v saved moves?

 What is Behind Today’s V Shaped Moves? 

We haven’t seen this type of volatility in the foreign exchange market in weeks. In the last 24 hours trading ranges expanded sharply leading to big moves in currencies. 

  the NY session started with strength for the U.S. dollar and weakness in EURO and sterling.Although the greenback ended the day higher versus the Japanese yen, it experienced significant losses  against other major currencies. The only explanation for today's moves is risk appetite but it took a while for USD/JPY

to catch up to the broader market. With  the dow rising over 300 points today,30k is in sight and currencies are benefitting from the prospect of a continued rally in equities.Having hit a low of 110.20 during the Asian trading session, USD/JPY quietly traded higher throughout the day but didn't break 111 until fed presidents Evans and kaplan made a hawkish shift.Evan who voted against a rate hike at the should add to business investment and jobs. kaplan said the base case in 2018 is for 3 rate hikes as the tax cuts could drive unemployment down to the 3% range by the end of the year. Foreifn central banks are also growing uncomfortable with the recent strenght of their currencies, so we may finally see the dollar recover some of this month's losses housing reports and philadelphia Fed index. we are looking for a move to 112but beyond that, there will be resistance between 112.30 and 112.30

The brightest spot of the Australian economy has been the labor market and today, we’ll learn if the momentum was sustained at the end of the year. It would be difficult for job growth to come any where close to the 61.6K increase reported in November but if employment change meets or beats the market’s 15K expectation just slightly and the unemployment rate declines, it would enough to send AUD/USD well above 80 cents.

 However if job growth slows more than expected with full time jobs suffering the most and the unemployment rate holding steady, we could see a sharp correction in AUD/USD especially ahead of what is widely believed to be slower Chinese growth in Q4.

2018 will be a challenging year for China and softer GDP, retail sales and industrial production numbers would remind investors of the trouble to come. Tonight’s economic reports should have a meaningful impact on AUD and NZD.






                                                                                                                                                                                                    expert : By Kathy Lien