Dollar shake out

19 March, 2015

Dollar bulls were squeezed last night as we saw some dramatic moves in FX markets with the dollar plunging after the Fed lowered its inflation and growth forecasts last night. There was every likelihood of there being a spike in volatility during and after the FOMC decision which we warned about yesterday, as well as being consistent in saying any rate hike is likely to come later than many were anticipating. As expected the word “patience” was removed and traders were caught off guard as the dollar headed lower rather than higher as Yellen clarified this did not mean inflation normalising anytime soon. The move was significant across all the majors with GBPUSD getting back above 1.5000, EURUSD exceeding 1.1000 and USDJPY touching 119.30 at its lowest, which would have triggered many stops and therefore exacerbating the moves. The initial reaction has been largely reversed overnight, although the plunge in US Treasury yields has barely see any recuperation of their losses, so doubtless to say the Fed continues to play a waiting game. They want to see a more sustainable improvement in the labour market, in particular on the wage growth front and signs that disinflation pressures are subsiding.

Now the Fed meeting is out of the way and we know the first rate hike will come later in the year, focus will revert back on the single currency as negotiations continue between Greece and its creditors in its quest to secure more funding and avert a Grexit.


Source link  
USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

Positive data negated by tax plan opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5%...

Data Boosts EUR Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition...


Chinese Data Disappoints

China’s economy has been robust throughout 2017 as a continued recovery in manufacturing and industrial sectors, a healthy property market...

Data & Polls Pressure Sterling

Sterling suffered downward pressure on Tuesday as the latest monthly report from the British Retail Consortium showed non-food sales slumping...

Closing the Year on a Strong Note

Data released on Monday indicates that the Eurozone economy is on target to close out 2017 strongly. The latest Markit composite PMI fell...


Sterling Falls on Rate Rise

In line with market expectations, the Bank of England raised the UK base rate to 0.5% (from 0.25%) on Thursday. The rise, the first in 10 years, was widely...

Another Political Headache for Trump

USD gave up some of its recent gains on news that investigators had charged President Trump’s former campaign manager regarding...

US Jobless Claims Lowest Since 1973

US Department of Labor released Initial Jobless Claims for the week ending October 13th that showed a resilient and stable labor market...

  


Share: