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Deutsche Bank: It's time to sell the most overvalued currency in the world

Currency strategists at Deutsche Bank, who already have in their portfolio short positions in Australian dollar against the Canadian, think it's time to consider selling AUD against the US Dollar.
Changes in the technical picture confirms the inability of the bulls to take advantage of this initiative, while improving the economic prospects of the United States after the victory of Trump and negative signals from data from Australia showed that the fundamental picture favors lowering. At Deutsche Bank paying attention to the weakening of wage growth in Australia and the general deterioration of the situation on the labor market in the country, which in the opinion of the analysts of the bank will cause the Reserve Bank of Australia to lower interest rates again in the first half of 2017.
In addition, DB doubt the recent rally in commodity assets as the bank's strategists do not believe that the movement reflects the real situation in the economy and therefore do not believe in its stability.
DB's analysts do not expect a noticeable improvement of the situation with the trade balance in Australia and also remind about the risks of China, which continue to maintain a policy of gradual devaluation of the yuan. From the bank also advise not to forget that with the arrival of Donald Trump at the White House it could be expecteda  deterioration in the trade disputes between the US and China.
At the bank believe that in given circumstances from the Australian currency can be expected a resumption of downward momentum, as the Australian dollar could be called the most overvalued currency in the world.

Three-week rally in the dollar against the yen is the biggest since 1995

Today is Friday - the last trading day of the week. If the dollar against the yen at the moment ended the day near current levels, this would be the most significant three-week rise since 1995 of the US dollar against Japanese rival, analysts say.
The opening of the markets after the celebration of Thanksgiving in the US was marked by continued growth in yields of US Treasury bonds. This pushed the USD/JPY up in Asian session, they added.
Markets calculated in the price the likelyhood of raising interest rates by the Federal Reserve in December long ago. But the flow of strong economic data continues to affect positive mood. Currently 64% of market participants expect another increase in US interest rates until June 2017, except for December, analysts reported. Earlier this week, the probability was 58 percent and half month ago - twice as low.
Technically USD/JPY now appears extremely overbought. 14-day indicator RSI (relative strength index) for 10 consecutive sessions held in the area more than 70%. Moreover, there are no signs of a possible reversal or correction, analysts conclude.

The dollar steadied after pre-holiday growth

The dollar stabilized in the course of trading on Thursday, breaking the majority of last year's highs against the euro.
Given the fact that US markets are closed because of Thanksgiving Day, trading activity was low yesterday after the dollar set a series of new highs early in the session in Europe, expanding its growth after strong economic data from the United States published on Wednesday.
The US currency hit an eight-month peak against the Japanese yen and the high of nearly 14 years to a basket of six major rivals.
In addition, the dollar renewed record highs in a number of emerging market currencies, including the Indian rupee, the Turkish lira and the offshore renminbi trading in which are held outside of mainland China.
The dollar's rise is largely due to expectations that the policy of Donald Trump will stimulate inflation, which will lead to an increase in Fed interest rates and potentially increase the inflow of capital into the country.
In developed markets, most strongly affected by the election of Trump is the yen. It fell by 0.6 percent to 113.15.
The euro is trading around the level of $1.0572 after falling to a low of $ 1.0518, while the dollar index held near 101.58, retreating from the morning peak 102.05.

Nikkei is up for the 6th consecutive session due to the strengthening of the dollar against the yen

Japan's Nikkei index rose for the sixth consecutive session on Thursday because of hopes for growth of earnings of Japanese exporters against the background of rise of the dollar against the yen.
The dollar rose after upbeat economic data in the US, which further strengthened the likelihood of the Fed raising rates.
Nikkei closed the trading session rising by 0.9 percent to 18.333.41 points.
The broader Topix index also gained 0.9 percent, ending trading session at 1.459,96 points and showing an increase for 10th consecutive session.
Index JPX-Nikkei 400 gained 0.9 percent to 13.105,50 points.
USD/JPY is currently trading at 113.32 yens per dollar.

