Date: JANUARY20, 2018
Daily World Economic and Financial News
(CNBC) JANUARY20, 2018---- The dollar held steady above a three-year low versus a basket of currencies on Friday, marking a fifth week of falls and its longest losing streak since May 2015 as worries over a possible U.S. government shutdown weighed.
On Thursday, the U.S. House of Representatives passed a bill to fund government operations through to Feb. 16 and avoid agency shutdowns from Saturday when existing allocations expire. The bill has yet to be approved by the Senate, where it faces an uncertain future.
(CNBC) JANUARY20, 2018---- The trade-weighted dollar index was last up 0.21 percent at 90.68.
(CNBC) JANUARY20, 2018---- The euro was down 0.14 percent at $1.222, below a three-year high of $1.2323 touched on Wednesday. The common currency booked a fifth straight week of gains in advance of next Thursday's European Central Bank meeting.
(CNBC) JANUARY20, 2018---- The dollar was down 0.30 percent at 110.76 yen, with its rebound from Wednesday's four-month low of 110.19 yen already fading even as benchmark U.S. 10-year yield rose to the highest level since Sept. 2014. A slim reduction in the Bank of Japan's bond purchases this month spurred speculation about a possible pullback in its policy, even though many market players think any move will be many months away.
(CNBC) JANUARY20, 2018---- Oil prices slid about 1 percent on Friday, posting their first weekly loss in five weeks, as a bounce-back in U.S. production outweighed ongoing declines in crude inventories. Brent crude futures fell 70 cents, or 1 percent, to $68.61 a barrel. On Monday, they hit their highest since December 2014 at $70.37. U.S. West Texas Intermediate (WTI) crude futures ended Friday's session down 58 cents at $63.37 a barrel. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.
(CNBC) JANUARY20, 2018---- Gold prices rose half a percent on Friday as the dollar labored near a three-year low amid heightened fears of a U.S. government shutdown, but the precious metal was still on track for its first weekly drop in six. Spot gold was up 0.46 percent at $1,333.16 an ounce at 1:18 a.m. EST, on track for a weekly drop of 0.3 percent, having fallen from four-month highs hit on Monday. U.S. gold futures were up 0.47 percent at $1,333.50.
(REUTERS) JANUARY20, 2018---- European shares notched up modest gains on Thursday, falling short of a rally that lifted Wall Street and Asia to new records. The pan-European STOXX 600 rose 0.1 percent by 0824 GMT but the UK’s FTSE and Italy’s FTSE MIB retreated 0.1 percent. Switzerland’s Geberit posted the best performance among European stocks, with a 4.8 percent rise after reporting a 3.5 percent increase in 2017 sales. In France, Carrefour led the CAC 40 higher with a 2 (BLOOMBERG) JANUARY20, 2018---- percent rise, with traders saying stronger-than-expected fourth quarter sales from the supermarket chain had offset the negative impact of a new profit forecast cut. In Frankfurt, German chipmaker Infineon led the DAX higher, adding 3.4 percent after getting a rating upgrade from Goldman Sachs. When 600 cryptocurrency enthusiasts set sail from Singapore on Monday night for their second annual Blockchain Cruise, the price of Bitcoin was hovering comfortably above $13,500. By the time their 1,020-foot-long ship pulled into Thailand on Wednesday, for an afternoon of bottomless drinks and crypto-focused talks on a sun-soaked private beach, Bitcoin had cratered to $10,000.
(EURONEWS) JANUARY20, 2018---- Unemployment in the Eurozone hit its lowest rate for almost nine years last November, the latest sign of the revival of the single currency area’s economy. Eurostat, the EU's official statistics agency said that the jobless rate fell to 8.7 per cent, hitting analyst predictions and down from 8.8 per cent in October. The figures are the lowest since January 2009, when the eurozone was reeling from a deep recession following the global financial crisis.
EUR/USD PAIR ANALYSIS
Trading was choppy this past week, particularly around the EUR/USD pair, but dollar's prevalent weakness once again dominated the FX board. EUR gains were modest ahead of the upcoming ECB's monetary policy meeting, with officers working to keep gains at check, fearing an expensive currency will slow down inflation progress. Further weighing on the common currency was inflation as in the EU, the YoY CPI was confirmed at 1.4% in December, down from 1.5% in November. In the US, the now familiar political woes, centered on a possible government shutdown, weighed. As for central bank officers, most pledged for three rate hikes this year, but their hawkish words are no longer heard by the market, which prefers waiting for Powell. In the meantime, Wall Street soared to record highs, while US Treasury yields surged to their highest since September 2014.
The ECB is clearly optimistic on the economic recovery, and inside pressures to remove QE for good have increased but seems unlikely Mario Draghi will give his arm to turn. In fact, it should not surprise markets if he tries once again to down talk the common currency. No changes to the economic policy or the forward guidance are expected this time.
Technically, the EUR/USD pair has set a higher high and a higher low weekly basis, reaching its highest since December 2014 and closing it marginally higher, all of which maintains the bullish trend in place. The pair is up for a fifth consecutive week, with the chart showing that technical indicators have pared gains near overbought readings, but aren't suggesting upward exhaustion. In the daily chart, the bullish potential is even stronger, as the 20 SMA has gained a strong upward slope below the current level, while the Momentum resumed its advance after correcting overbought conditions, as the RSI consolidates around 66, all of which leans the scale towards the upside.
However, the pair would now need to surpass the mentioned 1.2320 region to attract more buying interest and be able to extend its gains towards 1.2460, a major long-term static resistance level. The immediate support is 1.2200, but the low for the week at 1.2164 is a more relevant one, with a break below it favoring a steeper correction toward the 1.2000 figure. Market's sentiment is quite mixed, as the greenback is seen up against European currencies, but weakening against safe-haven and commodity-related ones. In the particular case of the EUR/USD pair and according to the FXStreet Forecast Poll, bears have taken the lead in the weekly perspective, now accounting for a 45%, and targeting on overage 1.2226. Last week, bulls were the majority, but the average target back then was 1.2162, meaning that the increased negative sentiment could be more a result of caution ahead of the ECB's meeting than hopes of a dollar's recovery. In the longer-term view, the picture is quite the same, with an increment in the number of bears, but higher targets ahead. The FXStreet overview chart shows that, despite averages, sentiment is quite bullish, weekly and monthly basis, although the longer-term outlook is neutral, with the pair seen mostly hovering around 1.2000. (Fxstreet)
International & Financial Terms
1. Black Economy: That portion of a nation s output of goods and services which illegally escapes taxation.
2. Import Deposits: Method of import restrictions requiring importers to deposit a percentage of the value of their imports before it is repaid.
3. Bank Bill: bill of exchange issued by a bank.
4. Bill Broker: Firm or individual who buys and sell bills of exchange.
5. Call Rate: Rate of interest payable on call money.
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