Equities Keep Trading North, NZD the Main G10 Winner

Stocks Continue Marching North on US Stimulus Optimism

The US dollar traded mixed against the other G10 currencies on Tuesday and during the Asian session Wednesday. It gained against NOK, EUR, AUD, GBP and CHF in that order, while it underperformed versus NZD, CAD and SEK. The greenback was found virtually unchanged against JPY.

Euro Stoxx 50 — Technical Outlook

After a sharp reversal to the upside in the beginning of this week, the Euro Stoxx 50 index almost managed to recover all the losses made during last week. By the looks of it, the bulls are not willing yet to leave the driver’s seat, as they continue to drive the price further to the upside. Although we already saw a decent upmove in a short period of time, we will continue aiming for slightly higher areas, at least for now.

Kiwi Rallies on Better Employment Data

Speaking about currencies, the Kiwi was the main G10 gainer, coming under strong buying interest overnight, after New Zealand’s employment data for Q4 beat market consensus. The unemployment rate declined to 4.9% from 5.3%, instead of rising to 5.6% as the forecast suggested, while the employment change showed that the economy added 0.6% qoq jobs, after losing 0.8% in Q3. The forecast was for another 0.8% qoq loss.

NZD/USD — Technical Outlook

NZD/USD popped higher yesterday, this way getting back into positive territory for the week. However, the pair is currently finding resistance near the 0.7225 barrier, marked by the high of January 29th. In order to get comfortable with the idea of seeing further advances, we would like to see a break of that barrier first. Until then, we will take a cautiously-bullish stance.

As for Today’s Events

During the European trading, we have Eurozone’s preliminary CPIs for January. The headline CPI rate is forecast to have rebounded to +0.5% yoy from -0.3%, while the HICP excluding energy and food is forecast to have accelerated to +0.7% yoy from +0.4%. Despite the lockdown measures around the Eurozone, at the latest ECB gathering, President Lagarde said that the downside risks to the economic outlook are now “less pronounced”, making investors skeptical over further easing by the ECB, although the Bank repeated once again that it stands ready to adjust all of its instruments as appropriate. Thus, improving inflation rates may reduce even further speculation over more easing by the ECB, at least at its upcoming gathering.

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