Core CPI m/m is forecast to have risen by 0.1 continue reading this.. percent in October. At 13.30 UTC also, the US Census Bureau will release October Retail Sales m/m and Core Retail Sales m/m, both expected to show 0.1 percent increases. US Existing Home Sales are due out at 15.00 UTC with expectations for 5.15 million in October. At that time also, the Census Bureau reports on Business Inventories m/m for September (0.3 percent rise expected) and FOMC member William Dudley is scheduled to speak. Another FOMC member, James Bullard, speaks at 17.10 UTC and then at 19.00 UTC the Fed will publish the minutes of the most recent FOMC meeting. Todays resistances: 0.9420, 0.9465 and 0.9500.
Global economies using quantitative easing as an economic stimulus strategy remain in uncharted waters, and any reversing can only be detrimental to that policy, no matter how optimistic anyone is on growth. RBA Rhetoric Stirs Sentiment Current forex market sentiment is trying to remain optimistically buoyant over Chinas reform and Yellens dovish remarks last week. Apart from global bourses, the real market enthusiasm remains rather lackluster across other asset classes fixed-income and cash. The fact is that central banks continue to have a stranglehold on forex; the Reserve Bank of Australia (RBA) is the latest transparent example.
FCA to consider forex rules after probes completed
The dollar fetched 100.11 yen after gaining 0.1 percent overnight, while the Australian dollar hit a one-month high of 94.56 yen. Analysts said the low-yielding yen is still the preferred funding currency for carry trades, with the Bank of Japan expected to maintain its ultra-loose monetary policy at its meeting on Thursday. Bernanke gave dollar bears a reason to emerge in Asia after he continued the dovish tone set earlier by other Fed officials including Janet Yellen and Charles Evans. The dollar index slipped 0.4 percent against a basket of major currencies to a two-week low of 80.487 as the euro reached a two-week high of $1.3584.
Official data earlier showed that producer price inflation input rose 2.2% in the third quarter, exceeding expectations for a 0.6% uptick, after a 0.6% rise in the three months to June. Producer price inflation output rose 2.4% in the last quarter, more than the expected 1% increase, after a 1% rise in the second quarter. The greenback strengthened after Bernanke said the Fed would maintain its accommodative monetary policy for as long as needed and would taper its USD85 billion-a-month asset purchase program only when it was sure that improvements in the labor market would continue. Interest rates will probably remain near zero for a “considerable time” after the bank winds up asset purchase program, he added. Last week Janet Yellen, who has been nominated to succeed Ben Bernanke, reiterated the need for continued stimulus to ensure a robust economic recovery.
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This is the reality that is reflected in the financial accounts of forex firms. And even a cursory look at their balance sheets brings this point to the fore. Wider spreads between official and open market exchange rates due to the pressure on the rupee in FY13 and in the first quarter of FY14 have benefited exchange companies a lot. Weve seen transactions expanding amazingly, and many of us have made big profits in the last fiscal year and so far during this year, says an official of the Exchange Companies Association of Pakistan. Since these companies are not listed and as such are not bound to make their financials public, recent statistics are not available.
The truth is we are at a very early stage and a long way off before we can make any conclusions.” REGULATORY PERIMETER Currently Libor is the only widely used financial benchmark to be directly regulated by the FCA in Britain, following a law in April which also made rigging of Libor a criminal offence. The watchdog has, however, begun looking beyond this regulatory “perimeter” to other types of benchmarks. With 40 percent of global forex trading taking place in London, the FCA has already begun scrutinising how benchmarks based on that market are being compiled, an FCA official said. And its inquiries go beyond that area. Those who administer oil, gold and other major, non- interest rate-related benchmarks, as well as those in forex, have been asked to assess by July next year how they comply with new global regulatory principles governing all types of indexes following the Libor scandal. The FCA has also asked banks which provide quotes for a range of benchmarks, including forex, to “run a rule” over their submissions process and show how they have applied lessons from the Libor scandal, the FCA official said.