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Jun 8, 2017
2 min

How Will Markets React to the UK General Elections 2017?

When Theresa May called a snap election on April 18, polls indicated a comfortable 20 point lead for the Conservative party and a safe bet in her attempts to increase her party’s majority. Market sentiment soared, however, the tightening of the polls in the lead-up to the elections calls for a closer look on how the markets could be affected by each outcome. A Conservative majority is still considered the most likely scenario and it is therefore expected to be interpreted as

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KG Team

May 29, 2017
2 min

Holidays in UK and US will compress busy trading week

The US dollar is regaining momentum after the Commerce department upgraded its first quarter GDP estimate from 0.7 percent to 1.2 percent. The U.S. Federal Reserve was already considering the slowdown a transitory one as per the minutes from its May meeting that were released on Wednesday. US political risk is keeping the USD from taking off as the Russian connection probe is now targeting Trump’s son law Jared Kushner. The price of gold has risen as investors look for a safe

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KG Team

May 29, 2017
4 min

Week Ahead - May 29, 2017

We are coming off the heels of an interesting week for the U.S. dollar which ended the week stronger versus the British pound, weaker versus the New Zealand dollar and basically unchanged against other major currencies. This divergence can be explained by the market’s fading confidence in the Federal Reserve. Fed Fund future are pricing in 100% chance of a June hike but data and the FOMC minutes suggest otherwise so investors are waiting for a reason to swing one way or the o

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KG Team

Apr 18, 2017
3 min

Week Ahead - April 18, 2017

For the past few weeks, front page news dictated currency flows with investors taking in headlines on big stories like the U.S. attack on Syria to the bombing in Afghanistan and President Trump’s currency comments. Of course the U.S. is not only the source of trouble as there’s also been terrorist attacks across Europe, Brexit and this weekend, we have the first round of the Presidential election in France. So it should be no surprise that the main theme in the Forex market i

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KG Team

Apr 10, 2017
3 min

Week Ahead - April 10, 2017

The U.S. dollar traded higher against most of the major currencies this past week. Unfortunately the strength was driven by risk aversion and not healthier data. This can be confirmed by the fact that the Australian dollar was the worst performer and the Japanese yen the best performer. High beta currencies tend to perform poorly when investors are nervous whereas the yen is generally bid up under these same conditions. Geopolitical risks are front and center for forex trader

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KG Team

Apr 5, 2017
2 min

US Private payrolls and Fed Minutes to Guide Markets

The USD is higher against most major pairs as investors are reducing their appetite for risk and flock to safe havens. The JPY is the only of the majors to gain against the dollar on Tuesday’s trading session ahead of the release of the first US employment report of the week and the much awaited minutes from the Fed policy meeting in March. ADP payrolls report will be published at 8:15 am EDT (12:15 pm GMT). The number of jobs added to employers excluding the government and f

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KG Team

Apr 3, 2017
3 min

Week Ahead - US Employment Data and Federal Reserve Minutes

The US dollar is mixed as it gained against the EUR, CHF, NZD and JPY but lost ground against the CAD, GBP and AUD. Political risk continues to impact markets as US uncertainty, the official triggering of Brexit and the upcoming French elections make investors anxious even as energy markets rebound thanks to a possible extension to the Organization of the Petroleum Exporting Countries (OPEC) production cut deal. On the diplomatic front Chinese President Xi Jinping will visit

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KG Team

Mar 29, 2017
3 min

Pound Lower As UK and EU Divorce Begins

UK PM Will Deliver Letter Triggering Brexit The Prime Minister of the United Kingdom, Theresa May, will invoke article 50 of the Lisbon treaty on Wednesday, March 29 at 7:00 am EDT (11:00 GMT) by telling the British parliament that she has submitted the signed letter to the European Union. This symbolic exchange will trigger a two-year process that will result in the UK withdrawal from the EU. The PM will face questions from the Commons at that time with a statement expected

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KG Team

Mar 27, 2017
4 min

The U.S. Dollar Could Fall Further & Week Ahead

The U.S. dollar traded lower against all of the major currencies with the exception of the Australian dollar. This divergence is a sign of risk aversion and not a function of Australia’s economy as there were no major economic reports released this past week. The RBA minutes were also optimistic. The only other explanation for AUD’s underperformance is the decline in iron ore prices. The best performer was the Japanese yen and the British pound. The former rose on risk aversi

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KG Team

Mar 20, 2017
3 min

Week Ahead - Dollar Drops After Rate Hike

The USD is weaker against major currencies across the board after the Fed hiked rates for the third time since the financial crisis but lacked upgrades to the economic projections. A proactive but patient Fed, with other central banks standing pat, meant the forward looking FX market came away with a less hawkish view on future US interest rates and sold the USD despite a 25 basis points hike to the benchmark rate. Fed member speeches during the week will give the central ban

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KG Team

Mar 20, 2017
4 min

Forex Market Review - Weekly 20/3/2017

The U.S. dollar traded lower across the board this past week. The best performers were the Australian dollar and British pound but outside of the euro, nearly all of the major currencies appreciated more than 1% against the greenback. Who would have thought that when the Federal Reserve raised interest rates by 25bp, the U.S. dollar would tank? But that was exactly what happened this past week as the greenback tumbled against all of the major currencies. Investors began unwin

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KG Team

Mar 16, 2017
3 min

Bank of England Expected to Hold

The USD dropped versus majors after the much anticipated rate hike at the end of the March Federal Open Market Committee (FOMC). The Fed raised rates by 25 basis points as expected, but did not alter economic projections and Fed Chair Janet Yellen was less hawkish than the market expected given her comments in the buildup to the policy meeting. A week filled with central bank activity continues with the Bank of Japan (BOJ) policy rate in overnight trading to be followed by th

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KG Team

Mar 15, 2017
3 min

Fed Expected to Raise US Interest Rates

The USD is higher across the board awaiting the release of the Federal Open Market Committee (FOMC) rate statement on Wednesday, March 15, at 2:00 pm EDT (6pm GMT). Fed speakers went out of their way in making sure they telegraphed the central banks’ decision as the market expected a more patient Fed given the Trump administration has not launched its tax stimulus and infrastructure spending policies. The CME FedWatch tool based on Fed fund rate futures shows the market has l

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KG Team

Mar 14, 2017
2 min

US interest rates possibly on the rise and stronger U.S. data

The only currency that did not end the week higher against was the euro and that was because of the ECB. The commodity currencies were hit particularly hard while the sterling crumbled under the weight of Brexit. The week ahead will be another busy one with four central bank rate decisions, Australia and the U.K.’s employment report and the possible trigger of Article 50 on the docket. Investors took profits on their long U.S. dollar positions on the back of Friday’s non-farm

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KG Team

Mar 8, 2017
3 min

Fed March Rate Hike Already Priced in as Markets Await ADP Payrolls

The U.S. dollar rose against major currencies on Tuesday ahead of employment data to be released this week. Comments from U.S. Federal Reserve members quickly shifted the expectations on the actions of the central bank when they meet next week. Chair Janet Yellen has made clear waiting for too long to hike could be a mistake. On February 14 Richmond Fed President Jeffrey Lacker said that “rates need to rise more briskly than the markets now seem to expect” as indicators such

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KG Team

Mar 7, 2017
1 min

RBA Leaves Interest Rates on Hold

No doubt, one of the key topics of conversation at this month’s RBA board meeting was around housing market conditions and the ongoing rebound in the rate of capital gains over the second half of 2016 and first two months of 2017. The CoreLogic monthly hedonic index shows capital city dwelling values have increased by 7.8% since the May ‘16 rate cut. The renewed exuberance in the housing market over the past eight months is due to more than just low mortgage rates. The reacce

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KG Team

Mar 6, 2017
2 min

Forex Market Review - Weekly 6/3/2017

Key levels were broken all around with EUR/USD testing 1.05, USD/JPY hitting 114.50, GBP/USD cracking 1.2300 and AUD/USD breaking below 76 cents. These big moves give traders a taste of the volatility that they can expect this month as there are a number of high profile events in March that could shake the financial markets. This coming week for example we have the European Central Bank’s monetary policy announcement and the U.S. non-farm payrolls report. The following week i

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KG Team

Mar 6, 2017
3 min

US Federal Reserve awaits NFP Report to determine March Interest Rate Hike

Comments from members of the U.S. Federal Reserve have put a rate hike in March back on the table. Lack of details on the Trump administration pro-growth policies had reduced the probability of the central bank raising interest rates but the words from Chair Yellen and other influential members now have the market pricing in an 80 percent probability of a rate increase on March 15. Chair Yellen has mentioned before that there are risks in waiting too long before raising rates

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KG Team

Mar 1, 2017
5 min

Currency Risk Management Strategies in 2017

The two key events that dominated the international political landscape in 2016 – the June Brexit vote in the U.K. and the U.S. election in November – had a pronounced impact on global foreign exchange markets. Brexit in particular served as a stark reminder of how quickly political instability can translate into financial market volatility – the almost instantaneous collapse in the value of the pound caught many unaware and the ongoing ambiguity around the U.K.’s exit from t

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KG Team

Feb 26, 2017
1 min

AUD, NZD & CAD - 27th Feb, 2017

All three of the commodity currencies held well last week versus the greenback with the oversold New Zealand dollar leading the gains. Data from New Zealand was mixed – although service sector activity gained momentum, producer prices and consumer spending grew at a slower pace while dairy prices fell. Nonetheless, the currency, which has come under heavy selling in recent weeks, rebounded strongly on the back of U.S. dollar weakness. The Canadian and Australian dollars will

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KG Team

Feb 26, 2017
1 min

EURUSD (EURO) - 27th Feb, 2107

The euro ended the week lower against the greenback. Politics will remain front and center for the euro as well as investors watch for fresh French election headlines. Two candidates (Bayou and Jadot) pulled out this past week and more could follow. Any decrease in the chance of Marine Le Pen becoming the next French President would be viewed as negative for the currency. Recent polls show Le Pen in the lead even in a race with scandal laden Filion not far behind. Le Pen’s po

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KG Team

Feb 26, 2017
2 min

US Dollar - 27th Feb, 2017

For the past two weeks investors have been scratching their heads over the underperformance of the U.S. dollar. Data has been good, the U.S. economy is improving and practically every Federal Reserve official who had an opportunity to speak said rate hikes are coming. So why has the U.S. dollar struggled to rally, particularly against the Japanese yen? The answer lies in expectations – the media has been talking up the possibility of a March rate hike and investors are just n

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KG Team

Feb 1, 2017
2 min

Bank of England Expected to Raise Growth Forecasts on Thursday

It’s been more than seven months since the UK voted to leave the European Union in a referendum that will change the shape of the country for years and despite strong warnings in the run up to the vote, the economy is still ticking along nicely. This should make Super Thursday another interesting affair for Bank of England Governor Mark Carney as he faces the very journalists he delivered those warnings to and has since faced some tough questions from. The central bank is exp

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