DN to cut interest rates in March, slower intervention- Danske

FXStreet (Córdoba) - Senior Analyst Jens Nærvig Pedersen from Danske Bank expects a rate cut of 10 basis points from the Danish National Bank and they forecast EUR/DKK at 7.4550 in 1 to 12 months. They noted that the DN slowed the pace of intervention in January.

Key Quotes:

“We expect DN to mirror a 10bp ECB rate cut in March, lowering the key policy rate to minus 0.75%, although we stress that it is a close call given that EUR/DKK continues to trade above the central rate.”

“In January, the FX reserve declined to DKK430bn, from DKK434bn in December. DKK7.7bn of the decline was due to DN purchasing DKK in FX intervention.”

“The 7 January rate hike does seems to have worked in capping EUR/DKK upside and we thus expect DN to mirror a 10bp rate cut from ECB in March, leaving the rate of interest on certificates of deposit at minus 0.75%. However, as previously noted, we stress that it is a close call, since EUR/DKK continues to trade above the central rate of 7.46038 and since DN might have needed to make some FX intervention after 7 January.”

“We forecast EUR/DKK at 7.4550 in 1M-12M.”

Senior Analyst Jens Nærvig Pedersen from Danske Bank expects a rate cut of 10 basis points from the Danish National Bank and they forecast EUR/DKK at 7.4550 in 1 to 12 months. They noted that the DN slowed the pace of intervention in January.

(Market News Provided by FXstreet) [...]

USD/CHF steady around 1.0190

FXStreet (Córdoba) - The Swiss franc rose against the US dollar after the beginning of the American session but if failed to break higher and currently is trading at the same level it closed yesterday.

USD/CHF supported by 1.0160/70

The pair bottomed hours ago at 1.0169 and then bounced back toward 1.0200 but it was standing around 1.0185/90. The area around 1.0160/70 is becoming a relevant short-term support area.

To the upside, USD/CHF is likely to face resistance between 1.0200 and 1.0195 (20-hour moving average) and above here at 1.0225 (daily high) and 1.0255 (Jan 29 high).

Data ahead

In the US, the key report tomorrow will be the ADP private employment report but traders attention focus on Friday’s NFP. The labor market numbers could impact the US dollar and also on risk appetite.

In Switzerland, a relevant data will be released on Friday with the reserves of the Swiss National Bank (SNB) that could give clues if the SNB intervened in the markets or not.

The Swiss franc rose against the US dollar after the beginning of the American session but if failed to break higher and currently is trading at the same level it closed yesterday.

(Market News Provided by FXstreet) [...]

RBA subtly joins the dovish chorus – UBS

FXStreet (Córdoba) - The Reserve Bank of Australia (RBA) held the cash rate unchanged at 2%, as expected. According to the UBS team, the statement was more dovish although the change on the RBA language has been more subtle than other banks. After the decision, UBS retains its bearish stance on AUD/USD targeting 0.65 on a six and 12-month basis.

Key Quotes

“Its comments in the accompanying statement had few surprises, although inflation and domestic demand were the clear touch points for Governor Glenn Stevens. By nature, we saw the statement as destined to sound more dovish given how global sentiment has evolved so far this year, mostly due to the recent equity market selloff, and softer activity data from China. The RBA now recognizes the global economy is more-than likely to expand ‘at a slower pace than earlier expected’."

“While many central banks have used January meetings to signal or reinforce further easing measures, the RBA was far more cautious in its tone and changes to the RBA's language far more subtle. For example, the RBA now says ‘Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand,’ whereas the December statement indicated ‘the outlook for inflation may afford scope for further easing of policy’.”

“The RBA seemed happy with domestic conditions, identifying: business indicators (ex-mining) as moving to above-average, solid employment growth, domestic demand largely resilient and a cooling of Sydney and Melbourne housing markets. Also, the RBA saw the path of the exchange rate as in line with the evolving economic outlook. Inflation will be a clear sticking point for the RBA; we anticipate revisions to the forecasts in the 5 February Statement on Monetary Policy. Adding to this, recent jobs reports have run ahead of other indicators, hence we expect some catch-up and that unemployment will rise modestly in coming months.”

“The AUD/USD spiked immediately following the decision, but has since bled lower to 0.705. We retain our bearish stance on AUDUSD targeting 0.65 on a six and 12-month basis.”

The Reserve Bank of Australia (RBA) held the cash rate unchanged at 2%, as expected. According to the UBS team, the statement was more dovish although the change on the RBA language has been more subtle than other banks. After the decision, UBS retains its bearish stance on AUD/USD targeting 0.65 on a six and 12-month basis.

(Market News Provided by FXstreet) [...]

USD/CAD loses momentum ahead of 1.4100

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USD/CAD loses momentum ahead of 1.4100

FITITOL--> FXStreet (Córdoba) - USD/CAD climbed back above 1.4000, stretching to fresh weekly highs during the American session as the loonie suffered on the back of lower oil prices and broader risk aversion.

USD/CAD reversed the previous day fall and rose about 150 pips throughout the day to hit a peak of 1.4081 during the New York trade. However, the pair found resistance and pulled back slightly, but the downside was contained by the 1.4020 zone. USD/CAD was last trading at 1.4045, still up 0.69% on the day.

USD/CAD is on track to post its first daily gain in six, as it was in a corrective phase from a 13-year high scored last month at 1.4689.

USD/CAD levels to watch

As for technical levels, next resistances could be found at 1.4081 (Feb 2 high), 1.4121 (Jan 28 high) and 1.4155 (Jan 27 high). On the flip side, immediate supports are seen at 1.3907 (Feb 1 low) and 1.3881 (50-day SMA).

USD/CAD climbed back above 1.4000, stretching to fresh weekly highs during the American session as the loonie suffered on the back of lower oil prices and broader risk aversion.

(Market News Provided by FXstreet) [...]

New Zealnd jobs key for RBNZ – UOB

FXStreet (Guatemala) - Analysts at UOB Group noted the key jobs data from New Zealand for Early Wednesday morning in Asia.Key Quotes:"We will receive New Zealand's 4Q employment numbers. This labour market data will play a key role in determining wheth... [...]

USD/JPY: fundamentals remain bullish – Scotiabank

FXStreet (Guatemala) - Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that movement in the Yen is constrained by pressure from fundamentals and relative central bank policy, offset by support from the broader tone of risk aversion.

Key Quotes:

"We note the lack of a specific response to the release of PMI’s (both domestic and China’s official/Caixin private sector measure).

Fundamentals are bearish for JPY, as we consider the renewed divergence in relative central bank policy following Friday’s surprise BoJ shift to negative rates.

With regards to sentiment, we note that JPY is vulnerable to positioning with Friday’s CFTC data detailing a net long JPY position of $5.3bn (as of January 26—pre-BoJ), its most bullish since early 2012."

Eric Theoret, CFA, CMT FX Strategist at Scotiabank explained that movement in the Yen is constrained by pressure from fundamentals and relative central bank policy, offset by support from the broader tone of risk aversion.

(Market News Provided by FXstreet) [...]

GBP/USD wavers below 1.4450 resistance area

FXStreet (Córdoba) - GBP/USD has been oscillating in a wide range near highs over the last hours following a short-lived pullback seen during the European session.

GBP/USD retreated from the 1.4445 zone but the downside was contained around 1.4325, leaving the pair in a wide range over the last hours. At time of writing, the pair is trading at 1.4400, still 0.21% below its opening price.

The Cable staged a sharp rally on Monday but found resistance at 1.4445. Despite a new attempt seen on Tuesday, the pair was unable to rise above that area. From a wider view, GBP/USD is extending a recovery from a 7-year low of 1.4078, struck on Jan 21.

GBP/USD levels to watch

In terms of technical levels, next resistances could be faced at 1.4443/45 (Feb 1 & 2 highs), 1.4475 (Jan 13 high) and 1.4559 (Jan 12 high). On the flip side, supports are seen at 1.4292 (10-day SMA), 1.4227 (Feb 1 low) and 1.4148 (Jan 29 low).

GBP/USD has been oscillating in a wide range near highs over the last hours following a short-lived pullback seen during the European session.

(Market News Provided by FXstreet) [...]