Dukascopy Market and Economic Research

Highlights of the latest Marker Research release on USD.

Full research available here.



USD currency index was one of the main losers during the last week, posting losses versus seven out of eight other major currencies. The only currency that posted even steeper decline was the loonie. Canadian Dollar plunged 1.21% over the week, as the nation’s building permits for February disappointed markets to the downside, falling most in five months. Moreover, even a more positive picture of Canada’s corporate sector was not able to provide a significant, long-term bullish bias for the loonie. In contrast, the Japanese Yen gained 1.15% over the described period, as the Bank of Japan refrained from additional stimulus, citing stronger growth and a pickup in inflation.



The U.S. Dollar lost 0.91% of its value during the last week, with the corresponding index staying mostly around 99.23 over the period. The currency began its depreciation on Tuesday, as investors slashed their Dollar long positions ahead of the FOMC minutes, while positive data from the U.K., Europe and confident BoJ’s comments added to the USD’s losses. The index reached its lowest level in the week on Wednesday, falling to 98.72 immediately after the release of the FOMC minutes. According to the minutes, the Fed officials are concerned over low inflation rate in the U.S., as they had predicted that a strengthening U.S. economy would boost inflation from 1% towards the healthy 2% target, associated with a robust business activity. Harsh winter conditions had stronger impact on the economy, hence, the Fed is projected not to accelerate the pace of the tapering process.



Over the last week the most traded currency pair was almost twice less volatile than the overall market’s volatility, due to a lack of important fundamental data from Europe and the United States. While the elevated volatility on EUR/USD was observed only in 16% of the time, the most volatile currency cross was USD/JPY, as Japanese central bank maintained the current pace of the stimulus programme, sticking to its upbeat assessment of the economy, as the impact of the sales tax is still unclear. Even Kuroda’s comments were able to push pair’s volatility only to 2.1%, however, later, the average volatility stayed around 1.1%, making the pair highly attractive for traders, as the pair moved to 101.32, after a massive sell-off.

Highlights of the latest Marker Research release on GBP.

Full research available here.



The Sterling index was one out of five major currencies that posted gains during the last five trading days, advancing 0.28%. Such an incremental change can be explained by the fact Mark Carney made it clear the Bank of England will not raise interest rates any time soon, until the remaining slack is eliminated. The central bank focuses on the wage and productivity growth, meaning that only statistic from the labour markets can be a major catalyst for the Sterling. At the same time, the Swiss Franc was the top-performer, climbing 0.85%, as renewed tensions in Ukraine boosted risk-on sentiment. In contrast, the kiwi and Aussie declined after a solid rally several weeks earlier.




GPB index fluctuated between 99.63 and 100.22 over the period, supporting the case that even important fundamental data has little impact on the currency. On Wednesday, a release of the stronger-than-excepted trade balance pushed the index to 99.97 from 99.92 earlier. Later on, the cable was trading in a narrow range following the Bank of England meeting, as policy makers offered no surprises, staying pat both on the interest rate and the stimulus programme. The GBP/USD pair moved slightly lower on Thursday, trading around 1.6764 level, posting no impressive moves amid soporiferous central bank's meeting. Even hawkish comments from George Osborne were not able to provide any boost to the Pound, with the index ending a period at 100.22.




Over the observed period, both the cable and the overall market remained mostly in the tranquil zone, as FOMC minutes, Bank of England meeting and a bunch of fundamental data from the world’s largest economy were not able to push GBP/USD volatility and Dukascopy Bank volatility index above 2.74 and 2.15 respectively. The most volatile currency pair was NZD/USD, with the elevated volatility being observed in 43% of the time– almost a half. On Tuesday, April 15, the pair sank to 0.8596 after a release of the disappointing inflation figures from New Zealand, as falling imports prices outweighed a surge in utilities. The least volatile was EUR/GBP, as a lack of events from Europe and no surprises from the U.K. resulted in a modest performance.

Highlights of the latest Marker Research release on EUR.

Full research available here.



The EUR Currency Index remained virtually unchanged throughout the previous week, giving up only 0.03% of its value. Even the six month period did not see the single currency undergo considerable changes, with the euro index gaining modest 2.46%. The index suffered some sharp declines in the begging of the depicted period, bottoming on Monday with a 0.47% loss. On Tuesday the Euro started a slow recovery, but an excessive decline in the German ZEW Economic Sentiment made a contribution to the minor and brief fall of the index. The Euro reached its highest value of 100.08 on Thursday, and by the end of the period came back to the initial level.



