Multiple speaks from central bank’s bosses along with plenty of significant economic data releases of the US and the UK this week have led global financial markets to be exuberant. In this article, we present the review of the binary options market during the period from Sept 25 to Sept 29 focusing on the prospects of the major currencies.
Unlike normal Mondays, the beginning of this week witnessed two important speaks from European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda agitate global financial markets. In Brussels on Monday, although Draghi said that the ECB “will keep as much stimulus as the euro-area economy needs” and also added that the 2.3 trillion-euro bond-buying program can be adjusted later this year, the Euro found itself weakening versus its US cousin. Meanwhile, Kuroda continued to push back the timing of the inflation target, marking six times in a row since he launched quantitative easing in 2013. However, due to swelling geopolitical risk causing by Pyongyang (North Korea), the Japanese Yen advanced well against major currencies.
Tuesday saw the US dollar be in focus as Federal Reserve Chair Janet Yellen had a speech in front of the National Association of Business Economics. Exactly as we had forecasted, Ms. Yellen adopted hawkish hints by stressing again the need for a rate hike in December, sending the Greenback higher versus its counterparts.
On the same day, U.S. CB Consumer Confidence was reported slightly dropping to 119.8 from its prior announcement of 120.4.
Another U.S. economic report negatively came out on Wednesday. The Core Durable Goods Orders rate was confirmed at 0.2% which matched economist’s prediction, down from the 0.6% level in August. Besides, Sept 27 also saw Stephen S. Poloz - the Governor of the Bank of Canada – speak before the St. John’s Board of Trade, emphasizing that “there is no predetermined path for interest rates from here”. Hence, most cross-CAD pairs traded higher, delivering dozens of calling opportunities for binary options traders.
In a separate development, New Zealand’s key interest rate was left unchanged at 1.75% as the Reserve Bank of New Zealand judged that a lower New Zealand dollar “is needed to increase tradable inflation and help deliver more growth.” The Kiwi dropped versus a basket of FX currencies.
The Sterling was in focus on Thursday thanks to crucial speaks from Bank of England President Mark Carney and British Prime Minister Theresa May. However, binary options traders had to see a tumbling British Pound since Mr.Carney argued fiercely with Mrs. May, telling that UK prime minister’s plan would lead to weaker real income growth and the BOE could do nothing to mitigate the pain, while Mrs. May appraised that the central bank could only smooth the economic cycle rather than boost prosperity.
Also on Thursday this week, when speaking at the National Securities Industry Convention, Tokyo, BOJ Kuroda’s rhetoric was a little more hawkish since he expected inflation to accelerate towards BOJ target, driving most cross-JPY currency pairs to head lower. Meanwhile, two U.S. economic data were oppositely announced. The final GDP trivially rose, while unemployment claims had another 12K expansion, causing the US dollar to tumble all day.
By the end of the week, UK’s Current Account was divulged declining to -23.2B from its previous report of -22.3B, bringing plenty of bearish signals for GBP/USD’s traders. Canada’s GDP was also affirmed on the same day, down to the no-growth level from the August release of 0.3%.