Governor Steven’s Remarks
• Swiss Franc Traders Await SNB’s Quarterly Currency Holdings Report
• Gold Working its Way into Another ‘Breakout’ Position

Dollar Rebound Lacks Strength, Dow Showing Extreme Breakout Risk
The Dow Jones FXCM Dollar Index posted its first advance in three trading sessions Monday, but we shouldn’t be on the lookout for a EURUSD reversal just yet. While the greenback managed to win a rebound against most of its major counterparts through the opening session of this trading week, the commitment behind the move was non-existent. That doesn’t come as much surprise as there is heavy event risk less than 48 hours out and the general ebb and flow of risk trends is just as sensitive to the upcoming headline items as the currency is. The combination of the advanced reading of 2Q US GDP and the Federal Reserve rate decision on Wednesday has set investors’ focus. The likelihood that investors would take major positions ahead of such a substantial gust of fundamental wind is extremely low. That said, the probability of volatility following the updates is extraordinarily high. We can see the traditional signs of anxiety in the markets. The Dow Jones Industrial Average is showing its lowest level of actual price action (five-day standard deviation) in 20 months while volume is at five-month lows. Expect Taper speculation to be stirred by the upcoming consumer sentiment and housing data, but commitment likely comes later.

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DAGELIJKSE MARKT ANALYE 31 JULI 2013


• Dollar Strategies for US GDP, Fed Rate Decision Impact
• Euro Unresponsive for In-Line Spain GDP, ECB Within Sight
• Australian Dollar Extends Tumble after RBA’s Stevens Ruminates on Further Cuts
• Japanese Yen Crosses Find Little Lift from Jobs Surge, Earnings on Tap
• Swiss Franc Advances Despite SNB’s Hearty 2Q Loss
• Canadian Dollar: Expect More Influence from US Data than Canada’s Own GDP
• Gold Primed for a Breakout Wednesday on FOMC Statement

Dollar Strategies for US GDP, Fed Rate Decision Impact
The activity level (average true range) for EURUSD has dropped to the lowest level this year while short-term historical volatility for the S&P 500 is dipping to the extremes of lethargy we’ve seen through the past five years. In other words, we are looking at extreme breakout risk with the level of event risk we have ahead of us. In the next 24 hours, we have two high-level pieces of event risk that could individually tap into one of the most enduring fundamental themes to the financial markets: risk appetite trends. The second quarter US gross domestic product (2Q GDP) report is due at 12:30 GMT and Federal Open Market Committee (FOMC) rate decision is set for 18:00 GMT. Both can materially alter the market’s expectations for the ‘Taper’ timeframe, and no other fundamental wind can more effectively set market-wide trends back on course.

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DAGELIJKSE MARKT ANALYSE 1 AUGUSTUS 2013

• Dollar, S&P 500 – All Clear after the Fed? Far From It
• British Pound: What Did Governor Carney Promise BoE Doves?
• Euro Traders Look for Further ‘Transparency’ from ECB
• Canadian Dollar Gains More Traction from US GDP than Own Growth
• Australian Dollar Extends Longest Tumble in 8 Years
• Gold Volume Hits a Month High, Activity Levels Hits 4 Month Low

Dollar, S&P 500 – All Clear after the Fed? Far From It
A tension-racked market absorbed two of the most important pieces of event risk released in six weeks this past session…and the result was the US dollar and S&P 500 frozen like deer in headlights. The combination of the first reading of second quarter US growth (2Q GDP) and the Federal Open Market Committee’s (FOMC) rate decision presented the most capable projections of economic health and monetary policy for the world’s largest economy since the central bank gave credibility to the Taper fears in its June policy meet, forecasts and press statement. If the heft of the event risk was so significant and projects directly on investors’ primary concerns, why didn’t the markets take off – bullish or bearish? Should we consider this a sign that there is no longer reason to fear near-term bouts of volatility and reversal?