Better-than-expected Retail Sales and Unemployment Claims provided good support for the USD Currency Index, which spent the week gradually growing and ended the period with a 0.66% gain. It underperformed only relative to the Sterling, which saw rapid appreciation due to a dip in the UK Unemployment Rate and as a result surged 0.69% over the base value. The Australian Dollar and its New Zealand counterpart were the most dynamic during the week – on Monday the indices reached their highest points of 100.73 and 100.77, respectively, but later they plunged even at a higher rate and ended the week close to the starting level. In turn, the biggest losers of the week were CHF (-0.26%), JPY (-0.40%) and SEK (-0.59%).

Highlights of the latest Marker Research release on JPY.

Full research available here.



Both liquidity and volatility are usually reduced by market holidays in various countries and seasonal periods of subdued market interest, like the late summer and around the Easter and Christmas holidays. Moreover, there is a lack of important fundamental data during these days, therefore, markets are mostly driven by speculations or by the demand for safe-haven currencies. The Japanese Yen depreciated over the last five trading days, with JPY index posting a 0.48% drop, mostly due to the risk aversion caused by Ukraine tensions and disappointing data from the world’s largest economy. At the same time, the Sterling has received a strong bullish bias from the upbeat labour data, resulting in a 0.71% gain.




While most of the major currencies ended a period with a high level of divergence from the base value, all gains or losses were muted due to subdued volatility. Kuroda’s pledge on April 16 to adjust central bank’s monetary policy if needed pushed the index to 99.64, however, a day later the USD/JPY failed to retest the key resistance at 102.50, also following Kuroda’s comments. This time he pointed out that the economy remains on a steadily improving path and pledged the 2% inflation target will be reached within the planned period. On April 20, the Ministry of Finance unveiled a trade balance for March, saying the trade gap soared to 1.45 trillion yen up from 356.9 billion in the same month a year earlier. Even disappointing exports data were not able to provide a massive sell-off, with JPY index hovering around 99.70.




As we already mentioned, currency trading remained very quiet over the observed period, as many dealing centres were just coming back from Easter holidays, while economic calendars across the major economies were almost barren. Therefore, it was not a surprise that elevated market volatility was observed only in 10% of the time, with the volatility index hitting a high only of 1.4, and averaging 0.7. One of the least volatile currency pairs, EUR/CHF, were 40% even less volatile than the market itself. In contrast, unemployment rate, business confidence and leading index from Australia, as well as reports form the world’s largest economy were pushing AUD/USD, with the elevated volatility observed in 21% of the time.

Highlights of the latest Market Research release on EUR.

Full research available here.



The Euro Currency Index was amongst the calmest performers again this week, but managed to finish the period with a 0.15% gain, sharing a virtual third place with GBP. The index entered the week on a mild downtrend, but climbed up rapidly in the Wednesday turquoise area. The surge was greatly fueled by the sharp appreciation of EUR/AUD against the background of weak CPI in Australia, and supported later on by the German and European services and manufacturing data exceeding expectations. The momentum did not last, however, and the index spent the last day of the period on a much more modest uptrend, induced by IFO business climate and expectations indices. The rise was briefly interrupted in the midday, as EUR fell sharply against its peers, but the index quickly recovered.



The last week was a particularly tranquil one for the market. While the per cent of the elevated volatility index of EUR/USD was only slightly below the result of the previous period, the fall in the market volatility was much more noticeable, lowering the measure almost twofold. A similar situation was observed for the other currency pairs as well. Even EUR/CHF volatility index, despite a relatively high maximal value, was below its historical levels throughout the most of the week.



The week was marked by a notably strong correlation between the most traded currency pair and the Euro crosses. EUR/SEK joined EUR/CHF in having periods of high negative correlation with EUR/USD, crossing the -0.2 limit even with its mean value. It resulted in the measure being unusually varying compared its historical values, and having heavier negative tail. EUR/CHF and EUR/USD correlation itself moved far to the negative side of the historical distribution, and finished the period with significantly negative correlation with EUR/USD and EUR/GBP. The positive relationship between EUR/USD and EUR/GBP, and EUR/USD and EUR/CAD also ended up on a significant level – a sharp contrast to the weak final values of the previous periods.

Highlights of the latest Market Research on USD.

Full research available here.

USD index was almost unchanged over the observed period, registering a 0.06% decline on Friday. A bunch of economic data from the U.S. housing market, as well as weekly unemployment claims and durable goods orders– a main proxy of overall production, had little impact on the U.S. Dollar, with the corresponding index fluctuating around the base value. The index climbed to 100.138 on March 24, hitting the highest over the period, as demand for the long-lasting goods was stronger than it was initially expected in March, meaning that American companies are shrugging off effects of harsh winter, hence, the economy will gather pace in the coming months. This week the currency is likely to be highly volatile, due to a slew of important fundamental data, including advance GDP, Janet Yellen’s speech as well as payrolls and unemployment rate.

