Re-writing the dollar rules

27 March, 2015

Yesterday was a strong indicator of the changing dynamic in FX markets, in that we saw the dollar weaker even when stocks were on the back-foot and political tensions in the Middle East were escalating. We moved away from the “risk-on/risk-off” world seen in the wake of the global financial crisis and the dollar was weaker despite these twin forces that in the past would have propelled the dollar higher. Since then, we’ve seen the dollar recover, with the dollar index bouncing off trend line support early in the day. On the charts, it’s sterling that is taking the brunt of the early dollar buying, cable touching the 1.48 level, with EURUSD also under pressure just above 1.08. Once again, the dollar is caught between consolidation and correction, which is likely to mean a choppy end to the week in terms of trading.

The points to note on the data calendar are the GDP data in the US at 12:30 GMT, together with Michigan Sentiment data at 14:00 GMT. BoE Governor Carney speaks early on, as does BoE’s Broadbent as well. Overnight, we’ve seen inflation data in Japan moderate on the headline and underlying measures, at 2.2% and 2.0% respectively. We also saw the unemployment rate fall to 3.5%. Wages remain the main issue for Japan and despite this low unemployment rate, with cash wages rising, but still not yet on a sustained basis.


Source link  
All Focus on US inflation data

The USD has weakened further overnight as the market awaits important US Data at 13:30 GMT. USDJPY broke down under 107.000, while...

Central Bank speakers start a quiet week

UK MPC Member Vlieghe spoke at the Resolution Foundation in London. Some of the comments made were: If there is less credit headwind to the UK economy...

Equities Face a Nervous Session

The global equity markets are bracing themselves for a stormy closing session this week, as data from Thomson Reuters Lipper unit shows US fund...


Super Thursday for the Bank of England

The Bank of England is expected to largely proceed as normal today on ‘Super Thursday’ when the central bank releases its policy decision and statement...

US Nonfarm Payrolls Today

Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer...

Australian Dollar drops after soft data

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on...


Trump Supports a Strong Dollar

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos...

A Weaker Dollar is Good for the US

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross...

U.S. Government Shuts Down

The U.S. government shutdown over the weekend as the Senate failed to pass a bill to keep the funds flowing late on Friday. The Democrats are making...

  


Share: