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.

Norwegian Krone Rallies with Accelerating Inflation, Retreats

The Norwegian krone rallied today as inflation accelerated more than analysts have expected, reducing incentive for the central bank to cut interest rates.
The currency retreated and trades below the opening level as of now. The Consumer Price Index, adjusted for taxes and energy prices, rose from 0.9 percent in March to 1.5 percent in April on an annual basis. The median forecast was at 1 percent. The gauge advanced 0.6 percent last month from the month before. The krone gained on the news, but retreated below the opening later. USD/NOK rose from 5.7799 to 5.7990 as of 12:09 GMT today, rallying from the low of 5.7680. If you have any questions, comments or opinions regarding the Norwegian Krone, feel free to post them using the commentary form below.

US Dollar Strengthens on Unexpected Jobless Claims Data

US dollar is showing strength today, heading higher as Forex traders look to the improving economic situation. When compared to other economies, the US economy is looking pretty good, and that is helping the greenback against its major counterparts today. The latest initial unemployment claims data in the United States indicates that 4,000 fewer people are applying for aid. Even with the budget sequester on, the economy appears to be improving for now.
(Employment data is a trailing indicator, though, so it might not provide information on what’s ahead.) As a result of the improvement on the labor front, the US dollar is getting a boost today. Compared to the eurozone, with its record-high unemployment rate, and with the United Kingdom, with its risk of a triple-dip recession, the United States is looking pretty good. Throw in the fact that Japan is aggressively pursuing a course that is meant to weaken the yen, and it is little surprise that the dollar is in demand. Lower commodities are also helping, as gold prices continue to struggle, and oil prices fall as demand remains unexpectedly low. At 16:53 GMT EUR/USD is down to 1.3105 from the open at 1.3153. GBP/USD is down to 1.5500 from the open at 1.5534. USD/JPY is up to 99.3500 from the open at 99.0055. If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Canadian Employment Trails Forecasts, CAD Loses to USD

Canadian employment growth was below forecasts, making the Canadian dollar close lower against its US peer. At the same time, the currency closed flat against the euro and higher versus the Japanese yen. Canadian employers added 12,500 jobs in April from March, when employment shrank as much as 54,500.
The consensus forecast was at 14,800. The unemployment rate stayed at 7.2 percent as it was expected. The Canadian currency, which was already depressed by the drop of commodities, fell after the report. The loonie managed to gain against the yen, which was lower against all major currencies. USD/CAD went up from 1.0070 to the intraday high of 1.0151 and closed at 1.0105. EUR/CAD closed flat at 1.3125. Meanwhile, CAD/JPY advanced from 100.09 to 100.52 and its intraday maximum was of 100.95 was highest since September 2008. If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Yen Drops, USD/JPY Advances Above 101 Mark

The Japanese fell today against all other most-traded currencies and dropped below the 101 per dollar level on positive data from the United States and signs that Japanese investors buy foreign bonds. The US federal budget balance turned from the deficit of $106.5 billion in March to the surplus of $112.9 in April. The excess was above the analysts forecast of $108.3 billion.
The government data showed that Japanese investors boosted their holdings of overseas bonds. Experts explained that aggressive monetary easing from the Bank of Japan made speculators seek profit outside of Japan. The data from Commodity Futures Trading Commission showed that future traders increased their short positions on the yen. With extensive stimulus measures from the BoJ and absence of need for safety the currency has no choice but go down. USD/JPY went up from 100.57 to 101.97 (the highest price since October 2008) intraday and closed at 101.57. EUR/JPY advanced from 131.15 to 131.89. GBP/JPY ticked up from 155.35 to 156.00, while its daily high was at 156.65. If you have any questions, comments or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

Canadian Dollar Weakens with Other Commodity Currencies


Canadian dollar is heading lower today, dropping along with other commodity currencies. With commodities plunging, it is little surprise that currencies like the loonie are losing ground today. Commodity currencies are struggling today as gold and oil drop in trading. The Canadian dollar is losing ground along with other commodity currencies. Oil, a major export for Canada, and a major support for the loonie, is down more than two dollars a barrel today. As a result, the Canadian dollar is dropping against the US dollar and other major counterparts. It’s also not helping
that there are still questions about the Canadian economy. Worries about a housing bubble, as well as uncertainty over what happens with Mark Carney leaving the Bank of Canada, are also factors weighing on the loonie. It will be interesting to see what happens next with the Canadian dollar. The loonie was termed an official reserve currency earlier this year, but so far that designation doesn’t seem to be helping a whole lot. At 14:09 GMT USD/CAD is higher, rising to 1.0125 from the open at 1.0068. EUR/CAD is also higher, heading up to 1.3165 from the open at 1.3133. GBP/CAD is moving higher, gaining to 1.5587 from the open at 1.5555. CAD/JPY is higher, thanks to yen weakness, moving up to 100.3110 from the open at 99.9030. If you have any questions, comments or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.