Compared with the previous week, markets are getting more active, as effects of Easter holidays began to wane. Elevated market volatility was observed in 18% of the time. The most volatile currency pair was the USD/SEK, with elevated volatility recorded in almost 30% of the observed period. Unemployment in Sweden picked up to 8.6% in March, and keeping in mind FOMC statement later this week, the pair has a great opportunity to penetrate an important resistance at 6.6257, with the outlook remaining bullish as long as the 6.3209 support level remains intact. In contrast, the least volatile pair was AUD/USD, with volatility reaching the turbulence zone only in 14% of the time.

As always, the U.S. Dollar played a significant role in financial markets over the described period, especially keeping in mind a bunch of important fundamental data. The average correlation coefficient turned lower in the first half of the week, as due to a lack of fundamental data, markets were mostly driven by a demand for safe haven assets. On Tuesday, at 2:00pm GMT the National Association of Realtors unveiled the first set of statistical data, saying the number of existing home sales climbed above the forecast. The average correlation coefficient, however, moved to 0.290 from 0.293, meaning that traders little attention to the report.

Highlights of the latest Market Research on GBP.

Full research available here.



The rally that has been seen on Aussie and kiwi are finally running out of steam, as both South Pacific currencies posted solid loses over the last five trading days. At the same time, major currencies like the Euro, greenback, Yen, Swiss Franc as well as the Sterling remained almost unchanged. The main gainer was Canadian Dollar, posting a 0.9% gain, despite Stephen Poloz comment’s the rate-cut option is still alive. Earlier the currency was pushed higher by strong retail sales and optimistic data from the U.S., as durable goods orders surprised markets to the upside, meaning demand in Canada’s largest trading partner is picking up.




The Sterling remained almost unchanged over the observed period even despite an abundance of important fundamental data from the U.K. On April 23 the GBP index remained in the negative territory, as BoE minutes showed policymakers are divided in their definitions of the “remaining slack”. On Thursday and Friday, CBI realized sales as well as retail sales surprised markets to the upside, however, both reports were able to push the Sterling index only up to 99.95. The Pound was highly volatile after weaker-than-excepted GDP figures this Tuesday. The economy accelerated in the first quarter of this year, as all key pillars, including manufacturing, construction and services sectors posted solid gains. Nevertheless, the figure fell short of analysts’ expectations. It seems that markets got used to the upbeat readings from the U.K.




Despite only a 0.09% change over the period, the cable was highly volatile, with the elevated volatility observed in 30% of the time. It means that the GBP/USD pair was slightly more volatile than the market in general. Meanwhile, volatility confirms that investors are losing their interest in the Aussie and kiwi, with elevated volatility on AUD/USD and NZD/USD observed only in 12% and 20% respectively. The most volatile pair was USD/SEK, with Swedish krona weakening to the two-year low against the U.S. Dollar. The Krona turned lower amid concerns the central bank will cut interest rates at least once later this year, in order to dampen the excessively strong demand for the currency. At the same time, retail sales in Sweden disappointed markets.

Highlights of the latest Market Research release on EUR.

Full research available here.

The Euro Currency Index dropped 0.13% - a record low among the results for the past month, - as the single currency finished the period on the losing side against most of its peers. The overall performance, however, was far from worst, with the index climbing steadily up in the beginning of the week. But the run-up was cut short by the disappointing CPI data, first from Germany on Tuesday and then from the Eurozone a day later. Though there was a short recovery in the end of the Wednesday Purple area, when the EUR index crossed the 100 point mark as some of the other indices experienced a sharp fall, the strength of the single currency still met the end of the period below the base value.

The last week of April was rather turbulent for the single currency. The volatility indices for the Euro crosses stayed elevated more often than the overall Dukascopy Bank Volatility Index, and even the average values were on the higher levels compared to previous periods. The most traded currency pair’s volatility index reached a notably high level of 3.6 on Wednesday, when the lower-than-expected Eurozone CPI pushed the 18-nation currency down. Another peak three times above the historical level was reached a day prior and under the similar circumstances, with the low Germany CPI playing the role of a downforce for EUR.

The past five days were the period of extremely strong correlation for the majority of the Euro crosses. During the start of the week EUR/USD – EUR/CHF and EUR/USD – EUR/CAD with the average correlation of -0.62 and 0.82, respectively, retained the leadership in this regard. In total, the Euro started the week with appreciation against almost all major currencies, thus moving the average correlation slightly upwards. The first real surge was observed on Tuesday, against the background of negative news on both Eurozone and Germany. Both lower-than-previous and lower-than-expected Eurozone Sentiment and German CPI releases caused the Euro to drop, and all pairs with EUR were driven by these news.