Dollar once again attacking highs

On world markets the dollar once again attacking highs: against the euro the US currency reached a mark of 1.054, while the dollar index rose to new multi-year highs.
Published data on reserves and production of oil in the United States did not changed the situation significantly: oil quotes reaction was mixed, but in general the price of oil in the first minutes remained in a narrow range of $49,20-49,40 per barrel after statistics. It did not lead to significant fluctuations in the domestic market.
Keeping in mind the outcome of the upcoming meeting of representatives of OPEC in late November, investors continue very painfully to react to any hints in favor of tightening of US interest policy.
USD/JPY easily overcomed 111.00 level and is now heading to new highs.

Dow Jones Industrial Average for the first time rose above 19,000 points

Indexes in Europe recorded gains supported by growth in the oil price and positivism overseas. The price of oil reached a month high today amid expectations that OPEC will agree to limit yields. The market continues to be sensitive to comments from OPEC members, but expectations for an agreement are growing, despite opposition from Iraq and Iran.
German DAX 30 ended with an increase of +0.27% at the level of 10713 points. Here the gains came from stocks of Thyssenkrupp who have added +2.85%, followed by Deutsche Telekom with a daily increase of +1.67%.
Britain's FTSE 100 rose by +0.62%, closing the session at 6819 points.
France's CAC 40 also ended at green area adding +0.41% to close at 4548.35 points.
Dow Jones, S&P500 and Nasdaq ended the session on Tuesday at record high levels. For the first time since March 1998 indices ended for second consecutive trading session, both reaching a record at once.
The data showed that existing home sales rose in October by 2% annual growth to 5.6 million units, the highest level in nine years and a half.
S&P500 also reached a record, rising above 2200 points, leading sectors are real estate and energy, recording daily growth of +0.22%. It closed at 2202.94 points.
Technological Nasdaq Composite added +0.33%, closing the day trading at a level of 5386.35 points.

Nomura expects growth of the pound

The reduction of short positions and the idea of ​​strengthening of the inflation caused rally of the pound. GBP regained the status of a reserve currency, but it does not reflect the hope that the UK can receive preferences in negotiations with the EU, analysts say. The pound should overtake other currencies in the short term as market attention is not drawn to negotiations for Brexit next year, they added.
Bank analysts expect the GBP/USD to reach 1.30 while EUR/GBP to fall to 0.84, while sales do not reach the threshold and did not give any other signal. The Supreme Court may decide that the reference to Article 50 of the Lisbon Treaty to initiate the procedure for leaving the country from the EU, requires the approval of parliament. But it is not excluded the Parliament to vote earlier and that they do not need a court decision, according to analysts.

Danske Bank: EUR/USD will fall to 1.04 dollars, and then will rise to 1.12 dollars

In the next 1-3 months the decisive mood of Federal Reserve and the growing political risk in Europe will send EUR/USD to 1,04-1,05 dollars, analysts say.
In the longer term, analysts remain bullish in the pair and believe that the huge difference between the positive current account of the euro area and negative US will send EUR/USD to 1.12 dollars.
Historically, the biggest fiscal deficit in the US, which does not accompany rising interest rates in the country, is a bearish factor for the US currency, analysts say.
They say the Fed will likely to disturb from the strength of the dollar, which may interfere with the planned increase in interest rates. Bank analysts lowered their forecasts for EUR/USD and now they look like this:
- 1 month - 1.05 dollars;
- 3 months - 1.04 dollars;
- 6 months - 1.08 dollars
- 12 months - 1.12 dollars.

