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Gold drops on U.S. data, BoJ move to expand stimulus

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Saturday, 01 November 2014 01:32

Gold prices plummeted to four-year lows on Friday after strong U.S. data and a Bank of Japan decision to expand its stimulus programs sparked hefty demand for the dollar, which tends to trade inversely from the yellow metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 2.30% at $1,171.00, up from a session low of $1,161.00 and off a high of $1,202.40.

The December contract settled down 2.15% at $1,198.60 on Thursday.

 
 

Dollar jumps over 1%, hits 4-year highs vs. rivals

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Friday, 31 October 2014 23:39

The dollar rallied over 1% against a basket of other major currencies on Friday, hovering close to four-year highs as the release of upbeat U.S. data fuelled further optimism over the health of the U.S. economy.

The dollar strengthened further after the University of Michigan said in a preliminary report that its consumer sentiment index rose to a seven-year high of 86.9 this month from 86.4 in September. Analysts had expected the index to remain unchanged.

 
 

EUR/USD hits 26-month trough after strong U.S. data

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Friday, 31 October 2014 22:23

The euro dropped to a 26-month low against the U.S. dollar on Friday, as strong U.S. economic reports lent further support to the greenback, while ongoing concerns over the outlook for growth in the euro zone dampened demand for the single currency.

EUR/USD hit 1.2486 during U.S. morning trade, the pair's lowest since August 2008; the pair subsequently consolidated at 1.2510, retreating 0.81%.

The pair was likely to find support at 1.2132 and resistance at 1.2640, Thursday's high.

 
   

BoJ takes new easing steps

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Friday, 31 October 2014 17:09

boj.2Kit Juckes, Global Head of Currency Strategy at Societe Generale senses some panic in BoJ's decision today to implement a fresh round of easing.

Key Quotes

"The BOJ decided to rush through the next round of QE. If there's a faint whiff of panic to BOJ action, and a sense of despair at the ropes binding Mr Draghi's ECB, then the contrast with the QE-ending Fed is all the starker."


"And for FX markets, it's that contrast which drives the dollar higher. EUR/USD has major support at 1.25 (see tech section) and if (when) this breaks, we're going to get the next leg of the whole dollar move properly underway, for another 5-10%."

"The yen is cheap already but there's no point screaming at the tide like Canute, it's going to weaken further. Our views on GBP/USD are still simple - it's going down."

 
 

Outlook for EUR/USD still bearish

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Friday, 31 October 2014 17:02

Euro8The Market Strategy Team at UOB Group suggest that EUR/USD should continue sliding, despite the rebound to 1.2560 levels from the overnight low of 1.2545.

Key Quotes

"As indicated in yesterday’s update, 1.2550 is a solid support and the strong rebound from the overnight low of 1.2545 is not surprising."

"However, the outlook is still bearish and we continue to expect the key resistant at 1.2730 to hold for EUR to eventually move lower towards the early October low of 1.2500."

 
   

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