Israeli New Shekel Mixed After Bank of Israel Cuts Interest Rates

The Bank of Israel made an unexpected move yesterday, cutting its benchmark interest rate. The Israeli new shekel dropped versus the euro today, but rose against the US dollar. The central bank cut its main interest rate by 0.25 percentage points to 1.5 percent.
The bank explained its decision by appreciation of the shekel and the similar actions (cutting interest rates) by central banks across the world. Policy makers were also worried how the start of natural gas production from the Tamar gas field may impact the exchange rate. On top of that, the central bank said it will start foreign-currency purchases to weaken the shekel. Truth be told, the move was not completely unexpected by analysts as they have anticipated some form of monetary easing. Yet market participants were not expected the bank to act so soon, therefore yesterday’s announcement has caught them unawares. USD/ILS fell from 3.6168 to 3.6130 as of 1:45 GMT today. EUR/ILS rose from 4.6930 to 4.7031. If you have any questions, comments or opinions regarding the Israeli New Shekel, feel free to post them using the commentary form below.

US Retail Sales Boost Canadian Dollar

The positive retail sales report from the United States boosted not only the US dollar, but the Canadian dollar as well. The loonie managed to outperform most of the major currencies. US retail sales rose 0.1 percent in April from March when they fell 0.5 percent. It was a nice surprise to market participants, who have expected a drop by 0.3 percent. The USA is Canada’s major trading partner, therefore good US fundamentals are favorable for the Canadian currency.
The loonie’s rally was not big though as futures for crude oil, the biggest Canadian export, fell. Crude dropped 1.1 percent to $95.01 per barrel in New York today. USD/CAD went down from 1.0115 to 1.0101 as of 23:51 GMT today. EUR/CAD was little changed at 1.3115 after falling to 1.3067. CAD/JPY was up from 100.44 to 100.63. If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Euro Struggles on Continued Recession Worries

Euro is struggling today, changing between gains and losses against the US dollar, and finding it difficult to gain solid traction against other major currencies. Worries about recession continue to weigh on the 17-nation currency. Later this week, the latest eurozone GDP data is supposed to be released a little later this week. There are expectations that, once again, a quarterly drop in GDP will be evident. A drop of 0.1 per cent may not seem like much,
but another GDP reduction would mean the sixth quarterly drop, and indicate that the eurozone is still in a recession. The news is resulting in uneven trading for the euro today. Euro has see-sawed against the US dollar today, and is managing grudging gains against the UK pound. Concerns about the ability of the euro to weather the storm continue to weigh on the 17-nation currency, but there is enough hope and risk appetite to allow the euro to eke out some gains against some of its counterparts. At 15:58 GMT EUR/USD is higher, up to 1.2980 from the open at 1.2971. Earlier, the euro had dropped to 1.2941 against the US dollar. EUR/GBP is higher at 0.8489, up from the open at 0.8446 and recovering from session lows of 0.8432. EUR/JPY is lower, dropping to 132.1650 from the open at 132.1450. If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

US Dollar Mostly Rangebound as Traders Look for Direction

US dollar is mostly rangebound today, turning in a mixed performance as traders look for direction and speculation about what’s next for the Federal Reserve raises questions about what’s next.
US dollar is mixed today, thanks in large part to speculation about what’s next from the Federal Reserve in terms of economic stimulus and exit from quantitative easing measures. Recent economic data showed an increase of 0.1 per cent in retail sales for April, indicating that the US economy is recovering. Add to that the encouraging employment data recently released, and it appears as though the economy might be on the right track. If the economy is improving, though, that means that the Fed could decide to exit its stimulus plan, and that might mean a strengthening US dollar. However, that course of action is far from set in stone. Indeed, there are questions about whether or not the United States can maintain its recent economic gains with the budget sequester in place. Plus, there are other factors that seem to be helping other currencies right now. At 15:32 GMT US dollar remains mixed, and little changed. EUR/USD is up to 1.2973 from the open at 1.2971. GBP/USD is down to 1.5298 from the open at 1.5356. USD/CAD is down to 1.0111 from the open at 1.0120. USD/JPY is down to 101.7815 from the open at 101.8950. If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

RBA Rate Cut Makes Week Bad for Aussie


This was definitely not good for the Australian dollar as the nation’s central bank unexpectedly reduced its interest rates and hinted that more rate cuts are possible. The Reserve Bank of Australia surprised the Forex market, easing its monetary policy further even though analysts have predicted that the bank would not make any changes. Moreover, the central bank said that it has scope for additional easing.
The decision undermined the strength of AUD, which rallied after positive employment data, but only briefly. USD was one of the best performers against AUD, gaining strength from positive US economic data. AUD dropped even against JPY, which by itself was rather weak. AUD/USD dropped from 1.0296 to 1.0010, the lowest weekly close since June. EUR/AUD advanced from 1.2722 to 1.2968, the highest weekly closing price since February. AUD/JPY declined from 102.12 to 100.39 during the week, but bounced and closed at 101.68. If you have any questions, comments or opinions regarding the Australian Dollar, feel free to post them using the commentary form below.