IMF Calls on Japan to Pursue Further Reforms IMF Says Further Growth Reforms Are Needed The International Monetary Fund called on Japan to pursue further reforms in order to stimulate growth. The Fund stated that uncertainty is…high whether the recovery and exit from deflation will become self-sustained under current policies,” adding that forceful growth reforms are needed to overcome structural headwinds to raising growth and ending deflation.” In order to overcome deflation and stimulate growth, the Japanese government plans to initiate a ¥18.6 trillion stimulus package, raise incomes by 3% and double the countrys monetary base. This would be achieved by increasing asset purchases, as well as purchasing risky assets and stocks. Further stimulus would be bearish for the yen and may strengthen the USD/JPY. The currency pair reached its highest level (103.08) April 8 on Wednesday. According to PwC, the Japanese economy will expected by 1.5% in 2014. In the U.S., the Bureau of Statistics reported that the Nonfarm Payrolls fell to 209K in July. The figure, which measures the change in the number of people employed during the previous month, came lower than the expected 233K. Following this news, the EUR/USD rose to 1.3443. This benefited traders who placed long positions at the start of Friday’s session. UPCOMING EVENTS 2014-08-04 09:30 GMT United Kingdom, Construction PMI 2014-08-04 09:30 GMT European Union, Sentix Investor Confidence 2014-08-04 15:00 GMT European Union, CB Employment Trends Index EUR/USD EUR/USD is traded at 1.3421 ahead of the Eurozone Producer Price Index (YoY). The index, which measures the changes in prices received by domestic producers for their product, is expected to stand at -1.0%. A higher than expected reading would be bullish for the euro and may strengthen the currency pair. Our intraday recommendation Buy the pair above 1.3420 towards 1.3440 & 1.3460. Below 1.3420 sell towards 1.3400 & 1.3380. USD/JPY USD/JPY is traded at 102.61 as traders await the ISM - NY Business Conditions. The index, which assesses business conditions among manufacturers and non-manufacturing firms, previously stood at 635.3. A lower than expected reading would be bearish for the dollar and may weaken the currency pair. Our intraday recommendation Sell the pair below 102.68 towards 102.47 & 102.28. Above 102.68 buy towards 102.88 & 103.08. GBP/USD GBP/USD is traded at 1.6827 ahead of the Construction Purchasing Managers’ Index (PMI). The index, which measures the activity level of purchasing managers in the construction industry, is expected to stand at 62.0. A higher than expected reading would be bullish for the pound and may strengthen the currency pair. Our intraday recommendation Buy the pair above 1.6830 towards 1.6850 & 1.6870. Below 1.6830 sell towards 1.6810 & 1.6790. AUD/USD AUD/USD rose after the Australian Retail Sales (MoM) and is now traded at 0.9312. The figure, which measures the change in the value of sales at the retail level, came higher (0.6%) than the expected 0.4%. Our intraday recommendation Sell the pair below 0.9314 towards 0.9294 & 0.9274. Above 0.9314 buy towards 0.9334 & 0.9354. Oil Oil is traded at 98.04 as traders await the Sentix Investor Confidence Index. The index, which rates the economic outlook for the Eurozone, is expected to stand at 9.0. A higher than expected reading would have a bullish effect on oil prices. Our intraday recommendation Sell the commodity below 98.18 towards 97.61 & 97.08. Above 98.18 buy towards 98.76 & 99.32. Thank you for reading, Have a lovely trading day
Posted on: Tue, 05 Aug 2014 02:53:59 +0000
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