Euro Tops $1.2000

Analisi Giornaliera - 08/09/2017

ECB Reaffirms Ultra-Easy Policy Stance

The Euro rallied to its strongest point against the US dollar since the start of 2015 after a European Central Bank policy meet did little to support the beleaguered greenback. The Central Bank left its benchmark interest rate unchanged and committed to continuing its bond-purchase program for the near future.

Euro Area Growth Outlook Brightens

The Governing Council of the European Central Bank found it prudent to leave the benchmark interest rate at a record low of 0.00% and opted to keep buying €60 billion a month at least through December.

The Central Bank also slashed its inflation target to 1.20% and 1.50% compared to earlier estimates of 1.30% and 1.60% for 2018 and 2019 respectively. In a conference following the decision, ECB President Mario Draghi said any potential policy tapering decision will likely be made in October, improving the short-term outlook for the single currency.

The US dollar found itself under further pressure following data that showed Americans filing for unemployment benefits surged to the highest level in over two years amidst a jump in applications in hurricane-hit Texas.

EURUSD is extending its gains from the previous session to last trade around 1.2060.

Chinese Export Engine Slows

Exports growth in China slowed in August as global demand for products made in the country moderated while imports witnessed an unexpected climb amid strong domestic demand.

On a yearly basis, the dollar value of Chinese outbound shipments rose 5.50% last month according to data from the General Administration of Customs, down from a 7.20% pace recorded back in July and trailing a median forecast of 6.00% growth. Meanwhile, inbound shipments surged 13.30% compared to a year ago, marking the tenth consecutive month of expansion that easily outperformed a median forecast of 10.00% growth.

Those flows left the country with a trade surplus of $41.99 billion for the month, defying expectations for a rise to $48.60 billion.

AUDNZD, which is prone to fluctuations in Chinese economic data, is down early Friday to last trade around 1.1085.

UK Home Price Growth at 8-Month High

Data compiled by mortgage lender Halifax indicated that British house prices soared in August by the fastest rate this year, adding to signs that a slowdown in the housing market is likely easing.

On a monthly basis, housing prices climbed 1.10% in August, easily besting the consensus estimate of a 0.20% rise. In the three months to August, prices gained 2.60%, up from 2.10% reported a month earlier.

House prices should continue to strengthen in the coming months thanks to support from lower mortgage rates and a shortage of properties for sale per a statement made by Halifax.

However, the statement added that falling wage growth could limit the affordability of houses.

GBPCHF is in a sustained downward trend and was last seen around the 1.2400-mark.

US Crude Stockpiles Rise for the First Time in 10-Weeks

West Texas Intermediate crude futures settled lower on Thursday after official data showed oil supplies rising for the first time in ten weeks following refinery shutdowns attributed to Hurricane Harvey lowered demand for crude.

The US Energy Information Administration report delivered on Thursday highlighted domestic crude inventories climbing by 4.580 million barrels during the week ended September 1^st, outpacing a forecast for an increase of 2.700 million barrels by analysts surveyed by S&P Global Platts.

It was the first weekly build-up in crude stocks for ten weeks and the largest in 6 months. Heavy flooding last week due to Hurricane Harvey knocked out close to a quarter of US refining capacity, eroding demand for crude.

Analysts expect the fallout from Harvey to continue to weigh on stockpiles. Crude futures for October delivery are currently hovering around the $49.05 per barrel zone.