GBP/JPY take offence at BoE's innuendo

Given that the Bank of England unrolled last week authentic set of stimulus, which exceeded even the most courageous expectations, it was not a surprise that this fact brought the GBP/JPY pair down and even below the Brexit low. The sterling weakened considerably and reached daily low at 132.20, but later on spilled slowly back to 133.17.
This week started with a gap above this point and the pair has found a new near term support which turned to be the old resistance.
While considering the sterling as quite bearish at present, we also must keep an eye on Bank of Japan as the expectations for stimulating monetary policy is still on the agenda.
Main resistance now is seen at 134.15 , which is another shift but from prior support to resistance.

Asian, European and US stocks in red

Asian, European and US stocks ended in red on Thursday. 

Germany’s DAX 30 index dragged down with 1.26% and Stoxx Europe 600 closed with a loss of 0.96%. The French CAC40 index decreased by 0.97%, Italy's MIB lost 0.76%, while the British FTSE100 index gave up 1.11%.

Wall Street also performed with losses on Thursday. Dow Jones Industrial Average fell 0.38 % to 17 985.13 points. The Standard & Poor's 500 index lost 0.42% to 2 115.95 points.

Bank of Korea cut the key interest rate to 1.25% in response to growing pressure to ease monetary policy and stimulate growth.

South Korea's Kospi index dipped with 2.91 points, or 0.14%, to 2 024.17 points. The Korean won weakened against the dollar, as the pair traded at 1160.30 after the decision against 1150.47 before the announcement of cutting the interest rate.

Japan's Nikkei 225 ended with a decline of 162.51 points, or 0.97%, to 16 668.41 points. In the early trading USD/JPY reached 107.80 but currently dropped to 106.80.

The Australian ASX 200 index closed with a drop of 0.15% to 5 361.93 points.

Hong Kong’s Hang Seng fell 0.14% to 2 1297.88 points, while the Chinese Shanghai Composite lost 0.32% to 2 926.70 points.

NFP weakened the US dollar

The NFP wave made the US dollar suffer with significant losses as the released data for May disappointed market participants. The results showed only 38,000 jobs created amid the expectations of 160,000 and the weak data dipped the US dollar 1.6% against the major currencies.
Following this the likelihood of an increase in interest rates by Fed next week slightly thinned, which reflected to the dollar. In view of the forthcoming referendum in Britain, central bankers may refrain from actions this month. Expectations for rates hike in July also decreased, but probably Janet Yellen will draw attention for possibly tightening the monetary policy later today in Philadelphia.
On Friday the dollar dipped against the yen to 106.50 as a result of negative data, but today started the week with declines again to return around the levels at 107 during the early trading. The pair nears the crucial level at 105 and this awakes the fluctuation about intervention by the Tokyo authorities in the foreign exchange market.
The greenback lost ground against the single currency. The euro climbed to 1.1373 after last week had depreciated to 1.1097. Despite the losses for the greenback due to weak data, overall  US economy remains framed and a rates hike is more likely to be postponed this month as now the focus is more on vote in UK rather than the employment report.
The British pound fell 0.8% against the US dollar this morning, because it became clear that the preliminary surveys showed Leave side ahead. Sterling dipped to 1.4351 dollars.

Yen weakens

The yen fell against the basket of major currencies as a result of the intention of the Japanese government to intervene in the foreign exchange market in case the yen strengthen. 

During the Asian session today the US dollar managed to advance to the level at 108,885 after previously had reached its lowest point for the past 18 months, falling to 105,546. 

This happened as a consequence of BoJ’s decision to keep the monetary policy unchanged which was posted at the last meeting of the bank at the end of April. 

Now, however, the comments of Japan’s finance minister Taro Aso weakened the yen, which in turn contributed to strengthening of USD/JPY. Currently the pair is trading at 109.10, as earlier peaked at 109.28. If the resistance at 109.30 could be conquered, the pair might push higher to 109.70. 

Aussie weakens

The Australian dollar tumbled today after surprisingly weak inflation numbers, while the US dollar and the yen are in defensive positions in anticipation of the Fed and BoJ meeting. The Australian dollar fell more than 1% in the morning and was trading at 0.7635 after data showed that consumer price index in Australia unexpectedly fell by 0.2% in January to March.

Preliminary estimates were for a rise of 0.3%. This number increased the speculations that RBA will defend its inflation target by cutting interest rates. The Australian dollar rose this month by almost 15% compared to seven year low in January, thanks to a recovery in commodity prices. Growing expectations of a reduction in interest rates, however, may stop the rally.

AUD/USD is trading sharply lower, currently at 0.7592, as ahead of the publication of the inflation figures the pair plunged with 1.65% to 0.7619.

Meanwhile AUD/JPY dropped below 85 mark, dragging down the aussie with 1.6%. 