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DAGELIJKSE MARKT ANALYSE 2 AUGUSTUS 2013

• Dollar: Will the NFPs Give Us the Taper Volatility the Fed Couldn’t?
• Euro Eases Back Despite ECB Hold, Improvement in Manufacturing Activity
• British Pound Left to Drift after BoE Hold Refocuses Next Week’s Quarterly Report
• Japanese Yen Crosses Rise Alongside Nikkei 225 Rally
• Australian Dollar Offers Questionable Bounce as Rate Cut Fears Ebb Slightly
• New Zealand Dollar Yield Offers Biggest Premium to AUD in 4 Years
• Gold Extends Worst Trends in 10 Weeks but is Only Down 1.8 Percent

Dollar: Will the NFPs Give Us the Taper Volatility the Fed Couldn’t?
Once again, the dollar has come unmoored from its safe haven role as substantial speculative positioning has subsided. For some, that is an unusual assertion given that the S&P 500 managed to overtake 1,700; but conviction behind the move – and thereby risk taking – is notably deficient. The drive towards or away from ‘risk’ can be revived with the proper catalyst however. Following Wednesday’s awkwardly balanced 2Q GDP (a headline beat and downward revision to the previous quarter’s figure) and the Fed’s obfuscation of their plans for the lifespan of their QE3 program, there was some interest in Thursday’s data. The ISM manufacturing report is a meaningful and timely update on an important sector of the US economy. The 55.4 reading reflected the strongest growth for the sector in two years. Such an indicator can add to the Taper argument, but it isn’t directed enough to the central bank’s targets to offset a general boost to investor confidence. That same lack of focus will not plague Friday’s employment data. There will be significant headline space dedicated to the net payrolls change for July, and the first move by the market will likely follow the outcome of this data point. However, the real influence comes from the jobless rate – the ‘threshold’ for Fed stimulus and rates. A hold or uptick could defer the Taper (USD bearish). A lower jobless rate could revive the September outlook.

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DAGELIJKSE MARKT ANALYSE 6 AUGUSTUS 2013


• Dollar Gains Little Taper Traction from Strong ISM Data, Fed Remarks
• Australian Dollar Volatility Risk High with RBA Rate Decision
• Euro: Will Italian 2Q GDP Generate More Heat than Spain Figure?
• British Pound Receives a Strong Push on Service Sector Strength
• New Zealand Dollar Suffers as China Cuts Off Vital Export Revenue
• Canadian Dollar Deviate from Futures Positioning, Trade Data Ahead
• Gold Bears at Make or Break $1,300

Dollar Gains Little Taper Traction from Strong ISM Data, Fed Remarks
After this past week’s round of heavy event risk – US GDP, FOMC rate decision, NFPs – it is clear that the market has tempered its fears of an impending Taper. However, this distinct threat for risk trends and opportunity for the US dollar can easily revive its influence over the market with the proper swell in volatility. Currently, the equities-based VIX Volatility Index stands at 11.8 percent – the lowest level for the activity / fear gauge since March 15. When looking for a sentiment-based drive for the global capital markets, there needs to be an impetus to align investors in different asset classes and regions to the same motivation: fear of volatility and loss or appetite for higher yield on assets with depressed values. With the S&P 500 trading just off record highs and the VIX index seemingly reflecting a ‘low risk’ environment, it may seem that we are naturally leaning towards a ‘risk on’ market. Yet, an absence of risk doesn’t innately feed speculative positioning. That is why we still see the USDollar just off three year highs, carry trade down 10 percent from April highs and even FX volatility measures still elevated.

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DAGELIJKSE MARKT ANALYSE 7 AUGUSTUS 2013

• Pound Likely to Fall if BOE Introduces “Forward Guidance” in Inflation Report
• Japanese Yen Outperforms as Nikkei Drops Nearly 3 Percent in Overnight Trade

All eyes are on the Bank of England’s quarterly Inflation Report in European trading hours. The central bank spelled out the significance of the publication in no uncertain terms in July’s policy statement: “[The] Chancellor had requested that the [MPC] provide an assessment, alongside its August Inflation Report, of the case for adopting some form of forward guidance, including the possible use of intermediate thresholds. This analysis would have an important bearing on the Committee’s policy discussions in August.”

The level of speculation surrounding the release has probably grown further after the BOE opted not to introduce forward guidance at the August MPC meeting. On one hand, this may have meant that such a move was ruled to be unnecessary against a backdrop of steady improvement in UK economic news-flow since March. Needless to say, the British Pound is likely to react favorably if the Inflation Report shows this to be true.

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DAGELIJKSE MARKT ANALYSE 8 AUGUSTUS 2013

- US dollar technical analysis
- S&P technical analysis
- Gold technical analysis
- Crude oil technical analysis

US DOLLAR TECHNICAL ANALYSIS – Prices took out support at a rising trend line set from mid-June, with sellers now aiming to challenge the 61.8% Fibonacci expansion at 10702. A break below this barrier exposes the 76.4% level at 10656. Near-term resistance is at 10739, the 50% Fib, followed by the trend line (now at 10751).