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The dollar plays all in

The rapid rise of the inspired by victory of Donald Trump US dollar revived the idea of ​​its parity with the euro. Traders have increased the probability of such an outcome to 45%, even though a week earlier it was estimated at two times lower. Deutsche Bank recalls that when the EUR/USD pair for the last time came out of a long consolidation range, it quotes changed by 10% over the next few weeks and expects them to decline to 1.05 by the end of 2016 and to 0,95 by the end of 2017. The main driver appears divergence in the monetary policy of the ECB and the Fed.
Indeed, comments from the Federal Reserve are "hawkish" in nature, allowing the derivatives market to increase the likelihood of tighter monetary policy in 2016 to 86%. Thus, according to the head of the Federal Reserve Bank of Richmond Jeffrey Lacker, the stimulating policy of the new president of the United States is able to force the Fed aggressively raise the federal funds rate. Trump plans to spend on infrastructure around $0.5-1 trillion and according to research by BofA Merrill Lynch, fiscal stimulus of 1% of GDP would lead to an increase in the yield on 10-year treasury bonds by 48 bp. In terms of the interest rate differential of US and German debt markets, EUR/USD should have been already traded in the parity area.

USD/CAD has won back losses on strong US statistics

The US dollar has won back losses against the Canadian Dollar on Tuesday and is trading at nine-month highs, supported by upbeat US economic data, while the decline in oil prices is putting pressure on the Canadian currency.
In early US trade, the pair USD/CAD rebounded from 1.3489, the session low, to 1.3527, still down by 0.26%.
The pair was likely to receive support at 1.3420, Friday's low, and resistance at 1.3589, Monday's high and a nine-month high level.
Demand for the dollar as a whole is stored on hopes that the presidency of Trump would increase budget spending, will come to tax cuts and a weakening of the financial regulation, which, in turn, will contribute to improving the economic growth and inflation.
The Canadian dollar remained under pressure as oil prices continue to decline amid concerns of oversupply of world reserves.
Canadian dollar is higher against the euro, with EUR/CAD rose by 0.29% to 1.4516.

The markets have calmed down and the dollar stopped growing

The dollar has stopped the rise and traded steadily against other currencies in quiet trading on Friday as investors have recovered from the shocking results of the voting in the United States, and became even optimistic considering the choice of Americans to the country's economy.
The EUR/USD fell by 0.30% to 1.0852. On Wednesday, the pair jumped to 1.1298, the highest level since September 8, before returning to 1.0902.
The dollar was supported as investors revised their initial expectations for Trump presidency. Market participants expect an increase in costs and increase in inflation during the administration of Trump.
The dollar showed an increase after on Thursday the US Department of Labor said the number of initial applications for unemployment benefits for the week ended November 5 fell by 11000 to 254000. Analysts had expected a decline in the number of initial applications by 5000 to 260,000 last week.
The Mexican peso continues to fall, MXN/USD pair fell by 1.44% to a fresh record low at 0.0479.
At a press conference on Wednesday the governor of the Mexican central bank said that the institution is watching the market volatility, but refrain from any national currency stabilization measures.
GBP/USD pair rose by 0.85% to 1.2595, the highest level since 6 October.
The pound was supported, as some British politicians have declared that they intend to vote against the negotiations on Brexit, after a court stated that the UK government must obtain parliamentary approval to initiate the process of exit from the EU.
Pair USD/JPY fell by 0.49% to 106.66, holding near a three-month high on Thursday at 106.94.
Australian and New Zealand dollars fell, AUD/USD pair fell by 0.33% to 0.7541 and the pair NZD/USD fell by 0.29% to 0.7106.
Pair USD/CAD rose by 0.27% to 1.3536, holding near a seven-month high at 1.3525.
USD index, which shows the relationship of the US dollar to a basket of major currencies, was steady at 98.84, remaining at the 2.5-week high on Thursday at 99.08.

