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  
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...

Politics Influence Markets

With fears abating surrounding the threat of Catalan independence, the EUR moved higher overnight. Catalan President Puigdemont stated...

US Unemployment at Lowest Level

On Friday, the US Department of Labour released Nonfarm Payrolls for September. The meagre forecast of 88K was beaten with an even worse...


Further Strong Data From the US

On Wednesday, the US Institute for Supply Management (ISM) released Non-Manufacturing PMI for September that surprised the market...

Upbeat Data Boosts Dollar

On Monday, the US Institute for Supply Management (ISM) released data showing the index of national factory activity surged to a reading...

Harvey & Irma Effects Still Evident

The EUR suffered a second day of selling pressure, as the markets are growing concerned that the rise in right wing nationalism witnessed...


Risk-On or Risk-Off?

The rhetoric continues between North Korea and the United States with North Korea’s Foreign Minister, Ri Yong Ho, describing President Trump’s recent comments as “tantamount...

German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

  


Share: