HeffX-LTN FX Report (Daily)

HeffX-LTN FX Report (Daily)


The USD trimmed gains but remained supported Vs the other peer currencies Wednesday, as FX investors became more cautious ahead of the minutes of the Federal Reserve’s most recent policy meeting due later in the day.

USDJPY climbed 0.49% to 109.68.

FX market participants were looking ahead to the minutes of the FOMC’s most recent policy meeting, due later in the day, for indications on the timing of future interest rate hikes.

Expectations for an upcoming US rate hike mounted after data Tuesday showed that US consumer prices rose at the fastest rate in more than 3 years in April.

Prices rose by 0.4% in April, the biggest 1-month gainer since February 2013, the US Labor Department said Tuesday.

Separate reports showed that housing starts and industrial production also rose strongly last month.

In addition, Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams both said Tuesday that there could be 2 or 3 rate hikes this year.

In Japan, data earlier showed that the economy grew by an annualized 1.7% in the 3 months to March, well ahead of forecasts for a 0.2% increase and recovering from a 1.7% contraction in the previous Quarter.

EURUSD slid 0.26% to 1.1284, the lowest since 25 April.

Eurostat said Wednesday that Eurozone consumer prices fell at an annual rate of 0.2% in April, in line with expectations.

The USD turned lower against Cable, with GBPUSD up 0.90% at 1.4592 and edged higher Vs the Suisse, with USDCHF adding 0.10% to 0.9816.

Sterling erased earlier losses after the US Office for National Statistics said the claimant count fell by 2,400 in April, against expectations for an increase of 4,300.

March’s claimant count was revised up to 14,700, the biggest monthly increase since September 2011. The UK unemployment rate remained stable at 5.1%, in line with economists’ forecasts.

UK wage growth continued to pick up, with average weekly earnings rising by 2.0% in the last 3 months, up from 1.9% in the 3 months to December. But excluding bonuses, salaries rose by 2.1%, slowing from 2.2% the previous Quarter.

The Australian and New Zealand Dollars were weaker, with AUDUSD down 0.78% at 0.7270 and with NZDUSD retreating 0.59% to 0.6772.

Elsewhere, USDCAD gained 0.30% to trade at 1.2941.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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