Gingerly trading ahead of ECB meeting

In early trading today the US dollar and the Japanese yen recorded a slight rise against other major currencies following the drop in oil prices and the  Asian stock markets.

The subsequent stabilization of stock markets in Europe turned back a part of yesterday's risk appetite in currency markets, parrying the appreciation of both major currencies.

The euro consolidated between 1.1350 and 1.1388 US dollars, as investors' attention is focused on tomorrow's regular meeting of ECB. Although it is not expected the central bank to make changes in its stimulating monetary and interest rate policy, Mario Draghi’s press conference is widely awaited with interest, because he will most likely confirm that the central bank stands ready to take further measures if necessary.

The decline in Asian markets and negative start on European stock markets initially led to a fall of the US dollar to 108.77 yen and of the euro to 123.54 yen before the subsequent stabilization of the capital markets in Europe returned USD and EUR to respectively 109,37 and 124,33 levels.

Slide and stumble

In the last day of March USD fell to a five-month low against the euro and is about to mark the most strong losses against other major currencies on a quarterly basis in five years. The greenback remains under pressure for the third consecutive day of trading after Yellen’s cautious message.

Meanwhile the dollar index decreased by 0.2% to a fresh five-month low at 94.555 points and is on track to record the biggest monthly decline since April 2015 and the most solid quarterly depreciation by nearly 4.3% from the first quarter of 2011 onwards.

The overall weakness of the US dollar pushed the euro towards five-month high at 1.1398. The single currency found some support from the rising core inflation in EU and mixed CPI numbers. A potential more stable break above 1.1400 level may deepen the upward movement of the euro towards 1.1460/1.1500 area. 

Today the greenback remains under pressure against the yen at 112.00 and is about to end with quarterly losses of nearly 7%.

Under pressure

The US dollar remains under pressure for a second straight day of trading after the surprisingly cautious speech by Fed president Janet Yellen on further increases in US interest rates this year.

Earlier today, the euro rose to 1.1338 dollars - slightly below its highs for the year around 1.1342 / 76 area before stabilizing around the 1.1300 level. And it was just beaten after the another report, showing how funky strong is the job growth in the US for March.

The British pound rose to a 10-day high of 1.4451 dollars glancing  4-week high of 1.4513 dollars, struck on 18 March, despite the bell rings inside UK, that’s challenging the doors of Brexit.
Meanwhile, the dollar fell to nearly 10-day low of 112.02 yen, but the good risk-appetite of global capital markets cut the appreciation of the Japanese currency since it lost its safe heaven status.

Falling

The US dollar depreciated sharply against other major currencies after Fed has indicated more restrained than initial estimates tightening of US interest rates this year. After yesterday's meeting  Federal Reserve presented new forecasts of central bankers, according to which the US base rate will probably be increased only twice by the end of 2016 against the previous forecast in December for an expected fourfold lifting of the interest rates.

This resulted in aggressive sales of "greenback" as only within the trading today the US dollar index fell about 1.5 percent to its lowest level since October 2015.

Since yesterday, the euro rose nearly 3 cents to 5-week high of $ 1.1342 with a view to its important 4-month high of $ 1.1376 nailed on 11 February, while the British pound reached a new 4-week high of $ 1.4501.

Meanwhile, the US currency fell nearly 2% to a 17-month low at 110.67 yen (the lowest level since November 2014) before it bounced back to 112.00 level, after rumors that the Bank of Japan has conducted a disguised intervention in the currency market through several local banks intending to restrict the appreciation of the national currency. This seems to suggest that the area around 111.00  is perhaps the strongest level of the Japanese currency, which can not be tolerated from BoJ.

Falling of US currency is a fact despite today’s series of stronger US economic data. 

But is this a shaft of light that shows the way of US economy’s recovery? 

Wall Street ahead of the FOMC meeting

Trading on Wall Street began furtively on Wednesday as investors prepare for the statement of the US Federal Reserve, which will be published at 14:00 local time.

The CBOE Volatility (VIX), which is considered as a measure of fear in the markets for a short fell to 15.56 points, the lowest level since December 24.

In the broader index S&P 500 best represent the health and energy sectors, but consumer staples leading six sectors lower. With the appreciation of Apple’ shares, Nasdaq rises.

For the growth of the index of blue-chip Dow Jones Industrial Average at most contributes Goldman Sachs.

US light crude oil WTI is rising by 3.27% to $ 37.53 a barrel, while the European benchmark gained 3.10% and traded in the early hours at $ 39.94 a barrel.

Gold is rising by 0.14% to $ 1 232.70 an ounce.

The dollar is rising by about 0.4 percent, the euro is near $ 1,106 and yen is 123.69 yen per dollar.

Shall we expect positive comments from the central bank about the state of the economy and intentions three times instead of four tightening of monetary policy in 2016? This will be known quite soon.