New Zealand Dollar Forecasts Remains Bearish as Rate Cut Approaches

New Zealand Dollar Forecasts Remains Bearish as Rate Cut Approaches

A rise in risk aversion paired with a weakening interest rate outlook dragged the New Zealand dollar lower against the Japanese yen and the greenback this week, and the exchange rate is likely to fall further over the following week as the Reserve Bank of New Zealand is widely expected to lower the official cash rate by another 75bp to a record low of 2.75% in March. New Zealand Dollar Forecast Remains Bearish as Rate Cut Approaches

Fundamental Outlook For New Zealand Dollar: Bearish Link........

Canada Consumer Prices Fall More than Expected on Gasoline

Canada Consumer Prices Fall More than Expected on Gasoline

The Canadian consumer price index dropped a more than expected 0.3% in January after falling 0.7% in the previous month, pressured by a sharp drop in vehicle and natural gas costs . The annual rate of inflation fell to 1.1% from 1.2% versus expectations of prices holding steady. P&G, Others Say Higher Prices Will Stick – Wall Street Journal

• Anglo American to Cut 19,000 Jobs – Wall Street Journal
• US claims 52,000 hid UBS accounts – Financial Times
• GM’s Saab Unit Files for Reconstruction to Survive – Bloomberg
• BOE Buys 340 Million Pounds of Commercial Paper – Bloomberg

USDCAD – The Canadian consumer price index dropped a more than expected 0.3% in January after falling 0.7% in the previous month, pressured by a sharp drop in vehicle and natural gas costs . The annual rate of inflation fell to 1.1% from 1.2% versus expectations of prices holding steady. Meanwhile, core CPI decline to 1.9% from 2.4% as the effects of declining oil prices start to filter throughout the economy. As commodity prices continue to fall lower, the Bank governor Mark Carney sees the annual inflation to fall below zero in the second and third quarters, which may led the central bank to cut borrowing costs again in order to keep inflation between 1-3% target range. Discuss the topic and your trade ideas in the USD/CAD Forum. Link......

US Dollar, Japanese Yen Down as CPI Shows the US is Teetering on Brink of Deflation

US Dollar, Japanese Yen Down as CPI Shows the US is Teetering on Brink of Deflation

Euro Jumps as ECB’s Nowotny Says Zero Rates ‘Neither Desirable Nor Needed’
• British Pound Gains as UK Retail Sales Rise, UK GDP Revision Could Weigh Next Week
• Canadian Dollar Shows Little Reaction to Bigger Than Expected Drop in Canadian CPI

US Dollar, Japanese Yen Down as CPI Shows the US is Teetering on Brink of Deflation
The US dollar and Japanese yen ended Friday mostly lower despite clear signs of risk aversion as evidenced by gold's test of $1000/oz, sharp drops in global stock markets, and a rally in government bonds, including US Treasuries. However, with the majors generally still contained to ranges and near their spike highs/lows, it may be a bit early to say that the US dollar and Japanese yen have lost their status as “safe havens,” as correlations have a tendency to fade in and out over time. Looking at charts of the DXY Index, price pulled back from resistance at the 2008 highs and the outlook for the greenback for the next few weeks may hinge upon whether or not the drop signal a reversal or ultimately yields a break higher. Link...........