Euro in response to weak data from the German Ifo Institute has not decreased, but rather increased, suggesting that the market is now in the emphasis shifted from Europe to the data from the United States. Market attention this week is aimed at meeting of the Federal Reserve (Fed) and the Bank of Japan. Traders do not expect changes in Fed policy following the meeting of April 26-27. The probability of the base rate of the Central bank hike is estimated at 20% at the June meeting by the US market.
In today’s Germany, by contrast, it has become standard practice to put pressure on the central bank. In recent months, even Finance Minister Wolfgang Schaeuble was making comments regularly about the ECB’s monetary policy. In his speeches, Schaeuble said about the basic principles of central bank’s independence. Although he does not seek to change the target of monetary policy, it has been suggested the tools should be used and how the ECB to achieve this goal.
We bought only 2 binary options on currency pairs with the euro – EURCAD and EURGBP. There were Call options. Economic statistics of the euro area has improved slightly in recent time, which gives us reason to consider buying binary options on the growth of the single European currency.
Traders Wait for US GDP Release
Preliminary data on the dynamics of US GDP for the first quarter 2016 will also attract attention. One of the reasons why the Fed will prefer to maintain a cautious stance is the dynamics of GDP. US GDP report for the first quarter will be the second most important event of the week after a meeting of the Federal Reserve. According to the median estimate of economists surveyed by Bloomberg, the US GDP growth in the first quarter of 2016 slowed to 0.6% from 1.4% in the previous quarter.
The US dollar three times participated in trading last week. These were two Call binary options on USDCHF currency pair and one Put option on GBPUSD pair. Data from the United States released controversial, but the US dollar is much oversold now so even the data coincide with the forecasts can cause the growth of the US currency.
Barack Obama Helped GBP to Increase
Pound sterling rose to a maximum of five weeks, responding to the call of US President Barack Obama to the British not to leave the EU. Pound peaked five weeks at 1.4475 and then stopped at a mark of 1.4420. As expected, the pound will maintain increased volatility and sensitivity to the publication of public opinion polls on Brexit.
We traded pound also 3 times, as the US dollar. However, in contrast to the US dollar and the European single currency, we have adhered to a rigid negative outlook on the pound sterling. The Britons are more skeptical of the idea of the country’s exit from the European Union, but our negative outlook for the pound was based on the technical picture.
Japanese Exporters Played Against the Yen
Yen adjusted against the US dollar, as investors try to assess whether there was a weakening of the Japanese currency on Friday on news of the Bank of Japan’s intent to further course of monetary policy in the country too much strict. USDJPY dropped to 111.90 – a maximum of more than three weeks. However, Japanese exporters took advantage of this right away, started to sell the currency pair and pushed it back to 111.05. On Friday, the yen dropped by 2.1%. This is the biggest fall since the Bank of Japan for the second time has softened the policy in October 2014.
Financial markets cooling assess the impact of negative interest rates on the economy. As a further easing of the Bank of Japan policy is partly inherent in the movement of the yen, the decline of the Japanese currency may be limited after a meeting of the central bank, according to some experts. However, investors decided to take a pause to thoroughly assess the possible outcome of the regulator’s meeting. Against this backdrop, the yen resumed its strengthening against the US dollar.
We stuck mostly positive outlook related to the Japanese yen. Japanese currency over the past 2 weeks has fallen significantly from the highs, so it is already possible to consider the purchase of binary options in favor of the currency of the rising sun country.
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