Dollar demonstrates rally against the Trump's victory

The dollar held close to the peak of three and a half months against the yen on Friday after rising last night, caused by the growth of the markets bets for the US economy and the rise in interest rates during the presidency of Donald Trump.
By 5.30 GMT the dollar fell slightly to 106.63 yen after rising to 106.950 yen at night - a maximum of 21 July.
The dollar is preparing to finish the week woth 3.3 percent growth against the Japanese yen, although earlier it was believed that the safe yen would gain against dollar in case of Trump's victory on presidential election in the United States.
The dollar on Wednesday briefly fell to around 101 yen after the Republican defeated Democratic candidate Hillary Clinton.
Now, however, the dollar demonstrates rally amid risk aversion and US bonds yields rise due to expectations that the Trump policy will support costs and accelerate inflation.
Trump promised large-scale of tax cuts and developing of infrastructure that can increase the US budget deficit.
Mexican peso stood at the level of 20.55 to the dollar, close to the record low reached on Wednesday.
The euro traded near $1.0906 after losing 1 percent last night and preparing to show a drop by 2.3 percent for the week.
The dollar has not changed to a safe Swiss franc, holding at a level of 0.9860 after falling to near three-month low of 0.9550 on Wednesday.
Sterling held position against the dollar, trading just below the monthly peak of $1.2585, reached on Thursday.

Key comments of Saxo Bank on the results of the US elections and the reactions of markets

Here are the key comments of Strategic Team of Saxo Bank shortly after announcing the results of the US elections and the reactions of the markets:

John Hardy, head of "Forex Strategies" at Saxo Bank

- The markets have already made conclusions
- The reaction in the US dollar is in line with the expectations
- USD/JPY is rated correctly, nothing changes basically
- It will be interesting to see what will be the next move against the status quo in Europe
- The clock is ticking for Janet Yellen

Steen Jakobsen, chief economist and CIO at Saxo Bank

- I'm currently in Russia, where they are not surprised by the victory of Trump
- It's not that Trump wins, but that Clinton lost again
- It's about the antiglobalizm and the coming of age of a generation "Berlin Wall"
- People can not live another eight years without change
- The likelihood of higher interest rates in the US dropped

Peter Garnri, head of "Strategies in securities" at Saxo Bank

- Today (on Wednesday) we will see a repeat of the reaction of the markets after Brexit
- Financial markets in Asia Pacific behave better than expected
- We can expect serious dynamics in Mexican stocks

Ole Hansen, head of "Strategies in raw materials" at Saxo Bank

- Oil and copper are down, bets on gold increase
- The Trump's policy on fuels can help restore oil production in the US
- Gold is necessary to close above 1.330 dollars to signal movement towards the peaks of 1.375 dollars that were in July
- We're already seeing great excitement in gold volumes

ING: The yen will rise to 95, the euro - to 1.15, and the Canadian dollar could drop to 1.38

A verbal intervention by the Ministry of Finance and the Bank of Japan after the rise of the yen is quite possible, but unilateral intervention beyond the level of 100 seems unlikely, say analysts at ING.
According to them there is a risk of collapse of the USD/JPY to 95 amid growing demand for protective assets, which may cause Japanese authorities to strengthen verbal and actual intervention in the currency market.
ING Analysts' forecasts after winning the US presidential election by Trump suggest growth of EUR/USD to 1.15, but any growth will be limited, taking into account that the re-evaluation of the prospects for an increase in interest rates by the Federal Reserve was partially compensated by a concern for the affairs of European exporters.
We can see a sharp movement on the USD/CAD to 1.38, as the global market will avoid the risk, analysts said. There are concerns about the expectations of easing of the monetary policy by the Bank of Canada, taking into account the current uncertainty in the US. All the factors are negative for the Canadian dollar. On the other hand the bank of Switzerland would remain on the market and will closely monitor francs and will resort to actual intervention, analysts said. USD/CHF will follow the dynamics of EUR/USD, they added.