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DAGELIJKSE MARKT ANALYSE 9 AUGUSTUS 2013


• Dollar Ready for Rebound after its Longest Slump in 18 Months?
• Japanese Yen Crosses Bounce after Four Day Tumble as Equities Firm
• Euro Extends its Climb, Can EURUSD Win 6 Months Highs?
• Canadian Dollar Faces Volatility Surge to End the Week with Jobs Data
• Australian Dollar Focuses on Chinese Data, Ignores Jobs Figures to Rally
• New Zealand Dollar: RBNZ Buys Currency, Conflicts with Easing Call
• Gold Posts Best Day in Two Weeks

Dollar Ready for Rebound after its Longest Slump in 18 Months?
A rebound for the S&P 500 after a three-day slump added a sentiment burden to the already-troubled, safe haven dollar. With Thursday’s close, the Dow Jones FXCM Dollar Index (ticker = USDollar) has dropped five consecutive trading days. That matches the worst slump for the greenback since late January 2012. The ‘traditional’ academic assessment of a reserve currency falling out of favor as appetite for yield rises doesn’t hold given the meandering performance of global equities and other sensitive asset classes. At the same time, the bearish ride lacks for justification from fears of a delayed Taper from the Fed. Both central banker commentary and data this week have proven largely supportive of an opening move to the wind-down in September. Dallas Fed President Fisher reiterated the hawkish line when he said he expected the Taper to start in September unless conditions deteriorate materially. Yet, even if the moderation of external support is within sight, the actual move is still six weeks away. A lot can change until then. The greatest potential for a committed trend still rests with an appreciable risk move.

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DAGELIJKSE MARKT ANALYSE 13 AUGUSTUS 2013


• British Pound to Interpret CPI Data in Terms of BOE Guidance Framework
• Euro May Rise as Pickup on German ZEW Gauge Limits Scope for ECB Easing
• US Dollar Looks to Retail Sales Report to Guide Fed QE “Taper” Speculation
• Japanese Yen Underperformed on Risk Trends as Nikkei Recovered Overnight

July’s UK CPI report is in focus in European trading hours. Economists expect the headline year-on-year inflation rate to slow to 2.8 percent, down from a 14-month high at 2.9 percent recorded in the prior month. Traders are likely to interpret the data in terms of the new forward guidance framework established by the Bank of England.

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DAGELIJKSE MARKT ANALYSE 14 AUGUSTUS 2013

• Dollar Extends Rebound with USDJPY Rallying Through 97.50
• Euro Traders Will Carry a Bias into 2Q Eurozone GDP Figures
• British Pound Threatens Bullish Break on EURGBP After CPI
• Japanese Yen Crosses Surge while Equities Struggle
• Australian Dollar: Treasury Projects Rising Jobless Rate, Deficit
• New Zealand Dollar Faces Data Measuring Foreign Investment
• Gold’s Breakout Stalls as Dollar Recovers

Dollar Extends Rebound with USDJPY Rallying Through 97.50
It seems that the greenback’s move Monday to end its longest slide in over two-and-a-half years was more than just a one-off tick higher before resuming the tumble. The Dow Jones FXCM Dollar Index advanced a second day through Tuesday’s session despite a bullish performance by equities and headlines that cast doubt on the Fed’s September ‘Taper’ time table. This performance can be interpreted as inherent strength; but without a clear fundamental bias to put FX traders on the same track, the world’s most prolific reserve currency is likely to succumb to the same congestion that currently plagues the broader financial markets. If the dollar is to run on a theme of ‘passive correction’ rather than concerted bid, the currency is presented will have to maximize its recovery through certain pairings. Where the dollar hasn’t retraced a quarter of its six-weeks drop with EURUSD and GBPUSD, USDJPY has already mounted a significant move and covered much of its range.

