Apart from rising in price of wheat, corn and soybeans, the coffee prices also rose | IFCM Hong Kong
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Apart from rising in price of wheat, corn and soybeans, the coffee prices also rose - 20.2.2014

The macroeconomic indicators in the U.S. yesterday were negative. Number of new buildings in January was the lowest in three years. Investors have reduced the growth forecasts for the U.S. GDP in the first quarter to 1.8-1.9 %. However, the Dollar Index (USDIDX) increased due to optimistic statements made by the Fed. It reaffirmed its commitment to the plans of further decline in redemption of the U.S. government bonds, which also implies a reduction of the Dollar issue. The interest rate increase is not excluded this year. Today at 13-30 GMT (0), we expect the U.S. inflation data for January to be released. This is a very important parameter for the exchange rate. The preliminary forecasts, in our opinion, are neutral. If data does not coincide with the forecast there might be a strong movement of the U.S. Dollar. there will be other statistics besides the inflation data and other indicators released. More information can be found in the Economic Calendar section.

Today at 9-00 and 15-00 GMT (0) we expect the macroeconomic indicators in the Eurozone to be released. We believe that their predictions are moderately positive and able to support the Euro.

The Australian dollar (AUDUSD) weakened on Wednesday (fall on the chart) due to fears of lower demand for raw materials from China - the main trade partner of Australia. The Preliminary Chinese Purchasing Managers' Index (Markit / HSBC PMI) fell to its lowest level in seven months and was 48.3 points in February. The Renminbi has fallen to a minimum of 11 weeks. The final value of the PMI, calculated by the bank HSBC, will be released in March 3, and the first of March China will announce the official PMI. Accordingly, the data on the Chinese economy will appear only once prior to the end of February. On Monday, we expect the information about changes in property prices to be released. As we have noted in previous reviews, the macroeconomic data from Australia are also not expected until early March. Probably Aussie will be in a neutral trend.

USDJPY, Daily

Slowing economic growth in China has strengthened the Japanese Yen (USDJPY) (fall on the chart). It is considered as a safe heaven in Southeast Asia. Note the negative data on foreign trade in Japan came out last night. Compared to last year, imports increased by 25%. This may limit the reducing potential for the yen on the chart. After the accident at Fukushima, Japan has closed part of the APS’s. As a result, Oil imports grew by 28.1% and imports of liquefied natural gas - by 21.4 %. Of course, this is a heavy load for the Japanese economy.

The wholesales in Canada for December by 1.4% to its lowest level in six months. It is much worse than expected. As a result, there was a strong weakening of the Canadian dollar. On the chart, it looks like a strong growth of the (USDCAD).

GBPUSD, Daily

The unemployment in the UK rose unexpectedly in December to 7.2% in spite of the forecasts. This reduced the likelihood of an early increase in interest rates and led to the Pound weakening (fall on the GBPUSD chart). Before it was insignificant as the majority of the Forex market participants believed that the UK economy remains strong. Tomorrow the meaningful data on retail sales for January are coming out.

Coffee, Weekly

Apart from rising in price of wheat (Wheat) and soybeans (Soyb), there is a strong growth in coffee prices (Coffee) observed. Its price has risen for three weeks by almost 40% and reached an annual high due to fears of crop reductions due to bad weather in South America. The pessimistic scenario is that the production of coffee in Brazil this year could shrink by 30 %. Exact figures are difficult predict before the harvest beginning in May. A similar situation is for the Brazilian soy. Farmers can not say the volume of production what will be for the current year. Now soybean crop in Brazil is estimated at 85-92 million tons. Agricultural agencies regularly report their updated forecasts. This causes the soybeans price fluctuations in frames of the uptrend. Note also the growth of Corn quotations.

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