The dollar steadied against the euro after a shock reaction to the victory of Donald Trump

The US dollar steadied against the euro and the majority of the world's currencies after falling sharply against the background of the panic caused by the victory of Donald Trump's presidential election in the United States.
Despite the fact that before voting probability of presidency for Hillary Clinton was estimated at 80%, D. Trump managed to win in the key "fluctuating" states. His victory was called by the US media the biggest surprise in the history of the US electoral system.
The euro exchange rate against the US dollar by 20:38 GMT was $1.0922 compared with $ 1.1026 at the close of the previous session. Earlier in the trade, the dollar fell to $1.1300 per euro.
Meanwhile, the Mexican peso fell in value by 7.5%, earlier that day its fall against the dollar exceeded 11%, which was a record for 20 years. According to economists, the election of President Trump could worsen relations between the two countries and to reduce the volume of trade. The newly-elected president spoke about the possible cancellation of a free trade zone with Mexico and Canada. Canadian dollar against the US dollar decreased by 1%.

Commerzbank believes that the euro will be stopped at 1.12

According to analysts at Commerzbank, upward momentum of the pair above 1.1200 could disappear. They say that the rally in EUR/USD looks more like targeted and it reached resistance at 1.1123, a minimum of August and September.
Above 1.1203, which is a 6-month resistance line, next level of resistance is at 1.1217. This level should keep the bulls and provoke failure, analysts say.
Falling below this level indicates that the 20-day moving average is at 1.1000 and initial support is at 1.0950 levels and 1.0821, the minimum from March, they added.
Currently lows should stay above 1.1060. If the market fails to close above 1.1203/17, it can eliminate the downward pressure, which  would lead to further rise to 1.1366, the maximum form August 2016, the experts wrote.

HSBC: Gold could rise to $1,500 an ounce if Trump wins the elections

The price of gold could rise to 1,500 dollars an ounce by the end of 2016 if Donald Trump wins the presidential election in the United States, analysts from HSBC said. On Tuesday there was published a poll, which shows that Trump for the first time since May, was pulled over Hillary Clinton. According to the study the candidate for US president Donald Trump is ahead of Hillary Clinton by 1%.
US presidential election will be held on 8 November. Gold is growing rapidly, adding 0.88 percent to 1288 dollars per ounce, analysts reported. Trump victory will undoubtedly contribute to the growth of quotations of gold since the policy of trade protectionism to which he adheres, will put pressure on the growth rate of the US economy, they added.

Free webinar: "US Election Fever: Which way will it go?"

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The Pro trader Paul Wallace will discuss how the US elections affect the trading on US markets.
Time: 7pm-8pm Cost: Free Place: Online
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November 10: "Working with Stop Losses and Take Profits";
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November 24: "ActivTrades Event Follow Up: Tools & Trading Setups".
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Dollar rises in price against the euro, while remaining at a maximum of 7 months

During today's Asian trade, the US dollar rises in price in tandem with the euro, while remaining at a peak since March on expectations of rate hikes by the Federal Reserve System in December.
In October, the dollar showed growth in pairs with all the currencies of developed countries, for Bloomberg the dollar index this month was the best since 2008 - an indicator added 2.2%.
Euro to 6:25 GMT was worth $1.0969 compared with $1.0981 at the close of the North American market.
The chances of increase in the Fed rate to the end of 2016 increased to 71.4% with less than 60% at the end of September. The market confidence in recent days was reinforced by published positive data, including the dynamics of US GDP in the 3rd quarter, and income and expenses of Americans in September.
The dollar against the yen is stable - 104,80 yen against 104.82 the previous day.

Societe Generale sees strong support for euro at 1.08

Currency strategists at Societe Generale believe that the fall of the EUR/USD may be limited at 1.0800 zone for a while. They say they still prefer to buy the dollar against the yen and the euro.
According to them EUR/USD seems likely to move down to 1.0800, but they are still concerned that the weakness of the euro depends on the ECB and active private investors in the European bond market.
They believe that reducing the volume of purchases of bonds can cause rebound of the euro, but in a broader sense, the weaker currency is one of the main channels through which worked ECB policy.
But if the euro is now located in a range of trade and the ECB almost has no response instruments, we can see difficulties in trying to find a new catalyst for another significant decrease of the euro, experts say.