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DAGELIJKSE MARKT ANALYSE 15 AUGUSTUS 2013

• Dollar Slips Despite Worst US Equity Drop in Six Weeks
• British Pound Rallies after Strong Jobs Report, Is There Still QE Support?
• Euro Finds No Reassurance from Eurozone’s Return to Growth
• Japanese Yen Crosses Deviate from Nikkei 225 Climb
• New Zealand Dollar: Data, Bond Yields Shows Drop in Foreign Investment
• Australian Dollar Traders Look Momentum to Back RBA Bias Shift
• Gold Maintains Volatility but Loses Direction, Still Strong Above $1,300

Dollar Slips Despite Worst US Equity Drop in Six Weeks
The benchmark Dow Jones Industrial Average posted its biggest drop in six weeks Wednesday and closed at its lowest level in five weeks, yet there was little ‘fear’ behind the move – as evidenced by the USDollar’s pullback. The recent, bearish milestones the US equity indexes are making are a consequence of the absence of conviction amongst speculators this past month and our proximity to record highs. In other words, ‘lows’ for risk measures are not indicative of a wholesale shift in sentiment. And, if the greenback is to reprise its role as a safe haven currency in demand, we have to see a genuine shot of streak of fear shoot though the global capital markets to fuel the demand. For event risk, Fed member James Bullard offered up commentary that obscured his lean at the highly-debated September policy meeting – which many believe will bring the long-awaited Taper for QE3. On one hand, he noted high risk of a swell in inflation going forward, but he also said the FOMC needs more data before making a call on the Taper. According to Bloomberg, 65 percent of economists expect a Taper next month.

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DAGELIJKSE MARKT ANALYSE 16 AUGUSTUS 2013


• Dollar: Why is the Greenback Quiet on a Huge S&P 500 Break?
• Japanese Yen Sensitive to Carry as Growth Outlook Reaffirms Stimulus Hold
• British Pound: In Confusion, Improving Growth and Stimulus Outlook Prevails
• Australian Dollar Looking for a Spark as Market Sees no Cuts First Time in 2 Years
• New Zealand Dollar Eyes 0.8100 as Rate Expectations Build
• Canadian Dollar Faces Data-Driven Volatility Threat
• Gold Posts Biggest Rally in Three Weeks, At Pre-June FOMC Level

Dollar: Why is the Greenback Quiet on a Huge S&P 500 Break?
This past session was incredible for both the US dollar and broader financial markets. Indisputably, the most remarkable development was the critical technical breakdown of the S&P 500 and other benchmark US equity indexes. Having muscled its way to record highs through a tumultuous economic recovery, fading revenue growth and record low market yields; the US stock market has found itself in an extremely exposed position. Having put our faith in the ongoing support of the Federal Reserve’s stimulus programs, we have achieved record highs on 15-year lows in participation, a buildup based on record amounts of leverage while investors have significantly bolstered their risk profile in the pursuit of higher returns. Though not the sole factor in the capital market’s rise, the US central bank is essential to maintaining the façade of strong and stable conditions. And, that is why there is so much concern surrounding the Taper and its time frame.

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DAGELIJKSE MARKT ANALYSE 20 AUGUSTUS 2013

• Dollar Struggles to Green as US Stocks Edge Closer to Collapse
• Euro Strength Limited to Bundesbank’s Mention of ECB Hikes
• Japanese Yen: Trade Deficit Balloons Despite Stimulus, A Jackson Hole Topic?
• British Pound Unable to Leverage GBPUSD Breakout
• Australian Dollar Worst Performer Monday ahead of RBA Minutes
• New Zealand Dollar Traders Look for Confirmation of Rate Forecasts
• Gold Quickly Drops Back Below 100-Day Moving Average

Dollar Struggles to Green as US Stocks Edge Closer to Collapse
The dollar was given another last-minute stay of technical execution Monday as the Dow Jones FXCM Dollar Index advanced for the first time in four trading days and in doing so held up 2013’s trend of higher swing lows. This technical boundary may not hold up for much longer though. The uneven and tepid performance by the greenback through the opening session seemed to find little inspiration from the risk aversion slide in US equities. The Dow Jones Industrial Average and S&P 500 extended their bearish corrections with the former sliding below its 100-day moving average and the latter chalking up its first 4-day decline since October. These disappointing feats certainly raise red flags, but it does not yet mark the scale of fear that usually triggers the demand for absolute safety that is exuded by the reserve currency. At this point, it could be argued we are seeing measured ‘Taper’ adjustment already experienced by carry interest, high yield exposure and other assets.

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DAGELIJKSE MARKT ANALYSE 21 AUGUSTUS 2013


• Dollar Builds Breakout Pressure Ahead of FOMC Minutes
• Euro Rallies Despite Tumbling European Stocks, Bonds
• Emerging Markets Currencies and Bonds Collapsing on Flight to Quality
• New Zealand Dollar Suffers Biggest Drop in Six Weeks after RBNZ Comments
• Australian Dollar: RBA Minutes Suggest Cuts are Still Possible
• Canadian Dollar Tumbles after Sharp Drop in Wholesale Sales
• Gold Gains but no Closer to $1,400 – Will the Fed Will Provide?

