Dollar weakness taking a breather

19 October, 2015

The dollar weakness story took a bit of a breather towards the end of last week, brining EURUSD off from the highs just below the 1.15 area, whilst cable has pulled back from the 1.55 area. As with the UK, there has been a gap emerging between what surveys of bank/economists suggest (Fed tightening before year end) and what markets are pricing (no pricing of rate hike). I’ve maintained the view that the Fed will not hike in 2015 for all of the year and still believe that will be the case. As such, it seems likely that the dollar will resume its downtrend before long, but with the market pricing no move on balance, it does not suggest that we are in a period of strong dollar gains into year end.

The overnight focus was with the release of data from China on GDP, retail sales and industrial production. GDP edged slightly lower on the YoY measure to 6.9%, marginally firmer than the 6.8% anticipated. Retail sales were also better than expected at 10.9% YoY, whilst production was weaker at 5.7% on the same measure. The main focus for this week will be with the ECB policy meeting on Thursday, although recent comments appear to have been playing down the prospect of further quantitative easing. So the question is whether Draghi is going to hint at any measure (such as further cut in the deposit rate) which could push the single currency lower. This is also a major week for Canada, with a policy meeting on Wednesday, tougher with retail sales and CPI data towards the end of the week. USDCAD has moved back below the 1.30 level, performing comparatively well on the majors over the past 3 weeks.


Source link  
All Eyes on Central Banks

Markets were, for the most part, little changed on Wednesday as traders waited for today’s Bank of Japan and ECB rate decisions. Earlier today...

Dollar Bears

UK Consumer Price Index (CPI) data was released on Tuesday showing inflation easing for the first time in nearly 10 months, retreating from the near 4-year high touched in May...

More Record Highs for Equities?

Early indications from Asia this morning are pointing towards a strong day for global equities, continuing the momentum from last week...


US Data brings on USD bulls

U.S. job growth surged more than expected in June and employers increased hours for workers, with signs of a labor market strengthening that is likely...

Biggest Quarterly Drop in 7 Years

USD recovered marginally on Friday, but had its biggest quarterly decline against several currencies in nearly 7 years following hawkish signals...

Markets look to Central Bankers

Asian Equities traded higher on Tuesday approaching near two-year highs on Tuesday as USD strength helped exporters...


Global Economic Optimism Continues

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD...

BOJ Monetary Policy Remains Steady

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption...

Final Confirmation for a June Rate Hike

The crucial US labour market data for May will be released today, June 2nd at 13:30 BST. It includes non-farm payrolls...

  


Share: