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  
USD Index Retesting Significant Lows

The Economic calendar for today is very light, with main events in focus for the European trading session concentrating around German PPI...

Economic calendar is relatively light

Today is Martin Luther King’s Birthday, which is a Bank Holiday in the United States. As a result, the Economic Calendar is relatively light today...

US Tax Bill passes

On Wednesday, the US Senate approved the tax bill 51 for and 48 against, while the House of Representatives gave it final approval, passing it for the second time in two days after...


US dollar 'treading water'

USD is treading water ahead of the expected enactment of President Trump’s tax bill. The initial euphoria of lower corporation tax, that many...

CB Monetary Policy Unchanged

Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that further modest increases...

No Surprises as Fed Raises Rates

The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike...


CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...

No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...

  


Share: