UK Pound and US Dollar

UK pound sterling went up against the US dollar as retail sales figures in the UK overcome expectations.

However, positive regional US manufacturing data caused the dollar to become steadier.

During stock market trading in the US, GBP/USD was up by 0.05 percent at 1.5689. This was an increase from a low of 1.5632.

The UK’s Office for National Statistics published a report that retail sales rose 0.8 percent and beat estimates for a 0.4 percent gain. Retail sales in September retail sales declined by 0.4 percent.

Annual retail output rose at a rate of 4.3 percent in October which topped expectations for a 3.8 percent gain after increasing at a rate of 2.3% in September.

Fundamental retail sales increased by 0.8 percent last month also went above forecasts for a 0.3 percent rise after falling by the same percentage during the past month.

In the meantime, manufacturing activity in the US grew at its fastest rate since 1993 this month and fueled optimism over US economic growth.

Analysts were looking at the index to decline to 18.5 within two months.

Existing new orders index, which reflects demand for manufactured goods, went up 18 points to 35.7.

The sterling was up against the single currency. The EUR/GBP was down 0.22% at 0.7987. However, it was up against the yen with the pair showing 0.19 percent at 185.30.

Trader from Goldman Tagged in FOREX Scandal

A currency trader from Goldman Sachs resigned due to alleged transgression in the stock market while he was still with HSBC. Frank Cahill did not make any statements regarding this matter.

The bank has not been incriminated in the currency scandal which saw six large lending institutions fined a total of $4.3 billion by regulators from three countries.

Other lenders like Barclays are still being probed and waiting for possible penalties from agencies like the US justice department.

Cahill was with HSBC between 2010 and 2012 based on records of the Financial Conduct Authority in the United Kingdom.

The FCA says that manipulation of FOREX took place at the six banks sometime from 2008 until 2013. Aside from the FCA, other watchdogs to include the Commodity Futures Trading Commission of the US took part in the investigations. The FCA’s probe was named “Operation Dover Court.”

The probe set off additional civil, criminal and anti-trust legal inquiries by authorities all over the world against 15 banks or even more because of purported collusion and rigging in the currency markets.

 

USD/JPY

USD/YENA no Yen buying interest in Asia continues for the currency is reaching fresh 7-year lows versus the US Dollar at 118.27 yens, as anxieties of losing the trend goes beyond any technical rational.

Tokyo Gotobi posted a fix retracement near round number 118.00; the dip was immediately fostered by leveraged participants, observing118.50 as coming intraday target before 119.00, with the gigantic 120.00 – big stops over – that shifts investment banks were professing as the forecast for year-end expecting to achieve  within this week disregarding the present bullish pace.

Observe the constant bidding in USDJPY team that is not actually emerging with optimism printed in Nikkei that indicate something more than just changes in the GPIF or QQE2 that might be driving prices continually higher. The market might begin to fear that a Yen crisis with BOJ. The QQE might be seen as eternally supporting the potential for failed experiment of Abenomics.

A psychological element though, that is, the fear of misplacing intraday yen can result into moves far surpassing any tech rationale is clearly at play, as well, it appears to be the main driver for now.

Japanese Yen Declines versus US and EU Currencies

The Japanese yen reached a seven-year low versus the US currency and a six-year slump against the common currency as traders opted for carry trades subsidized by very low liquidity from Japan’s Central Bank.

The US dollar went as high as 118.09 yen. It was above the yen in 24 hours and almost 10 yen since the BOJ came out with a surprise stimulus package in the market before the end of last month.

At the same time, the euro surged to 148.05 after gaining 1.1 percent over 10 yen in 14 trading sessions.

Members of the US central bank seemed to be quite indifferent about the strength of the dollar. This was opposite of what other primary central banks have in mind where weaker currencies have been favored.

The take-profit level of the US dollar and Japanese yen remains ahead of the principal 120-Japanese yen level.

Stock markets were focused on the yen so the common currency moved only a bit on the dollar and edged up to $1.2553 EUR. This was below resistance of roughly $1.2600.

The euro was higher after a survey indicated that majority of voters did not favor a proposal for the Swiss central bank to purchase more gold.

The euro was close to 1.2010 francs. On the other hand, the price of gold price was recorded at $1,182 per ounce.