London is the world’s largest currency trading hub. Related: U.K. joins currency manipulation probe Authorities in Europe and Asia revealed earlier this month they are on the hunt for evidence that banks may have tried to rig exchange rates. The global sweep includes European Union regulators, as well as counterparts in the U.K., Switzerland and Hong Kong. In the U.S., the Justice Department has “an active, ongoing investigation into possible manipulation of foreign exchange rates,” Acting Assistant Attorney General Mythili Raman said. The push is part of a wider crackdown into financial industry misconduct.
In the meantime, the central bank will be on edge, ready to protect its currency from rapid appreciation. The SNB will update its 3Q effort today as well as its currency holdings (likely unchanged). Gold Retreats, Bears Rule Should We Break $1,335, Dollar Rally There is ambiguity to the round of monetary policy decisions and commentary as of late, but gold acts as a good gut check for the lean towards global stimulus. When the worlds major central bank troupe are overall accommodative, this one it diminishes the appeal of traditional currencies in general as there is no viable reserve to diversify to.
Learn Forex: NZDUSD 200-Day Simple Moving Average Bounce (Chart Created using Marketscope 2.0 charts) In the example above, we can see a strong uptrend in the daily NZDUSD chart. The trend started at the end of August at 0.7718 from below the 200-day simple moving average crossed above the 200-SMA on 9/16 and reached a high of 0.8434 on 9/19. Traders who missed the over 700 pip move had a second chance to join this powerful trend as NZDUSD retraced back and bounced from the blue 200-day simple moving average in the 0.8200 neighborhood. In Forex, numbers ending in 00 usually act as significant areas of support and resistance as well.
The BOJ will issue a semi-annual report on the economy and prices, which will include fresh long-term growth prospects, at 0600 GMT, followed by a news conference by Governor Haruhiko Kuroda at 0630 GMT. “I think basically they (BOJ) would say that they are comfortable with the outlook,” said Sim Moh Siong, FX strategist for Bank of Singapore. “But I think the bigger question is, will they still have the same level of comfort three to six months down the road. Perhaps then there may be a higher possibility of easing if the sales tax hike does impact on the economy,” Sim added.
Barclays maintains its view that the Fed will reduce the pace of asset purchases to $70bn per month in March of next year. Following the FOMC statement, sterling dropped sharply to a two-week low at 1.5998. GFKs UK Consumer Confidence for October came out just after midnight UTC today, falling short of forecasts for -8 with the softer reading of -11, marginally below Septembers -10, which remains the best level since the financial crisis. The current-month Nationwides UK House Price Index m/m checked in earlier today at 1.0 percent, comfortably beating expectations for a rise of 0.7 percent, following the prior periods gain of 0.9 percent. House prices have thus maintained the momentum that has been building in the second half of 2013 on the back of a sustained upward trend in the wider UK economy, said Robert Gardner, chief economist at Nationwide. In the US today, Unemployment Insurance Initial Claims for last week are due out at 12.30 UTC, with the consensus for a drop to 339,000 from the prior periods 350,000.