Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: Dollar Strengthening in 2014 Looks Inevitable

SINGAPORE, SINGAPORE -- (Marketwired) -- 02/05/14 -- In FXPRIMUS' Market Brief of The Week for 3 February, the brokerage firm's Senior Economist, Jimmy Zhu, discusses the Dollar's performance.

Economic Insights

Dollar Almost Outperformed All G10 Currencies Despite Concerns for U.S. Labour Market

In the first month of 2014, U.S. Dollar remains on the strong side, nearly outperforming all G10 currencies except for the Yen. Although consensus is to reduce monthly purchases by USD 10 billion in every Federal Open Market Committee (FOMC) meeting, it is still data dependent and not a pre-set course, according to the Federal Reserve (Fed).

It is a heavy week amid the global central banks' meeting and some top tier data from the U.S., such as Non-Farm Payroll (NFP) and Institute for Supply Management (ISM) manufacturing Purchasing Managers' Index (PMI). The market is keen to know whether the soft release of December's payrolls was due to bad weather, or economic downturn. We do see some uncertainties on possible decline here because durable orders and housing data released earlier suggested another possible soft print. Another key issue will be that the change in payrolls is inconsistent with last month's 6.7% falling unemployment rate. A 35-year low labour market participating rate suggested that increasing amount of people has left the labour force.

As we mentioned few times this year, where is the correlation in the near term? Our advice will be a "risk off" model until next payrolls data returns to resilience. You can see equities selling off, USD and U.S. Treasuries rallied, clearly suggesting that traders are looking at safer assets for this stage. For currency traders, they only wonder about the USD direction if U.S. economic data rebounds in later days. In our view, the direction should still have upside bias. Capital flows into the U.S. are likely to continue regardless of market scenario or risk sentiment. The only question is whether capital will flow into riskier equities or safer Treasury bills. Either will result in further strengthening of the Greenback. Even a catastrophe in the U.S. (a much worse economic condition than now) may boost both the Dollar and U.S. Treasury bills, judging from previous market scenarios, such as the U.S. debt-ceiling debates and sovereign credit-rating downgrade by Standard & Poor's in 2011.

U.S. 10-Year notes March Future (white) vs. S&P 500 (yellow) last month

To view the figure associated with this press release, please visit the following link: http://media3.marketwire.com/docs/fxpr02051.jpg

Source: Bloomberg

Still, demand in global economy remains lacklustre which suggested safe haven assets might be in traders' favour before future catalysts appear. China's States manufacturing PMI fell to 50.5 last month, confirming HSBC's survey that economy growth has reached the peak.

Various central banks will meet this week, including the Reserve Bank of Australia (RBA), Bank of England (BoE) and European Central Bank (ECB). Among all, ECB could gain the most attraction as investors are keen to learn further of ECB's monetary policy. Mario Draghi said in Davos 2014 conference that the bank was ready to act if necessary, but he insisted that deflation was not yet an issue for the Euro Zone. The message hinted that an immediate rate cut is unlikely, thus the attention will be its press conference this Thursday. In the coming few months, we expect ECB to be as dovish as they can. According to current data, Euro Zone inflation is subdued, and expected to remain subdued in 2014. The longer it stays at a low level, the more serious the risk of deflation. The central bank shall seek its available tools to reverse the scenario, such as Long-Term Refinancing Operations (LTRO), Funding Lending Scheme loans, or even U.S. Style Quantitative Easing (QE). For the RBA, we do not expect it to lower the Official Cash Rate (OCR) by another 25 bps since the central bank has raised caution of rising prices in the property market. But Aussie dollar downside risk remains as the central bank may continue its verbal intervention such as "a comfortable level at 0.85 or 0.80 for the AUDUSD".

Top News This Week

U.S. Non-Farm Payroll
I expect figures to come in at 125K

RBA Cash Rate decision
I expect figures to come in at 2.5% unchanged

ECB main refinancing rate decision
I expect figures to come in at 0.25% unchanged

Trade Recommendation

AUDUSD - Short at 0.8780

AUDUSD retains its downside bias due to the Chinese economy weakening and "RBA's 0.85 bias". Based on the recent price reaction, most of the price rebound is due to technical factors, instead of fundamentals factors. Thus, the pressure remains on the downside.

Based on the H1 chart, we see some resistance level around the level of 0.8780, and we will short this pair if the price rebounds to this level.

Entry Price - 0.8780
Stop Loss - 0.8830
1st Target Price - 0.8730
2nd Target price - 0.8680

To view the figure associated with this press release, please visit the following link: http://media3.marketwire.com/docs/fxpr02052.jpg

Source: Bloomberg, AUDUSD H1 Chart

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

Contacts:
FXPRIMUS Support
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
First generation hyperconverged solutions have taken the data center by storm, rapidly proliferating in pockets everywhere to provide further consolidation of floor space and workloads. These first generation solutions are not without challenges, however. In his session at 21st Cloud Expo, Wes Talbert, a Principal Architect and results-driven enterprise sales leader at NetApp, will discuss how the HCI solution of tomorrow will integrate with the public cloud to deliver a quality hybrid cloud e...
Is advanced scheduling in Kubernetes achievable? Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, will answer these questions and demonstrate techniques for implementing advanced scheduling. For example, using spot instances ...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
The session is centered around the tracing of systems on cloud using technologies like ebpf. The goal is to talk about what this technology is all about and what purpose it serves. In his session at 21st Cloud Expo, Shashank Jain, Development Architect at SAP, will touch upon concepts of observability in the cloud and also some of the challenges we have. Generally most cloud-based monitoring tools capture details at a very granular level. To troubleshoot problems this might not be good enough.
Organizations do not need a Big Data strategy; they need a business strategy that incorporates Big Data. Most organizations lack a road map for using Big Data to optimize key business processes, deliver a differentiated customer experience, or uncover new business opportunities. They do not understand what’s possible with respect to integrating Big Data into the business model.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities – ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups. As a result, many firms employ new business models that place enormous impor...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Taica manufacturers Alpha-GEL brand silicone components and materials, which maintain outstanding performance over a wide temperature range -40C to +200C. For more information, visit http://www.taica.co.jp/english/.
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
We all know that end users experience the Internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices – not doing so will be a path to eventual b...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...