Fundamental Headlines
• AUDUSD – A booming economy and strong labor market fueled an 11.3% jump in Australian new home sales in January. The Move was underlined by a 13.3% increase in detached homes. However, sales going forward are expected to be weighed down by increased borrowing costs due to the RBA increasing the benchmark interest rate to a 12 year high of 7.25%. For more news and resources please visit our Australian Dollar Currency Room.
• USDJPY – Japan’s central bank left their benchmark interest rate unchanged at 0.50%. Although aware of the downside risks, the MPC reiterated their commitment to a measured policy of rate increases. The current state of the economy will prevent them from raising rates in the near term, as a U.S. slowdown and strong Yen have weighed on exports and raised concerns of a recession. The BoJ’s hawkish tone, diminishes prospects of a anticipated rate cut by year’s end. For more news and resources please visit our Japanese Yen Currency Room.
• EURUSD – German industrial output in January grew 1.8%, surpassing expectations of 0.3%. The largest gains were in capital goods and construction, signaling that recession concerns are fading. Increased investment by managers should provide stronger growth going forward and allow the ECB to focus on inflation and maintain their hawkish stance, which they reiterated yesterday. Discuss the topic and your trade ideas in the EUR/USD Forum.
• Hedge Funds Squeezed As Lenders Get Tough (link) – Wall Street Journal
• Housing, Bank Troubles Deepen (link)– Wall Street Journal
• Weak Dollar Rattles Equity Markets (link) – Financial Times
• US Household Wealth On A Decline (link) – Financial Times
• Money Market Rates For Euros Climbed To Highest In Seven Weeks (link) – Bloomberg
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