Talking Points:
Upbeat China Trade Data Amplifies Sentiment Rebound in Overnight Trade
Fed Comments May Fuel US Dollar Gains, Trigger Renewed Risk Aversion
Gauge Trends and Spot Reversals in Leading Currencies with DailyFX SSI
The sentiment-linked Australian and New Zealand Dollars outperformed while funding currencies like the Euro, Franc and Japanese Yen traded lower as risk appetite firmed in Asian trade. The move appeared to reflect carry-over from an upbeat day on Wall Street, where benchmark S&P 500 index posted the largest gain in nine sessions.
The chipper mood was bolstered by an upbeat set of Chinese trade figures. In Yuan terms, exports unexpectedly grew 2.3 percent year-on-year in December. Economists forecast a 4.1 percent decline ahead of the release. Cross-border sales fell in US Dollar terms, but the reported drop of 1.4 percent was far smaller than the 8 percent drawdown projected by analysts.
Looking ahead, another round of commentary from Federal Reserve officials is in focus. Chicago and Boston Fed Presidents Charles Evans and Eric Rosengren will comment on the outlook for growth and monetary policy. Evans represented the dovish end of the voting bloc on the 2015 FOMC, a role he hands of to Rosengren this year.
With that in mind, their comments may serve as a baseline for the rest of the committee. Indeed, if Evans and Rosengren foresee 3-4 rate hikes in 2016, this seems to imply the average Fed view is significantly more hawkish than prevailing market bets. Such a scenario is likely to prove broadly supportive for the US Dollar and but may rekindle risk aversion. An upbeat tone in the Fed’s Beige Book survey of regional economic conditions may amplify this dynamic.
Losing Money Trading Forex? This Might Be Why.
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:00
NZD
QV House Prices (YoY) (DEC)
14.2%
–
15.0%
23:50
JPY
Money Stock M2 (YoY) (DEC)
3.0%
3.3%
3.3%
23:50
JPY
Money Stock M3 (YoY) (DEC)
2.5%
2.7%
2.7%
00:30
AUD
Job vacancies (NOV)
3.5%
–
3.5%
02:00
CNH
Trade Balance (CNY) (DEC)
382.05B
338.80B
343.10B
02:00
CNH
Exports (CNY) (YoY) (DEC)
2.3%
-4.1%
-3.7%
02:00
CNH
Imports (CNY) (YoY) (DEC)
-4.0%
-7.9%
-5.6%
02:55
CNH
Trade Balance ($) (DEC)
60.09B
51.3B
54.1B
02:55
CNH
Exports ($) (YoY) (DEC)
-1.4%
-8%
-6.8%
02:55
CNH
Imports ($) (YoY) (DEC)
-7.6%
-11%
-8.7%
04:30
JPY
Bankruptcies (YoY) (DEC)
1.89%
–
-3.39%
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
10:00
EUR
Eurozone Industrial Production (MoM) (NOV)
-0.3%
0.6%
Medium
10:00
EUR
Eurozone Industrial Production (YoY) (NOV)
1.3%
1.9%
Medium
11:00
EUR
ECB’s Lautenschlaeger Speaks in Frankfurt
–
–
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.0699
1.0779
1.0819
1.0859
1.0899
1.0939
1.1019
GBP/USD
1.4037
1.4245
1.4347
1.4453
1.4555
1.4661
1.4869
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya’s analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx