Yellen’s Testimony Tension Affects Dollar Rate

Janet Yellen

On Tuesday forex investors were cautious about betting on the dollar because of the apprehension caused by the testimony Janet Yellen (Federal Reserve Chair) would give in the congressional meeting on Tuesday.


The release of the January congressional meeting minutes last week drew a lot of attention to Janet Yellen Testimony before the Banking Committee of the United States Senate on Tuesday. This has affected the dollar rate, limiting further increase until this mist clears.


BK Asset Management’s managing director, Kathy Lien said that “the more convoluted and muddled her message is on when rates will rise, the more negative it will be for the U.S. dollar. But even in this case, we do not expect the dollar to crash because rates are still poised to move higher,”


The United States dollar went down from 119.35 to 118.92 against the Japanese Yen. The euro was exchanged at $1.1335 having experienced a 0.4 percent overnight reduction, this slight reduction should be as a result of the new tension arising from the verdict of Greece creditors concerning their list of reforms. The Euro also traded 0.6 percent down against the Japanese Yen at a rate of 134.79yen


United States dollar index was 94.562 rising at 0.3 percent and it has maintained an almost eleven years high of 95.481 as at January.



Image:By United States Federal Reserve (Obtained via email from Federal Reserve OPA.) [Public domain], via Wikimedia Commons

Greece Prepares Reform Promises

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Greece’s government prepared reform strategies on Sunday in the attempt to secure the financial lifeline from the euro zone, but the response was negative and the government was attacked for selling ”illusions” to voters. This is in response of failing to keep a promise to extract the country from the international bailout.

The euro zone finance ministers agreed to extend the bailout agreement for four months with a condition: for the government to come with a list of reforms by Monday. The Leftist Prime Minister Alexis Tsipras insisted this was a negotiation success, but the population does not agree with him.

Friday’s deal avoided or at least postponed a banking crisis, as fellow euro zone Ireland announced that such a crisis is possible and that it could have erupted in the coming week. Greeks reacted with relief and this showed that Prime Minister Alexis Tsipras kept at least one promise: to keep the country in the Euro zone. Under this new deal, Greece will still live under the EU/IMF bailout and a new program must be proposed and negotiated by this summer.

”Greece achieved an important negotiating success in Europe”, he said on Saturday. In spite of the Prime Minister’s relief and pride in the results of the negotiations, top Marxist members of the coalition party of the left, the Syriza party, remained so far silent. This is a clear evidence of the fact that the compromises made to win the Eurogroup agreement are painful.

But veteran leftist Manolis Glezos was not silent about the agreement and wrote in a blog: ”I apologize to the Greek people because I took part in this illusion”. Even though Glezos is not a party heavyweight, he does command moral authority. He became a national hero during World War Two when, as a young man, he scaled the acropolis, ripped down the Nazi flag and hoist the Greek flag.

Finance Minister Yanis Varoufakis said he is confident that the list of reforms will be approved by all institutions, this being a new step towards stabilization and growth.

Government officials said the reforms would include a crackdown on corruption and tax evasion.

The Brussels deal offers the possibility to free up some funds to ease the effect of pension cuts and the painful 25 percent unemployment and it also avoids language that has inflamed many Greeks angered and tired of four years of austerity imposed by foreign creditors.


Eurozone Service Activity Boom


Markit report has shown that there has been an increase in the business activity of service firms in the Eurozone within the month of February. This means that Eurozone services has constantly been on an increase for seven months now – indicating a serious boom for the service companies through out the Eurozone.

The report indicated that the composite services purchasing managers’ index (PMI) for February is 53.5, increasing from the value in January which was 52.6.

One can deduce from the data that there is a boost in business activity in the Eurozone, because it has maintained a PMI above 50 for several months instead of going below 50 which would mean a decline.  As a result of this boom, firms have been hiring more than before for quit a while now – meaning employment increase.

The reverse is the case for manufacturing activity in the Eurozone, the purchasing managers’ index for manufacturing this February fell below 50 for the euro zone. Its value decreased from 49.2 in January to 47.7 in February.

Eurozone depend more on services than manufacturing, making servicing companies the core of their economy. More so, the fall in oil price has boosted the services sector since they rely greatly on products like gas in other to run their business activities – a fall in the price of oil means reduced cost of gas. So input has been reduced while output has increased for the service providers in the Eurozone.

Contrary to the fear harboured by many, the Greece indebtedness saga did not really hinder the economic growth of other European countries in the Eurozone.  In spite of the crisis, there is a boom in business activity this February. Markit’s Chief Economist, Chris Williamson statement supports this – “Undeterred by the on-going Greek debt crisis, economic growth is gathering momentum and looks set to gain further traction in coming months,” So, the business service sector in the Eurozone is experiencing an all time high.

New Forex trading app launched

forex app

The different properties and features offered by have distinguished it from other forex brokers. One of such facilities is the recent launch of a new mobile forex trading app.


This leading forex brokering firm has been ahead of its competitors since its inception, it presents a wide range of heterogeneous trading platforms, and has received some forex awards since its inception in the year 2006. The firm is CySEC regulated and authorized.


FxPro has a large client base spread across one hundred and twenty countries; its regional offices are available in countries like France, Russia, Austria, Greece and the United Kingdom.


The new mobile forex trading app is loaded with a wide range of features that makes forex trading easy and result oriented. There are some specific services offered on this app that are particular to the app alone, and can not be found with other Forex apps – it even has an extension for major browsers like Firefox and google chrome.


FxPro mobile app contains useful distinctive features that produce economic indicators with the use of an economic calendar. This helps to know the next move in the market and the result of that to the individual currencies traded in the market. The user of the app receives all updates from the all app on their mobile device.

Japanese Yen Declines


The early Friday Asian trade market left the Japanese Yen weaker to other major currencies, however there were no data released yet because of the closed market due to the holidays for the Lunar New Year.


Haruhiko Kuroda, the Governor of the bank of Japan made statements to lessen the effects of the decline. He said that the Bank of Japan is monitoring the bond market of the government of Japan, clarifying that in other to achieve the 2 percent target rate of sustained inflation, negative declined rate of the Japanese Yen will help achieve this.


The US dollar traded against the Japanese yen at 119.03, up 0.007%, it also traded up against the Canadian dollar early in Friday hitting 1.2521 up 0.21%, this is as a result of the bad Canadian retail sales data that reduced the demand for the Canadian dollar.


The United States preliminary manufacturing data which was released later in the day on Friday was upbeat. This data revealed that US manufacturing PMI increased this February to 54.3 higher than the 53.9 in January.

Greece Deadlock Continues While Euro Edges Higher


Financial experts report that Euro edges higher against the dollar on Tuesday, as data shows that the German confidence improved and reached a one year high this February. In the meantime, the deadlock between the euro zone and Greece continues.

The ZEW Centre for Economic Research announced an index of 53.0 of German economic sentiment, a rise by 4.6 points from January’s index of 48.4. This is the highest reading since February 2014, but it still hasn’t reached the expectation of 55.0.

The financial market experts expressed a rising sentiment as result of the unexpectedly strong rate of economic growth in the fourth quarter of 2014.

Following the data, the EUR/USD touched session highs of 1.1400, going up from the earlier 1.1385.

The single currency experienced muted gains following the breakdown in talks between the euro zone prime ministers and Greece discussing a new financial agreement for the country.

Greece already has a 240 billion Euro bailout that expires at the end of this month and the new Greek government already expressed the desire of not having it expanded. A six month extension for the bailout was proposed to the government on Monday, but it was drastically rejected after being called ‘’unacceptable’’.

A new extension can still be requested by Athens by Friday. Otherwise, the present bailout will expire on February 28 and the country will literally run out of money, which will trigger its exit from the euro zone.

The euro also rose to session highs against the Yen, with EUR/JPY up to 135.38 and it was also higher against sterling, the EUR/GBP reaching 0.7403.

Tuesday data also shows that the rate of inflation slowed in UK to a record low in January, as consequence of the falling oil prices.

The annual rate of consumer inflation was at 0.5% in December and only 0.3% in January. This was the slowest rate of inflation since records began in 1989.