Dollar Builds Breakout Pressure Ahead of FOMC Minutes
While EURUSD soared to a six-month high this past session, the Dow Jones FXCM Dollar Index presented a currency dangerously restrained ahead of dangerous event risk. A measure of activity, the USDollar’s 5-day Average True Range is the lowest we have seen since May 18. That happens to draw a comparison to a period of quiet that preceded a remarkable greenback rally. Technical considerations and inter-market relationships suggest the benchmark currency is indeed positioned for a breakout. However, a high probability volatility event does not insinuate a specific direction. That likely depends on how the FOMC minutes are interpreted by market participants. If the transcript undermines the September Taper time frame, the deferment may not salvage risk trends but it could still force a bearish dollar break. Alternatively, reinforcing the progression in the wind down will run on two gears: mild reassurance that modestly boosts the USD and unleashing pent up risk aversion.

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DAGELIJKSE MARKT ANALYSE 22 AUGUSTUS 2013

• Dollar Climbs after FOMC Minutes Confirm September Taper
• Euro May Not Hold 1.3300 if PMI Figures Point to Growth Troubles
• Japanese Yen: Will BoJ Governor Kuroda Talk Stimulus at Jackson Hole?
• Emerging Market Currencies Suffer Another Heavy Tumble to Record Lows
• British Pound Steady Strength Unable to Push GBPUSD Above 1.5700
• New Zealand Dollar Suffers Biggest Three-Day Loss in 17 Months
• Gold Finds No Relief in Fed’s Minutes, Path to QE Wind Down

Dollar Climbs after FOMC Minutes Confirm September Taper
Though some may lament the level of volatility and trend development that followed this past session’s top fundamental release – the FOMC minutes – the event nevertheless proved bullish for the dollar and bearish for US equities. That is the kind of outcome that promotes the return of the market’s most prolific fundamental theme: risk-defined positioning. We have seen a positive correlation persist between the FX market’s favored reserve currency and the benchmark risk asset (US equities) throughout 2013. This presents a backdrop where the naturally-derived balance between fear and greed has softened while the distortion caused by the central bank’s stimulus program leverages its influence on capital allocation. Yet, as the Taper nears, we not only return to elemental sentiment; the market recognizes its risk exposure.

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DAGELIJKSE MARKT ANALYSE 23 AUGUSTUS 2013

• Dollar Extends Rebound but Loses Momentum Before Key Breakouts
• Japanese Yen Crosses Surge Higher with USDJPY, EURJPY Boundaries at Hand
• Euro Attempts Fundamental Rally on Strong Data, Success Uneven
• Canadian Dollar Drops after Poor Retail Sales Data, Inflation Numbers Ahead
• British Pound: Will the 2Q GDP Update Catch the Market’s Attention?
• Emerging Markets Currencies Slow Descent but Recovery Elusive
• Gold Ignores Dollar and Holds Range, Silver Ratio Heading Lower

Dollar Extends Rebound but Loses Momentum Before Key Breakouts
The Dow Jones FXCM Dollar Index extended its rebound Thursday, but it would lose its drive before the greenback could secure breakouts on pairs like EURUSD and USDJPY. Nevertheless, the benchmark’s performance on the day is impressive against the backdrop of swell in risk appetite. Looking to the US equity markets, the battered S&P 500 muscled a 0.9 percent rally – the biggest run in threeweeks – to close just below its 50-day moving average and the range of highs established throughout the week. Investor sentiment is less bullish than it is congestive, and that lack of conviction carries over to the safe haven dollar. Sentiment is thereby neither a benefactor nor burden. Yet, as much potential as the ebb and flow of risk positioning has on capital flows and the dollar, there are a few other fundamental themes that the currency can revert to when left to its own devices. The second most influential driver for the dollar is the market’s view of the Fed’s Taper timetable. Following up on the FOMC minutes’ revelation that the group broadly supported the schedule Bernanke laid out in June, the New York Fed released the results of its primary dealer survey. According to the consensus, the major banks charged with dealing Treasuries expect a September Taper of $15 billion – more than economists expected. Further, the group projected a further $15 billion cut in December and halt by June.

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