April Release of Dukascopy Bank Sentiment Index
Video version will be available here.

1. Dukascopy Sentiment Index shows that academic experts have become more optimistic about the short and long term outlooks for Europe, North America as well as the global economy, with the corresponding gauges inching higher. However, professors lost some of their faith in the Asia-Pacific region even despite brighter economic prospects for New Zealand and Australia. This might be due to the fact that China’s economy has been slowing further, while Japan decided to hike sales tax, which is estimated to significantly affect the fragile economic recovery in the world’s third-largest economy.
2. Professors appeared to be even more upbeat when assessing the North American economy compared to the previous month’s results, as the economy shrugged off the harsh winter. Six-month outlook rose 0.04 to 0.72, while the three-year sentiment advanced 0.06, posting the biggest increase amidst other regions.
3. The measure of Europe’s outlook continues to move in the uptrend which started in March, following a decrease in the first months of the year.

Figure 3 represents the term structure of Dukascopy Bank Sentiment Index (Y-axis) mapped against GDP growth forecasts made by poll respondents (X-axis). Overall, DBSI values and GDP growth forecasts match directionally, suggesting the global economy will perform better three years from now.
Expected growth for the European economy six months from now surged to 0.93% from 0.77% in the previous month, reaching the highest level this year. The same applies to the three-year growth outlook, with the corresponding measure increasing to 1.53% compared to the March figure of 1%.
Experts revised upwards their six-month economic outlook for North America, expecting the region’s economy to expand 1.87% in October 2014, up from 1.83% growth rate predicted in the March report. As to the three-year growth outlook, it appears that professors were more upbeat during the winter months, anticipating 2.53% and 2.27% expansion in January and February, respectively. As spring has come, they have become less confident concerning the growth of the U.S. and Canada, with the anticipated growth rate standing at 2.13% in the April report.
Asia-Pacific economic growth is expected to post slightly lower figures both in the medium and long term. Since the beginning of the year there have been fluctuations in professors’ expectations. In April, their forecasts were not that optimistic compared to the prior month. Thus, they saw the region’s economy growing at 3.23% pace in six months and at 3.53% in three years.


Figure 4 presents the business cycle and its phases: expansion (real GDP is increasing), peak (real GDP stops increasing and begins decreasing), contraction or recession (real GDP is decreasing), and trough (real GDP stops decreasing and begins increasing).
The number of respondents who predict the European economy will move up along the business cycle curve in the near and long term increased in April, with 15 of those surveyed expecting the economy to reach the expansion phase six months from now, while 22 professors see the economy moving further away from the recessionary territory.
The same picture is seen in North America, where the majority (27) of respondents anticipates the economy to enter the expansion phase in the short term. 3-year EDS also speaks in favour of further movement to the Business Peak territory.
More and more people expect the Asia-Pacific region to reach the Business Peak, with the corresponding number having increased to from 1 seen in March. However, the 3-year EDS seems less optimistic compared to March findings.


Figure 9 presents a discrepancy in views on the economic outlook among the local and foreign experts. April poll results reveal that respondents from Europe are more optimistic about the local six-month economic outlook compared to their foreign colleagues. The same is true for the Asia-Pacific and North American regions. However, the picture is quite different when comparing professors’ long-run economic assessment.
Europe: While local experts evaluate the region’s economy more positively over the next six months, with the discrepancy in opinions being 0.05, they seem to underestimate European economy over the long term period, as foreign experts feel more upbeat when assessing three-year economic prospects (0.63 vs. 0.65).
North America: Local respondents from North America are more optimistic about the regional six-month outlook (0.73 vs. 0.71); however, it appears that both local and foreign professors are unanimous when it comes to the three-year growth prospects.
Asia-Pacific: Local experts constantly tend to be more upbeat about their economic situation than their foreign colleagues over the past four months. In April the discrepancy in views rose to the record of 0.2 for the short term outlook and 0.25 for the tree-year sentiment.

Highlights of the latest Marker Research release on EUR.
Full research available here.



The past week was relatively stable for the single European currency. Throughout the first four days the Euro Currency Index was, on average, at the 99.95 level, almost at the base value. Nevertheless, EUR ended the period at 99.43 mark, losing about 0.52%. This fall was the most considerable since March 2014. On Thursday morning the EUR Index climbed above the base value, reaching the value of 100.02, but at the time of the ECB Monetary policy statement and press conference it begun to decrease. The reduction continued up until the end of the period.