ONS said that consumer prices fell 0.9% in January, compared to the expectations of dropping to only 0.8%.

However, there is bad news as well, as the core inflation rose 1.4% up from 1.3%  in December.


Investors concerned about Ukraine, Greece as Yen raises


After going down for two days, Yen is now raising. Economic data from Ukraine and Greece is missing, causing investors to fret.

According to Reuters, Yen started advancing against euro and dollar on Monday as investors decided to stay safe with Yen as the future of Greece and the Ukrainian conflict caused worries.

Yen had suffered from losses on the previous two days against dollar, however, this year it has gained 0.7% in total. It went down Friday mainly because of a positive jobs report from the US rose optimism about Federal Reserve’s rate rise to take place this year.

Alexis Tsipras, the Prime Minister of Greece spoke to the parliament about plans to find relief for this cruel program that international lenders have imposed on Greece. He said that there won’t be extensions, which will cause problems with his partners in the EU.

Western Union market analyst Joe Manimbo said that if Greece were to leave the euro, markets would see a period of serious turmoil.

Angela Merkel, Chancellor of Germany discussed the Ukrainian conflict in a meeting with Barack Obama. The fact that seven civilians and nine troops have been killed there in the past day has also left its mark on the markets.

The Yen had gone down 1.4% Friday, but as investors found it a safe investment, on Monday, dollar went down 0.6% against 118.37 yen. Euro went down 0.3% to 134.13 yen. However, the euro went up 0.2 against dollar, closing at $1.1326. Even though, expectations towards euro stay negative.

Finance ministers of the Eurozone will meet Wednesday to hear a proposal from the Greek minister. The European Council will meet the next day.

Swiss Stocks Continue to Fall

BuffaloReport (Milan) – SNB decision still put pressure on Swiss Stock market.


On Friday, the second day after the decision of SNB to scrap a 3 year old cap on CHF price, Swiss stocks continue to go down. Swatch and Richemont have the highest losses up to 6,3%. Markets have concerns on the profits of Swiss exporters and some huge banks have reviewed their forecasts.

Nowadays, about 40% of Eurozone export goes to Eurozone countries. And such a decision, made by SNB on yesterday, may lead Swiss companies to losses.

SMI index shows decline of the Swiss stock market in total. Today it was down by 4,3%.

The other problem is that the ECB may implement its QE programme next Thursday. Markus Huber from Peregrine&Black thinks that speculations on those events may provide further EUR fall and rise of CHF. And this will create more troubles to Swiss export to the Eurozone countries.



Oil prices downtrend is negative for global economy

BuffaloReport (Minks) – G5 economies benefit from the Oil prices downtrend. However, their global impact is negative.

Commodities market still shows no sign of recovery, as Copper prices have joined the downtrend and have lost 25% of their last year value. Some experts think that this will boost the G5 economies growth. However, it is bad for the global recovery.

The pressure on commodities is still very high due to the latest World Bank’s forecasts on the global growth. The oversupply of Oil markets may be explained by weak recovery in the world’s biggest economies.

On the other side, there is OPEC with its unwillingness to cut oil extraction because of competition with US Oil market newcomers. Despite a very slow recovery in EU and Asian countries, OPEC is still deaf to the new challenges. In such situation, most of US Oil companies may have difficulties as the breakeven price for them is around 65$ per Brent barrel.


CPI in Britain pressures on Cable

BuffaloReport (Warsaw) – Weak inflation data contribute to the prolongation of the GBP/USD downtrend

UK inflation results show that the situation is more serious and requires some additional action. CPI y/y has fallen to 0,5% from 1,0% in November. The pair was testing 1,51 level after the news. However, right now the price is higher.

The main direction of the Cable is still downside. The next aim is at 1,5033. Following to the today’s stats, Mark Carney will write a letter to the Chancellor. It is required by the monetary policy remit.

UK inflation continues to show negative dynamics. Today’s data shows, that inflation is on the lowest levels since the beginning of the 21st Century. It strengthens expectations that Bank of England will have to hold rates at their current level for longer.

For the moment, British economists and financial authorities avoid to speak about risks of deflation. However, there is almost no doubts that BoE will remain cautious for the next half a year period.