The past week was notably calm for both the market and the Euro crosses, with periods of rising volatility less frequent and less prolonged than usual. Two of those periods, however, could be marked as extraordinary turbulent, as they saw most of the volatility indices reach far into their historical maximal levels. The first period, indicated by the yellow area, was accompanied by the releases of the US Nonfarm Payrolls and Unemployment Claims, both better than previous and expected, and a decline in the single currency. The purple area, in turn, covered mainly the news from the Eurozone itself. Here volatility started to rise with the announcement of the ECB Interest Rate Decision and reached its peak against the background of the ECB press conference.




The past five-day period was interesting for its strong negative correlations between various currency pairs. From Friday noon to Tuesday midday unprecedentedly strong negative correlation levels were observed in EUR/USD–EUR/CHF and EUR/GBP–EUR/CHF combinations, with average values at -0.74 and -0.6, respectively. Moreover, EUR/USD–EUR/JPY, which usually demonstrates positive correlation above 0.5, slid as low as -0.42, with -0.27 average over the period. During the second half of the week correlations remained at their historical levels, with the exception of the sharp appreciation on Thursday’s afternoon. Thus the average correlation for the Euro crosses ranged from -0.04 to 0.43.

Highlights of the latest Marker Research release on USD.

Full research available here.



Last week’s main highlight was ECB’s press conference and the minimum bid rate announcement on Thursday. Draghi’s pledge to act in June pushed the single currency 0.69% lower over the week and what is more important, the currency is likely to remain under the pressure until the next policy meeting. In contrast, the Aussie soared 1.54% on the back of stronger-than-expected Chinese fundamentals as well as better domestic jobs data. At the same time, the RBA’s May meeting and the gathering of the Bank of England had muted impact on markets, as policymakers at both countries reduced speculations for a revision of their monetary policies any time soon.




It was a relatively calm week for the U.S. Dollar, with only services PMI, trade balance, jobless claims and Janet Yellen’s speeches on the economic calendar. A report from the ISM had almost no impact on markets, with the currency index standing around the base value. On Tuesday, the currency remained under pressure ahead of the trade balance, which missed markets’ forecasts, while exports still posted a bigger gain than imports. The reaction was not really impressive, however, the index reached the lowest level in a week, hitting 99.33. The second half of the week was slightly more optimistic for the Dollar, as Yellen said policymakers are hoping for a highly anticipated spring revival in economic growth, which is likely to receive a boost from increased business hiring and consumer spending. This resulted in a 0.26% gain.




As we already mentioned, there was a lack of important fundamentals from the world’s largest economy last week. Hence, the most traded currency pair was mostly driven by events from Europe. Overall, markets were calm as well, even despite three policy meetings over the period. The elevated market volatility was observed only in 28% of the time, meaning that investors are less interested in policymakers’ comments. Weak disappointing statistics from Sweden, as well as comments from the central bank that eight largest banks are underlined the risks from borrowing. These worrying signs made the USD/SEK currency pair the most volatile among others, with the pair trading in a turbulence zone for 39% of time.

Highlights of the latest Marker Research release on GBP.

Full research available here.



After staying around the base value on May 7, five out of nine major currencies posted more than a half per cent gain or loss. The Euro and the Swiss Franc posted largest losses on the back of weaker-than-expected inflation from Switzerland, ECB’s press conference and disappointing data from Germany. In contrast, the loonie, greenback and Aussie posted 0.51%, 0.66% and 1.33%, respectively. At the same time, the kiwi remained almost unchanged, posting just a 0.27% gain, suggesting there is a waning interest for New Zealand currency. This is a good sign for the RBNZ, who already claimed that future rate hikes will depend on the strength of domestic currency.



The Sterling remained around the base value for most of the time, expect May 9 and 14. Last Friday, despite stronger-than-expected trade balance and manufacturing production from the U.K., the index fell to 99.71. During the next several days the index moved back into the positive territory, as investors were expecting the Inflation Report to shed light on central bank’s future moves. On Wednesday, however, weaker-than-expected labour market data and a lack of action from the Bank of England dragged the GBP index sank to the lowest level over the period, hitting 99.52. Further decline is also expected, as Mark Carney disappointed markets once again, even despite saying the remaining slack has fallen to 1% from 1.5% expected in February’s report.



The cable together with USD/CAD and USD/SEK were the most volatile currency pairs over the last five trading days. Canadian currency benefited from strong Chinese and domestic data, while disappointing statistics from Sweden raised concerns of the immediate action from the central bank. All these factors resulted in a high volatility and stronger interest for currencies. In general, markets remained rather calm, with elevated volatility observed in 26% of the time, as markets have chosen a fresh course after Mario Draghi signalled central bank’s readiness to act in June in case fundamentals continue to deteriorate. Meantime, Swiss Franc crosses remained one of the least volatile, once again supporting the view interest in Franc is waning.

Highlights of the latest Marker Research release on EUR.

Full research available here.

The past five-day period was associated with negative change of the EUR and the CHF indices, while greenback, Aussie, and kiwi were the top performers of the week. Interestingly, the NZD and the CHF indices were moving in the opposite directions throughout the week and finished the period with the best and the worst results of 101.14 and 98.78, respectively. The Euro index was stably below the base value, and the single currency ended the period with an average loss of 0.5% against its peers.

The observed period was amongst the most volatile ones for the past several months. While the separate peaks of volatility indices were on generally unimpressive levels, far below the past week’s maxima, the portion of time during which they exceeded historical averages was notably high. Such findings could be largely attributed to a great number of small spikes in the indices – a somewhat uncommon occurrence, indicating that volatility was increasing more chaotically and frequently than usual. It was most pronounced in the EUR/USD index, whose peaks were lower than the ones of other Euro indices, but which showed a second-best result at keeping in the turbulent area.

The week’s average correlations were rather elevated compared to the historical levels. In particular, there were extremely strong correlations between EUR/USD and EUR/JPY, and EUR/USD and EUR/CAD, which reached outstandingly high level of 0.9 by the middle of the period. It is worth noting that almost all correlation series, excepting those with EUR/SEK, had a swift rise in the turquoise area. This unity of the movement might be explained by the unexpectedly low values of the ZEW Survey for Eurozone and U.S. Retail Sales.

Highlights of the latest Marker Research release on USD.

Full research available here.



Monday once again proved to be a calm day with practically all major currencies remaining around the base value. During the remaining four days of the last week, however, currencies were highly volatile. The single currency and the Swiss Franc were the main losers over the period, with performances of both currencies being almost the same. Disappointing German ZEW index and weak inflation resulted in about 0.5% loss for both currencies. At the same time, budgets from New Zealand and Australia had muted impact on corresponding indices, however can provide additional long-term boost for the kiwi and stop Aussie’s appreciation.




USD index was fluctuating around the base value for most of the time and posted only a 0.05% on Friday. The only spikes into positive territory were observed on May 13 and 15. On Tuesday, the greenback benefited from disappointing statistics from Europe, however, later gains were erased by weaker-than-expected retail sales from the world’s largest economy, indicating weaker consumer spending, which accounts for majority of overall economic activity. A pickup in inflation was welcomed by markets, with USD index rising 0.23%. Friday’s building permits and consumer sentiment from the University of Michigan had almost no impact on the currency, as investors switched their focus to this week’s speeches from policymakers and FOMC minutes that will be released on May 22.




Over the second week of May markets were trading in the turbulence zone only for 28% of the time. The main reason for such a low figure is lack of movement in crosses with South Pacific currencies like the kiwi and Aussie. While both NZD/USD and AUD/USD stabilized around 0.8650 and 0.9360 respectively, the pause can be only temporary, keeping in mind the fact New Zealand budget will reach a surplus of $372 million in 2014-15, while Oz economy will return to surplus only in the beginning of the next decade. In contrast, the cable has been the most volatile currency pair, as labour market data fell short of analysts’ expectations, while Inflation Report was not able to offer the expected message, sending the cable to 1.6732.

Highlights of the latest Marker Research release on JPY.

Full research available here.



The Japanese Yen was poised to become one of this year’s main losers, as analysts predicted a significant deceleration in economic growth after April’s tax hike. Moreover, exports were unlikely to pick up, hence, speculations about fresh round of easing were heating up during the last months. Nevertheless, unstable global political situation and resilient domestic demand were pushing the Yen higher in the recent weeks. During the last five trading days the currency climbed 1.32%, becoming the top performer among all nine major currencies, even outpacing the loonie, which logged solid gains recently. In contrast, the Aussie fell 1.59% as consumers fell worried about future prospects amid looming spending cuts and new tax.




JPY index appreciated versus all other major currencies, while AUD/JPY was the most attractive currency pair other the observed period. There were two major events that became major catalysts for the Yen: the GDP report and BoJ meeting. Japan’s gross domestic product soared an annualized 5.9% in the first quarter, supported by increased consumer spending and stronger investment. Even though, the boost was anticipated and provoked by the tax hike, still consumer spending rocketed at the fastest pace since the quarter before the previous tax hike in 1997, while capital spending advanced the most since 2011. Stronger-than-expected core machinery orders, less dovish policymakers and the fact imports rose the least in 16 months, were all pushing the Yen higher, resulting in a 1.32% appreciation over the period.




Markets were rather calm over the last five trading days amid a lack of important events from largest economies. Therefore, elevated volatility was observed only in 25% of the time. At the same time, AUD/USD was even less volatile, despite disappointing news from the resource-rich economy. It will be also worth mentioning that NZD/USD was the least volatile currency pair, falling to 0.8550 level, suggesting neither upbeat government budget, nor fresh rate hike expectations were not able to support the currency. This is a good sign indeed, as the pair is preparing for a fresh rally. Low volatility and slight depreciation of the kiwi are all adding to signs the RBNZ will make another rate hike next month, as policymakers have already claimed that everything depends now on the exchange rate.

Highlights of the latest Marker Research release on EUR.

Full research available here.



The past five days were tranquil for Euro, and its currency index remained in a narrow range of 99.84-100.26 throughout the period. Friday was calm for almost all observed currencies, and the Euro index suffered a slight decreased against its peers following the lower-than-expected Eurozone Trade Balance data. Monday was marked by the sharp 0.5% drop of SEK index, but the majority of indices remained on their Friday’s levels as the event of the day – Bundesbank’s President Speech – did not affect the Euro rate. Later in the afternoon AUD started its prolonged fall, after S&P warnings about Australia’s credit rating.



The past week, as opposite to the previous one with its high portion of elevated volatility, was quite calm, and the percent of the exceeded EUR/USD volatility index came back to its usual level. The same tranquility was observed in all the other observed currency pairs, marking the period as a generally calm one. It is also supported by the maximal values of the volatility indices, which were not distinctive and held on their usual levels of about 2-3.



The currency significance measure spent most of the period on a feebly positive level, mostly fueled by the correlations between EUR/USD and the Euro crosses with JPY, AUD, CAD, NZD, and GBP. The European crosses, in turn, showed little to no synchroneity in their movements. Their correlations ranged from mildly positive to mildly negative, with little impact to the overall picture. That being said, the general tint of the relationships between the currency pairs during the period offered no revelations, as all values were well in their average historical limits.

Highlights of the latest Marker Research release on USD.

Full research available here.



Surprisingly, several major currencies has been highly volatile since the release of the previous Market Research on Friday. While Canadian Dollar benefited from optimistic inflation figures that pushed the loonie index to 0.64% from 0.26% on Friday, Swedish currency has been even more volatile. Despite the fact, Swedish consumer confidence improved in May, the currency index plunged to –0.82% compared with +0.01% on Friday. So far this year, the currency has lost more than 4%, becoming one of the worst performer among a basket of eight major currencies. Important to mention, that seven out of nine major currencies has climbed since Friday.




The U.S. Dollar advanced or remained unchanged against all other major currencies, as the currency benefited from statistics from the manufacturing and housing sectors, while FOMC confidence also contributed to the strength of the Dollar. The latest minutes showed the Fed see no risk of sparking an undesirable jump in the inflation rate that can be provoked by the prolonged stimulus. Yellen claimed there is no trade-off between the employment and inflation. The recent statistics only supported the case for a still dovish bias and until now there has been no evidence the FOMC can hit the break harder than usual. Despite dovish stance, the buck climbed 0.7%, as it benefited from the weakness of the single currency, while stronger-than-expected new home sales suggested the key housing market is gaining momentum.




Markets remained rather calm ahead of the ECB’s meeting on June 5, with elevated market volatility observed only in 28% of the time, while the most traded currency pair was even less volatile, the least to be more precise. The cable, in contrast, has been trading in the turbulence zone for 34% of the time, as stronger-than-expected pick up in the inflation rate pushed the Sterling higher, however, later, a report from the ONS showed the U.K. economy expanded in line with expectations, while investors were making bets for a revision to the upside. Moreover, the AUD/USD was highly volatile in 30% of the time, as despite a lack of important economic data from Australia, the pair hit a strong support around 0.92-mark and bounced back.

Highlights of the latest Marker Research release on CAD.

Full research available here.



The Canadian Dollar was the top performer over the last five trading days, advancing against all other major currencies and posting a solid 0.86% increase, adding to earlier made gains. The second top performer was the Australian Dollar, as a pickup in inflation expectations pushed the Aussie higher, resulting in a 0.63% gain. The Japanese Yen, in contrast, was the main loser, depreciating 0.54%, as minutes from the BoJ revived stimulus speculations and recent Kuroda’s speech only supported the case more action is needed to support growth. At the same time, the sharpest drop was recorded in the SEK index on May 23, as investors were disappointed by a drop in manufacturing confidence.



The loonie edged higher on Thursday, May 22, rebuffing stronger American counterpart even despite some soft Canadian retail sales figures. While retail sales plunged 0.1% in March, the anticipation of inflation figures provided a solid boost to the currency. Therefore, it was not a surprise that reacted positively to the fact the land of the maple leaf has reached its inflation target in April. Statistics Canada said that the CPI index gained half a percentage point to 2% last month from the previous year, whereas core inflation, which strips out volatile items, remains at 1.4%. The inflation report is the last before a June 4 decision on the bank's policy interest rate, which has been 1% since 2010. The fact Canada will outperform the U.S. in the first quarter also added to the sentiment, pushing the loonie higher.



Every day starting from May 21 and up to May 23 was rich with economic reports from the United States and Canada, hence, it was not a surprise that elevated market volatility was observed in 22% of the time. Canada retail sales, weekly jobless claims from its neighbour as well as manufacturing PMI and existing home sales had a strongest impact on USD/CAD volatility, pushing it to 2.0 last Thursday. Due to a lack of events and bank holiday in the U.S., the USD/CAD volatility remained only in the tranquil zone and was even less volatile than the market in general. A day later positive statistics from the U.S. pushed the volatility index to 1.07. During the rest of this week the pair is expected to be more volatile, keeping in mind GDP reports from both sides.

Highlights of the latest Marker Research release on EUR.

Full research available here.



The week was extremely tranquil for the Euro. Neither German GDP, nor ECB President Draghi’s speech nor German unemployment and Eurozone’s sentiment data could significantly impact the Euro positions, and the single currency stayed at the base value throughout the whole period. Meanwhile, the top performers of the week were AUD and CAD. The latter started to appreciate on Friday afternoon, when Canada’s Consumer Price Index was announced in line with expectations. SEK, in turn, tumbled after a report on consumer and business confidence on the same day, and remained the weakest performer up until Wednesday.



Volatility indices of almost all observed currency pairs were extremely feeble throughout the past week. The percent of the elevated volatility for EUR/USD dropped to the utterly low level of 14%, marking the period as the most tranquil one since February. The similar situation was observed in most of the other indices, and AUD/USD and NZD/USD were the only pairs to experience a notably high portion of elevated volatility. Consequently, turbulence on the market as a whole was also subdued, but not quite as dramatically as in the most traded currency pair.




The period proved to be unsuccessful for the Euro significance measure, as it started out on a solid level around 0.3, but ended down in the tenuous area. The slide was caused by most of the components slipping to weakly negative values, suggesting that the single currency was not on the strong governing side of the exchange rate movements. The main contributors to the feebleness of the measure were, as it often happens, the European crosses, and, rather untypically, the Australian and the New Zealand dollars.

Highlights of the latest Marker Research release on USD.

Full research available here.

The U.S. Dollar was not able to benefit amid Euro’s weakness, posting just a 0.1% appreciation, as fundamentals were weak, while U.S. Treasury yields plunged. Meanwhile, the Australian Dollar added to earlier gains, with AUD index posting 0.9% gain, as there were some bright spots in capital expenditure, with promising indicator of investment in equipment. At the same time, the Swedish Krone, New Zealand Dollar and Sterling were among main losers, each posting around 0.5% drop. It will be also worth mentioning, that the single currency was performing above expectations, posting a 0.08% gain, as despite looming ECB meeting, fundamentals were not as disappointing.

There is always a clam before the storm. This is how can be explained mostly tranquil volatility on the major currency crosses last week. This Thursday the ECB is expected to slash all three main interest rates, and provoke a massive sell-off of the single currency. Furthermore, Draghi’s comments can cause massive market turmoil in case he provides hints about the U.S.-style quantitative easing. That is why the most traded currency pair was trading in the turbulence zone only in 19% of the time, while overall market volatility was recorded in the turbulence zone in just 28% of the observed period. Meanwhile, the cable was the most volatile currency cross, as abundance of news from the U.S. and Mark Carney’s comments appeared to be major catalysts.

In the anticipation of the U.S. GDP report the level of USD significance has climbed higher, with several major spikes in the average correlation coefficient caused by other important news releases. Ahead of the U.S. durable goods data and the consumer confidence, investors forgot about the upcoming GDP report, as the average correlation coefficient was pushed to 0.42-mark. Later on, stronger demand for long-lasting goods and a pickup in consumer confidence outweighed looming GDP report and the average correlation coefficient was able to soar to 0.56, hitting the highest over the period.